>>I wondered if it were possible that there was some language in the agreement that made the value of royalties dependent on patent issues. . . . . Is such language likely, in your opinion?<<
A.J.,
There's no reason INCY would weaken its contract royalty rights by agreeing to make them dependent on INCY prevailing on any challenge to its patents. A straight, unqualified right to a royalty is stronger than a patent right, and is what one would expect INCY to insist on, and get, in its master agreements with its big pharma customers. And as tommysdad says, that is what they got.
The big pharma customers found it easy to agree to these royalty provisions, Rocketman used to tell us, because they were a little tiny slice of a revenue stream far in the future ? easy to think the price negligible for the valuable information and genetic material INCY could supply and the pharmas needed.
Of course, a patent will give the patentholder the right to royalties from anyone who uses the patented invention or discovery, whether or not they have a contract with INCY. But in this area, where the validity and scope of "gene patents" is less than certain, INCY was shrewd to take a straight contract right to these potentially huge future royalties on drugs developed from its data and reagents. This is a very nice fallback position, even in the very unlikely event that INCY's patents turn out not to be worth much.
--RCM |
