(1) Subject to subdivision (a)(2) of this regulation, a Grantee must pay 25 percent of Net Licensing Revenue in excess of $500,000 to the State of California for deposit into the State's General Fund. The threshold amount of $500,000 (in the aggregate) shall be adjusted annually by a multiple of a fraction, the denominator of which is the Consumer Price Index, All Urban Consumers, All Items (San Francisco-Oakland-San Jose; 1982-84=100) as prepared by the Bureau of Labor Statistics of the United States Department of Labor and published for the month of December 2007, and the numerator of which is such Index published for the month in which the Grantee accepts the Grant.

(2) If funding sources other than CIRM (including those of the Grantee) contributed to the development of a CIRM-funded Patented Invention, then the return to the State of California on Net Licensing Revenue in excess of the threshold amount described in subdivision (a)(1) of this regulation shall be proportionate to the support provided by CIRM, as follows: The amount of CIRM funding of the patented invention shall be divided by the total of funding provided by all sources, and that fraction shall be multiplied by 25. That numeral is the percentage due to the State of California of Net Licensing Revenue.

(1) A Grantee must pay royalties to the State of California for deposit into the State's General Fund on Net Commercial Revenue exceeding the threshold amount described in subdivision (a)(1) of this regulation. Total payments under this subdivision (b)(1) shall not exceed three times the total amount of the CIRM Grant or Grants. The precise rate of payback in the form of a royalty shall be negotiated between the Grantee and CIRM, but in no event shall be less than two (2) percent nor more than five (5) percent of the annual Net Commercial Revenue from the invention, unless the product achieves blockbuster status, as provided in subdivisions (b)(2) and (b)(3) below.

(2) If Net Commercial Revenue from a self-commercialized product resulting from its CIRM-funded Research exceeds the milestone of $250 million per year, and then if Net Commercial Revenue exceeds the milestone of $500 million per year from a self-commercialized product resulting from its CIRM-funded Research, then upon the first occurrence of each of these milestones the Grantee will pay to the State of California a one-time blockbuster payment of three times the total amount of the Grant.

(3) In addition to any amounts due under any other provision of this regulation, where a CIRM-funded Patented Invention(s) is involved in the achievement of Net Commercial Revenue realized by Grantee equivalent to or greater than $500 million in any year, and where CIRM Grants amounting to more than $5 million (in the aggregate) were made in support of CIRM-funded Research that contributed to the creation of Net Commercial Revenue, the Grantee will pay the State of California one percent of Net Commercial Revenue in excess of $500 million for the life of the patent.