[ * ] = 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 10.52
SOLE COMMERCIAL PATENT LICENSE AGREEMENT
THIS AGREEMENT, made effective on the 1st day of November, 2002 (the
"Effective Date"), by and between UT-Battelle, LLC (hereinafter "UT-Battelle"),
a corporation organized and existing under the laws of the State of Tennessee
and having a place of business at Post Office Box 2008, Oak Ridge, Tennessee
37831-6499, and Caliper Technologies Corp., (hereinafter "Licensee"), a
corporation organized and existing under the laws of the State of Delaware and
whose address for notices is 605 Fairchild Drive, Mountain View, California
94043-2234, both being hereinafter jointly referred to as the "Parties" or
singly as "Party."
W I T N E S S:
A. Martin Marietta Energy Systems, Inc. (hereinafter "MMES"), a Delaware
corporation, pursuant to Prime Contract No. DE-AC05-84OR21400 with the United
States Government as represented by the Department of Energy (hereinafter "DOE")
originally developed and/or obtained rights to the Original Proprietary Rights
relating to Products subject to the DOE nonexclusive, nontransferable,
irrevocable, paid-up license for the United States Government and certain
march-in rights and any other conditions of waivers granted by the DOE;
B. MMES and Caliper Microanalytic Systems, Inc. (hereinafter "Caliper
Microanalytic"), a Maryland corporation, executed a sole commercial patent
license agreement to the Original Proprietary Rights having an effective date of
February 14, 1995;
1
C. MMES changed its name to Lockheed Martin Energy Systems, Inc.
(hereinafter "LMES"), a Delaware corporation, when the former Lockheed
Corporation and Martin Marietta Corporation merged;
D. Caliper Microanalytic changed its name to Caliper Technologies, Corp.
(hereinafter "Licensee") and reorganized under the laws of the State of
Delaware;
E. Caliper Microanalytic assigned its rights and delegated its duties with
respect to the Original Proprietary Rights to Licensee and LMES consented to
said assignment and delegation;
F. The prior sole commercial patent license agreement between LMES and
Licensee was superceded by two sole commercial patent license agreements
identified as PLA 147 and PLA 148 having respective effective dates of September
1, 1995;
G. LMES and Licensee amended PLA 147 by virtue of an Amendment A having an
effective date of May 1, 1996;
H. LMES and Licensee amended PLA 148 by virtue of an Amendment A having an
effective date of May 1, 1996;
I. Lockheed Martin Energy Research Corporation (hereinafter "LMER"), a
Delaware corporation, succeeded LMES as the management and operating contractor
of the Oak Ridge National Laboratory (hereinafter "ORNL") pursuant to Prime
Contract No. DE-AC05-96OR22464 with the DOE;
J. LMES, pursuant to Prime Contract No. DE-AC05-84OR21400 with the DOE,
assigned its rights and delegated its duties with respect to the Original
Proprietary Rights to LMER and Licensee consented to said assignment and
delegation;
K. LMER and Licensee amended PLA 147 by virtue of an Amendment B having an
effective date of June 16, 1997;
L. LMER and Licensee amended PLA 148 by virtue of an Amendment B having an
effective
2
date of June 16, 1997;
M. LMER, pursuant to Prime Contract No. DE-AC05-96OR22464 with the DOE
originally developed and/or obtained rights to the New Proprietary Rights
relating to Products subject to the DOE nonexclusive, nontransferable,
irrevocable, paid-up license for the United States Government and certain
march-in rights and any other conditions of waivers granted by the DOE;
N. UT-Battelle, LLC (hereinafter "UT-Battelle"), a Tennessee limited
liability company, succeeded LMER as the management and operating contractor of
the ORNL pursuant to Prime Contract No. DE-AC05-00OR22725 with the DOE;
O. LMER, pursuant to Prime Contract No. DE-AC05-96OR22464 with the DOE,
assigned its rights and delegated its duties with respect to the Original
Proprietary Rights and the New Proprietary Rights to UT-Battelle and Licensee
consented to said assignment and delegation;
P. UT-Battelle and Licensee amended PLA 147 by virtue of an Amendment C
having an effective date of January 2, 2001;
Q. UT-Battelle and Licensee amended PLA 148 by virtue of an Amendment C
having an effective date of January 2, 2001;
R. UT-Battelle and Licensee desire to replace all prior license agreements
between the Parties relating to the Original Proprietary Rights and any and all
amendments thereto (collectively, the "Prior Agreements") with a new amended and
restated sole commercial license agreement to the Original Proprietary Rights;
and
S. UT-Battelle and Licensee desire to add New Proprietary Rights to the
sole commercial license agreement regarding Original Proprietary Rights on the
terms set forth in this Agreement.
THEREFORE, in consideration of the foregoing premises and the
respective covenants,
3
undertakings and agreements contained herein, the Parties hereto agree to be
bound as follows:
1. DEFINITIONS
1.1 "Proprietary Rights" shall mean the U.S. and foreign patents and U.S.
and foreign patent applications listed in Exhibits A1 and A2 (collectively
referred to as "Exhibit A" elsewhere in this Agreement) attached hereto and
hereby incorporated into this Agreement by reference and all United States and
foreign patents and patent applications issuing from or corresponding to such
United States and foreign patent applications including all continuations,
continuations-in-part, divisions, reissues, reexaminations and temporal
extensions of any of the foregoing.
1.2 "Original Proprietary Rights" shall mean the Proprietary Rights that
were subject to the Prior Agreements, as listed in Exhibit A1 herein and all
United States and foreign patents and patent applications issuing from or
corresponding to those listed on Exhibit A1.
1.3 "New Proprietary Rights" shall mean all Proprietary Rights other than
the Original Proprietary Rights, as listed in Exhibit A2 herein and all United
States and foreign patents and patent applications issuing from or corresponding
to those listed on Exhibit A2.
1.4 "Products" shall mean any and all products manufactured, used, sold or
transferred by Licensee or manufactured, used or sold by Licensee's Affiliates
or Sublicensee(s), covered by one or more Claims of the Proprietary Rights
licensed hereunder.
1.5 "Other Field" shall mean the field of "Analysis of Nucleic Acids for
Diagnostic Applications and Non-Electrophoretic Means of Gene Discovery."
1.6 "Net Sales" shall mean the total amounts received from purchasers
during the accounting period in question for Products sold commercially by
Licensee and Licensee's Affiliates, less allowances for returns of Products,
discounts, commissions, allowances actually granted (including any allowances
for bad debt), transportation and delivery charges, including insurance
4
premiums, and excise or other taxes on Products. Net Sales in the case of
Products used by Licensee in a service business or other commercial enterprise
(but not Licensee's or Sublicensees' internal research and development) shall
mean the fair market value of Products as if they were sold to an unrelated
third party in similar quantities. It is the Parties' intention that Net Sales
will not include any transfer of Products to any Affiliate, unless the Affiliate
is the end user of such Products.
With respect to any product that is developed and sold by Licensee or its
Affiliates and is comprised in part of one or more Products and of one or more
other products or parts which could be sold separately (a "Combination
Product"), Net Sales shall be determined by multiplying the amounts received by
Licensee or its Affiliates attributable to Combination Products by a fraction,
the numerator of which is the fair market value of the Product included in the
Combination Product, and the denominator of which is the sum of the fair market
value of such Product and the fair market value of the products or parts which
are not Products. Whenever possible, the fair market value of the Product
included in the Combination Product will be the market price at which such
Product is sold on a stand-alone basis; provided that fair market value shall be
determined reasonably and in good faith by Licensee in the event that no market
price is available.
1.7 "Affiliate" shall mean any entity which controls, is controlled by or
is under common control with Licensee, where "control" means beneficial
ownership of more than fifty percent (50%) of the outstanding shares or
securities.
1.8 "Sublicensee" shall mean third parties (other than Affiliates) to whom
Licensee has granted a sublicense under the Proprietary Rights.
1.9 "Sublicensing Revenue" shall mean the amount actually paid to Licensee
by a Sublicensee, in consideration for the sublicense, including any license
fees, royalties and
5
milestone payments. Sublicensing Revenue shall not mean research and development
support payments (other than in consideration for the Proprietary Rights) and
any payments to Licensee by a Sublicensee to compensate Licensee for the grant
of rights to any other intellectual property of Licensee.
1.10 "Claim" shall mean a claim of an issued and unexpired patent within the
Proprietary Rights that has not been held unenforceable, unpatentable, or
invalid by a decision of a court of competent jurisdiction, and that has not
been admitted to be invalid or unenforceable through reissue, disclaimer or
otherwise. "Claim" shall also mean a pending claim of any patent application
that is added to the Proprietary Rights after the Effective Date of this
Agreement by amendment of this Agreement (i.e. that would not fall within the
above definition of Proprietary Rights but for an amendment of this Agreement).
1.11 "Original Field of Use" shall mean all fields of application of the
Proprietary Rights excluding "Analysis of Nucleic Acids for Diagnostic
Applications and Non-Electrophoretic Means of Gene Discovery."
1.12 "All Fields of Use" shall mean all fields of application of the
Proprietary Rights.
2. GRANTS
2.1 Subject to the terms and conditions of this Agreement, UT-Battelle
hereby grants to Licensee and its Affiliates the exclusive (non-governmental)
commercial right and license under the Original Proprietary Rights to
manufacture, have manufactured for Licensee and its Affiliates, use, sell, offer
for sale and import the Products in the Original Field of Use, including the
exclusive (non-governmental) commercial right to grant sublicenses in the
Original Field of Use under non-financial terms and conditions consistent with
those set forth in this Agreement and subject to sublicense royalties as
provided in Exhibit B. Licensee agrees to provide UT-
6
Battelle a copy of each sublicense within thirty (30) days of the effective date
thereof.
2.2 Subject to the terms and conditions of this Agreement, UT-Battelle
hereby grants to Licensee and its Affiliates the exclusive (non-governmental)
commercial right and license under the New Proprietary Rights to manufacture,
have manufactured for Licensee and its Affiliates, use, sell, offer for sale and
import the Products in All Fields of Use, including the exclusive
(non-governmental) right to grant sublicenses in All Fields of Use under
non-financial terms and conditions consistent with those set forth in this
Agreement and subject to sublicense royalties as provided in Exhibit B. Licensee
agrees to provide UT-Battelle a copy of each sublicense within 30 days of the
effective date thereof.
2.3 In the event that any rights under the Original Proprietary Rights in
the Other Field revert to UT-Battelle, UT-Battelle shall so notify Licensee. If
all of said rights revert to UT-Battelle and, thus, UT-Battelle can make said
rights available to Licensee on an exclusive (non-governmental) commercial basis
then Licensee shall have the right to include such rights in the Other Field in
the license granted to Original Proprietary Rights under this Agreement, upon
payment to UT-Battelle of an amount equal to the remaining installment of the
up-front fee owed to UT-Battelle by a third party, and, by amendment of Exhibit
B, the addition of the minimum royalty still owed to UT-Battelle by the third
party, to the minimum royalty agreed to in this Agreement by Licensee. Such
addition shall occur to the extent that the installment or minimum royalty
payments owed UT-Battelle by the third party are reduced or eliminated. However,
if less than all of said rights revert to UT-Battelle (e.g., the previous
licensee retains non-exclusive rights) and, thus, UT-Battelle cannot make said
rights available to Licensee on an exclusive (non-governmental) commercial
basis, then: (1) UT-Battelle shall make said rights available to Licensee under
the financial terms and conditions described in this Section to the maximum
extent it is able to do so (e.g., by including such rights in the Other Field in
the license granted to
7
Original Proprietary Rights under this Agreement, subject only to the prior
licensee's retained, non-exclusive rights in the Other Field); (2) UT-Battelle
shall not further license or make said rights available to any other third
parties; and (3) the terms and conditions of Exhibit D shall apply to said
rights.
2.4 UT-Battelle hereby agrees not to grant to any other party right and
license to Proprietary Rights in accordance with the grants hereinabove, unless:
(1) any grant described herein is converted to a nonexclusive grant or
terminated consistent with the terms of this Agreement; or (2) UT-Battelle is
required to so grant such right and license in accordance with Federal Statutory
or Regulatory enactments conditioning the waiver of rights to UT-Battelle by the
DOE, particularly as set forth in 10 CFR 784.12; 10 CFR Part 781; or 37 CFR Part
404.
2.5 Licensee agrees that any Products for use or sale in the United States
shall be manufactured substantially in the United States, its territories and
possessions.
2.6 Should Licensee fail to meet the developmental commitments described in
Exhibit C herein with respect to the New Proprietary Rights, UT-Battelle shall
have the option, to be exercised on [*] written notice anytime during [*] to
convert the license grant under New Proprietary Rights set forth in Paragraph
2.2 to a nonexclusive license pursuant to the terms of Paragraph 2.9 below.
2.7 Licensee agrees to affix appropriate markings of the applicable
UT-Battelle Proprietary Rights upon or in association with Licensee's Products
or the packaging thereof, as required under 35 U.S.C. 287. Licensee further
agrees to use commercially reasonable efforts to require that Licensee's
Affiliates and future Sublicensees (excluding existing Sublicensees as of the
Effective Date) also mark the Products consistent with the terms of this
Agreement.
2.8 Licensee shall have the option, to be exercised at any time on [*] to
convert the license grant set forth in Section 2.2 to nonexclusive with respect
to any patents or patents applications
8
included in the New Proprietary Rights on the terms set forth in Section 2.9.
2.9 If the license to New Proprietary Rights granted under Section 2.2 is
converted into a nonexclusive license with respect to any or all patents and
patent applications pursuant to Sections 2.6 or 2.8, then as of the effective
date of such conversion, with respect to such patents or patent applications (i)
Licensee shall no longer be obligated to reimburse patent expenses under Article
20 (but UT-Battelle shall retain any reimbursements previously paid), (ii)
royalties and sublicense royalties due under this Agreement shall be reduced by
[*] (iii) Article 6 Infringement by Third Parties shall be replaced by the
Article 6 set forth in Exhibit D attached hereto, and (iv) Licensee shall have
no further rights to sublicense such patents or patent applications but
previously granted sublicenses will continue pursuant to Paragraph 9.8. If the
license is converted to non-exclusive with respect to all New Proprietary
Rights, then in addition the developmental commitments of Exhibit C shall no
longer apply.
3. ROYALTIES AND COMMERCIALIZATION PLAN
3.1 In consideration of the right and license granted herein, Licensee
agrees to the provisions of Exhibit B and Exhibit C attached hereto and hereby
incorporated herein by reference, as well as the provisions of Section 20.3
regarding New Proprietary Rights.
3.2 No royalties shall be owing on any Products produced for or under any
Federal Governmental agency contract pursuant to the DOE nonexclusive license
for Federal Governmental purposes but only to the extent that Licensee can show
that the Federal Government received a discount on Product sales which discount
is equivalent to or greater than the amount of any such royalty that would
otherwise be due. Any sales for Federal Governmental purposes shall be reported
under the Records and Reports Section hereinbelow by providing: (a) a Federal
Government contract number; (b) identification of the Federal
9
government agency; and (c) a description as to how the benefit of the royalty
free sale was passed onto the Federal Government.
3.3 The royalty provisions of Exhibit B shall be offset by any advances
made by Licensee in Article 6, Infringement by Third Parties, hereinbelow.
3.4 Upon termination of this Agreement for any reason whatsoever, any
royalties that remain unpaid, and any pro-rata portion that is due UT-Battelle
per Article 9.7, shall be properly reported and paid to UT-Battelle within
thirty (30) days of any such termination.
3.5 In the event that Licensee is required to withhold taxes under the laws
of any foreign country for the account of UT-Battelle, then such payments will
be made by Licensee on behalf of UT-Battelle to the appropriate governmental
authority, and Licensee shall furnish proof of payment of such tax together with
official or other appropriate evidence issued by the appropriate government
authority. Any such tax actually paid on UT-Battelle's behalf shall be deducted
from royalty payments then due and owing UT-Battelle.
3.6 Licensee shall make all payments to UT-Battelle in U.S. Dollars. In
instances where Licensee receives Net Sales or Sublicensing Revenue in foreign
currency, Licensee shall convert such currency to U.S. dollars for purposes of
payments to UT-Battelle in a manner consistent with any commercially reasonable
mechanism that Licensee employs for its own financial reporting purposes.
4. RECORDS AND REPORTS
4.1 Licensee agrees to keep for three (3) years adequate and sufficiently
detailed records of utilization of the Proprietary Rights by Licensee,
Licensee's Affiliates and Sublicensees to enable royalties and Sublicensing
Revenue payable hereunder to be determined and to provide such records for
inspection by authorized representatives of UT-Battelle at any time upon
reasonable
10
advance notice during regular business hours of Licensee up to a maximum of two
(2) times per calendar year. Licensee agrees that any additional available
records of Licensee, Licensee's Affiliates and Sublicensees, as UT-Battelle may
reasonably determine are necessary to verify the above records, shall also be
made accessible to UT-Battelle for inspection during such three (3) year period.
If the inspection discloses that UT-Battelle was underpaid royalties by at least
five percent (5%) for any calendar year, then Licensee shall reimburse
UT-Battelle for any documented and reasonable UT-Battelle costs associated with
the inspection, together with an amount equal to the additional royalties to
which UT-Battelle is entitled as disclosed by the inspection.
4.2 Within Ninety (90) calendar days after the close of each calendar year
during the term of this Agreement (i.e. March 31), Licensee will furnish
UT-Battelle a written report providing: (a) the aggregate amount of all domestic
Net Sales in U.S. Dollars during the preceding calendar year period including
sales to any Federal governmental agency under Section 3.2 hereinabove and the
aggregate amount of all export Net Sales, and if none, Licensee will so indicate
and (b) the aggregate amount of royalties due in U.S. Dollars for the preceding
calendar year period pursuant to the provisions hereof; and (c) payment of the
aggregate amount of the royalties due in U.S. Dollars for the preceding calendar
year payable to the order of UT-Battelle, LLC, pursuant to the report to be
transmitted to UT-Battelle in accordance with the Notices Section hereinbelow.
If UT-Battelle wishes to contest the methods described in any royalty report to
calculate royalties due, it shall do so in writing to Licensee no later than six
(6) months after the date of receipt of such report by UT-Battelle. Promptly
thereafter, the Parties shall confer and resolve any issues raised.
Notwithstanding, this provision shall not prohibit UT-Battelle from later
contesting any Net Sales or Sublicensing Revenue figures in such report to the
extent such figures could only reasonably be verified through inspection of
Licensee records not provided with the royalty report. With the exception of
UT-Battelle's ongoing audit of Licensee's
11
litigation bills incurred during litigation activities conducted under the Prior
Agreements (but not the analysis set forth in previous royalty reports regarding
methods of calculating royalty credits for litigation expenses), these
provisions regarding contesting any royalty report shall apply retroactively to
all royalty reports delivered pursuant to the Prior Agreements.
4.3 Should Licensee fail to make any payment to UT-Battelle within the time
period prescribed for such payment, then the unpaid amount shall bear interest
at the lesser of: (i) the rate of one and one half percent (1.5%) per month or,
(ii) the greatest amount permitted by law, from the date when payment was due
until payment in full, with interest, is made.
5. TECHNICAL ASSISTANCE
5.1 UT-Battelle agrees, upon the written request of Licensee, to assist
Licensee in seeking necessary DOE approvals for UT-Battelle to provide technical
assistance to Licensee at UT-Battelle facilities under appropriate agreements.
The cost of such technical assistance shall be paid for by the Licensee.
5.2 UT-Battelle agrees to permit its employees, within UT-Battelle
corporate policy guidelines then in effect and subject to DOE requirements then
in effect, to provide consulting services to Licensee with reference to
Licensee's use and commercial exploitation of the Proprietary Rights as
contemplated herein. Licensee shall make payment directly to the individual
consultant(s) for all such services.
6. INFRINGEMENT BY THIRD PARTIES
6.1 Licensee shall give notice to UT-Battelle of any discovered third party
infringement of the rights granted herein of which Licensee has actual
knowledge. In the event that UT-Battelle does not take appropriate action to
stop or prevent such infringement within ninety (90) days after receiving such
notice and diligently pursue such action, Licensee has the right to take
12
appropriate action to stop and prevent the infringement, including the right to
file suit.
6.2 Except for any liability resulting from any negligent acts or omissions
of UT-Battelle, in the event that Licensee files suit to stop infringement or
defends any action against the validity of the patent, Licensee shall indemnify
and hold UT-Battelle harmless against all liability, expense and costs,
including attorneys' fees incurred as a result of any such suit, except that
Licensee may credit litigation expenses against royalties due to UT-Battelle as
provided below in this Article 6.
6.3 Pursuant to sections 6.1 and 6.2 above, Licensee may file an action to
stop alleged infringement of the Proprietary Rights by third parties, such
actions including, by way of example and not limitation, litigation,
arbitration, or other non-judicial dispute resolution activities (collectively
referred to hereinafter as "Dispute Resolution"). The provisions of this Article
6 shall not apply, however, in the case of customary sublicense negotiations;
they shall only apply after a formal filing has been made seeking third party
Dispute Resolution of the matter. Licensee may deduct all costs and expenses for
Dispute Resolution, including but not limited to fees of attorneys, experts,
arbitrators and other third parties, taken against alleged infringers of the
Proprietary Rights or challengers to the validity of the Proprietary Rights from
any royalties (including sublicense royalties) that Licensee may owe to
UT-Battelle during the term of Dispute Resolution or thereafter. Licensee shall
only be permitted to retain all or a portion of a deduction as described in this
Section upon conclusion of the Dispute Resolution if: (1) upon such conclusion
Licensee receives a settlement, judgment, or compensatory recovery ("J" below),
if any, that does not exceed the sum of said costs and expenses ("C(L)" below)
plus Licensee's damages plead and proved ("D(PP)" below); and (2) Licensee
either provides UT-Battelle with, or makes available to UT-Battelle upon
request, verified bills of said costs and expenses that are actually incurred in
accordance with the Records and Reports Section of this Agreement. Licensee
shall deposit any royalties that Licensee may owe UT-Battelle during the
13
term of Dispute Resolution in an interest-bearing escrow account and shall
provide UT-Battelle with quarterly statements of said escrow account in
accordance with the Records and Reports Section of this Agreement. Upon
conclusion of Dispute Resolution, the amount that shall immediately become due
and payable to UT-Battelle by Licensee shall be calculated as follows:
[*]
wherein: R(UTB) = Amount owed to UT-Battelle;
E(G) = Gross funds available in the interest bearing escrow account at
the time that funds are distributed, said funds including royalties deposited
plus interest;
C(L) = Licensee's costs for Dispute Resolution as described herein; and
J = Amount of the compensatory recovery, judgment, settlement, or the
like to which Licensee is entitled as described herein, including but not
limited to D(PP). Where "J" consists of payments made over time, each payment
shall be counted for purposes of this Agreement only when it is actually
received by Licensee.
D(PP) = Actual or consequential Damages that Licensee pleads and proves
during the course of the dispute resolution activity and which are accounted for
in said settlement, judgment, or entitlement to compensatory recovery
For purposes of this Article 6, a Dispute Resolution shall be considered
"concluded" when the last costs or expenses have been incurred, the total amount
of "J" above (recovery, etc.) has been finally determined, at least the first
installment of "J" above has been received, and no appeal may be taken or the
time period for any possible appeal has elapsed. If R(UTB) as calculated above
is a negative number, then Licensee shall not be obliged to pay any amount to
UT-Battelle upon conclusion of the Dispute Resolution and may apply any negative
R(UTB) amount as a reduction of any royalties (including sublicense royalties)
due to UT-Battelle thereafter.
14
6.4 If, on the other hand, upon conclusion of Dispute Resolution Licensee
becomes entitled to receive a settlement, judgment, or compensatory recovery
from Dispute Resolution that exceeds said costs and expenses, Licensee shall
immediately owe UT-Battelle all funds accrued in the interest bearing escrow
account described above plus [*] of the difference between: (1) any settlement,
judgment, or entitlement to compensatory recovery resulting from Dispute
Resolution; and (2) the costs and expenses that Licensee actually incurs for
pursuing said Dispute Resolution plus any actual or consequential damages that
Licensee pleads and proves during Dispute Resolution and which are accounted for
in said settlement, judgment, or entitlement to compensatory recovery, as set
forth in the following formula:
[*]
wherein: R(UTB) = Amount owed to UT-Battelle by Licensee;
E(G) = Gross funds available in the interest bearing escrow account at
the time that funds are distributed, said funds including royalties deposited
plus interest;
J = Amount of the compensatory recovery, judgment, settlement, or the
like to which Licensee is entitled as described herein, including but not
limited to D(PP); and
C(L) = Licensee's costs for Dispute Resolution as described herein.
D(PP) = Actual or consequential Damages that Licensee pleads and proves
during the course of the dispute resolution activity and which are accounted for
in said settlement, judgment, or entitlement to compensatory recovery
6.5 The Parties hereby agree to cooperate with each other in the
prosecution of any such legal actions or settlement actions undertaken under
this Section and each will provide to the other all pertinent data in its
possession which may be helpful in the prosecution of such actions; provided,
however, that the Party in control of such action shall reimburse the other
Party for any and all costs and expenses in providing data and other information
necessary to the conduct of
15
the action.
6.6 The Party having filed such action shall be in control of such action
and shall have the right to dispose of such action in whatever reasonable manner
consistent with the terms of this Agreement that it determines to be in the best
interest of the Parties hereto, except that any settlement which affects or
admits issues of patent validity shall require the advance written approval of
UT-Battelle and any settlement which involves either (i) a grant of license
rights within the scope of Licensee's licenses under this Agreement or (ii) a
release of claims for past infringement within the scope of Licensee's licenses
under this Agreement, shall require the advance written approval of Licensee.
6.7 In the event any Product becomes the subject of a claim for patent or
proprietary-right infringement anywhere in the world by virtue of the
incorporation of the Proprietary Rights herein, the Parties shall promptly give
notice one to the other and meet to consider the claim and the appropriate
course of action. Licensee shall have the right to conduct the defense of any
such suit brought against Licensee and shall have the sole right and authority
to settle any such suit, provided that any settlement which affects or admits
issues of the validity of UT-Battelle's Proprietary Rights shall require advance
written approval of UT-Battelle. UT-Battelle shall cooperate with Licensee, as
reasonably requested by Licensee, in connection with defense of such claim, at
Licensee's expense.
6.8 Each Party shall notify the other if at any time a Party becomes
engaged in a patent proceeding wherein the issue is raised as to whether any of
the Proprietary Rights have priority of invention over any third party
intellectual property (a "Priority Action"), whether in the context of a patent
interference declared by the USPTO, defense of a patent infringement action or
any other context. The Parties recognize that such a challenge to the
Proprietary Rights could result in the Proprietary Rights being invalidated, or
dominated by third party intellectual property, to
16
the detriment of both Parties. Accordingly, the Parties shall cooperate in any
such Priority Action as provided for other actions in this Article 6. If
Licensee pays the costs and expenses of such a Priority Action, then Licensee
may deduct all such costs and expenses, including but not limited to fees of
attorneys, experts, arbitrators and other third parties, from any royalties
(including sublicense royalties) that Licensee may owe to UT-Battelle during the
term of such Priority Action or thereafter. Licensee shall only be permitted to
retain all or a portion of a deduction as described in this Section upon
conclusion of the Priority Action if: (1) upon such conclusion, Licensee
receives a settlement, judgment, or compensatory recovery, if any, that does not
exceed said costs and expenses; and (2) Licensee either provides UT-Battelle
with, or makes available to UT-Battelle upon request, verified bills of said
costs and expenses that are actually incurred in accordance with the Records and
Reports Section of this Agreement. Licensee shall deposit any royalties that
Licensee may owe UT-Battelle during the term of such Priority Action in an
interest-bearing escrow account and shall provide UT-Battelle with quarterly
statements of said escrow account in accordance with the Records and Reports
Section of this Agreement. In the unlikely event that upon conclusion of such
Priority Action Licensee receives a settlement, judgment, or compensatory
recovery that exceeds said costs and expenses, then Licensee shall make payments
to UT-Battelle in accordance with the formula set forth in Section 6.4 above.
7. REPRESENTATIONS AND WARRANTIES
7.1 UT-Battelle represents and warrants that Exhibit A contains a complete
and accurate listing of all the Proprietary Rights licensed and that UT-Battelle
has the right to grant the rights, licenses, and privileges granted herein.
UT-Battelle also represents and warrants that as of the Effective Date of this
Agreement, it has no other active licenses to practice Proprietary Rights in the
Original Field of Use with parties other than Licensee and the Affiliates
thereof.
7.2 UT-Battelle represents and warrants that UT-Battelle has no knowledge
of any claims of
17
infringement filed against UT-Battelle for practicing the Exhibit A Proprietary
Rights anywhere in the world.
7.3 Except as set forth hereinabove, UT-Battelle makes NO REPRESENTATIONS
OR WARRANTIES, express or implied, with regard to the infringement of
proprietary rights of any third party.
7.4 Licensee acknowledges that the export of any of the Proprietary Rights
from the United States or the disclosure of any of the Proprietary Rights to a
foreign national may require some form of license from the U.S. Government.
Failure to obtain any required export licenses by Licensee may result in
Licensee subjecting itself to criminal liability under U.S. laws.
8. DISCLAIMERS
8.1 Neither UT-Battelle, the DOE, nor any persons acting on their behalf
shall be responsible for any injury to or death of persons or other living
things or damage to or destruction of property or for any other loss, damage, or
injury of any kind whatsoever resulting from the manufacture, manufacture for,
use, sale, or offer for sale of any Products or Proprietary Rights hereunder by
Licensee, Licensee's Affiliates, or any Sublicensee of Licensee or Licensee's
Affiliates. In no event will UT-Battelle, the DOE, or any person acting on
behalf of any of them be liable for any incidental, special or consequential
damages resulting from the license granted pursuant to this Agreement or the use
or commercial development of the Proprietary Rights.
8.2 EXCEPT AS SET FORTH HEREINABOVE, NEITHER UT-BATTELLE, THE DOE, NOR
PERSONS ACTING ON THEIR BEHALF MAKE ANY WARRANTY, EXPRESS OR IMPLIED: (1) WITH
RESPECT TO THE MERCHANTABILITY, ACCURACY, COMPLETENESS, OR USEFULNESS OF ANY
SERVICES, MATERIALS, OR INFORMATION FURNISHED HEREUNDER; (2) THAT THE USE OF ANY
SUCH SERVICES, MATERIALS, OR INFORMATION WILL NOT INFRINGE PRIVATELY
18
OWNED RIGHTS; (3) THAT THE SERVICES, MATERIALS, OR INFORMATION FURNISHED
HEREUNDER WILL NOT RESULT IN INJURY OR DAMAGE WHEN USED FOR ANY PURPOSE; OR (4)
THAT THE SERVICES, MATERIALS, OR INFORMATION FURNISHED HEREUNDER WILL ACCOMPLISH
THE INTENDED RESULTS OR ARE SAFE FOR ANY PURPOSE, INCLUDING THE INTENDED OR
PARTICULAR PURPOSE. FURTHERMORE, UT-BATTELLE AND THE DOE HEREBY SPECIFICALLY
DISCLAIM ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, FOR ANY PRODUCTS
MANUFACTURED, MANUFACTURED FOR, USED, OR SOLD BY LICENSEE, Licensee's
Affiliates, or any Sublicensee of Licensee or Licensee's Affiliates. NEITHER
UT-BATTELLE NOR THE DOE SHALL BE LIABLE FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES
IN ANY EVENT.
8.3 Licensee agrees to indemnify UT-Battelle, the DOE, and persons acting
on their behalf for all damages, costs, and expenses, including attorney's fees,
arising from Licensee's, it's Affiliates' or Sublicensees' manufacturing,
manufacturing for, using, selling, or offering for sale of any Proprietary
Rights or Products, in whatever form furnished hereunder by Licensee, Licensee's
Affiliates, or any Sublicensee of Licensee or Licensee's Affiliates.
9. TERM OF AGREEMENT AND EARLY TERMINATION
9.1 This Agreement shall extend from the effective date of this Agreement
to the date of expiration of the last-to-expire item in the Proprietary Rights
of Exhibit A. This Agreement is subject to early termination as set forth
hereinbelow.
9.2 Either Party shall have the right to terminate this Agreement without
judicial resolution upon written notice to the other Party after any material
breach of this Agreement by the other Party has gone uncorrected for sixty (60)
days after the other Party has been notified in writing of
19
such breach.
9.3 This Agreement shall terminate automatically upon the extinguishment of
all of the Exhibit A Proprietary Rights, for any reason, but only after the time
for appealing said extinguishment has expired.
9.4 Any assignment of this Agreement by Licensee shall require prior
written concurrence of UT-Battelle, which shall not be unreasonably withheld.
The Parties agree that it would be unreasonable for UT-Battelle to withhold its
concurrence to any assignment of this Agreement (particularly an assignment from
Licensee to any of its Affiliates, any purchaser of all or substantially all of
its assets or to any successor corporation, including a successor corporation
resulting from any merger or consolidation of Licensee with or into such
corporation) unless such assignment would: (1) cause UT-Battelle to breach any
provision of its Prime Contract with the DOE; (2) be inconsistent with DOE
policy that is in effect at the time such assignment request is received by
UT-Battelle, made applicable to UT-Battelle, and relates to technology transfer
and foreign owned or controlled individuals, organizations, or entities; or (3)
materially alter any of UT-Battelle's rights or duties under this Agreement. Any
assignee of Licensee must abide by the terms and conditions of this Agreement,
in conformance with all UT-Battelle obligations to DOE under the Prime Contract.
Upon written notice to Licensee, UT-Battelle may transfer its Administration of
this Agreement to DOE or its designee, and UT-Battelle shall have no further
responsibilities except for the confidentiality and/or non-disclosure
obligations of this Agreement.
9.5 Licensee shall provide notice to UT-Battelle of its intention to file a
voluntary petition in bankruptcy, or of another party's intention to file an
involuntary petition in bankruptcy for Licensee to the extent Licensee is aware
of such intent, said notice to be received by UT-Battelle at least twenty (20)
days prior to filing such a petition. Licensee's failure to provide such notice
20
to UT-Battelle of such intentions shall be deemed a material, pre-petition,
incurable breach of this Agreement.
9.6 Licensee agrees that it may only offer Licensee's rights under this
Agreement as collateral to a third party with UT-Battelle's written consent, not
to be unreasonably withheld.
9.7 The Parties agree that Licensee, if not then in breach of any portion
of this Agreement, may voluntarily terminate this Agreement upon sixty (60) days
notice to UT-Battelle and payment to UT-Battelle of a pro rata share of any
minimum royalty due UT-Battelle in the year of such termination.
9.8 Termination under any of the provisions of this Article of the rights
granted to Licensee under Articles 2.1 and 2.2 of this Agreement shall terminate
all sublicenses which may have been granted by Licensee, provided that any
Sublicensee may elect to continue its sublicense by advising UT-Battelle in
writing, within sixty (60) days of the Sublicensee's receipt of written notice
of such termination, of its election, and of its agreement to assume, in respect
to UT-Battelle, all the obligations (including obligations for payment)
contained in its sublicensing agreement with Licensee to the extent they pertain
to the sublicense of Proprietary Rights. Any sublicense granted by Licensee
shall contain provisions corresponding to those of this paragraph respecting
termination and the conditions of continuance of sublicenses.
10. RIGHTS OF PARTIES AFTER TERMINATION
10.1 After expiration or termination of this Agreement, neither Party shall
be relieved of any obligation or liability under this Agreement arising from any
act or omission committed prior to the effective date of such termination. In
the event of expiration of this Agreement or termination of this Agreement for
any reason whatsoever, the rights and obligations of the Parties under Sections
9 and 18 shall survive any expiration or termination of this Agreement.
21
10.2 From and after any termination of this Agreement, Licensee shall have
the right to sell any Products that Licensee had already manufactured or had
manufactured for Licensee prior to termination, but not manufacture, nor have
manufactured, use or import any further Products, provided that all royalties
and reports required herein above shall be timely submitted to UT-Battelle.
10.3 The rights and remedies granted herein, and any other rights or
remedies which the Parties may have, either at law or in equity, are cumulative
and not exclusive of others. On any termination, Licensee shall duly account to
UT-Battelle and transfer to it all rights to which UT-Battelle may be entitled
under this Agreement.
11. FORCE MAJEURE
11.1 No failure or omission by UT-Battelle or by Licensee in the performance
of any obligation under this Agreement shall be deemed a breach of this
Agreement or create any liability if the same shall arise from acts of God, acts
or omissions of any government or agency thereof, compliance with, rules,
regulations, or orders of any governmental authority or any office, department,
agency or instrumentality thereof, fire, storm, flood, earthquake, accident,
acts of the public enemy, war, rebellion, insurrection, riot, sabotage,
invasion, quarantine, restriction, transportation embargoes, or failures or
delays in transportation.
12. NOTICES
12.1 All notices and reports shall be addressed to the Parties hereto as
follows:
If to UT-Battelle:
Finance Manager-Technology Transfer Facsimile No.
UT-Battelle, LLC (865) 576-9465
22
Post Office Box 2008 Verify No.
Oak Ridge, Tennessee 37831-6499 (865) 241-2353
If to Licensee:
General Counsel Facsimile No.
Caliper Technologies Corp. (650) 623-0500
605 Fairchild Drive Verify No.
Mountain View, California 94043-2234 (650) 623-0700
12.2 All minimum and royalty payments due UT-Battelle shall be sent to:
UT-Battelle, LLC
Royalty Account
P. O. Box 888071
Knoxville, TN 37995-8071
12.3 Any notice, report or any other communication required or permitted to
be given by one Party to the other Party by this Agreement shall be in writing
and either (a) served personally on the other Party, (b) sent by express,
registered or certified first-class mail, postage prepaid, addressed to the
other Party at its address as indicated above, or to such other address as the
addressee shall have previously furnished to the other Party by proper notice,
(c) delivered by commercial courier to the other Party, or (d) sent by facsimile
to the other Party at its facsimile number indicated above or to such other
facsimile number as the Party shall have previously furnished to the other Party
by proper notice, with machine confirmation of transmission.
13. NON-ABATEMENT OF ROYALTIES
13.1 UT-Battelle and Licensee acknowledge that certain of the Proprietary
Rights may expire prior to the conclusion of the term of this Agreement;
however, UT-Battelle and Licensee agree that the royalty rates provided for
hereinabove shall be uniform and undiminished except as otherwise provided
pursuant to this Agreement.
23
14. WAIVERS
14.1 The failure of either Party at any time to enforce any provisions of
this Agreement or to exercise any right or remedy shall not be construed to be a
waiver of such provisions or of such rights or remedy or the right of either
Party thereafter to enforce each and every provision, right or remedy.
15. MODIFICATIONS
15.1 It is expressly understood and agreed by the Parties hereto that this
instrument contains the entire agreement between the Parties with respect to the
subject matter hereof and that all prior representations, warranties, or
agreements relating hereto, including but not limited to the Prior Agreements,
have been merged into this document and are thus superseded in totality by this
Agreement. This Agreement may be amended or modified only by a written
instrument signed by the duly authorized representatives of both of the Parties.
16. HEADINGS
16.1 The headings for the sections set forth in this Agreement are strictly
for the convenience of the Parties hereto and shall not be used in any way to
restrict the meaning or interpretation of the substantive language of this
Agreement.
17. LAW
17.1 This Agreement shall be construed according to the laws of the State of
Tennessee and the United States of America.
18 CONFIDENTIALITY
18.1 The Parties agree that during the term of this Agreement and for a
period of three (3)
24
years after it terminates, a Party receiving information of the other Party,
which is marked "Confidential," will not use or disclose such confidential
information to any third party without prior written consent of the disclosing
Party, except to those necessary to enable the Parties to perform under this
Agreement or as may be required by the UT-Battelle Prime Contract with the DOE
under the same restrictions as set forth herein.
18.2 A Party shall have no obligations with respect to any portion of such
confidential information of the other Party which:
a) is publicly disclosed through no fault of any Party hereto, either
before or after it becomes known to the receiving Party; or
b) was known to the receiving Party prior to the date of this Agreement
which knowledge was acquired independently and not from the other Party; or
c) is subsequently disclosed to the receiving Party in good faith by a
third party which has a right to make such a disclosure; or
d) has been published by a third party as a matter of right; or
e) is subsequently independently invented or discovered by the receiving
Party without reference to the other Party's confidential information.
19. SEVERABILITY
19.1 If any term, condition or provision of this Agreement is held to be
unenforceable other than as provided in Article 11, all other terms, conditions,
and provisions of this Agreement shall be deemed valid and enforceable to the
extent possible.
20. PATENT PROSECUTION
20.1 UT-Battelle shall, during the term of this Agreement, seek patent
protection for the
25
Proprietary Rights listed in Exhibit A. The securing of patent protection for
all Proprietary Rights shall be the sole responsibility and at the sole
discretion of UT-Battelle; provided, however that (i) Licensee shall have a
reasonable opportunity to review and comment on patent filings in advance and to
consult and cooperate with UT-Battelle in securing patent protection, and (ii)
UT-Battelle will timely keep Licensee advised of the status of such prosecution
and maintenance by providing Licensee with copies of all official
communications, amendments and responses with respect to the patent applications
and patents contained in the Proprietary Rights. Licensee may request and
UT-Battelle, at its sole discretion, may seek patent extension for patents
licensed under the Proprietary Rights listed in Exhibit A, under such applicable
laws and regulations where such patent extension rights are available currently
or are available in the future. In the event that UT-Battelle elects to abandon
a patent application included in the Proprietary Rights or elects not to seek an
extension of a patent included in the Proprietary Rights, it will so notify
Licensee at least ninety (90) days prior to any applicable deadline. Upon
receipt of such notice, and to the extent allowed by the UT-Battelle Prime
Contract with DOE, Licensee may, following written notice to UT-Battelle, seek,
at its own expense a waiver from DOE to continue the prosecution of such
application or extend such application at Licensee's expense.
20.2 Reimbursement of all UT-Battelle's external costs and fees, and a
reasonable allocation of internal costs, relating to the securing of patent
protection for the Proprietary Rights after August 1, 2002 ("Patent Costs")
shall be the responsibility of Licensee. UT-Battelle shall bill Licensee for
Patent Costs on a bi-annual basis, and Licensee shall reimburse UT-Battelle
within thirty (30) days of receipt of the invoice.
20.3 Licensee agrees to reimburse UT-Battelle a total of [*] as costs not
previously reimbursed under the Prior Agreements related to patent protection of
the Original and New Proprietary
26
Rights listed on Exhibits A1 and A2 incurred by UT-Battelle prior to August 1,
2002. Such payment will be made by Licensee to UT-Battelle within thirty (30)
days of execution of this Agreement. UT-Battelle acknowledges receipt of payment
from Licensee for UT-Battelle's last invoice for reimbursement of patent costs
under Licensee's Prior Agreements. Such invoice was numbered 6329266 and was
dated July 18, 2002.
21. CONTINUING RIGHTS AND DUTIES FROM PRIOR AGREEMENT(S)
21.1 The Parties agree that this Agreement, upon execution, shall supercede
and terminate all Prior Agreements between the Parties. Prior Agreements
include, but are not limited to, the license agreements identified as PLA 147
and 148.
21.2 Notwithstanding termination of Prior Agreements, the Parties hereto
further agree that the rights and duties that accrued under Prior Agreements but
which have not been fully performed as of the Effective Date shall survive until
fully performed and shall be carried forward and applied pursuant to the terms
of this Agreement. In particular, the Parties agree that (i) the royalty credit
balance described in the most RECENT royalty report shall be carried forward and
(ii) the $5 million license fee, and two subsequent $2.5 million minimum royalty
payments, due from Aclara to Caliper under the litigation settlement agreements
in effect on the Effective Date, shall be treated as Sublicense Revenue pursuant
to the terms of this Agreement, when and if such payments are actually received.
Should Aclara default on any such payment to Licensee, Licensee agrees to take
timely legal and management action to enforce its litigation settlement
agreements with Aclara. Caliper acknowledges that the first such payment was
received by Caliper prior to the Effective Date.
27
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed in their respective names by their duly authorized
representatives.
"UT-Battelle"
UT-BATTELLE, LLC
By: /s/ Alexander R. Fischer
------------------------
Name: Alexander R. Fischer
Title: Director, Technology Transfer & Economic Development
Date: 11/13/02
"Licensee"
CALIPER TECHNOLOGIES CORP.
By: /s/ Michael R. Knapp
--------------------
Name: Michael R. Knapp
Title: CEO
Date: 11/27/2002
[ * ] = 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.
28
EXHIBIT A1, ORIGINAL PROPRIETARY RIGHTS
1) U.S. Patent 6,001,229; Issued December 14, 1999 (1401.0) "Apparatus and
Method for Performing Microfluidic Manipulations for Chemical Analysis"
Inventor: J. M. Ramsey
2) U.S. Patent 6,342,142; Issued January 29, 2002 (1401.2)
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis" Inventor: J. M. Ramsey
3) U.S. Patent Application Serial No. 09/909,638 filed at the USPTO July
20, 2001 on (1401.3)
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis" Inventor: J. M. Ramsey
4) U.S. Patent 5,858,195; Issued January 12, 1999 (1781.0)
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
5) U.S. Patent 6,033,546; Issued March 7, 2000 (1781.1)
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
6) U.S. Patent 6,010,607; Issued January 4, 2000 (1781.2)
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
7) U.S. Patent 6,010,608; Issued January 4, 2000 (1781.3)
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
8) U.S. Patent Application Serial No. 09/477,585 filed at the USPTO
January 4, 2000 (1781.4)
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
9) Canadian Patent No. 2,196,429; Issued May 8, 2001 (1781)
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
10) Australian Patent No. 701,348; Issued April 28, 1999 (1781)
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
11) Chinese Patent No. 54022; Issued January 22, 2000 (1781)
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey.
29
EXHIBIT A1, ORIGINAL PROPRIETARY RIGHTS CONTINUED
12) Mexican Patent No. 194,601; Issued December 13, 1999 (1781)
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
13) Japanese Patent Application Serial No. 8-506614; filed August 1, 1995
(1781)
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
14) Korean Patent Application Serial No. 700763/97; filed August 1, 1995
(1781)
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
15) EPO Patent Application Serial No. 95927492.9; filed August 1, 1995
(1781.10) and registered in Netherlands (NL).
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
16) EPO Patent Application Serial No. 95927492.9; filed August 1, 1995
(1781.11) and registered in France (FR).
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
17) EPO Patent Application Serial No. 95927492.9; filed August 1, 1995
(1781.12) and registered in Germany (DE).
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
18) EPO Patent Application Serial No. 95927492.9; filed August 1, 1995
(1781.6) and registered in Denmark (DK).
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
19) EPO Patent Application Serial No. 95927492.9; filed August 1, 1995
(1781.7) and registered in Italy (IT).
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
20) EPO Patent Application Serial No. 95927492.9; filed August 1, 1995
(1781.8) and registered in Sweden (SE).
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
21) EPO Patent Application Serial No. 95927492.9; filed August 1, 1995
(1781.9) and registered in Spain (ES).
30
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
22) EPO Patent Application Serial No. 01203481.5; filed September 14, 2001
(1781.5).
"Apparatus and Method for Performing Microfluidic Manipulations for
Chemical Analysis and Synthesis" Inventor: J. M. Ramsey
[ * ] = 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.
31
EXHIBIT A2, NEW PROPRIETARY RIGHTS
1) U. S. Patent 6,120,666; Issued September 19, 2000 (0504.0)
"Microfabricated Device and Method for Multiplexed Electrokinetic
Focusing of Fluid Streams and A Transport Cytometry Method Using Same"
Inventors: S. C. Jacobson and J. M. Ramsey
2) Australian Patent application serial No 45696/99 filed June 16, 1999
(0504.2)
"Microfabricated Device and Method for Multiplexed Electrokinetic
Focusing of Fluid Streams and A Transport Cytometry Method Using Same"
Inventors: S. C. Jacobson and J. M. Ramsey
3) Canadian Patent application serial No 2,334,749 filed June 16, 1999
(0504.3)
"Microfabricated Device and Method for Multiplexed Electrokinetic
Focusing of Fluid Streams and A Transport Cytometry Method Using Same"
Inventors: S. C. Jacobson and J. M. Ramsey
4) European (EPO) Regional Patent application serial No 99928693.3 filed
June 16, 1999 (0504.4)
"Microfabricated Device and Method for Multiplexed Electrokinetic
Focusing of Fluid Streams and A Transport Cytometry Method Using Same"
Inventors: S. C. Jacobson and J. M. Ramsey
5) Japanese Patent application serial No 2000-555086 filed June 16, 1999
(0504.5)
"Microfabricated Device and Method for Multiplexed Electrokinetic
Focusing of Fluid Streams and A Transport Cytometry Method Using Same"
Inventors: S. C. Jacobson and J. M. Ramsey
6) U.S. Patent Application Serial No. 09/759,590 filed at the USPTO
January 12, 2001 on (0532.1)
"A Microfluidic Device and Method for Focusing, Segmenting, and
Dispensing of a Fluid Stream" Inventors: S. C. Jacobson and J. M.
Ramsey
7) U.S. Patent 6,062,261; Issued May 16, 2000 (0270.0)
"Microfluidic Circuit Designs for Performing Electrokinetic
Manipulations that Reduce the Number of Voltage Sources and Fluid
Reservoirs" Inventors: S. C. Jacobson and J. M. Ramsey
8) U.S. Patent 6,213,151B1; Issued April 10, 2001 (0270.2)
"Microfluidic Circuit Designs for Performing Electrokinetic
Manipulations that Reduce the Number of Voltage Sources and Fluid
Reservoirs" Inventors: S. C. Jacobson and J. M. Ramsey
9) Australian Patent application serial No 28445/00 filed December 15,
1999 (0270.3)
"Microfluidic Circuit Designs for Performing Electrokinetic
Manipulations that Reduce the Number of Voltage Sources and Fluid
Reservoirs" Inventors: S. C. Jacobson and J. M. Ramsey
32
EXHIBIT A2, NEW PROPRIETARY RIGHTS CONTINUED
10) Canadian Patent application serial No 2,355,084 filed December 15, 1999
(0270.4)
"Microfluidic Circuit Designs for Performing Electrokinetic
Manipulations that Reduce the Number of Voltage Sources and Fluid
Reservoirs" Inventors: S. C. Jacobson and J. M. Ramsey
11) European (EPO) Regional Patent application serial No 99969278.3 filed
December 15, 1999 (0270.5)
"Microfluidic Circuit Designs for Performing Electrokinetic
Manipulations that Reduce the Number of Voltage Sources and Fluid
Reservoirs" Inventors: S. C. Jacobson and J. M. Ramsey
12) Japanese Patent application serial No 2000-588583 filed December 15,
1999 (0270.6)
"Microfluidic Circuit Designs for Performing Electrokinetic
Manipulations that Reduce the Number of Voltage Sources and Fluid
Reservoirs" Inventors: S. C. Jacobson and J. M. Ramsey
13) U.S. Patent 5,858,187; Issued January 12, 1999 (1906.0)
"Apparatus and Method for Performing Electrodynamic Focusing on a
Microchip" Inventors: J. M. Ramsey and S. C. Jacobson
14) U.S. Patent 6,110,343; Issued August 29, 2000 (0216.0)
"Material Transport Method and Apparatus" Inventors: J. M. Ramsey and
R. S. Ramsey
15) U.S. Patent 6,231,737B1; Issued May 15, 2002 (0216.1)
"Material Transport Method and Apparatus" Inventors: J. M. Ramsey and
R. S. Ramsey
16) U.S. Patent Application Serial No. 09/408,060 filed at the USPTO on
September 29, 1999 (0686.1)
"Microfluidic Devices for the Controlled Manipulation of Small Volumes"
Inventor: S. C. Jacobson and J. M. Ramsey
17) U.S. Patent Application Serial No. (To Be Assigned) filed at the USPTO
on (Not Yet Filed) (0686.10)
"Microfluidic Devices for the Controlled Manipulation of Small Volumes"
Inventors: S. C. Jacobson and J. M. Ramsey
18) Australian Patent application serial No 77586/00 filed August 10, 2000
(0686.3)
"Microfluidic Devices for the Controlled Manipulation of Small Volumes"
Inventors: S. C. Jacobson and J. M. Ramsey
19) Canadian Patent application serial No 2,380,614 filed August 10, 2000
(0686.4)
"Microfluidic Devices for the Controlled Manipulation of Small Volumes"
Inventors: S. C. Jacobson and J. M. Ramsey
33
EXHIBIT A2, NEW PROPRIETARY RIGHTS CONTINUED
20) European Patent application serial No 00967377.3 filed August 10, 2000
(0686.6)
"Microfluidic Devices for the Controlled Manipulation of Small Volumes"
Inventors: S. C. Jacobson and J. M. Ramsey
Initials
UT-Battelle: /s/ ARF
-----------
Date: 11/13/02
Licensee: /s/ MRK
-----------
Date: 11/27/2002
[ * ] = 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
EXHIBIT B, EXECUTION FEE, EARNED ROYALTIES, SUBLICENSE ROYALTY AND MINIMUM
ANNUAL ROYALTIES AMOUNTS
(1) Execution Fees: In consideration of the rights and licenses granted
herein with respect to New Proprietary Rights, Licensee agrees to pay
UT-Battelle [*] according to the following schedule of payments:
(i) [*] within thirty (30) days of the execution of this Agreement
by the Parties; and
(ii) [*] on or before March 31, 2003; and
(iii) [*] on or before September 30, 2003
(2) Earned Royalties: The Running Royalty Rate for sales of Products shall
be:
(i) [*] of the Net Sales of Chips; provided however that if
Licensee must pay royalties to one or more third parties on
sales of Chips ("Third Party Payments"), then the royalty
payable to UT-Battelle on Chips shall be reduced by [*] of the
Third Party Payments but not lower than [*] of Net Sales of
Chips in any quarter. "Chips" shall mean chips consisting of a
glass or polymer base with reservoirs, microchannels or
similar features and a glass or polymer cover, which chips are
covered by one or more Claims of the Proprietary Rights
licensed hereunder.
(ii) [*] of the Net Sales of Products for Products other than
Chips.
N O T I C E
THIS EXHIBIT CONTAINS FINANCIAL AND COMMERCIAL INFORMATION THAT IS
BUSINESS CONFIDENTIAL AND THE PARTIES HEREBY AGREE NOT TO USE OR DISCLOSE THIS
EXHIBIT TO ANY THIRD PARTY WITHOUT THE ADVANCE WRITTEN APPROVAL OF THE OTHER
PARTY HERETO, EXCEPT TO THOSE NECESSARY TO ENABLE THE PARTIES TO PERFORM UNDER
THIS AGREEMENT OR AS MAY BE REQUIRED BY THE UT-BATTELLE CONTRACT WITH THE DOE
UNDER THE SAME RESTRICTIONS AS SET FORTH HEREIN.
NOTWITHSTANDING THE FOREGOING, EITHER PARTY MAY DISCLOSE THE PROVISIONS
OF THIS EXHIBIT UNDER STANDARD OBLIGATIONS OF CONFIDENTIALITY AND NON-USE ON A
NEED-TO-KNOW BASIS, TO INVESTORS AND THEIR REPRESENTATIVES IN A PRIVATE OR
PUBLIC EQUITY FINANCING TRANSACTION, OR TO POTENTIAL ACQUIRERS OR TARGETS AND
THEIR REPRESENTATIVES IN A CORPORATE CHANGE OF CONTROL TRANSACTION, OR TO OTHER
THIRD PARTIES IN CONNECTION WITH POTENTIAL COMMERCIAL TRANSACTIONS INVOLVING THE
SUBJECT MATTER OF THIS AGREEMENT (E.G., COLLABORATION AGREEMENTS, DISTRIBUTION
ARRANGEMENTS, ETC.).
35
EXHIBIT B, EXECUTION FEE, EARNED ROYALTIES, SUBLICENSE ROYALTY
AND MINIMUM ANNUAL ROYALTIES AMOUNTS CONTINUED
(3) Sublicense Royalties: In order to maximize the commercialization of the
Products and UT-Battelle's overall income from this Agreement, in accordance
with Articles 2.1 and 2.2 of this Agreement, Licensee may grant sublicenses to
third parties under this Agreement. Licensee agrees to pay UT-Battelle a
"Sublicense Royalty" of [*] of the total "Sublicensing Revenue" owed Licensee
under said sublicenses.
(4) Annual Minimum Royalties: If the Earned Royalties for a Calendar Year
do not equal the Minimum Annual Royalty amount as shown below, Licensee shall
pay UT-Battelle the difference between the amount of actual royalties paid and
the Minimum Annual Royalty by March 31 of the following Calendar Year:
Calendar Year Minimum Annual Royalty (U.S. Dollars)
2001 onward: [*]
N O T I C E
THIS EXHIBIT CONTAINS FINANCIAL AND COMMERCIAL INFORMATION THAT IS
BUSINESS CONFIDENTIAL AND THE PARTIES HEREBY AGREE NOT TO USE OR DISCLOSE THIS
EXHIBIT TO ANY THIRD PARTY WITHOUT THE ADVANCE WRITTEN APPROVAL OF THE OTHER
PARTY HERETO, EXCEPT TO THOSE NECESSARY TO ENABLE THE PARTIES TO PERFORM UNDER
THIS AGREEMENT OR AS MAY BE REQUIRED BY THE UT-BATTELLE CONTRACT WITH THE DOE
UNDER THE SAME RESTRICTIONS AS SET FORTH HEREIN.
NOTWITHSTANDING THE FOREGOING, EITHER PARTY MAY DISCLOSE THE PROVISIONS
OF THIS EXHIBIT UNDER STANDARD OBLIGATIONS OF CONFIDENTIALITY AND NON-USE ON A
NEED-TO-KNOW BASIS, TO INVESTORS AND THEIR REPRESENTATIVES IN A PRIVATE OR
PUBLIC EQUITY FINANCING TRANSACTION, OR TO POTENTIAL ACQUIRERS OR TARGETS AND
THEIR REPRESENTATIVES IN A CORPORATE CHANGE OF CONTROL TRANSACTION, OR TO OTHER
THIRD PARTIES IN CONNECTION WITH POTENTIAL COMMERCIAL TRANSACTIONS INVOLVING THE
SUBJECT MATTER OF THIS AGREEMENT (E.G., COLLABORATION AGREEMENTS, DISTRIBUTION
ARRANGEMENTS, ETC.).
Initials
UT-Battelle: /s/ ARF
-------
Date: 11/13/02
Licensee: /s/ MRK
-------
Date: 11/27/2002
[ * ] = 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.
36
EXHIBIT C, DEVELOPMENT AND COMMERCIALIZATION PLAN
Licensee agrees to invest in the development of technology and market
for Products practicing one or more Claims within the New Proprietary Rights by
committing Licensee's resources, at a minimum, to achieving at least one of the
following two requirements:
1) Funding minima for development of technology and markets for Products
practicing one or more Claims within the New Proprietary Rights.
1st year after signing: [*]
2nd year after signing: [*]
3rd year after signing: [*]
Excess amounts invested in one year may be carried forward and applied against
future requirements.
OR
2) Commence sales (and royalty payments) on at least one Product
practicing one or more Claims within the New Proprietary Rights within [*] of
the Effective Date.
Progress and substantiation of Licensee meeting these requirements shall be
provided to UT-Battelle in the form of a written report to be presented at a
meeting between the Parties to be held at the mutual convenience of said Parties
but no later than the first anniversary and each anniversary thereafter of the
effective date thereof.
N O T I C E
THIS EXHIBIT CONTAINS FINANCIAL AND COMMERCIAL INFORMATION THAT IS
BUSINESS CONFIDENTIAL AND THE PARTIES HEREBY AGREE NOT TO USE OR DISCLOSE THIS
EXHIBIT TO ANY THIRD PARTY WITHOUT THE ADVANCE WRITTEN APPROVAL OF THE OTHER
PARTY HERETO, EXCEPT TO THOSE NECESSARY TO ENABLE THE PARTIES TO PERFORM UNDER
THIS AGREEMENT OR AS MAY BE REQUIRED BY THE UT-BATTELLE CONTRACT WITH THE DOE
UNDER THE SAME RESTRICTIONS AS SET FORTH HEREIN.
NOTWITHSTANDING THE FOREGOING, EITHER PARTY MAY DISCLOSE THE PROVISIONS
OF THIS EXHIBIT UNDER STANDARD OBLIGATIONS OF CONFIDENTIALITY AND NON-USE ON A
NEED-TO-KNOW BASIS, TO INVESTORS AND THEIR REPRESENTATIVES IN A PRIVATE OR
PUBLIC EQUITY FINANCING TRANSACTION, OR TO POTENTIAL ACQUIRERS OR TARGETS AND
THEIR REPRESENTATIVES IN A CORPORATE CHANGE OF CONTROL TRANSACTION, OR TO OTHER
THIRD PARTIES IN CONNECTION WITH POTENTIAL COMMERCIAL TRANSACTIONS INVOLVING THE
SUBJECT MATTER OF THIS AGREEMENT (E.G., COLLABORATION AGREEMENTS, DISTRIBUTION
ARRANGEMENTS, ETC.).
Initials
UT-Battelle: /s/ ARF
-------
Date: 11/13/02
Licensee: /s/ MRK
-------
Date: 11/27/2002
[ * ] = 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.
37
EXHIBIT D. INFRINGEMENT OF NONEXCLUSIVE RIGHTS BY THIRD PARTIES
In the event any license granted to Proprietary Rights under this Agreement
should be converted to non-exclusive in accordance with the terms of this
Agreement, the following provisions shall apply to the nonexclusive grant.
6.1 Licensee shall give notice to UT-BATTELLE of any discovered third party
infringement of the rights granted herein of which Licensee has actual
knowledge.
6.2 UT-BATTELLE shall exercise its sole discretion to dispose of such
infringement in whatever reasonable manner it determines to be in its best
interest or to seek authorization for initiating litigation against such
infringement from the DOE Contracting Officer. UT-BATTELLE shall not have any
duty to consult with or confer with any of its licensees having a nonexclusive
right to practice Proprietary Rights in UT-BATTELLE's disposition of such
infringement. UT-BATTELLE's licensees having a nonexclusive right to practice
Proprietary Rights shall not: (1) have any right to participate in or have
access to any matters involving or relating to any disposition of infringement
conducted by UT-BATTELLE consistent with this clause; and (2) share in any
judgment, award, settlement, or the like that UT-BATTELLE may receive as a
result of any disposition of infringement conducted by UT-BATTELLE consistent
with this clause.
6.3 If authorization for initiating litigation to dispose of such
infringement obtained from the DOE Contracting Officer then UT-BATTELLE, at its
sole discretion, shall initiate such action in accordance with the Litigation
and Claims section of its prime contract DE-AC05-00OR22725. UT-BATTELLE's
licensees having a nonexclusive right to practice Proprietary Rights shall not:
(1) have any right to participate in or have access to any matters involving or
relating to litigation
38
conducted by UT-BATTELLE consistent with this clause; and (2) share in any
judgment, award, settlement, or the like that UT-BATTELLE may receive as a
result of said litigation conducted by UT-BATTELLE consistent with this clause.
6.4 If UT-BATTELLE obtains authorization to initiate litigation
proceedings, but not at the expense of the Government, then UT-BATTELLE, at its
sole discretion, may proceed with whatever actions it deems necessary to advance
and resolve said litigation in UT-BATTELLE's best interests. UT-BATTELLE's
licensees having a nonexclusive right to practice Proprietary Rights shall not:
(1) have any right to participate in or have access to any matters involving or
relating to litigation conducted by UT-BATTELLE consistent with this clause; and
(2) share in any judgment, award, settlement, or the like that UT-BATTELLE may
receive as a result of said litigation conducted by UT-BATTELLE consistent with
this clause.
6.5 Licensee hereby agrees to cooperate with UT-BATTELLE in the prosecution
of any such legal actions or settlement actions undertaken under this section
and each will provide to the other all materially pertinent data in its
possession which may be helpful in the prosecution of such actions.
6.6 UT-BATTELLE shall be in control of any such litigation proceedings and
shall have the right to dispose of such proceedings at any time in whatever
reasonable manner it determines to be in the best and sole interests of
UT-BATTELLE.
Initials
UT-Battelle: /s/ ARF
-------
Date: 11/26/02
Licensee: /s/ MRK
-------
Date: 11/27/2002
[ * ] = 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.
39