Common use of Validity Challenge Clause in Contracts

Validity Challenge. If Licensee or a Sublicensee, itself or through a third party, institutes any proceeding that contests the validity of any Patent Right during the term of this Agreement, Licensee agrees to pay to The Regents, directly and not into any escrow or other account, all royalties and other amounts due in view of Licensee’s and its Sublicensees’ activities under this Agreement during the period of challenge and The Regents’ attorneys fees in defending such action. Should the outcome of such contest determine that any challenged patent claim is valid, Licensee (or its Sublicensee, as applicable) will thereafter, and for the remaining term of this Agreement, pay a royalty rate of [***] the royalty rate specified above and the entirety of The Regents’ legal (including attorney) fees and costs incurred during such proceeding. For clarity, in the case wherein a Sublicensee challenges the validity of the Patent Rights, so long as Licensee did not directly or indirectly induce, encourage, or otherwise assist such Sublicensee in its challenge of the Patent Rights, then Licensee’s royalty rate will not be tripled per the foregoing sentence and Licensee will not be obligated to pay for The Regents’ attorneys fees in defending such action against a Sublicensee (provided that, if the challenging Sublicensee fails to do so Licensee must terminate the applicable Sublicense).