Common use of Initial Products Clause in Contracts

Initial Products. In the event that Ethicon assumes the responsibility for the manufacture of an Initial Product pursuant to Section 7(1), then Ethicon shall pay to Focal on a country by country basis in the Territory the following royalties: (A) a royalty of [*] of Net Sales of an Initial Product in a country, if the making, using or selling of such Initial Product by Ethicon, its Affiliates or sublicensees, in such country, (1) is covered by a Valid Claim of an issued patent included in Patents, (2) is covered by a Valid Claim of a patent application included in Patents; provided, however, that if a patent based on such application does not issue within [*] of the First Commercial Sale of such Initial Product in such country, then, commencing with the [*] Anniversary of such First Commercial Sale, Ethicon shall pay to Focal the royalties specified in Section 6(d)(i)(B) on the sale of such Initial Product until such time, if ever, that a patent based on such application issues, in which case the royalty payable by Ethicon on the sale of such Initial Product shall revert to the level specified in this Section 6(d)(i)(A), or (3) would be covered by a Valid Claim of an issued patent or patent application included in Patents but for a joint decision by the parties (other than where such decision was made on the basis that the seeking of such a patent would not be successful due to previously existing patents or prior art) to not obtain or maintain a patent with respect to such Initial Product in such country (collectively, the "Requirements for Full Royalty"). (B) a royalty of [*] of Net Sales of an Initial Product in a country, if the making, using or selling of such Initial Product in such country does not meet any of the Requirements for Full Royalty.