This criterion is met when the promise of licence transfer is separate from the research and development services. The license may be identifiable separately from research and development services if research and development services do not expect them to substantially modify or adapt the original IP. This is often the case in clinical trials when the goal is to validate the use and efficacy of a drug in relation to the significant modification or adaptation of the original PI (for example. B the active compound). Company A entered into an agreement with Company B, as Company A agreed to license Company B for its IP address. The licence was transferred to Company B at the beginning of the contract. In return, Company B has paid a down payment of $10 million to Company A and will pay an additional $20 million to Company A if annual revenue from the company B`s licensed IP file exceeds $250 million. CSA 606-10-55-56: … Examples of licenses that are no different from other products or services promised in the contract are: According to a sales contract, Company A sells a medical device and is also required, in accordance with the agreement, to provide certain future improvements/improvements to medical devices sold. The terms of sale also require Company A to provide upgrades/extensions of its unspecified medical devices for the three-year term of the agreement.
Company A is fully paid after the start of the contract. Company A expects to provide the upgrades indicated shortly after the first sale. The agreement does not contain general or specific restitution rights. In its response, Starbucks stated that the transaction “constitutes a down payment for the use of our trademarks, trademarks and trade names during the term of the contract. That is why we believe that the obligation to provide is a promise of the right of access to our intellectual property. Starbucks then explained its basis for treating the IP license as a symbolic license, found in ASC 606-10-55-59: b. A license that the customer can only benefit from in combination with an appropriate service… On January 1, 20X9, Company A entered into a six-year agreement to transfer a Functional Intellectual Property (IP) licence in exchange for a non-refundable pre-charge of US$500 million and US$200 million ($40 million per year) in five equal annual tranches from 2020 to 2024.
As such, Company A entrusted control of the licence to Company B at that time. There are no other performance obligations in the contract and Company A (1) has concluded that consideration recovery is likely and (2) a substantial termination penalty in the event of termination of the contract by the customer. As the IP refers to an active substance, the functionality is autonomous and Company B has no other activities that influence this feature.