Common use of Stacking Clause in Contracts

Stacking. If Astellas reasonably determines that it is necessary for Astellas to license one or more Patent Rights from one or more Third Parties in order to Develop, Manufacture or Commercialize any Licensed Product, then Astellas will have the sole right to, and may, in its sole discretion, negotiate and obtain a license under such Patent Rights (each such Third Party license, a “Third Party License”). In the event Astellas pays a royalty to any Third Party for such Third Party License (including royalty payments made by Astellas to Pandion for such Third Party License), Astellas may, on a Licensed Product-by-Licensed Product and country-by-country basis, offset and deduct from any of the royalties otherwise payable to Pandion pursuant to Section 8.5, an amount equal to [**] percent ([**]%) of any royalties paid by Astellas to such Third Party pursuant to the applicable Third Party License with respect to the Development, Manufacturing or Commercialization of the same Licensed Product in such country. Notwithstanding the foregoing, Astellas shall not be entitled to offset or deduct royalties payable to a contract manufacturing organization (“CMO”) for intellectual property owned or controlled by such CMO (“CMO IP”) in connection with the engagement of such CMO to provide manufacturing services for a Licensed Product unless the utilization of such CMO and CMO IP and the resulting payment of such royalties is the only commercially reasonable alternative for the manufacture of such Licensed Product.