Common use of Lines Clause in Contracts

Lines. 1. Ownership (General). Lines developed by employees, contractors and/or consultants (other than AGRILIFE) of CERES alone without the use of AGRILIFE Materials or Other Contributions, will be owned by CERES. Lines developed by employees and/or researchers of AGRILIFE alone without the use of CERES Materials or Other Contributions will be owned by AGRILIFE. Jointly-Owned Lines jointly developed by employees, contractors and/or consultants (other than AGRILIFE) of CERES and employees and/or researchers of AGRILIFE shall be jointly owned. Lines where the Materials or Other Contributions of CERES and AGRILIFE have been combined through traditional or artificial means in the Program shall be jointly owned. 2. Ownership (CERES breeding program). In the event that CERES or its Affiliated Companies use Jointly-Owned Lines or Lines owned by AGRILIFE in its or its Affiliated Companies’ own breeding program outside the Program in compliance with this Agreement or a license agreement for Lines as provided in Article IX.D.4, the resulting Lines, New Parental Lines or Hybrids developed by CERES or its Affiliated Companies shall be solely owned by CERES, without regard to whether or not the operative license agreement for Lines was in effect at the time of CERES or its Affiliated Companies’ development of such Lines, New Parental Lines or Hybrids. Any use for commercial exploitation of any Lines, New Parental Lines or Hybrids by CERES or its Affiliated Companies shall be subject to CERES obtaining a license under this Article IX.D and pursuant to the IPRA. 3. Option to Obtain a Commercial Exploitation License. AGRILIFE grants to CERES a time-limited option to obtain an exclusive world-wide commercial exploitation license in AGRILIFE’s rights in Lines and in Jointly-Owned Lines with the right to grant sublicenses, as set forth 4. Exercise of Option to a Commercial Exploitation License. CERES may at any time identify a Line for which it elects to exercise its option. In addition, the Management Committee may nominate a Line in writing to the Executive Committee which, in the Management Committee’s judgment, exhibits valuable characteristics which may be of interest to CERES. The Executive Committee is responsible for determining whether or not to validate each such Line nomination as a formal written disclosure to CERES (“Lines Disclosure”). Any Lines Disclosure by the Executive Committee will state that such disclosure is a Lines Disclosure under this Agreement and describe the Line with sufficient specificity to allow assessment by CERES. CERES shall advise AGRILIFE in writing within ninety (90) days of any such Lines Disclosure to CERES (“Option Period”) whether or not CERES elects to exercise its option to obtain exclusive commercial exploitation rights to such Line to maintain and increase seed of Lines; develop New Parental Lines; develop Hybrids; and sell Hybrids. In the event that CERES elects to obtain a commercial exploitation license to one or more or all Line(s), the Parties shall initiate negotiation of such license agreement in compliance with the IPRA and substantially in the form of the Annexes thereto, such negotiations not to extend beyond one hundred eighty (180) days from CERES’ notice of election (“Negotiation Period”) without the mutual consent of both Parties. 5. The Parties agree that any such license as negotiated by the Parties for Line(s) shall be negotiated in good faith and shall contain reasonable business terms common to CERES’ field of commercial interest and proposed application, and shall contain royalty rates customary in the seed industry, taking into consideration, (i) AGRILIFE Genetic Contribution, (ii) Other Contributions of CERES, (iii) financial contributions of each Party, and (iv) germplasm contributed by CERES, if any, all of the foregoing (i) through (iv) to the development of such Lines, New Parental Lines and Hybrids.