Question
From:
(Redacted)
Sent:
Friday, September 17, 2010 3:28 PM
To:
Verne, B. Michael
Subject: QuestionsRegarding Exclusive Licenses
Mike-
I hope you are well.We have a question whether the acquisition of intellectual property assets by aperson who already has an exclusive license to the same IP is a reportabletransaction under the HSR Act? In 2006, our client entered into a ExclusiveLicense and Collaboration Agreement ("ECLA") with Firm A pursuant towhich it received an exclusive license under Firm A's IP rights to make, useand sell pharmaceutical compound XYZ ("Compound XYZ"). Our client andFirm A filed HSR notifications to report the Compound XYZ exclusive license asan asset acquisition in 2006, and the ECLA became effective after terminationof the HSR waiting period. Our client's exclusive license under the CompoundXYZ IP rights has not expired or otherwise been terminated.
Our client nowproposes to make an outright acquisition of the compound XYZ IP assets for alump sum payment, which would transfer the Compound XYZ IP to our client,terminate the collaboration agreement and end any obligation of our client tomake future royalty payments to Firm A. Assume the lump sum payment exceeds thecurrent HSR thresholds.
We do not believethat our client's proposed acquisition the Compound XYZ assets requires HSRnotification because, under the HSR rules, the 2006 exclusive license ofcompound XYZ was a "transfer of assets" from Firm A to our client. SeeFTC Informal Interpretation No. 27 (4th ed. 2007). In otherwords, our client already owns the compound XYZ assets for HSR purposes and anyfurther acquisition of Compound XYZ's IP by our client would not be anacquisition of assets "of [] another person" under the HSR Act. SeeSection 7(a) of the HSR Act. Therefore, no HSR filing would be required.