Exhibit 10.47
Text Marked By [* * *] Has Been Omitted Pursuant To A Request For Confidential Treatment And Was Filed Separately With The Securities And Exchange Commission.
THE National Institutes of Health
PATENT LICENSE AGREEMENT –EXCLUSIVE
COVER PAGE
For theNIH internal use only:
License Number: L-107-2015/0
License Application Number: A-286-2014
Serial Number(s) of Licensed Patent(s) or Patent Application(s):
Group A
| I. | U.S. Provisional Patent Application No. 61/237,889, filed August 26, 2009 entitled “Adoptive cell therapy with young T cells” (HHS Ref No. E-273-2009/0-US-01); |
| II. | U.S. Patent No. 8,383,099 issued February 26, 2013 entitled “Adoptive cell therapy with young T cells” (HHS Ref No. E-273-2009/0-US-02); |
| III. | U.S. Patent Application No. 13/742,541 filed January 16, 2013 entitled “Adoptive cell therapy with young T cells” (HHS Ref No. E-273-2009/0-US-03); |
| IV. | U.S. Provisional Patent Application No. 61/466,200 filed March 22, 2011entitled “Methods of growing tumor infiltrating lymphocytes in gas-permeable containers” (HHS Ref No. E-114-2011/0-US-01); |
| V. | PCT Application No. PCT/US2012/029744 filed March 20, 2012 entitled “Methods of growing tumor infiltrating lymphocytes in gas-permeable containers” (HHS Ref No. E-114-2011/0-PCT-02); |
| VI. | U.S. Patent Application No. 13/424,646 filed May 20, 2012 entitled “Methods of growing tumor infiltrating lymphocytes in gas-permeable containers” (HHS Ref No. E-114-2011/0-US-03); |
Group B
| I. | U.S. Provisional Patent Application No. 60/408,681, filed September 6, 2002 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/0-US-01); |
| II. | PCT Application No. PCT/US2012/029744 filed September 5, 2003 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/1-PCT-01); A-286-2014 |
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| III. | U.S. Patent No. 8,034,334 issued October 11, 2011 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/1-US-02); |
| IV. | European Patent Application No. 03794636.5 filed April 4, 2005 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/1-EP-03); |
| V. | Canadian Patent No. 2,497,552 issued May 27, 2014 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/1-CA-04); |
| VI. | Australian Patent No. 2003265948 issued September 3, 2009 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/1-AU-05); |
| VII. | U.S. Patent No. 8,287,857 issued October 16, 2012 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/1-US-06); |
Licensee: Lion Biotechnologies, Inc.
Cooperative Research and Development Agreement (CRADA) Number: C-057-2011 (NCI 02734)
Public Benefit(s):
The public will benefit from the development ofLicensed Products by theLicensee that are granted FDA approval. There is a long felt need for better treatments for metastatic melanoma. The development of novel TIL-based therapies will provide patients with new cancer treatment options in the realm of personalized medicine to support public health.
This Patent License Agreement, hereinafter referred to as the “Agreement”, consists of this Cover Page, an attachedAgreement, a Signature Page, Appendix A (List of Patent(s) or Patent Application(s)), Appendix B (Fields of Use and Territory), Appendix C (Royalties), Appendix D (Benchmarks and Performance), Appendix E (Commercial Development Plan), Appendix F (Example Royalty Report), and Appendix G (Royalty Payment Options). The Parties to thisAgreement are:
| 1) | The National Institutes of Health (“NIH”), an agency within the Department of Health and Human Services (“HHS”); and |
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| 2) | The person, corporation, or institution identified above or on the Signature Page, having offices at the address indicated on the Signature Page, hereinafter referred to as the “Licensee”. |
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TheNIH and theLicenseeagree as follows:
| 1.1 | In the course of conducting biomedical and behavioral research, theNIH or theFDAinvestigators made inventions that may have commercial applicability. |
| 1.2 | By assignment of rights fromNIH orFDA employees and other inventors,HHS, on behalf of theGovernment, owns intellectual property rights claimed in any United States or foreign patent applications or patents corresponding to the assigned inventions.HHS also owns any tangible embodiments of these inventions actually reduced to practice by theNIH or theFDA. |
| 1.3 | The Secretary ofHHS has delegated to theNIHthe authority to enter into thisAgreement for the licensing of rights to these inventions. |
| 1.4 | TheNIH desires to transfer these inventions to the private sector through commercialization licenses to facilitate the commercial development of products and processes for public use and benefit. |
| 1.5 | TheLicensee desires to acquire commercialization rights to certain of these inventions in order to develop processes, methods, or marketable products for public use and benefit. |
| 2.1 | “Affiliate(s)” means a corporation or other business entity, which directly or indirectly is controlled by or controls, or is under common control with theLicensee. For this purpose, the term "control" shall mean ownership of more than fifty percent (50%) of the voting stock or other ownership interest of the corporation or other business entity, or the power to elect or appoint more than fifty percent (50%) of the members of the governing body of the corporation or other business entity. |
| 2.2 | “Benchmarks” mean the performance milestones that are set forth in Appendix D. |
| 2.3 | “Commercial Development Plan” means the written commercialization plan attached as Appendix E. |
| 2.4 | “CRADA”means a Cooperative Research and Development Agreement. |
| 2.5 | “FDA” means the Food and Drug Administration. |
| 2.6 | “First Commercial Sale” means the initial transfer by or on behalf of theLicenseeor its sublicensees of theLicensed Productsor the initial practice of aLicensed Process by or on behalf of theLicenseeor its sublicensees in a country after obtaining regulatory approval by the U.S. Food and Drug Administration or any foreign equivalent necessary for the marketing and sale of suchLicensed Productor practice of suchLicensed Processin exchange for cash or some equivalent consideration to which value can be assigned for the purpose of determiningNet Sales. |
| 2.7 | “Government” means the Government of the United States of America. |
| 2.8 | “Licensed Fields of Use” means the fields of use identified in Appendix B. |
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| 2.9 | “Licensed Patent Rights” shall mean: |
| (a) | Patent applications (including provisional patent applications and PCT patent applications) or patents listed in Appendix A, all divisions and continuations of these applications, all patents issuing from these applications, divisions, and continuations, and any reissues, reexaminations, and extensions of these patents; |
| (b) | to the extent that the following contain one or more claims directed to the invention or inventions disclosed in 2.9(a): |
| (i) | continuations-in-part of 2.9(a); |
| (ii) | all divisions and continuations of these continuations-in-part; |
| (iii) | all patents issuing from these continuations-in-part, divisions, and continuations; |
| (iv) | priority patent application(s) of 2.9(a); and |
| (v) | any reissues, reexaminations, and extensions of these patents; |
| (c) | to the extent that the following contain one or more claims directed to the invention or inventions disclosed in 2.9(a): all counterpart foreign and U.S. patent applications and patents to 2.9(a) and 2.9(b), including those listed in Appendix A; and |
| (d) | Licensed Patent Rights shallnot include 2.9(b) or 2.9(c) to the extent that they contain one or more claims directed to new matter which is not the subject matter disclosed in 2.9(a). |
| 2.10 | “Licensed Processes” means processes which, in the course of being practiced, would be within the scope of one or more claims of theLicensed Patent Rights that have not been held unpatentable, invalid or unenforceable by an unappealed or unappealable judgment of a court of competent jurisdiction. |
| 2.11 | “Licensed Products” means tangible materials which, in the course of manufacture, use, sale, or importation, would be within the scope of one or more claims of theLicensed Patent Rights that have not been held unpatentable, invalid or unenforceable by an unappealed or unappealable judgment of a court of competent jurisdiction. |
| 2.12 | “Licensed Territory” means the geographical area identified in Appendix B. |
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| 2.13 | “Net Sales” means the total gross receipts received byLicensee for sales ofLicensed Products or practice ofLicensed Processes by or on behalf of theLicensee or its sublicensees, and from leasing, renting, or otherwise making theLicensed Products available to others for consideration without sale or other dispositions, whether invoiced or not, less returns and allowances, packing costs, insurance costs, freight out, taxes or excise duties imposed on the transaction (if separately invoiced), and wholesaler and cash discounts in amounts customary in the trade to the extent actually granted. No deductions shall be made for commissions paid to individuals, whether they are with independent sales agencies or regularly employed by theLicensee, or sublicensees, and on its payroll, or for the cost of collections. “Net Sales” shall not include the supply ofLicensed Products or use ofLicensed Processes, for use in pre-clinical or clinical studies, or for process development, quality control or assurance, storage as safety stock, transfer as a charitable donation or any other transaction for which no gross revenue is received. |
| 2.14 | “Practical Application” means to manufacture in the case of a composition or product, to practice in the case of a process or method, or to operate in the case of a machine or system; and in each case, under these conditions as to establish that the invention is being utilized and that its benefits are to the extent permitted by law orGovernmentregulations available to the public on reasonable terms not inconsistent with the terms applicable to similar products or processes and taking into account the efficacy and safety profile of theLicensed Product or the utility of theLicensed Processand other relevant commercial, scientific, technical and other factors. |
| 2.15 | “Research License” means a nontransferable, nonexclusive license to make and to use theLicensed Products or theLicensed Processes as defined by theLicensed Patent Rights for purposes of research only and not for purposes of commercial sale, manufacture or distribution or in lieu of purchase. |
| 2.16 | “Commercially Reasonable Efforts” means, with respect to the efforts to be expended byLicenseewith respect to any objective, the reasonable, diligent, good faith efforts to accomplish such objective asLicensee would normally use to accomplish a similar objective under similar circumstances. It is understood and agreed that with respect to the research, development and sale ofLicensed Products orLicensed Process(es)byLicensee, such efforts shall be substantially equivalent to those efforts and resources commonly used byLicensee for products owned by it or to which it has rights, which product is at a similar stage in its development or product life cycle.Commercially Reasonable Efforts shall be determined on a market-by-market basis, and it is anticipated that the level of effort will be different for different markets, and will change over time, reflecting changes in the status of theLicensed Products orLicensed Process(es)and the market(s) involved. |
| 3.1 | TheNIH hereby grants and theLicensee accepts, subject to the terms and conditions of thisAgreement, an exclusive license to Group A of theLicensed Patent Rightsand a non-exclusive license to Group B of theLicensed Patent Rights in theLicensed Territory to make and have made, to use and have used, to sell and have sold, to offer to sell, and to import anyLicensed Products in theLicensed Fields of Use and to practice and have practiced anyLicensed Process(es) in suchLicensed Fields of Use. |
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| 3.2 | TheNIH hereby grants and theLicensee accepts, subject to the terms and conditions of thisAgreement, a non-exclusive license to Groups A and B of theLicensed Patent Rights in theLicensed Territory to make and have made, to use and have used, to sell and have sold, to offer to sell, and to import anyLicensed Productsin theLicensed Fields of Use (b-d) in Appendix B and to practice and have practiced anyLicensed Process(es) in suchLicensed Fields of Use. |
| 3.3 | ThisAgreement confers no license or rights by implication, estoppel, or otherwise under any patent applications or patents of theNIH other than theLicensed Patent Rights regardless of whether these patents are dominant or subordinate to theLicensed Patent Rights. |
| 4.1 | Upon written approval, which shall include prior review of any sublicense agreement by theNIH and which shall not be unreasonably withheld or delayed, theLicensee may enter into sublicensing agreements under theLicensed Patent Rights. |
| 4.2 | TheLicensee agrees that any sublicenses shall provide that the obligations to theNIH of Paragraphs 5.1-5.4, 8.1, 10.1, 10.2, 12.5, and 13.8-13.10 of thisAgreementshall be binding upon the sublicensee as if it were a party to thisAgreement. TheLicensee further agrees to attach copies of these Paragraphs to all sublicense agreements. |
| 4.3 | Any sublicenses granted by theLicensee shall provide for the termination of the sublicense, or the conversion to a license directly between the sublicensees and theNIH, at the option of the sublicensee, upon termination of thisAgreement under Article 13. This conversion is subject to theNIHapproval, which will not be unreasonably denied or delayed. and contingent upon acceptance by the sublicensee of the remaining provisions of thisAgreement. |
| 4.4 | TheLicensee agrees to forward to theNIH a complete copy of each fully executed sublicense agreement postmarked within thirty (30) days of the execution of the agreement. To the extent permitted by law, theNIH agrees to maintain each sublicense agreement in confidence. |
| 5. | STATUTORY AND NIH REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS |
| 5.1 | (a) theNIH reserves on behalf of theGovernment an irrevocable, nonexclusive, nontransferable, royalty-free license for the practice of all inventions licensed under theLicensed Patent Rights throughout the world by or on behalf of theGovernmentand on behalf of any foreign government or international organization pursuant to any existing or future treaty or agreement to which theGovernment is a signatory. Prior to theFirst Commercial Sale, theLicenseeagrees to provide theNIH with reasonable quantities of theLicensed Products or materials made through theLicensed Processes forNIH research use. Given the nature of the envisionedLicensed Products as personalized autologous cell therapy products, if anyLicensed Products and/or materials made through theLicensed Processesare not available in reasonable quantities forNIH research use, they shall not be subject to the foregoing obligation; and |
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| (b) | in the event that theLicensed Patent Rights are Subject Inventions made underCRADA, theLicensee grants to theGovernment, pursuant to15 U.S.C §3710a(b)(1)(A),a nonexclusive, nontransferable, irrevocable, paid-up license to practice theLicensed Patent Rightsor have theLicensed Patent Rights practiced throughout the world by or on behalf of theGovernment. In the exercise of this license, theGovernment shall not publicly disclose trade secrets or commercial or financial information that is privileged or confidential within the meaning of5 U.S.C. §552(b)(4)or which would be considered as such if it had been obtained from a non-Federal party. Prior to theFirst Commercial Sale, theLicensee agrees to provide theNIH with reasonable quantities of theLicensed Products or materials made through theLicensed ProcessesforNIH research use. Given the nature of the envisionedLicensed Products as personalized autologous cell therapy products, if anyLicensed Products and/or materials made through theLicensed Processesare not available in reasonable quantities forNIH research use, they shall not be subject to the foregoing obligation. |
| 5.2 | TheLicensee agrees that products used or sold in the United States embodying theLicensed Products or produced through use of theLicensed Processes shall be manufactured substantially in the United States, unless a written waiver is obtained in advance from theNIH. |
| 5.3 | TheLicensee acknowledges that theNIH may enter into futureCRADAs under theFederal Technology Transfer Act of 1986 that relate to the subject matter of thisAgreement. TheLicensee agrees not to unreasonably deny requests for aResearch License from future collaborators with theNIH when acquiring these rights is necessary in order to make aCRADA project feasible. TheLicenseemay request an opportunity to join as a party to the proposedCRADA. |
| 5.4 | (a) in addition to the reserved license of Paragraph 5.1, theNIH reserves the right to grantResearch Licenses directly or to require theLicensee to grantResearch Licenses on reasonable terms. The purpose of theseResearch Licensesis to encourage basic research, whether conducted at an academic or corporate facility. In order to safeguard theLicensed Patent Rights, however, theNIHshall consult with theLicensee before granting to commercial entities aResearch License or providing to them research samples of materials made through theLicensed Processes; and |
| (b) | in exceptional circumstances, and in the event that theLicensed Patent Rights are Subject Inventions made under aCRADA, theGovernment, pursuant to15 U.S.C. §3710a(b)(1)(B), retains the right to require theLicensee to grant to a responsible applicant a nonexclusive, partially exclusive, or exclusive sublicense to use theLicensed Patent Rights in theLicensed Field of Useon terms that are reasonable under the circumstances, or if theLicensee fails to grant this license, theGovernmentretains the right to grant the license itself. The exercise of these rights by theGovernment shall only be in exceptional circumstances and only if theGovernmentdetermines: |
| (i) | the action is necessary to meet health or safety needs that are not reasonably satisfied by theLicensee; |
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| (ii) | the action is necessary to meet requirements for public use specified by Federal regulations, and these requirements are not reasonably satisfied by theLicensee; or |
| (iii) | theLicenseehas failed to comply with an agreement containing provisions described in15 U.S.C. §3710a(c)(4)(B); and |
| (c) | the determination made by theGovernment under this Paragraph 5.4 is subject to administrative appeal and judicial review under35 U.S.C. §203(b). |
| 6. | ROYALTIES AND REIMBURSEMENT |
| 6.1 | TheLicensee agrees to pay theNIH a noncreditable, nonrefundable license issue royalty as set forth in Appendix C. |
| 6.2 | TheLicensee agrees to pay theNIH a nonrefundable minimum annual royalty as set forth in Appendix C. |
| 6.3 | TheLicensee agrees to pay theNIH earned royalties as set forth in Appendix C. |
| 6.4 | TheLicensee agrees to pay theNIH benchmark royalties as set forth in Appendix C. |
| 6.5 | TheLicensee agrees to pay theNIH sublicensing royalties as set forth in Appendix C. |
| 6.6 | A patent or patent application licensed under thisAgreement shall cease to fall within theLicensed Patent Rightsfor the purpose of computing earned royalty payments in any given country on the earliest of the dates that: |
| (a) | the application has been abandoned and not continued; |
| (b) | the patent expires or irrevocably lapses, or |
| (c) | the patent has been held to be invalid or unenforceable by an unappealed or unappealable decision of a court of competent jurisdiction or administrative agency. |
| 6.7 | No multiple royalties shall be payable because anyLicensed Products orLicensed Processes are covered by more than one of theLicensed Patent Rights. |
| 6.8 | On sales of theLicensed Productsby theLicensee to sublicensees or on sales made in other than an arms-length transaction, the value of theNet Sales attributed under this Article 6 to this transaction shall be that which would have been received in an arms-length transaction, based on sales of like quantity and quality products on or about the time of this transaction. |
| 6.9 | With regard to unreimbursed expenses associated with the preparation, filing, prosecution, and maintenance of all patent applications and patents to the extent included within theLicensed Patent Rightsand paid by theNIH prior to the effective date of thisAgreement, theLicenseeshall pay theNIH, as an additional royalty, within sixty (60) days of theNIH’s submission of a statement and request for payment to theLicensee, an amount equivalent to these unreimbursed expenses previously paid by theNIH. |
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| 6.10 | With regard to unreimbursed expenses associated with the preparation, filing, prosecution, and maintenance of all patent applications and patents to the extent included within theLicensed Patent Rights and paid by theNIH on or after the effective date of thisAgreement, theNIH, at its sole option, may require theLicensee: |
| (a) | to pay theNIH on an annual basis, within sixty (60) days of theNIH’s submission of a statement and request for payment, a royalty amount equivalent to these unreimbursed expenses paid during the previous calendar year(s) provided, however, that if theNIH grants a commercialization license under theLicensed Patent Rights to one or more third parties, then theLicensee shall pay theNIH a pro-rated portion of such unreimbursed expenses calculated by dividing the total patent costs paid during the previous calendar year(s) by the number of commercialization licensees of record whose licenses have aLicensed Field of Use which includes the development of therapeutic or diagnostic products and falls within the scope of theLicensed Patent Rights as of the date of this statement. For avoidance of doubt, if theLicensee is the only commercialization licensee of record whose license has aLicensed Field of Use which includes the development of therapeutic or diagnostic products and falls within the scope of theLicensed Patent Rights as of the date of this statement, theLicensee shall payNIH a royalty amount equivalent to one hundred percent (100%) of these unreimbursed expenses paid during the previous calendar year(s); |
| (b) | to pay these unreimbursed expenses directly to the law firm employed by theNIH to handle these functions. However, in this event, theNIH and not theLicensee shall be the client of the law firm; or |
| (c) | in limited circumstances, theLicensee may be given the right to assume responsibility for the preparation, filing, prosecution, or maintenance of any patent application or patent included with theLicensed Patent Rights. In that event, theLicenseeshall directly pay the attorneys or agents engaged to prepare, file, prosecute, or maintain these patent applications or patents and shall provide theNIH with copies of each invoice associated with these services as well as documentation that these invoices have been paid. |
| 6.11 | TheNIH agrees, upon written request, to provide theLicensee with summaries of patent prosecution invoices for which theNIH has requested payment from theLicenseeunder Paragraphs 6.9 and 6.10. TheLicensee agrees that all information provided by theNIH related to patent prosecution costs shall be treated as confidential commercial information and shall not be released to a third party (other than itsAffiliates) except as required by law or a court of competent jurisdiction. |
| 6.12 | TheLicensee may elect to surrender its rights in any country of theLicensed Territory under any of theLicensed Patent Rights upon ninety (90) days written notice to theNIH and owe no payment obligation under Paragraph 6.10 for patent-related expenses incurred in that country after ninety (90) days of the effective date of the written notice. |
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| 7. | | PATENT FILING, PROSECUTION, AND MAINTENANCE |
| 7.1 | Except as otherwise provided in this Article 7, theNIHagrees to take responsibility for, but to consult with, theLicenseein the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in theLicensed Patent Rights and shall furnish copies of relevant patent-related documents to theLicensee. |
| 7.2 | Upon theNIH’s written request, theLicenseeshall assume the responsibility for the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in theLicensed Patent Rights and shall, on an ongoing basis, promptly furnish copies of all patent-related documents to theNIH. In this event, theLicensee shall, subject to the prior approval of theNIH, select registered patent attorneys or patent agents to provide these services on behalf of theLicenseeand theNIH. TheNIH shall provide appropriate powers of attorney and other documents necessary to undertake this action to the patent attorneys or patent agents providing these services. TheLicensee and its attorneys or agents shall consult with theNIH in all aspects of the preparation, filing, prosecution and maintenance of patent applications and patents included within theLicensed Patent Rights and shall provide theNIH sufficient opportunity to comment on any document that theLicensee intends to file or to cause to be filed with the relevant intellectual property or patent office. |
| 7.3 | | At any time, afterLicensee has assumed responsibility for the preparation, filing, prosecution, and maintenance ofLicensed Patent Rights as provided in Section 7.2, theNIHmay provide theLicensee with written notice that theNIHwishes to re-assume control of the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in theLicensed Patent Rights. If theNIH elects to reassume these responsibilities, theLicenseeagrees to cooperate fully with theNIH, its attorneys, and agents in the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in theLicensed Patent Rights and to provide theNIH with complete copies of any and all documents or other materials inLicensee’s possession or controlthat theNIH deems necessary to undertake such responsibilities. TheLicensee shall be responsible for all costs associated with transferring patent prosecution responsibilities to an attorney or agent of theNIH’s choice. |
| 7.4 | Each party shall promptly inform the other as to all material matters that come to its attention that may affect the preparation, filing, prosecution, or maintenance of theLicensed Patent Rights and permit each other to provide comments and suggestions with respect to the preparation, filing, prosecution, and maintenance of theLicensed Patent Rights, which comments and suggestions shall be considered by the other party. |
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| 8.1 | TheLicensee agrees to keep accurate and correct records of theLicensed Productsmade, used, sold, or imported and theLicensed Processes practiced under thisAgreementappropriate to determine the amount of royalties due theNIH. These records shall be retained for at least five (5) years following a given reporting period and shall be available during normal business hours for inspection, at the expense of theNIH, by an accountant or other designated auditor selected by theNIHfor the sole purpose of verifying reports and royalty payments hereunder. Licensee may require such auditor or accountant to enter into a confidentiality agreement with Licensee containing reasonable terms and conditions for the protection of Licensee’s non-public and proprietary information. The accountant or auditor shall only disclose to theNIH information relating to the accuracy of reports and royalty payments made under thisAgreement. If an inspection shows an underreporting or underpayment in excess of five percent (5%) for any twelve (12) month period, then theLicenseeshall reimburse theNIH for the cost of the inspection at the time theLicenseepays the unreported royalties, including any additional royalties as required by Paragraph 9.8. All royalty payments required under this Paragraph shall be due within sixty (60) days of the date theNIHprovides to theLicenseenotice of the payment due. |
| 9. | | REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS |
| 9.1 | Prior to signing thisAgreement, theLicenseehas provided theNIH with theCommercial Development Plan in Appendix E, under which theLicensee intends to useCommercially Reasonable Efforts to bringLicensed Product(s)orLicensed Process(es)within the subject matter of theLicensed Patent Rights to the point ofPractical Application. ThisCommercial Development Planis hereby incorporated by reference into thisAgreement. Based on this plan, performanceBenchmarks are determined as specified in Appendix D. |
| 9.2 | TheLicensee shall provide written annual reports on its product development progress or efforts to commercialize under theCommercial Development Plan for each of theLicensed Fields of Use within sixty (60) days after December 31 of each calendar year. These progress reports shall include, but not be limited to: progress on research and development, status of applications for regulatory approvals, manufacturing, sublicensing, marketing, importing, and sales during the preceding calendar year, as well as, plans for the present calendar year. TheNIHalso encourages these reports to include information on any of theLicensee's public service activities that relate to theLicensed Patent Rights. If reported progress differs from that projected in theCommercial Development Plan andBenchmarks, theLicensee shall explain the reasons for these differences. In the annual report, theLicenseemay propose amendments to theCommercial Development Plan, acceptance of which by theNIH may not be denied unreasonably. TheLicensee agrees to provide any additional information reasonably required by theNIH to evaluate theLicensee's performance under thisAgreement. TheLicenseemay amend theBenchmarks at any time upon written approval by theNIH. TheNIH shall not unreasonably withhold approval of any request of theLicenseeto extend the time periods of this schedule if the request is supported by a reasonable showing by theLicensee of diligence in its performance under theCommercial Development Plan and toward bringing theLicensed Products to the point ofPractical Application as defined in37 C.F.R. §404.3(d). TheLicensee shall amend theCommercial Development Plan andBenchmarks at the request of theNIH to address anyLicensed Fields of Use not specifically addressed in the plan originally submitted. |
| 9.3 | TheLicensee shall report to theNIH the dates for achievingBenchmarks specified in Appendix D and theFirst Commercial Sale in each country in theLicensed Territory within thirty (30) days of such occurrences. |
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| 9.4 | Following theFirst Commercial Sale,theLicensee shall submit to theNIH, within sixty (60) days after each calendar half-year ending June 30 and December 31, a royalty report, as described in the example in Appendix F, setting forth for the preceding half-year period the amount of theLicensed Productssold orLicensed Processes practiced by or on behalf of theLicenseein each country within theLicensed Territory, theNet Sales, and the amount of royalty accordingly due. With each royalty report, theLicensee shall submit payment of earned royalties due. If no earned royalties are due to theNIHfor any reporting period, the written report shall so state. The royalty report shall be certified as correct by an authorized officer of theLicenseeand shall include a detailed listing of all deductions made under Paragraph 2.13 to determineNet Sales made under Article 6 to determine royalties due. The royalty report shall also identify the site of manufacture for theLicensed Product(s)sold in the United States. |
| 9.5 | TheLicensee agrees to forward semi-annually to theNIH a copy of these reports received by theLicensee from its sublicensees during the preceding half-year period as shall be pertinent to a royalty accounting to theNIH by theLicensee for activities under the sublicense. |
| 9.6 | Royalties due under Article 6 shall be paid in U.S. dollars and payment options are listed in Appendix G. For conversion of foreign currency to U.S. dollars, the conversion rate shall be the New York foreign exchange rate quoted inThe Wall Street Journal on the day preceding the day that the payment is due. Any loss of exchange, value, taxes, or other expenses incurred in the transfer or conversion to U.S. dollars shall be paid entirely by theLicensee. The royalty report required by Paragraph 9.4 shall be mailed to theNIH at its address forAgreementNotices indicated on the Signature Page. |
| 9.7 | TheLicensee shall be solely responsible for determining if any tax on royalty income is owed outside the United States and shall pay the tax and be responsible for all filings with appropriate agencies of foreign governments. As reasonably requested byLicensee,NIH shall cooperate withLicensee in applying for any valid exemption or obtaining any valid refund of such taxes paid byLicensee. |
| 9.8 | Additional royalties may be assessed by theNIH on any payment that is more than ninety (90) days overdue at the rate of[* * *]per month. This[* * *] per month rate may be applied retroactively from the original due date until the date of receipt by theNIH of the overdue payment and additional royalties. The payment of any additional royalties shall not prevent theNIH from exercising any other rights it may have as a consequence of the lateness of any payment. |
| 9.9 | All plans and reports required by this Article 9 and marked “confidential” by theLicensee shall, to the extent permitted by law, be treated by theNIH as commercial and financial information obtained from a person and as privileged and confidential, and any proposed disclosure of these records by theNIH under the Freedom of Information Act (FOIA),5 U.S.C. §552 shall be subject to the predisclosure notification requirements of45 C.F.R. §5.65(d). |
| 10.1 | TheLicensee shall use itsCommercially Reasonable Efforts to bring theLicensed Products and theLicensed Processes toPractical Application. “Reasonable commercial efforts” for the purposes of this provision shall include reasonable adherence to theCommercial Development Plan in Appendix E and performance of theBenchmarksin Appendix D in each case as either may be amended from time to time. The efforts of a sublicensee or anAffiliate ofLicensee shall be considered the efforts of theLicensee. |
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| 10.2 | Upon theFirst Commercial Salein the United States, until the expiration or termination of thisAgreement, theLicenseeshall use itsCommercially Reasonable Effortsto make theLicensed Products and theLicensed Processes reasonably accessible to the United States public. |
| 10.3 | TheLicensee agrees, after itsFirst Commercial Sale,to make reasonable quantities of theLicensed Products or materials produced through the use of theLicensed Processeswithin theLicensed Fields of Useavailable to patient assistance programs. |
| 10.4 | TheLicenseeagrees, after itsFirst Commercial Saleand as part of its marketing and product promotion, to develop educational materials (e.g., brochures, website, etc.) directed to patients and physicians detailing theLicensed Productsor medical aspects of the prophylactic and therapeutic uses of theLicensed Products. |
| 10.5 | TheLicensee agrees to supply, to the Mailing Address forAgreementNotices indicated on the Signature Page, the Office of Technology Transfer,NIH with inert samples of theLicensed Products or theLicensed Processesor their packaging for educational and display purposes only. |
| 11. | | INFRINGEMENT AND PATENT ENFORCEMENT |
| 11.1 | TheNIH and theLicensee agree to notify each other promptly of each infringement or possible infringement of theLicensed Patent Rights, as well as, any facts which may affect the validity, scope, or enforceability of theLicensed Patent Rightsof which either party becomes aware. |
| 11.2 | Pursuant to thisAgreement and the provisions of35 U.S.C. Chapter 29, theLicensee may: |
| (a) | bring suit in its own name, at its own expense, and on its own behalf for infringement of presumably valid claims in theLicensed Patent Rights; |
| (b) | in any suit, enjoin infringement and collect for its use, damages, profits, and awards of whatever nature recoverable for the infringement; or |
| (c) | settle any claim or suit for infringement of theLicensed Patent Rights provided, however, that theNIH and appropriateGovernment authorities shall have the first right to take such actions; and |
| (d) | if theLicensee desires to initiate a suit for patent infringement, theLicensee shall notify theNIH in writing. If theNIH does not notify theLicensee of its intent to pursue legal action within ninety (90) days, theLicenseeshall be free to initiate suit. TheNIH shall have a continuing right to intervene in the suit. TheLicensee shall take no action to compel theGovernment either to initiate or to join in any suit for patent infringement. TheLicenseemay request theGovernment to initiate or join in any suit if necessary to avoid dismissal of the suit. Should theGovernment be made a party to any suit, theLicensee shall reimburse theGovernment for any costs, expenses, or fees which theGovernment incurs as a result of the motion or other action, including all costs incurred by theGovernmentin opposing the motion or other action. In all cases, theLicensee agrees to keep theNIH reasonably apprised of the status and progress of any litigation. Before theLicensee commences an infringement action, theLicensee shall notify theNIH and give careful consideration to the views of theNIH and to any potential effects of the litigation on the public health in deciding whether to bring suit. |
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| 11.3 | In the event that a declaratory judgment action alleging invalidity or non-infringement of any of theLicensed Patent Rights shall be brought against theLicensee or raised by way of counterclaim or affirmative defense in an infringement suit brought by theLicensee under Paragraph 11.2, pursuant to thisAgreement and the provisions of35 U.S.C. Part 29 or other statutes, theLicensee may: |
| (a) | defend the suit in its own name, at its own expense, and on its own behalf for presumably valid claims in theLicensed Patent Rights; |
| (b) | in any suit, ultimately to enjoin infringement and to collect for its use, damages, profits, and awards of whatever nature recoverable for the infringement; and |
| (c) | settle any claim or suit for declaratory judgment involving theLicensed Patent Rights-provided, however, that theNIH and appropriateGovernment authorities shall have the first right to take these actions and shall have a continuing right to intervene in the suit; and |
| (d) | if theNIH does not notify theLicensee of its intent to respond to the legal action within a reasonable time, theLicensee shall be free to do so. TheLicenseeshall take no action to compel theGovernment either to initiate or to join in any declaratory judgment action. TheLicensee may request theGovernment to initiate or to join any suit if necessary to avoid dismissal of the suit. Should theGovernment be made a party to any suit by motion or any other action of theLicensee, theLicenseeshall reimburse theGovernment for any costs, expenses, or fees, which theGovernment incurs as a result of the motion or other action. If theLicensee elects not to defend against the declaratory judgment action, theNIH, at its option, may do so at its own expense. In all cases, theLicensee agrees to keep theNIH reasonably apprised of the status and progress of any litigation. Before theLicensee commences an infringement action, theLicensee shall notify theNIH and give careful consideration to the views of theNIHand to any potential effects of the litigation on the public health in deciding whether to bring suit. |
| 11.4 | In any action under Paragraphs 11.2 or 11.3 the expenses including costs, fees, attorney fees, and disbursements, shall be paid by theLicensee. The value of any recovery made by theLicensee through court judgment or settlement actually collected shall first be applied byLicensee to reimburse it for all of its costs and expenses (including attorneys’ fees, expert witness fees, and any reimbursement payments made toNIH or theGovernment) and the balanceshall be treated asNet Sales and subject to earned royalties as provided in Appendix C when and as collected. |
| 11.5 | TheNIH shall cooperate fully with theLicenseein connection with any action under Paragraphs 11.2 or 11.3. TheNIHagrees promptly to provide access to all necessary documents and to render reasonable assistance in response to a request by theLicensee. |
| 12. | | NEGATION OF WARRANTIES AND INDEMNIFICATION |
| 12.1 | TheNIH offers no warranties other than those specified in Article 1. |
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| 12.2 | TheNIH does not warrant the validity of theLicensed Patent Rights and makes no representations whatsoever with regard to the scope of theLicensed Patent Rights, or that theLicensed Patent Rights may be exploited without infringing other patents or other intellectual property rights of third parties. |
| 12.3 | THENIH MAKES NO WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER DEFINED BY THE CLAIMS OF THELICENSED PATENT RIGHTSOR TANGIBLE MATERIALS RELATED THERETO. |
| 12.4 | TheNIH does not represent that it shall commence legal actions against third parties infringing theLicensed Patent Rights. |
| 12.5 | TheLicensee shall indemnify and hold theNIH, its employees, students, fellows, agents, and consultants harmless from and against all liability, demands, damages, expenses, and losses, including but not limited to death, personal injury, illness, or property damage in connection with or arising out of: |
| (a) | the use by or on behalf of theLicensee, its sublicensees, directors, employees, or third parties of anyLicensed Patent Rights; or |
| (b) | the design, manufacture, distribution, or use of anyLicensed Products,Licensed Processes or materials by theLicensee, or other products or processes developed in connection with or arising out of theLicensed Patent Rights. |
| 12.6 | TheLicensee agrees to maintain a liability insurance program consistent with sound business practice. |
| 13. | | TERM, TERMINATION, AND MODIFICATION OF RIGHTS |
| 13.1 | ThisAgreement is effective when signed by all parties, unless the provisions of Paragraph 14.16 are not fulfilled, and shall extend to the expiration of the last to expire of theLicensed Patent Rights unless sooner terminated as provided in this Article 13. |
| 13.2 | In the event that theLicensee is in default in the performance of any material obligations under thisAgreement, including but not limited to the obligations listed in Paragraph 13.5, and if the default has not been remedied within ninety (90) days after the date of notice in writing of the default, or if not reasonably capable of remedy within such period,Licensee has not taken substantial steps to remedy the alleged default within such ninety (90) day period, theNIH may terminate thisAgreement by written notice and pursue outstanding royalties owed through procedures provided by theFederal Debt Collection Act. |
| 13.3 | In the event that theLicensee (i) becomes insolvent, (ii) files a petition in bankruptcy, or has such a petition filed against it and, in either case, suchpetition is not dismissed within sixty (60) days, theLicensee shall immediately notify theNIH in writing. |
| 13.4 | TheLicensee shall have a unilateral right to terminate thisAgreement or any licenses in any country or territory by giving theNIH sixty (60) days written notice to that effect. |
| 13.5 | TheNIH shall specifically have the right to terminate or modify, at its option, thisAgreement, if theNIH determines that theLicensee: |
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| (a) | is not executing theCommercial Development Plan submitted with its request for a license and theLicensee cannot otherwise demonstrate to theNIH’s satisfaction that theLicensee has taken, or can be expected to take within a reasonable time, effective steps to achieve thePractical Application of theLicensed Products or theLicensed Processes; |
| (b) | has not achieved and is not reasonably likely to achieve theBenchmarks as may be modified under Paragraph 9.2; |
| (c) | has willfully made a material false statement of, or willfully omitted a material fact in the license application or in any report required by thisAgreement; |
| (d) | has committed a material breach of a covenant or agreement contained in thisAgreement; |
| (e) | is not keeping theLicensed Products or theLicensed Processes within the scope of theLicensed Fields of Use reasonably accessible to the public after commercial use commences; |
| (f) | cannot reasonably satisfy unmet health and safety needs; or |
| (g) | cannot reasonably justify a failure to comply with the domestic production requirement of Paragraph 5.2 unless waived. |
| 13.6 | In making the determination referenced in Paragraph 13.5, theNIH shall take into account the normal course of such commercial development programs conducted with sound and reasonable business practices and judgment and the annual reports submitted by theLicensee under Paragraph 9.2. Prior to invoking termination or modification of thisAgreement under Paragraph 13.5, theNIH shall give written notice to theLicenseeproviding theLicensee specific notice of, and a ninety (90) day opportunity to respond to, theNIH’sconcerns as to the items referenced in 13.5(a)-13.5(g). If theLicenseefails to alleviate theNIH’s reasonable concerns as to the items referenced in 13.5(a)-13.5(g) or fails to initiate corrective action to theNIH’s reasonable satisfaction, theNIH may terminate thisAgreement. |
| 13.7 | When the public health and safety so require, and after written notice to theLicensee providing theLicensee a sixty (60) day opportunity to respond, theNIH shall have the right to require theLicensee to grant sublicenses to responsible applicants, on commercially reasonable terms, in anyLicensed Fields of Use under theLicensed Patent Rights, unless theLicensee can reasonably demonstrate that the granting of the sublicense would not materially increase the availability to the public of the subject matter of theLicensed Patent Rights. TheNIH shall not require the granting of a sublicense unless the responsible applicant has first negotiated in good faith with theLicenseefor a sublicense on commercially reasonable terms and conditions. |
| 13.8 | TheNIH reserves the right according to35 U.S.C. §209(d)(3) to terminate or modify thisAgreement if it is determined that this action is necessary to meet the requirements for public use specified by federal regulations issued after the date of the license and these requirements are not reasonably satisfied by theLicensee. |
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| 13.9 | Within thirty (30) days of receipt of written notice of theNIH's unilateral decision to modify or terminate thisAgreement, theLicensee may, consistent with the provisions of37 C.F.R. §404.11, appeal the decision by written submission to the designatedNIH official. The decision of the designatedNIH official shall be the final agency decision. TheLicensee may thereafter exercise any and all administrative or judicial remedies that may be available. |
| 13.10 | Within ninety (90) days of expiration or termination of thisAgreement under this Article 13, a final report shall be submitted by theLicensee. Any royalty payments, including those incurred but not yet paid (such as the full minimum annual royalty), and those related to patent expenses, due to theNIHshall become immediately due and payable upon termination or expiration. If terminated under this Article 13, sublicensees may elect to convert their sublicenses to direct licenses with theNIH pursuant to Paragraph 4.3. Unless otherwise specifically provided for under thisAgreement, upon termination or expiration of thisAgreement, theLicensee shall return allLicensed Products or other materials included within theLicensed Patent Rights to theNIH or provide theNIH with certification of the destruction thereof. TheLicensee may not be granted additionalNIH licenses if the final reporting requirement is not fulfilled. |
| 14.1 | Neither party may waive or release any of its rights or interests in thisAgreement except in writing. The failure of either party to assert a right hereunder or to insist upon compliance with any term or condition of thisAgreement shall not constitute a waiver of that right by that party or excuse a similar subsequent failure to perform any of these terms or conditions by the that party. |
| 14.2 | ThisAgreement constitutes the entire agreement between the parties relating to the subject matter of theLicensed Patent Rights, theLicensed Productsand theLicensed Processes, and all prior negotiations, representations, agreements, and understandings are merged into, extinguished by, and completely expressed by thisAgreement. |
| 14.3 | The provisions of thisAgreement are severable, and in the event that any provision of thisAgreement shall be determined to be invalid or unenforceable under any controlling body of law, this determination shall not in any way affect the validity or enforceability of the remaining provisions of thisAgreement. |
| 14.4 | If either party desires a modification to thisAgreement, the parties shall, upon reasonable notice of the proposed modification by the party desiring the change, confer in good faith to determine the desirability of the modification. No modification shall be effective until a written amendment is signed by the signatories to thisAgreement or their designees. |
| 14.5 | The construction, validity, performance, and effect of thisAgreement shall be governed by Federal law as applied by the Federal courts in the District of Columbia. |
| 14.6 | AllAgreement notices required or permitted by thisAgreement shall be given by prepaid, first class, registered or certified mail or by an express/overnight delivery service provided by a commercial carrier, properly addressed to the other party at the address designated on the following Signature Page, or to another address as may be designated in writing by the other party.Agreement notices shall be considered timely if the notices are received on or before the established deadline date or sent on or before the deadline date as verifiable by U.S. Postal Service postmark or dated receipt from a commercial carrier. Parties should request a legibly dated U.S. Postal Service postmark or obtain a dated receipt from a commercial carrier or the U.S. Postal Service. Private metered postmarks shall not be acceptable as proof of timely mailing. |
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| 14.7 | ThisAgreement shall not be assigned or otherwise transferred (including any transfer by legal process or by operation of law, and any transfer in bankruptcy or insolvency, or in any other compulsory procedure or order of court) except to theLicensee’s Affiliate(s) without the prior written consent of theNIH. The parties agree that the identity of the parties is material to the formation of thisAgreementand that the obligations under thisAgreement are nondelegable. In the event thattheNIHapproves a proposed assignment,theLicensee shall pay theNIH, as an additional royalty, one percent (1%) of the fair market value of any consideration received for any assignment of thisAgreement within sixty (60) days of the assignment. |
| 14.8 | TheLicensee agrees in its use of anyNIH-supplied biological materials that are supplied under this Agreement to comply with all applicable statutes, regulations, and guidelines, includingNIH andHHS regulations and guidelines. TheLicensee agrees not to use such biological materials for research involving human subjects or clinical trials in the United States without complying with21 C.F.R. Part 50 and45 C.F.R. Part 46. TheLicensee agrees not to use such biological materials for research involving human subjects or clinical trials outside of the United States without notifying theNIH, in writing, of the research or trials and complying with the applicable regulations of the appropriate national control authorities. Written notification to theNIH of research involving such biological materials in human subjects or clinical trials outside of the United States shall be given no later than sixty (60) days prior to commencement of the research or trials. |
| 14.9 | TheLicensee acknowledges that it is subject to and agrees to abide by the United States laws and regulations (including theExport Administration Act of 1979andArms Export Control Act) controlling the export of technical data, computer software, laboratory prototypes, biological material, and other commodities. The transfer of these items may require a license from the appropriate agency of the U.S.Government or written assurances by theLicensee that it shall not export these items to certain foreign countries without prior approval of this agency. TheNIH neither represents that a license is or is not required or that, if required, it shall be issued. |
| 14.10 | TheLicensee agrees to mark theLicensed Productsor their packaging sold in the United States with all applicable U.S. patent numbers and similarly to indicate “Patent Pending” status. All theLicensed Products manufactured in, shipped to, or sold in other countries shall be marked in a manner to preserve theNIH’s patent rights in those countries. |
| 14.11 | By entering into thisAgreement, theNIH does not directly or indirectly endorse any product or service provided, or to be provided, by theLicensee whether directly or indirectly related to thisAgreement. TheLicensee shall not state or imply that thisAgreement is an endorsement by theGovernment, theNIH, any otherGovernmentorganizational unit, or anyGovernment employee. Additionally, theLicensee shall not use the names of theNIH, theFDA or theHHS or theGovernment or their employees in any advertising, promotional, or sales literature without the prior written approval of theNIH. |
| 14.12 | The parties agree to attempt to settle amicably any controversy or claim arising under thisAgreement or a breach of thisAgreement, except for appeals of modifications or termination decisions provided for in Article 13. TheLicensee agrees first to appeal any unsettled claims or controversies to the designatedNIH official, or designee, whose decision shall be considered the final agency decision. Thereafter, theLicenseemay exercise any administrative or judicial remedies that may be available. |
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| 14.13 | Nothing relating to the grant of a license, nor the grant itself, shall be construed to confer upon any person any immunity from or defenses under the antitrust laws or from a charge of patent misuse, and the acquisition and use of rights pursuant to37 C.F.R. Part 404 shall not be immunized from the operation of state or Federal law by reason of the source of the grant. |
| 14.14 | Any formal recordation of thisAgreement required by the laws of anyLicensed Territoryas a prerequisite to enforceability of theAgreement in the courts of any foreign jurisdiction or for other reasons shall be carried out by theLicenseeat its expense, and appropriately verified proof of recordation shall be promptly furnished to theNIH. |
| 14.15 | Paragraphs 4.3, 8.1, 9.5-9.8, 9.9 12.1-12.5, 13.9, 13.10, 14.12 and 14.15 of thisAgreement shall survive termination of thisAgreement. |
| 14.16 | The terms and conditions of thisAgreement shall, at theNIH’s sole option, be considered by theNIH to be withdrawnfrom theLicensee’s consideration and the terms and conditions of thisAgreement,and theAgreementitself to be null and void, unless thisAgreement is executedby theLicensee and a fully executed original is received by theNIHwithin sixty (60) days from the date of theNIH’s signature found at the Signature Page. |
SIGNATURES BEGIN ON NEXT PAGE
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NIH PATENT LICENSE AGREEMENT –EXCLUSIVE
SIGNATURE PAGE
For theNIH:
| /S/ RICHARD U. RODRIGUEZ | | 02/09/15 |
| Richard U. Rodriguez | | Date |
| Director, Division of Technology Development and Transfer | | |
| Office of Technology Transfer | | |
| National Institutes of Health | | |
Mailing Address or E-mail Address forAgreement notices and reports:
Chief, Monitoring & Enforcement Branch
Office of Technology Transfer
National Institutes of Health
6011 Executive Boulevard, Suite 325
Rockville, Maryland 20852-3804 U.S.A.
E-mail: LicenseNotices_Reports@mail.nih.gov
For theLicensee (Upon, information and belief, the undersigned expressly certifies or affirms that the contents of any statements of theLicensee made or referred to in this document are truthful and accurate.):
| by: | | |
| | | |
| /S/ ELMA HAWKINS | | 02/09/15 |
| Signature of Authorized Official | | Date |
| | | |
| Elma Hawkins, Ph.D. | | |
| Printed Name | | |
| | | |
| President and CEO | | |
| Title | | |
I. Official and Mailing Address forAgreement notices:
Peter Ho, Ph.D.
Director, Business Development
21900 Burbank Blvd., 3rdFloor
Woodland Hills, CA 91367
Phone: 818-992-3127
Fax: 818-475-5194
Email: peter.ho@lionbio.com
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II. Official and Mailing Address for Financial notices (theLicensee’s contact person for royalty payments)
Peter Ho, Ph.D.
Director, Business Development
21900 Burbank Blvd., 3rdFloor
Woodland Hills, CA 91367
Phone: 818-992-3127
Fax: 818-475-5194
Email: peter.ho@lionbio.com
Any false or misleading statements made, presented, or submitted to theGovernment, including any relevant omissions, under thisAgreement and during the course of negotiation of thisAgreement are subject to all applicable civil and criminal statutes including Federal statutes31 U.S.C. §§3801-3812(civil liability) and18 U.S.C. §1001 (criminal liability including fine(s) or imprisonment).
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APPENDIX A – Patent(s) or Patent Application(s)
Patent(s) or Patent Application(s):
Group A
| I. | U.S. Provisional Patent Application No. 61/237,889, filed August 26, 2009 entitled “Adoptive cell therapy with young T cells” (HHS Ref No. E-273-2009/0-US-01); |
| II. | U.S. Patent No. 8,383,099 issued February 26, 2013 entitled “Adoptive cell therapy with young T cells” (HHS Ref No. E-273-2009/0-US-02); |
| III. | U.S. Patent Application No. 13/742,541 filed January 16, 2013 entitled “Adoptive cell therapy with young T cells” (HHS Ref No. E-273-2009/0-US-03); |
| IV. | U.S. Provisional Patent Application No. 61/466,200 filed March 22, 2011entitled “Methods of growing tumor infiltrating lymphocytes in gas-permeable containers” (HHS Ref No. E-114-2011/0-US-01); |
| V. | PCT Application No. PCT/US2012/029744 filed March 20, 2012 entitled “Methods of growing tumor infiltrating lymphocytes in gas-permeable containers” (HHS Ref No. E-114-2011/0-PCT-02); |
| VI. | U.S. Patent Application No. 13/424,646 filed May 20, 2012 entitled “Methods of growing tumor infiltrating lymphocytes in gas-permeable containers” (HHS Ref No. E-114-2011/0-US-03); |
Group B
| I. | U.S. Provisional Patent Application No. 60/408,681, filed September 6, 2002 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/0-US-01); |
| II. | PCT Application No. PCT/US2012/029744 filed September 5, 2003 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/1-PCT-01); |
| III. | U.S. Patent No. 8,034,334 issued October 11, 2011 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/1-US-02); |
| IV. | European Patent Application No. 03794636.5 filed April 4, 2005 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/1-EP-03); |
| V. | Canadian Patent No. 2,497,552 issued May 27, 2014 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/1-CA-04); |
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| VI. | Australian Patent No. 2003265948 issued September 3, 2009 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/1-AU-05); |
| VII. | U.S. Patent No. 8,287,857 issued October 16, 2012 entitled “Immunotherapy with in vitro-selected antigen-specific lymphocytes after nonmyeloablative lymphodepleting chemotherapy” (HHS Ref No. E-275-2002/1-US-06); |
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APPENDIX B – Licensed Fields of Use and Territory
| I. | | Licensed Fields of Use: |
| (a) | The use of theLicensed Patent Rights to develop, manufacture, and sale autologous tumor infiltrating lymphocyte adoptive cell therapy products for the treatment of metastatic melanoma. |
Tumor infiltrating lymphocytes (TIL) are a subset of T lymphocytes (T cells) that migrate and are located within a tumor site. TIL isolated from these tumor sites exhibit natural anti-tumor activity without genetic modifications. For the avoidance of doubt, cell therapy products involving genetically modified TIL or TIL isolated by cancer-specific mutations are excluded from theLicensed Fields ofUse, unless the cell therapy products are a combination of TIL therapy with theLicensee’s proprietary technologies or theLicensee’s in-licensed technologies.
| II. | | Licensed Territory:Worldwide |
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APPENDIX C – Royalties
Royalties:
| I. | | TheLicensee agrees to pay to theNIH a noncreditable, nonrefundable license issue royalty in the amount of[* * *] within sixty (60) days from the effective date of thisAgreement. |
| II. | | TheLicensee agrees to pay to theNIH a nonrefundable minimum annual royalty in the amount of[* * *]as follows: |
| (a) | The first minimum annual royalty is due within sixty (60) days of the effective date of thisAgreement and may be prorated according to the fraction of the calendar year remaining between the effective date of thisAgreement and the next subsequent January 1; and |
| (b) | Subsequent minimum annual royalty payments are due and payable on January 1 of each calendar year and may be credited against any earned royalties due for sales made in that year. |
| (c) | In the case of each of (a) and (b) above, such payments shall be due so long asLicensee has not terminated this Agreement pursuant to Paragraph 13.4. |
| III. | | TheLicensee agrees to pay theNIH earned royalties of[* * *] onNet Sales by or on behalf ofLicenseeor its sublicensees.Licensee shall be entitled to a credit of[* * *] against the earned royalty rate for each percent point in excess of[* * *] thatLicensee must pay to an unaffiliated licensor(s) for the manufacture and sale ofLicensed Product(s) andLicensed Process(es). Said credit however, shall not reduce the earned royalty rate due toNIH forLicensed Product(s) andLicensed Process(es) below[* * *]. |
| IV. | | TheLicensee agrees to pay theNIHBenchmarkroyalties within sixty (60) days of achieving eachBenchmarkbyLicenseeor its sublicensees for eachLicensed Product: |
| (a) | [* * *] for successful completion of the firstLicensee-sponsored Phase 2 clinical study. |
| (b) | [* * *]for successful completion of the firstLicensee-sponsored Phase 3 clinical study. |
| (c) | [* * *] upon the first FDA approval or foreign equivalent for aLicensed Product orLicensed Process. |
| (d) | [* * *] for the First Commercial Sale of aLicensed Product orLicensed Process in the United States. |
| (e) | [* * *] for the First Commercial Sale of a Licensed Product or Licensed Process in any foreign country for either of Licensed Field of Use. |
For purposes of thisAgreement, “successful completion of aLicensee-sponsored Phase 2 Clinical Study” shall mean, with respect to a specified construct, formulation and dose of a specifiedLicensed Product in a specified cancer indication, the statistical demonstration in a pivotal Phase 2 Clinical Study of safety and efficacy, sufficient to support a Phase 3 clinical trial submission by theLicensee for such specified construct, formulation and dose of such specifiedLicensed Product for the treatment of such specified cancer indication.
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For purposes of thisAgreement, “successful completion of aLicensee-sponsored Phase 3 Clinical Study” shall mean, with respect to a specified construct, formulation and dose of a specifiedLicensed Product in a specified cancer indication, the statistical demonstration in a pivotal Phase 3 Clinical Study of safety and efficacy, sufficient to support a BLA submission by theLicensee for such specified construct, formulation and dose of such specifiedLicensed Product for the treatment of such specified cancer indication.
| V. | The Licensee agrees to pay theNIH: |
(a) additional sublicensing royalties of[* * *] on the fair market value of any consideration received for granting each sublicense within sixty (60) days of the execution of each sublicense if any such sublicense is executed prior to FDA approval or foreign equivalent for a Licensed Product or Licensed Process within each Licensed Field of Use from Appendix B; and
(b) additional sublicensing royalties of[* * *] on the fair market value of any consideration received for granting each sublicense within sixty (60) days of the execution of each sublicense if any such sublicense is executed following FDA approval or foreign equivalent for a Licensed Product or Licensed Process within each Licensed Field of Use from Appendix B.
(c) Notwithstanding anything in this Agreement to the contrary, any such consideration will not include the following:
| (1) | Bona fide support research and development activities corresponding directly to the development ofLicensed Product(s) and/orLicensed Process(es), which do not exceed Licensee's fully-burdened cost for undertaking such research and development, and limited to support which is received after the effective date of this Agreement specifically excluding any support which is used by Licensee to offset research and development expenses which are incurred prior to the effective date of this Agreement; |
| (2) | Proceeds derived from debt financing received after the effective date of this Agreement, to the extent that such financing is at market rates; |
| (3) | Consideration received after the effective date of this Agreement for the purchase of an equity interest in Licensee to the extent that the price per share paid for such equity does not exceed by more than twenty-five pecent (25%) the average closing price of such equity on the stock exchange for the thirty (30) consecutive business days immediately preceding the date on which said stock is transferred, or if such equity is not so traded, then the fair market value of such equity as reasonably agreed to by the parties or as determined in the same financing round involving non-sublicensee investors; |
| (4) | As earned royalties on Net Sales or sales by sublicensee(s); and |
| (5) | Any non-monetary consideration which is specifically in the form of license(s) received in exchange for the grant of a sublicense, if such license(s) are necessary or useful for the development of Licensed Product(s) and/or Licensed Process(es). |
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APPENDIX D – Benchmarks and Performance
TheLicensee agrees to the followingBenchmarks for its performance under thisAgreement and, within thirty (30) days of achieving aBenchmark, shall notify theNIH that theBenchmark has been achieved.
| | | Benchmark | | Deadline |
| | | | | |
| I. | | [* * *] | | [* * *] |
| | | | | |
| II. | | [* * *] | | [* * *] |
| | | | | |
| III. | | [* * *] | | [* * *] |
| | | | | |
| IV. | | [* * *] | | [* * *] |
| | | | | |
| V. | | [* * *] | | [* * *] |
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APPENDIX E – Commercial Development Plan
Licensee intends to use the licensed technology to develop and commercialize a product based on T cells derived from tumors or tumor-infiltrating lymphocytes (TILs) to treat patients with melanoma, HPV cancers, bladder cancer, breast cancer, lung cancer, and other solid tumors.
In August 2011,Licensee entered into a Cooperative Research and Development Agreement (CRADA) with the National Cancer Institute (NCI) to develop and evaluate improved adoptive cell transfer (ACT) based immunotherapies using TILs to treat patients with metastatic melanoma utilizing the business development expertise and resources ofLicensee (C-057-2011, NCI 02734). The CRADA includes the development of improved methods for the generation and selection of TIL, standard operating procedures (SOPs) for large-scale TIL growth, selection and testing to support the FDA approval of an ACT/TIL therapy approach. It further includes clinical trials designed and implemented to evaluate the clinical effectiveness of ACT/TIL therapy resulting from large-scale techniques in patients with metastatic melanoma based on the proprietary NCI Surgery Branch technology and approaches developed as part of the CRADA. In January 2015,Licensee and the NCI amended the CRADA to add HPV cancers (such as cervical, anal, and head and neck cancers), bladder cancer, breast cancer, and lung cancer.
The overall strategy for commercial development and program prioritization for an ACT/TIL product for the treatment of metastatic melanoma is summarized below:
[* * *]
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Appendix F – Example Royalty Report
Required royalty report information includes:
| · | OTT license reference number (L-XXX-200X/0) |
| · | Catalog number and units sold of each Licensed Product (domestic and foreign) |
| · | Gross Sales per catalog number per country |
| · | Itemized deductions from Gross Sales |
| · | Earned Royalty Rate and associated calculations |
| · | Adjustments for Minimum Annual Royalty (MAR) and other creditable payments made |
Example
| Catalog Number | | | Product Name | | Country | | Units Sold | | | Gross Sales
(US$) | |
| | 1 | | | A | | US | | | 250 | | | | 62,500 | |
| | 1 | | | A | | UK | | | 32 | | | | 16,500 | |
| | 1 | | | A | | France | | | 25 | | | | 15,625 | |
| | 2 | | | B | | US | | | 0 | | | | 0 | |
| | 3 | | | C | | US | | | 57 | | | | 57,125 | |
| | 4 | | | D | | US | | | 12 | | | | 1,500 | |
| Total Gross Sales | | | 153,250 | |
| | Less Deductions: | | | | |
| Freight | | | 3,000 | |
| Returns | | | 7,000 | |
| Total Net Sales | | | 143,250 | |
| | | | | |
| Royalty Rate | | | 8 | % |
| Royalty Due | | | 11,460 | |
| Less Creditable Payments | | | 10,000 | |
| Net Royalty Due | | | 1,460 | |
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Appendix G – Royalty Payment Options
The OTT License Number MUST appear on payments, reports and correspondence.
Automated Clearing House (ACH) for payments through U.S. banks only
TheNIH encourages its licensees to submit electronic funds transfer payments through the Automated Clearing House (ACH). Submit your ACH payment through the U.S. Treasury web site located at:https://www.pay.gov. Locate the "NIH Agency Form" through the Pay.gov "Agency List".
Electronic Funds Wire Transfers
The following account information is provided for wire payments. In order to process payment via Electronic Funds Wire Transfer sender MUST supply the following information within the transmission:
Drawn on aU.S. bank account via FEDWIRE should be sent directly to the following account:
| Beneficiary Account: | Federal Reserve Bank of New York or TREAS NYC |
| Bank: | Federal Reserve Bank of New York |
| ABA# | 021030004 |
| Account Number: | 75080031 |
| Bank Address: | 33 Liberty Street, New York, NY 10045 |
| Payment Details: | License Number (L-XXX-XXXX) |
| | Name of the Licensee |
Drawn on aforeign bank account should be sent directly to the following account. Payment must be sent inU.S. Dollars (USD)using the following instructions:
| Beneficiary Account: | Federal Reserve Bank of New York/ITS or FRBNY/ITS |
| Bank: | Citibank N.A. (New York) |
| SWIFT Code: | CITIUS33 |
| Account Number: | 36838868 |
| Bank Address: | 388 Greenwich Street, New York, NY 10013 |
| Payment Details (Line 70): | NIH 75080031 |
| | License Number (L-XXX-XXXX) |
| | Name of the Licensee |
| Detail of Charges (line 71a): | Charge Our |
Checks
All checks should be made payable to “NIH Patent Licensing”
Checks drawn on aU.S. bank account and sent by US Postal Service should be sent directly to the following address:
National Institutes of Health (NIH)
P.O. Box 979071
St. Louis, MO 63197-9000
Checks drawn on a U.S. bank account and sent byovernight or courier should be sent to the following address:
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US Bank
Government Lockbox SL-MO-C2GL
1005 Convention Plaza
St. Louis, MO 63101
Phone: 314-418-4087
Checks drawn on aforeign bank account should be sent directly to the following address:
National Institutes of Health (NIH)
Office of Technology Transfer
Royalties Administration Unit
6011 Executive Boulevard
Suite 325, MSC 7660
Rockville, Maryland 20852
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