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Question: Assume that Pfizer, a large research-based pharmaceutical company, enters into a contract with a start-up biotechnology company called HealthPro and promises to:
- Grant HealthPro the exclusive rights to use Pfizer's Technology A for the life of its patent. The license gives HealthPro the exclusive right to market, distribute, and manufacture Drug B as developed using Technology A. Pfizer views the patent as functional intellectual property.
- Assign four full-time equivalent employees to perform research and development services for HealthPro in a specifically designated Pfizer lab facility. The primary objectives of these services is to receive regulatory approval to market and distribute Drug B using Technology A
- HealthPro is required to use Pfizer's lab to perform the research and development services necessary to develop Drug B using Technology A, because the expertise related to Technology is propriety to Pfizer and not available anywhere else.Required:
- What parts of this contract are separate performance obligations?
- Explain your reasoning for each obligation.
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