Laboratory Service Agreement: Definition & Sample
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What is a Laboratory Service Agreement?
A laboratory service agreement is a legal document that defines the terms for a contract between two or more parties. A laboratory service agreement is necessary when it comes to determining needs regarding services such as clinical pathology testing, microbiology testing, immunoassays, hematology testing, molecular diagnostics tests or other specialized lab tests.
The laboratory service agreement will outline the rights of patients and the responsibilities of lab staff. In addition, confidentiality, the standard of care, and prompt results are often detailed in this agreement.
Common Sections in Laboratory Service Agreements
Below is a list of common sections included in Laboratory Service Agreements. These sections are linked to the below sample agreement for you to explore.
Laboratory Service Agreement Sample
REQUESTED PURSUANT TO RULE 406
Master Laboratory Services Agreement
Introduction and Scope
Section 1. Parties; Defined Terms
| 1.1 | This is an agreement between Eli Lilly and Company, Lilly Corporate Center, Indianapolis, IN 46825, (“Lilly”) and Shanghai ChemPartner Co., Ltd., Building #3, 720 Cailun Road, Zhangjiang Hi-Tech Park, Pudong New Area, Shanghai, People Republic of China, 201203 (“ChemPartner”). |
| 1.2 | Other capitalized terms are defined in Exhibit A. |
Section 2. Scope of Agreement
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| 2.1 | Projects . From time to time during the term of the Master Agreement, ChemPartner and Lilly may execute Work Orders that are consistent with Exhibit B for Projects comprising the types of laboratory services listed below. Except to the extent the parties agree to particular Work Orders, nothing about the Agreement requires ChemPartner to furnish, or Lilly to request ChemPartner to furnish, any particular services or deliverables or any particular quantity of services or deliverables. |
| 2.2 | Manner of Executing Work Orders . Lilly may from time to time request ChemPartner to prepare and submit a proposed Work Order signed by ChemPartner. Should it choose to comply, ChemPartner/bears the expense of preparing and submitting the proposal. A proposed Work Order becomes part of the Agreement only if Lilly accepts it by: |
| 2.2.1 | Signing the proposed Work Order (or an identical counterpart). Lilly may then issue a purchase order/solely for administrative purposes. If so, neither the terms and conditions of the purchase order nor anything else about it affect the agreed Work Order. |
| 2.2.2 | Issuing its standard form of purchase order solely for the purpose of accepting the proposed Work Order without revision. Neither the terms and conditions of the purchase order nor anything else about it affects the proposed Work Order. |
Term of Master Agreement . The term of the Master Agreement is from March 1, 2008 through June 30 th 2011, unless it is cancelled or terminated earlier. Nonetheless, if any Work Orders are in effect on the day the Master Agreement would otherwise expire, the Master Agreement remains in effect solely for the purpose of those Work Orders (and not for the purpose of executing new Work Orders) until their expiration, cancellation, or termination.
| 2.4 | Term of Work Orders. Each Work Order takes effect and expires according to the Project Specifications, unless it is cancelled or terminated earlier. If the Project Specifications do not state when the Work Order takes effect, it takes effect when Lilly accepts ChemPartner’s proposal. If no expiration date is specified, the Work Order expires when the Project is complete. Any individual Work Order may be cancelled or terminated independently of the rest of the Agreement, with any provision of the Agreement relevant to termination or cancellation apply only to that Work Order. Cancellation or termination of the Master Agreement cancels or terminates all Work Orders. |
| * | Indicates where text has been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. The omitted materials have been filed separately with the Securities and Exchange Commission. |
| 2.5 | Inconsistencies Between Master Agreement and Work Order . If the terms of the Master Agreement are inconsistent with the terms of the Work Order, the Master Agreement controls unless: |
| 2.5.1 | the Master Agreement expressly allows a Work Order to supersede the inconsistent term and; |
| 2.5.2 | the Work Order clearly expresses the parties’ intent to do so. |
ChemPartner’s Rights and Obligations
Section 3. ChemPartner’s General Obligations
| 3.1 | ChemPartner will furnish Lilly all Services and Deliverables described by the Project Specifications and will provide everything it needs to furnish such Services and Deliverables except for those responsibilities the Project Specifications expressly assign to Lilly. |
| 3.2 | Upon expiration, notice of termination or notice of cancellation of this Agreement and request by Lilly, ChemPartner will cooperate in transferring ChemPartner’s obligations and any work in progress to another supplier. |
Section 4. Warranties
| 4.1 | ChemPartner warrants that: |
| 4.1.1 | ChemPartner’s performance under this Agreement (including all Services, Deliverables, Work Product and ChemPartner’s employment practices) complies with all Applicable Law. |
| 4.1.2 | Services will be rendered with at least that degree of skill and knowledge normally possessed and employed by members of the relevant trade or profession in good standing in the United States of America. |
| 4.1.3 | The Services, Deliverables, and Work Product do not infringe any Intellectual Property Rights of any other Person, and any use thereof by Lilly consistent with this Agreement does not infringe such rights; however, this warranty does not extend to any substances, processes, methods, information, or written materials furnished by Lilly and used in accordance with Lilly’s instructions in performing the Services or incorporated into the Deliverables or Work Product in accordance with Lilly’s instructions. |
| 4.2 | Without limiting any other representations or warranties in this Agreement, ChemPartner disclaims any and all implied warranties of merchantability and of fitness for a particular purpose. |
Section 5. Customs-Trade Partnership Against Terrorism (C-TPAT)
| 5.1 | As a participant in the U.S. Department of Homeland Security’s Customs-Trade Partnership Against Terrorsim (or “ C-TPAT ”), Lilly takes measures to secure its supply chains against acts of terrorism, including an assessment of the security practices of its suppliers using the C-TPAT Security Criteria established by the United States Department of Homeland Security, available at http://supplierportal.lilly.com or http://www.customs.gov . ChemPartner will take measures consistent with the C-TPAT Security Criteria to ensure the security of the supply chain for all articles shipped to Lilly by way of importation into the United States. ChemPartner will cooperate with Lilly’s measures to implement C-TPAT, for example by completing and updating questionnaires that Lilly uses to assess the security practices of its suppliers, by informing Lilly of any breaches of the security of the supply chain for articles shipped to Lilly, and by assisting Lilly in assessing and evaluating ChemPartner’s security practices. |
Section 6. ChemPartner’s Invoices
| 6.1.1 | ChemPartner will submit invoices for hourly fees and for reimbursement of expenses once a month. |
| 6.1.2 | ChemPartner will submit invoices for an advanced payment, a part of fixed fees to initiate the services, or submit invoices for fixed fees after Lilly has received and accepted all Services and Deliverables subject to the fixed fee. |
| 6.2 | Invoices . Each invoice submitted by ChemPartner must comply with Lilly’s standard forms and procedures (as changed from time to time) and published on the interact at http://supplierportal.lilly.com and with any specific requirements in this Agreement. Each invoice will be accompanied by: |
| 6.2.1 | Reference to Work Order and associated purchase order number. |
| 6.2.2 | Any additional information that Lilly may reasonably request. |
| 6.3 | Currency . Invoices will be in United States dollars and payment will be in United States dollars. |
Section 7. Safety and Security at Lilly’s Facilities
| 7.1 | ChemPartner will comply with, and will cause its Affiliates, Subcontractors, and their respective Representatives to comply with, all policies and procedures that Lilly establishes to enhance the safely or security of Lilly’s facilities or of persons at or near Lilly’s facilities, including measures restricting access such as the use of identification badges and passwords. ChemPartner will promptly notify Lilly of any violation of such policies and procedures by any of the Persons listed in the preceding sentence. |
| 7.2 | ChemPartner will comply with, and will cause its Affiliates, Subcontractors, and their respective Representatives to comply with, the instructions of a Lilly security official that are reasonably necessary to redress a threat, or to avoid an imminent threat, to the safety or security of such facilities or persons. |
Section 8. Debarment and Exclusion from Certain Health Care Programs
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| 8.1 | ChemPartner represents that it has not been |
| 8.1.1 | Debarred by the United States Food and Drug Administration under any provision of the Generic Drug Enforcement Act or |
| 8.1.2 | Excluded by the Office of the Inspector General of the United States Department of Health and Human Services, or by any other authority, from participating in any health care program (such as Medicare or Medicaid) funded by any Governmental Authority. |
| 8.2 | ChemPartner agrees that no Person who has been debarred or excluded as described above will furnish any of the Services or Deliverables or perform any of ChemPartner’s other obligations under the Agreement. |
| 8.3 | ChemPartner will immediately notify Lilly in writing (with a copy to Lilly’s legal counsel) of any actions taken or proceeding pending that threatens or confirms a debarment or exclusion of any such Person. |
Section 9. Section 9 Care of Animals
| 9.1 | ChemPartner will comply with the applicable requirements of Exhibit E for all animals that ChemPartner or its Subcontractors either: |
| 9.1.1 | Supply to Lilly for use in research; or |
| 9.1.2 | Use in animal studies that are conducted for the purpose of providing the Services or Deliverables. |
| 9.2 | To avoid misunderstanding, ChemPartner acknowledges that the requirements of this Section 9 are in addition to (and neither limit nor are limited by) its other obligations under the Agreement, including its obligations to comply with Applicable Law and to satisfy the Project Specifications. |
Lilly’s Rights and Obligations
Section 10. Lilly’s General Obligations
| 10.1 | Lilly will pay ChemPartner the Compensation according to the terms of this Agreement. Lilly will owe ChemPartner no compensation other than that described in this Section, whether for time of staff, labor, materials, expenses, overhead, profit, taxes, insurance, or other costs of furnishing the Services and Deliverables. |
| 10.2 | Lilly will perform any obligations expressly assigned to it in the Project Specifications or elsewhere in the Agreement. |
Section 11. Payment
| 11.1 | Payment Terms . Payment will be due* days after Lilly’s Accounts Payable Department receives an invoice that complies with the requirements of this Agreement, except that Lilly may withhold payment of any amount that it may reasonably dispute in good faith until such dispute is resolved. |
Section 12. Access to Lilly’s Facilities and Information Systems
| 12.1 | Lilly retains its right to restrict or refuse any Person (including ChemPartner, its Affiliates, its Subcontractors, and their respective Representatives) access to Lilly’s facilities, computers, or other information systems. |
| 12.2 | In particular, but not in limitation of the preceding Section, Lilly may restrict or refuse access to any individual who does not do any of the following to Lilly’s satisfaction. |
| 12.2.1 | Submit to and pass a drug screen. |
| 12.2.2 | Pass a background check. |
| 12.2.3 | Accept or acknowledge in writing a personal obligation to protect Lilly’s Confidential Information. |
| * | Indicates where text has been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. The omitted materials have been filed separately with the Securities and Exchange Commission. |
| 12.3 | Such restriction or refusal excuses ChemPartner’s performance under this Agreement only if it renders ChemPartner’s performance impracticable, does not comport with Lilly’s written procedures, and is manifestly unreasonable. |
Section 13. Lilly’s Right to Cancel
| 13.1 | Lilly may cancel this Agreement for any reason including convenience by written notice to ChemPartner. Cancellation will be effective ninety (90) days after ChemPartner receives the notice or on a later date if the notice so specifies. |
| 13.2 | In the event of such cancellation, Lilly’s obligation to compensate ChemPartner is reduced to the portion of the Compensation corresponding to Services and Deliverables properly furnished prior to cancellation, with the calculation of the amount of the reduction consistent with the provisions of this Agreement establishing the amount of Compensation. |
Information and Property Rights
Section 14. Ownership of Inventions, Work Product, and Deliverables
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| 14.1 | (a) Ownership in Lilly . Subject to the terms and conditions of this Agreement (including the provisions of any applicable Work Order), all Inventions, excluding any ChemPartner Prior Rights, that are developed, generated, discovered, evolved or derived by ChemPartner in relation to a Work Plan undertaken by ChemPartner under this Agreement (the “Inventions”) shall be assigned to Lilly. Lilly shall be the sole and exclusive owner of any and all information, items, material and knowledge relating to a Invention that is either: (i) disclosed (orally, in writing, electronically, by observation or otherwise) to ChemPartner from Lilly under this Agreement or (ii) acquired, generated, developed, discovered, evolved or derived by ChemPartner (solely or jointly with Lilly) as a result of the Work Order or Project performed by ChemPartner under this Agreement, including all Lilly Confidential Information as defined in Exhibit A. In order to ensure that Lilly’s sole ownership interest in Inventions is fully vested in Lilly, ChemPartner shall promptly after the conception, discovery, invention and/or development of any material Inventions notify Lilly thereof and cooperate with Lilly in taking all steps which Lilly believes reasonably necessary or desirable to secure its ownership rights in such Inventions including cooperation in completing any patent applications relating to such Inventions, as well as executing and delivering any instrument that may be reasonably useful or required to confirm the ownership in Lilly, or assign, convey and transfer to Lilly any ownership interest, if any, that ChemPartner may have in such Inventions. Moreover, promptly after the conception, discovery, invention and/or development of material Inventions, ChemPartner shall, to the extent not already in Lilly’s possession, furnish to Lilly all information, items, material and knowledge encompassed in such Inventions together with any other information, items, material and knowledge that is reasonably useful or necessary for Lilly to exploit its sole ownership interest in such Inventions. |
(b) Assignment of Inventions . ChemPartner acknowledges and agrees that (a) the development, generation, discovery, evolution or creation of such Invention is sponsored by and will be assigned to Lilly, (b) responsibility for patenting such Invention is borne by Lilly, and (c) Lilly is the exclusive holder of all rights in such Invention worldwide. ChemPartner further acknowledges and agrees that ChemPartner has no right to, and will not, directly or indirectly, reproduce, adapt, modify, create derivative works from, manufacture, market, introduce into circulation, publish, distribute, sell, license, sublicense, transfer, rent, lease, transmit or provide access electronically, broadcast, display, enter into computer memory, or use such Invention, any portion or copy thereof in any form, or any such rights, or authorize or assign others to do so, except as explicitly provided in this Agreement or as otherwise agreed in writing by Lilly. ChemPartner has no right to, and shall not directly or indirectly, apply to register any copyright, trademark, patent, title, or other intellectual property rights in or related to the Invention, in the People’s Republic of China or any country or region throughout the world, unless requested in writing to do so by Lilly.
During the term of this Agreement, ChemPartner shall promptly disclose to Lilly all material Inventions developed, generated, discovered, evolved or created by or vested in ChemPartner. If and to the extent that Lilly does not originally acquire full legal and beneficial interest to any Invention pursuant to Section 14.1(a) of this Agreement, ChemPartner shall and hereby does in advance assign to Lilly such right and interest, therein, and shall take all other steps and execute all other documents, including under the import/export control regulations (e.g., the Regulations of the People’s Republic of China on Technology Import and Export Administration), which may be necessary in order to give full force and effect to the provisions of this Article. The provisions of the preceding sentence apply inter alia to patent application rights vesting in or assigned to ChemPartner pursuant to the provisions of the Patent Law of the People’s Republic of China or to contracts entered into by ChemPartner with employees and permitted contractors. Lilly shall have the sole discretion to apply for patents in any jurisdiction for any patentable subject matter comprising or contained in any Invention, and ChemPartner shall assist and shall procure the assistance of its current and former employees and permitted contractors in the prosecution of any such patent applications. If, by operation of law, ChemPartner is unable to assign such rights to Lilly or such assignment is not approved or registered (as applicable) by a government authority, ChemPartner grants to Lilly, its successors and assigns, an exclusive (without ChemPartner retaining any rights), irrevocable, worldwide, paid-up license to use, reproduce, adapt, modify, create derivative works from manufacture, market, introduce into circulation, publish, distribute, sell, offer to sell, import, license, sublicense, transfer, rent, lease, transmit or provide access electronically, broadcast, display, enter into computer memory, and use the Invention, all modified and derivative Invention thereof, all portions and copies thereof in any form. Ancillary rights such as the right to sue on behalf of the patent owner, to reissue or reexamine the patent, to pay maintenance fees, to revoke or abandon the patent, to obtain patent term extensions, supplementary protection certificates and the like shall also be included in the terms of the exclusive license granted to Lilly.
(c) Assignment from Employees . In respect of each ChemPartner employee who is or will be assigned to a Work Order or Project and to the extent required under the laws of the People’s Republic of China, ChemPartner agrees to obtain an assignment from such employee to ChemPartner by agreement between ChemPartner and such employee, and to negotiate and resolve, through disclaimer or waiver, any rights such employee might have, including securing a waiver of any ChemPartner employee-inventor’s right to first assignment to service invention-creation (or Invention) pursuant to “Implementing Rules for Ownership Rights to Invention-Creation and Service Remuneration in Shanghai Municipality”(effective as of April 29, 2007), in respect of any Invention developed, generated, discovered, evolved or derived hereunder, including any rights to any reward or remuneration related to his or her contribution to such Invention or to ChemPartner’s assignment thereof, and any pre-emptive right to the assignment of such Invention. ChemPartner further agrees to assign to Lilly all rights in such Invention. ChemPartner shall hold Lilly harmless from any claim from any of ChemPartner’s employees in relation to any reward or remuneration related to such employee’s contribution to such Invention or employee’s assignment thereof to the ChemPartner, and ChemPartner shall not claim any other reimbursement, compensation or payment for any reason, other than the fees that Lilly has expressly agreed to pay ChemPartner under this Agreement.
| 14.2 | Procedural Safeguard Restrictions to Protect Confidentiality and Invention Ownership . ChemPartner shall require each of its employees and permitted independent Subcontractors performing Services to execute and deliver written agreements embodying confidentiality and non-use restrictions and assignment of intellectual property covenants in such form and substance as is reasonably acceptable to Lilly. In addition, during the term of any applicable Work Order under this Agreement, ChemPartner agrees not to engage either itself or with or for a third party in any research efforts with respect to any drug target that is or has been the subject of Project without Lilly’s prior written consent, which consent shall not be unreasonably withheld. |
| 14.3 | Security . As a means reasonably designed to protect Lilly’s rights and otherwise to ensure such ChemPartner’s compliance with its respective obligations set forth in Section 7 and Section 12 of this Agreement, ChemPartner agrees to maintain reasonable security measures to ensure the protection, secrecy and confidentiality of all Lilly Confidential Information and Inventions. To that end, in addition to other customary security measures taken by ChernPartner, ChemPartner shall: (i) appropriately partition all Lilly Projects from any other work performed by ChemPartner, either for its own account or for third parties; and (ii) maintain information technology systems that are compatible with Lilly’s information technology systems and that ensure confidential communications between ChemPartner and Lilly, as well as the confidential transfer of data between ChemPartner and Lilly. |
| 14.4 | Ownership of Lilly Data . Lilly Data is and shall remain the exclusive property of Lilly and/or its Affiliates, as applicable. ChemPartner will not possess or assert any lien or other right against or to Lilly Data. The Lilly Data shall be used by ChemPartner solely as specified in this Agreement and then only in connection with providing the Services set forth in this Agreement. ChemPartner shall protect the proprietary nature of Lilly Data and shall in no way, directly or indirectly, disclose Lilly Data or allow third party access to Lilly Data. ChemPartner shall in no way, directly or indirectly, commercially exploit Lilly Data. |
| 14.4.1 | Upon expiration or other termination of this Agreement, or upon request of Lilly, ChemPartner agrees to remove all copies and instances of Lilly Data from ChemPartner’s systems and files, and at Lilly’s discretion either promptly return all Lilly Data to Lilly or destroy the Lilly Data in its possession, and certify to the same. |
| 14.4.2 | ChemPartner acknowledges that the Lilly Data may contain personal data, health data and/or medical records data, the use of which data is subject to various privacy laws, including all state, federal and international laws and regulations and state, federal and national government agency orders and decrees to which Lilly may be subject (“Privacy Laws”), as well as certain restrictions imposed on the Lilly Data by the data subjects or other third party data providers. Any such Lilly Data containing personal data, health data and/or medical records data that is subject to various privacy laws shall be a Trade Secret for purposes of this Agreement, whether separately designated as such or not. ChemPartner agrees to strictly abide by all such restrictions pertaining to the Lilly Data, as they are promulgated and applied, currently and in the future. Furthermore, ChemPartner shall in good faith execute any and all documents that Lilly is required to have ChemPartner execute in order that Lilly may comply with any Privacy Laws. If ChemPartner’s use (whether directly or indirectly) of the Lilly Data is contrary to any Privacy Law, or contrary to any of the restrictions set forth in this Agreement, Lilly shall have the right to: i) terminate this Agreement for cause if such breach has not been cured within five (5) days of receipt by ChemPartner of written notice, and ii) pursue any other legal and equitable remedies. |
| 14.4.3 | ChemPartner represents and warrants that it will only transfer (including internal ChemPartner transfers that occur beyond the internal firewalls of ChemPartner) Lilly Data in a secure and confidential mariner, including at a minimum, encrypting the data with no less than 128 bit encryption or through establishing a virtual private network with Lilly. |
| 14.4.4 | ChemPartner will, and will cause ChemPartner’s Subcontractors and CheinPartner Affiliates to, maintain reasonable and adequate security measures to ensure protection, secrecy and confidentiality of all Confidential Information, including but not limited to, Lilly Data, and cooperate fully in resolving any actual or suspected acquisition or misuse of Lilly Data. |
Section 15. Lilly’s Property in ChemPartner’s Possession
| 15.1 | In the course of their relationship under this Agreement, ChemPartner may have Lilly’s Property in its possession. ChemPartner will retain Lilly’s Property and will exercise appropriate care toward it to protect against damage, destruction, loss, unauthorized use, or unauthorized disclosure, but in no event will ChemPartner exercise a lower degree of care in safeguarding Lilly’s Property than ChemPartner uses in safeguarding its own Property of a similar nature. |
| 15.2 | ChemPartner will neither encumber Lilly’s Property nor use it for any purpose other than the performance of its obligations under this Agreement. |
| 15.3 | ChemPartner will promptly notify Lilly of any loss or damage to Lilly’s Property in its possession. |
| 15.4 | ChemPartner will neither dispose of Lilly’s property nor transfer possession of it to anyone else except in accordance with this Agreement. ChemPartner will follow Lilly’s written instructions for disposition of any of Lilly’s Property (including Records that are Lilly’s Property) in ChemPartner’s possession. Such disposition may include destruction, delivery to Lilly, or delivery to another destination of Lilly’s choosing. For the purpose of Electronic Records, “delivery” includes an electronic transmission of the Record or the delivery of the Record stored on an appropriate physical medium; and “destruction” includes the destruction of the physical medium on which a Record is stored or the complete and permanent removal of a Record from its storage medium. |
| 15.5 | If Lilly does not furnish written instructions for the disposition of its Property within a reasonable period of time after expiration, termination, or cancellation of the Agreement, ChemPartner will deliver to Lilly all of Lilly’s Property in its possession and will destroy ally residual Electronic Records that are Lilly’s Property. |
Section 16. Laboratory Samples
| 16.1 | For the purpose of this Section, “laboratory samples” means any compound, substance, or mixture of compounds or substances (and any derivative of such a compound, substance, or mixture of compounds or substances) |
| 16.1.1 | that Lilly furnishes ChemPartner for any purpose related to the Agreement (such as research compounds, reference standards, reagents, or specimens) or |
| 16.1.2 | that ChemPartner creates as a result of performing the Services or Lilly. |
| 16.2 | Lilly will be the sole owner of any and all laboratory samples. |
| 16.3 | ChemPartner will dispose of any waste generated from ChemPartner’s possession of the laboratory samples in accordance with Applicable Law and the other provisions of the Agreement. |
| 16.4 | To avoid misunderstanding, ChemPartner acknowledges that |
| 16.4.1 | All laboratory samples in the possession of ChemPartner are subject to the provisions of Section 15. |
| 16.4.2 | Information regarding the laboratory samples (including the identity, description, and properties of any laboratory samples and any information that ChemPartner acquires from its processing, study, use, or handling of the laboratory samples) is Lilly’s Confidential Information, provided it satisfies the definition of Confidential Information. |
Section 17. Lilly’s Confidential Information
| 17.1 | “Confidential Information” means any and all information, items, material or knowledge (whether or not patentable) including, without limitation, any and all suggestions, descriptions, ideas, inventions (whether or not patentable) discoveries, know-how, Trade Secrets, techniques, data, results, strategies, methods, syntheses, processes, practices, skill, experience, documents, apparatus, devices, chemical formulations, compounds, composition of matter, chemical or biological samples, assays, cell lines, vectors, screens, databases, database structures and data, analysis, methods, chemical synthesis or process data that is: (i) disclosed to ChemPartner from Lilly or any agent of Lilly (including, without limitation, acquired by ChemPartner through observation at Lilly’s facilities) during the term of this Agreement or (ii) acquired, generated, developed, discovered, evolved or derived by ChemPartner (solely or jointly with Lilly) as a result of the Services. |
“Trade Secret” shall mean any technical or business information including, without limitation, technical or non-technical data, a formula pattern, compilation, program, device, method, technique, drawing, process, financial data, or list of actual or potential customers or suppliers which: (i) derives economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality. The Parties hereby agree that in the absence of clear and convincing evidence to the contrary, that any Confidential Information shall be presumed to be a Trade Secret. ChemPartner shall not:
| 17.1.1 | disclose Lilly’s Confidential Information except as authorized below or by Lilly in writing; nor |
| 17.1.2 | use Lilly’s Confidential Information for any purpose other than the purpose of this Agreement. |
| 17.1.3 | disclose Lilly’s Trade Secrets except with only its Representatives who must need to know the information for the sole purpose of this Agreement. |
| 17.2 | ChemPartner may disclose Lilly’s Confidential Information: |
| 17.2.1 | To its Representatives and to its Affiliates, Subcontractors, and their respective Representatives who need to know the information for the purpose of this Agreement and who have contractual confidentiality obligations that prohibit any disclosure and use of Lilly’s Confidential Information under this Agreement. ChemPartner shall be responsible to Lilly for any unauthorized disclosure or use of Lilly’s Confidential Information by ChemPartner’s Representatives. |
| 17.3 | Promptly upon termination, expiration, or cancellation of this Agreement, ChemPartner will destroy all Records of Lilly’s Confidential Information in ChemPartner’s possession or control that are not Lilly’s Property. (Such Records that are Lilly’s Property are addressed in Section 15.) For the purpose of Electronic Records, “destroy” includes destroying the physical medium on which a Record is stored or completely and permanently removing a Record from its storage medium. |
| 17.4 | The restrictions on disclosure and use of Lilly’s Confidential Information survive for ten (10) years after expiration, termination, or cancellation of this Agreement or after ChemPartner returns or destroys all Records of the relevant Confidential Information in its possession or control, whichever is later. The foregoing notwithstanding, the restrictions on prohibition or use of Lilly’s Trade Secrets survive for as long as the information satisfies the definition of Trade Secret. |
Section 18. Records and Audits
