💡 Plain English Explanation

This clause protects patent-related information, including pending applications, prosecution strategies, prior art analyses, and freedom-to-operate opinions. In the pharmaceutical industry, patent portfolios often determine market exclusivity periods worth billions of dollars.

Patent information is uniquely sensitive because it reveals both offensive and defensive intellectual property strategies. Pending applications disclose inventions before publication, prosecution history reveals claim scope limitations, and prior art analyses expose potential vulnerabilities in existing patents.

This clause addresses critical patent-related concerns:

⚠ Why This Clause Matters

For the Disclosing Party (Patent Owner): Your patent strategy is a competitive blueprint. Sharing pending applications, prosecution positions, or validity analyses with a potential partner who later becomes a competitor could undermine years of IP development. This clause ensures that patent information shared during negotiations remains protected.

For the Receiving Party (Potential Licensee/Partner): You need to evaluate IP strength for business decisions. However, receiving privileged attorney-client information may create complications if the relationship does not proceed. Clear definitions help manage these complexities.

Attorney-Client Privilege Considerations: Patent opinions often involve attorney-client privileged information. Sharing such information under an NDA may waive privilege if not properly structured. Consider separate privilege protection provisions for attorney work product.

📄 Clause Versions

Balanced Version: Comprehensive protection for patent information with appropriate carve-outs for published patents and public prosecution history. Addresses privilege concerns while enabling meaningful due diligence. Suitable for licensing negotiations and partnership discussions. 
"Patent Information" means Confidential Information relating to patents, patent applications, and intellectual property strategy, including without limitation:

(a) unpublished patent applications, provisional applications, and invention disclosures not yet filed;

(b) patent prosecution documents, including office action responses, claim amendments, declaration, and examiner interview summaries, to the extent not publicly available;

(c) patent portfolio strategies, including filing timelines, continuation strategies, and geographic filing decisions;

(d) prior art analyses, patentability opinions, and searches conducted by or for the Disclosing Party;

(e) freedom-to-operate analyses, infringement opinions, and validity/invalidity assessments;

(f) patent term extension strategies, patent term adjustment calculations, and Orange Book listing strategies; and

(g) licensing analyses, royalty rate assessments, and patent valuation methodologies.

The Receiving Party acknowledges that Patent Information may include attorney-client privileged materials and attorney work product. Disclosure of such materials under this Agreement is made solely for purposes of evaluating a potential business relationship and shall not constitute a waiver of any applicable privilege. The Receiving Party agrees not to assert that such disclosure waives privilege in any proceeding.

Patent Information does not include:
(i) issued patents and published patent applications available through public patent databases;
(ii) prosecution history available through USPTO PAIR, EPO Register, or equivalent public databases; or
(iii) patent information disclosed in SEC filings, investor presentations, or press releases.

The Receiving Party shall not file any patent application or pursue any intellectual property right based on or derived from Patent Information disclosed hereunder without prior written consent.
Disclosing Party Favor: Maximum protection for IP assets, including non-compete provisions for disclosed technology areas. Strong privilege protection and extended confidentiality periods. Ideal for M&A due diligence or strategic partnership discussions involving core IP. 
"Patent Information" means all information of any kind relating to patents, patent applications, intellectual property, and proprietary rights, including without limitation:

(a) all unpublished patent applications, including provisional applications, non-provisional applications, PCT applications, and national phase applications, in any jurisdiction worldwide;

(b) all invention disclosures, inventor notebooks, conception records, and reduction to practice documentation;

(c) all patent prosecution materials, including office action responses, claim amendments, declarations, petition, appeals, examiner interview summaries, and continuation/divisional strategies;

(d) all patent portfolio strategies, including filing priorities, prosecution timelines, geographic filing strategies, and patent family management approaches;

(e) all prior art analyses, patentability searches, novelty opinions, and obviousness assessments;

(f) all freedom-to-operate analyses, infringement analyses, clearance opinions, design-around strategies, and risk assessments;

(g) all validity and invalidity analyses, inter partes review strategies, and litigation positioning assessments;

(h) all patent term strategies, including patent term extension applications, patent term adjustment analyses, and regulatory exclusivity coordination;

(i) all licensing analyses, royalty rate benchmarking, comparable transaction analyses, and patent valuation methodologies; and

(j) all internal documents discussing patent strategy, competitive IP landscapes, or IP-related business decisions.

The Receiving Party shall:
(i) not file any patent application claiming subject matter disclosed in Patent Information or derived therefrom;
(ii) not challenge the validity or enforceability of any patent or patent application disclosed hereunder;
(iii) not conduct freedom-to-operate or invalidity analyses of disclosed patents using third-party counsel or patent search firms without prior written consent;
(iv) not use Patent Information to design around the Disclosing Party's intellectual property;
(v) limit access to Patent Information to in-house attorneys and designated business personnel; and
(vi) maintain Patent Information in confidence for a period of ten (10) years following disclosure, or until such information becomes publicly available through patent publication, whichever is later.

All Patent Information constituting attorney-client privileged materials or attorney work product is disclosed pursuant to a common interest agreement. The parties share a common legal interest in evaluating the potential transaction, and disclosure is made in furtherance of that common interest. Neither party waives any privilege by such disclosure, and the Receiving Party agrees to maintain privilege and not disclose such materials to any third party.
Receiving Party Favor: Narrower definition focused on genuinely non-public patent information. Preserves right to file independent patents and conduct FTO analyses. Suitable for companies with active R&D programs evaluating licensing opportunities. 
"Patent Information" means only that information which:

(a) relates specifically to patents or patent applications owned by the Disclosing Party; and

(b) is not available through public patent databases, including USPTO, EPO, WIPO, or equivalent national databases.

Patent Information includes only:
(i) copies of unpublished patent applications provided in writing and marked as Confidential;
(ii) prosecution correspondence not available through public pair or equivalent databases; and
(iii) written opinions prepared by outside counsel and expressly designated as Confidential.

Patent Information expressly does not include:
(i) issued patents, including all claims, specifications, and prosecution history;
(ii) published patent applications, including PCT publications and national phase publications;
(iii) information available through USPTO PAIR, EPO Register, WIPO PATENTSCOPE, or equivalent databases;
(iv) patent information disclosed in SEC filings, annual reports, or investor presentations;
(v) information available through commercial patent databases or analytics services;
(vi) general patent filing strategies or practices common in the pharmaceutical industry; or
(vii) publicly available prior art or prior art cited in issued patents or published applications.

The Receiving Party may:
(i) conduct independent freedom-to-operate analyses using its own counsel;
(ii) file patent applications on independently developed inventions, even if related to the same therapeutic area;
(iii) engage patent counsel and search firms for purposes of evaluating the Disclosing Party's patent portfolio;
(iv) challenge the validity of Disclosing Party's patents through appropriate legal proceedings; and
(v) retain copies of Patent Information in accordance with legal hold and document retention requirements.

Nothing in this Agreement shall create an implied license to any patent or patent application, or restrict the Receiving Party's independent patent filing activities.

Confidentiality obligations with respect to Patent Information shall terminate upon the earlier of:
(i) three (3) years from disclosure;
(ii) publication of the relevant patent application; or
(iii) public disclosure of such information by the Disclosing Party.

💬 Key Considerations