EXCLUSIVE LICENSE AGREEMENT
BETWEEN
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
AND
VYSIS, INC.
FOR
MOLECULAR CYTOGENETICS SOFTWARE
TABLE OF CONTENTS
ARTICLE NO. TITLE PAGE
----------- ----- ----
RECITALS ........................................................ 1
1. DEFINITIONS ..................................................... 3
2. REPRESENTATIONS AND WARRANTS .................................... 8
3. GRANT .......................................................... 10
4. LICENSE ISSUE FEE ............................................... 14
5. ROYALTIES ....................................................... 14
6. DUE DILIGENCE .................................................. 21
7. PROGRESS AND ROYALTY REPORTS ................................... 24
8. BOOKS AND RECORDS .............................................. 26
9. LIFE OF THE AGREEMENT .......................................... 27
10. TERMINATION BY THE REGENTS ..................................... 28
11. TERMINATION BY THE LICENSEE ..................................... 28
12. SUPPLY OF THE SOFTWARE ......................................... 29
13. CONFIDENTIALITY ................................................ 29
14. PATENT PROSECUTION AND MAINTENANCE ............................. 31
15. USE OF NAMES AND TRADEMARKS AND NONDISCLOSURE OF AGREEMENT ..... 34
16. PROPERTY PROTECTION ............................................ 35
17. INFRINGEMENT ................................................... 37
18. INDEMNIFICATION ................................................ 39
19. WAIVER ......................................................... 41
20. ASSIGNABILITY .................................................. 41
21. LATE PAYMENTS .................................................. 41
22. NOTICES ........................................................ 42
23. GOVERNING LAWS ................................................. 42
24. GOVERNMENT APPROVAL OR REGISTRATION ............................ 43
25. EXPORT CONTROL LAWS ............................................ 43
26. FORCE MAJEURE .................................................. 43
27. DISPOSITION OF PRODUCT ON HAND UPON TERMINATION ................ 44
28. MISCELLANEOUS .................................................. 45
EXCLUSIVE LICENSE AGREEMENT FOR
MOLECULAR CYTOGENETICS SOFTWARE
THIS LICENSE AGREEMENT ("Agreement") is made and is effective this 1st day
of June, 1995, by and between The Regents of the University of California, a
California corporation, having its statewide administrative offices at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, hereinafter
referred to as "The Regents", and Vysis Incorporated, an Illinois corporation,
having a principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, hereinafter referred to as "Licensee".
RECITALS
WHEREAS, certain inventions and discoveries, generally characterized as
Molecular Cytogenetics Software ("Discovery"), useful for acquisition of
multi-color images, for fluorescently stained cells and chromosomes for
localization of probe hybridization domains along metaphase chromosomes, and
for analysis of chromosomes stained using Comparative Genomic Hybridization
were made in the course of research at the University of California, ▇▇▇▇▇▇▇▇
Berkeley Laboratory (LBL) by ▇▇▇▇▇ ▇▇▇▇▇, et al., under the direction of ▇▇▇ ▇.
▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ and are covered by Patent Rights, Copyrights, and
Property Rights as defined below;
WHEREAS, The Regents and Licensee entered into a License Agreement
entitled "License Agreement For Chromosome Analysis Technology With
Chromosome Specific Probes" effective August 15, 1989, and having UC
Agreement Control Number 89-03-0021 ("Prior License Agreement");
WHEREAS, under the terms of the Prior License Agreement, The Regents
granted to Licensee exclusive licenses to make, use, and sell products covered
by patent applications and any patents issuing thereon claiming the techniques
of Chromosome Painting and Comparative Genomic Hybridization;
WHEREAS, The Regents and Licensee acknowledge that the use or practice of
the Discovery but for the licenses granted to Licensee under the Prior License
Agreement would constitute contributory infringement of the patent applications
and resulting patents comprising the patent portfolios of Chromosome Painting
and Comparative Genomic Hybridization;
WHEREAS, The Regents and Licensee have concluded that the competitive
advantage comprising the economic value of Products is essentially the same
regardless of the available form of current protection in Copyright and
Property Rights that The Regents has provided to Licensee covering such
Products, and accordingly, the royalty paid to The Regents is independent of
such protection ascribed to the Product at any given time;
WHEREAS, if patent protection claiming the Products becomes available in
the future, the parties agree to limit the total royalty exposure of Licensee;
WHEREAS, both parties recognize and agree that royalties due hereunder
will be paid on pending patent applications (for a limited period of time) and
issued patents;
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WHEREAS, The Regents recognizes that Licensee has dedicated its business
to the development of the technology licensed under the Prior License
Agreement, and accordingly, The Regents concludes that Licensee is the best
possible party to commercialize the Discovery to the fullest extent;
WHEREAS, Licensee is desirous of acquiring exclusive licenses to any and
all of Patent Rights, Copyrights, and Property Rights covering the Discovery,
subject to rights granted to the U.S. Government as hereinafter described; and
WHEREAS, The Regents desires to grant such licenses to Licensee in order
that the Discovery be developed, utilized, and marketed to the fullest extent
so that tho Products therefrom and other benefits can be enjoyed by the general
public.
The parties agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meaning set
forth below:
1.1 "Patent Rights" means all U.S. patents and patent applications and
foreign patents and patent applications assigned to The Regents and requested
under Paragraph 15.4 infra, including any reissues, extensions,
substitutions, continuations, divisions and continuations-in-part (only to
the extent, however, that claims in the continuations-in-part are entitled to
the priority filing date of the parent patent application) based on and
including any subject matter claimed in or covered by any of or covered by
any of the following:
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1.1.1 any subject matter claiming the Discovery or Software made by
employees at LBL under the direction of ▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇ for a period not to exceed two (2) years from the
effective date hereof to which such employees are obligated under
their employment agreement to assign the patent applications and
resulting patents to The Regents.
1.2 "Patent Products" means (a) any Software Product, kit, composition of
matter, material, or product; (b) any Software Product, kit, composition of
matter, material, or product to be used in a manner requiring the performance
of the Patent Method, or any Software Product, kit, composition of matter,
material, or product produced by the Patent Method, or (c) the practice of the
Patent Method itself to the extent the manufacture, use, or sale of (a), (b),
or (c) immediately above falls within the scope of one or more claims of Patent
Rights during the term of the patent grant, in countries in which such claim or
claims have issued and have not expired, been abandoned, disclaimed, or found
invalid or unenforceable.
1.3 "Unprotected Products" means (a) any Software Product, kit,
composition of matter, material, or product; (b) any Software Product, kit,
composition of matter, material, or product to be used in a manner requiring
the performance of the Unprotected Method, or any Software Product, kit,
composition of matter, material, or product produced by the Unprotected
Method, or (c) the practice of the Unprotected Method itself to the extent
the manufacture, use, or sale of (a), (b), or (c) immediately above falls
within the scope of one or more pending claims within Patent Rights during
the period and in such countries in which such claim or claims have not
issued, and have not expired, been
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abandoned, disclaimed, or found invalid or unenforceable, such period not to
exceed five (5) years from the date in which the subject matter is introduced
in a patent application in each country that such patent application is filed.
1.4 "Patent Method" means any process or method the use or practice of
which would constitute in a particular country, but for the license granted
to the Licensee pursuant to this Agreement, an infringement of an unexpired
claim of a patent within Patent Rights in that country in which the Patent
Method is used or practiced.
1.5 "Unprotected Method" means any process or method the use or practice
of which would constitute in a particular country, but for the license granted
to the Licensee pursuant to this Agreement an infringement of any unabandoned,
pending claim of a patent application within Patent Rights during the period
and in such countries in which such claim or claims have not issued, and have
not expired, been abandoned, disclaimed, or found invalid or unenforceable,
such period not to exceed five (5) years from the date in which the subject
matter is introduced in a patent application in each country that such patent
application is filed.
1.6 "Method" means Patent Method and Unprotected Method.
1.7 "Application" means one or more subroutines transferred to Licensee
by The Regents that when utilized in aggregate constitute a fully functional
unit that performs a complete task for the end user. An example of an
Application is an aggregate of subroutines that when utilized in combination
perform CGH analysis.
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1.8 "Software" means the QUIPS-TM- multi-color image acquisition
Application, the CGH image analysis and profile analysis Application, the
fractional length metaphase mapping Application, and any new Applications
transferred to Licensee by The Regents after the effective date recited on
page one of this Agreement, created by ▇▇▇▇▇ ▇▇▇▇▇, et al., at LBL and
further described in Appendix A attached hereto and incorporated herein.
1.9 "Copyright" means those rights that: (i) cover Software Products
obtained under Title 17 of the United States Code and applicable related treaty
provisions with other countries, and (ii) are assigned to The Regents.
1.10 "Software Products" means the Software supplied to Licensee by The
Regents under this Agreement and any Derivative Works thereof for which the
reproduction, Distribution, display, performance, or preparation of such
Software or Derivative Works would constitute, but for the licenses granted
to Licensee pursuant to this Agreement, an infringement of Copyright or
Patent Rights and would constitute but for the licenses granted to Licensee
pursuant to this Agreement a misappropriation of Property Rights.
1.11 "Derivative Works" means any revisions, modifications, translations,
abridgements, condensations, expansions, enhancements or supplements of the
Software Products or any other form in which such Software Products may be
recast, transferred or adapted.
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1.12 "Source Code" means the source code, the internal documentation to the
source code, and the external reference specifications to the source code of
the Software Products.
1.13 "Distribute/Distribution" means transfer by any means whatsoever,
including, but not limited to, sale, rental, lease, display, loan, sublicense,
or the like.
1.14 "Products" means Patent Products, Unprotected Products, and Software
Products.
1.15 "Property Rights" means all the personal proprietary rights covering
the tangible personal property in Software Products owned or managed by The
Regents. In no case, however, shall Property Rights include Patent Rights or
Copyright or any tangible personal property or Derivative Works developed or
produced by or for Licensee whether independently or pursuant to any agreement
between Licensee and a third party.
1.16 "Affiliate(s)" of a party means any entity which, directly or
indirectly, controls such party, is controlled by such party or is under
common control with such party ("control" for these purposes being defined as
the actual, present capacity to elect a majority of the directors of such
affiliate, or if not, the capacity to elect the members that control fifty
percent (50%) of the outstanding stock or other voting rights entitled to
elect directors) provided, however, that in any country where the local law
shall not permit foreign equity participation of a majority, then an
"Affiliate" shall include any company in which the Licensee shall
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own or control, directly or indirectly, the maximum percentage of such
outstanding stock or voting rights permitted by local law. Each reference to
Licensee herein shall be meant to include its Affiliates.
1.17 "Joint Venture" means any separate entity established pursuant to an
agreement between a third party and Licensee to constitute a vehicle for a
joint venture, which separate entity manufacture, uses, purchases, sells, or
acquires a Product from Licensee. Each reference to Licensee herein shall be
meant to include its Joint Ventures.
1.18 "Infringement Litigation Costs" means costs incurred in the
infringement suit, provided for in Article 17 (INFRINGEMENT) of this
Agreement, consisting of (i) outside attorney's and in-house attorney's fees
(who are specifically hired for the purpose of litigating intellectual
property related matters) billed to Licensee or The Regents, (ii) royalties
(due The Regents) that were used to offset the infringement suit costs in
accordance with ▇▇▇▇▇▇▇▇▇ ▇▇.▇, (▇▇▇) outside attorney fees of the Licensee
that were used to offset the infringement suit costs in accordance with
Paragraph 17.2a, and (iv) other out-of-pocket expenses of both parties.
2. REPRESENTATIONS AND WARRANTS
2.1 The Regents represents and warrants the following:
2.1.1 Patent Rights and Copyrights were developed under ▇▇▇▇▇▇▇▇ ▇▇.
▇▇-▇▇▇▇-▇▇▇▇▇▇▇▇▇ between The Regents and the United States
Department of Energy (DOE);
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2.1.2 Pursuant to the terms of ▇▇▇▇▇▇▇▇ ▇▇. ▇▇-▇▇▇▇-▇▇▇▇▇▇▇▇▇, title to
Patent Rights and Copyrights rests in DOE without action on the
part of The Regents to acquire or retain title;
2.1.3 The Regents has petitioned the DOE on March 15, 1995, for the
right to assert Copyright covering the Software Products and was
granted such right on ________________________________.
2.1.4 Pursuant to ▇▇▇▇▇▇▇▇ ▇▇. ▇▇-▇▇▇▇-▇▇▇▇▇▇▇▇▇, The Regents may elect
to retain title to any invention, (including the Discovery) made
by it under U.S. Government funding.
2.1.5 If The Regents elects to retain title to the intellectual
property rights covering the Discovery, The Regents is required
by law to grant to the U.S. Government a nontransferable,
paid-up, nonexclusive, irrevocable license to use the Discovery
by or on behalf of the U.S. Government throughout the world.
2.2 The Regents represents to the best of its knowledge and accordingly
warrants that:
2.2.1 These licenses and the associated Invention(s) are provided
WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR ANY OTHER WARRANTY, EXPRESSED OR IMPLIED. THE REGENTS
MAKES NO REPRESENTATION OR WARRANTY THAT EACH PRODUCT, OR METHOD
WILL NOT INFRINGE ANY PATENT, COPYRIGHT, OR OTHER PROPRIETARY
RIGHT;
2.2.2 IN NO EVENT WILL THE REGENTS BE LIABLE FOR ANY INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS
LICENSE OR THE USE OF THE DISCOVERY, METHOD, OR PRODUCT;
2.2.3 Nothing in this Agreement shall be construed as a warranty or
representation by The Regents as to the validity, enforceability,
or scope of any of Patent Rights or Copyrights; a warranty or
representation that anything made, used, sold, or otherwise
disposed of under any license granted in this Agreement is or
will be free from infringement of patents of third parties; an
obligation to bring or prosecute actions or suits against third
parties for patent infringement except as provided in Article
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17, 17 (INFRINGEMENT); or conferring by implication, estoppel or
otherwise any license or rights under any patents or copyrights
of The Regents other than Patent Rights and Copyrights as
defined herein, regardless of whether such patents are dominant
or subordinate to Patent Rights; or an obligation to furnish any
know-how not provided in Patent Rights, Copyrights, or Property
Rights; and
2.2.4 The Regents has not granted licenses to the Software to any third
parties other than the U.S. Government and that as of the
effective date recited on page one (1) of this Agreement, to the
best of their knowledge, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇
do not know of any third-party patent or copyright claim against
the Software.
3. GRANT
3.1 Subject to: (i) the limitations set forth in this Agreement, (ii) the
grant by DOE to The Regents to assert Copyright to the Software Products, (iii)
the rights and licenses granted to the U.S. Government as set forth in
paragraph 2.1e supra, and (iv) the continuing rights of The Regents in
Paragraph 3.9 infra, The Regents grants to Licensee exclusive licenses under
Patent Rights to practice the Method to make, have made, use, and Distribute
Patent Products and Unprotected Products where Patent Rights exist.
3.2 Subject to: (i) the limitations set forth in this Agreement, (ii) the
grant by DOE to The Regents to assert Copyright to the Software Products, (iii)
the rights and licenses granted to the U.S. Government as set forth in
Paragraph 2.1e supra, and (iv) the continuing rights of The Regents in
Paragraph 3.9 infra, The Regents grants to Licensee licenses under Copyright to
Distribute, use, copy, format, edit, and reproduce partial or complete object
code versions of the Software Products
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and to use, copy, format, reproduce, and to prepare Derivative Works to the
Source Code and Software Products where Copyright exists.
3.3 Subject to: (i) the limitations set forth in this Agreement, (ii) the
grant by DOE to The Regents to assert Copyright to the Software Products, (iii)
the rights and license granted to the U.S. Government as set forth in Paragraph
2.1e supra, and (iv) the continuing rights of The Regents in Paragraph 3.9
infra, The Regents grants to Licensee licenses under Property Rights to
possess, use, and Distribute the Software Products and to possess and use the
Source Code throughout the world where The Regents may lawfully grant such a
license.
3.4 The licenses granted in Paragraphs 3.2 and 3.3 supra shall be exclusive
for a period of five (5) years from the effective date recited on page one of
this Agreement. Thereafter, the licenses granted in Paragraphs 3.2 and 3.3
shall be non-exclusive. Licensee, however, shall be entitled to extend the
exclusive period of this Agreement for two (2) additional renewal periods of
five (5) years each upon the written approval of DOE.
3.5 The licenses granted under Property Rights set forth in Paragraph 3.3
immediately above, expressly limit the rights granted to Licensee in the
Software Products and the Source Code to those licenses expressly stated in
this Agreement and for no other purpose.
3.6 Under Property Rights, the right to transfer possession of the
Source Code by Licensee to third parties other than its agents, consultants,
contractors, sublicensees, and such other third parties within the scope of
the rights and licenses granted to Licensee hereunder, is expressly excluded
from this Agreement.
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Except as otherwise stated in this Agreement, Licensee shall not attempt to
sell, donate, abandon or otherwise transfer Source Code to any third party.
Subject to Paragraph 16.4, Licensee acknowledges that title to the tangible
material comprising the Source Code is owned by The Regents and that title is
not being transferred to Licensee under this Agreement.
3.7 The Regents shall have no obligation to provide support, advice, or
maintenance services for the Software Products.
3.8 The manufacture of each Product and the practice of the Method shall
be subject to applicable government importation laws and regulations of a
particular country on each Product made outside the particular country in which
such Product is used or sold.
3.9 Nothing in this Agreement shall be deemed to limit the right of The
Regents to publish and use technical data from any research performed by The
Regents relating to the Discovery and to make and use Products, Methods, and
associated technology for educational and research purposes.
3.10 The licenses granted in Paragraphs 3.1, 3.2, and 3.3 hereunder shall
be subject to the rights of the U.S. Government including those set forth in 35
U.S.C. 200-212 and applicable governmental implementing regulations, and
Article XII, Clause 7(c) of Contract DE-AC03-▇▇▇▇▇▇▇▇▇ attached hereto as
Appendix B and incorporated herein.
3.11 Licensee may grant sublicenses to others in the form of label
licenses for purchase of Software Products. The Regents also grants to
Licensee the right
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to issue sublicenses under its rights hereunder to third parties to make,
have made, Distribute, use, copy, format, edit, and reproduce Products and
prepare Derivative Works thereof and to practice the Method and have others
practice the Method, provided that Licensee has current exclusive rights
thereto under this Agreement. To the extent applicable, such sublicenses
shall include all of the rights of and obligations due The Regents and the
U.S. Government that are contained in this Agreement except that Licensee
shall not be bound by the royalty rate and license issue fee contained herein
with respect to its negotiation with third parties seeking such sublicenses.
However, Licensee shall, in such third-party negotiations, use its best
efforts in reaching favorable royalty rates and license issue fees. Licensee
shall be entitled to five percent (5%) of all income generated from
sublicensing as an administrative fee, and of the remaining income, one-half
(1/2) of all income generated from sublicensing shall be paid to The Regents
and one-half (1/2) shall be retained by Licensee.
3.12 Licensee shall notify The Regents of each sublicense other than label
licenses granted hereunder and provide The Regents with a summary of the major
terms of each sublicense. Licensee shall collect and pay all income from fees
and royalties due The Regents (and guarantee all such payments) received from
sublicensees. Licensee shall require sublicensees to provide it with progress
and royalty reports in accordance with the provisions herein, and Licensee
shall collect and deliver to The Regents all such reports due from
sublicensees.
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3.13 Upon termination of this Agreement for any reason, The Regents, at its
sole discretion, shall determine whether any or all sublicenses shall be
canceled or assigned to The Regents.
3.14 Pursuant to 35 USC Section 204, because this Agreement grants the
exclusive right to make, Distribute, use, copy, format, edit, and reproduce
Products in the United States, each Software Product embodying the Discovery or
produced through the use thereof will be manufactured substantially in the
United States absent a waiver from the U.S. Government.
4. LICENSE ISSUE FEE
4.1 As consideration for all the rights and licenses granted to Licensee,
Licensee will pay to The Regents a license issue fee of Twenty Thousand Dollars
($20,000) in two (2) installments at the times set forth below:
4.1.1 Ten Thousand Dollars ($10,000) within thirty (30) days after the
grant by DOE to The Regents of the right to assert Copyright to
the Software Products;
4.1.2 Ten Thousand Dollars ($10,000) on the first anniversary of the
effective date recited on page one of this Agreement.
4.2 The fee set forth in Paragraph 4.1 above is non-refundable,
noncreditable, and not an advance against royalties.
5. ROYALTIES
5.1 As and in further consideration for all the rights and licenses
granted herein, Licensee shall pay to The Regents an earned royalty in the
following
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amount to be paid on the Distribution of any instrument or device on which the
Software Products run or the Distribution of Software Products Distributed to
upgrade the capability of an instrument or device:
5.1.1 Two Thousand Five Hundred Dollars ($2,500) on the Distribution
of each instrument or device on which the Software Products
covered by Copyright run; or
5.1.2 Two Thousand Five Hundred and One Dollars ($2,501) on the
Distribution of each instrument or device on which the Patent
Products and Unprotected Products run;
5.1.3 One Thousand Dollars ($1,000) on each Software Product covered
by Copyright Distributed to run on any instrument or device
where the customer has never received a Software Product for
that instrument or device; or
5.1.4 One Thousand One Dollars ($1,001) on each Patent Product or
Unprotected Product Distributed to run on any instrument or
device where the customer has never received a Patent Product
or Unprotected Product for that instrument or device;
5.1.5 Two Hundred Fifty Dollars ($250) on each functionally enhanced
Software Product (as opposed to correction of a Software
malfunction) covered by Copyright Distributed to update a
previous version of the Software Products where such updated
Software Products are not Distributed to run in combination with
a new instrument or device, provided, however, that Licensee
shall pay to The Regents an earned royalty per Application for
each new Application transferred from The Regents to Licensee
after the effective date of this Agreement that is Distributed
to update a version of the existing Software Products already in
the possession of the customer when the customer of Licensee has
not previously received such new Application. The royalty rate
paid to The Regents for a Software Product containing such new
Application shall be Five Hundred Dollars ($500) for each copy
Distributed to the customers of Licensee; or
5.1.6 Two Hundred Fifty-One Dollars ($251) on each functionally
enhanced Patent Product or Unprotected Product (as opposed to
correction of a Software malfunction) Distributed to update a
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previous version of the Patent Product or Unprotected Product
where such updated Products or Unprotected Product is not
Distributed to run in combination with a new instrument or
device, provided, however, that Licensee shall pay to The
Regents an earned royalty per Application for each new
Application transferred from The Regents to Licensee after the
effective date of this Agreement that is Distributed to update a
version of the existing Patent Product or Unprotective Product
already in the possession of the customer when the customer of
Licensee has not previously received such new Application. The
royalty rate paid to The Regents for a Software Product
containing such new Application shall be Five Hundred and One
Dollars ($501) for each copy Distributed to the customers of
Licensee.
The earned royalty paid to The Regents for Products covered by both Copyright
and Patent Rights and specified in Paragraphs 5.1.1 and 5.1.2 shall not
exceed Two Thousand Five Hundred and One Dollars ($2,501). The earned royalty
paid to The Regents for Products covered by both Copyright and Patent Rights
and specified in Paragraphs 5.1.3 and 5.1.4 shall not exceed One Thousand-One
Dollars ($1,001). The earned royalty paid to The Regents for Products covered
by both Copyright and Patent Rights specified in Paragraphs 5.1.5 and 5.1.6
shall not exceed Two Hundred Fifty-One Dollars ($251) for any updated version
of the Software Products not containing a new Application and shall not
exceed Five Hundred and One Dollars ($501) for a Software Product containing
new Application Distributed with an updated version of the Software Products.
5.2 Licensee shall be entitled to reduce the royalty rates specified in
Paragraphs 5.1.1 and 5.1.2 supra to One Thousand Dollars ($1,000) and One
Thousand and One Dollars ($1,001) respectively, if the Contribution by The
Regents to subsequent versions of the first Derivative Work deemed to be a
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commercially acceptable Produet is reduced below fifty percent (50%).
"Contribution" for the purposes of this Paragraph 5.2 means inclusion of
lines of Source Code and object code originating with The Regents either
explicitly, or by transference to Licensee from The Regents of concepts,
algorithms, methods of operation, look and feel, and the like. In the event
that the Contribution to the Software Products provided by The Regents is
less than five percent (5%), then Licensee shall make a one-time payment in
the amount of Ten Thousand Dollars ($10,000) to The Regents. Such Ten
Thousand Dollar ($10,000) payment shall constitute a paid-up license to
Licensee, and Licensee shall owe no further consideration to The Regents for
the licenses granted hereunder for Software Products. But if Licensee accepts
Contributions from The Regents at a later time, the royalties shall revert to
the original royalty rate specified in Paragraphs 5.1.1 through 5.1.6.
5.3 Beginning in the year 1996, Licensee shall pay to The Regents a minimum
annual royalty as set forth below:
1996 - $ 40,000
1997 - $ 25,000
1998 - $ 20,000
1999 - $ 10,000
In each succeeding calendar year after the year 1999, Licensee shall pay a
minimum annual royalty of Ten Thousand Dollars ($10,000) thereafter for the
life of this Agreement. The amount by which minimum royalties for any given
year
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exceed earned royalties for that year shall be paid to The Regents by
February 28th of each year and shall be credited against earned royalties
quarter to quarter until consumed for that year. In the event minimum annual
royalties exceed earned royalties, the excess may be credited against earned
royalties in succeeding years until such excess is consumed.
5.4 Patent Rights, Products, and Methods are defined so that royalties
shall be payable on Products and Methods covered by both pending patent
applications and issued patents. Earned royalties shall accrue in each
country for the period of time specified in Paragraph 9.1 infra and shall be
payable to The Regents when a Product is invoiced, or if not invoiced, when
delivered to a third party or to itself, an Affiliate, or Joint Venture in
the case where such delivery of a Product to Licensee, an Affiliate, or Joint
Venture is intended for end use for purposes other than inventory, Product
demonstration, or internal research and development.
5.5 Royalties accruing to The Regents shall be paid to The Regents
quarterly on or before the following dates of each calendar year:
February 28th
May 31st
August 31st
November 30th
Each such payment will be for royalties which accrued within the most
recently completed calendar quarter.
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5.6 All monies due The Regents shall be payable in United States funds
collectible at par in San Francisco, California. When a Product is Distributed
for monies other than United States dollars, the earned royalties will first be
determined in the foreign currency of the country in which such Product was
Distributed and then converted into equivalent United States funds. The
exchange rate will be that rate quoted in the Wall Street Journal on the last
business day of the reporting period.
5.7 Earned royalties on sales of a Product occurring in any country outside
the United States shall not be reduced by any taxes (including value-added
taxes), fees, or other charges imposed by the government of such country on the
remittance of royalty income. The Licensee shall also be responsible for all
bank transfer charges.
5.8 Notwithstanding the provisions of Article 26 (FORCE MAJEURE), if at any
time legal restrictions other than tax withholding on sublicensing revenues
prevent prompt remittance of part or all royalties owed to The Regents by the
Licensee with respect to any country where a Product is Distributed, the
Licensee shall convert the amount owed to The Regents into United States funds
and shall pay The Regents directly from another source of funds for the amount
impounded.
5.9 In the event that any patent or any claim thereof included within the
Patent Rights shall be held invalid or unenforceable in a final decision by a
court of competent jurisdiction and last resort and from which no appeal has or
can be taken, all obligation to pay royalties based on such patent or claim or
any claim
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patentably indistinct therefrom shall cease as of the date of such final
decision. The Licensee shall not, however, be relieved from any royalties
that accrued before such decision or that are based on another patent or
claim that has not expired or that is not involved in such decision.
5.10 No royalties shall be collected or paid hereunder to The Regents on
Products sold to the account of the U.S. Government. Licensee and its
sublicensee shall reduce the amount charged for a Product distributed to the
U.S. Government by an equal amount to the royalty for such a Product otherwise
due The Regents as provided herein.
5.11 In the event the exclusive license granted to Licensee herein is
reduced to nonexclusive licenses under Article 6 (DUE DILIGENCE) and The
Regents grants rights to any third party under Patent Rights, Copyrights, or
Property Rights (except for the U.S. Government) on financial terms and
conditions different than the financial terms of this Agreement, then The
Regents shall notify Licensee of such different terms and conditions.
Licensee shall have the option of adopting such different terms and
conditions by giving notice to The Regents within sixty (60) days of
notification by The Regents to Licensee.
5.12 To the maximum extent permitted under applicable law, the Licensee
shall be responsible for the administration and payment of all taxes in the
United States other than income or related taxes, whether federal, state, or
local government taxes, however designated or levied on this Agreement or
related Software Products transferred by The Regents to the Licensee,
including any sales
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and use taxes and state and local privilege or excise taxes based on gross
revenues. Any such payments made under this Paragraph 5.12 shall not be
deductible or creditable against the fees and royalties due The Regents.
6. DUE DILIGENCE
6.1 The Licensee, upon execution of this Agreement, shall diligently
proceed with the development, manufacture, and Distribution of Products and
shall earnestly and diligently endeavor to market same within a reasonable
time after execution of this Agreement and in quantities sufficient to meet
the market demands therefore.
6.2 The Licensee shall be entitled to exercise prudent and reasonable
business judgment in the manner in which it meets its due diligence
obligations hereunder. In no case, however, shall Licensee be relieved of its
obligations to meet the due diligence provisions of this Article 6 (DUE
DILIGENCE).
6.3 The Licensee shall endeavor to obtain all necessary governmental
approvals in each country for the manufacture, use and sale of each Product.
6.4 The Regents shall have the right and option to either terminate this
Agreement or reduce the exclusive licenses granted to Licensee to nonexclusive
licenses in accordance with Paragraph 6.5 hereof if Licensee is unable to meet
the obligations set forth in Paragraph 6.1 above or is unable to introduce the
Products (or the functional equivalent of Software Products) to the market
place anywhere in the world before March 1, 1996, subject to Article 26 (FORCE
MAJEURE) or the
-21-
freedom to practice Patent Rights and Copyrights by Licensee without
infringement of third-party rights. The exercise of such right and option by
The Regents supersedes the rights granted in Article 2 (REPRESENTATIONS AND
WARRANTS).
6.5 To exercise the right to terminate the licenses to a Product or to
reduce the grant to Licensee to one of nonexclusivity under this Article 6
(DUE DILIGENCE), The Regents must give the Licensee written notice of the
deficiency. The Licensee thereafter has sixty (60) days to cure the
deficiency or to request arbitration. If The Regents has not received a
written request for arbitration or satisfactory tangible evidence that the
deficiency has been cured by the end of the sixty (60)-day period, then The
Regents may, at its option, terminate the license to that Product or reduce
the exclusive license granted to Licensee to a nonexclusive license to such
Product by giving written notice to the Licensee. These notices shall be
subject to Article 22 (NOTICES).
6.6 Either party may refer any controversy or claim arising out of or
relating to this Article 6 (DUE DILIGENCE) or the breach thereof, to
arbitration under the provisions of this Article 6 (DUE DILIGENCE) by so
notifying the other party in writing in accordance with the provisions of
Article 22 (NOTICES) stating the nature of the dispute to be resolved.
6.7 Within fifteen (15) business days following such notice, three (3)
arbitrators shall be selected by the following process:
6.7.1 each party shall designate one individual, not an employee,
director, paid consultant, or shareholder of the party to serve
as an arbitrator; and
-22-
6.7.2 these two arbitrators shall select a third individual, who shall
be an attorney experienced in arbitration proceedings, to serve
as the third arbitrator and to preside in resolution of the
dispute. The third arbitrator shall not be an employee, director,
or shareholder of either party.
6.8 Promptly after selection of the three arbitrators, the arbitrators
shall meet with the parties at which time the parties shall each present in
writing the issue to be resolved and a proposed ruling on it. Such writing
shall be served on the other party in advance and be limited to no more than
twenty (20) pages.
6.9 The following general provision shall apply to the arbitration
proceeding:
6.9.1 no later than thirty (30) days after the appointment of the
third arbitrator, the arbitrators shall set a date for a hearing
to resolve the issue identified by the parties. The hearing shall
take place no later than one hundred twenty (120) days from the
original notice requesting arbitration;
6.9.2 the arbitrators shall permit the taking of not more than one (1)
deposition by each party, and shall permit, subject to the
provision of a mutually agreeable protective order, the
production of only those documents immediately and directly
bearing on the issue or issues subject to arbitration and only to
the extent necessary for the convenience and use of the
arbitrators, and shall not require or permit any other discovery
by any means, including, but not limited to, depositions
interrogatories or production of documents;
6.9.3 no later than ten (10) business days prior to the hearing, each
party may submit a single written brief or memorandum in support
of its position which may be no more than twenty (20) pages. Each
party shall be entitled to no more than three (3) hours of
hearing to present testimony or documentary evidence. Such time
limitation shall include any direct, cross or rebuttal testimony,
but such time limitation shall only be charged against the party
conducting such direct, cross or rebuttal testimony. It shall be
the responsibility of the arbitrators to determine whether each
party has had the three (3) hours to which it is
-23-
entitled or may, upon good cause shown, have additional time to
present its case.
6.9.4 each party shall have the right to be represented by counsel. The
arbitrators shall have sole discretion with regard to the
admissibility of evidence. Admissibility will be decided by
two-thirds vote; and
6.9.5 within fifteen (15) days of the conclusion of the hearing, each
party must submit a proposal finding to the arbitrators.
6.10 The arbitrators shall rule on the disputed issue within thirty (30)
days following the completion of the testimony of both parties. Such ruling
shall adopt in their entirety the proposed findings of one of the parties on
the disputed issue, or the arbitrators shall adopt alternative findings. The
issue shall be resolved upon two-thirds vote of the arbitrators.
6.11 Arbitration shall take place in the location of choice of the party who
has not requested arbitration, but such location shall be in the State of
California.
6.12 The arbitrators shall be paid reasonable fees plus expenses, which
shall be shared equally between The Regents and Licensee.
6.13 The decision of the arbitrators shall be enforceable, but not
appealable, in any court of competent jurisdiction.
7. PROGRESS AND ROYALTY REPORTS
7.1 Beginning on February 15, 1996, and annually thereafter, the Licensee
shall submit to The Regents a progress report covering the activities of the
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Licensee related to the development and testing of each Product and the
obtaining of the governmental approvals necessary for marketing. These progress
reports shall be provided to The Regents to cover the progress of the research
and development of the Product until its first commercial sale in the United
States.
7.2 The progress reports submitted under Section 8.1 shall include, but
not be limited to, the following topics so that The Regents may be able to
determine the progress of the development of each Product and may also be
able to determine whether or not Licensee has met its diligence obligations
set forth in Article 6 (DUE DILIGENCE) above:
- summary of work completed
- key scientific discoveries
- summary of work in progress
- date of introduction of each Product to the market
- activities of sublicensees, if any
7.3 The Licensee also agrees to report to The Regents in its immediately
subsequent progress and royalty report the date of first commercial sale of a
Product in each country.
7.4 After the first commercial sale of a Product, the Licensee will
provide The Regents with quarterly royalty reports to The Regents on or
before each February 28, May 31, August 31, and November 30 or each year.
Each such royalty report will cover the most recently completed calendar
quarter (October
-25-
through December, January through March, April through June, and July through
September) and will show:
7.4.1 the number of instruments and devices on which the Software
Products run Distributed by Licensee and the number and type of
each Product Distributed by Licensee in accordance with the
royalty categories specified in SubParagraphs 5.1a through 5.1f
during the most recently completed calendar quarter;
7.4.2 the number of instruments an devices on which the Software
Products run Distributed by the sublicensees of Licensee and the
number and type of each Product Distributed by the sublicensees
of Licensee in accordance with the royalty categories specified
in SubParagraphs 5.1a through 5.1f during the most recently
completed calendar quarter;
7.4.3 the royalties in U.S. dollars, payable hereunder with respect to
the royalty categories specified in Sub Paragraphs 5.1a through
5.1f;
7.4.4 the exchange rates used, if any.
7.5 If no Product has been made during any reporting period, a statement
to this effect shall be required.
8. BOOKS AND RECORDS
8.1 The Licensee shall keep books and records accurately showing each
Product manufactured, used, Distributed, copied, formatted, edited, and
reproduced under the terms of this Agreement. Such books and records shall be
preserved for at least five (5) years from the date of the royalty payment to
which they pertain and shall be open to inspection, upon seven (7) days
notice during normal business hours at the normal place of business of
Licensee to a mutually
-26-
agreed upon independent accountant or auditor who shall be bound by an
obligation of confidentiality for such audit. Audits of the books and records
of Licensee shall not take place more than once in any twelve (12)-month
period.
8.2 The fees and expenses of the accountant or auditor performing such
examination shall be borne by The Regents. However, if an error in royalties
of more than five percent (5%) of the total royalties due for any year is
discovered, then the fees and expenses of the accountant or auditor shall be
borne by the Licensee.
9. LIFE OF THE AGREEMENT
9.1 Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the terms of this Agreement, this Agreement shall
be in force from the effective date received on page one and shall remain in
effect for the life of the last-to-expire patent licensed under this
Agreement or until the last patent application licensed under this Agreement
is abandoned. In the event none of the patents licensed under this Agreement
issues or all patents are abandoned, this Agreement shall be in force for a
period of twenty (20) years from market introduction for the last to be
introduced Software Product covered by Copyright and Property Rights in the
United States.
9.2 Any termination of this Agreement shall not affect the rights and
obligations set forth in the following Articles:
Article 8 Books and Records
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Article 13 Confidentiality
Article 15 Use of Names and Trademarks
Article 18 Indemnification
Article 27 Disposition of each Product on Hand Upon Termination
10. TERMINATION BY THE REGENTS
10.1 If the Licensee should violate or fail to perform any term or
covenant of this Agreement, then The Regents may give written notice of such
default ("Notice of Default") to the Licensee. If the Licensee should fail to
repair such default within sixty (60) days of the effective date of such
notice, The Regents shall have the right to terminate this Agreement and the
licenses herein by a second written notice ("Notice of Termination") to the
Licensee. If a Notice of Termination is sent to the Licensee, this Agreement
shall automatically terminate on the effective date of such notice. These
notices shall be subject to Article 22 (NOTICES).
11. TERMINATION BY THE LICENSEE
11.1 The Licensee shall have the right upon ninety (90) days written
notice to The Regents to terminate this Agreement in whole or as to any
portion of Patent Rights, Copyright, and Property Rights. Upon expiration of
the ninety (90)-day period, termination by Licensee shall be effective and
Licensee shall stand
-28-
unlicensed hereunder. Such notice of termination shall be subject to
Article 22 (NOTICES).
12. SUPPLY OF THE SOFTWARE
12.1 The Regents agrees to initially supply Licensee with one copy of all
applicable Source Code materials and existing documentation relating to the
Software Products. During the term hereof, The Regents, upon the mutual
agreement of the parties hereto, may supply Licensee with updated versions of
the Software Products and any new Applications developed therefor. Licensee
shall promptly supply The Regents with at least one copy of each latest version
of all applicable Source Code materials and existing documentation relating to
the Software Products for so long as this Agreement is in effect. The Regents
agrees to keep Derivative Works of the Licensee in confidence in accordance
with the provisions of Article 13 (CONFIDENTIALITY).
13. CONFIDENTIALITY
13.1 Licensee and The Regents respectively shall treat and maintain the
proprietary business, patent prosecution, software, engineering drawings,
process and technical information, and other proprietary information of the
other party ("Proprietary Information") in confidence using at least the same
degree of care as that party uses to protect its own proprietary information
of a like nature for a period from the date of disclosure until five (5)
years after the date of termination
-29-
of this Agreement, provided that all Proprietary Information shall be labeled
or marked confidential or as otherwise similarly appropriate by the
disclosing party, or if the Proprietary Information is orally disclosed, it
shall be reduced to writing or some other physically tangible form, marked
and labeled as set forth above by the disclosing party and delivered to the
receiving party within thirty (30) days of the oral disclosure as a record of
the disclosure and the confidential nature thereof. Notwithstanding the
foregoing, Licensee and The Regents may use and disclose Proprietary
Information to its employees, agents, consultants, contractors, and
sublicensees, or as is deemed necessary by Licensee or The Regents to market
and Distribute each Product, and for any purpose set forth or relating to
this Agreement, provided that any such parties are bound by a like duty of
confidentiality.
13.1.1 Nothing contained herein shall in any way restrict or
impair the right of Licensee or The Regents to use,
disclose or otherwise deal with any Proprietary
Information:
13.1.1.1 that recipient can demonstrate by written records was
previously known to it; or
13.1.1.2 that is now, or becomes in the future, public knowledge
other than through acts or omissions of recipient; or
13.1.1.3 that is lawfully obtained without restrictions by
recipient from sources independent of the disclosing
party; or
13.1.1.4 that is required to be disclosed to a governmental
entity or agency in connection with seeking any
governmental or regulatory approval, or pursuant to
the lawful requirement or request of a governmental
entity or agency; or
-30-
13.1.1.5 that is furnished to a third party by the recipient
with similar confidentiality restrictions imposed on
such third party, as evidenced in writing; or
13.1.1.6 that The Regents is required to disclose pursuant to
the California Public Records Act or other applicable
law.
If The Regents is required to disclose Proprietary Information of the
Licensee pursuant to SubParagraphs (iv) and (vi) above, The Regents shall
give Licensee ten (10) days notice prior to disclosure.
13.2 The Licensee and The Regents agree to destroy or return to the
disclosing party Proprietary Information received from the other in its
possession within fifteen (15) days following the effective date of
termination. However, each party may retain one copy of Proprietary
Information for archival purposes in nonworking files. Licensee and The
Regents agree to provide each other, within thirty (30) days following
termination, with a written notice that Proprietary Information has been
returned or destroyed.
14. PATENT PROSECUTION AND MAINTENANCE
14.1 The Regents shall diligently prosecute and maintain the United
States and foreign patent applications and patents comprising Patent Rights
using counsel of its choice. The Regents shall promptly provide Licensee with
copies of all relevant documentation so that Licensee may be currently and
promptly informed and apprised of the continuing prosecution, and may comment
upon such documentation sufficiently in advance of any initial deadline for
filing a response,
-31-
provided, however, that if Licensee has not commented upon such documentation
prior to the initial deadline for filing a response with the relevant
government patent office or The Regents must act to preserve Patent Rights,
The Regents shall be free to respond appropriately without consideration of
the comments made by Lieensee, if any. Both parties hereto agree to keep this
documentation in confidence in accordance with the provisions of Article 13
(CONFIDENTIALITY) herein. The counsel of The Regents will take instructions
only from The Regents. The Regents shall retain counsel of its choice that is
reasonably acceptable to Licensee, provided, however, that if Licensee
rejects choice of counsel made by The Regents three (3) times consecutively
(i.e., three different new attorneys), then The Regents shall be free, in its
sole discretion, to choose an attorney of its choice.
14.2 The Regents shall use all reasonable efforts to amend any patent
application to include claims requested by the Licensee and required to
protect each Product contemplated to be sold or Method to be practiced under
this Agreement.
14.3 The Regents shall, at the request of Licensee, file, prosecute, and
maintain patent applications and patents covered by Patent Rights in foreign
countries if available. The Licensee must notify The Regents within seven (7)
months of the filing of the corresponding United States application of its
decision to request The Regents to file foreign counterpart patent
applications. This notice concerning foreign filing shall be in writing and
must identify the countries desired. The absence of such a notice from the
Licensee to The Regents within the seven
-32-
(7)-month period shall be considered an election by Licensee not to request
The Regents to secure foreign patent rights on behalf of the Licensee. The
Regents shall have the right to file patent applications at its own expense
in any country Licensee has not included in its list of desired countries,
and such applications and resultant patents, if any, shall not be included in
the licenses granted under this Agreement. However, The Regents shall notify
Licensee of such foreign countries in which The Regents filed patent
applications and in which Licensee elected not to secure foreign rights.
Subject to the availability of relevant rights, Licensee shall have the right
and option to include in this Agreement (if not already licensed exclusively
to a third party) those patent applications and patents issuing thereon filed
in countries not originally included in the desired list of the Licensee at
any time up to five (5) years from the filing date of such patent
applications, provided, however, that Licensee shall notify The Regents in
writing of its decision and shall share equally with other licensees in all
filing, prosecution, and maintenance fees for such additional patents and
patent applications.
14.4 1/n of past, present and future costs of preparing, filing,
prosecuting and maintaining all United States and foreign patent applications
and all costs and fees relating to the preparation and filing of patents
covered by Patent Rights in Paragraph 1.1 shall be borne by Licensee. The
costs of all interferences and oppositions shall be considered prosecution
expenses and also shall be borne by Licensee. Licensee shall reimburse The
Regents for all costs and charges within thirty (30) days following receipt
of a proper itemized invoice from The Regents to
-33-
which relevant law firm ▇▇▇▇▇▇▇▇ shall be attached. For purposes of this
Paragraph, "n" means the number of licensees of the Regents to Patent Rights.
But, the United States Government shall not be considered a licensee of The
Regents.
14.5 The obligation by Licensee to underwrite and to pay patent filing
costs and related costs, prosecution and maintenance costs shall continue for
so long as this Agreement remains in effect, provided, however, that the
Licensee may terminate its obligations with respect to any patent application
or patent in any or all designated countries upon three (3) months written
notice to The Regents. The Regents will use its best efforts to curtail the
associated patent costs after such a notice is received from the Licensee.
The Regents may continue prosecution and/or maintenance of such
application(s) or patent(s) at its sole discretion and expense, provided,
however, that the Licensee shall have no further right or licenses thereunder.
15. USE OF NAMES AND TRADEMARKS AND NONDISCLOSURE OF AGREEMENT
15.1 Nothing contained in this Agreement shall be construed as conferring
any right to use in advertising, publicity, or other promotional activities
any name, trade name, trademark, or other designation of either party hereto
by the other (including any contraction, abbreviation, or simulation of any
of the foregoing). The use of the name by Licensee of "The Regents of the
University of California" or the name of any University of California campus
or national laboratory is expressly
-34-
prohibited except as provided for under Articles 13 (CONFIDENTIALITY) and 15
(USE OF NAMES AND TRADEMARKS AND NONDISCLOSURE OF AGREEMENT).
15.2 Each party hereto further agrees not to use or refer to this
Agreement or any license granted hereunder in any promotional activity
without the express written approval of the other party. However, The Regents
shall be free to release to the inventors of the Discovery and authors of the
Software covered by this Agreement and senior administration officials
employed by The Regents the terms and conditions of this Agreement upon their
request. If such release is made, The Regents shall request that the
inventors not disclose such terms and conditions to others. It is further
understood that should a third party inquire whether a license is available,
The Regents may disclose the existence of this Agreement and the extent of
the grant in Article 2 (REPRESENTATIONS AND WARRANTS) to such third party,
but shall not disclose the name of the Licensee, except where The Regents is
required to release information under either the California Public Records
Act or other applicable law.
15.3 Licensee shall be entitled to file at its expense for a trademark
registration on the ▇▇▇▇ QUIPS-TM-. In any event, The Regents and Licensee
have the right to use such ▇▇▇▇. If this Agreement is terminated in its
entirety by either party hereto, then title to the QUIPS-TM- trademark shall
be assigned to The Regents.
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16. PROPERTY PROTECTION
16.1 Licensee agrees to ▇▇▇▇ each Product falling within the scope of an
issued claim within Patent Rights or Copyright for anything made and
Distributed under the terms of this Agreement, or their containers, in
accordance with the applicable patent marking laws.
16.2 The Licensee shall provide in each copy of Software Products a
notice of copyright in the name of The Regents of the University of
California in such reasonable manner as is designated by The Regents. Subject
to the rights granted to the U.S. Government specified in Appendix B,
Licensee will maintain the proprietary nature of the Source Code and take
such reasonable precautions to prevent the unauthorized disclosure of the
Source Code to the same extent that Licensee protects the proprietary
information contained in source code of its own. Licensee shall be entitled
to register the Copyright covering the Software Products with the Library of
Congress in the United States in the name of The Regents at the time it
desires. The Regents shall use its best efforts to cooperate fully with
Licensee in the timely execution of all documents necessary to register said
Copyright in the name of The Regents.
16.3 Licensee shall copy protect each copy of Software Products
Distributed or transferred to a third party. Such copy protection for the
Software Products shall be provided by means of non-copyable media or
hardware security device.
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16.4 Any tangible personal property or Derivative Works developed or
produced by or for Licensee independently or pursuant to any agreement
between Licensee and a third party shall be the exclusive property of and
owned by Licensee.
17. INFRINGEMENT
17.1 In the event that either party responsible for administering this
Agreement learns of substantial infringement of any patent or copyright
licensed under this Agreement, the informed party shall call such
infringement to the attention of the other party thereto in writing and shall
provide the other party with reasonable evidence of such infringement. Both
parties to this Agreement agree that during the period and in a jurisdiction
where Licensee has exclusive rights under this Agreement, neither will notify
an infringing third party of the infringement of any Patent Rights or
Copyright limited to the exclusive rights granted under this Agreement
without first obtaining consent of the other party, which consent shall not
be unreasonably denied. Both parties shall use their best efforts in
cooperation with each other to terminate such infringement without litigation.
17.2 Licensee may request that The Regents take legal action against the
infringement of Patent Rights or Copyright. Such request shall be made in
writing and shall include reasonable evidence of such infringement and
damages to
-37-
Licensee. If the infringing activity has not been abated within ninety (90)
days following the date of such request, The Regents shall have the right to:
17.2.1 commence suit on its own account to terminate the
infringement. In the event The Regents commences suit,
Licensee shall reimburse The Regents for fifty percent (50%)
of the actual Infringement Litigation Costs of the Regents.
Licensee's share of the Infringement Litigation Costs of the
Regents shall be paid to The Regents on a quarterly basis
within sixty (60) days of receiving notice from The Regents
of the amount of such costs. Such reimbursement shall
continue until the suit is finally adjudicated or settled.
All recoveries shall first be applied to fully repay The
Regents and Licensee for the Infringement Litigation Costs.
Any remainder shall be shared between The Regents and
Licensee, with The Regents and Licensee sharing equally in
the recovery; or
17.2.2 refuse to participate in such suit. In the event The Regents
refuses to participate in such suit, The Regents shall give
notice of its election in writing to Licensee by the end of
the one-hundredth (lOOth) day after receiving notice of such
request from Licensee. Licensee thereafter may bring suit
for patent or Copyright infringement in the name of Licensee
and if the infringement occurred during the period and in a
jurisdiction where Licensee has exclusive rights under this
Agreement. In the event Licensee elects to bring suit in
accordance with this Paragraph, The Regents may thereafter
join such suit at its own expense.
17.3 Subject to Paragraph 17.2b above, legal action brought jointly by
The Regents and Licensee and participated in by both shall be at the joint
expense of the parties and all recoveries be shared jointly by them in
proportion to the share of expense paid by each party.
17.4 In the event that The Regents refuses to participate in a suit and
the Licensee brings same, the Licensee may withhold, during pendency of the
suit, up
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to fifty percent (50%) of the minimum and earned royalty income otherwise due
The Regents to offset one-half of Infringement Litigation Costs of Licensee.
The Infringement Litigation Costs of Licensee shall be deducted from royalty
payments on a quarterly basis, and an accounting of such deductions shall be
reflected in the quarterly royalty reports provided by Licensee to The
Regents as set forth in Article 7 (PROGRESS AND ROYALTY REPORTS). Said
withheld royalty income shall be applied to only those Infringement
Litigation Costs that Licensee incurred during the quarter in which such
royalty income was due and owing. Should one-half (1/2) of the Infringement
Litigation Costs of the suit exceed one-half (l/2) of the royalties allowed
to be withheld in accordance with this Paragraph 17.4, Licensee may apply
such excess to the following quarter. This same application of excess cost
will continue until such time as the suit is finally adjudicated. All
recoveries shall first be applied to fully repay both parties for the cost of
the suit, and any remainder shall be shared equally.
17.5 Each party shall cooperate with the other in litigation proceedings
instituted hereunder. Such litigation shall be controlled by the party
bringing the suit, except that The Regents may be represented by counsel of
its choice pursuant to the determination of The Regents in any suit brought
by Licensee.
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18. INDEMNIFICATION
18.1 Licensee and The Regents are acting as independent contractors
under this Agreement and nothing contained herein shall make either party the
agent, employee, partner, or representative of the other.
18.2 Licensee agrees (and requires its sublicensees other than label
sublicensees) to indemnify, hold harmless and defend The Regents, its
officers, employees, and agents; the sponsors of the research that led to the
Discovery covered by Copyright, Patent Rights, and Property Rights; and the
inventors of any Discovery covered by the patents and patent applications
comprising Patent Rights and the authors of any Software covered by the
Copyright to which The Regents is owner or co-owner of record, for any loss
of or damage to the property of any person or persons and any injury or death
of any person or persons resulting from or arising out of the exercise of
this license or any sublicense granted herein, excluding acts of negligence
on the part of The Regents and claims of infringement brought by The Regents
against Licensee. Where The Regents is held to be negligent, liability shall
be apportioned according to the percentage of negligence accorded to The
Regents by an appropriate court or forum having jurisdiction. In those states
or countries where such an allocation of the percentage of negligence is not
awarded, any controversy or claim relating to such allocation of negligence
between the parties to this Agreement shall be settled by arbitration in
accordance with the arbitration provisions of Paragraphs 6.7 through 6.13
supra. In no event
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shall The Regents be liable for normal commercial activities of Licensee nor
will The Regents be liable for any product liability under any related cause
of action.
18.3 The Regents shall promptly notify Licensee in writing of any claim
or suit brought against The Regents in respect of which The Regents intends
to invoke the provisions of this Article 18 (INDEMNIFICATION). Licensee will
keep The Regents informed on a current basis of its defense of any claims
pursuant to this Article 18 (INDEMNIFICATION).
19. WAIVER
19.1 It is agreed that no waiver by either party hereto of any breach or
default of any of the covenants or agreements herein set forth shall be
deemed a waiver as to any subsequent and/or similar breach or default.
20. ASSIGNABILITY
20.1 This Agreement is binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns, provided,
however, this Agreement shall be personal to the Licensee and shall be
assignable by the Licensee only with the written consent of The Regents,
which consent shall not be unreasonably withheld, except that Licensee may
freely assign this Agreement to an Affiliate or to a business entity that
acquires all or substantially all of the business or assets of the Licensee
and that assumes, in writing, the performance of all provisions of this
Agreement.
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21. LATE PAYMENTS
21.1 In the event royalty payments, fees, or patent prosecution costs
are not received by The Regents when due, Licensee shall pay to The Regents
interest charges at the rate of five percent (5%) plus the rate of interest
which is charged by the San Francisco Federal Reserve Bank to member banks
twenty-five (25) days prior to the date the payment was due. Such interest
shall be calculated from the date payment was due until actually received by
The Regents. Acceptance by The Regents of any late payment interest from
Licensee under this Paragraph 21.1 shall in no way affect the provision of
Article 19 (WAIVER) herein.
22. NOTICES
22.1 Any payment, notice, or other communication required or permitted
to be given to either party hereto shall be in writing and shall be deemed to
have been properly given and to be effective (a) on the date of delivery if
delivered in person or (b) on the fourth day after mailing if mailed by
first-class certified mail, postage paid, to the respective address given
below, or to such other address as it shall designate by written notice given
to the other party as follows:
In the case of the Licensee: VYSIS, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Vice President, Technology and Bus. Dev.
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In the case of The Regents: THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA (C/N 85-157-1)
Office of Technology ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Director
23. GOVERNING LAWS
23.1 This Agreement shall be interpreted and construed in accordance
with the laws of the State of California, excluding any choice of law rules
that would direct the application of the laws of another jurisdiction, but
the scope and validity of any Copyright, patent, or patent application shall
be governed by the applicable laws of the country of such Copyright, patent,
or patent application.
24. GOVERNMENT APPROVAL OR REGISTRATION
24.1 If this Agreement or any associated transaction is required by the
law of any nation to be either approved or registered with any governmental
agency, Licensee shall assume all legal obligations to do so. Licensee will
notify The Regents if it becomes aware that this Agreement is subject to a
United States or foreign government reporting or approval requirement.
Licensee will make all necessary filings and pay all costs including fees,
penalties, and all other out-of-pocket costs associated with such reporting
or approval process.
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25. EXPORT CONTROL LAWS
25.1 The Licensee shall observe all applicable United States and foreign
laws with respect to the transfer of Products and related technical data to
foreign countries, including, without limitation, the International Traffic
in Arms Regulations (ITAR) and the Export Administration Regulations.
26. FORCE MAJEURE
26.1 The parties to this Agreement shall be excused from any performance
required hereunder if such performance is rendered impossible or unfeasible
due to any catastrophes or other major events beyond their reasonable
control, including, without limitation, war, riot, and insurrection; laws,
proclamations, edicts, ordinances or regulations; strikes, lockouts or other
serious labor disputes; and floods, fires, explosions, or other natural
disasters. When such events have abated, the parties' respective obligations
hereunder shall resume.
27. DISPOSITION 0F PRODUCT ON HAND UPON TERMINATION
27.1 Upon termination of this Agreement, the Licensee shall have the
privilege of disposing of each previously made or partially made Product, but
no more, within a period of one hundred and twenty (120) days, provided,
however, that the sale of such Product shall be subject to the terms of this
Agreement including, but not limited to the payment of royalties for each
Product at the rates
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and at the times provided herein and the rendering of reports in connection
therewith.
27.2 Subject to Paragraph 27.1 supra, upon termination of this Agreement
for any reason, Licensee shall destroy the Products (including Source Code
and documentation) in its possession within thirty (30) days following the
offective date of termination. Licensee shall provide The Regents within
forty (40) days of said destruction with written notice that the products
have been destroyed.
28. MISCELLANEOUS
28.1 The headings of the several sections are inserted for convenience
of reference only and are not intended to be a part of or to affect the
meaning or interpretation of this Agreement.
28.2 This Agreement will not be binding upon the parties until it has
been signed below on behalf of each party, in which event, it shall be
effective as of the date recited on page one.
28.3 No amendment or modification hereof shall be valid or binding upon
the parties unless made in writing and signed on behalf of each party.
28.4 This Agreement embodies the entire understanding of the parties and
supersedes all previous communications, representations, or understandings,
either oral or written, between the parties relating to the subject matter
hereof.
28.5 In case any of the provisions contained in this Agreement shall be
held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality or
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unenforceability shall not affect any other provisions hereof, but this
Agreement shall be construed as if such invalid or illegal or unenforceable
provisions had never been contained herein.
28.6 This Agreement includes Appendix A and Appendix B which are attached
hereto.
IN WITNESS WHEREOF, both The Regents and the Licensee have executed
this Agreement, in duplicate originals, by their respective officers hereunto
duly authorized, on the day and year hereinafter written.
VYSIS, INC. THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
By /s/▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------- --------------------------
(Signature) (Signature)
Name ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
____________________________
(Please Print)
Title President Title: Interim Director
_____________________________ Office of Technology Transfer
Date May 18, 1995 Date 5-23-95
_____________________________ ______________________________
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APPENDIX A
Description of imaging applications to be licensed to Vysis
1) QUIPS multi-color image acquisition Application
The image acquisition Application is a software package that drives the
acquisition of multiple fluorescence color images in registration under
interactive control. It is specifically designed to control an automated
microscope configured with a high resolution digital CCD camera (Xillix
MicroImager 1400 or Photometric. 200 series/KAF1400), multi bandpass filters
(Chrome Technology), an automated filterwheel in the excitation lightpath
(LEP or ▇▇▇▇▇▇ Instruments), and optionally a X-Y scanning stage (LEP or
Marzhauser).
The functionality of the Application:
- let the user interactively configure the acquisition parameters
- perform auto-focussing
- accurate relocation of fields from previous experiments or from an
automated metaphase scan
- allow independent control of the exposure times for up to 6
fluorochrome images
- calculate suggested exposure times
- show intensity histograms for each fluorochrome images
- show the acquired images individually or as color composites in full
or reduced resolution
- allow selection of multiple regions-of-interest for saving
- save image date in standard format including all associated
experiment information
Subroutines in this Application:
- autofocussing (JM)
- camera control (DS)
- microscope automation control (DS)
- importing/relocation of metaphase lists (DS)
- automatic exposure time calculation (JM)
- image data storage in ICS format (JM, DS)
- dark field correction (JM)
- contrast enhancement (DS)
- intensity/exposure histogram calculation (JM)
- selection of regions-of-interest for saving (JM, DS)
- interactive parameter configuration (DK)
- acquisition control panel (DK)
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2) CGH image analysis and profile analysis Application
The CGH image analysis Application extracts ratio profile information from
images of CGH experiments acquired with the QUIPS Application. The ratio
profiles show the relative copy number of DNA sequences along each chromosome
in the metaphase spread between test DNA and reference DNA used in the
experiment. The profile analysis part of the Application combines profile
date from multiple metaphase spreads into a single "copy number karyogram"
showing statistical significance of the entire experiment.
The functionality of the Application:
- read in the image data and extract required experiment information data
- perform background correction using non-linear filters in each
fluorochrome image
- segment the chromosomes in the image using non-linear filtering and
model-based correction
- calculate normalizer for each fluorochrome image interactively
identify chromosomes
- calculate the medial axis for each identified chromosome, integrate
intensities perpendicular to the medial axis, calculate a local estimate for
the background intensity, and save the normalized and background corrected
profile data to file.
- normalize the lengths of the chromosome profiles for each chromosome
type in the experiment, show the average profile and the statistical
distribution as standard deviation, confidence intervals, range, etc.
- support output to file, screen, and printer of the "copy number
karyograms"
Subroutines in this Application:
- image and experiment information import (DS)
- interactive segmentation (DS)
- enhanced DAPI image calculation (JM)
- background correction (DS, JP)
- fallset calculation and background correction (DS, JP)
- medial axis extraction (DS, LM)
- profile calculation (DS)
- automatic segmentation (MdK, JM)
- normalization (JP, DS)
- CGH analysis control panel (DS)
- profile averaging (JP)
- profile interpretation (JP)
- averaged profile export (DS)
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3) Fractional length metaphase mapping Application
The fractional length mapping Application calculates the location along
the length of a chromosome of a specific locus DNA probe for the purpose of
characterizing the probe.
The functionality of the Application:
- read in sub-images containing one chromosome each
- segment the chromosome
- calculate the medial axis
- segment the DNA probe hybridization domain and select domains
interactively
- report the location of the probe relative to the length of the
chromosome
Subroutines in this Application:
- image and experiment information import (DS)
- chromosome segmentation (LM, DS)
- DRT hybridization spot segmentation (LM)
- medial axis extraction (DS, LM)
APPENDIX B
MODIFICATION NO. M145
SUPPLEMENTAL AGREEMENT TO
▇▇▇▇▇▇▇▇ ▇▇. ▇▇-▇▇▇▇-▇▇▇▇▇▇▇▇▇
Copyright Office. The University grants to the Government, and others acting
on its behalf, a paid-up, nonexclusive, irrevocable worldwide license in such
copyrighted data to reproduce, prepare derivative works, distribute copies to
the public, and perform publicly and display publicly, by or on behalf of the
Government.
(e) Copyrighted works (other than scientific and technical articles).
(1) The University may obtain permission to assert copyright, on an individual
work, group or class basis, subsisting in technical data and computer software
first produced by the University in performance of this contract, where the
University can show that commercialization would be enhanced by such copyright
protection, subject to the following:
(i) University Request to Assert Copyright.
(A) For data other than scientific and technical articles, the University
shall submit in writing to Patent Counsel its request to assert copyright in
data first produced in the performance of this contract pursuant to this
clause. Each request by the University to be complete must include: (1) the
identity of the data (including any computer program) for which the
University requests permission to assert copyright, as well as an abstract
which is descriptive of the data and is suitable for dissemination purposes,
(2) the program under which it was funded, (3) on a best effort basis whether
the data is subject to an international treaty or agreement, (4) whether the
data is subject to export control, (5) a statement that the University plans
to commercialize the data within five years of obtaining permission to assert
copyright, and (6) for data other than computer software, a statement
explaining why the assertion of copyright is necessary to enhance
commercialization. For data that is developed using other funding sources in
addition to DOE funding, the permission to assert copyright in accordance
with this clause must also be obtained by the University from all other
funding sources prior to the University's request to Patent Counsel. The
request shall include the University's certification or other documentation
acceptable to Patent Counsel demonstrating such permission has been obtained.
(B) Permission for the University to assert copyright in excepted categories
of data as determined by DOE is expressly withheld. Such excepted categories
include data whose release (1) would be detrimental to national security,
i.e., involve classified information or data or sensitive information under
Section 148 of the Atomic Energy Act of 1954, as amended, or are subject to
export control for nonproliferation and other nuclear-related national security
purposes, (2) would not enhance the appropriate transfer or dissemination and
commercialization of such data, (3) would have a negative impact on U.S.
industrial competitiveness, (4) would prevent DOE from meeting its obligations
under treaties and international agreements, or (5) would be detrimental to one
or more of DOE's programs. Additional excepted categories may be added by the
Assistant General Counsel for Intellectual Property. Where data are determined
to be under an export control restriction, the University may still obtain
permission to assert copyright in such restricted data for purposes of limited
commercialization within the constraints provided by the export control
statutes and regulations subject to the provisions of this clause. However,
notwithstanding any other provision of this contract, all data developed with
Naval Reactors' funding and those data that are classified fall within the
above excepted categories and permission to assert copyright will not be
granted by DOE for those data. Additionally, the rights of the University in
data are subject to the disposition of data rights in the treaties and
international agreements
identified under this contract as well as those additional treaties and
international agreements which DOE may from time to time identify by
unilateral amendment to the contract; such amendment listing added treaties
and international agreements is effective only for data which is developed
after the date such treaty or international agreement is added to this
contract. Also, the University will not be permitted to assert copyright in
data in the form of various technical reports generated by the University
under the contract without first obtaining the advanced written permission of
the Contracting Officer.
(ii) DOE Review and Response to University's Request. The Patent Counsel
shall use its best efforts to respond in writing within 90 days of receipt of a
compete request by the University to assert copyright in technical data and
computer software pursuant to this clause. Such response shall either give or
withhold DOE's permission for the University to assert copyright or advise the
University that DOE needs additional time to respond and the reasons therefor.
(iii) Permission for University to Assert Copyright.
(A) For computer software, the University shall furnish to the contractor
designated by DOE to serve as the DOE centralized software distribution and
control point, at the time permission to assert copyright is given under (ii)
above: (1) an abstract describing the software suitable for publication, (2)
the source code for each software program, and (3) the object code and at
least the minimum support documentation needed by a technically competent
user to understand and use the software. The Patent Counsel, for good cause
shown by the University, may allow the minimum support documentation to be
delivered within 60 days after permission to assert copyright is given or at
such time the minimum support documentation becomes available. The
University acknowledges that the above-identified DOE-designated contractor
may provide a technical description of the software in an announcement
identifying its availability from the copyright holder. If adequate
documentation is not available at the time of assertion of copyright, then
the University shall require its licensee to supply such documentation within
6 months of license issuance.
(B) Unless otherwise directed by the Contracting Officer, for data other than
computer software to which the University has received permission to assert
copyright under paragraph (ii) above, the University shall within sixty (60)
days of obtaining such permission furnish to DOE's Office of Scientific and
Technical Information (OSTI) a copy of such data as well as an abstract of the
data suitable for dissemination purposes. The University acknowledges that
OSTI may provide an abstract of the data in an announcement to DOE, its
contractors and to the public identifying its availability from the copyright
holder.
(C) For a period of five (5) years beginning on the date the University is
given permission to assert copyright in data, the University grants to the
Government, and others acting on its behalf, a paid-up, nonexclusive,
irrevocable worldwide license in such copyrighted data to reproduce, prepare
derivative works, and perform publicly and display publicly, by or on behalf of
the Government. Subject to DOE approval, the five-year period is renewable for
two more five-year periods. The DOE approval will be based on the standard
that the work is still commercially viable and the market demand is being met.
(D) After the five (5) year period set forth in (C) above, or if, prior to the
end of such periods, the University abandons commercialization activities
pertaining to the data to which the University has been given permission to
assert copyright, the University grants to the Government, and others acting on
its behalf, a paid-up, nonexclusive, irrevocable worldwide license in such
copyrighted data to reproduce, distribute copies to the public, prepare
derivative works, perform publicly and display publicly, and to permit others
to do so.
(E) Whenever the University obtains permission to assert copyright in data,
the University shall affix the applicable copyright notice of 17 U.S.C.
Section 401 or Section 402 on the copyrighted data and also an
acknowledgement of the Government sponsorship and license rights of
paragraphs (C) and (D) above. Such action shall be taken when the data are
delivered to the Government, published, licensed, or deposited for
registration as a published work in the U.S. Copyright Office. The
acknowledgement of Government sponsorship and license rights shall be as
follows:
NOTICE: The Government is granted for itself and others acting on its
behalf a paid-up, nonexclusive, irrevocable worldwide license in this
data to reproduce, prepare derivative works, and perform publicly and
display publicly. Beginning five (5) years after (date permission to
assert copyright was obtained), subject to two possible five year
renewals, the Government is granted for itself and others acting on its
behalf a paid-up, nonexclusive, irrevocable worldwide license in this
data to reproduce, prepare derivative works, distribute copies to the
public, perform publicly and display publicly, and to permit others to
do so. NEITHER THE UNITED STATES NOR THE UNITED STATES DEPARTMENT OF
ENERGY, NOR ANY OF THEIR EMPLOYEES, MAKES ANY WARRANTY, EXPRESS OR
IMPLIED, OR ASSUMES ANY LEGAL LIABILITY OR RESPONSIBILITY FOR THE
ACCURACY, COMPLETENESS, OR USEFULNESS OF ANY INFORMATION, APPARATUS,
PRODUCT, OR PROCESS DISCLOSED, OR REPRESENTS THAT ITS USE WOULD NOT
INFRINGE PRIVATELY OWNED RIGHTS.
(F) With respect to any data to which the University has received permission
to assert copyright, the DOE has the right, during the five-year period(s) set
forth in subparagraph (e) (1) (i) (A) above, to request the University to grant
a nonexclusive, partially exclusive or exclusive license in any field of use to
a responsible applicant(s) upon terms that are reasonable under the
circumstances, and if the University refuses such request, to grant such
license itself, if the DOE determines that the University has not made a
satisfactory demonstration that either it or its licensee(s) is actively
pursuing commercialization of the data as set forth in subparagraph
(e)(1)(i)(A) above. Before licensing under this subparagraph (F), DOE shall
furnish the University a written request for the University to grant the stated
license, and the University shall be allowed thirty (30) days (or such longer
period as may be authorized by the Contracting Officer for good cause shown in
writing by the University) after such notice to show cause why the license
should not be granted. The University shall have the right to appeal the
decision of the DOE to grant the stated license to the Invention Licensing
Appeal Board as set forth in 10 C.F.R. 781.65 - "Appeals."
(G) No costs shall be allowable for maintenance of copyrighted data for
commercial purposes, primarily for the benefit of the University and/or a
licensee and which exceeds DOE Program needs, except as expressly
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