Question
From:(redacted)
Sent:Friday, October 28, 2005 12:43 PM
To:Verne, B. Michael
Subject: RE: License Agreement
Mike,
Would the analysis change with respect to non-exclusivity if the licenseagreement includes a provision that grantor's right to manufacture the licensedproducts is encumbered by an obligation for grantor to pay a fee to thelicensee in the event that Grantor manufactures the licensed products? Notethat Grantor's right to manufacture the licensed products still remains. (MVcomment No)
Also, I have one additional clarification. If the license is worldwide andcovers trademarks registered in countries outside the US, then we understand that it is reasonable to use the seller'sprior fiscal year sales information as a basis to allocate the purchase pricebetween US and non-US located assets under Rule 802.50(a). For example, if 45%of total sales (from the prior fiscal year) of the products to be licensed werefrom sales in or into the US, then the appropriate calculation is tomultiply such percentage by the purchase price. If the resulting figure is lessthan $53.1 m, and since the non-US located assets under that calculation aredeemed not to generate sales into the US, then no HSR filing would be required. Is this still the PNO's position? (MV comment This is OK)
-----Original Message ----
From: Verne, B. Michael [mailto:MVERNE@ftc.gov]
Sent: Thursday, October 27, 2005 8:14 AM
To:(redacted)
Subject: RE: License Agreement
Yes - it is still our position that an exclusive license, even for limitedduration and limited field of use, is the transfer of an asset.
Even if the grantor has no intent to manufacture the licensed products, if itis able to do so under the license agreement, the license is non-exclusive for HSR purposes.
-----Original Message ----
From:(redacted)
Sent: Wednesday, October 26, 2005 5:35 PM
To: Verne, B. Michael Subject: License Agreement
Hi Mike,
I hope you are doing well.
I am writing to you with two questions about an IP license agreement. First, I wantto confirm that it is still the position of the Premerger Notification Officethat the grant of an exclusive license to certain intellectual property, eventhough limited in duration, and even though limited in field of use (i.e., thelicensee of the intellectual property has the right to manufacture only twospecific categories of products), is considered the transfer of an asset. Seealso attached. (MV comment Agree)
Second, I want to confirm whether the license agreement more fully describedbelow would actually be considered exclusive. The license agreement states thatthe license is non-exclusive and that the grantor may not license to any otherparty. However, the license agreement does not expressly state that it isexclusive against the grantor. The grantor does not intend to actuallymanufacture the products in the categories covered by the license butnonetheless would be permitted to do so under the license agreement as drafted.Would the Premerger Notification Office consider this a nonexclusivelicense? (MV comment Yes)