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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT 10.32
SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE
THIS SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE (hereinafter the
"Settlement Agreement") is made and entered into this 12 day of March, 2001 by
and between CALIPER TECHNOLOGIES CORP., a Delaware corporation (hereinafter
"CALIPER") and ACLARA BIOSCIENCES, INC., a Delaware corporation (hereinafter
"ACLARA"). CALIPER and ACLARA are collectively referred to herein as the
"Parties".
RECITALS
A. WHEREAS, CALIPER has alleged various claims, counterclaims, and causes
of action against ACLARA arising out of or relating to the `022 Patent Family
(as defined in the Cross-License Agreement entered into by and between CALIPER
and ACLARA as of the same date hereof and attached hereto as Exhibit B
(hereinafter the "Cross-License Agreement")). CALIPER has also alleged various
claims and causes of action against ACLARA arising out of or relating to the
Ramsey Patent Family as defined in the Cross-License Agreement.
B. WHEREAS, ACLARA has alleged various claims and causes of action
against CALIPER arising out of or relating to the `022 Patent Family. ACLARA has
also alleged various counterclaims and causes of action against CALIPER arising
out of or relating to the Ramsey Patent Family.
C. WHEREAS, the various claims, counterclaims, and causes of action
described above (collectively hereinafter the "Claims") are at issue and/or are
related to certain litigation (collectively hereinafter the "Litigation")
pending in:
1. the Superior Court of the State of California, in and for the County
of Santa Clara, entitled "CALIPER TECHNOLOGIES CORP. v. BERTRAM ROWLAND; FLEHR,
HOHBACH, TEST, ALBRITTON & HERBERT; ACLARA BIOSCIENCES, INC.; AND DOES ONE TO
ONE HUNDRED", Santa Clara County Superior Court Case No. CV780743 (hereinafter
"the State Action");
2. the United States District Court for the Northern District of
California, entitled "ACLARA BIOSCIENCES, INC. v. CALIPER TECHNOLOGIES CORP.",
Northern District of California Civil Case No. C-99-1968 CRB (hereinafter "the
015 Action"); and/or
3. the United States District Court for the Northern District of
California, entitled "CALIPER TECHNOLOGIES CORP. AND UT-BATTELLE, LLP v. ACLARA
BIOSCIENCES, INC.", Northern District of California Civil Case No. C-00-0145
(hereinafter "the Ramsey Action").
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D. WHEREAS, on January 4, 2001, the Parties met in the presence of
Magistrate Judge Bernard Zimmerman of the United States District Court for the
Northern District of California and signed a document entitled "Term Sheet"
(attached hereto as Exhibit A) to record the essential terms of the agreement
that would settle the Litigation. The Term Sheet was lodged with the Court and
identified by the Parties on the record as reflecting all essential terms of the
settlement to which the Parties had agreed.
E. WHEREAS, it is the intent of the Parties to effectuate the terms set
out in the Term Sheet, with such additional terms and clarifications as the
Parties have subsequently agreed upon, through the following agreements:
1. this Settlement Agreement;
2. the Cross -License Agreement (Exhibit B); and
3. that certain Common Stock Issuance Agreement entered into by and
between CALIPER and ACLARA as of the same date hereof and attached hereto as
Exhibit C (hereinafter the "Common Stock Issuance Agreement").
F. WHEREAS, it is the further intent of the Parties that this Settlement
Agreement, the Cross-License Agreement, and the Common Stock Issuance Agreement
(collectively hereinafter the "Integrated Agreement") form an integrated set of
agreements that are to be interpreted and applied together as a single agreement
for the purpose of effectuating the Parties' full intent and agreement on the
subjects addressed in these agreements. It is the further intent of the Parties
that the Integrated Agreement is to take the place of, and to supersede, the
Term Sheet (which shall, as of delivery of the executed Integrated Agreement, be
of no further force or effect), and that any conflict between the terms of the
Integrated Agreement and those of the Term Sheet are to be resolved solely by
reference to the terms reflected in the Integrated Agreement.
TERMS AND CONDITIONS
1. INCORPORATION OF RECITALS. The Parties incorporate herein all of the
above recitals as if fully set forth in the body of this Settlement Agreement.
2. GOOD FAITH SETTLEMENT. The Parties desire to resolve the Litigation
and the Claims, and certain other disputes, in the manner and to the extent set
forth in the Integrated Agreement. The Parties agree that the settlement
embodied in the Integrated Agreement is made in good faith.
3. REPRESENTATIONS AND WARRANTIES.
(a) The Parties mutually represent and warrant to each other that:
(i) they are authorized to enter into the Integrated Agreement
and to satisfy the terms and conditions established therein;
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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(ii) neither the execution nor performance of the Integrated
Agreement will breach or conflict with any agreement, undertaking, instrument or
court order to which they are subject;
(iii) all actions and approvals, corporate or otherwise,
necessary for them to enter into the Integrated Agreement and to perform their
obligations hereunder have been obtained;
(iv) each of them has obtained any and all waivers and/or
approvals that may be required under its existing agreements with third parties
to permit it to enter into the Integrated Agreement and to perform the
obligations and grant the rights established therein;
(v) the Integrated Agreement constitutes a valid and binding
obligation of each Party, enforceable against it in accordance with its terms
and conditions;
(vi) the person or persons signing the Integrated Agreement on
behalf of each of them are authorized to do so;
(vii) each of them has not transferred or assigned, including by
operation of law or otherwise, any of the property, rights, claims, suits,
causes of action, demands, liabilities or obligations that are the subject of
the Integrated Agreement;
(viii) each of them has read and understood the terms and
consequences of the Integrated Agreement and is fully aware of the legal and
binding effect of the Integrated Agreement;
(ix) each of them has obtained advice of legal counsel in
connection with the negotiation and settlement of all aspects of the Litigation
prior to entering into the Integrated Agreement;
(x) each of them has made such investigation of the facts
pertaining to the Integrated Agreement, and of all matters pertaining to it, as
it deems necessary; and
(xi) each of them has executed the Integrated Agreement
voluntarily and without any duress or undue influence on the part of the Parties
hereto or any third party.
(b) The Parties are not relying on any representations, warranties,
or advice as to the rights, obligations, and terms of the Integrated Agreement
from each other or from the other's attorneys, other than those that appear in
the Integrated Agreement, the attached exhibits and the letter from Latham &
Watkins delivered to CALIPER pursuant to Section 3 of the Common Stock Issuance
Agreement.
(c) The Parties voluntarily execute the Integrated Agreement on their
own behalf and, with respect to CALIPER, on behalf of the CALIPER Entities (as
defined in Section 6(a) of this Settlement Agreement), and, with respect to
ACLARA, on behalf of the ACLARA Entities (as defined in Section 6(a) of this
Settlement Agreement), with full knowledge of its significance and with the
express intention of effecting its legal consequences.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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4. CONSIDERATION TO CALIPER. In consideration for the promises and
covenants set forth in the Integrated Agreement, CALIPER shall receive the
consideration set forth in the Integrated Agreement, including without
limitation: (a) the general releases and dismissals provided for herein; (b)
payment of $27.5 million in cash and/or stock, as provided for and in accordance
with the Common Stock Issuance Agreement, in full and final settlement of its
Claims in the Litigation; (c) $5 million in cash and/or stock, as provided for
and in accordance with the Common Stock Issuance Agreement, for its license to
ACLARA of the Ramsey Patent Family patents as provided for and in accordance
with the Cross-License Agreement; (d) [ * ] as provided for and in accordance
with the Cross-License Agreement; and (e) [ * ] license to ACLARA's `022 Patent
Family patents as provided for and in accordance with the Cross-License
Agreement.
5. CONSIDERATION TO ACLARA. In consideration for the promises and
covenants set forth in the Integrated Agreement, ACLARA shall receive the
consideration set forth in the Integrated Agreement, including without
limitation: (a) the general releases and dismissals provided for herein and (b)
[ * ] license to CALIPER's Ramsey Patent Family patents as provided for and in
accordance with the Cross-License Agreement.
6. RELEASE OF ACLARA BY CALIPER.
(a) Subject to Section 6(b), CALIPER, on behalf of itself and on
behalf of each of its predecessors, successors, assigns, and present and former
officers, directors, employees, agents, representatives, insurers, sureties,
CALIPER Controlled Persons (as defined in Section 20(a)(ii)(B)) and attorneys
([ * ]) (collectively hereinafter the "CALIPER Entities"), hereby releases and
forever discharges ACLARA and each of its predecessors, successors, assigns, and
present and former officers, directors, employees, agents, representatives,
insurers, sureties, ACLARA Controlled Persons and attorneys ([ * ])
(collectively hereinafter the "ACLARA Entities") who were, are, or may ever
become liable to CALIPER or the CALIPER Entities of and from any and all claims,
demands, causes of action, obligations, liens, taxes, damages, losses, costs,
attorneys' fees, and expenses of every kind and nature whatsoever, known or
unknown, fixed or contingent, including any and all rights to subrogation
therefor, which CALIPER or the CALIPER Entities may have had, now has, or may
hereafter have against ACLARA or the ACLARA Entities by reason of any matter,
cause, or thing arising at any time up to the Effective Date, including without
limitation (i) all claims and disputes at issue in the Litigation, (ii) any and
all claims for incidental, consequential, ensuing, and/or resulting damage
arising from the prosecution of the complaints, counterclaims, defenses, and/or
settlement of the Litigation, (iii) all claims arising from actions taken or
statements made concerning or in connection with the Litigation, and (iv) any
and all matters raised and/or which could have been raised in, or as a result
of, the Litigation; (collectively hereinafter, and as further restricted by
Section 6(b) below, the "CALIPER Released Claims").
(b) Notwithstanding Section 6(a), CALIPER Released Claims shall not
include (collectively hereinafter the "CALIPER Excluded Claims"):
(i) any claims arising out of or relating to the Integrated
Agreement;
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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(ii) the right to assert in an Arbitration concerning the `022
Patent Family, in which ACLARA has asserted infringement of a Patent in the `022
Patent Family or CALIPER has commenced a declaratory judgment action based upon
the imminent threat of such assertion, equitable claims, counterclaims and
defenses [ * ];
(iii) claims, counterclaims and defenses [ * ];
(iv) the right to assert that unlicensed products currently
manufactured by ACLARA, or unlicensed current activities of ACLARA, infringe a
Valid Claim of a Patent in the Ramsey Patent Family, as such terms are defined
in the Cross-License Agreement; provided however, that the right to claim
damages for such alleged infringement occurring prior to the Effective Date is
hereby released and forever discharged and extinguished;
(v) any claims by any CALIPER Entities where such claims are
unrelated to (A) the CALIPER Entities' affiliation with CALIPER, (B) any rights
derived directly or indirectly from CALIPER (by assignment or otherwise), or (C)
any duty that they may have to CALIPER or that CALIPER may have to them; and
(vi) any claims against any ACLARA Entities, where such claims
are unrelated to (A) the ACLARA Entities' affiliation with ACLARA, (B) any
rights derived directly or indirectly from ACLARA (by assignment or otherwise),
or (C) any duty that they may have to ACLARA or that ACLARA may have to them.
7. RELEASE OF CALIPER BY ACLARA.
(a) Subject to Section 7(b), ACLARA, on behalf of itself and on
behalf of each of the ACLARA Entities, hereby releases and forever discharges
CALIPER and each of the CALIPER Entities who were, are, or may ever become
liable to ACLARA or the ACLARA Entities of and from any and all claims, demands,
causes of action, obligations, liens, taxes, damages, losses, costs, attorneys'
fees, and expenses of every kind and nature whatsoever, known or unknown, fixed
or contingent, including any and all rights to subrogation therefor, which
ACLARA or the ACLARA Entities may have had, now have, or may hereafter have
against CALIPER or the CALIPER Entities by reason of any matter, cause, or thing
arising at any time up to the Effective Date, including without limitation (i)
all claims and disputes at issue in the Litigation, (ii) any and all claims for
incidental, consequential, ensuing, and/or resulting damage arising from the
prosecution of the complaints, counterclaims, defenses, and/or settlement of the
Litigation, (iii) all claims arising from actions taken or statements made
concerning or in connection with the Litigation, and (iv) any and all matters
raised and/or which could have been raised in, or as a result of, the
Litigation; (collectively hereinafter, and as further restricted by Section 7(b)
below, the "ACLARA Released Claims").
(b) Notwithstanding Section 7(a), ACLARA Released Claims shall not
include (collectively hereinafter the "ACLARA Excluded Claims"):
(i) any claims arising out of or relating to the Integrated
Agreement;
(ii) claims, counterclaims and defenses [ * ]
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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(iii) the right to assert that unlicensed products currently
manufactured by CALIPER, or unlicensed current activities of CALIPER, infringe a
Valid Claim of a Patent in the `022 Patent Family, as such terms are defined in
the Cross-License Agreement; provided, however, that the right to claim damages
for such alleged infringement arising or occurring prior to the Effective Date
is hereby released and forever discharged and extinguished;
(iv) any claims by any ACLARA Entities where such claims are
unrelated to (A) the ACLARA Entities' affiliation with ACLARA, (B) any rights
derived directly or indirectly from ACLARA (by assignment or otherwise), or (C)
any duty that they may have to ACLARA or that ACLARA may have to them; and
(v) any claims against any CALIPER Entities, where such claims
are unrelated to (A) the CALIPER Entities' affiliation with CALIPER, (B) any
rights derived directly or indirectly from CALIPER (by assignment or otherwise),
or (C) any duty that they may have to CALIPER or that CALIPER may have to them.
8. DISMISSAL OF THE STATE ACTION. Within two business days of delivery of
the executed Integrated Agreement, CALIPER and/or its attorneys shall execute
and file with the Superior Court of California, in and for Santa Clara County, a
Request for Dismissal with Prejudice, in the form of Exhibit E attached to this
Settlement Agreement, of all of its claims against ACLARA in the State Action.
Notwithstanding such dismissal, it is understood and agreed that CALIPER shall
have the right to reassert its equitable claims in the State Action in
accordance with Section 20(x) in the event that the `022 Patent Family becomes
the subject of a future arbitration proceeding under Section 20(x) of this
Settlement Agreement, with such assertion to be made as part of that proceeding.
A filed-endorsed copy of CALIPER's Request for Dismissal shall be served upon
ACLARA or its counsel immediately after filing.
9. DISMISSAL BY THE PARTIES OF THE `015 ACTION AND THE RAMSEY ACTION.
Within two business days of delivery of the executed Integrated Agreement, the
Parties shall execute and file with the United States District Court for the
Northern District of California (hereinafter the "District Court") stipulations
addressing dismissal of the `015 Action and the Ramsey Action in the forms of
Exhibits F and G attached to this Settlement Agreement (collectively hereinafter
"Stipulations"). Such Stipulations shall dismiss with prejudice the respective
plaintiffs' (including all co-plaintiffs) claims in each case but shall dismiss
without prejudice the respective defendants' defenses and counterclaims asserted
in the `015 Action and the Ramsey Action. In the event that the District Court
declines, as a formal matter, to accept the dismissal of said defenses and
counterclaims without prejudice and instead requires some or all of those
defenses and counterclaims to be dismissed with prejudice, the respective
defendants will dismiss such defenses and counterclaims with prejudice, but it
shall nonetheless be understood and agreed between the Parties that such
defenses and counterclaims may, except as otherwise provided under the
Cross-License Agreement, be asserted in any future proceeding concerning these
or other Patents pursuant to Section 20 of this Settlement Agreement, with such
assertion to be made pursuant to the mandatory ADR Procedures established under
that Section. File-endorsed copies of the Stipulations shall be served upon both
Parties immediately after filing.
10. WAIVER. The Parties hereby acknowledge that there is a risk that,
subsequent to the Effective Date, they may incur, suffer, or sustain injury,
loss, damage, costs, attorneys' fees,
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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or expenses, that are in some way caused by and/or connected with the persons,
entities, and/or matters referred to in the Litigation or Claims, or that are
unknown or unanticipated as of the Effective Date, or that are not presently
capable of being ascertained. Further, the Parties acknowledge that there is a
risk that such damages as are presently known may become more serious than they
now expect or anticipate. Nevertheless, the Parties expressly agree the
Integrated Agreement has been negotiated and agreed upon in light of those
realizations, and it is their intention that the releases set forth in Section 6
and 7 above of this Settlement Agreement (collectively hereinafter "Releases")
be and remain in full force and effect as a full and complete release as to all
matters covered by such Releases, notwithstanding the discovery of any
additional facts or claims that existed either before or after the Effective
Date. In so doing, the Parties have had the benefit of counsel, and have been
advised of, understand, and knowingly, voluntarily, and specifically waive all
rights they may have under California Civil Code Section 1542, which provides as
follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.
11. INDEMNITY.
(a) Indemnification of ACLARA by CALIPER
(i) Subject to Section 11(a)(ii), CALIPER agrees to and will
hold harmless and indemnify ACLARA and the ACLARA Entities of and from any and
all liability (including all costs, expenses, and attorneys' fees incurred
therein) arising out of:
(A) [ * ]
(B) [ * ]
(ii) Notwithstanding Section 11(a)(i), CALIPER shall not be
obligated to indemnify ACLARA or the ACLARA Entities [ * ].
(b) INDEMNIFICATION OF CALIPER BY ACLARA.
(i) Subject to Section 11(b)(ii), ACLARA agrees to and will hold
harmless and indemnify CALIPER and the CALIPER Entities of and from any and all
liability (including all costs, expenses, and attorneys' fees incurred therein)
arising out of:
(A) [ * ]
(B) [ * ].
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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(ii) Notwithstanding Section 11(b)(i), ACLARA shall not be
obligated to indemnify CALIPER or the CALIPER Entities for any claims,
cross-claims, or counterclaims that may be asserted against CALIPER or the
CALIPER Entities by any person or entity [ * ].
12. COMPROMISE. The Integrated Agreement is the result of a compromise
between CALIPER and ACLARA in the Litigation and shall never at any time or for
any purpose be considered an admission of liability, fault, and/or
responsibility by CALIPER or ACLARA; nor shall the existence or performance of
any obligation under the Integrated Agreement constitute or be construed as an
admission of any liability, fault, or responsibility whatsoever by CALIPER or
ACLARA. It is expressly acknowledged and understood by CALIPER that ACLARA
continues to deny any and all liability, fault and/or responsibility for the
matters alleged by CALIPER in the Litigation. It is also expressly acknowledged
and understood by ACLARA that CALIPER continues to deny any and all liability,
fault, and/or responsibility for the matters alleged by ACLARA in the
Litigation. This Settlement Agreement shall not be construed as being an
acknowledgment of the absence of liability or fault on behalf of any third
person (including, without limitation, [ * ]). This Section is without prejudice
to the mutual right of the Parties otherwise to enforce the prospective rights
and obligations established under the Integrated Agreement.
13. ATTORNEYS' FEES. The Parties acknowledge and agree that CALIPER and
ACLARA shall each bear its own costs, expenses, consultant and expert fees, and
attorneys' fees arising out of and/or connected with the Litigation, the
negotiation, drafting, and execution of the Integrated Agreement, and all
matters arising out of or connected therewith, except that in the event any
action is brought to enforce the Integrated Agreement, the prevailing Party
shall be entitled to reasonable attorneys' fees, expenses and costs in addition
to all other relief to which that Party may be entitled, if the Arbitration
Panel finds that the non-prevailing Party's position was frivolous or taken in
bad faith.
14. CONSTRUCTION AND INTERPRETATION.
(a) The Settlement Agreement is the product of negotiation and
preparation by and among the Parties and their respective attorneys. The Parties
therefore expressly acknowledge and agree that the Settlement Agreement shall
not be deemed prepared or drafted by one Party or another, or its attorneys, and
will be construed fairly in accordance with its terms and without any
construction in favor of or against either Party.
(b) The captions and section and paragraph headings used in the
Settlement Agreement are inserted for convenience only, and shall not affect the
meaning or interpretation of the Integrated Agreement.
(c) The Recitals and Exhibits to the Integrated Agreement are
integral parts of the Integrated Agreement, and will be read and construed and
have the same force and effect as if set out in the body of the Integrated
Agreement.
15. GOVERNING LAW. The Settlement Agreement shall in all respects be
interpreted in accordance with and governed by the laws of the State of
California, United States, without reference to or application of its conflicts
of law provisions.
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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16. BINDING EFFECT. Except as expressly provided otherwise, the Settlement
Agreement shall be binding upon and inure to the benefit of the Parties, the
CALIPER Entities and the ACLARA Entities.
17. EFFECTIVE DATE. The Integrated Agreement shall be effective as of the
date of the complete execution by the Parties and their attorneys of all of the
agreements which are a part of, and together form, the Integrated Agreement
(hereinafter the "Effective Date").
18. ENTIRE AGREEMENT. This Settlement Agreement together with the exhibits
hereto, and to the extent provided herein, the Cross-License Agreement and the
Common Stock Issuance Agreement, constitutes the entire agreement between the
Parties concerning the subject matter hereof and supersedes all prior or
contemporaneous representations, discussions, proposals, negotiations,
conditions, agreements and communications, whether oral or written, between the
Parties relating to the subject matter of this Agreement, including without
limitation the Term Sheet, and all past courses of dealing or industry custom.
There are no representations, warranties, agreements, arrangements, or
undertakings, oral or written, between CALIPER and ACLARA relating to the
subject matter of the Integrated Agreement that are not fully expressed in such
agreements. No amendment or modification of any provision of the Settlement
Agreement shall be effective unless in writing and signed by a duly authorized
signatory of the Party against which enforcement of the amendment or
modification is sought.
19. COVENANT NOT TO SUE. Each of the Parties hereto covenants and agrees,
on behalf of itself and on behalf of, in the case of CALIPER, each of the
CALIPER Entities, and, in the case of ACLARA, each of the ACLARA Entities, never
to commence and/or prosecute against the other any legal action and/or other
proceedings based in whole or in part upon the claims, demands, causes of
action, obligations, damages and/or liabilities released in this Settlement
Agreement.
20. MANDATORY ALTERNATIVE DISPUTE RESOLUTION PROCEDURE.
(a) SCOPE; DEFINED TERMS.
(i) GENERALLY. Each of CALIPER and ACLARA hereby acknowledges
and agrees, on behalf of itself and on behalf of, in the case of CALIPER, each
of the CALIPER Controlled Persons and, in the case of ACLARA, each of the ACLARA
Controlled Persons, that the alternative dispute resolution procedures set forth
in this Section 20 (hereinafter the "ADR Procedures") shall apply to [ * ] that
arise after the Effective Date, or arose prior to the Effective Date and have
not been released pursuant to the Settlement Agreement, and which:
(A) arise under the patent laws [ * ] ("Patent Disputes");
or
(B) arise out of, concern, or relate to the [ * ] which are
not [ * ] (including without limitation, disputes based upon contract, tort or
statute) ("Non-Patent Disputes").
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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Patent Disputes and Non-Patent Disputes are collectively referred to herein as
"Disputes." The Parties irrevocably waive their right to a jury trial with
respect to any and all Disputes. Notwithstanding the foregoing, Interferences
declared by the USPTO between a Patent [ * ] (as such terms are defined in the
Cross-License Agreement) shall be subject to Section 21 below.
(ii) DEFINED TERMS.
(A) "Assigned Patent" shall mean a Patent of a Party under
which any rights are transferred by such Party to a Controlled Person of such
Party, including through assignment of an underlying patent application, and/or
a patent owned by a Controlled Person based on research or development of a
party.
(B) "Controlled Person" shall mean, with respect to a
Party, any Person Controlled (as such term is defined by the Cross-License
Agreement) by such Party.
(C) "Person" shall mean an individual, sole proprietorship,
partnership, limited partnership, limited liability partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, or other similar entity or
organization.
(D) "Third Party" shall mean, with respect to a Party, any
third party who agrees, pursuant to Section 20(c)(ii), (iii) or (iv), to resolve
any dispute with the other Party, its Controlled Persons and/or its Third
Parties concerning, arising out of, or relating to (I) Patents owned or
controlled by CALIPER or ACLARA or (II) any Assigned Patent in accordance with
the ADR Procedures, as a Patent Dispute.
(iii) STATUS OF CONTROLLED PERSONS AND THIRD PARTIES AS PARTIES.
Except as otherwise set forth in this Settlement Agreement or limited by the
Arbitration Panel (as such term is defined in Section 20(h)), for purposes of
this Section 20 only, references to a Party, and its rights and obligations
under this Section 20, shall include any CALIPER Controlled Persons, CALIPER
Third Parties, ACLARA Controlled Persons and ACLARA Third Parties who are
parties to a given Dispute.
(b) CONSOLIDATION OF DISPUTES.
(i) Any Dispute involving both a Patent Dispute and a Non-Patent
Dispute which are so related as to form the same case or controversy within the
meaning of 28 U.S.C. Section 1367 and/or to constitute a compulsory counterclaim
within the meaning of Fed. R. Civ. P. 13(a) shall be treated as a Patent Dispute
for the purposes of this Section 20 and shall be joined in the same proceeding.
Such joinder shall not be required, however, if it would bar or delay assertion
of a Non-Patent Dispute because of the limit on the number of simultaneously
pending Patent Disputes established under Section 20(b)(iv) or 20(b)(v).
(ii) To the extent practicable, the Parties shall consolidate
within a single arbitration proceeding all related Disputes that may be
outstanding at the time such arbitration is commenced. However, unless the
Parties otherwise mutually agree, each proceeding involving [ * ]. Nothing in
this provision shall be construed as requiring a Party to
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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assert its patents at any time; nor will any Party be deemed to have waived its
right to assert any of its patents solely by reason of its failure to do so in
any given proceeding.
(iii) If the Parties are unable to agree to consolidate within a
single arbitration proceeding all related Disputes that may be outstanding at
the time such arbitration is commenced, those Disputes will be resolved
simultaneously in separate proceedings.
(iv) From the Effective Date, for a period of [ * ], no more than
[ * ] [ * ] may be at issue in any and all Patent Disputes which are pending at
the same time. [ * ] the right to assert [ * ], either directly or through their
respective Controlled Persons. The [ * ] may only be asserted in proceedings
commenced by third parties. [ * ] may only be asserted by [ * ] asserting claims
arising out of a different [ * ] than that asserted by [ * ] in a separate
pending proceeding, if any, commenced by [ * ], or against a different [ * ]
than that asserted by [ * ] in a pending proceeding, if any, commenced by [ * ].
[ * ] may only be commenced by [ * ] asserting claims arising out of a different
[ * ] than that asserted by [ * ] in a pending proceeding, if any, commenced by
[ * ] or against a different [ * ] than that asserted by [ * ] in a pending
proceeding, if any, commenced by [ * ].
(v) After expiration of the [ * ] following the Effective Date,
no more than [ * ] may be at issue in any and all Patent Disputes which are
pending at the same time. [ * ] the right to assert up to [ * ], either directly
or through their respective Controlled Persons. [ * ] may only be asserted in
proceedings commenced by third parties. [ * ] may only be asserted by [ * ]
asserting claims arising out of a different [ * ] than that asserted by [ * ] in
a separate pending proceeding, if any, commenced by [ * ], or against a
different [ * ] than that asserted by [ * ] in a pending proceeding, if any,
commenced by [ * ]. [ * ] may only be commenced by an [ * ] asserting claims
arising out of a different [ * ] than that asserted by [ * ] in a pending
proceeding, if any, commenced by [ * ] or against a different [ * ] than that
asserted by [ * ] in a pending proceeding, if any, commenced by [ * ].
(vi) For purposes of calculating the number of Patent Disputes
that may be pending simultaneously, a Patent Dispute shall be considered
"pending" during the period between (A) the service of a Demand for Arbitration
under Section 20(e) and (B) service of the final award of the Arbitration Panel
under Section 20(s), regardless of whether that final award is appealed.
(c) THIRD PARTIES. All Disputes shall be determined in accordance
with this Section 20 [ * ].
(i) NECESSARY PARTIES. If the interests of a third party are so
inextricably involved in the proceeding that the third party would constitute a
"person needed for just adjudication" within the meaning of Fed. R. Civ. P. 19
(hereinafter a "Necessary Party"), [ * ]
(ii) FUTURE LICENSEES AND SUBLICENSEES UNDER PARTY PATENTS.
ACLARA and CALIPER shall [ * ] (A) [ * ] (B) [ * ].
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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(iii) EXISTING LICENSEES AND SUBLICENSEES UNDER PARTY PATENTS.
ACLARA and CALIPER shall [ * ]:
(A) [ * ] (A) [ * ] (B) [ * ]
(B) [ * ] (A) [ * ] (B) [ * ].
(iv) PARTY COOPERATION IN ADR PROCEDURES WITH THIRD PARTIES. Each
Party agrees that it will resolve in accordance with the ADR Procedures any
Disputes [ * ] in accordance with the ADR Procedures.
(v) OTHER THIRD PARTIES WITH AN INTEREST IN A DISPUTE. A third
party who is [ * ] but who has an interest in a Dispute and would not be a
Necessary Party may be given notice of the Dispute and will be permitted to
participate if:
(A) the Parties agree; or
(B) after such Dispute arises, the third party agrees to
resolve such Dispute in accordance with the ADR Procedures, and agrees to become
contractually obligated to resolve any subsequent dispute between it and the
adverse Party in the existing Dispute concerning, arising out of, or relating to
(I) Patents owned or controlled by CALIPER or ACLARA and (II) any Assigned
Patents in accordance with the ADR Procedures as a Patent Dispute.
(vi) PROCEDURAL RIGHTS OF THIRD PARTIES. In any proceeding
involving a third party or Controlled Person under the ADR Procedures, such
third party or Controlled Person shall be afforded such procedural rights and
obligations as are consistent with the nature and scope of its interest in the
subject matter of the Dispute.
(D) INFORMAL DISPUTE RESOLUTION. The Parties adopt the principle that
Disputes should be regarded as business problems to be resolved promptly through
business-oriented negotiations before resorting to arbitration. The Parties
shall therefore first use their best efforts to attempt in good faith to resolve
such Dispute promptly by negotiation between executives of such Parties prior to
resorting to arbitration hereunder.
(i) A Party shall give the other Party or Parties written notice
of any Dispute not resolved in the normal course of business ("Notice of
Dispute"), which shall include a brief statement of the nature of the Party's
position and the relief requested and shall identify the executive who will
represent the Party in the negotiations and suggest a date for a face-to-face
meeting to discuss the Dispute.
(ii) Within fifteen business days of receiving a Notice of
Dispute, the responding Party or Parties shall participate in a face-to-face
meeting, at a mutually acceptable time and place, to discuss the Dispute in a
good-faith effort to achieve a resolution.
(iii) If the Dispute has not been resolved in the initial
face-to-face meeting, the Parties shall hold at least one additional
face-to-face meeting within five business days in a further effort to resolve
the Dispute. If that second meeting is unsuccessful in
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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achieving a resolution, and if the Parties do not agree within five business
days following such meeting to schedule additional meetings in lieu of
proceeding to arbitration, any Party to such Dispute may initiate an arbitration
proceeding after five business days following such second meeting.
(iv) All negotiations pursuant to this subsection concerning
Informal Dispute Resolution shall be treated as compromise and settlement
negotiations for purposes of applicable rules of evidence.
(e) INITIATION OF ARBITRATION. In the event that a Dispute is not
resolved by negotiation pursuant to the preceding subsection, the Dispute shall
be settled by binding arbitration in accordance with the terms set out below
("Arbitration"). Any Party may initiate an Arbitration proceeding by serving on
the other Party or Parties and filing with the American Arbitration Association
("AAA") a demand for arbitration ("Demand for Arbitration"). The Demand for
Arbitration shall state the claims, demands, prayer for relief and facts upon
which the same are based with the same level of specificity required by the
Federal Rules of Civil Procedure for a complaint and shall identify with
reasonable particularity any patent claims, products, activities, and/or
provisions of the Integrated Agreement that are at issue. The Demand for
Arbitration shall also identify the demanding Party's party-appointed
arbitrator.
(f) RESPONSE. Within fifteen business days of receipt of a Demand for
Arbitration, the responding Party or Parties shall each file with the AAA and
serve a response ("Response"), which shall identify: (i) its positions on the
issues identified in the Demand for Arbitration and any defenses to the
allegations set forth in the Demand for Arbitration in the same manner and with
the same level of specificity required by the Federal Rules of Civil Procedure
for an answer; and (ii) any counterclaims or additional issues that it believes
should be addressed in the arbitration proceeding with the same level of
specificity as required of the Demand for Arbitration; and (iii) the responding
Party's party-appointed arbitrator.
(g) AMENDMENT OF PLEADINGS. The amendment and supplementation of the
Demand for Arbitration and Response shall be permitted in the same manner and to
the same extent as set forth in Rule 15 of the Federal Rules of Civil Procedure.
In determining whether to grant leave to a party to amend, the Arbitration Panel
shall consider whether permitting such amendment would prevent it from rendering
a just and equitable decision in the proceeding within the Time Period specified
in Section 20(o).
(h) SELECTION OF ARBITRATORS. The Arbitration shall be held before a
neutral, independent, three-member arbitration panel ("Arbitration Panel"), of
which one member shall be selected by ACLARA, one member shall be selected by
CALIPER, and the third member shall be selected by the first two members. In the
event that ACLARA or CALIPER has ceded its right to appoint an arbitrator to a
third party (e.g., through a contract with that third party), such third party
will have the right and obligation to appoint an arbitrator in place of ACLARA
or CALIPER, as applicable. The selection of the third member, who shall serve as
chair ("Chair") of the Arbitration Panel, shall be made by the two
party-appointed arbitrators from among any candidates identified by them,
subject to the qualifications and requirements set forth herein. The Chair shall
be selected within fifteen business days following the appointment of the last
party-appointed arbitrator. The selection of each arbitrator shall be effected
by a notice that
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COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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includes sufficient information concerning the arbitrator's affiliations,
experience, and qualifications to permit the Parties to assess any potential
challenges.
(i) QUALIFICATION OF ARBITRATORS. Regardless of by whom appointed,
each of the arbitrators shall be neutral and unbiased and shall have no material
financial interest in any of the parties to the arbitration or the Disputes to
be decided. Each arbitrator shall have sufficient knowledge and experience (as
well as sufficient available time) to qualify him or her to understand and
evaluate the issues to be presented fully and intelligently within the time
allotted for the proceeding. In a Patent Dispute, the Chair shall be an attorney
[ * ] in the field of patent law and experience and/or training in one or more
technical areas relevant to the Dispute. In a Non-Patent Dispute, the Chair
shall be an attorney [ * ] in the field of patent law, the licensing of
intellectual property, and/or the litigation of intellectual property disputes.
Apart from a Party's initial contacts with its prospective party-appointed
arbitrators to ascertain their qualifications, availability, and willingness to
serve, there shall be no ex parte contacts between any Party-appointed
arbitrator and any Party. There shall be no ex parte contacts at any time
between any arbitrator and any Party concerning any matter bearing on the merits
of the issues to be determined in the arbitration.
(j) EFFECT OF FAILURE TO APPOINT ARBITRATOR. In the event a Party
fails to appoint its party-appointed arbitrator within the time required herein,
or if an arbitrator is removed or becomes unable to serve and the Party
appointing that arbitrator fails to appoint a replacement within fifteen
business days of receiving notice of the removal or resignation of that
arbitrator, or if the two party-appointed arbitrators fail to appoint (or
replace) the Chair within the required period, a request shall be made for
appointment of the required arbitrator by the AAA in accordance with Rule R-13
of the AAA Commercial Arbitration Rules, as amended and effective on September
1, 2000 ("AAA Rules") Any such appointment shall be made within fifteen business
days of submission of the request to the AAA.
(k) CHALLENGES TO ARBITRATORS. Any Party may challenge any arbitrator
for cause, based on interest, bias, lack of qualification, or inability to
serve. The Parties shall meet and confer in good faith on any such challenge,
which must be made within five business days of the arbitrator's appointment,
except that a later challenge may be made up to five business days after the
date on which the challenging Party first learns of the facts upon which the
challenge is based if those facts did not exist at the time of the original
five-day period and/or could not have been ascertained by the challenging Party
at that earlier time with the exercise of reasonable diligence. If the Parties
are unable to reach agreement on retention or dismissal of a challenged
arbitrator within five business days of a timely challenge, the challenge shall
be submitted to the AAA for resolution pursuant to R-19(b) of the AAA Rules. Any
such resolution shall be made within fifteen business days of submission to the
AAA.
(l) PROCEDURES. Unless the Parties otherwise agree, the AAA Rules
shall govern the Arbitration, except that in the case of any conflict between
this or any other provision of the Integrated Agreement and the AAA Rules, the
requirements of the Integrated Agreement shall govern. In the event that the AAA
Rules or the Integrated Agreement do not provide for a relevant rule or
procedure, the Arbitration shall follow such arbitration rules and procedures as
the Parties may agree upon or, in the absence of such agreement, as established
by the Arbitration Panel. Such rules and procedures shall be designed to
effectuate the Parties' intent
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COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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that the dispute be resolved fairly, efficiently, and in a cost-effective
manner. The Parties shall have full rights of disclosure and discovery provided
for under the Federal Rules of Civil Procedure and the Local Rules of the
District Court for the Northern District of California. The Arbitration Panel,
however, shall have wide discretion to streamline procedures in order to resolve
Disputes in a fair manner within the agreed upon time.
(m) LOCATION AND LANGUAGE. Unless the Parties otherwise mutually
agree, the Arbitration shall be conducted in San Francisco, California at the
offices of the AAA, and the proceedings shall be conducted in English.
(n) SUBSTANTIVE LAW. The Arbitration Panel shall apply the same
substantive laws as would be applied to the Dispute if it were brought before
the District Court. The interpretation and enforcement of the ADR Procedures and
any order or award entered thereunder, shall be governed by the Federal
Arbitration Act.
(o) TIME FOR DECISION. The Time Period for the arbitration of each
Patent Dispute shall depend upon the number of [ * ] involved in that Patent
Dispute as follows: (i) [ * ]; (ii) [ * ]; (iii) [ * ]; (iv) [ * ]; and (v)
[ * ]. The Time Period shall commence upon appointment of the Chair of the
Arbitration Panel. For this purpose, the appointment of the Chair shall be
effective five business days after the Chair is selected pursuant to Subsections
20(h) or 20(j) above, except that if the Chair is subject to an unsuccessful
challenge made within the initial five-day period under subsection 20(k), the
appointment shall be effective immediately upon resolution of the challenge. For
Non-Patent Disputes the Time Period shall be [ * ]. If one or more arbitrators
must be replaced after the initial five-day challenge period for each of them
has lapsed, the proceeding may be extended, if necessary, by up to, but no more
than, [ * ].
(i) The Arbitration Panel shall issue its final award within the
Time Period. In extraordinary circumstances, the Arbitration Panel, upon a
finding that it is impracticable to meet this deadline consistent with its
primary obligation justly to determine the controversy before it, shall have
discretion to extend or alter the deadline in [ * ], but only to the extent
necessary to preserve the enforceability of its awards. This deadline may also
be extended at any time with the agreement of all Parties to the Arbitration.
(ii) The Arbitration Panel shall in its discretion schedule (and
may in its discretion amend) deadlines for, inter alia, the close of discovery,
the submission of dispositive motions, the pre-hearing conference, and the
hearing to promote the orderly and just resolution within the Time Period of the
Dispute before it.
(p) DISPOSITIVE MOTIONS AND HEARING. Prior to the hearing, the
Parties may make motions for summary adjudication in accordance with Rule 56 of
the Federal Rules of Civil Procedure of any claims, counterclaims, defenses, or
issues as to which it believes there is no genuine issue of material fact. The
Arbitration Panel shall resolve such motions prior to the hearing. The
Arbitration Panel shall hold a hearing no later than one month before the
expiration of the Time Period to resolve those claims, counterclaims, defenses
and issues as to which the Arbitration Panel concludes that there exist genuine
issues of material fact. At that hearing, the Parties shall be permitted to
present, inter alia, live testimony of witnesses and legal arguments in support
of their respective positions. The Parties shall voluntarily produce all
documents that
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COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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they intend to use at the hearing and a list of intended witnesses, together
with a statement of the subject matter upon which each will testify, at least
two weeks prior to the hearing, subject to supplementation for purposes of
rebuttal or good cause shown.
(q) CONFIDENTIALITY. All Arbitration proceedings under this Section
20 shall be confidential, except to the extent otherwise agreed by the Parties
or required by law, regulation, or court order. If disclosure is so required,
the Parties shall cooperate to attempt to ensure that such disclosure is
strictly limited to that necessary to comply with such law, regulation, or order
and shall otherwise take such steps as are available to maintain the
confidentiality of the Arbitration to the full extent permitted by law. However,
in the event that a Party contends that a third party would constitute a
Necessary Party for purposes of a particular Arbitration proceeding or has a
right or obligation to participate in the Arbitration proceeding pursuant to a
commitment to be bound by the ADR Procedures, that Party may, following notice
to the other Parties, give notice of the proceeding to such third party.
(r) FEES AND EXPENSES OF THE ARBITRATION. The fees and expenses of
the arbitrators and any other joint costs of the Arbitration (including, without
limitation, incidental expenses of the arbitrators, facilities costs, and other
joint expenses, but excluding each Party's attorneys' fees, expert fees, and
other litigation expenses and costs) shall be [ * ]: (i) in the case of a Patent
Dispute, [ * ]; (ii) for a Non-Patent Dispute, [ * ]. If a Controlled Person,
Third Party or other third party participates in the proceeding, the Arbitration
Panel shall establish a fair allocation of joint costs to that Controlled
Person, Third Party or other third party, taking into account the presumptive
allocation established above, as well as the nature and scope of the Controlled
Person's, Third Party's, or other third-party's interest in the proceeding. The
failure of any Party to post its share of the joint costs shall subject that
Party to monetary or other sanctions at the discretion of the Arbitration Panel,
including terminating sanctions for repeated failure to post its share of the
joint costs. Notwithstanding the divisions established in or pursuant to this
subsection, the Arbitration Panel shall require a Party to bear the entire cost
of the Arbitration, or of a particular portion of the Arbitration, if it finds
that Party's position in that Arbitration or portion of the Arbitration to have
been frivolous or taken in bad faith.
(s) DECISIONS OF THE ARBITRATION PANEL.
(i) DECISIONS BY MAJORITY VOTE. All rulings by the Arbitration
Panel, including its final award, shall be by majority vote. The Arbitration
Panel shall issue its award in writing, accompanied by findings of fact and
conclusions of law, and signed by the arbitrators. If a decision is not
unanimous, the dissenting arbitrator shall identify in writing her or his
reasons for disagreement.
(ii) DAMAGES AWARDS. The Arbitration Panel shall be empowered to
award such compensatory damages, attorneys fees and exemplary damages, as are
authorized or permitted by the governing law with respect to the claim or claims
upon which liability is found.
(iii) DECLARATORY RULINGS. The Arbitration Panel shall be
empowered to issue awards in the form of declaratory determinations, applying
the standards applicable in federal courts for declaratory judgments.
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COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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(iv) INJUNCTIVE RELIEF. The Arbitration Panel may grant interim,
provisional, or final awards providing injunctive relief ("Injunction Orders").
If a Party refuses or fails to comply with an Injunction Order under this
provision, the prevailing Party may seek to have the Injunction Order enforced
by a court of competent jurisdiction under the Federal Arbitration Act or other
applicable laws. If the applicable law does not permit the Injunction Order to
be enforced directly, but instead requires further proceedings before the court,
the Parties agree that the substantive findings of the Arbitration Panel shall
be binding on the merits.
(t) REVIEW OF AWARDS IN NON-PATENT DISPUTES. No review of any order
or award entered by the Arbitration Panel in a Non-Patent Dispute shall be
available, except on the limited grounds established for appeal of binding
arbitral awards under the Federal Arbitration Act. Any arbitration award granted
under this provision may be confirmed and enforced in any court of competent
jurisdiction pursuant to the Federal Arbitration Act.
(u) REVIEW OF AWARDS IN PATENT DISPUTES. An Injunction Order or final
award entered in a Patent Dispute (collectively hereinafter an "Appealable
Award"), in addition to being reviewable under the Federal Arbitration Act,
shall be reviewable on the same grounds and to the same extent as if the
reviewing court were the United States Court of Appeals for the Federal Circuit
("Federal Circuit") reviewing an order or judgment of a United States District
Court, in accordance with the procedure set forth in section 20(v) below. No
review of orders and awards other than Appealable Awards shall be available to
the Parties, except on the limited grounds established for appeal of binding
arbitral awards under the Federal Arbitration Act. Any order or award in a
Patent Dispute which is not an Appealable Award may be confirmed and enforced in
any court of competent jurisdiction pursuant to the Federal Arbitration Act.
(v) APPEAL OF INJUNCTION ORDERS AND FINAL AWARDS IN PATENT DISPUTES.
In order to secure the expanded scope of review for Appealable Awards
contemplated in section 20(u) above, the Parties have provided a preferred and a
secondary method for securing such review. The secondary method is to be
followed in the event that a court of competent jurisdiction determines that the
Parties cannot obtain by the preferred method the substantive review of an
Appealable Award contemplated herein.
(i) PREFERRED METHOD. Upon entry of an Appealable Award by the
Arbitration Panel, any Party may make application to the District Court for
enforcement or confirmation of such Appealable Award.
(A) A Party contesting such Appealable Award, shall, within
thirty (30) days of notice of the Appealable Award, serve notice on the
prevailing Party of its desire to appeal. Within ten (10) business days of
receipt of such notice, the prevailing Party shall file an application to the
District Court for enforcement or confirmation of such Appealable Award. Within
five (5) business days following the filing of such application, the Party
seeking to appeal shall file in the District Court and serve on the other Party
or Parties a pleading stating the grounds for contesting or appealing such
Appealable Award. Such pleading may state as such grounds any grounds available
under the Federal Arbitration Act and any grounds that would be available if the
Federal Circuit were reviewing the Appealable Award as an order or judgment of a
United States District Court, including without limitation, whether such
Appealable Award is supported by substantial evidence and/or its conclusions of
law are
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erroneous. The Parties shall then enter into a stipulation consenting to the
confirmation of the award by the District Court and entry of the Appealable
Award as a judgment of the District Court, without waiving any right by the
Parties to appeal such Appealable Award. If the District Court or Federal
Circuit refuse to accept the stipulation or to act in accordance with it, the
Parties agree to forego the preferred method at that time, to dismiss the action
in the District Court (provided that claims asserted under the grounds for
review established under the Federal Arbitration Act may be dismissed without
prejudice), and to proceed in accordance with the secondary method set forth in
section 20(v)(ii) below.
(B) The Party contesting or appealing such Appealable Award
shall have the right to appeal the District Court's judgment to the Federal
Circuit for final resolution of such Patent Dispute, including all issues
arising under the patent laws and any patent questions determined or resolved by
such Appealable Award or the District Court's judgment, including without
limitation patent construction, interpretation, validity, enforceability and
infringement. In addition to reviewing the Appealable Award under the Federal
Arbitration Act, the Federal Circuit shall review the Appealable Award on the
same grounds and to the same extent as if it were reviewing an order or judgment
of a United States District Court, including without limitation, whether such
Appealable Award is supported by substantial evidence, and/or the conclusions of
law supporting such Appealable Award are erroneous.
(C) No Party shall contest the jurisdiction of the Federal
Circuit to hear and decide the appeal. A Party that challenges the jurisdiction
of the Federal Circuit in such appeal shall be liable to the other Party or
Parties for all attorney's fees incurred by such other Parties in connection
with actions taken pursuant to this preferred method. No Party shall assert that
any Party waived the right to appeal any issue by failing to litigate such issue
on the merits before the District Court or by entering into the stipulation
discussed in Subsection (A) above.
(D) If the Federal Circuit declines to accept an appeal for
jurisdictional reasons or otherwise dismisses the appeal without reaching the
merits, the District Court's judgment shall be vacated by stipulation and shall
have no further force or effect, and appeal may be had to a new three-member
private Appeal Panel (as such term is defined in Section 20(v)(ii)(D)) in
accordance with the procedures set forth in subsection 20(v)(ii) below. Any
appeal to such a private Appeal Panel shall be initiated within thirty days of
entry of the Arbitration Panel's Appealable Award, or rejection of the case on
jurisdictional grounds by the federal courts, if later.
(E) If the Federal Circuit decides on its own motion to
decline jurisdiction over, or otherwise refuses to reach the substantive merits
of, an appeal of an Appealable Award entered in Patent Disputes held under these
ADR Procedures, and if the grounds for that decision are of general
applicability and would apply to future appeals of Appealable Awards made under
these ADR Procedures, then any such future appeals shall be made directly
pursuant to subsection 20(v)(ii) below and need not first be presented to the
court.
(ii) SECONDARY METHOD
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(A) INITIATION OF ARBITRATION. Within 30 days of the entry
of the Arbitration Panel's Appealable Award, or rejection of the case on
jurisdictional grounds by the federal courts, if later, any Party desiring to
contest the Appealable Award may initiate an arbitration proceeding to appeal
such Appealable Award (the "Arbitration Appeal") by serving on the other Party
or Parties and filing with the AAA a Demand for Arbitration. The Demand for
Arbitration shall state with reasonable particularity the issues on appeal. The
Demand for Arbitration shall also identify the demanding Party's party-appointed
arbitrator.
(B) RESPONSE. Within fifteen business days of receipt of a
Demand for Arbitration, the responding Party or Parties shall each file with the
AAA and serve a Response, which shall identify with reasonable particularity:
(i) its positions on the issues identified in the Demand for Arbitration; (ii)
any additional issues to be raised by way of cross-appeal; and (iii) the
responding Party's party-appointed arbitrator.
(C) AMENDMENT OF PLEADINGS. The amendment and
supplementation of the Demand and Response shall be permitted only with leave of
the Appeal Panel.
(D) SELECTION OF ARBITRATORS. The Arbitration Appeal shall
be held before a neutral, independent, three-member arbitration panel ("Appeal
Panel"), of which one member shall be selected by each of ACLARA and CALIPER,
and the third member shall be selected by the first two members. In the event
that ACLARA or CALIPER has ceded its right to appoint an arbitrator to a third
party (e.g., through a contract with that third party), such third party will
have the right and obligation to appoint an arbitrator in place of ACLARA or
CALIPER, as applicable. The selection of the third member, who shall serve as
Chair of the Appeal Panel, shall be made by the two party-appointed arbitrators
from among any candidates identified by them, subject to the qualifications and
requirements set forth herein. The Chair shall be selected within fifteen
business days following the appointment of the last party-appointed arbitrator.
The selection of each arbitrator shall be effected by a notice that includes
sufficient information concerning the arbitrator's affiliations, experience, and
qualifications to permit the Parties to assess any potential challenges.
(E) QUALIFICATION OF ARBITRATORS. Regardless of by whom
appointed, each of the arbitrators on the Appeal Panel shall be neutral and
unbiased and shall have no material financial interest in any of the parties to
the arbitration or the Disputes to be decided. Each arbitrator shall be [ * ].
The Chair of the Appeal Panel shall also have experience and/or training in one
or more technical areas relevant to the Dispute. Apart from a Party's initial
contacts with its prospective party-appointed arbitrators to ascertain their
qualifications, availability, and willingness to serve, there shall be no ex
parte contacts between any Party-appointed arbitrator and any Party. There shall
be no ex parte contacts at any time between any arbitrator and any Party
concerning any matter bearing on the merits of the issues to be determined in
the Arbitration Appeal.
(F) EFFECT OF FAILURE TO APPOINT ARBITRATOR. In the event a
Party fails to appoint its party-appointed arbitrator within the time required
herein, or if an arbitrator is removed or becomes unable to serve and the Party
appointing that arbitrator fails to appoint a replacement within fifteen
business days of receiving notice of the removal or
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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resignation of that arbitrator, or if the two party-appointed arbitrators fail
to appoint (or replace) the Chair within the required period, a request shall be
made for appointment of the required arbitrator by the AAA in accordance with
Rule R-13 of the AAA Rules. Any such appointment shall be made within fifteen
business days of submission of the request to the AAA.
(G) CHALLENGES TO ARBITRATORS. Any Party may challenge any
arbitrator for cause, based on interest, bias, lack of qualification, or
inability to serve. The Parties shall meet and confer in good faith on any such
challenge, which must be made within five business days of the arbitrator's
appointment, except that a later challenge may be made up to five business days
after the date on which the challenging Party first learns of the facts upon
which the challenge is based if those facts did not exist at the time of the
original five-day period and/or could not have been ascertained by the
challenging party at that earlier time with the exercise of reasonable
diligence. If the Parties are unable to reach agreement on retention or
dismissal of a challenged arbitrator within five business days of a timely
challenge, the challenge shall be submitted to the AAA for resolution pursuant
to R-19(b) of the AAA Rules. Any such resolution shall be made within fifteen
business days of submission to the AAA.
(H) PROCEDURES. Briefing of the issues on appeal shall be
in accord with the rules of the Federal Circuit. Unless the Parties otherwise
agree, the AAA Rules shall govern the Arbitration Appeal, except that in the
case of any conflict between this or any other provision of the Integrated
Agreement and the AAA Rules, the requirements of the Integrated Agreement shall
govern. In the event that the AAA Rules or the Integrated Agreement do not
provide for a relevant rule or procedure, the Arbitration Appeal shall follow
such arbitration rules and procedures as the Parties may agree upon or, in the
absence of such agreement, as established by the Appeal Panel. Such rules and
procedures shall be designed to effectuate the Parties' intent that the dispute
be resolved fairly, efficiently, and in a cost-effective manner.
(I) LOCATION AND LANGUAGE. Unless the Parties otherwise
mutually agree, the Arbitration Appeal shall be conducted in San Francisco,
California at the offices of the AAA, and the proceedings shall be conducted in
English.
(J) SCOPE OF REVIEW AND SUBSTANTIVE LAW. The standard(s) of
review and the substantive law shall be the same as those ordinarily applied by
the Federal Circuit in an appeal from a United States District Court.
(K) THE RECORD ON APPEAL. The record on appeal shall
consist of the record (e.g., transcripts, filings and exhibits) of the
arbitration proceedings conducted in accordance with Section 20(e)-(s) giving
rise to the Arbitration Appeal ("Record on Appeal"). The Appeal Panel shall not
permit further discovery or take further evidence, but rather shall determine
the Arbitration Appeal based upon the briefs of the Parties, the Record on
Appeal, and the oral argument of counsel for the Parties.
(L) CONFIDENTIALITY. All Arbitration Appeal proceedings
under this provision shall be confidential, except to the extent otherwise
agreed by the Parties or required by law, regulation or Court Order. If
disclosure is so required, the parties shall cooperate to attempt to ensure that
such disclosure is strictly limited to that necessary to comply
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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with such law, regulation or order and shall otherwise take such steps as are
available to maintain the confidentiality of the Arbitration Appeal to the full
extent permitted to law.
(M) FEES AND EXPENSES OF THE ARBITRATION. The joint costs
of the Arbitration Appeal shall be [ * ]. Upon announcement of the final award
of the Appeal Panel, the [ * ] (which shall be identified in the Appeal Panel's
final award) [ * ] of the joint costs other than the fees of the arbitrators and
[ * ] of the fees of the arbitrators. [ * ] for any expenditures in excess of
that allocation previously made by such [ * ]. However, the Appeal Panel shall
require a Party to bear all or a greater proportion of the joint costs on appeal
for all or a particular portion of the Arbitration Appeal, if it finds that
Party's position in the Arbitration Appeal or portion of the Arbitration Appeal
to have been frivolous or taken in bad faith. The failure of any Party to post
its share of the joint costs shall subject that Party to monetary or other
sanctions at the discretion of the Appeal Panel, including terminating sanctions
for repeated failure to [ * ].
(N) DECISIONS OF THE APPEAL PANEL. All rulings by the
Appeal Panel, including its final award, shall be by majority vote. The
arbitrators shall issue their final award in writing, identifying the reasons
for the decision, and signed by the arbitrators. If a decision is [ * ].
(iii) The decision from the Federal Circuit (if on the merits) or
Appeal Panel shall be final. No further appeals shall be available. The losing
Party on appeal shall not contest or oppose any application by the prevailing
Party to confirm and enforce the final award entered by the Appeal Panel in any
court of competent jurisdiction.
(iv) Following the period for appeal established above, or
following the conclusion of any appeal (if and to the extent that the award is
affirmed), any Appealable Award entered pursuant to these ADR Procedures may be
confirmed and enforced in any court of competent jurisdiction in accordance with
the Federal Arbitration Act.
(w) BINDING EFFECT OF ARBITRATION DECISIONS. Any final determination
in an arbitration conducted pursuant to this provision (including any appeals,
if permitted) shall be binding and shall have full res judicata and collateral
estoppel effect as between the Parties to the Arbitration Appeal (including any
third parties who are contractually bound to participate in the proceeding, as
well as any third parties who in fact participate). However, it is not the
Parties' intent that any such arbitration decision is to create any rights in,
or to have preclusive effect on claims brought by or against, any third parties
who have not agreed to be bound by or otherwise joined in these ADR Procedures,
except insofar as the rights and obligations of a third party derive directly
from rights and obligations of the Parties (and any participating third parties)
that are actually adjudicated by the arbitration decision.
(x) SPECIAL RULE FOR PROCEEDINGS CONCERNING [ * ]. In the event, and
only in the event, of an Arbitration concerning the [ * ], in which [ * ]. In
considering [ * ], the Arbitration Panel shall, if asked, receive as evidence
and consider, but shall not be bound by, [ * ]. In any such Arbitration, the
Arbitration, including discovery, shall be bifurcated. The Arbitration Panel
shall first consider on [ * ]. Either Party may elect to appeal the decision [ *
] in accordance with the procedure set forth in section 20(v)(ii) above. Only
after the final
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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resolution of this first phase of the proceeding and resolution of any appeal
will the arbitrators consider and issue a decision, if necessary, on the
remaining matters. Each phase of such bifurcated proceeding shall count as a
separate Arbitration for purposes of calculating the time limit for issuance of
the final award.
(y) PROVISIONAL REMEDIES. The Arbitration Panel or the Appeal Panel
(or the Federal Circuit, in the context of any appeal from an Arbitration Panel
award made to that court) shall have exclusive authority to order provisional or
interim relief. Such provisional or interim relief may be immediately and
specifically enforced by a court otherwise having jurisdiction; provided,
however, that the effect of any Injunction Order shall be automatically stayed
pending the disposition of any appeal of such Injunction Order, without
prejudice to the right of the prevailing party to seek damages for any
infringement or other injury occurring during the course of such stay if the
Injunction Order is upheld.
(z) PERSONAL JURISDICTION AND VENUE. The Parties waive any objection
to venue and consent to the personal jurisdiction of the federal courts of the
Northern District of California or, if those courts lack subject matter
jurisdiction, to the Superior Court for the State of California in the county of
Santa Clara, California, in any action to enforce the ADR Procedures or any
order or award entered thereunder, or the provisional or interim remedies
provided for herein.
(aa) TERMINATION. This Section 20 shall terminate in accordance with
Section 32 of the Settlement Agreement.
21. SPECIAL ADR PROCEDURES FOR INTERFERENCES INITIATED BY THE UNITED
STATES PATENT & TRADEMARK OFFICE ("USPTO"). In the event that the USPTO declares
an Interference between a Patent [ * ], the Parties will promptly (and in no
event later than ten business days following receipt of notice of the
Interference from the USPTO) begin an arbitration proceeding ("Interference
Arbitration"). Without precluding the right of the Senior Party, as defined in
the USPTO regulations, to initiate the Interference Arbitration sooner, the
Junior Party, as defined in the USPTO regulations, in the Interference as
declared shall have the obligation to initiate the Arbitration by filing and
serving the Demand for Arbitration on the other Party and with the AAA within
the time limit.
(a) THIRD PARTIES. If, in addition to the [ * ], the Interference
involves a Patent of a third party, then the Parties will request such third
party to join in the Interference Arbitration; provided, however, that if such
third party declines to join in such proceeding, the Parties will nonetheless
proceed with the Interference Arbitration to determine their rights vis-a-vis
one another. Unless the Parties otherwise agree, any such third party that
agrees to participate in an Interference Arbitration shall not be entitled to
appoint an arbitrator but shall otherwise be afforded all other rights and
obligations of a Party under this Section.
(b) INFORMAL DISPUTE RESOLUTION PROCEDURE. The Informal Dispute
Resolution Procedure set out in subsection 20(d) shall not be required before an
Interference Arbitration is begun. The Parties shall, however, consider in good
faith whether the dispute can be resolved informally, and either Party may
request the scheduling of a meeting to address such a potential informal
resolution. Such a meeting shall take place within fifteen business days of
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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the request, or at such other time as the Parties may agree upon; however, the
Interference Arbitration shall not be deferred while such discussions take
place.
(c) PERIOD FOR APPOINTMENT OF ARBITRATORS. The Interference
Arbitration shall be resolved by the majority decision of three independent
neutral arbitrators (the "Interference Panel"). Each Party shall appoint one
arbitrator within ten business days of initiation of the Interference
Arbitration. The party-appointed arbitrators shall then have ten business days
to agree upon the appointment of the third arbitrator who shall be the Chair of
the Interference Panel. If they are unable to agree on the third arbitrator,
then the third arbitrator shall be appointed by the AAA in accordance with Rule
R-13 (Appointment from Panel).
(d) QUALIFICATION OF ARBITRATORS IN INTERFERENCE ARBITRATION.
Regardless of by whom appointed, each of the arbitrators on the Interference
Panel shall be neutral and unbiased and shall have no material financial
interest in any of the parties to the arbitration or the Disputes to be decided.
Each arbitrator shall have sufficient knowledge and experience (as well as
sufficient available time) to qualify him or her to understand and evaluate the
issues to be presented fully and intelligently within the time allotted for the
proceeding. In addition, the Chair of the Interference Panel shall [ * ]. Apart
from initial contacts with prospective Party-appointed arbitrators to ascertain
their qualifications, availability, and willingness to serve, there shall be no
ex parte contacts between any Party-appointed arbitrator and any Party. There
shall be no ex parte contacts at any time between any arbitrator and any Party
concerning any matter bearing on the merits of the issues to be determined in
the arbitration.
(e) EFFECT OF FAILURE TO APPOINT ARBITRATOR. In the event a Party
fails to appoint its party-appointed arbitrator within the time required herein,
or if an arbitrator is removed or becomes unable to serve and the Party
appointing that arbitrator fails to appoint a replacement within fifteen
business days of receiving notice of the removal or resignation of that
arbitrator, or if the two party-appointed arbitrators fail to appoint (or
replace) the Chair within the required period, the missing arbitrator shall be
appointed by the AAA in accordance with Rule R-13 (Appointment from Panel) of
the AAA Rules. Any such appointment shall be made within fifteen business days
of submission of the request to the AAA.
(f) CHALLENGES TO ARBITRATORS. Either Party may challenge any
arbitrator for cause, based on interest, bias, or inability to serve. The
Parties shall meet and confer in good faith on any such challenge, which must be
made within five business days of the arbitrator's appointment, except that a
later challenge may be made up to five business day after the date on which the
challenging Party first learns of the facts upon which the challenge is based if
those facts did not exist at the time of the original five-day period and/or
could not have been ascertained by the challenging Party at that earlier time
with the exercise of reasonable diligence. If the Parties are unable to reach
agreement on retention or dismissal of a challenged arbitrator within five
business days of a timely challenge, the issue will be submitted to the AAA for
resolution in accordance with the Rules.
(g) NARROWING OF ISSUES AND DISCOVERY. Within three weeks following
the final date by which party-appointed arbitrators must be named, the Parties
shall exchange any documents that they contend support their position(s) as to
Priority (as such term is defined in the Cross-License Agreement). Upon request
of the other Party (which must be made within ten
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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business days of such exchange), each Party shall also produce any specifically
identified related documents (e.g., additional pages from the same laboratory
notebooks) that may reasonably be needed to establish a complete record
concerning the documents that have been provided. Thereafter, to the extent
possible the Parties shall agree to a stipulated set of facts and narrow the
issues for resolution. If the Parties cannot so agree and with respect to the
remaining issues, the Parties shall voluntarily produce all documents that they
intend to use at the hearing and a list of intended witnesses, together with a
statement of the subject matter upon which each will testify, at least two weeks
prior to the hearing, subject to supplementation for purposes of rebuttal or
good cause shown. No other discovery shall be permitted unless ordered by the
Interference Panel upon a showing of exceptional circumstances.
(h) ISSUES FOR DETERMINATION. The only issues before the Interference
Panel shall be:
(i) [ * ];
(ii) [ * ]
(iii) [ * ].
The Interference Panel shall render a decision on all three issues regardless of
the outcome of its determination on any of them. However, the Interference Panel
shall only disclose to the Parties such portions of its decision as are
necessary to implement Sections 21(j) and 21(m).
(i) [ * ]
(j) PROCEDURE. The rule of decision for the Interference Panel shall
be as follows:
(i) If the Interference Panel finds that there is no [ * ], it
shall initially notify the Parties of its decision on that issue only and shall
preserve in confidence its determination on the other two issues. The Parties
shall jointly seek dissolution of the Interference on that basis. If the USPTO
declines to dissolve the Interference or if the Interference Panel determines
that there is an interference-in-fact, the Interference Panel shall promptly
inform the Parties of its determination on support and Priority, and the Parties
shall then have the respective rights and obligations set out below.
(ii) If the Interference Panel determines that neither Party has
support for its claims, both Parties shall promptly withdraw their respective
claims.
(iii) If the Interference Panel determines that only one Party
can support its claims, then that Party shall prevail in the Interference
Arbitration and be entitled to those claims.
(iv) If the Interference Panel determines that both Parties can
support their claims, then the Party identified by the Interference Panel as
having Priority shall be the prevailing Party and entitled to those claims.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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(k) TIME LIMIT. The proceeding shall be completed, and a decision
issued, as promptly as possible but in any event within [ * ] from the date on
which the Chair of the Interference Panel is appointed, or if a shorter time
limit is set by the USPTO for completion of the Interference Arbitration, within
the limit set by the USPTO.
(l) FORM OF DECISION. The Interference Panel shall make its decision
by majority vote. The Interference Panel shall not issue written findings of
fact and conclusions of law, but shall instead merely identify the claims or
sets of claims at issue, and which Party, if any, is entitled to those claims.
If the Interference declared by the USPTO involves multiple sets of potentially
interfering claims, the Interference Panel shall render separate determinations
as to each set of claims.
(m) RIGHTS AND OBLIGATIONS OF THE PARTIES FOLLOWING THE PANEL'S
DETERMINATION.
(i) The decision of the Interference Panel shall be final and
non-appealable and may be confirmed and enforced in any court of competent
jurisdiction if the non-prevailing Party does not voluntarily comply with the
decision by taking the actions set out in this subsection. The non-prevailing
Party shall not take any steps to challenge or contest the decision in any
forum, including without limitation the USPTO.
(ii) Upon receipt of notice of the decision of the Interference
Panel, the non-prevailing Party shall promptly withdraw or amend accordingly the
non-prevailing claims that were included in the Interference and, if necessary,
shall take such actions as are necessary (e.g., filing a concession of priority
or request for adverse judgment), to permit the prevailing Party to continue to
prosecute those of its claims that were included in the Interference upon which
it prevailed.
(n) ABSENCE OF FUTURE PRECLUSIVE EFFECT. In any subsequent action or
dispute between the Parties outside of the context of an Interference between a
Patent [ * ], the award entered by the Interference Panel shall have no issue or
fact preclusive effect, and shall be inadmissible to establish any fact. The
intent of the Parties in agreeing to this arbitration procedure is simply to
streamline the Interference procedure. The Parties preserve any and all rights
and defenses outside of such Interference procedure in any forum whatsoever,
whether in alternative dispute resolution procedures or in proceedings before
any court or other governmental agency.
(o) CONFIDENTIALITY. Any arbitration under this Section 21 shall be
strictly confidential and shall not be disclosed, except as may be required by
law, regulation or court order. If disclosure is so required, the Parties shall
cooperate to attempt to ensure that such disclosure is strictly limited to that
necessary to comply with such law, regulation or order and shall otherwise take
such steps as are available to maintain the confidentiality of the Interference
Arbitration to the full extent permitted to law. If the non-prevailing Party
fails to withdraw or adequately amend its claims as provided in Section
21(m)(ii) above, the prevailing Party may seek injunctive relief to require such
compliance; however, the Parties shall seek to have any such judicial
proceedings maintained as confidential and the record sealed.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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(p) COSTS AND FEES. The [ * ]. If a third party participates in the
Interference Arbitration, the Interference Panel shall establish a fair
allocation of joint costs to that third party, taking into account the
presumptive allocation established above, as well as the nature and scope of the
third-party's interest in the proceeding.
(q) THIRD PARTIES. Neither CALIPER, nor ACLARA, will assist or enable
any third party to take any action that CALIPER or ACLARA, as applicable, would
be prohibited from taking under this Section 21 or Sections 5.1 or 5.2 of the
Cross License Agreement, including by transferring rights in a Patent (including
a patent application therein) involved in an Interference between a Patent [ * ]
to a third party without the attendant agreement to abide by this Section 21 and
Sections 5.1, 5.2 and 5.3 of the Cross License Agreement; [ * ]
(r) TERMINATION. This Section 21 shall terminate in accordance with
Section 32 of the Settlement Agreement.
22. ASSIGNMENT. The Parties agree that their rights and obligations under
this Settlement Agreement, and its accompanying rights and obligations, may not
be sold, transferred, assigned, delegated, pledged, otherwise disposed of, in
whole or part, whether voluntarily, by operation of law or otherwise, by any
Party without the prior written consent of the other Party, except that either
Party may assign this Settlement Agreement, without the prior written consent of
the other Party, in connection with a Change in Control (as defined in the
Cross-License Agreement) of the assigning Party, or of such Party's microfluidic
systems line of business. Subject to the preceding sentence, the rights and
liabilities of the Parties hereto will bind, and inure to the benefit of, their
respective and permitted assignees and successors and is binding on the Parties
and their successors and permitted assigns. Any attempted assignment other than
in accordance with this Section 22 shall be null and void. This Settlement
Agreement shall be binding upon all successors in interest to all or
substantially all of either Parties' microfluidic systems line of business.
23. NOTICES. Any notice, request, demand, or other communication required
or permitted hereunder shall be in writing, shall reference this Settlement
Agreement and shall be deemed to be properly given: (a) when delivered
personally; (b) when sent by facsimile, with written confirmation of receipt;
(c) five business days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (d) two business days after
deposit with a private industry express courier, with written confirmation of
receipt. All notices shall be sent to the address set forth below (or to such
other address as may be designated by a Party by giving written notice to the
other Party pursuant to this Section 23:
- ---------------------------------------------- --------------------------------------------
IF TO ACLARA: IF TO CALIPER:
- ---------------------------------------------- --------------------------------------------
Aclara BioSciences, Inc. Caliper Technologies Corp.
1288 Pear Ave 605 Fairchild Drive
Mountain View, CA 94043 Mountain View, CA 94043-2234
Attn: General Counsel Attn: Sr. Director of Legal Affairs
with a copy to: with a copy to:
David Doyle, Esq. Sonya Winner, Esq.
- ---------------------------------------------- --------------------------------------------
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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- ---------------------------------------------- --------------------------------------------
Morrison & Foerster LLP Covington & Burling
3811 Valley Centre Drive, Suite 500 601 California Street, 19th Floor
San Diego, CA 92130 San Francisco, CA 94108
- ---------------------------------------------- --------------------------------------------
24. WAIVER OF BREACH OR DEFAULT. The waiver by either Party of a breach of
or a default under any provision of the Settlement Agreement, shall not be
effective unless in writing and shall not be construed as a waiver of any
subsequent breach of or default under the same or any other provision of the
Settlement Agreement, nor shall any delay or omission on the part of either
Party to exercise or avail itself of any right or remedy that it has or may have
hereunder operate as a waiver of any right or remedy.
25. SEVERABILITY. If the application of any provision of the Settlement
Agreement or any promise hereunder to any particular facts or circumstances
shall be held to be invalid, unenforceable, prohibited or illegal by an
arbitration panel, a court or any other governmental or supranational authority
(including, without limitation, the European Commission) of competent
jurisdiction, then the validity and enforceability of such provision or promise
as applied to any other particular facts or circumstances and the validity of
other provisions of the Settlement Agreement or promises hereunder shall not in
any way be affected or impaired thereby.
26. COUNTERPARTS. This Settlement Agreement may be executed in one or more
counterparts, with the same effect as if the Parties had signed the same
document. Each counterpart so executed shall be deemed to be an original, and
all such counterparts shall be construed together and shall constitute one
Settlement Agreement.
27. PUBLICITY. The Parties shall [ * ]. The Parties shall not make public
statements regarding [ * ] shall be confidential, but may be disclosed without
consent (a) for ordinary business purposes under a further binder of
confidentiality, or (b) as required by law or court order.
28. THIRD PARTIES. Nothing in this Settlement Agreement shall be deemed to
constitute a waiver or release by either Party of any rights or actions that it
may have with respect to third parties [ * ] other than those specifically
provided herein. Nothing in this Settlement Agreement is intended to provide
benefits or rights to third parties, other than those specifically provided
therein, [ * ]
29. FORCE MAJEURE. Neither Party shall be deemed to be in default of, or
to have breached, any provision of this Settlement Agreement as the result of
delay or failure in performance resulting directly or indirectly from
circumstances beyond the Party's reasonable control, including without
limitation, acts of God, acts of civil or military authority, civil disturbance,
war, strikes or other labor disputes, fires, transportation contingencies, laws,
regulations, acts or orders or any government agency or official thereof, or
other catastrophes. The non-performing Party shall notify the other Party of
such force majeure within three days after such occurrence by giving notice to
the other party stating the nature of the event, its anticipated duration, and
any action being taken to avoid or minimize its effect. The suspension of
performance shall be of no greater scope and no longer duration than is
necessary and the non-performing Party shall use commercially reasonable efforts
to remedy its inability to perform.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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30. FURTHER ASSURANCES. Each Party agrees to take or cause to be taken
such further actions, and to execute, deliver and file or cause to be executed,
delivered and filed such further documents and instruments, and to obtain such
consents, as may be reasonably required or requested in order to effectuate
fully the purposes, terms and conditions of this Settlement Agreement.
31. RELATIONSHIP OF THE PARTIES. Nothing contained in this Settlement
Agreement shall be deemed or construed as creating a joint venture, partnership,
agency, employment or fiduciary relationship between the Parties. Neither Party
nor its agents have any authority of any kind to bind the other Party in any
respect whatsoever, and the relationship of the Parties is, and at all times
shall continue to be, that of independent contractors.
32. SURVIVAL; EFFECT OF BREACH OF OTHER AGREEMENTS.
(a) Subject to Section 32(b), this Settlement Agreement shall survive
termination of the Cross-License Agreement and the Common Stock Issuance
Agreement.
(b) Sections 20 and 21 of this Settlement Agreement shall terminate
upon the date of expiration, abandonment or final determination of invalidity or
unenforceability of the last remaining Valid Claim within the `022 Patent Family
and the Ramsey Patent Family, as such terms are defined in the Cross License
Agreement.
(c) No breach of the Cross-License Agreement or the Common Stock
Issuance Agreement shall, by itself, constitute a breach of this Settlement
Agreement, unless such breach is itself a breach of this Settlement Agreement.
(d) The Releases contained herein shall survive termination of this
Settlement Agreement.
Dated: March 12, 2001 By: /s/ Jame L. Knighton
---------------------------- ---------------------
Dated: March 12, 2001 By: /s/ Joseph M. Limber
---------------------------- ----------------------
Dated: By:
---------------------------- ----------------------
Dated: By:
---------------------------- ----------------------
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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Exhibit A
[ * ]
(10 pages of continuous text omitted here)
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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Exhibit A
[ * ]
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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Exhibit B
[ * ]
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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Exhibit B
Cross-License Agreement
See Exhibit 10.30 to this Caliper Technologies 10-Q
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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Exhibit C
Common Stock Issuance Agreement
See Exhibit 10.31 to this Caliper Technologies 10-Q
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
33
34
Exhibit D
Exhibit D is left intentionally blank
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
34