Common use of Third Party Patent Royalty Offset Clause in Contracts

Third Party Patent Royalty Offset. If the JPC or JSC determines pursuant to Clause 11.7 that a licence under a Third Party Patent Right is necessary for Commercialisation of the Product in a country pursuant to Clause 18.1, then: (A) Subject to Clause 18.2(B), GSK shall be entitled to deduct [***] percent [***] of any royalties paid by GSK, its Affiliates or sublicensees to such Third Party pursuant to such licence against the royalties owed to Genmab based on the Net Sales of the Product in that country; provided, however, that any amount that has not been so deducted in a particular Calendar Quarter may be deducted from royalties due in subsequent Calendar Quarters. (B) Notwithstanding the foregoing, the deductions permitted in Clause 18.2(A) shall not cause the royalty rate payable on Net Sales to Genmab to be lower than [***] percent [***] of those relevant Net Sales (or [***] percent [***] of the relevant Net Sales where the operation of Clause 17.2 also applies), regardless of the total amount of such Net Sales. Subject to the foregoing, any amount that has not been effectively deducted pursuant Clause 18.2(A) for whatever reason in a particular Calendar Quarter may be rolled over into subsequent Calendar Quarters until the full amount has been fully credited against royalties due in subsequent Calendar Quarters. (C) Any other payments required to be made under any license to Third Party Patent Rights such as, but not limited to, license fees and milestones, (but not including any royalties incapable of deduction pursuant to Clause 18.2(A) due to the operation of Clause 18.2(B)) shall be Shared Expenses for the purposes of Clause 20.4.