EXHIBIT 10.7
LICENSE AGREEMENT
Effective June 1, 1994 ("EFFECTIVE DATE"), RESEARCH CORPORATION
TECHNOLOGIES, INC., a Delaware corporation at 101 North Wilmot, Suite 600,
Tucson, Arizona 85711-3335 ("RCT"), and JENNER TECHNOLOGIES, a California
corporation at 1895 Mountain View Drive, Tiburon, California 94920 ("JENNER")
agree as follows:
ARTICLE I
LICENSE and OPTION
SECTION 1.1 Grant of License. RCT hereby grants to JENNER a license
under the LICENSED PATENTS to do the following in the LICENSED TERRITORIES in
the LICENSED FIELD: to develop, make, have made, promote and SELL LICENSED
PRODUCTS; and to use LICENSED PRODUCTS for research and development purposes,
specifically including the performance of clinical trials, and for quality
control and promotional purposes. Except as set forth in the preceding sentence,
JENNER shall have no license to use LICENSED PRODUCTS. Further, JENNER shall
have no license to practice any process claimed in the LICENSED PATENTS. No
other license or right is granted or implied by this SECTION.
SECTION 1.2 Term of License. The license granted in this ARTICLE shall
expire on the EXPIRATION DATE, unless it is sooner terminated as provided in
ARTICLE V ("Termination").
SECTION 1.3 Extensions to AFFILIATES.
Subsection 1.3.1 Grant of Right. RCT hereby grants to JENNER,
on the terms and conditions of this Agreement, the right to extend to AFFILIATES
of JENNER the license granted under SECTION 1.1. JENNER shall notify RCT in
writing before any extension to an AFFILIATE is made. In the event this
Agreement is terminated for any reason, all extension to JENNER's AFFILIATES
pursuant to this SECTION shall simultaneously be terminated.
Subsection 1.3.2 JENNER Responsible for Performance. JENNER
agrees to be responsible for the performance under this Agreement by the
AFFILIATES to which such license is extended. For purposes of assessing,
reporting and paying earned royalties the manufacture or SALE of LICENSED
PRODUCTS by JENNER'S AFFILIATES shall be considered the manufacture or SALE of
such LICENSED PRODUCTS by JENNER.
Subsection 1.3.3 Reports and Payments. Each AFFILIATE may make
the pertinent reports and royalty payments specified in ARTICLE III ("Fees and
Royalties") directly to RCT on behalf of JENNER, provided JENNER notifies RCT in
writing in advance. Otherwise such reports and payments shall be made by JENNER.
In any event, the SALE of LICENSED PRODUCTS by JENNER'S AFFILIATES shall be
separately shown in JENNER'S reports to RCT.
SECTION 1.4 OPTION FOR A LICENSE IN JAPAN.
Subsection 1.4.1 Grant of Option. RCT hereby grants to JENNER
an option to add the Japanese patent applications listed in EXHIBIT A-2 and
patents issuing therefrom to the definition of LICENSED PATENTS under this
License Agreement, and to add Japan to the definition of LICENSED TERRITORIES
under this Agreement.
Subsection 1.4.2 Exercise of Option. Within thirty (30) days
after RCT's receipt of written notice that the Japanese Patent Office will issue
claims in either or both of the applications of EXHIBIT A-2, RCT shall notify
JENNER of such notice of issuance. Within thirty (30) days after JENNER's
receipt of such notice from RCT, JENNER may exercise its option by giving RCT
written notice of its election to exercise. Unless JENNER exercises its option
as permitted under this Subsection, the option shall expire and have no further
effect as of the date of expiration of such thirty (30) day period.
Subsection 1.4.3 Effect of Exercise. Upon RCT's receipt of
JENNER's written notice of its election to exercise, the applications listed in
EXHIBIT A-2 and any and all issued patents, reissue, reexamination, renewal or
extension patents that may be based on such applications shall be immediately
included in the definition of LICENSED PATENTS under this License Agreement.
Similarly, upon RCT's receipt of JENNER's written notice, Japan shall be
immediately added to the definition of LICENSED TERRITORIES under this License
Agreement. JENNER's obligations under this Agreement with respect to such
Japanese applications and patents (specifically including the obligation to pay
royalties for LICENSED PRODUCTS made, or SOLD in Japan) shall begin on the date
of such inclusion in this License Agreement.
SECTION 1.5 SUBLICENSE.
Subsection 1.5.1 Right to Grant SUBLICENSES. RCT hereby grants
to JENNER the right to grant to each of three third parties, upon reasonable
terms and conditions, a nonassignable, royalty-bearing SUBLICENSE under the
LICENSED PATENTS in the LICENSED TERRITORIES in the LICENSED FIELD commensurate
in scope with the rights granted in SECTION 1.1. In addition to such three
SUBLICENSES, JENNER may grant one or more additional SUBLICENSES under the
LICENSED PATENTS in the LICENSED TERRITORIES in the LICENSED FIELD, with RCT's
prior written consent.
Subsection 1.5.2 SUBLICENSE Fees. JENNER shall pay to RCT [*]
of any license issue fee and [*] of each maintenance fee received from the
SUBLICENSEE for such SUBLICENSE, excluding any amounts that JENNER represents
and warrants it has received for research and/or development or equity
investment in JENNER. Each such amount shall be payable no later than sixty (60)
days after receipt by JENNER of such fee from the SUBLICENSEE.
Subsection 1.5.3 SUBLICENSE Requirements. The SUBLICENSE
agreement shall be in writing and shall contain provisions similar in all
material respects to those of [*] of this Agreement. Further, the SUBLICENSE
agreement must comply with all applicable laws and
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governmental regulations. In particular, JENNER shall not have the right or
power to grant a SUBLICENSE under any circumstance amounting to a misuse of any
LICENSED PATENT.
Subsection 1.5.4 JENNER's Obligations Continue. The grant of a
SUBLICENSE under Subsection 1.5.1, shall not relieve JENNER of any of its
obligations under this Agreement; in particular, JENNER shall continue to be
obligated, under SECTION 3.2, to pay an earned royalty to RCT for each LICENSED
PRODUCT SOLD, whether such SALE is by JENNER or by the SUBLICENSEE.
Subsection 1.5.5 Notification Requirement. JENNER shall
promptly notify RCT in writing of the issuance of such SUBLICENSE. On or before
the date thirty (30) days after the execution of such SUBLICENSE, JENNER shall
provide RCT with a true copy of the SUBLICENSE and an English language
translation if it is in another language.
SECTION 1.6 No Further Rights. Except as provided in this ARTICLE, no
other license or rights is granted or implied under this Agreement.
ARTICLE II
NON-EXCLUSIVITY
The license granted in ARTICLE I shall be non-exclusive and RCT, in its
sole discretion, may grant concurrently effective nonexclusive licenses under
the LICENSED PATENTS in the LICENSED TERRITORIES in the LICENSED FIELD to third
parties for commercial purposes, and to INSTITUTION for educational and research
purposes.
ARTICLE III
FEES AND ROYALTIES
SECTION 3.1 License Issue Fee. JENNER shall pay to RCT a license issue
fee of [*], payable as follows: [*] No portion of the license issue fee shall be
refundable, nor may it be used as a credit against any other amount payable by
JENNER under this Agreement. If this Agreement is terminated for any reason
under ARTICLE V before JENNER has made full payment of the license issue fee
[*], JENNER shall have no obligation to pay the remaining unpaid amount.
SECTION 3.2 Earned Royalties.
Subsection 3.2.1 Payability. JENNER shall pay to RCT an earned
royalty for:
(a) all LICENSED PRODUCTS SOLD by or for JENNER and
its AFFILIATES and SUBLICENSEES during the term of this Agreement; and
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(b) all LICENSED PRODUCTS made before expiration or
termination of this Agreement but SOLD by or for JENNER and its AFFILIATES and
SUBLICENSEES after expiration or termination of this Agreement.
Subsection 3.2.2 One Royalty. JENNER's obligation to pay an
earned royalty to RCT shall arise upon the first to occur of the making or
SELLING of a LICENSED PRODUCT in a place that, but for this License Agreement,
would infringe a LICENSED PATENT. Notwithstanding the foregoing, JENNER shall
have no obligation to pay an earned royalty for any LICENSED PRODUCT unless and
until such LICENSED PRODUCT is SOLD. The amount of such royalty shall be
calculated based on the NET SALES VALUE of the SALE of such LICENSED PRODUCT.
None of JENNER, its AFFILIATES and SUBLICENSEES (if any) shall be obligated to
pay a royalty for the use of LICENSED PRODUCTS for research, development,
clinical trials, quality control or promotional purposes. Only one earned
royalty shall be payable with respect to any LICENSED PRODUCT, regardless of how
many claims or patents within the LICENSED PATENTS cover such LICENSED PRODUCT.
If a LICENSED PRODUCT is made in the U.S. or Canada, and is SOLD outside the
U.S. or Canada, JENNER's obligation to pay royalties shall arise when such
LICENSED PRODUCT is made, but the royalties shall not be payable until such time
as the LICENSED PRODUCT is SOLD; furthermore, if the SALE of such LICENSED
PRODUCT does not infringe a LICENSED PATENT in such country, JENNER shall still
be obligated to pay RCT a royalty for the making of LICENSED PATENTS in the U.S.
or Canada, and the amount of such royalty shall be calculated based on revenue
generated by the SALE in such country outside the U.S. or Canada.
Subsection 3.2.3 Royalty Amount. The amount of earned
royalties JENNER shall pay to RCT shall be [*].
Subsection 3.2.4 More Favorable Royalty Rates.
(a) Generally. If, under substantially identical
provisions and conditions, RCT grants a license under the LICENSED PATENTS to
any third party (other than to JENNER's AFFILIATE) SELLING products covered by
the LICENSED PATENTS in a given country(ies) covered by the LICENSED PATENTS at
an earned royalty rate that is lower than that provided in Subsection 3.2.3 of
this Agreement, then RCT shall promptly notify JENNER as provided in Subsection
3.2.4(b) below and, upon JENNER's timely request, modify the terms of this
Agreement by changing the earned royalty rate in Subsection 3.2.3 as it applies
to such country(ies) only, to such lower earned royalty rate. [*].
(b) [*]. If RCT grants to one or more third parties a
license under the LICENSED PATENTS having a lower earned royalty rate, RCT shall
notify JENNER in writing of any such license and a brief description of the
terms of such third party license, [*].
(c) Limitations. This Subsection shall not entitle
JENNER to any refund for amounts previously paid to RCT. Further, JENNER shall
not be entitled to a lower earned royalty rate if the third-party licensee has
obtained such lower earned royalty rate in return for substantial and unique
consideration that JENNER is unable or unwilling to provide to RCT. The
provisions of this Subsection
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shall not be called into operation because of the existence or operation of any
license granted or to be granted to or on behalf of any government or any
increase in the royalty rate because of taxes imposed by any government.
Subsection 3.2.5 No Royalty Charged under U.S. Government
License. Notwithstanding Subsection 3.2.1, earned royalties shall not be payable
on any LICENSED PRODUCT made or SOLD under any license under the LICENSED
PATENTS granted to or on behalf of the U.S. Government as further described in
ARTICLE VIII of this Agreement.
Subsection 3.2.6 Withholding of Taxes. If the taxing authority
of any government of any country covered by the LICENSED PATENTS imposes a tax
on the royalties to be paid under this Agreement or requires JENNER to withhold
amounts from royalties payable to RCT to ensure payment of such taxes, JENNER
shall cooperate with RCT in RCT's efforts to obtain exemption from payment of
such taxes or a refund of taxes withheld.
SECTION 3.3 Annual Minimum Royalties.
Subsection 3.3.1 Amount and Payment Date. JENNER shall pay to
RCT a prepaid, annual minimum royalty of [*].
Subsection 3.3.2 [*] until expiration or termination of this
Agreement.
Subsection 3.3.3 Credits. JENNER shall be entitled to credit
the annual minimum royalty payment paid against the amount of the earned
royalties payable in the same calendar year for manufacture or SALES of LICENSED
PRODUCTS. No amount of earned royalties paid for any calendar year shall be
creditable against any annual minimum royalty payment due in any other calendar
year.
SECTION 3.4 Books and Records. JENNER shall keep full, true and
accurate books of account containing all particulars and reasonable supporting
documentation that may be necessary for the purpose of determining the NET SALES
VALUE of all LICENSED PRODUCTS SOLD. The books of account and reasonable
supporting documentation shall be kept at JENNER's principal place of business
and shall be open at all reasonable times, for three (3) years following the end
of the calendar year to which they pertain (and access shall not be denied
thereafter if reasonably available), to the inspection of an independent
certified public accountant retained by RCT for the purpose of verifying
JENNER's royalty statements; however, RCT shall not be entitled to more than one
(1) such inspection each calendar year. RCT agrees to keep in confidence all
information it learns about JENNER's business pursuant to this SECTION and
SECTION 3.6. If any such inspection discloses an underpayment of royalties [*]
of the amount of royalties actually due for any quarterly period, then JENNER
shall promptly pay the reasonable cost of such inspection after JENNER's receipt
of the bill/invoice for such inspection. RCT shall instruct its certified public
accountant to disclose to RCT only if such inspection discloses an underpayment
of royalties [*], and if so, the amount thereof.
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SECTION 3.5 Periodic Reports. Beginning with the first SALE of LICENSED
PRODUCTS under this Agreement, and continuing throughout the term of this
Agreement, on or before February 1, May 1, August 1, and November 1 of each
year, JENNER shall deliver to RCT a true and accurate written report, showing
the following as they apply to the preceding calendar quarter just ended:
(a) the quantities of LICENSED PRODUCTS invoiced by
JENNER, its AFFILIATES and SUBLICENSEES on a country-by-country basis;
(b) the U.S. dollar value of the invoiced amount on
such quantities in (a);
(c) the computation of the NET SALES VALUE based on
the dollar value of the invoiced amount on in (b); and
(d) the computation of royalties based on the NET
SALES VALUE computed under (c).
JENNER's payment of the royalties due for the calendar quarter covered by the
written report shall accompany the report. If no royalties are due, it shall be
so reported. Royalties shall be paid to RCT in U.S. currency at RCT's address
specified in SECTION 7.2. The correctness and completeness of each such report
shall be certified in writing by a responsible financial officer (or his or her
designee) of JENNER, by the independent public accounting firm acting as
JENNER's auditor, or by the chair or other head of JENNER's internal audit
committee. Within thirty (30) days after expiration or termination of this
Agreement, JENNER shall provide to RCT a written report that complies in all
respects with this SECTION.
SECTION 3.6 Foreign Sales.
Subsection 3.6.1 Exchange Rate. If JENNER, its AFFILIATE(S) or
SUBLICENSEE(S) SELL any LICENSED PRODUCTS for currency other than U.S. currency,
the earned royalty payable as to such LICENSED PRODUCT shall first be determined
in such currency for which the LICENSED PRODUCT was SOLD and then converted into
its equivalent in U.S. currency as follows:
(a) at the selling rate, for such currency, for the
last business day of the accounting period for which payment is made, published
by the Wall Street Journal; or
(b) if such rate is not so published, at the selling
rate for such currency for the last business day of the accounting period for
which payment is made, as published by a leading New York, New York bank chosen
by JENNER and reasonably acceptable to RCT.
If JENNER is late in making any payment under this Agreement, the applicable
exchange rate obtained from the sources described above shall be the greater of
such rate on the date payment was actually made or the rate on the date on which
payment is due.
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SECTION 3.7 Late Payment.
Subsection 3.7.1 Late Payment Fee. JENNER hereby acknowledges
that late payment by JENNER to RCT of sums due under this Agreement will cause
RCT to incur certain costs, including costs for legal, accounting and other
professional services to manage and administer this Agreement, the exact amount
of which will be extremely difficult to ascertain. Accordingly, if JENNER fails
to make any payment required under this Agreement on or before the date thirty
(30) days after JENNER's receipt of RCT's written notice of such failure, in
addition to any other remedy available under this Agreement and any remedy
available at law or equity, JENNER shall pay to RCT a late payment fee equal to
the lesser of [*] (in addition to any interest charges required or permitted
below). The parties hereby agree that such late charge represents a fair,
reasonable and administratively simple estimate, at the time of execution of
this Agreement, of the costs RCT will incur by reason of JENNER's late payment.
Subsection 3.7.2 Interest. If JENNER fails to make any payment
required under this Agreement on or before the date ten (10) days after JENNER's
receipt of RCT's written notice of such failure, JENNER shall pay interest on
such amount at an annual rate of [*] which shall accrue from the date the
payment not timely made became due until the date such payment is paid in full;
provided, however, that if such [*] rate exceeds the rate allowed by applicable
law, then the highest rate allowed by law shall apply.
Subsection 3.7.3 No Waiver. RCT's acceptance of late charges
or interest shall in no event constitute a waiver of JENNER's default with
respect to such overdue amount, nor prevent RCT from exercising any of the other
rights and remedies granted under this Agreement. Any payments received shall be
applied first to any late charges, second to the satisfaction of any unpaid,
accrued interest and finally to the satisfaction of any unpaid principal.
ARTICLE IV
OBLIGATIONS OF JENNER; DILIGENCE
SECTION 4.1 JENNER's Development. JENNER shall exercise diligence
consistent with its reasonable business judgment in developing, testing,
manufacturing and marketing LICENSED PRODUCTS under this License Agreement.
SECTION 4.2 Activities Limited to LICENSED FIELD and SALES of LICENSED
PRODUCTS. JENNER covenants that all of its activities under the LICENSED PATENTS
shall be limited to the LICENSED FIELD. JENNER promises and covenants that it
shall not SELL LICENSED PRODUCTS outside the LICENSED FIELD. JENNER promises and
covenants that it shall not use LICENSED PRODUCTS or LICENSED PROCESSES to
provide services on a fee-for-service basis.
ARTICLE V
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EXPIRATION AND TERMINATION
SECTION 5.1 Expiration on EXPIRATION DATE This Agreement shall expire
on the EXPIRATION DATE unless sooner terminated, as provided below.
SECTION 5.2 JENNER's Election. JENNER may terminate this Agreement at
any time by giving the RCT three (3) months' written notice of JENNER's election
to terminate this Agreement.
SECTION 5.3 JENNER's Default.
Subsection 5.3.1 Monetary Default. Upon any material monetary
default under this Agreement by JENNER (i.e., failure to timely pay amounts to
RCT required to be paid under this Agreement), RCT, in addition to any other
remedy available at law or equity, may elect to terminate this Agreement by
giving JENNER thirty (30) days' written notice of RCT's election to terminate
this Agreement. This Agreement shall terminate on the expiration of such thirty
(30) day period unless JENNER has cured such default on or before such date.
Subsection 5.3.2 Non-Monetary Default. Upon any material
non-monetary default under this Agreement by JENNER (i.e., one not involving the
payment to RCT of any amounts required to be paid under this Agreement), RCT
may, in addition to any other remedy available at law or equity, elect to
terminate this Agreement by giving JENNER thirty (30) days' written notice of
RCT's election to terminate this Agreement. This Agreement shall terminate upon
the expiration of such thirty (30) day period, unless JENNER has cured such
default on or before such date.
Subsection 5.3.3 Immediate Default. The following shall be
defaults under this Agreement that JENNER may not cure: any voluntary or
involuntary dissolution, bankruptcy, insolvency of JENNER or assignment of
JENNER's assets for the benefit of creditors (collectively, a "Financial
Default") and a lawsuit or reexamination or protest proceeding (or the
equivalent) filed by JENNER against RCT seeking a declaratory judgment or
determination, as the case may be, that any of the PATENT CLAIMS are invalid,
unenforceable, or otherwise not patentable ("Procedural Default"). Financial
Defaults and Procedural Defaults shall constitute immediate defaults under this
Agreement and, upon the occurrence of either a Financial Default or Procedural
Default, this Agreement shall immediately terminate. On or before the date
thirty (30) days before the occurrence of a Financial Default or the filing of a
bankruptcy petition concerning JENNER, JENNER shall notify RCT in writing of
JENNER'S intention to file the petition or of another's intention to file an
involuntary petition in bankruptcy, if JENNER knows or should know of such other
party's intention to file, or the impending Financial Default. Failure to
provide such written notice shall be deemed to be an immediate, pre-petition,
incurable default under this Agreement.
SECTION 5.4 Surviving Obligation to Pay Royalties. JENNER's obligations
to pay royalties under Subsection 3.2.1(b) shall survive expiration or
termination of this Agreement.
SECTION 5.5 Surviving Provisions. In addition to any provision of this
Agreement that expressly provides for acts or obligations to continue beyond the
expiration or termination of this
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Agreement, the provisions of SECTIONS 3.5 ("Books and Records"), the final
sentence of SECTION 3.6 ("Periodic Reports"), 3.8 ("Late Payment") and ARTICLE
VII ("General") shall survive expiration or termination of this Agreement.
ARTICLE VI
INFRINGEMENT
SECTION 6.1 RCT'S Right to Prosecute. RCT shall protect the LICENSED
PATENTS from infringement and prosecute infringers when in its sole judgment
such action may be necessary, proper and justified.
SECTION 6.2 Obligation to Cooperate. If RCT initiates or carries on
legal proceedings to enforce the LICENSED PATENTS against an alleged infringer,
JENNER shall cooperate with RCT, at no out-of-pocket expense to JENNER.
ARTICLE VII
GENERAL
SECTION 7.1 Integration. This Agreement and any Exhibits, and Riders
attached to this Agreement constitute the entire agreement between the parties
as to the subject matter of this Agreement and all prior negotiations,
representations, warranties, and promises are superseded and merged into, and
completely expressed by it. No party shall be bound by or charged with any
written or oral agreements, representations, warranties, or promises not
specifically set forth in this Agreement.
SECTION 7.2 Addresses and Notices. All notices, requests and other
communications provided in this Agreement shall be in writing and shall be
deemed to have been given: (a) when delivered, if delivered by hand, or sent by
facsimile, telegram or telecopier; (b) on the date following deposit with an
overnight courier, if sent via overnight courier; or (c) on the date five (5)
days following deposit with the U.S. mail, certified or registered:
If to RCT: If to JENNER
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President Anthony E. Maida
Research Corporation Technologies, Inc. Chief Executive Officer
101 North Wilmot Jenner Technologies
Suite 600 1895 Mountain View Drive
Tucson, Arizona 85711-3335 Tiburon, California 94920
TEL: (602) 748-4400 TEL: (510) 736-1863
FAX: (602) 748-0025 FAX: (510) 736-5910
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Such addresses may be altered by notice. If no time limit is specified for a
notice required or permitted to be given by this Agreement, the time limit
therefor shall be three (3) full business days, not including the day of
mailing.
SECTION 7.3 Applicable Law; Venue. This Agreement is subject to and
shall be construed in accordance with the law of the State of Arizona, U.S.A.,
without regard to the law of Arizona regarding the conflicts of laws, except as
to any issue that depends upon the validity, scope or enforceability of any
LICENSED PATENTS, which issue shall be determined in accordance with the
applicable patent laws of the country of such patent. Except with respect to any
issue that involves the patent laws of the country of a patent, the parties
agree that any action, suit or proceeding brought under this Agreement or any of
the transactions contemplated in this Agreement shall be brought in the U.S.
District Court for the District of Arizona or any court in Pima County, Arizona
of competent jurisdiction in the case where JENNER brings such action, and in
the U.S. District Court for the Northern District of California or any court in
Marin County, California of competent jurisdiction in the case where RCT brings
such action. Each party further agrees that service of process of notice in any
such action, suit or proceeding shall be effective if in writing and sent in a
manner provided in SECTION 7.2.
SECTION 7.4 Non-Use Of Names. JENNER shall not use the name of
INVENTORS, INSTITUTION, RCT or any adaption of any of them, in any advertising,
promotional or sales literature, without prior written consent obtained from the
INVENTORS, INSTITUTION or RCT, as applicable.
SECTION 7.5 Assignment. This Agreement shall not be assigned by JENNER
except upon the merger, acquisition or sale of substantially all of JENNER's
business assets pertaining to this License Agreement, upon prior written notice
to RCT, and upon JENNER's assignee's agreement to abide by the terms of this
Agreement and assume all of JENNER's obligations under this Agreement. Upon such
assignment, the term "JENNER" as used in this Agreement shall thereafter mean
the assignee of JENNER.
SECTION 7.6 Arbitration.
Subsection 7.6.1 Dispute Resolution. The parties shall make
all reasonable efforts to resolve any dispute or controversy arising out of or
relating to this Agreement, its construction or its actual or alleged breach, by
face-to-face negotiations between senior executives. Should such negotiations
fail to resolve the matter, the matter shall be finally decided by binding
arbitration by one arbitrator in accordance with the Licensing Agreement Rules
then in effect of the American Arbitration Association, and judgment upon the
award rendered may be entered in the highest court of the forum, state or
federal, having jurisdiction. Any arbitration instituted by JENNER shall be
conducted in the Tucson, Arizona metropolitan area, and any arbitration
instituted by RCT shall be conducted in the San Francisco, California
metropolitan area. The costs of the arbitration shall be shared equally by RCT
and JENNER, except that each party shall pay its own attorneys' fees.
Subsection 7.6.2 Exceptions. The provisions of Subsection
7.6.1 relating to arbitration shall not apply to any issue of the patentability,
enforceability or infringement of any LICENSED PATENT or to any dispute or
controversy as to which any applicable law or treaty prohibits
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such arbitration. If, in any arbitration proceeding, any issue shall arise
concerning validity, scope, enforceability or infringement of any LICENSED
PATENT, the arbitration shall assume the LICENSED PATENTS to be valid,
enforceable and infringed (but for this Agreement). In any event, the
arbitrators shall not delay the arbitration proceeding for the purpose of
obtaining or permitting either party to obtain judicial resolution of such
issue, unless an order staying such arbitration proceeding shall be entered by a
court of competent jurisdiction. Neither party shall raise any issue concerning
the validity, construction, enforceability or effect of any LICENSED PATENT in
any proceeding to enforce an arbitration award hereunder or in any proceeding
otherwise arising out of such arbitration award.
Subsection 7.6.3 No Waiver. Notwithstanding the foregoing,
nothing in Subsections 7.6.1 or 7.6.2 shall be construed to waive any rights or
timely performance of any obligations existing under this Agreement.
SECTION 7.7 Compliance with Law. Nothing in this Agreement shall be
construed so as to require the commission of any act contrary to law, and
wherever there is any conflict between any provision of this Agreement and any
statute, law, ordinance or treaty concerning the legal right of the parties to
contract, the latter shall prevail, but in such event the affected provisions of
this Agreement shall be curtailed and limited only to the extent necessary to
bring it within the applicable legal requirements.
SECTION 7.8 Severability. If any provision of this Agreement is held to
be or becomes invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
SECTION 7.9 Representations, Warranties, and Covenants.
Subsection 7.9.1 By RCT. RCT represents and warrants that: (i)
RCT has the full right and authority to grant rights, license and interest
granted herein and perform its obligations hereunder; (ii) RCT owns all right,
title and interest in the LICENSED PATENTS; (iii) RCT has not previously, and
will not grant during the term of this Agreement, any right, license or interest
in and to the LICENSED PATENTS, or any portion thereof, on an exclusive basis;
(iv) the LICENSED PATENTS are free and clear of all liens, encumbrances,
security interests and restrictions; and (v) to the best of RCT's knowledge,
there are no actions, suits, claims or proceedings pending or threatened in any
way relating to the LICENSED PATENTS.
Subsection 7.9.2 By JENNER. JENNER represents and warrants
that it has the full right and authority to enter into this License Agreement
and to perform its obligations hereunder.
Subsection 7.9.3 Limitations. Notwithstanding anything to the
contrary in this Agreement, nothing contained in this Agreement shall be
construed as a representation or warranty: (a) as to the scope or validity of
LICENSED PATENT; or (b) that any performance, practice under any LICENSED PATENT
is not an infringement of any patent of others.
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SECTION 7.10 Independent Contractor. In its performance under this
Agreement, each party shall be an independent contractor and neither party (nor
any employee or agent thereof) shall be an agent or partner of the other party.
SECTION 7.11 Headings. The headings of the various ARTICLES, SECTIONS
and Subsections of this Agreement are used solely for the convenience of the
parties, do not form a part of this Agreement and are not intended to affect the
interpretation or meaning of this Agreement or to define, limit, extend or
describe its scope or intent.
SECTION 7.12 No Third-Party Beneficiaries. Except for SECTIONS 7.4
("Non-Use of Names") and 7.16 ("Indemnity"), which shall also be for the benefit
of, and enforceable by, INSTITUTION and INVENTOR, none of the provisions of this
Agreement shall be for the benefit of, or enforceable by, any third-party.
SECTION 7.13 Waiver. No consent or waiver, express or implied, by a
party of any breach or default by any other party in the performance by such
other party of its obligations hereunder shall be construed to be a consent to
or waiver or any other breach or default in the performance of such other party
of the same or any other obligations hereunder. Failure on the part of a party
to complain of any act or failure to act by the other party, to declare the
other party in default, irrespective of how long such failure continues, to
insist upon the strict performance of any covenant, duty, agreement or condition
of this Agreement or to exercise any right or remedy consequent upon a breach
thereof shall not constitute a waiver by such party of its rights hereunder, of
any such breach, or of any other commitment, duty, agreement or condition. The
giving of consent by a party in any one instance shall not limit or waive the
necessity to obtain such party's consent in any future instance and in any event
no consent or waiver shall be effective for any purpose hereunder unless such
consent or waiver is in writing and signed by the party sought to be charged.
SECTION 7.14 Computation of Time. In computing any period of time
pursuant to this Agreement, the day or date of the act, notice, event or default
from which the designated period of time begins to run will not be included. The
last day of the period so computed will be included, unless it is a Saturday,
Sunday or a federal holiday, in which event the period runs until the end of the
next day that is not a Saturday, Sunday or federal holiday. Only business days
shall be counted in any computation of time.
SECTION 7.15 Disclaimer. It shall be the full and sole responsibility
of JENNER to use appropriate care in the practice, manufacture and use of any
product pursuant to any license or immunity granted under this Agreement. RCT
shall have no right to control the manner in which any LICENSED PRODUCT is made
or practiced. RCT shall not be required to provide any know-how or operating
instructions or other information with respect to any such product and RCT makes
no representation or warranty whatsoever with respect to any such product. RCT
shall not be obligated to file any patent applications, secure any patent or
maintain any patent in force, although, if RCT intends and elects to discontinue
the prosecution of any such patent application or the maintenance of any such
patent, RCT shall so advise JENNER and, subject to RCT's obligations to previous
licensees under the LICENSED PATENTS, give JENNER an opportunity to continue
such prosecution or maintenance on RCT's behalf
-12-
and at JENNER's expense. Any out-of-pocket expenses thereafter incurred by
JENNER for such prosecution or maintenance of any patent or patent application
of any such country shall be creditable against earned royalties thereafter
payable under this Agreement solely in respect of LICENSED PRODUCTS, made, or
SOLD in the country of such patent or patent application. RCT shall keep JENNER
apprised of the status of the prosecution of the LICENSED PATENTS, upon
reasonable request of JENNER occurring not more frequently than monthly.
SECTION 7.16 Indemnity. JENNER agrees to indemnify, defend and hold
harmless RCT, INVENTORS, INSTITUTION, and all officers, directors, employees and
agents of RCT and INSTITUTION (collectively, the "INDEMNITIES") from and against
any and all claims, damages and liabilities, including legal costs and fees,
asserted by third parties arising from the manufacture, use or sale of any
LICENSED PRODUCTS by or for JENNER, or arising from the use of any such LICENSED
PRODUCT by any third party, including any customer of JENNER, except to the
extent such claims, damages or liabilities are due to RCT's willful misconduct
or negligence. JENNER hereby waives any rights of subrogation it may have
against the INDEMNITIES on account of any claim, damage or liability arising
from activities under or in connection with this Agreement. JENNER shall cause
its applicable product liability insurance policy to contain a provision whereby
the insurer waives any rights of subrogation against the INDEMNITIES.
SECTION 7.17 Insurance. On or before the date of the first SALE of a
LICENSED PRODUCT under this Agreement, JENNER shall obtain and, thereafter
throughout the term of this Agreement, maintain in force product liability
insurance and other insurance coverage typically carried by PERSONS engaged in
JENNER's business, but at least [*] for JENNER's SALE of LICENSED PRODUCTS as a
therapeutic vaccine for prostate cancer, and at least [*] for JENNER's SALE of
LICENSED PRODUCTS as a prophylactic vaccine for prostate cancer, or, in the
alternative, JENNER may self-insure against such risks if its net worth, as
measured by the most recent audited statement, exceeds [*]. Such insurance
policies shall name RCT as an additional named insured. JENNER hereby waives any
rights of subrogation it may have against RCT on account of any product
liability claim. The insurance policies required to be carried by JENNER under
this Agreement shall be with companies that have a Best's Financial Rating of A
or better. JENNER shall furnish RCT with a certificate of such policy upon
request, and whenever requested, shall satisfy RCT that such policy is in full
force and effect.
SECTION 7.18 Construction. The parties agree that each party has
reviewed this Agreement and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not apply to the
interpretation of this Agreement.
SECTION 7.19 Patent Marking. JENNER agrees that it shall mark all
LICENSED PRODUCTS with a legible notice indicating the patents to which the
LICENSED PRODUCTS are subject.
SECTION 7.20 Registration of Agreement. JENNER agrees to take all
reasonable and necessary steps to register this Agreement in any country of the
LICENSED TERRITORIES where such is required to permit the transfer of funds
and/or payment of royalties to RCT hereunder or is otherwise required by the
government or law of such country to effectuate or carry out this Agreement.
-13-
Notwithstanding anything contained herein, JENNER shall not be relived of any of
its obligations under this Agreement by any failure to register this Agreement
in any country of the LICENSED TERRITORIES, and specifically, JENNER shall not
be relieved of its obligation to make any payment to RCT hereunder, which such
payment is blocked due to any failure to register this Agreement.
SECTION 7.21 Authority and Binding Agreement. Each party represents and
warrants to the other that this Agreement constitutes a valid and binding
agreement of the representing party, that execution, delivery and performance of
this Agreement by the representing party are within the representing party's
corporate power, and have been duly authorized by all necessary corporate
action.
SECTION 7.22 No Publicity About this Agreement. The parties agree to
keep the existence and terms of this License Agreement in confidence and that
they shall refrain from publicly disclosing the existence and terms of this
Agreement, except to the extent that RCT is required to disclose such to the
INSTITUTION and the INVENTORS, and to previous licensees under the LICENSED
PATENTS; provided, however, the parties may disclose the existence and terms of
this Agreement to comply with court order, law or government regulation, or to
accountants, banks or another financing source (or their advisors) or in
connection with a merger, acquisition or securities offering.
ARTICLE VIII
GOVERNMENT RIGHTS
SECTION 8.1 Prior Rights. This Agreement is subject to the rights of
the U.S. Government in and to the LICENSED PATENTS, including those derived
through the National Cancer Institute ("NCI") of the Department of Health,
Education, and Welfare ("DHEW"), pursuant to a certain grant by the Government
to INSTITUTION identified as NCI Grant CA-15437, which rights are described in a
certain contract entitled "Institutional Patent Agreement", made the 7th day of
April, 1976, by and between the U.S. Government and INSTITUTION. A copy of the
"Institutional Patent Agreement" is attached as Exhibit B-1, and a transcript of
that copy (for clarity) is attached at Exhibit B-2. Such rights include a
nonexclusive, nontransferable, royalty-free, irrevocable license to the U.S.
Government for governmental purposes. Such license to the U.S. Government shall
remain unaffected by this Agreement.
SECTION 8.2 License to Conform. Any inconsistency between this
Agreement and the pertinent provisions of any law, regulation, or executive
order by the U.S. Government shall be resolved by conforming this Agreement to
such provisions of any such law, regulation, or executive order. This Agreement
shall be subject to applicable governmental laws relating to compulsory
licensing.
ARTICLE IX
DEFINITIONS
-14-
SECTION 9.1 "AFFILIATE" means any PERSON to which one or more of the
following apply:
(a) any PERSON directly or indirectly controlling,
controlled by or under common control with JENNER;
(b) any PERSON owning or controlling fifty percent
(50%) or more of the outstanding voting rights or securities of JENNER; or
(c) any PERSON whose outstanding voting rights or
securities are owned fifty percent (50%) or more by JENNER.
SECTION 9.2 "EXPIRATION DATE" means the expiration date of the
last-to-expire LICENSED PATENT.
SECTION 9.3 "INSTITUTION" means Health Research, Inc. of Buffalo, New
York.
SECTION 9.4 "INVENTION" means "Immunological Test for Prostate Cancer".
SECTION 9.5 "INVENTORS" means [*].
SECTION 9.6 "LICENSED FIELD" means the use of prostate specific antigen
("PSA") as a prophylactic vaccine for prostate cancer and/or a therapeutic
vaccine for prostate cancer.
SECTION 9.7 "LICENSED PATENTS" means:
(a) all issued, unexpired patents listed in EXHIBIT
A-1;
(b) all divisional or continuation, in whole or in
part, applications based on any of the patents or applications listed in EXHIBIT
A-1;
(c) all issued, unexpired patents resulting from any
of the applications described in (b); and
(d) all issued, unexpired reissue, reexamination,
renewal or extension patents that may be based on any of the patents described
in (a) or (c).
SECTION 9.8 "LICENSED PRODUCT" means a product, the manufacture, use,
or SALE of which infringes a PATENT CLAIM under 35 USC ss.271 and/or applicable
case law, but for this License Agreement.
SECTION 9.9 "LICENSED TERRITORIES" means Canada and the United States
of America, its territories and possessions.
-15-
SECTION 9.10 "NET SALES VALUE" of any LICENSED PRODUCT means the actual
billings for the SALE of such LICENSED PRODUCT, less allowable deductions,
listed below.
Subsection 9.10.1 [*] used for calculating [*] shall be the
amount [*]; provided, however, [*] shall only be included in [*], otherwise [*]
shall only include [*].
Subsection 9.10.2 [*]. When factually applicable, [*] as
determined above:
(a) [*], in amounts customary in the trade;
(b) [*], and with specific referent to, particular
[*];
(c) [*]; and
(d) [*], to the extent included in such [*].
No other [*] shall be made including without limitation [*] by whatever name
known or for any [*].
SECTION 9.11 "PATENT CLAIM" means a claim in a LICENSED PATENT. A
PATENT CLAIM shall be presumed to be valid unless and until it has been held to
be invalid or unenforceable by a final judgment of a court of competent
jurisdiction from which no appeal can be or is taken. For purposes of this
Agreement, and especially for purposes of royalty determination and payment, any
claim in a pending patent application shall be deemed to be the equivalent of a
valid claim of an issued, unexpired patent and in consideration of RCT's
agreement to grant a license under any patent issuing thereon earned royalties
shall be payable in respect thereto as though it were a valid patent claim.
SECTION 9.12 "PERSON" means an individual or a corporation,
partnership, trust, unincorporated organization, association or any other entity
or a government or any department or agency thereof.
SECTION 9.13 "SELL" (and any noun form, including "SALE", and
conjugated verb form thereof) shall mean to sell, or otherwise part with or
dispose of LICENSED PRODUCTS, for value.
SECTION 9.14 "SUBLICENSE" means mean a sublicense under the LICENSED
PATENTS granted in accordance with the terms of SECTION 1.5 of this Agreement.
Likewise, "SUBLICENSEE" shall mean the party to which rights are granted under a
SUBLICENSE.
RESEARCH CORPORATION JENNER TECHNOLOGIES
TECHNOLOGIES, INC.
/s/ GARY M. MUNSINGER /s/ ANTHONY E. MAIDA
- --------------------- -----------------------
Gary M. Munsinger Anthony E. Maida
President Chief Executive Officer
-16-
EXHIBIT A-1
Invention: "Immunological Test for Prostate Cancer"
INVENTORS: [*]
Issued Patents
Country Patent No. Issue Date
------- ---------- ----------
Canada 1,165,685 04/17/84
United States Re. 33,405* 10/23/90
* A Reissue Patent issued on United States Patent No. 4,446,122, issued
05/01/84, which was issued on the basis of PCT/US80/01708, filed December 23,
1980, as a continuation-in-part of U.S. Application Serial No. 108,217 filed
December 28, 1979.
EXHIBIT A-2
[*]
EXHIBIT B-1
September 20, 1979
EXHIBIT I
Dr. Roger Herdman
State Department of Health and Health Research, Inc.
Tower Building
Empire State Plaza
Albany, New Jersey 12237
Dear Dr. Herdman:
Re: Your Institutional Patent Agreement
This refers to the Institutional Patent Agreement governing grants and
awards from this Department to your institution.
By this letter, we are amending Section VII of the Agreement pertaining
to patent management organizations to delete its limitation to nonprofit patent
management organizations. Please note that this does not change any of the other
requirements contained in that Section, particularly the one requiring approval
by this Department of any patent administration agreement between your
institution and a patent management organization. Accordingly, in Section VII,
line 4, please cancel "nonprofit."
Section XI is also hereby amended to change September 30 in line 2 to
December 31 and June 20 in line 3 to September 30. This change will make the
annual reports coincide with the fiscal year.
It would be appreciated if you would have the responsible official of
your institution sign the enclosed copy of this letter to indicate your
concurrence and return it to this office at your convenience.
Sincerely yours,
/s/
---------------------------
Leroy B. Randall
Acting Chief, Patent Branch
/s/
- ---------------------------------------
David Axelrod, M.D.
Commissioner
New York State Department of Health
and President and Chairman of the Board
Health Research, Inc.
October 9, 1979
[Illegible Date]
Roger C. Herdman, M.D.
Deputy Commissioner for Preventive Services
Research and Development
New York State Department of Health
Tower Building, Empire State Plaza
Albany, New York 12237
Dear Dr. Herdman:
Reference is made to previous correspondence with this Department
regarding the desire of the New York State Department of Health to enter into an
Institutional Patent Agreement with the Department of Health, Education and
Welfare.
I have reviewed the policy and procedures of your institution and find
them acceptable. It appears, therefore, that the Now York State Department of
Health will be in a position to administer inventions under the enclosed
Institutional Patent Agreement in a manner fully protective of the public
interest.
It is important to understand that Article V of the Institutional
Patent Agreement provides that, notwithstanding the election by the New York
State Department of Health not to retain title to domestic rights to an
invention covered by the Agreement, it is still required to report the invention
so that disposition of such-rights can be made by the Department of Health,
Education and Welfare. Waiver of domestic rights to New York State Department of
Health employees is not provided for in the Agreement.
Further, it is believed that it would be to the mutual interest of the
New York State Department of Health and this Department if you, as the person
responsible for patent matters at the Health Department, would arrange to meet
with Mr. Norman J. Latker, Patent Counsel, to discuss problems that might arise
in the administration of the Agreement.
In accordance with the above, I have signed the Agreement submitted
with your letter of April 7, 1976, and am returning a copy for your files.
It is hoped that you will find this Agreement a useful instrument for
encouraging further development for ultimate use by the public of inventions
generated with HEW funds.
Sincerely yours,
/s/
------------------------------
Theodore Cooper, M.D.
Assistant Secretary for Health
Enclosure
cc: Dr. Robert P. Whalen
New York State Dept. of Health
-2-
INSTITUTIONAL PATENT AGREEMENT
GOVERNING GRANTS AND AWARDS FROM THE
DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE
This Agreement, made and entered into this 7th day of April , 1976, by
and between the United States of America, as represented by the Assistant
Secretary (Health and Scientific Affairs) of the Department of Health, Education
and Welfare, hereinafter sometimes referred to as the Grantor, and
NEW YORK STATE DEPARTMENT OF HEALTH
hereinafter referred to as the Grantee.
WITNESSETH:
WHEREAS, the Regulations of the Department of Health, Education, and
Welfare, covering inventions resulting from research grants, fellowship awards,
and contracts for research (45 CFR Parts 6 and 8), provide in Secs. 8.1 through
8.5 that upon approval by the Assistant Secretary (Health and Scientific
Affairs), the ownership and disposition of domestic and foreign rights to
inventions arising out of activities assisted by grants and awards may be left
to the Grantee pursuant to its approved established patent policy, with such
modifications as may be agreed upon; and
WHEREAS, the Grantee is desirous of entering into an agreement whereby
it has a first option to retain principal rights in and to administer inventions
made in the course of or under research supported by grants and awards from the
Department of Health, Education, and Welfare, pursuant to the aforesaid
Regulations; and
WHEREAS, the Assistant Secretary (Health and Scientific Affairs) has
reviewed the patent policy of the Grantee as set forth in ITS ADMINISTRATIVE
POLICIES & PROCEDURES MANUAL, ITEM 455 ENTITLED "IDENTIFICATION AND REPORTING
INVENTIONS" effective 12/5/74 and its practices thereunder and has found them to
be acceptable, subject to the provisions of this Agreement, and that said policy
provides for administration by the Grantee of patents in the public interest and
is consistent with the stated objectives of the President's Statement and
Memorandum of Government Patent Policy, issued October 10, 1963;
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:
I. Scope of Agreement
This Agreement shall define the rights of the parties hereto regarding
disposition of title to inventions made in the course of or under research
supported by grants and awards from the Department
of Health, Education, and Welfare, which are subject to the Department Patent
Regulations and are issued after the date hereof.
II. Definitions
(a) The term "subject invention" as used in this Agreement means any
process, machine, manufacture, composition of matter or design, or any new or
useful improvement thereof, and any variety of plant which is or may be
patentable under the Patent Laws of the United States made in the course of or
under research supported by grants and awards from the Department of Health,
Education, and Welfare.
(b) The term "made" when used in relation to any invention or discovery
means its conception or first actual reduction to practice.
III. Disposition of Principal Rights to Subject Inventions
The Grantee shall have the right to elect to file patent application in
the United States and in foreign countries on any subject invention and to
administer such invention pursuant to the provisions of this Agreement. Grantee
shall notify Grantor at the time each subject invention is reported to Grantor
as required by paragraph V hereof, if it intends to file patent applications on
and to administer the invention. If Grantee does not elect to file a U.S. patent
application on and to administer a subject invention, it shall notify Grantor in
sufficient time to permit Grantor to file a U.S. patent application thereon. In
such event, all rights in and to such invention, except rights to any foreign
patent application filed by Grantee, shall be subject to disposition by the
Grantor in accordance with its Regulations then in effect.
IV. Supplementary Patent Agreements
(a) The Grantee shall obtain patent agreements from all persons who
perform any part of the work under a grant or award from the Department of
Health, Education, and Welfare, exclusive of clerical and manual labor
personnel, requiring that such persons promptly report and assign all subject
inventions to Grantee or its approved patent management organization.
(b) The Grantee shall include the following provision in any contract
it enters into involving research and/or development for which DHELI research
grant or award funds are utilized.
"The Contractor hereby agrees to report fully and promptly to NEW YORK,
STATE DEPARTMENT OF HEALTH OR HEALTH RESEARCH, INC.
(Grantee)
-2-
any invention conceived or first actually reduced to practice in
performance of this contract (hereinafter referred to as "such
inventions", and to assign all right, title and interest in and to such
invention to NEW YORK STATE DEPARTMENT OF HEALTH OR HEALTH RESEARCH,
INC.
(Grantee)
or its designee.
"In addition, the Contractor agrees to furnish the following materials,
disclosures and reports:
(i) Upon request, such duly executed instruments (Prepared by the NEW
YORK STATE DEPARTMENT OF HEALTH OR HEALTH RESEARCH, INC.
(Grantee)
or its designee) and such other papers as are deemed necessary to vest
in the NEW YORK STATE DEPARTMENT OF HEALTH OR HEALTH RESEARCH, INC. or
its designee the (Grantee)
rights granted under this clause and to enable the NEW YORK STATE
DEPARTMENT OF HEALTH OR HEALTH RESEARCH, INC. or its
(Grantee)
designee to apply for and prosecute any patent application, in any
country, covering such invention.
(ii) Interim reports on the first anniversary of this contract where
extended or renewed and every year thereafter listing all such
inventions made during the period whether or not previously reported or
certifying that no inventions wore conceived or first actually reduced
to practice during the applicable period.
(iii) Prior to final settlement of this contract, a final report
listing all such inventions, including all those previously listed in
interim reports, or certifying that no inventions were conceived or
first actually reduced to practice under the contract.
V. Report of Invention
(a) The Grantee shall submit a written invention report to the Grantor
of each subject invention promptly after conception or first actual reduction to
practice.
(b) Such invention report shall be furnished directly the Grantor in
addition to any other requirement under any grant or award for the submission of
progress or financial reports, and whether or not reference to subject invention
has been made in any progress or other report furnished to the Grantor; such
report shall include description of such invention, appropriately illustrated by
a simple sketch or diagram, to permit the invention to be understood and
evaluated, and such other information as Grantor may require.
-3-
(c) The report shall specify whether or not Grantee intends to file a
U.S. patent application or any foreign patent application on the invention.
Notice of an election not to file a U.S. patent application shall be given
Grantor not less than ninety (90) days prior to the date a statutory bar becomes
effective.
(d) If the Grantee specifies that no U.S. patent application will be
filed (or having specified that it intends to file, thereafter notifies the
Grantor to the contrary), the Grantee shall promptly inform the Grantor of the
date and identification of any known publication of subject invention made by or
known to the Grantee or, where applicable, of any contemplated publication to be
made by or known to the Grantee. and also the date subject invention or any
embodiment thereof was first in public use or on sale in the United States and
shall furnish such other information (and have executed such documents as
provided in VIII(F) as may be required to enable the Grantor to make disposition
of subject invention rights).
VI. Administration of Inventions on Which the Grantee Elects to File Patent
Applications
(a) The Grantee shall require assignment to it of all right, title and
interest in and to each subject invention on which it elects to file any patent
application for administration by it in accordance with and subject to the terms
and conditions herein set forth. Assignments from the inventor to the Grantee
under U.S. patent applications shall be promptly obtained and recorded by the
Grantee in the United States Patent Office, and copies of the recorded
assignment shall be furnished to the Grantor.
(b) The Grantee shall grant to the Government of the United States a
nonexclusive, irrevocable, royalty-free license for governmental purposes and on
behalf of any foreign government, pursuant to any existing or future treaty or
agreement with the United States under each U.S. or foreign patent application
it elects to file on a subject invention. The form of the license to be granted
shall be as set forth in Exhibit "A" attached hereto, and by this reference made
a part hereof. Any license issued by Grantee shall be made expressly subject to
the license to the Government of the United States.
(c) The Grantee shall administer those subject inventions to which it
elects to retain title in the public interest and shall, except as provided in
paragraph (d) below, make them available through licensing on a nonexclusive,
royalty-free or reasonable royalty basis to qualified applicants.
(d) The Grantee may license a subject invention on an exclusive basis
if it determines that nonexclusive licensing will not be effective in bringing
such inventions to the commercial market in a satisfactory manner. Exclusive
licenses should be issued only after reasonable efforts have been made to
license on a nonexclusive basis, or where the grantee has determined that an
exclusive license is necessary as an incentive for development of the invention
or where market conditions art such as to require licensing on an exclusive
basis. Any exclusive license issued by Grantee under a U.S. patent or patent
application shall be for a limited period of time and such period shall not,
unless otherwise approved by the Assistant Secretary (Health and Scientific
Affairs), exceed three years from the date of the first commercial sale in the
United States of America of a product or process embodying the invention, or
eight years from the date of the exclusive license, whichever occurs first,
provided that the licensee shall use all reasonable effort to effect
introduction into the commercial market as soon as
-4-
practicable, consistent with sound and reasonable business practices and
judgment. Any extension of the maximum period of exclusivity shall be subject to
approval of the Grantor. Upon expiration of the period of exclusivity or any
extension thereof, licenses shall be offered to all qualified applicants at a
reasonable royalty rate not in excess of the exclusive license royalty rate.
(e) Any license granted by the Grantee to other than the Government of
the United States under any patent application or patent on a subject invention
shall include adequate safeguards against unreasonable royalty and repressive
practices. Royalties shall not, in any event, be in excess of normal trade
practice. Such license shall also provide that all sales to the U.S. Government
shall be royalty free.
(f) If permitted by its patent policies and the terns of the grant or
award under which an invention is made. the Grantee may share royalties received
with the inventors, provided that the Grantee shall not pay the inventors more
than (1) fifty percent (50%) of the first $3,000 gross royalty paid under the
patent, (2) twenty-five percent (25%) of the gross royalty income between $3,000
and $13,000, and (3) fifteen percent (15%) of the gross royalty in excess of
$13,000. The balance of the royalty income after payment of expenses incident to
the administration of all inventions assigned to it pursuant to the provisions
of this Agreement shall be utilized for the support of educational and research
pursuits.
(g) All licenses issued by the Grantee to other than the Government of
the United States under any patent application or patent on a subject invention
shall be subject to the conditions of this Agreement and shall specifically
reserve to Grantor those rights specified in paragraph XII hereof. The Grantee
shall, upon request, promptly furnish copies of any license agreements entered
into by it to the Department.
VII. Patent Management Organizations
The Grantee shall not assign any subject invention to parties other
than the Grantor in circumstances as set forth in this Agreement except it may
assign rights in the invention to a nonprofit patent management organization,
provided that the patent administration agreement between such organization and
Grantee is approved by the Grantor. Any reference to a Grantee in this Agreement
shall also include a patent management organization when applicable and an
assignment to such an organization shall be subject to all the terms and
conditions of this Agreement.
VIII. Patent Applications
(a) Grantee shall promptly furnish Grantor with a copy of each U.S.
patent application filed in accordance with this Agreement specifying the filing
date and the serial number. Grantee shall promptly notify Grantor of each
foreign patent application filed, including filing date and serial number, and
shall furnish a copy of each application upon request.
(b) Upon request, Grantee shall fully advise the Grantor concerning all
steps and actions taken during the prosecution of any patent application
covering a subject invention and shall, upon request, furnish copies of any
final actions, amendments, petitions, motions, appeals or other papers relating
to the prosecution of said application.
-5-
(c) Upon request, the Grantee shall promptly furnish to the Grantor an
Irrevocable power of attorney granting the right to inspect and make copies of
any patent application covering a subject invention or any of the final actions,
amendments, petitions, motions, appeals, or other papers relating to the
prosecution of said application.
(d) The Grantee shall include the following statement in the first
paragraph of the specification following the abstract of any patent application
filed on a subject invention:
"The invention described herein was made in the course of work under a
grant or award from the Department of Health, Education, and Welfare."
(e) The Grantee shall not abandon any U.S. patent application filed on
a subject invention without first offering to transfer all rights in and to such
application to the Grantor not less than forty-five (45) days prior to the date
a reply to the Patent Office action is due. If the Grantor does not request
assignment within thirty (30) days of receipt of this offer, the Grantee may
permit the application to go abandoned.
(f) If the Grantee elects to file no patent application or to abandon
prosecution of a U.S. patent application on a subject invention, he shall, upon
request, execute instruments or require the execution of instruments (prepared
by the Grantor) and such other papers as are deemed necessary to vest in the
Grantor all right, title and interest in the subject invention to enable the
Grantor to apply for and prosecute patent applications in any country.
IX. Invention Reports and Certifications
Notwithstanding the provisions of this Agreement, the Grantee shall
provide invention reports and certifications as may be required by the terms of
any grant or award.
X. Disclosure-and Publication
The Grantee shall not bar or prohibit publication of disclosures of
inventions on which patent applications have been filed.
The Grantor shall have the right to publish and make disclosure of any
information relating to any subject invention whenever deemed to be in the
public interest, provided that upon request, reasonable opportunity shall be
afforded the Grantee to file U.S. and foreign patent applications.
XI. Reports on Development and Commercial Use
The Grantee shall provide a written annual report to the Department on
or before September 30 of each year covering the preceding year, ending June 30,
regarding the development and commercial use that is being mad or intended to be
made of all subject inventions left for administration by the Grantee. Such
reports shall include information regarding development, the date of first
commercial sale, gross
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sales by licensees, gross royalties received by the Grantee, and such other data
and information as the Department may specify.
XII. Additional Licenses
(a) The Grantee agrees that if it, or its licensee, has not taken
effective steps within three years after a United States patent issues on a
subject invention left for administration to the Grantee to bring that invention
to the point of practical application, and has not made such invention available
for licensing royalty-free or on terms that are reasonable in the circumstances,
and cannot show cause why he should retain all right, title and interest for a
further period of time, the Grantor shall have the right to require (1)
assignment of said patent to the United States, as represented by the Grantor;
(2) cancellation of any outstanding exclusive licenses under said patent; or (3)
the granting of licenses under said patent to an applicant on a nonexclusive,
royalty-free basis or on terms that are reasonable in the circumstances.
(b) The Grantor reserves the right to license or to require the
licensing of other persons under any U.S. patent or U.S. patent application
filed by the Grantee on a subject invention on a royalty-free basis or on terms
that are reasonable in the circumstances, upon a determination by the Assistant
Secretary (Health and Scientific Affairs) that the invention is required for
public use by governmental regulations, that the public health, safety or
welfare requires the issuance of such license(s), or, that the public interest
would otherwise suffer unless such license(s) were granted. The Grantee and its
licensees shall be given written notice of any proposed determination pursuant
to this subparagraph not less than thirty (30) days prior to the effective date
of such determination, and that if requested, shall be granted a hearing before
the determination is issued and otherwise made effective.
XIII. Inventions by Federal Employees
Notwithstanding any provision contained in this Agreement, inventions
made by Federal employees, or by Federal employees jointly with others, shall be
subject to disposition under provisions of Executive Orders, Governmental and
Department Regulations applicable to Federal employees.
XIV. Termination
This Agreement may be terminated by either party for convenience upon
thirty (30) days written notice, Disposition of rights in, and administration of
inventions made under grants or awards entered into during and subject to this
Agreement will not be affected by such a termination except that in the event
the Department terminates this Agreement because of a failure or refusal by
Grantee to comply with its obligations under Articles V or VI of this Agreement,
the Department shall have the right to require that the Grantee's entire right,
title and interest in and to the particular invention with respect to which the
breach occurred be assigned to the United States of America, as represented by
the Secretary of the Department of Health, Education, and Welfare.
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XV. Limitation
It is agreed and understood that this Agreement shall not apply to any
grants or awards issued under statutes containing requirements for disposition
of invention rights with which the provisions of this Agreement are
inconsistent. It is further agreed, that any constituent agency of the
Department of Health, Education, and Welfare may, with the approval of the
Assistant Secretary (Health and Scientific Affairs), provide as a condition of
any grant or award that this Agreement shall not apply thereto. It is also
agreed that any constituent agency of the Department of Health, Education, and
Welfare may provide, subject to approval by the Assistant Secretary (Health and
Scientific Affairs), that this Agreement shall apply to specific research
contracts.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the day and year first above written.
UNITED STATES OF AMERICA
BY: /s/
--------------------------------
TITLE: Asst. Secretary of Health
------------------------------
NEW YORK STATE DEPARTMENT OF HEALTH
------------------------------------
(Grantee)
BY: /s/
--------------------------------
Robert P. Whalen
TITLE: Commissioner of Health
------------------------------
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STATE OF NEW YORK)
CITY OF ALBANY ) ss:
COUNTY OF ALBANY )
On the 7th day of April, 1976, before me personally came ROBERT P.
WHALEN, M.D., to me known and known to me to be the same person who executed the
foregoing instrument for and on behalf of the NEW YORK STATE DEPARTMENT OF
HEALTH, and who, being by me duly sworn, did depose and say, that he resides in
the County of Albany, State of New York, and that he is COMMISSIONER of the
Department of Health of the State of New York, and that he executed the
foregoing instrument for and on behalf of the State of New York by virtue of the
authority vested in him in Section 206 of the Public Health Law as such
COMMISSIONER of the Department of Health of the State of New York.
[Notary Stamp]
/s/
-------------------------
NOTARY PUBLIC
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Exhibit "A"
LICENSE TO THE UNITED STATES GOVERNMENT
WHEREAS,___________________________________________________________, of
(Inventor)
___________________________________________________________________________, has
invented___________________________________________________________________, and
(Invention)
filed a patent application thereon in___________________________________________
(Country)
bearing Serial No.__________________________, filing date_______________________
and
WHEREAS, the invention was made In the course of research supported by
grant(s) from the Department of Health, Education, and Welfare; and
WHEREAS, the United States Government is entitled to certain rights in
and to said invention and application by reason of the terms of said grant(s);
and
WHEREAS, the___________________________________________________________
(Institution)
whereinafter called the "Licensor" has acquired by assignment from the inventor
the entire right, title and interest of the inventor to such invention;
NOW, THEREFORE:
1. The Licensor, in consideration of the premises and other good and valuable
consideration, hereby grants and conveys to the United States Government a
royalty-free, nonexclusive and irrevocable license for governmental purposes and
on behalf of any foreign government pursuant to any existing or future treaty or
agreement with the United States under the aforesaid patent application, and any
and all divisions or continuations, and in any and all patents or reissues which
may be granted thereon during the full term or terms thereof. As used herein,
"governmental purpose" means the right of the Government of the United States
(including any agency thereof, state or
EXHIBIT B-2
Certification of Timothy J. Reckart
1. Timothy J. Reckart, am General Counsel and Secretary for Research
Corporation Technologies, Inc.
2. I have reviewed the documents included in Exhibit B-1, namely, the
Institutional Patent Agreement, the Letter to Dr. Roger Herdman dated
September 20, 1979, and the Letter to Roger Herdman dated ("Received")
August 2, 1976.
3. I have caused such documents to be retyped for clarity. These retyped
documents are included in this Exhibit B-2.
4. Based on my review of the documents included in Exhibit B-1, and the
documents included in Exhibit B-2, I certify that, to the best of my
knowledge, the documents shown in Exhibit B-2 are exact transcriptions
of the typed portions of the documents appearing in Exhibit B-1.
- ------------------------------------------------------------
Timothy J. Reckart, Esq.
General Counsel and Secretary
Research Corporation Technologies, Inc.
- ------------------------------------------------------------
Date