Plain English Meaning
It's the climb path the aircraft is expected to fly after one engine fails on takeoff, but with a built-in penalty applied so the path looks worse on paper than the airplane can actually do. Obstacles must be cleared using this penalised path, not the best-case one.
Full Definition
The vertical and horizontal path that a multi-engine aircraft is certified to fly after losing one engine during takeoff, with the demonstrated climb performance reduced by a required safety margin. The reduction (typically 0.8% to 1.0% of climb gradient depending on the number of engines) is subtracted from the gross flight path to account for real-world variability. This net path is what must clear all obstacles in the departure area by the margins specified in the regulations.
Context Anchor
Seen in instrument departure planning, planning, and discussions of takeoff .