Common use of Blocking Rights Clause in Contracts

Blocking Rights. (a) Neither party (nor any Affiliate or Third Party licensee of Gen-Probe) shall have the right to commence development of (and subsequently commercialize) any Nonexclusive Future Clinical Diagnostic Assay to be conducted by the Clinical Diagnostic Instruments for use in the Clinical Diagnostic Field which is directed to the same virus or marker for the same primary clinical indication as a Nonexclusive Future Clinical Diagnostic Assay which is then being sold by the other party; and Gen-Probe shall not grant any further licenses to any Affiliate or Third Party under the Gen-Probe IP Rights to develop or commercialize a Nonexclusive Future Clinical Diagnostic Assay to be conducted by the Clinical Diagnostic Instruments for use in the Clinical Diagnostic Field directed to such virus or marker for the same primary clinical indication. (b) With respect to any Nonexclusive Future Clinical Diagnostic Assay which a party selects for development under Section 4.3.1 above and subject to Section 4.3.7(c) below, if such party gives express written notice (a "Blocking Notice"), together with reasonably satisfactory evidence, to the other party that it has completed Phase 1 of the Design Review Process (as defined below) of such Nonexclusive Future Clinical Diagnostic Assay and thereafter such party diligently continues the good faith development or sale of such Nonexclusive Future Clinical Diagnostic Assay, then during the effectiveness of the Blocking Notice, (a) the other party (and if the other party is Gen-Probe, any Affiliate or Third Party licensee of Gen-Probe) shall have no right to develop or commercialize a Nonexclusive Future Clinical Diagnostic Assay to be conducted by the Clinical Diagnostic Instruments for use in the Clinical Diagnostic Field which is directed to the same virus or marker for the same primary clinical indication as the Nonexclusive Future Clinical Diagnostic Assay which is the subject of the Blocking Notice; (b) if the other party is Gen-Probe, Gen-Probe shall not grant any further licenses to any Affiliate or Third Party under the Gen-Probe IP Rights to develop or commercialize a Nonexclusive Future Clinical Diagnostic Assay to be conducted by the Clinical Diagnostic Instruments for use in the Clinical Diagnostic Field directed to the same virus or marker for the same primary clinical indication as the Nonexclusive Future Clinical Diagnostic Assay which is the subject of the Blocking Notice; and (c) the other party shall not (and shall cause its Affiliates not to) enforce any patent rights acquired after the effective date of such Blocking Notice (except rights acquired pursuant to a patent application filed before such date) to preclude such party from developing or commercializing such Nonexclusive Future Clinical Diagnostic Assay. For purposes of this Section 4.3.7, "Phase 1 of the Product Design Review Phase" shall have the meaning set forth in the Quality System Regulations ("QSRs"), i.e., the design input (product requirements document), design development (technical plan) and risk analysis. (c) A Blocking Notice given by a party shall be effective for the applicable Nonexclusive Future Clinical Diagnostic Assay on the date of such notice and shall remain in effect, until (i) the notice is voluntarily and irrevocably withdrawn by such party by giving express written notice of withdrawal to the other party, or (ii) the party which gave the Blocking Notice discontinues development of the Nonexclusive Future Clinical Diagnostic Assay which is the subject of the Blocking Notice, or (iii) the First Commercial Sale of a Product developed under such Blocking Notice. Notwithstanding any other provision of this section, a party may not have in effect at any time Blocking Notices for more than seven (7) Nonexclusive Future Clinical Diagnostic Assays which have not received applicable regulatory approval, if any, for sale in the United States, or such greater number as may be established by the Supervisory Board. Upon termination of a Blocking Notice pursuant to clauses (i) or (ii) or (iii) of this section, the party which gave such notice shall then obtain the right to use such Blocking Notice in connection with another Nonexclusive Future Clinical Diagnostic Assay. Upon termination of a Blocking Notice by a party pursuant to clause (i) or (ii), a Blocking Notice for the same virus or marker may not be issued by that party during the succeeding six months. (d) Notwithstanding the foregoing, a Blocking Notice given by a Developing Party shall not preclude the other party (or a then-existing Affiliate or Third Party licensee of Gen-Probe) from developing and commercializing a Nonexclusive Future Clinical Diagnostic Assay with respect to a virus or marker that (i) is claimed in an issued patent or pending patent application owned by or licensed to the other party (other than pursuant to this Agreement) and (ii) is not claimed in an issued patent of the Developing Party. (e) Prior to the Effective Date, the parties shall meet and agree in writing upon viruses and markers with potential utility for Nonexclusive Future Clinical Diagnostic Assays which each party currently has in development and as to which each party shall have the exclusive right, but not the obligation, to issue a Blocking Notice during the first one hundred and eighty (180) days following the Effective Date. For the thirty (30) days following the Effective Date, neither party shall issue a Blocking Notice for a virus or marker not on its agreed list.