This Agreement, made and entered into as of this 2nd day of
November, 1999
between
THE CLOROX Company, 1221 Broadway, Oakland, California
94612, USA (hereinafter referred to as "CLOROX")
and
HENKEL KGaA, Henkelstrasse 67, D-40191 Duesseldorf,
Federal Republic of Germany (hereinafter referred to
as "HENKEL")
WITNESSETH:
WHEREAS, CLOROX and HENKEL have concluded an agreement
dated January 16, 1992, providing for cooperative
research and development in the field of consumer
products excluding cosmetics; and
WHEREAS, CLOROX and HENKEL have also concluded a
Joint Venture Agreement dated October 1, 1985, and
WHEREAS, CLOROX and HENKEL, in light of the progress
made and the experience so far gathered, wish to renew
and extend their cooperation on a basis mutually beneficial,
and to revise their prior agreements related to ownership
and licensing of their inventions, know how and patents
to enhance such cooperative efforts and MAXIMIZE the
mutual benefits thereof to both parties.
NOW, THEREFORE, the Parties hereto have agreed as follows:
(1)
SUPERSEDES PRIOR AGREEMENTS
This Agreement supersedes and replaces in their entirety
the agreement of January 16, 1992, the provisions of
section 9.2 of the Joint Venture Agreement of October 1,
1985.
(2)
DEFINITIONS
"Affiliate" shall mean an entity or party controlled by a
party hereto, either directly or indirectly.
"Cleaning Product Categories" shall mean all consumer
chlorine laundry bleach, fabric deodorizer products and
household cleaning products, except the "Excepted Cleaning
Product Categories."
"Excepted Cleaning Product Categories" shall mean consumer
dish detergents and in-home dry cleaning products, including
products for cleaning, deodorizing, freshening, softening,
static control or spot removal in a clothes dryer.
"Clorox Territory" shall mean the United States, Canada,
Argentina and Caribbean countries.
"Henkel Territory" shall mean Western Europe, as defined
below.
"Other Territory" shall mean all territories other than
the Clorox Territory and the Henkel Territory.
"Western Europe" shall comprise the following countries:
Austria, Belgium, Denmark, Finland, France, Germany,
Italy, Luxembourg, Malta, Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland, Turkey and the United Kingdom.
"Technology" shall mean, with respect to Cleaning Product
Categories, all rights to any developments, trade secrets,
know how, inventions, patent applications and patents wholly
owned by a party including its Affiliates, or jointly with
Affiliates, but excluding any rights jointly owned by a
party with third parties other than Affiliates.
(3)
LICENSES OF TECHNOLOGY
To facilitate the communication, sharing and cooperative
development efforts of the parties with respect to
Technology in the Cleaning Product Categories, CLOROX and
HENKEL agree that all rights in their respective Technology
with respect to the Cleaning Product Categories shall upon
request of the other party be licensed to the other party
as follows:
(a) CLOROX shall grant to HENKEL an exclusive, royalty
free license under its Technology rights with respect to
the Cleaning Product Categories in the HENKEL Territory.
(b) HENKEL shall grant to CLOROX an exclusive, royalty
free license under its Technology rights with respect to the
Cleaning Product Categories in the CLOROX Territory.
(c) Neither party shall have any rights in the other's
Technology in the Other Territory unless the other party
gives written notice to it at any time within nine (9) months
after first launching a product utilizing such Technology in
any country, at its sole option, that it does not choose to
use a specific Technology, or launch a specific product, in
one or more specific countries of the Other Territory,
(a "Disclaimed Country"), whereupon the party so notified,
including its Affiliates and joint ventures, (the "Notified
Party"), shall have a period of nine (9) months from such
notice of the owning party during which it may launch a
product utilizing the same Technology in the Disclaimed
Countries. (If a party does not give such notice within nine
(9) months after first launch of a product utilizing any
specific Technology in a country, then this subsection (c)
shall be inapplicable with respect to such Technology.) If
the Notified Party launches such a product in a Disclaimed
Country within this period, it will have an exclusive,
royalty free license in such Technology in every Disclaimed
Country where it launched the product within such period.
For each of the Disclaimed Countries in which it does not
launch such a product within this time period it will have
no further rights to a license in such Technology, and the
owning party shall be free to license others under such
Technology. The date of the first launch shall be the last
day of the month in which a product is first generally
available to the consumer. Each party further agrees not to
license its Technology in the Other Territory to any third
party without giving notice to the other party as provided
in Article 3(c).
(d) Such licenses shall include Technology developed
prior to this agreement to the extent not previously
licensed to others. Hereafter, the right to grant licenses
to others in areas outside the granting party's territory
shall be limited by the rights granted herein.
(e) It is understood that if Technology developed for
the Excepted Cleaning Product Categories can be applied to
the fields included in the Cleaning Product Categories, the
license provisions of Article 3(a) through (c) will extend
to such application within the Cleaning Product Categories
unless otherwise restricted by agreements entered into
before the effective date of this agreement.
(f) The licenses and rights provided for herein shall
include the right to sublicense Affiliates, including
subsidiaries and joint ventures.
(g) The parties recognize that conflicts may arise with
respect to the non-exclusive licenses outside the
Territories of the respective parties, and, accordingly,
either party may bring to the attention of the other the
existence of a conflict or potential conflict with respect
to any specific product, whereupon the senior management
of the parties shall confer in good faith to try to resolve
any conflicts or potential conflicts.
(h) In the event that either party acquires a business in
the other party's Territory, the exclusive licenses of
sections (3)(a) and (b) shall not apply to Technology
acquired with such business or to Technology subsequently
developed by such party to the extent that such Technology
has application to such business.
(4)
COOPERATIVE RESEARCH AND DEVELOPMENT
The parties shall cooperate on research and development in
the Cleaning Product Categories as follows:
1) Joint Projects
The parties agree to undertake joint research and
development projects ("Joint Projects") in the Cleaning
Product Categories in areas of mutual interest as may be
agreed upon from time to time by the parties. Each party
shall bear its own costs for work done pursuant to a Joint
Project.
2) Experimental Work
The parties also agree to individually undertake
Experimental Work in the Cleaning Product Categories
which is not of mutual interest and which is unrelated
to any experimental or other work undertaken as a part of
a Joint Project. Such work may be requested from time to
time by either party and shall be carried out at the expense
of the requesting party, subject to mutual agreement, and
consistent with each party's available capacity for undertaking
such work.
3) Disclosure of Individual Developments
The parties also agree to disclose to each other their
own individual inventions and product developments as follows:
(a) Each party shall provide the other with a quarterly
listing (informative title) of all patent applications first
filed anywhere in the world relating to the Cleaning Product
Categories making the patent application itself available
for review by the other party if so requested.
(b) Each party shall supply the other with a description
and sample of each consumer product in the Cleaning Product
Categories for which they conduct market testing within
four weeks after initiation of such market testing test.
(c) Each party shall disclose to the other all
analytical techniques and test methods that they employ or
develop related to consumer products in the Cleaning Product
Categories and deliver copies of technical reports primarily
related thereto on request.
(d) Each party will inform the other of any new chemical
product developments relating to the Cleaning Product
Categories in, to the extent that such information can be of
use in formulating end products in the Cleaning Product
Categories , provided however, that such exchange of
information, per se, shall not confer any rights in such
information.
4) Visiting Scientists
The parties also agree that, from time to time, and upon
their mutual agreement, one or more scientists of a party
will be temporarily assigned to work at the research
facilities and with the scientists of the other party in
connection with said other party's own research. Such
visiting scientists shall at all times remain the
employees of their normal employer, which will continue
to be responsible for all salary and benefits for the
visiting scientists.
(5)
JOINT PROJECTS
1) Establishment
CLOROX and HENKEL shall identify areas of mutual interest
in the Cleaning Product Categories from time to time. They
shall undertake Joint Projects in such areas as the
parties may agree upon from time to time. Each agrees to
use its reasonable best efforts in implementing the Joint
Projects instituted under this Agreement, taking into
account the available research and development capacity
of each party.
Upon the commencement of any Joint Project, each party
will disclose to the other party any prior invention and
patent which it owns, which dominates, or is likely to
dominate, any inventions arising from the Joint Project,
and any licenses which have been granted under such
patent unless such disclosure is not permitted according
to the terms of such license agreements.
At the commencement of Joint Projects under this
Agreement the parties shall promptly prepare a formal
project proposal for approval of management of each
party which, to the extent possible, shall set forth,:
(a) objectives and scope of the projects to be
undertaken, equipment needs, personnel needs, and the
like;
(b) provisions for the administration of the project,
including budget provisions, project organization, the
respective parties' responsibilities, and the like;
(c) prior developments of each of the parties that
relate to the proposed Joint Project; and
(d) inventions which dominate, or are likely to dominate,
inventions arising from the Joint Project.
2) Communication of Joint Project Information
The parties shall keep each other fully informed of
their progress in all Joint Project work performed under
this Agreement. The parties' research and development
management shall meet from time to time (at least once a
year) to review the progress of the work and outline and
agree upon any changes in the program which may be necessary
or desirable in view of the results, and to select
additional areas of cooperation.
In addition, working meetings of scientists participating
directly in a Joint Project will be held as needed.
Scientist employees of each party shall have access to
the laboratories of the other to participate in work
conducted with respect to the Joint Project.
Copies of all written work reports prepared by either
party for its own internal use will be supplied to the
other party within a reasonable time to the extent as
they relate to Joint Projects or Experimental Work
under this Agreement.
3) Termination of Joint Projects
Joint Projects established hereunder may be terminated
by either party at any time by giving the other party
sixty (60) days written notice thereof.
Upon such termination of a Joint Project the
parties shall prepare a written summary of the Joint
Project, including an identification of all developments
made during the Joint Project and the contributions of
each party to the Joint Project, as well as identification
of any prior dominating inventions of either party.
All developments made on a Joint Project up to the time
of termination shall be owned and treated as Joint Project
inventions as provided in Article (7), and all information
obtained from the other party during the course of the
Joint Project shall continue to be treated as provided in
Article (9).
Developments related to a terminated Joint Project made by
a party after termination of the Joint Project shall not be
considered Joint Project developments. However, they should
be treated as other inventions, and disclosed pursuant to
Article (4) Paragraph 3), and shall be licensed to the
other pursuant to Article (3) . If a Joint Project is
reinstituted after such a termination developments made
after reinstitution of the Joint Project shall be Joint
Project developments, but developments made while the Joint
Project was terminated shall not become Joint Project
developments.
4) Joint Projects with Third Parties
Upon agreement of both parties, a third party may be
included in a Joint Project, either at its inception or
at any other time, provided the third party agrees to the
terms of this agreement related to Joint Projects, namely:
Disclosure of and agreement to license prior
dominating inventions,
- - Full disclosure and reports on Joint Project work
and developments, and
- - Prior disclosure and agreement on filing patents on
Joint Project inventions, as well as any territorial
restrictions on rights to Joint Project developments
that the parties deem appropriate.
(6)
EXPERIMENTAL WORK
Each party performing Experimental Work under this Agreement
shall be compensated by the other party for the true and
accurate costs incurred by it.
The cost shall be computed on the basis of the hourly
manpower rates prevailing at the time of the performance of
the work in the party performing the Experimental Work and
shall consist of the following:
1) cost of the personnel performing the work under this
Agreement plus prorated overhead cost of the respective
department;
2) other costs directly incurred in the performance of
the work under this Agreement, e.g.consumption of factory
supplies, energy and the like, depreciation on buildings and
machinery, services of other departments, travel expenses,
transportation costs plus prorated overhead costs for the
administration of the foregoing.
In addition to the compensation of actual cost hereunder
the party performing the project work shall be entitled to
a surplus benefit of ten percent (10%) of the true and
accurate costs incurred by it as consideration for making
laboratory capacity available.
The aforementioned costs and surplus benefits shall be
computed on a quarterly basis by the party performing the
project work under this Agreement and be paid by the other
party no later than thirty (30) days after presentation of
the invoice.
(7)
PATENT RIGHTS
1) Ownership of Inventions
(a) Generally
Inventions and developments, and patents thereon, will be
owned by the party whose employees made such inventions,
except as provided in (b) or (c) below. Inventorship of
employees of the parties shall be determined in accordance
with the applicable laws of the USA and the Federal Republic
of Germany. Where inventorship is unclear, inventorship shall
be reviewed and resolved jointly by research and development
management and patent attorneys in keeping with the
patent laws of the applicable countries..
(b) Joint Inventions
All inventions made and trade secrets and know-how
developed in the course of a Joint Project or otherwise
determined to be joint inventions of employees of both
parties shall be assigned to and owned by one of the
parties herein, regardless of inventorship, such owning
party to be chosen by joint agreement of the parties
pursuant to consideration of the relative investments and
contributions of the parties, and the relevance and
importance of the invention to each party's markets and
other patents. Such Technology shall be subject to the
licensing provisions of Article (3). However, outside
of each parties' Territories such licenses shall be
exclusive except for the owning party and its Affiliates.
Each party shall agree to the other party's licensing or
sublicensing third parties as to such inventions, trade
secrets and know-how if that is necessary or reasonable
to avert mandatory licensing according to the applicable
laws.
c) Experimental work
All patent rights covering inventions made by employees of
either party, whether solely or jointly, in the course of
any Experimental Work requested under this Agreement shall
be the property of the party requesting and paying for such
work. To the extent that they relate to the Cleaning
Product Categories, they shall be subject to the licensing
provisions of section (3). Otherwise, the other party, who
did the experimental work, shall have a non-exclusive
royalty-free license with the right to sublicense.
2) Patent Filing
a) General
(i) Each party shall file such patent applications in
its Territory on its own inventions that it deems warranted,
and shall file corresponding patent applications thereon in
the other party's Territory unless otherwise instructed by
the other party. In other territories, if the owning party
chooses not file an application or maintain a patent, it
will so advise the other party at least ninety (90) days
prior to any deadline set in the subject case for taking
action and it will give the other party a right to do so
upon request.
(ii) Each party shall pay for or reimburse the other
for all maintenance costs related to the other party's
patent applications and patents licensed to it in its
Territory pursuant to Article (3).
(b) Joint Project Inventions
Prior to filing any patent application on a Joint Project
invention, the parties shall discuss the contents of
such applications including claims, initial filing country,
countries of mutual interest, and the party to undertake
initial preparation and filing as promptly as feasible in
order not to jeopardize priority. Rights in such Joint
Project Inventions, and the costs of maintenance of such
patent applications and patents, shall be in accordance
with Article (3) and Article (7) section (1)(b).
However, prior to the first filing of an application on a
Joint Project invention or any other joint invention, a
copy of the application shall be provided to the other
party with an opportunity for review and comment, at least
two weeks before filing. If the reviewing party notifies
the filing party that there is a disagreement as to
inventorship or the use of the reviewing party's
information in the application that cannot be resolved
by the Technical and Legal staffs of the parties, the
application will not be filed until the matter is resolved,
except with the agreement of the Vice President of
Research and Development for each party.
Also, each party shall disclose to the other party any
patent applications on their own individual projects
which utilize or disclose any information derived from
Joint Project disclosures or any information of the other
party obtained in the course of cooperation under this
Agreement, whether or not any related Joint Project has
been terminated, as soon as reasonably possible, but in
any event at least ten (10) days prior to filing to allow
the other party to review and comment on or object to such
a utilization or disclosure.
(c) Experimental Work Inventions
Each party shall notify the other as to all countries in
which it intends to apply for patent rights on inventions
made in the course of the Experimental Work performed
under this Agreement which it owns under the terms hereof
and, if so requested, shall grant to the other the right to
apply in the other's own name and at its own expense for
patents with respect to such inventions in any country where
the first party does not intend to apply; and if either
party intends to abandon any of the aforementioned patent
rights covering such inventions, it shall first advise the
other, who shall then have the right to receive an assignment
of such patent or patent application and to maintain such
patent right or to continue its prosecution at its own expense.
3) Visiting Scientists
(a) Ownership and Licensing of Inventions
Any inventions made by an employee of a party while assigned
to work with scientists of the other party on research or
development work not falling within Article 4, Section 1,
whether or not the sole invention of the employee, or an
invention made jointly with scientists of the other party,
shall be owned by the party to whose research project the
invention relates (typically the host company). However, the
other party shall have a right to a license under such
inventions and any patents granted thereon. as provided in
Article (3).
(b) Any employee assigned to work with scientists of the
other party shall receive compensation (inventors fees and
the like) for inventions made and covered by these provisions
from his employer.
(8)
MARKETING RIGHTS
Henkel and Clorox shall inform each other about all new
consumer products that they develop in the Cleaning Product
Categories and make them available to the other party for
manufacture or marketing in accordance with the provisions of
Article (3) with respect to rights in Technology.
(9)
CONFIDENTIALITY
Each party shall retain in strict confidence and disclose to
no one without the prior written consent to the other party,
any information which it first acquires as a result of any
Joint Project work, or which otherwise is disclosed to it by
the other party under this Agreement, provided, however, that
this obligation:
1) shall not prevent the disclosure under a like condition
of confidence and trust of information to companies at least 50%
of which one of the parties hereto owns or controls;
2) shall not apply to information already lawfully known to
the receiving party prior to the date of this Agreement, or to
information which is or becomes part of the public domain through
no fault of the receiving party; and
3) shall be limited to a period of ten (10) years from the
date of such disclosure.
The foregoing shall not be interpreted to allow either party to
disclose information concerning test marketing of the other
party disclosed to it according to Article (4) Paragraph 3) b).
(10)
INDEMNITY
Marketing any of the products and substances developed under
this Agreement or utilization of any Technology as provided in
this Agreement remains the sole responsibility of the party
deciding so to do. Therefore, the party marketing any product
developed or disclosed pursuant to this Agreement shall indemnify
the other party against any and all loss, liability, damage
and expense of every character whatsoever for loss of, or damage
to, property, or for personal injury, sickness and disease
(including death) sustained by any person, if such loss, damage
or injury is caused by, or is in any way connected with products
developed under this Agreement.
Neither party shall have any liability to the other for patent
infringement, or the like, for utilization of its Technology
by the other party pursuant to this Agreement. However, each
party will use its reasonable best efforts to insure that it
has obtained all inventor's rights in its Technology that it
makes available to the other pursuant to this Agreement.
(11)
TERMINATION
The term of this Agreement shall commence on the date and day
first written above and shall continue for ten (10) years
thereafter, unless sooner terminated as herein provided.
This Agreement may be terminated by either party on twelve
(12) calendar months prior written notice given as of any
date after one (1) year from the commencement date of this
Agreement.
Either party may terminate this Agreement forthwith in any
of the following events:
1) if at any time and for any reason HENKEL should hold
directly or indirectly less than 15 per cent of the then
outstanding shares of CLOROX common stock; or
2) if at any time one or more corporations or individuals
acting in concert or as a syndicate or other group, or any
persons so acting on behalf of any of the foregoing, shall
acquire without HENKEL's consent or hold more than 15 percent
of the then outstanding shares of CLOROX common stock; or
3) if either party is subject to corporate reorganization
and as a result thereof is not the surviving or controlling
corporation.
Also, this agreement shall terminate immediately upon any
termination of the Joint Venture Agreement dated October 1,
1985.
(12)
SURVIVABILITY
Upon the expiration or sooner termination of the term hereof,
all rights and obligations of the parties shall come to an
end except that:
1) the non-disclosure provisions of Article (9) shall
not immediately terminate but shall remain in full force and
effect for the period provided in Article (9) and shall then
terminate;
2) with respect to Technology for which a party has
developed plans for use or actually made use in a commercial
product prior to such expiration or termination the provisions
of Article (3) and (7) relating to licenses under patent, trade
secret and know-how rights shall not terminate but shall
continue in full force and effect, as to patents, until
expiration of the patents and, as to trade secrets and know-how,
perpetually;
(13)
ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof. Any
alteration, amendment or termination of this Agreement shall
be valid only if made in written form.
(14)
SEVERABILITY
In the event that any provision of this Agreement shall be held
illegal, void or in effective, the remaining portions hereof
shall remain in full force and effect. In this case, the parties
hereto shall replace the illegal, void or ineffective provision
by a provision which has the same or similar economic effect.
(15)
NOTICES
All notices given under this Agreement shall be in writing and
as to CLOROX shall be addressed to:
THE CLOROX COMPANY
Attention: General Counsel
1221 Broadway
Oakland, California 94612
U S A
and as to HENKEL shall be addressed to
HENKEL KGaA
Attention: General Counsel
Henkelstrasse 67
D-40191 Duesseldorf Germany
or as modified from time to time by the parties hereto.
(16)
ASSIGNABILITY
This Agreement shall be assignable in whole or in part by
either party to any assignee controlled by the parties hereto.
Otherwise, this Agreement shall be assignable in whole or in part
only with the prior written consent of the other party.
(17)
GOVERNING LAW
This Agreement shall be construed and interpreted in accordance
with and its performance governed by the laws of the State of
New York, USA.
All disputes arising in connection with this Agreement shall
be finally settled by the courts of the State of New York, USA.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first written above.
THE CLOROX COMPANY
/S/ G. CRAIG SULLIVAN
G. Craig Sullivan
Chairman of the Board and
Chief Executive Officer
HENKEL KGaA
/S/ DR. KLAUS MORWIND
Dr. Klaus Morwind
Executive Vice President, Personally Liable
Associate and Member of Management Board