Common use of No Patent Coverage Clause in Contracts

No Patent Coverage. Notwithstanding anything to the contrary in Section 8.3.1, if any Licensed Product is sold in a country and the composition of matter, a Regulatory Authority-approved method of use, or the Encapsulation Material as a component of such Licensed Product is not Covered by a Valid Claim of a Sigilon Patent Right in such country, the royalty rates applicable to Net Sales in such country shall be reduced by [***] percent ([***]%) of the rates set forth in Section 8.3.1 above, continuing until the last day of the applicable Royalty Term with respect to such Licensed Product and such country at issue. The Parties hereby acknowledge and agree that royalties that are payable for a Licensed Product for which no Sigilon Patent Rights exist shall be in consideration of (i) Sigilon’s expertise and know-how concerning its development of the Sigilon Know-How and its other development activities conducted prior to the Effective Date; (ii) the rights granted to Lilly hereunder with respect to the Sigilon Know-How that are not within the claims of any Patent Rights Controlled by Sigilon; (iii) the restrictions on Sigilon in Section 2.4.1; and (iv) the “head start” afforded to Lilly by each of the foregoing.