- indicates material omitted pursuant to a confidential treatment request and filed separately with the Securities and Exchange Commission. NIKON-ASML PATENT CROSS-LICENSE AGREEMENT
Exhibit 4.6
*** - indicates material omitted pursuant to a confidential treatment request and filed separately with the Securities and Exchange Commission.
NIKON-ASML PATENT CROSS-LICENSE AGREEMENT
THIS NIKON-ASML PATENT CROSS-LICENSE AGREEMENT (this “AGREEMENT”) is made and entered into as of November 12, 2004 (the “EFFECTIVE DATE”) by and between ASML Holding N.V., a corporation organized under the laws of the Netherlands (“ASML”), and Nikon Corporation, a corporation organized under the laws of Japan (“NIKON”). ASML and Nikon are hereinafter also referred to collectively as the “PARTIES” and individually as a “PARTY.”
RECITALS
WHEREAS, Nikon, ASML and Zeiss SMT entered into a Memorandum of Understanding entered into as of September 27, 2004 (“MOU”), pursuant to which they agreed, among other things, to settle certain litigation proceedings and grant cross-licenses of certain patent rights; and
WHEREAS, pursuant to the MOU, Nikon and ASML are entering into that certain Nikon-ASML Settlement and Release Agreement of even date herewith (the “NIKON-ASML SETTLEMENT AND RELEASE AGREEMENT”);
NOW, THEREFORE, the Parties agree as follows:
AGREEMENT
1. DEFINITIONS; INTERPRETATION
1.1 Terms Defined in this Agreement. The following terms when used in this Agreement shall have the following definitions:
1.1.1 “ACQUIRED PATENT” is defined in Section 1.2.7.
1.1.2 “ACQUIRING PARTY” is defined in Section 1.2.7.
1.1.3 “AFFILIATE” means, with respect to any Person, any other Person that controls, is controlled by or is under common control with such first Person, but only for such time as control exists. For this purpose control of a Person means possession, directly or indirectly, of the power to direct or cause the direction of management, business affairs or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).
1.1.4 “AGREEMENT TERM” means the period commencing on the Effective Date and ending on December 31, 2014.
1.1.5 “ARBITRATION AGREEMENT” means the Arbitration Agreement dated as of the Effective Date by and among Nikon, ASML, Zeiss SMT, and ▇▇▇▇ Zeiss.
1.1.6 “ASML LICENSED PATENTS” is defined in Section 1.2.5.
1.1.7 “ASML LICENSED PRODUCTS” is defined in Section 1.3.1
1.1.8 “ASSERTING PARTY” is defined in Section 4.2.1.
1.1.9 “▇▇▇▇ ZEISS” means ▇▇▇▇ Zeiss AG, a corporation organized under the laws of Germany.
1.1.10 “CLASS A PATENT” is defined in Section 1.2.7.
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1.1.11 “CLASS B PATENT” is defined in Section 1.2.8.
1.1.12 “CLASS C PATENT” is defined in Section 1.2.9.
1.1.13 “CO-OWNED” (and the correlative “CO-OWNER”) is defined in Section 1.2.11.
1.1.14 “CONVERTIBLE PATENTS” is defined in Section 1.2.3.
1.1.15 “COVERED ENTITIES” of a Party means, with respect to a Licensed Product, the direct and indirect resellers, distributors, users and other customers of such Licensed Product of such Party and/or its Subsidiaries, and any Person acquiring such Licensed Product from any of the foregoing.
1.1.16 “DESIGNATED NEUTRAL” means the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, or if he is unable or unwilling to perform the relevant function, a substitute of comparable experience who is mutually agreeable to the Parties.
1.1.17 “DESIGNATED NIKON PATENTS” means the three (3) Patent applications listed on Schedule E hereto.
1.1.18 “DIRECT OR INDIRECT SALE” means the sale, lease, or other conveyance of a product by a Party or its Subsidiaries to a third Person, or the sale, lease, or other conveyance of a product by a Party or its Subsidiaries to another Person which in turn sells, leases, or otherwise conveys such product to the third Person substantially in the form acquired from such Party or its Subsidiaries.
1.1.19 “E-BEAM LITHOGRAPHY” means electron beam lithography or other charged particle beam lithography, including direct write electron beam lithography.
1.1.20 “EFFECTIVE APPLICATION DATE” of a Patent application means the earliest of (a) the filing date of such application, and (b), in the event that such application claims priority from the filing date of an earlier filed application or applications (including provisional applications), the earliest (i) filing date of any of such earlier filed application or applications, and (ii) for all of such earlier filed applications that make further priority claims to earlier dates, the Effective Application Dates of such earlier filed applications.
1.1.21 “ELIGIBLE NIKON PATENT FAMILY” is defined in Section 1.2.21
1.1.22 “ELIGIBLE NIKON PATENT FAMILY MEMBER” is defined in Section 1.2.22.
1.1.23 “EXCESS ASSERTION” is defined in Section 2.8.5(b).
1.1.24 “EXCLUDED CLAIM” is defined in Section 1.2.15.
1.1.25 “EXCLUDED CLAIM CRITERIA” is defined in Section 1.2.16.
1.1.26 “EXCLUDED CLAIMS LIST” is defined in Section 2.3.1.
1.1.27 “EXCLUDED GLASS METHODS” means all methods or processes for making Excluded Glass Products described in subclauses (a) and (b) of Section 1.1.28.
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1.1.28 “EXCLUDED GLASS PRODUCTS” means (a) optical material, including glass, silica glass, crystal, and calcium fluoride crystal, but not including optical coatings, (b) optical blanks, and (c) unfinished lenses purchased by a Party or its Subsidiaries from third parties other than Zeiss SMT and its Subsidiaries.
1.1.29 “EXCLUDED LITHOGRAPHY TECHNOLOGY” is defined in Section 1.2.1.
1.1.30 “EXCLUDED NIKON PATENTS” is defined in Section 1.2.20.
1.1.31 “FINALLY RESOLVED” (and the correlative, “FINAL RESOLUTION”) with respect to a Suit, means that such Suit is (a) settled and dismissed with prejudice, (b) subject to a final judgment as to which no appeal is possible or taken within the time permitted, or (c) is withdrawn completely by the Person bringing such Suit.
1.1.32 “FPD/LARGE AREA SUBSTRATE LITHOGRAPHY” means lithography to manufacture flat panel displays or expose large area substrates other than wafers (i.e., substrates other than wafers that are greater than 500mm along any dimension).
1.1.33 “FULL RIGHTS TERMINATION” is defined in Section 2.8.4.
1.1.34 “GLASS SUPPLIER” is defined in Section 4.2.2.
1.1.35 “GOVERNMENTAL AUTHORITY” means any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or entity and any court or other tribunal); or (d) individual, entity or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature.
1.1.36 “INDEPENDENT AUDITOR” shall have the meaning set forth in Section 5.5.
1.1.37 “LAW” means any law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, order, edict, decree, proclamation, treaty, convention, rule, regulation, ruling, directive, pronouncement, requirement (licensing or otherwise), determination, decision, opinion or interpretation that is, has been or may in the future be issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
1.1.38 “LICENSABLE CO-OWNED PATENT” is defined in Section 1.2.12.
1.1.39 “LICENSE TERM” means the period commencing on the Effective Date and ending on December 31, 2009.
1.1.40 “LICENSED PATENTS” is defined in Section 1.2.6.
1.1.41 “LICENSED PRODUCTS” is defined in Section 1.3.3.
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1.1.42 “LITHOGRAPHY” is defined in Section 1.3.4.
1.1.43 “LITHOGRAPHY EQUIPMENT” is defined in Section 1.3.5.
1.1.44 “LITHOGRAPHY PATENT” is defined in Section 1.2.2.
1.1.45 “MASKLESS LITHOGRAPHY” means Lithography in which light is patterned using individually-controllable elements and not a reflective or transmissive mask.
1.1.46 “MOU” shall have the meaning set forth in the recitals.
1.1.47 “NET SELLING PRICE” means the gross revenues actually received by a Party or its Subsidiaries from Direct or Indirect Sales of a product, less (a) normal and customary rebates, and cash and trade discounts; (b) sales, use and/or other excise taxes or duties; (c) insurance costs and outbound transportation charges; (d) import and/or export duties; and (e) amounts allowed or credited due to returns (not to exceed the original billing or invoice amount).
1.1.48 “NIKON-ASML SETTLEMENT AND RELEASE AGREEMENT” shall have the meaning set forth in the recitals.
1.1.49 “NIKON-ZEISS PATENT CROSS-LICENSE AGREEMENT” means that certain Nikon-Zeiss Patent Cross-License Agreement by and between Nikon and Zeiss SMT of even date herewith, as amended from time to time.
1.1.50 “NIKON DEFENSIVE SUIT” is defined in Section 2.8.5(a).
1.1.51 “NIKON LICENSED PATENTS” is defined in Section 1.2.4.
1.1.52 “NIKON LICENSED PRODUCTS” is defined in Section 1.3.6.
1.1.53 “OPTICAL COMPONENTS” means (a) optical elements, modules and systems, including illumination optical systems, projection optical systems, manipulation devices and mounting means, and (b) processes, materials and devices for designing, manufacturing, assembling, adjusting, measuring and qualifying such optical elements, modules and systems, in each case for Lithography Equipment.
1.1.54 “OWNED” (and the correlative “OWNERSHIP”) is defined in Section 1.2.10.
1.1.55 “PATENTS” means all classes or types of patents (including design patents) and utility models of all countries of the world, and applications therefor, together with any divisionals, continuations, continuations-in-part, reissues and results of re-examinations thereof.
1.1.56 “PAYMENTS” shall have the meaning set forth in Section 5.1.
1.1.57 “PERSON” means any person or entity, whether an individual, corporation, partnership, limited partnership, limited liability company, trust, foundation, unincorporated organization, business association, firm, joint venture or other legal entity.
1.1.58 “PRACTICALLY USABLE EMBODIMENTS” shall have the meaning set forth in Section 1.2.16.
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1.1.59 “PURCHASING PARTY” shall have the meaning set forth in Section 4.2.2(a).
1.1.60 “RESTRICTED PATENT” is defined in Section 1.2.13.
1.1.61 “RUNNING ROYALTY PAYMENTS” is defined in Section 4.2.2(b)(v).
1.1.62 “SCHEDULE D OMITTED CLAIMS” is defined in Section 1.2.18.
1.1.63 “SCHEDULE D PATENTS” is defined in Section 1.2.17.
1.1.64 “SCHEDULE D PATENT FAMILY” is defined in Section 1.2.18.
1.1.65 “SCHEDULE D PATENT FAMILY MEMBER” is defined in Section 1.2.19.
1.1.66 “SCHEDULE D RESPONSE” is defined in Section 2.8.5(c).
1.1.67 “SCHEDULE D SUIT” is defined in Section 2.8.5(c).
1.1.68 “SPECIAL MASK TECHNOLOGY” means (i) a pattern on a mask having a modified shape (as compared to the desired shape of the pattern to be printed on the substrate), where such modification is made for the purpose of forming a circuit pattern onto a substrate (“SPECIAL PATTERN”); (ii) a mask with a Special Pattern, modified transmittance (as compared to a binary mask) or modified phase (as compared to a binary mask), where such modification is made for the purpose of forming a circuit pattern onto a substrate (“SPECIAL MASK”); (iii) a method of exposing a substrate using a Special Mask; (iv) a method of manufacturing a semiconductor chip using a Special Mask; (v) a method of manufacturing a Special Mask; or (vi) data processing hardware, software, methods or processes used to analyze, simulate, predict, generate or modify pattern data used on a Special Mask.
1.1.69 “SPECIFICALLY DIRECTED TO” shall have the meaning set forth in Section 1.2.16.
1.1.70 “SPECIFIED ENTITY” shall mean the Person listed in Schedule F.
1.1.71 “SPECIFIED ENTITY SUIT” is defined in Section 2.8.5(a).
1.1.72 “SUBLICENSABLE” is defined in Section 1.2.14.
1.1.73 “SUBLICENSOR” is defined in Section 1.2.14.
1.1.74 “SUBSIDIARY” of a Person means any other Person with respect to which such first Person has beneficial ownership, directly or indirectly, of securities representing more than fifty percent (50%) of the power to elect such other Person’s board of directors or other managing authority or, in the case of a non-corporate Person, equivalent interests.
1.1.75 “▇▇▇” means (a) to threaten, bring, or participate in any legal or equitable action, claim or demand in any court or before any tribunal or any arbitration or compulsory and binding alternative dispute resolution proceeding, either directly or indirectly, or (b) to instruct, request, encourage, or assist any designee, agent, nominee or other third party to do the same, unless legally compelled to do so by a valid subpoena or court order which the recipient has opposed by all reasonable means. “▇▇▇” shall not be construed to include offers to license Patents in connection with cross-license or other license negotiations.
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1.1.76 “SUIT” means any legal or equitable action, claim or demand in any court or before any tribunal or any arbitration or compulsory and binding alternative dispute resolution proceeding, or any threat thereof, but not including offers to license Patents in connection with cross-license or other license negotiations.
1.1.77 “TRANSACTION AGREEMENTS” is defined in Section 10.6.
1.1.78 “TRANSFER” shall have the meaning set forth in Section 9.3.
1.1.79 “TRANSFEREE” shall have the meaning set forth in Section 9.3.
1.1.80 “TRANSITION PERIOD” means the period beginning upon the end of the License Term and ending at the end of the Agreement Term.
1.1.81 “WITHHOLDINGS” shall have the meaning set forth in Section 5.2.
1.1.82 “ZEISS SMT PAYMENTS” shall have the meaning set forth in Section 8.2.2.
1.1.83 “ZEISS SMT” means ▇▇▇▇ Zeiss SMT AG, a corporation organized under the laws of Germany.
1.2 Additional Definitions Relating to Licensed Patents.
1.2.1 “EXCLUDED LITHOGRAPHY TECHNOLOGY” means each of E-Beam Lithography, FPD/Large Area Substrate Lithography, and Maskless Lithography.
1.2.2 “LITHOGRAPHY PATENT” means any Patent (a) that either (i) issues from an application having an Effective Application Date on or before December 31, 2002, or (ii) issues on or before December 31, 2014 from an application having an Effective Application Date after December 31, 2002, and (b) has one or more claims, other than Excluded Claims, which read on Lithography Equipment or the manufacture or use thereof. For purposes of Section 6.3 only, a Patent application shall not constitute a “Lithography Patent” unless and until such Patent application is published.
1.2.3 “CONVERTIBLE PATENTS” means, with respect to Patents of a Party or its Subsidiaries, (i) Class B Patents that are Licensed Patents of such Party, and (ii) any Class C Patents of such Party.
1.2.4 “NIKON LICENSED PATENTS” means all Class A Patents and Class B Patents Owned or Sublicensable by Nikon or its Subsidiaries, excluding any Excluded Claims thereof and excluding, subject to Section 2.8.3, all Excluded Nikon Patents.
1.2.5 “ASML LICENSED PATENTS” means all Class A Patents and Class B Patents Owned or Sublicensable by ASML or its Subsidiaries, excluding any Excluded Claims thereof.
1.2.6 “LICENSED PATENTS” means the ASML Licensed Patents or the Nikon Licensed Patents, as applicable. For purposes of this Agreement, the Licensed Patents “of” ASML
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and/or its Subsidiaries means the ASML Licensed Patents and the Licensed Patents “of” Nikon and/or its Subsidiaries means the Nikon Licensed Patents, and the Licensed Patents “of” a Party and/or its Subsidiaries means the ASML Licensed Patents and/or the Nikon Licensed Patents, as applicable.
1.2.7 “CLASS A PATENT” means (a) a Patent that issues at any time (whether before or after the end of the License Term) from an application having an Effective Application Date on or before December 31, 2002, and (b) a Convertible Patent that is converted by a Party pursuant to and in accordance with Section 2.5. Notwithstanding subsection (a) above, a Patent of a Party that is purchased or otherwise acquired by such Party (“ACQUIRING PARTY”) from a third party (other than an Affiliate of such Party), whether by assignment, merger, acquisition of assets or otherwise, after the Effective Date, and that otherwise qualifies as a Licensed Patent (“ACQUIRED PATENT”), shall be deemed to be a Class B Patent and not a Class A Patent, regardless of its Effective Application Date (unless such Patent is converted to a Class A Patent by a Party in accordance with Section 2.5); provided, however, that this sentence shall not apply to any Schedule D Patent Family Member or any Patent that the Specified Entity or any of its Affiliates has or had an obligation to assign to ASML or any of its Subsidiaries. Notwithstanding anything to the contrary in this Section 1.2.7, if (i) the Acquired Patent issues with the Acquiring Party being identified on the face of the Acquired Patent or by patent office records as the initial owner or assignee of record of such issued Acquired Patent, and (ii) such Acquired Patent qualifies as a Class A Patent by virtue of its Effective Application Date, then such issued Acquired Patent shall be deemed a Class A Patent unless the Acquiring Party provides express written notice to the other Party that such Patent is an Acquired Patent within three (3) months of the issuance of such Acquired Patent.
1.2.8 “CLASS B PATENT” means (a) a Patent that issues on or before the end of the License Term from an application having an Effective Application Date after December 31, 2002, excluding (b) any such Patent that is converted to a Class A Patent by a Party pursuant to and in accordance with Section 2.5. Notwithstanding subsection (a) above, an Acquired Patent shall be deemed to be a Class B Patent and not a Class A Patent, regardless of its Effective Application Date (unless such Patent is converted to a Class A Patent by a Party in accordance with Section 2.5); provided, however, that this sentence shall not apply to any Schedule D Patent Family Member or any Patent that the Specified Entity or any of its Affiliates has or had an obligation to assign to ASML or any of its Subsidiaries. Notwithstanding anything to the contrary in this Section 1.2.8, if (i) the Acquired Patent issues with the Acquiring Party being identified on the face of the Acquired Patent or by patent office records as the initial owner or assignee of record of such issued Acquired Patent, and (ii) such Acquired Patent qualifies as a Class A Patent by virtue of its Effective Application Date, then such issued Acquired Patent shall be deemed a Class A Patent unless the Acquiring Party provides express written notice to the other Party that such Patent is an Acquired Patent within three (3) months of the issuance of such Acquired Patent.
1.2.9 “CLASS C PATENT” means a Patent having an Effective Application Date after December 31, 2002 and issuing during the Transition Period that would be an ASML Licensed Patent or Nikon Licensed Patent, as applicable, had such Patent issued on or before the end of the License Term.
1.2.10 “OWNED” (and the correlative “OWNERSHIP”) means, with respect to a Patent of a Person, (a) a Patent that is solely assigned to and/or solely owned by such Person (without regard to rights that employees may have in inventions that they develop while employed by a Party, such as, for example, the right to receive monetary compensation or assert preemptive rights), or (b) a Licensable Co-Owned Patent. A Patent shall not be deemed “Owned” by the applicable Party to the extent and as long as it is a Restricted Patent.
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1.2.11 “CO-OWNED” (and the correlative “CO-OWNERS”) means, with respect to a Patent, a Patent that has been assigned to two or more Persons or in which two or more Persons have an ownership interest.
1.2.12 “LICENSABLE CO-OWNED PATENT” means (a) a Patent that is Co-Owned by a Party or its Subsidiaries and all other Co-Owners of which are Affiliates of such Party or its Subsidiaries, (b) a Patent that is Co-Owned by ASML and/or its Subsidiaries and all other Co-Owners of which are Zeiss SMT and/or its Subsidiaries, and (c) a Patent that is Co-Owned by a Party or its Subsidiaries and where any other Co-Owner is a third party (other than an Affiliate of such Party) as to which, and only to the extent and for such time as, and subject to the conditions under which, such Party or its Subsidiaries have the right to grant licenses, immunities, and additional commitments within the scope of the licenses and immunities granted under this Agreement (i) without such grant requiring consent of any such third party, or (ii), where such grant requires consent of any such third party or parties, if and to the extent such consent is or has been granted by all such third parties.
1.2.13 “RESTRICTED PATENTS” means (a) any Patent that (i) is listed on Schedule B-1 or Schedule C-1, as applicable (as initially attached hereto, and not as such Schedules may be amended pursuant to Section 6.5 or otherwise), or (ii) is published after the Effective Date and results from activities funded by a Governmental Authority, in each case where the license of such Patent to third parties is generally prohibited under applicable Law or the applicable contract with such Governmental Authority in accordance with the standard procedures of such Governmental Authority, but only as long as such prohibition shall remain in force and effect, and (b) any Patent that is (i) Co-Owned by a Party or its Subsidiaries and one or more third parties, and (ii) not a Licensable Co-Owned Patent, but only as long as, and solely to the extent that, it is not a Licensable Co-Owned Patent.
1.2.14 “SUBLICENSABLE” means, with respect to a Patent licensed or sublicensed to a Party or any of its Subsidiaries (as applicable, the “SUBLICENSOR”), a Patent as to which, and only to the extent and for such time as, and subject to the conditions under which, the Sublicensor has the right to grant licenses or sublicenses, and extend immunities and additional commitments, to the other Party and its Subsidiaries and their respective Covered Entities within the scope of the licenses, immunities, and additional commitments granted or made under this Agreement without such grant resulting in the payment of royalties or other payments to third parties, except for payments (i) relating to the prosecution or maintenance of Patents, (ii) to Affiliates of the Sublicensor, or (iii) to Persons for inventions made by such Persons while employees or contractors of the Sublicensor.
1.2.15 “EXCLUDED CLAIM” means any Patent claim that:
(a) is contained on the Excluded Claims List, unless and until such Patent claim ceases to meet the Excluded Claim Criteria as set forth in Section 2.3.2; or
(b) is not contained on the Excluded Claims List, but meets the Excluded Claim Criteria, but only for so long as such Patent claim meets the Excluded Claim Criteria; or
(c) reads only on Excluded Glass Products or Excluded Glass Methods (provided that Patent claims reading only on unfinished lenses shall constitute Excluded Claims solely with respect to unfinished lenses purchased by a Party or its Subsidiaries from third parties other than Zeiss SMT and its Subsidiaries); or
(d) includes any Special Mask Technology as a required element that is material to the patentability of such claim.
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1.2.16 “EXCLUDED CLAIM CRITERIA” with respect to a Patent claim shall be deemed met if such Patent claim is Specifically Directed To equipment or methods for an Excluded Lithography Technology. A Patent claim shall be deemed to be “SPECIFICALLY DIRECTED TO” equipment or methods for an Excluded Lithography Technology if, and only for so long as,
(i) the embodiments of the Patent claim that are practically usable in a commercial setting (“PRACTICALLY USABLE EMBODIMENTS”) encompass only equipment or methods for any one or more Excluded Lithography Technologies, and
(ii) the Patent claim contains one or more limitations by reason of which the Practically Usable Embodiments of the Patent claim encompass only equipment or methods for the Excluded Lithography Technology and that are material to the patentability of the Patent claim;
provided that:
(A) actual use in a commercial setting is not required for an embodiment of a Patent claim to qualify as a Practically Usable Embodiment,
(B) an embodiment of a Patent claim is not a Practically Usable Embodiment outside the Excluded Lithography Technology if it does not have practical utility as an improvement upon, or alternative solution to, existing technology other than the Excluded Lithography Technology,
(C) no Patent claim that covers actual and bona fide commercial Lithography Equipment or Lithography methods, anywhere in the world from any source, other than equipment or methods for an Excluded Lithography Technology, shall qualify as an Excluded Claim, and
(D) if a dependent claim of a Patent depends from another claim of such Patent that does not qualify as an Excluded Claim, such dependent claim shall not qualify as an Excluded Claim simply by virtue of the fact that it recites an Excluded Lithography Technology.
It is the Parties’ intent to exclude only Patent claims in which the “heart of the invention” of such Patent claim is practically usable only in equipment or methods for an Excluded Lithography Technology.
The Parties anticipate that, in preparing the Excluded Claims List, they may develop ideas for clarifying the Excluded Claim Criteria for whether certain types of Patent claims should qualify as Excluded Claims. Accordingly, upon completion of the Excluded Claims List, the Parties will revisit and negotiate clarifications to such Excluded Claim Criteria in good faith, and if the Parties agree on any such clarifications (each in its sole discretion), they will amend the Excluded Claim Criteria to implement such clarifications.
1.2.17 “SCHEDULE D PATENTS” means the Patents listed on Schedule D hereto.
1.2.18 “SCHEDULE D PATENT FAMILY” means, with respect to a Schedule D Patent, collectively, such Schedule D Patent and (i) any Patents claiming priority from such Schedule D
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Patent, but excluding claims of such Patents that are not entitled to claim priority from such Schedule D Patent, and (ii) any Patents from which such Schedule D Patent claims priority, but excluding claims of such Patents that are not supported by such Schedule D Patent. The excluded claims described in subclauses (i) and (ii) hereof, together with any Excluded Claims of any Schedule D Patent Family Member, are referred to as “SCHEDULE D OMITTED CLAIMS”. For the avoidance of doubt, it is understood that there shall, subject to reduction pursuant to Section 2.8.3, be three Schedule D Patent Families, one based on each of the three Schedule D Patents.
1.2.19 “SCHEDULE D PATENT FAMILY MEMBER” means, with respect to any Schedule D Patent Family, separately, each Patent in such Schedule D Patent Family (excluding any Schedule D Omitted Claims thereof).
1.2.20 “EXCLUDED NIKON PATENTS” means issued Eligible Nikon Patent Family Members that are designated by Nikon as set forth in Section 2.8.1.
1.2.21 “ELIGIBLE NIKON PATENT FAMILY” means, with respect to a Designated Nikon Patent, collectively, such Designated Nikon Patent and (i) any Patents claiming priority from such Designated Nikon Patent, but excluding claims of such Patents that are not entitled to claim priority from such Designated Nikon Patent, and (ii) any Patents from which such Designated Nikon Patent claims priority, but excluding claims of such Patents that are not supported by such Designated Nikon Patent. For the avoidance of doubt, it is understood that there shall, subject to reduction pursuant to Section 2.8.3, be three Eligible Nikon Patent Families, one based on each of the three Designated Nikon Patents.
1.2.22 “ELIGIBLE NIKON PATENT FAMILY MEMBER” means, with respect to any Eligible Nikon Patent Family, separately, each Patent in such Eligible Nikon Patent Family.
1.3 Additional Definitions Relating to Licensed Products.
1.3.1 “ASML LICENSED PRODUCTS” means Lithography Equipment and all applications therefor, but excluding Optical Components until the occurrence of a Licensed Product Expansion, at which time the term “ASML Licensed Products” shall automatically be deemed to mean “Lithography Equipment and all applications therefor, including Optical Components” for all purposes hereunder, including the license grants in Section 2.1, as more fully described in, and subject to the conditions set forth in, Section 2.10. For purposes of clarity, “ASML Licensed Products” shall in all events include ASML’s products within the following product families, as and in the form marketed by ASML as of the Effective Date: TwinScan, PAS, MicraScan and Micralign series, including components thereof, as described in Section 1.3.5, other than Optical Components as long as they are not ASML Licensed Products pursuant to this Section 1.3.1.
1.3.2 “LICENSED PRODUCT EXPANSION” shall have the meaning set forth in Section 2.10.
1.3.3 “LICENSED PRODUCTS” means the ASML Licensed Products or the Nikon Licensed Products, as applicable.
1.3.4 “LITHOGRAPHY” means exposing a resist using optical (photons) projection means (including extreme ultraviolet) or particle (including electron beam) projection means.
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1.3.5 “LITHOGRAPHY EQUIPMENT” means, individually and collectively, any tool or machine for transferring a pattern onto a substrate by Lithography, for use in the fabrication of integrated circuits, thin film heads, flat panel displays, micromachines, and other applications with similar requirements (including (i) separately installed components of such tool or machine, (ii) any components integrated in such tool or machine, (iii) materials for use in, and solely to the extent they are for use in, the operation of such tool or machine, such as fluids and gases, and (iv) any software used to operate or control such tool or machine), including where such tool or machine uses and/or incorporates masks, or uses, incorporates and/or processes resists or substrates, including wafers, provided that “Lithography Equipment” shall not include masks, resists, or such substrates themselves.
1.3.6 “NIKON LICENSED PRODUCTS” means Lithography Equipment and all applications therefor, including Optical Components. For purposes of clarity, “Nikon Licensed Products” shall in all events include Nikon’s products within the following product families, as and in the form marketed by Nikon as of the Effective Date: NSR series and FX series.
1.4 Interpretation.
1.4.1 Certain Terms. The words “hereof,” “herein,” “herewith,” “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “including” is not limited and means “including without limitation.”
1.4.2 Section References; Titles and Subtitles. Unless otherwise noted, all references to Sections and Schedules herein are to Sections and Schedules of this Agreement. The titles, captions and headings of this Agreement 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.
1.4.3 Reference to Persons, Agreements, Statutes. Unless otherwise expressly provided herein, (a) references to a Person include its successors and permitted assigns, (b) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments, restatements and other modifications thereto or supplements thereof and (c) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such statute or regulation.
1.4.4 Further Negotiations. Any reference in this Agreement to subsequent meetings, discussions, or negotiations between the Parties shall be interpreted to include an obligation of the Parties to conduct such meetings, discussions, or negotiations in good faith.
2. LICENSE GRANTS
2.1 Grant to ASML. Nikon on behalf of itself and its Subsidiaries, hereby grants to ASML and its Subsidiaries, under the Nikon Licensed Patents, retroactive to the Effective Application Date of each Nikon Licensed Patent, a non-exclusive, non-sublicensable (provided that this restriction on sublicensing shall not limit or otherwise affect the immunities and additional commitments set forth in Sections 3 and 4), non-transferable (except as set forth in Section 9.1) license to (a) make, use (including use with patterns or masks for processing substrates such as wafers), sell, offer to sell, import, export, lease and otherwise convey ASML Licensed Products anywhere in the world, (b) have ASML Licensed Products made by their suppliers anywhere in the world, provided that such ASML Licensed Products (i) are made by such suppliers in accordance with specifications provided by, or agreed upon with, ASML or any of its Subsidiaries, and (ii) are not “off the shelf” products offered for sale, lease, or other conveyance to Persons other than ASML or its Subsidiaries, (c) practice any method or process anywhere in the world in connection with the design, manufacture, installation, assembly, operation, adjustment, measurement,
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qualification, maintenance, support, repair, or diagnosis of ASML Licensed Products designed, made, used and/or sold under this Section 2.1, and (d) make, have made, and use any tool, software, machine, or other apparatus anywhere in the world in connection with the design, manufacture, installation, assembly, operation, adjustment, measurement, qualification, maintenance, support, repair, or diagnosis of ASML Licensed Products designed, made, used and/or sold under this Section 2.1. Notwithstanding the foregoing, to the extent that the licenses granted in this Section 2.1 include a sublicense under any third party rights, such sublicense shall not exceed in scope the license granted to Nikon by the applicable third party licensor or the rights that Nikon is otherwise authorized to sublicense under any agreement with such third party licensor.
2.2 Grant to Nikon. ASML, on behalf of itself and its Subsidiaries, hereby grants to Nikon and its Subsidiaries, under the ASML Licensed Patents, retroactive to the Effective Application Date of each ASML Licensed Patent, a non-exclusive, non-sublicensable (provided that this restriction on sublicensing shall not limit or otherwise affect the immunities and additional commitments set forth in Sections 3 and 4), non-transferable (except as set forth in Section 9.1) license to (a) make, use (including use with patterns or masks for processing substrates such as wafers), sell, offer to sell, import, export, lease and otherwise convey Nikon Licensed Products anywhere in the world, (b) have Nikon Licensed Products made by their suppliers anywhere in the world, provided that such Nikon Licensed Products (i) are made by such suppliers in accordance with specifications provided by, or agreed upon with, Nikon or any of its Subsidiaries, and (ii) are not “off the shelf” products offered for sale, lease, or other conveyance to Persons other than Nikon and its Subsidiaries, (c) practice any method or process anywhere in the world in connection with the design, manufacture, installation, assembly, operation, adjustment, measurement, qualification, maintenance, support, repair, or diagnosis of Nikon Licensed Products designed, made, used, and/or sold under this Section 2.2, and (d) make, have made, and use any tool, software, machine, or other apparatus anywhere in the world in connection with the design, manufacture, installation, assembly, operation, adjustment, measurement, qualification, maintenance, support, repair, or diagnosis of Nikon Licensed Products designed, made, used and/or sold under this Section 2.2. Notwithstanding the foregoing, to the extent that the licenses granted in this Section 2.2 include a sublicense under any third party rights, such sublicense shall not exceed in scope the license granted to ASML by the applicable third party licensor or the rights that ASML is otherwise authorized to sublicense under any agreement with such third party licensor.
2.3 Excluded Claims List.
2.3.1 Creation. Within sixty (60) days of the Effective Date, the Parties will attempt to agree on a list of Patent claims for each Excluded Lithography Technology that will be excluded from the Licensed Patents (as so agreed or as finalized by the Designated Neutral, the “EXCLUDED CLAIMS LIST”). The Excluded Claims List will only include Patent claims that are contained in Patents nominated by each Party as follows: for each Excluded Lithography Technology, each Party may nominate claims from no more than five (5) English-language Patents, provided that for the purposes of the foregoing, a Patent and all of its counterparts and its continuation, divisional, and continuation-in-part applications will be counted as a single Patent. If the Parties are unable to agree on the Excluded Claims List within sixty (60) days of the Effective Date, the Designated Neutral will have the authority to finalize the Excluded Claims List by including on the list all Patent claims nominated by the Parties for each Excluded Lithography Technology (as described above) that qualify as Excluded Claims pursuant to Sections 1.2.15 and 1.2.16, and omitting from the Excluded Claims List all such Patent claims that do not qualify as Excluded Claims pursuant to Sections 1.2.15 and 1.2.16. The Excluded Claims List, with the entries agreed to by the Parties, and, as applicable, finalized by the Designated Neutral, shall be incorporated into this Agreement as Schedule A.
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2.3.2 Significance of Inclusion. Inclusion of a Patent claim on the Excluded Claims List will constitute a binding determination that such Patent claim is an Excluded Claim, unless and until such Patent claim ceases to meet the Excluded Claim Criteria because of changed circumstances (such as, for example, the subsequent emergence or awareness of a practical use of an embodiment of such Patent claim in a commercial setting other than for an Excluded Lithography Technology).
2.3.3 Significance of Non-Inclusion. For purposes of clarification:
(a) the Excluded Claims List will be deemed exemplary and will not constitute an exhaustive list of the Excluded Claims for any Excluded Lithography Technology nor will the failure to nominate a Patent claim for the list be deemed an admission that the claim is not an Excluded Claim; and
(b) a Patent claim that does not appear on the Excluded Claims List will be an Excluded Claim if (and for so long as) it qualifies as an Excluded Claim pursuant to Sections 1.2.15 and 1.2.16, whether or not such Patent claim was in existence at the time of the creation of the Excluded Claims List.
2.3.4 Process for Removing Claims from Excluded Claims List. If a Party believes that a Patent claim, whether of such Party or of the other Party, that is included in the Excluded Claims List has ceased to meet the Excluded Claim Criteria because of changed circumstances as described in Section 2.3.2, such Party shall notify the other Party in writing of such belief and, subject to existing confidentiality obligations, the basis therefor. If the other Party agrees in writing that such Patent claim should no longer be included within the Excluded Patent Claims List, such Patent claim shall be deemed to be removed from the Excluded Claims List for all purposes hereunder. If the other Party does not so agree within thirty (30) days after its receipt of such notice, the Parties shall, at the request of either Party, resolve the matter under the Arbitration Agreement.
2.4 Inquiries as to Patents. In the event that a third party Sues a Party or its Subsidiary and alleges or asserts that such Party has infringed, or invites such Party to license, any one or more issued Patents of such third party, or if a Party is otherwise actively engaged in licensing negotiations with a third party with respect to any one or more issued Patents (each a “PATENT IN DISPUTE”), such Party may request that the other Party confirm whether each such Patent in Dispute is included within the Licensed Patents (whether as an Owned Patent, a Sublicensable Patent or a Licensable Co-Owned Patent) of such other Party hereunder (a “LICENSE INQUIRY”). License Inquiries shall be in writing and shall set forth the identity of the applicable third party and each Patent in Dispute. With respect to each License Inquiry, the responding Party will inform the inquiring Party (a) if the Patent in Dispute is a Licensed Patent of such responding Party, and (b) if so, the scope of the rights thereunder, if any, to grant and extend the licenses, immunities, and additional commitments granted and extended hereunder. If, after responding to any License Inquiry, the responding Party becomes aware of any inaccuracy in the response to a License Inquiry provided to the other Party, the responding Party will, as its sole obligation or liability for any such failure, promptly notify the other Party and provide a corrected response.
2.5 Conversion of Class B Patents To Class A Patents.
2.5.1 At any time from the Effective Date until six (6) months after the end of the Agreement Term, each Party shall have the right to designate up to five (5) Convertible Patents of the other Party to be converted into Class A Patents, in which case such designated Convertible Patents, together with all Patents anywhere in the world that issue from or claim priority to either the application that issued as the designated Convertible Patent or any application or applications from which the
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designated Convertible Patent claims priority, including all counterparts (including foreign counterpart Patents), divisionals, continuations, continuations-in-part, reissues and results of re-examinations thereof (“RELATED PATENTS”), shall be deemed Class A Patents effective as of and retroactive to the Effective Application Date of such Convertible Patent (or, if earlier, the earliest Effective Application Date among the Related Patents thereof) for all purposes of this Agreement (including the respective licenses and immunities). For the avoidance of doubt, such retroactive effect shall also apply with respect to Related Patents that issue after such conversion.
2.5.2 Notwithstanding the period described in the first clause of Section 2.5.1, in the event a Party designates a Convertible Patent of the other Party to be converted into a Class A Patent (the “INITIALLY DESIGNATED PATENT”) and the other Party is of the opinion that such Initially Designated Patent would, in whole or in part, not be a Licensed Patent of such other Party if it were a Class A Patent (e.g., because such Patent is not Owned or Sublicensable or to the extent it includes Excluded Claims), then such other Party shall promptly notify such first Party thereof. If the Parties agree that such Initially Designated Patent would not be a Licensed Patent of such other Party if it were a Class A Patent, then such first Party shall have the right, within six (6) months of such agreement, to designate another Convertible Patent (the “SUBSEQUENTLY DESIGNATED PATENT”) to be converted into a Class A Patent in lieu of such Initially Designated Patent as to which Subsequently Designated Patent the Parties agree that it would be a Licensed Patent of such other Party if it were a Class A Patent. If the Parties do not so agree with respect to the Initially Designated Patent or the Subsequently Designated Patent, they shall resolve such dispute pursuant to the Arbitration Agreement. If it is determined in such arbitration that such Initially Designated Patent or Subsequently Designated Patent would not be a Licensed Patent of such other Party if it were a Class A Patent, then such first Party shall provide in such arbitration proceedings a list, in order of preference, of Convertible Patents to be converted into a Class A Patent in lieu of such Initially Designated Patent or Subsequently Designated Patent and the first of such Patents, if any, with respect to which it is determined in such arbitration proceedings that it would be a Licensed Patent of the other Party if it were a Class A Patent shall be finally converted into a Class A Patent pursuant to Section 2.5.1 in lieu of such Initially Designated Patent or Subsequently Designated Patent. If no Convertible Patent on such list is determined to meet such requirements, such Party may not convert any Convertible Patent into a Class A Patent in lieu of such Initially Designated Patent or Subsequently Designated Patent.
2.6 Pre-Issuance Damages. To the extent, if any, that under applicable law a Party has or its Subsidiaries have a right to claim damages or seek other remedies with respect to activities of the other Party, its Subsidiaries, or its or their respective Covered Entities or third party suppliers making Licensed Products for such other Party as permitted under Sections 2.1 or 2.2, as applicable, occurring prior to the issuance of a Patent with respect to such Patent, each Party hereby waives and agrees not to assert such rights under Patents issuing after the License Term and having an Effective Application Date after December 31, 2002 and that would have been Licensed Patents of such Party had they issued prior to the end of the License Term, but only with respect to activities occurring prior to the end of the License Term that would have been licensed or immune from suit under this Agreement if such Patent were a Licensed Patent, and only for the period ending upon the end of the License Term.
2.7 Restricted Patents.
2.7.1 Covenant Not to ▇▇▇.
(a) Each Party covenants, to the extent not precluded by contractual obligations that exist as of the Effective Date, that it shall not, and shall cause its Subsidiaries not to, and shall not grant consent to, or otherwise assist, encourage, or permit, any Co-Owner of any Restricted Patent to ▇▇▇ the other Party or its Subsidiaries, or their respective third party suppliers making Licensed Products or
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Optical Components (but, in the case of ASML being such other Party, only as long as ASML has a sublicense from Zeiss SMT under the Nikon-Zeiss Patent Cross-License Agreement, unless Optical Components are ASML Licensed Products following a Licensed Product Expansion) for such Party as permitted under Sections 2.1 or 2.2, as applicable, for direct or indirect infringement (including for inducement of infringement or contributory infringement) of any Restricted Patent (excluding any Excluded Claims thereof) based on activities that would be covered by such Party’s license under Sections 2.1 or 2.2 or sublicense pursuant to and in accordance with the Nikon-Zeiss Patent Cross-License Agreement, as and if applicable, if such Restricted Patent were a Licensed Patent of such covenanting Party. Such covenant shall last perpetually (i) with respect to Class A Patents, and (ii) under Restricted Patents that are Class B Patents and Restricted Patents that would be Class C Patents if they were Owned by the covenanting Party, with respect to activities of the other Party occurring prior to the end of the License Term that would be covered by the other Party’s license under Sections 2.1, 2.2, or 2.3, as applicable, if such Restricted Patents were Licensed Patents of the covenanting Party.
(b) Each Party covenants, to the extent not precluded by contractual obligations that exist as of the Effective Date, that Sections 3.1, 3.2, 3.3, 4.2, and 4.3 shall apply to Restricted Patents to the same extent and in the same manner and the same time periods as if such Restricted Patents were Owned by such covenanting Party.
2.7.2 Consent to License. Subject to Section 2.7.3, each Party hereby grants its consent to a license to the other Party of the full scope of the licenses granted to such other Party under this Agreement under any Restricted Patent of such Party, provided, however, that such grant does not result in any payment obligations by such first Party to any Co-Owner of such Restricted Patent, other than payments relating to prosecution or maintenance of Patents.
2.7.3 No Obligation to Seek Consent. Notwithstanding anything to the contrary in this Agreement, neither Party shall have any obligation to seek or obtain consent from any Co-Owner of any Restricted Patent with respect to a grant of any license or immunity under such Restricted Patent.
2.7.4 No Circumvention. Neither Party nor its respective Subsidiaries shall make any sale, assignment, transfer, or other conveyance or transaction (i) with respect to any Lithography Patent that is a Licensed Patent Owned by such Party that would result in such Licensed Patent becoming a Restricted Patent, and (ii), solely during the Transition Period, with respect to any Lithography Patent that is a Class B Patent or a Class C Patent Owned by such Party that would result in such Lithography Patent becoming a Restricted Patent during the Transition Period.
2.8 Excluded Nikon Patents.
2.8.1 Designation. Nikon shall be entitled to designate, from time to time and at any time, in a writing provided to ASML and Zeiss SMT, issued Eligible Nikon Patent Family Members to be included in the Excluded Nikon Patents, provided that (a) the total number of Excluded Nikon Patents shall not exceed, at any time, the total number of issued Schedule D Patent Family Members, and (b) the number of Excluded Nikon Patents issued in any one country shall not exceed, at any time, the number of Schedule D Patent Family Members issued in the same country, provided that, for purposes of the foregoing, the European Community and all of its member states shall collectively be deemed to constitute “one country.” Nikon shall be entitled to designate issued Eligible Nikon Patent Family Members to be included within the Excluded Nikon Patents in accordance with the foregoing, but Nikon shall not be entitled to subsequently change any such designation. For purposes of clarity, (i) no Eligible Nikon Patent Family Member shall be deemed to be an Excluded Nikon Patent unless and until such Patent is designated by Nikon as an Excluded Nikon Patent pursuant to and in accordance with this
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Section 2.8.1, and (ii) Nikon may pre-designate a Patent pursuant to the foregoing at any time, including, for example, Patent applications, provided that a Patent application shall not constitute an Excluded Nikon Patent unless and until a Patent or Patents issue from such application, at which time each such pre-designated issued Patent shall, as designated or, if not otherwise designated, in the order of issuance, and subject to the limitations set forth in subclauses (a) and (b) of this Section 2.8.1, constitute an Excluded Nikon Patent.
2.8.2 No License. Subject to Section 2.8.3, nothing in this Agreement, nor the activities of the Parties under or in connection with this Agreement, including, without limitation, the sale of any Licensed Product, shall be construed to grant or otherwise convey or provide any right, license, immunity, or other defense, whether directly, by implication, estoppel, or otherwise, under any Excluded Nikon Patents to ASML or its Subsidiaries or any third party acquiring Licensed Products or other products from ASML or its Subsidiaries.
2.8.3 Schedule D Patents.
(a) When and if, and as long as, at least all claims other than Schedule D Omitted Claims of all Patents within any one Schedule D Patent Family either (a) become Owned or Sublicensable by ASML or its Subsidiaries, such that they are included within the ASML Licensed Patents, and/or (b) expire or are invalidated or abandoned, such that they are permanently not enforceable, then Nikon or ASML (as determined pursuant to Section 2.8.3(b) below) shall select one Eligible Nikon Patent Family (including all Eligible Nikon Patent Family Members therein), excluding any Excluded Claims of any such Patents, which (i) shall be deemed to be included within the Nikon Licensed Patents, retroactive to the Effective Application Date of such Patents, for all purposes hereunder (including the licenses, immunities and additional commitments granted or extended hereunder), and (ii) shall not be deemed to be, or designable as, Excluded Nikon Patents as long as at least all claims other than Schedule D Omitted Claims of all Patents within the corresponding Schedule D Patent and Schedule D Patent Family Members thereof remain (A) Owned or Sublicensable by ASML or its Subsidiaries or (B) subject to all the licenses, immunities, and additional commitments granted and extended by ASML and its Subsidiaries hereunder.
(b) On the first occasion that the condition set forth in Section 2.8.3(a) above occurs with respect to any one Schedule D Patent Family, Nikon shall be entitled to select, and shall select, the first Eligible Nikon Patent Family to be included in the Nikon Licensed Patents as set forth in Section 2.8.3(a). On the occasion that the condition set forth in Section 2.8.3(a) above occurs with respect to a second Schedule D Patent Family, ASML shall be entitled to select, and shall select, the second Eligible Nikon Patent Family to be included in the Nikon Licensed Patents as set forth in Section 2.8.3(a). Each Party shall make the selection described in this Section 2.8.3(b) in a writing provided to the other Party and Zeiss SMT no later than thirty (30) days following ASML’s notification to Nikon and Zeiss SMT that the condition set forth in Section 2.8.3(a) has occurred. On the occasion that the condition set forth in Section 2.8.3(a) occurs with respect to the remaining Schedule D Patent Family, the remaining Eligible Nikon Patent Family shall automatically be included in the Nikon Licensed Patents as set forth in Section 2.8.3(a).
(c) During the life of the Eligible Nikon Patent Family Members, except while such Patents are included in the Nikon Licensed Patents as provided under this Section 2.8.3, in which case Section 9.3 shall apply, Nikon shall, and shall ensure that its Subsidiaries shall, maintain all rights under each of the Eligible Nikon Patent Family Members necessary in order to grant to ASML and its Subsidiaries the full scope of the licenses and immunities granted under Nikon Licensed Patents hereunder should such Eligible Nikon Patent Family Members be included in the Nikon Licensed Patents.
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2.8.4 Consequences of Assertion. If Nikon or any of its Subsidiaries Sues ASML, Zeiss SMT, their respective Subsidiaries, or any of their respective vendors or Covered Entities, for direct or indirect infringement (including inducement of infringement or contributory infringement) of any Excluded Nikon Patent based on any activity that would be covered by a license or immunity under this Agreement if such Excluded Nikon Patent were included within the Nikon Licensed Patents, then ASML shall have the right to terminate (a) at any time after the end of the Withdrawal Period (as defined below), if applicable, or (b) if no Withdrawal Period is applicable, at any time thereafter, all of the licenses, immunities, and other commitments granted and extended by ASML and its Subsidiaries to Nikon and its Subsidiaries and their respective Covered Entities, vendors, and Glass Suppliers under this Agreement (a “FULL RIGHTS TERMINATION”) upon written notice to Nikon, provided, however, that ASML shall have no right to initiate or effect such Full Rights Termination (i) in the cases expressly set forth in Section 2.8.5, or (ii) if Nikon or its Subsidiary notifies ASML in writing of the existence of such Suit and together with such notice provides to ASML copies of the initial court filing made by Nikon or its Subsidiary in connection with such Suit within thirty (30) days of the filing of any legal action, and Nikon or its Subsidiary takes, within two (2) months after Nikon’s or its Subsidiary’s receipt of a written response by ASML to such notice stating ASML’s good faith belief that such Suit is within the scope of this Section 2.8.4 and the reasons therefor (the “WITHDRAWAL PERIOD”), all actions required on its part to withdraw such Suit completely. Such Full Rights Termination shall have no effect on the licenses, immunities and other commitments granted or extended to ASML, its Subsidiaries, Covered Entities, vendors and Glass Suppliers by Nikon and its Subsidiaries as set forth in this Agreement.
2.8.5 Defensive Assertion.
(a) No Termination for Nikon Defensive Suits. In the event that the Specified Entity or any of its Affiliates Sues Nikon or any of its Subsidiaries under any Schedule D Patent Family Member (a “SPECIFIED ENTITY SUIT”), then, subject to this Section 2.8.5, Nikon and its Subsidiaries shall be permitted to ▇▇▇ the Specified Entity or such Affiliate (a “NIKON DEFENSIVE SUIT”). The Nikon Defensive Suit shall be under an aggregate number of Excluded Nikon Patents that does not exceed the aggregate number of issued Schedule D Patent Family Members that are asserted by the Specified Entity and its Affiliates in the Specified Entity Suit. Section 2.8.4 shall not apply with respect to such Nikon Defensive Suit, and ASML shall have no right to initiate or effect a Full Rights Termination on account of such Nikon Defensive Suit.
(b) Excess Assertion By Nikon. If Nikon asserts against the Specified Entity and/or its Affiliates in a Nikon Defensive Suit an aggregate number of Excluded Nikon Patents greater than the aggregate number of issued Schedule D Patent Family Members asserted by the Specified Entity and/or its Affiliates against Nikon and/or its Subsidiaries in such action (an “EXCESS ASSERTION”), then, if Nikon and/or its Subsidiaries fail to take all actions required on their part to withdraw their claims completely under such number of Excluded Nikon Patents as is required to eliminate the Excess Assertion within thirty (30) days from such Excess Assertion, ASML may, at its sole discretion upon written notice to Nikon and Zeiss SMT, designate any of the Excluded Nikon Patents asserted in such Nikon Defensive Suit as Nikon Licensed Patents, up to a number of Excluded Nikon Patents as required to eliminate the Excess Assertion, and any Excluded Nikon Patents that are so designated shall be deemed ab initio to be Nikon Licensed Patents for all purposes of this Agreement, including for purposes of the immunities and other commitments granted or extended by Nikon and its Subsidiaries under Sections 2.9, 3, and 4. In no event shall ASML be entitled to initiate or effect a Full Rights Termination on account of any Excess Assertion.
(c) Specified Entity Assertion of Schedule D Omitted Claims. The Parties acknowledge that, because Schedule D Patent Family Members do not include Schedule D Omitted Claims, a Suit by the Specified Entity or its Affiliates in which only Schedule D Omitted Claims are
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asserted does not constitute a Specified Entity Suit hereunder, and does not give rise to Nikon’s or its Subsidiaries’ right to bring a Nikon Defensive Suit pursuant to Section 2.8.5(a). The Parties further acknowledge that it may be difficult to determine whether a Patent claim asserted in a Suit by the Specified Entity and/or its Affiliates is a Schedule D Omitted Claim. Accordingly, if the Specified Entity and/or its Affiliates assert any claim of any Schedule D Patent and/or any Patent claiming priority from a Schedule D Patent and/or any Patent from which a Schedule D Patent claims priority against Nikon and/or its Subsidiaries (a “SCHEDULE D SUIT”), and Nikon and/or its Subsidiaries subsequently ▇▇▇ the Specified Entity and/or its Affiliates under Excluded Nikon Patents (a “SCHEDULE D RESPONSE”), such Schedule D Response by Nikon and/or its Subsidiaries shall not be grounds for a Full Rights Termination pursuant to Section 2.8.4. Instead, (A) if a Party believes that the Schedule D Suit is partly or solely based on Schedule D Omitted Claims, such Party shall notify the other Party of such belief, and if the Parties disagree as to whether such Schedule D Suit is partly or solely based on Schedule D Omitted Claims, the Parties shall resolve such dispute under the Arbitration Agreement including, if applicable, which of the Patent claims asserted in such Schedule D Suit are Schedule D Omitted Claims, and (B) if it is determined in such arbitration procedure that all or some of the Patent claims asserted in the Schedule D Suit are Schedule D Omitted Claims, the consequences shall be as set forth in the following subclauses (i) and (ii) of this Section 2.8.5.
(d) If (A) it is determined in such arbitration that all Patent claims asserted by the Specified Entity or its Affiliates in such Schedule D Suit against Nikon or its Subsidiaries are Schedule D Omitted Claims, and (B) Nikon and its Subsidiaries fail to withdraw completely all Suits which assert any Excluded Nikon Patents against the Specified Entity and/or its Affiliates within thirty (30) days after such determination, then all Nikon Excluded Patents asserted by Nikon and/or its Subsidiaries in such Suit shall be deemed ab initio to be Nikon Licensed Patents for all purposes of this Agreement, including for purposes of the licenses granted to ASML and its Subsidiaries under Section 2.1 and the immunities and other commitments granted or extended by Nikon and its Subsidiaries under Sections 2.9, 3, and 4. In no event shall ASML be entitled to initiate or effect a Full Rights Termination on account of any such Suit and/or failure to withdraw.
(ii) If it is determined in such arbitration procedure that some but not all Patent claims asserted by the Specified Entity and/or its Affiliates in the Specified Entity Action are Schedule D Omitted Claims, then Section 2.8.5(a) or 2.8.5(b), as applicable, shall apply, it being understood that, if the Specified Entity and/or its Affiliates asserted any claim of a Schedule D Patent Family Member other than a claim that has been determined in an arbitration procedure pursuant to this Section 2.8.5(c), or agreed by the Parties in writing, to be a Schedule D Omitted Claim, such Schedule D Patent Family Member shall be counted as a Schedule D Patent Family Member asserted by the Specified Entity and/or its Affiliates for purposes of determining the number of Nikon Excluded Patents that may be asserted in any Nikon Defensive Suit in accordance with Section 2.8.5(a).
2.9 Transition Period Covenants and Limitation of Remedies.
2.9.1 Covenant Not To ▇▇▇ During Transition Period. Each Party covenants that, during the Transition Period, it shall not, and shall cause its Subsidiaries not to (such Party and its Subsidiaries being referred to as the “NON-ASSERTING PARTY”), ▇▇▇ the other Party or its Subsidiaries, or their respective third party suppliers making Licensed Products or Optical Components (but, in the case of ASML being such other Party, only as long as ASML has a sublicense from Zeiss SMT under the Nikon-Zeiss Patent Cross-License Agreement, unless Optical Components are ASML Licensed Products following a Licensed Product Expansion) for such Party as permitted under Sections 2.1 or 2.2, as applicable (as applicable, the “DEFENDANT PARTY”), for direct or indirect infringement (including for inducement of infringement or contributory infringement) of any (i) Class B Patents that were Licensed Patents of the Non-Asserting Party prior to the end of the License Term, (ii) Class C
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Patents Owned or Sublicensable by the Non-Asserting Party, or (iii), to the extent not precluded by contractual obligations that exist as of the Effective Date, Restricted Patents of the Non-Asserting Party, excluding, in each case, any Excluded Claims thereof and, in each case, based on (a) the Defendant Party’s activities that would be covered by the Defendant Party’s license under Sections 2.1 or 2.2, as applicable, or sublicense pursuant to and in accordance with the Nikon-Zeiss Patent Cross-License Agreement, if such Class B Patents, Class C Patents, or Restricted Patents were Licensed Patents (collectively “LITHOGRAPHY ACTIVITIES”), but solely with respect to Lithography Activities that occur during the Transition Period, or (b) activities of Covered Entities of the Defendant Party to the extent such activities are within the scope of the immunities granted by the Non-Asserting Party under this Agreement.
2.9.2 Limitation of Remedies As To Transition Period. Nothing in Section 2.7 or in this Section 2.9 shall constitute any restriction or limitation on the Non-Asserting Party’s right and ability (a) to ▇▇▇ the Defendant Party at any time after the Transition Period, or (b) to seek, after the Transition Period, any remedies with respect to any activities occurring during the Transition Period (including, without limitation, Lithography Activities), provided, however, that with respect to Lithography Activities occurring during the Transition Period, and only to the extent such Lithography Activities occur during the Transition Period, such remedies shall be limited to damages in the form of a reasonable royalty not to exceed three percent (3%) of the Net Selling Price of the applicable Licensed Products or Optical Components.
2.9.3 No Other Rights. Nothing in this Section 2.9 shall be construed to grant or otherwise convey or provide any right or license under any Patents, whether directly, by implication, estoppel, or otherwise. Nothing in this Section 2.9, nor the Parties’ or their Subsidiaries’ conduct pursuant hereto, shall give rise to any defense, claim, or counterclaim, including based on laches or equitable estoppel, based on the failure of a Party or its Subsidiaries to bring Suit or otherwise assert a claim during the Transition Period where such Party or its Subsidiaries could not have brought such Suit or assert such claim in accordance with this Section 2.9, and the Defendant Party hereby expressly waives any such defense, claim, or counterclaim.
2.10 Licensed Product Expansion. If Zeiss SMT or any third party files for Zeiss SMT’s insolvency and such insolvency proceedings are opened by a court of competent jurisdiction or are not opened for lack of assets (Nichteroffnung des Insolvenzverfahrens ▇▇▇▇▇▇▇ ▇▇▇▇▇), or if Zeiss SMT is the subject of a bankruptcy or is dissolved, liquidated or ceases to do business in the ordinary course and, as a consequence of any of the foregoing, ASML loses (and does not retain through a successor to Zeiss SMT or its rights, by operation of law, or otherwise) any rights under Nikon Licensed Patents that were sublicensed to ASML from Zeiss SMT pursuant to the Nikon-Zeiss Patent Cross-License Agreement, then the term “ASML Licensed Products” shall automatically be deemed to mean “Lithography Equipment and all applications therefor, including Optical Components” for all purposes hereunder, including the license grants in Section 2.1 and the immunities and other commitments extended by Nikon and its Subsidiaries under this Agreement (the “LICENSED PRODUCT EXPANSION”); provided, however, that (i) as a condition of such modification to the term “ASML Licensed Products”, ASML shall assume responsibility to pay any of the Zeiss SMT Payments that Zeiss SMT has not paid to Nikon at the time of such modification, which amount(s) ASML shall pay within thirty (30) days following the later of the due date therefor or Nikon’s notice to ASML thereof, and (ii) the scope of ASML’s rights under this Agreement with respect to Optical Components shall not exceed the scope of a permissible sublicense to ASML under the Nikon-Zeiss Patent-Cross License Agreement, as it exists as of the Effective Date, as described therein.
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3. CERTAIN IMMUNITIES
3.1 Immunity for ASML Products.
3.1.1 The rights granted to ASML and its Subsidiaries in Section 2.1 shall include immunity as set forth in this Section 3.1 under the Nikon Licensed Patents and the Class C Patents Owned or Sublicensable by Nikon or its Subsidiaries for the Covered Entities of ASML and its Subsidiaries for such Covered Entities’ use, importation, offer for sale, sale, lease, and other distribution or conveyance of ASML Licensed Products or Optical Components (but only as long as ASML has a sublicense from Zeiss SMT under the Nikon-Zeiss Patent Cross-License Agreement, unless Optical Components are ASML Licensed Products following a Licensed Product Expansion) made, had made, sold, offered for sale, leased, imported or otherwise conveyed by or for ASML or its Subsidiaries pursuant to the license granted in Section 2.1. Such immunity means that Nikon shall not, and shall cause its Subsidiaries not to, ▇▇▇ any Covered Entity of ASML or its Subsidiaries for direct or indirect infringement (including for inducement of infringement or contributory infringement) based on such Covered Entities’ use, importation, offer for sale, sale, lease, and other distribution or conveyance of such ASML Licensed Product or Optical Components (but only as long as ASML has a sublicense from Zeiss SMT under the Nikon-Zeiss Patent Cross-License Agreement, unless Optical Components are ASML Licensed Products following a Licensed Product Expansion) (a) at any time under any Class A Patents that are Nikon Licensed Patents, regardless of when such ASML Licensed Product or such Optical Component was first sold, leased, or otherwise distributed or conveyed by ASML or its Subsidiaries, (b) at any time under Class B Patents that are at any time Nikon Licensed Patents, with respect to ASML Licensed Products or such Optical Components that were first sold, leased, or otherwise distributed or conveyed by ASML or its Subsidiaries prior to or during the License Term or the Transition Period, and (c) at any time under Class C Patents enforceable by Nikon or its Subsidiaries, with respect to ASML Licensed Products or such Optical Components that were first sold, leased, or otherwise distributed or conveyed by ASML or its Subsidiaries prior to or during the License Term or the Transition Period.
3.1.2 Notwithstanding anything to the contrary in this Agreement, the immunity described in subclauses (b) and (c) of Section 3.1.1 is expressly conditioned upon the applicable Covered Entity not Suing Nikon or any of its Subsidiaries for Patent infringement with respect to Lithography Equipment or any activities relating thereto (including the manufacture, use, sale, offer for sale, or import of Lithography Equipment and any other activities described in Section 2.2 hereof), and upon any such Suit such immunity shall retroactively be null and void and of no effect with respect to such Covered Entity, and Nikon and its Subsidiaries shall be entitled to seek any remedies against such Covered Entity available under applicable Law, including with respect to past activities, but only if Nikon has notified ASML of the existence of such Suit and the Covered Entity has not taken all actions required on its part to withdraw such Suit completely within two (2) months after such notification. No Suit by Nikon or its Subsidiaries against such Covered Entity prior to any such withdrawal shall constitute a breach of this Section 3.1 by Nikon or its Subsidiaries as long as Nikon or its Subsidiaries take all actions required on their part to withdraw such Suit completely within two (2) months after the Covered Entity has taken all actions required on its part to withdraw its Suit completely.
3.2 Immunity for Nikon Products.
3.2.1 The rights granted to Nikon and its Subsidiaries in Section 2.2 shall include immunity as set forth herein under the ASML Licensed Patents and the Class C Patents Owned or Sublicensable by ASML or its Subsidiaries for the Covered Entities of Nikon and its Subsidiaries for such Covered Entities’ use, importation, offer for sale, sale, lease, and other distribution or conveyance of Nikon Licensed Products made, had made, sold, offered for sale, leased, imported or otherwise conveyed by or for Nikon or its Subsidiaries pursuant to the license granted in Section 2.2. Such immunity means
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that ASML shall not, and shall cause its Subsidiaries not to, ▇▇▇ any Covered Entity of Nikon or its Subsidiaries for direct or indirect infringement (including for inducement of infringement or contributory infringement) based on such Covered Entities’ use, importation, offer for sale, sale, lease, and other distribution or conveyance of such Nikon Licensed Product (a) at any time under any Class A Patents that are ASML Licensed Patents, regardless of when such Nikon Licensed Product was first sold, leased, or otherwise distributed or conveyed by Nikon or its Subsidiaries, (b) at any time under Class B Patents that are at any time ASML Licensed Patents with respect to Nikon Licensed Products that were first sold, leased, or otherwise distributed or conveyed by Nikon or its Subsidiaries prior to or during the License Term or the Transition Period, and (c) at any time under Class C Patents enforceable by ASML or its Subsidiaries, with respect to Nikon Licensed Products that were first sold, leased, or otherwise distributed or conveyed by Nikon or its Subsidiaries prior to or during the License Term or the Transition Period.
3.2.2 Notwithstanding anything to the contrary in this Agreement, the immunity described in subclauses (b) and (c) of Section 3.2.1 is expressly conditioned upon the applicable Covered Entity not Suing ASML or any of its Subsidiaries for Patent infringement with respect to Lithography Equipment or any activities relating thereto (including the manufacture, use, sale, offer for sale, or import of Lithography Equipment and any other activities described in Section 2.1 hereof), and upon any such Suit such immunity shall retroactively be null and void and of no effect with respect to such Covered Entity, and ASML, and its Subsidiaries shall be entitled to seek any remedies available against such Covered Entity under applicable Law, including with respect to past activities, but only if ASML has notified Nikon of the existence of such Suit and the Covered Entity has not taken all actions required on its part to withdraw such Suit completely within two (2) months after such notification. No Suit by ASML or its Subsidiaries against such Covered Entity prior to any such withdrawal shall constitute a breach of this Section 3.2 by ASML or its Subsidiaries as long as ASML or its Subsidiaries take all actions required on their part to withdraw such Suit completely within two (2) months after the Covered Entity has taken all actions required on its part to withdraw its Suit completely.
3.3 Excluded Glass Products Claims.
3.3.1 Neither Party will ▇▇▇ the other Party or its Subsidiaries, or any of its or their respective Covered Entities, for direct or indirect infringement (including for inducement of infringement or contributory infringement) based on such Party’s or its Subsidiaries’, or any of their respective Covered Entities’ use, importation, offer for sale, sale, lease, and other distribution or conveyance of Licensed Products of the other Party or any Optical Components (but, if ASML is such other Party, only as long as ASML has a sublicense from Zeiss SMT under Section 2.2 of the Nikon-Zeiss Patent Cross-License Agreement, unless Optical Components are ASML Licensed Products following a Licensed Product Expansion) sold as, installed in, or as replacement or upgrade components for, such Licensed Products, (i) at any time under any Excluded Claims described in Section 1.2.15(c) that would have constituted Class A Patents and Licensed Patents of such first Party but for the application of Section 1.2.15(c), regardless of when such Licensed Products or such Optical Components were first sold, leased, or otherwise distributed or conveyed by the other Party or its Subsidiaries, (ii) with respect to Licensed Products or such Optical Components that were first sold, leased, or otherwise distributed or conveyed by the other Party or its Subsidiaries prior to or during the License Term or the Transition Period, at any time under any Excluded Claims described in Section 1.2.15(c) that would have constituted Class B Patents and Licensed Patents of such first Party but for the application of Section 1.2.15(c), and (iii) with respect to Licensed Products or such Optical Components that were first sold, leased, or otherwise distributed or conveyed by the other Party or its Subsidiaries prior to or during the License Term or the Transition Period, at any time under any claims of Patents having an Effective Application Date after December 31, 2002 and issuing during the Transition Period that are Excluded Claims described in Section 1.2.15(c) and that would have constituted Licensed Patents of such Party but for the application of Section 1.2.15(c) had such Patents issued during the License Term (the claims described in
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(ii) and (iii) of the foregoing being “TRANSITION PERIOD CLAIMS”). For the avoidance of doubt, the foregoing sentence shall not apply to Glass Suppliers of the other Party or its Subsidiaries. 3.3.2 Notwithstanding anything to the contrary in this Agreement, the immunity pursuant to Section 3.3.1 under Transition Period Claims is expressly conditioned upon the applicable Covered Entity not Suing the applicable Party or any of its Subsidiaries for Patent infringement, and upon any such Suit such immunity shall retroactively be null and void and of no effect with respect to such Covered Entity and the applicable Party and its Subsidiaries shall be entitled to seek any remedies available, including with respect to past activities, but only if such Party has notified the other Party of the existence of such Suit and the Covered Entity has not taken all actions required on its part to withdraw such Suit completely within two (2) months after such notification. No Suit by such Party or its Subsidiaries of such Covered Entity prior to any such withdrawal shall constitute a breach of this Section 3.3 by such Party or its Subsidiaries as long as such Party or its Subsidiaries take all actions required on their part to withdraw such Suit completely within two (2) months after the Covered Entity has taken all actions required on its part to withdraw its Suit completely.
4. ADDITIONAL COMMITMENTS
4.1 Opposition Proceedings. Neither Party (“OPPOSING PARTY”) nor its Subsidiaries will present arguments, or request, encourage or assist any designee, agent, or nominee or other strawman to present arguments, in any opposition proceedings (which, for clarity, include reexaminations but do not include interference proceedings) (i) directed against any claim of any Class A Patent of the other Party or any of its Subsidiaries, to the extent that such claim only covers subject matter that falls within the definition of the Licensed Products of the Opposing Party, or (ii) to the extent that the other Party covenants to the Opposing Party, in a form binding on the other Party and its Subsidiaries and assigns, that it will never contend against the Opposing Party or its Subsidiaries or their respective vendors, direct and indirect resellers, distributors, users and other customers that such claim covers subject matter that falls outside the definition of the Licensed Products of the Opposing Party. Each Party shall have the right, but not the obligation, at any time to provide the other Party with written notice identifying Subsidiaries of such Party. If an Opposing Party presents arguments, or requests, encourages or assists any designee, agent, or nominee or other strawman to present arguments, in any opposition proceeding against a Subsidiary of the other Party that does not do business under a name including the name of the other Party and has not previously been identified in writing to the Opposing Party, or that the Opposing Party does not actually know to be a Subsidiary of the other Party, then such presentation, request, encouragement or assistance shall not be deemed to be a breach of this Section 4.1, provided that, upon receipt of written notice from the other Party of such Subsidiary relationship, such Opposing Party shall promptly withdraw from such opposition proceeding.
4.2 Glass Product Suppliers
4.2.1 No Injunction. Subject to Section 4.2.4, a Party and its Subsidiaries (collectively the “ASSERTING PARTY”) will not seek or obtain an injunction, restraint or other form of prohibitive order enjoining the supply of Excluded Glass Products to the other Party or its Subsidiaries on the basis that such Excluded Glass Products infringe, directly or indirectly, the Patents of the Asserting Party. Subject to Section 4.2.4, the foregoing covenant and the provisions of Section 4.2.2 shall last (i) perpetually under Class A Patents of the Asserting Party, and (ii) until the end of the Agreement Term under Class B Patents of the Asserting Party and under any patents that would have constituted Class C Patents of the Asserting Party but for the application of Section 1.2.15(c) (each such period, as applicable, the “GLASS RESTRICTION PERIOD”).
4.2.2 Payment of Glass Excess Payment.
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(a) If, during the applicable Glass Restriction Period the Asserting Party asserts or seeks to assert any applicable Patents against a third party with respect to the supply of Excluded Glass Products by such third party (a “GLASS SUPPLIER”) to the other Party (the “PURCHASING PARTY”), then, with regard to all Covered Excluded Glass Products, the Asserting Party shall pay any Glass Excess Payment to the Purchasing Party as set forth in Section 4.2.3.
(b) For purposes of this Section 4.2:
(i) “COVERED EXCLUDED GLASS PRODUCTS” means Excluded Glass Products that are (A) covered by a license under the Asserting Party’s Patents, or (B) the subject of a damages award for infringement of the Asserting Party’s Patents.
(ii) “GLASS EXCESS PAYMENT” means the portion of Attributable Glass Proceeds, if any, that exceeds an amount equal to [***] percent ([***]%) of the Purchasing Party’s Glass Product Expenses in any calendar year. By way of example, if the Attributable Glass Proceeds in any calendar year are $[***] and the Glass Product Expenses for such calendar year are $[***], then the Glass Excess Payment payable by the Asserting Party to the other Party in respect of such calendar year shall be such portion of $[***] that exceeds [***]% of $[***] ($[***]), i.e., $[***] in total. In no event shall the Purchasing Party be required to pay any amount to the Asserting Party under this Section 4.2, even if in any calendar year the Attributable Glass Proceeds are less than [***] percent ([***]%) of the Purchasing Party’s Glass Product Expenses.
(iii) “GLASS PRODUCT EXPENSES” means the aggregate amount paid by the Purchasing Party and its Subsidiaries to the Glass Supplier for Covered Excluded Glass Products purchased by the Purchasing Party from the Glass Supplier in the applicable calendar year.
(iv) “ATTRIBUTABLE GLASS PROCEEDS” means the sum of the following received with respect to any one calendar year: (A) Running Royalty Payments based on sales of Covered Excluded Glass Products to the Purchasing Party in such calendar year, (B) Allocable Amortized Lump-Sum Payments allocable to such calendar year, and (C) Allocable Damages that are attributable to sales of Covered Excluded Glass Products to the Purchasing Party in such calendar year.
(v) “RUNNING ROYALTY PAYMENTS” means running royalty payments made by the Glass Supplier to the Asserting Party under an applicable license agreement the amounts of which are based on sales by the Glass Supplier of Covered Excluded Glass Products in any calendar year. “Running Royalty Payments” excludes any other payments, such as, for example, up-front license fees, annual license fees, or other lump sum payments or payments other than variable payments based on sales of Covered Excluded Glass Products.
(vi) “LUMP-SUM PAYMENTS” means up-front or lump-sum license fees paid by the Glass Supplier to the Asserting Party (e.g., annual license fees, but excluding, in any event, Running Royalty Payments) in consideration of, and to the extent reasonably attributable to, the grant of license rights by the Asserting Party to the Glass Supplier, under the Asserting Party’s Patents covering Covered Excluded Glass Products, to make and sell Covered Excluded Glass Products. For the avoidance of doubt,
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if, under the applicable license agreement, the Asserting Party grants any rights, or provides any consideration, other than only the right to manufacture and sell Covered Excluded Glass Products, only such portion of any up-front or recurring lump-sum license fees shall be taken into account, for purposes of calculating Lump-Sum Payments, that is reasonably attributable to the grant of the right to manufacture and sell Covered Excluded Glass Products (but not any portion of such license fees that is reasonably attributable to other rights granted, or other consideration provided, to the Glass Supplier under such license agreement).
(vii) “ALLOCABLE DAMAGES” means the positive difference, if any, between (A) such portion, if any, of damages finally assessed against the Glass Supplier, and paid (including by way of setoff) to the Asserting Party, for infringement of the Asserting Party’s Patents based on the Glass Supplier’s sale of Covered Excluded Glass Products that is attributable to sales of Covered Excluded Glass Products by the Glass Supplier to the Purchasing Party; the ratio of such portion to the total damages finally assessed against the Glass Supplier, and paid (including by way of setoff) to the Asserting Party, for infringement of the Asserting Party’s Patents based on the Glass Supplier’s sale of Covered Excluded Glass Products being referred to as the “FRACTION”, minus (B) the Fraction multiplied by the amount of damages, if any, finally assessed against the Asserting Party in the same lawsuit, cause, or action, or in a lawsuit pending at the same time, and paid (including by way of setoff) to the Glass Supplier, for infringement of the Glass Supplier’s Patents based on the Asserting Party’s sales of Excluded Glass Products.
(viii) “AMORTIZED LUMP-SUM PAYMENTS” means the applicable portion of Lump-Sum Payments when such Lump-Sum Payments are amortized on a straight line basis over the applicable Amortization Period.
(ix) “AMORTIZATION PERIOD” means, (A) with respect to up-front license fees, the shorter of (I) a period of six (6) years from the payment date of such up-front license fee, or (II) the initial term of the applicable license agreement, and (B) with respect to any recurring lump-sum license fees, the applicable period for which such recurring lump-sum license fee is made under the applicable license agreement (e.g., one year in case of an annual license fee).
(c) “ALLOCABLE AMORTIZED LUMP-SUM PAYMENTS” means such portion of the Amortized Lump-Sum Payment, if any, that is attributable to sales of Covered Excluded Glass Products by the Glass Supplier to the Purchasing Party in the applicable calendar year.
(d) For purposes of clarification, nothing in this Section 4.2 or any other provision of this Agreement shall constitute, or shall be deemed to constitute, a restriction on the amount of any payments that may be sought by or payable to the Asserting Party or any of its Subsidiaries from a Glass Supplier, whether on account of Excluded Glass Products supplied to the Purchasing Party or otherwise.
4.2.3 Payments and Records. The payments, if any, owed to the Purchasing Party pursuant to Section 4.2.2 by the Asserting Party shall be made annually within ninety (90) days following the last day of each calendar year of the Agreement Term. The Parties agree to keep full and accurate books and records setting forth in reasonable detail the Attributable Glass Proceeds, the Glass Product Expenses, and the calculation of the Glass Excess Payment. The Purchasing Party shall report its Glass Product Expenses, if any, to the Asserting Party no later than thirty (30) days following the last day
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of each calendar year of the Agreement Term. In the event that the Asserting Party receives in any one calendar year (the “CURRENT YEAR”) any Attributable Glass Proceeds based on sales in, or otherwise attributable or allocable to, any previous calendar year(s) ( “PREVIOUS YEAR(S)”), the Asserting Party will notify the Purchasing Party thereof within thirty (30) days following the last day of such Current Year and the Purchasing Party may then, unless previously reported, report its Glass Product Expenses for such Previous Year(s) to the Asserting Party within ninety (90) days following the last day of such Current Year. The Asserting Party will then calculate or recalculate the Glass Excess Payment, if any, for such Previous Year(s) and submit its report relating thereto within one hundred twenty (120) days following the last day of the Current Year, together with the payment of any Glass Excess Payment owed and not previously paid for such Previous Year(s).
4.2.4 Defensive Actions. The provisions of Sections 4.2.1 through 4.2.3 will be suspended, and during such suspension shall cease to bind the Asserting Party with respect to (but only with respect to) any Glass Supplier or any of its Subsidiaries if such Glass Supplier or any of its Subsidiaries seeks an injunction, restraint or other form of prohibitive order from any Government Authority against the Asserting Party on the basis that the Asserting Party or any of its products or services allegedly infringes, directly or indirectly, the Patents of such Glass Supplier (“GLASS PROCEEDINGS”) prior to any Suit by the Asserting Party against such Glass Supplier. Such suspension shall last as long as such Glass Proceedings are not Finally Resolved. Upon Final Resolution of such Glass Proceedings, the provisions of Sections 4.2.1 through 4.2.3 shall (i) be again effective from and after such Final Resolution, if such Glass Proceedings are Finally Resolved by either an amicable settlement between the Asserting Party and the Glass Supplier or a withdrawal of all such Glass Proceedings by the Glass Supplier, and (ii) terminate and permanently cease to bind the Asserting Party with respect to such Glass Supplier in all other cases. Upon termination or during any suspension of the provisions of Sections 4.2.1 through 4.2.3 the Asserting Party shall be entitled to seek any remedies available, including with respect to past activities.
4.3 Special Mask Technology
4.3.1 Definitions. For purposes of this Section 4.3:
(a) “EXCLUDED SPECIAL MASK CLAIM” means an Excluded Claim that is described in Section 1.2.14(d);
(b) “CLASS A EXCLUDED SPECIAL MASK CLAIM” means an Excluded Special Mask Claim that would have been included in a Class A Patent within the Licensed Patents of a Party or its Subsidiaries (collectively, the “LICENSOR PARTY”) but for the application of Section 1.2.14(d).
(c) “CLASS B EXCLUDED SPECIAL MASK CLAIM” means an Excluded Special Mask Claim that would have been included in a Class B Patent within the Licensed Patents of a Licensor Party but for the application of Section 1.2.14(d).
(d) “CLASS C EXCLUDED SPECIAL MASK CLAIM” means an Excluded Special Mask Claim that is included in a Patent Owned or Sublicensable by a Licensor Party having an Effective Application Date after December 31, 2002 and issuing during the Transition Period.
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4.3.2 Limited Party Immunity. The Licensor Party will not ▇▇▇ the other Party or its Subsidiaries (collectively, the “OTHER PARTY”) at any time, during or after the Agreement Term:
(a) for direct or indirect infringement (including contributory infringement and inducement to infringe) of any Class A Excluded Special Mask Claim based on (i) activities of the Other Party occurring at any time before, during or after the Agreement Term that would be covered by the Other Party’s license under Sections 2.1 or 2.2, as applicable, if such Class A Excluded Special Mask Claim were a licensed claim within a Licensed Patent, or (ii) a Covered Entity’s use, import, repair, offer for sale, sale, lease, and other distribution or conveyance at any time before, during or after the Agreement Term of Licensed Products or Optical Components (but, if ASML is such Other Party, only as long as ASML has a sublicense from Zeiss SMT under the Nikon-Zeiss Patent Cross-License Agreement, unless Optical Components are ASML Licensed Products following a Licensed Product Expansion) that were first sold, leased, or otherwise distributed or conveyed by the Other Party at any time before, during or after the Agreement Term and the sale, lease, or other distribution or conveyance of which by the Other Party would be covered by the Other Party’s or its Subsidiaries’ license under Sections 2.1 or 2.2, as applicable, if such Class A Excluded Special Mask Claim were a licensed claim within a Licensed Patent.
(b) for direct or indirect infringement (including contributory infringement and inducement to infringe) of any Class B Excluded Special Mask Claim or Class C Excluded Special Mask Claim based on either (i) any activities of the Other Party occurring at any time during (but not after) the Agreement Term that would be covered by the Other Party’s license under Sections 2.1 or 2.2, as applicable, if such Class B Excluded Special Mask Claim or Class C Excluded Special Mask Claim, as applicable, were a licensed claim within a Licensed Patent, or (ii) a Covered Entity’s use, import, repair, offer for sale, sale, lease, and other distribution or conveyance at any time before, during or after the Agreement Term of Licensed Products or Optical Components that were first sold, leased, or otherwise distributed or conveyed by the Other Party at any time before or during (but not after) the Agreement Term and the sale, lease, or other distribution or conveyance of which by the Other Party or its Subsidiaries would be covered by the Other Party’s or its Subsidiaries’ license under Sections 2.1 or 2.2, as applicable, if such Class B Excluded Special Mask Claim or Class C Excluded Special Mask Claim were a licensed claim within a Licensed Patent.
4.3.3 Limited Covered Entity Immunity. Subject to Section 4.3.4, the Licensor Party will not ▇▇▇ any Covered Entity of the Other Party:
(a) at any time during or after the Agreement Term, for direct or indirect infringement (including contributory infringement and inducement to infringe) of any Class A Excluded Special Mask Claim based on such Covered Entity’s use, import, repair, offer for sale, sale, lease, and other distribution or conveyance at any time before, during or after the Agreement Term of Licensed Products or Optical Components (but, if ASML is such Other Party, only as long as ASML has a sublicense from Zeiss SMT under the Nikon-Zeiss Patent Cross-License Agreement, unless Optical Components are ASML Licensed Products following a Licensed Product Expansion) that were first sold, leased, or otherwise distributed or conveyed by the Other Party at any time before, during or after the Agreement Term and the sale, lease, or other distribution or conveyance of which by the Other Party or its Subsidiaries would be covered by the Other Party’s or its Subsidiaries’ license under Sections 2.1 or 2.2, as applicable, if such Class A Excluded Special Mask Claim were a licensed claim within a Licensed Patent;
(b) at any time, during or after the Agreement Term, for direct or indirect infringement (including contributory infringement and inducement to infringe) of any Class B Excluded Special Mask Claim or Class C Excluded Special Mask Claim based on such Covered Entity’s use, import, repair, offer for sale, sale, lease, and other distribution or conveyance at any time before, during or after the Agreement Term of Licensed Products or Optical Components (but, if ASML is such Other Party, only as long as ASML has a sublicense from Zeiss SMT under the Nikon-Zeiss Patent Cross-License Agreement, unless Optical Components are ASML Licensed Products following a Licensed
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Product Expansion) that were first sold, leased, or otherwise distributed or conveyed by the Other Party or its Subsidiaries at any time before or during (but not after) the License Term and the sale, lease, or other distribution or conveyance of which by the Other Party or its Subsidiaries would be covered by the Other Party’s or its Subsidiaries’ license under Sections 2.1 or 2.2, as applicable, if such Class B Excluded Special Mask Claim or Class C Excluded Special Mask Claim were a licensed claim within a Licensed Patent; and
(c) during the Transition Period, for direct or indirect infringement (including contributory infringement and inducement to infringe) of any Class B Excluded Special Mask Claim or Class C Excluded Special Mask Claim based on such Covered Entity’s use, import, repair, offer for sale, sale, lease, and other distribution or conveyance at any time prior to the end of the Transition Period of Licensed Products or Optical Components (but, if ASML is such Other Party, only as long as ASML has a sublicense from Zeiss SMT under the Nikon-Zeiss Patent Cross-License Agreement, unless Optical Components are ASML Licensed Products following a Licensed Product Expansion) that were first sold, leased, or otherwise distributed or conveyed by the Other Party at any time prior to or during (but not after) the Transition Period and the sale, lease, or other distribution or conveyance of which by the Other Party or its Subsidiaries would be covered by the Other Party’s or its Subsidiaries’ license under Sections 2.1 or 2.2, as applicable, if such Class B Excluded Special Mask Claim or Class C Excluded Special Mask Claim were a licensed claim within a Licensed Patent.
4.3.4 Limitation of Certain Remedies Against Covered Entities as to Transition Period. Nothing in this Agreement (including, without limitation, Section 4.3.3(c) above) shall constitute any restriction or limitation on the Licensor Party’s right and ability to ▇▇▇, after the end of the Transition Period, any Covered Entity of the Other Party for direct or indirect infringement (including contributory infringement and inducement to infringe) of any Class B Excluded Special Mask Claim or Class C Excluded Special Mask Claim based on such Covered Entity’s use, import, repair, offer for sale, sale, lease, and other distribution or conveyance at any time prior to the end of the Transition Period of Licensed Products or Optical Components that were first sold, leased, or otherwise distributed or conveyed by the Other Party at any time after the end of the License Term; provided, however, that with respect to Licensed Products or Optical Components (but, if ASML is such Other Party, only as long as ASML has a sublicense from Zeiss SMT under the Nikon-Zeiss Patent Cross-License Agreement, unless Optical Components are ASML Licensed Products following a Licensed Product Expansion) that were first sold, leased, or otherwise distributed or conveyed by the Other Party during the Transition Period, the Licensor Party’s remedies in any such action against any Covered Entity of such Other Party shall be limited to damages in the form of a reasonable royalty not to exceed three percent (3%) of the Net Selling Price of all applicable Licensed Products.
4.3.5 Defensive Actions. Notwithstanding anything to the contrary in this Agreement, the immunity described in Section 4.3.3 and the application of Section 4.3.4 are expressly conditioned upon the applicable Covered Entity not Suing the Licensor Party for Patent infringement, and upon any such Suit such immunity shall retroactively be null and void and of no effect with respect to such Covered Entity, and the Licensor Party shall be entitled to seek any remedies available against such Covered Entity under applicable Law, including with respect to past activities, but only if the Licensor Party has notified the Other Party of the existence of such Suit and the Covered Entity has not taken all actions required on its part to withdraw such Suit completely within two (2) months after such notification. No Suit by the Licensor Party against such Covered Entity prior to any such withdrawal shall constitute a breach of this Section by the Licensor Party as long as the Licensor Party takes all actions required on its part to withdraw such Suit completely within two (2) months after the Covered Entity has taken all actions required on its part to withdraw its Suit completely.
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5. PAYMENTS
5.1 Payments. ASML or ASML Netherlands B.V. (provided that ASML Netherlands B.V. can make such payments only for so long as it remains a Dutch corporation) shall pay to Nikon the aggregate sum of Eighty-Seven Million U.S. Dollars (US$ 87,000,000), to be payable in the following installments (“PAYMENTS”):
(a) Sixty Million U.S. Dollars (US$ 60,000,000) on the Effective Date, receipt of which amount on November 16, 2004 is hereby acknowledged by Nikon;
(b) Nine Million U.S. Dollars (US$ 9,000,000) on the first anniversary of the Effective Date;
(c) Nine Million U.S. Dollars (US$ 9,000,000) on the second anniversary of the Effective Date; and
(d) Nine Million U.S. Dollars (US$ 9,000,000) on the third anniversary of the Effective Date.
5.2 Taxes. All Payments shall be paid such that, after deduction or withholding of any taxes or other amounts due on such Payments (not including income taxes owed by Nikon) (collectively, “WITHHOLDINGS”), Nikon receives the entire amounts of such Payments as if no Withholdings had been required.
5.3 Late Payments. For purposes of clarification, ASML shall owe no interest on any Payments set forth in Section 5.1.
5.4 Other Payment Provisions. All amounts payable by ASML to Nikon shall be paid by wire transfer of U.S. Dollars in immediately available funds to the account of “Nikon Corporation,” account number [***], Bank of Tokyo-Mitsubishi Ltd., Head Office, ▇▇▇▇▇▇▇▇▇▇ ▇-▇-▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇ (SWIFT Code ▇▇▇▇▇▇▇▇), or such other financial institution and account number as Nikon may designate in writing to ASML, such notice to be received by ASML no later than two (2) months prior to the applicable date on which payment is due. Each Party shall be responsible for the proper allocation of payments made under this Agreement in its own tax filings and financial statements.
5.5 Audit. The Parties agree to keep full and accurate books and records setting forth in reasonable detail the payments payable to the other Party hereunder, or Glass Product Expenses to be recorded hereunder, and the calculation thereof. Each Party (the “AUDITING PARTY”) shall have the right to appoint an internationally recognized accounting firm (but not the Auditing Party’s accounting firm) reasonably acceptable to the other Party (the “INDEPENDENT AUDITOR”) to audit the financial books and records that the other Party (the “AUDITED PARTY”) is expressly required to keep under this Agreement with respect to payments owed to the Auditing Party, or Glass Product Expenses to be recorded, under this Agreement (the “RELEVANT BOOKS AND RECORDS”). The Audited Party may require the Independent Auditor, prior to any such audit, to agree to reasonable confidentiality restrictions and the Independent Auditor shall (i) treat as confidential information of the Audited Party all information obtained in connection with such audit and (ii) not disclose the same to the Auditing Party or others, except that the Independent Auditor may disclose to the Auditing Party only whether the audit revealed an underpayment, or an inaccuracy with respect to Glass Product Expenses, and the amount of such underpayment or inaccuracy, if any. An audit shall be permitted only upon at least thirty (30) days’ prior written notice to the Audited Party, and in no event more than once during any calendar year (unless an audit in any calendar year revealed an underpayment, in which case the Auditing Party may conduct one (1) additional audit in such calendar year). The Independent Auditor shall conduct the audit during normal business hours solely as necessary to confirm the accuracy of the Relevant Books and Records. The Independent Auditor may not be paid on a contingency fee basis and shall provide its report simultaneously to both Parties. The Auditing Party shall be solely liable for all costs and expenses accrued in connection with such audit. In the event the audit reveals an underpayment or inaccuracy,
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prompt adjustment of all unpaid amounts owed under this Agreement shall be made by the Audited Party, provided that nothing contained herein is intended to waive or limit the Audited Party’s right to contest the accuracy of any finding of the Independent Auditor.
6. WARRANTIES AND DISCLAIMERS
6.1 Authority. Each Party represents and warrants to the other Party that (a) it has all requisite corporate power and authority to execute and deliver this Agreement and to carry out the provisions of this Agreement, and (b) the execution, delivery and performance by such Party of this Agreement have been approved by all requisite action on the part of such Party, and no other corporate proceeding on the part of such Party is necessary to authorize this Agreement.
6.2 No Conflicts. Each Party represents and warrants to the other Party that (a) it has the right, and will continue during the Agreement Term to have the right, to grant to the other Party and its Subsidiaries the licenses, rights and immunities granted hereunder in accordance with the terms of this Agreement, and (b) such grant of licenses, rights and immunities and such Party’s execution, delivery and performance of this Agreement do not, and will not during the Agreement Term, conflict with, violate or result in any breach of any provision of any license, agreement, contract, understanding, arrangement, commitment or undertaking of any nature (whether written, oral or otherwise) to which such Party is a party.
6.3 No Encumbrances With Respect To Owned Licensed Patents.
6.3.1 ASML Representations. ASML hereby represents and warrants to Nikon that, (a) except as set forth in Schedule B-1, no Lithography Patent that is either solely assigned to and/or owned (use of the non-defined term being intentional) by, or Co-Owned by, ASML or its Subsidiaries as of the Effective Date (but excluding any Excluded Claims thereof) is subject to any lien, encumbrance or other restriction (including any contractual restriction such as an exclusive license) that would prevent or prohibit ASML or its Subsidiaries from granting to Nikon the full scope of the rights granted under Section 2.2 (excluding rights that employees may have in inventions that they develop while employed by ASML or its Subsidiaries, such as, for example, the right to receive monetary compensation or assert preemptive rights), and (b) except as set forth in Schedule B-2, since January 1, 1996, neither ASML nor its Subsidiaries have assigned any issued Patents to a third party, except for assignments that were the result of Patent maintenance decisions in the ordinary course of ASML’s or its Subsidiaries’ business, which Patents would, if Owned by ASML or its Subsidiaries as of the Effective Date, constitute a Lithography Patent included within the ASML Licensed Patents.
6.3.2 Nikon Representations. Nikon hereby represents and warrants to ASML that, (a) except as set forth in Schedule C-1, no Lithography Patent that is either solely assigned to and/or owned (use of the non-defined term being intentional) by, or Co-Owned by, Nikon or its Subsidiaries as of the Effective Date (but excluding any Excluded Claims thereof) is subject to any lien, encumbrance or other restriction (including any contractual restriction such as an exclusive license) that would prevent or prohibit Nikon or its Subsidiaries from granting to ASML the full scope of the rights granted under Section 2.1 (excluding rights that employees may have in inventions that they develop while employed by Nikon or its Subsidiaries, such as, for example, the right to receive monetary compensation or assert preemptive rights), and (b) except as set forth in Schedule C-2, since January 1, 1996, neither Nikon nor its Subsidiaries have assigned any issued Patents to a third party, except for assignments that were the result of Patent maintenance decisions in the ordinary course of Nikon’s or its Subsidiaries’ business, which Patents would, if Owned by Nikon or its Subsidiaries as of the Effective Date, constitute a Lithography Patent included within the Nikon Licensed Patents.
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6.4 No Transfers or Encumbrances in Anticipation of Litigation or Execution. Each Party hereby represents to the other, as of the Effective Date, that it has not transferred or assigned any ownership interest in any Patents to any third party, or encumbered any Patents in a manner that would prevent or prohibit such Party or its Subsidiaries from granting to the other Party and its Subsidiaries the full scope of the rights granted hereunder, in anticipation of Patent litigation with the other Party or in anticipation of the execution of this Agreement.
6.5 Inadvertent Omissions. In the event that a Party discovers after the Effective Date an inadvertent, good faith omission from its Schedule B or Schedule C, as applicable, such Party shall have the right to update the applicable Schedule hereunder, provided that such omission does not result in any material disadvantage to the other Party.
6.6 No Circumvention. No Circumvention. Each Party agrees that, during the License Term, neither it nor its Subsidiaries shall initiate any corporate reorganization, merger, spinoff or restructuring that has the foreseeable effect that Lithography Patents having an Effective Application Date after the Effective Date, that would be Licensed Patents of such Party absent such reorganization, merger, spinoff or restructuring, would be Owned by a Related Company of such Party that is not a Subsidiary of such Party, unless, at the sole election of the first Party, (a) such Related Company is obligated to grant or extend to the other Party the licenses, immunities, and other commitments that are set forth in this Agreement, or (b) such first Party retains sufficient rights or is granted sufficient sublicensable rights by such Related Company to grant or extend to the other Party the licenses, immunities, and other commitments that are set forth in this Agreement. For purposes of this Section 6.6, “RELATED COMPANY” means, with respect to any Person, any other Person that possesses or is under common possession with such first Person, but only for such time as such possession exists. For this purpose, “possession” of a Person (and the correlative “possesses”) means beneficial ownership, directly or indirectly, of securities representing more than fifty percent (50%) of the power to elect such other Person’s board of directors or other managing authority or, in the case of non-corporate Person, equivalent interests.
6.7 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES (AND EACH PARTY HEREBY EXPRESSLY DISCLAIMS), WITH RESPECT TO THIS AGREEMENT, ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT, AND ANY WARRANTIES THAT MAY ARISE FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE.
7. LIMITATION OF LIABILITY
TO THE EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY UNDER ANY LEGAL THEORY FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, OR ANY DAMAGES FOR LOSS OF PROFITS, REVENUE OR BUSINESS, ARISING OUT OF ANY BREACH OF THIS AGREEMENT BY SUCH PARTY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY FINES, PENALTIES, OR LEVIES ASSESSED AGAINST THE OTHER PARTY BY ANY GOVERNMENTAL AUTHORITY.
8. TERM AND TERMINATION
8.1 Term of Agreement. This Agreement will be effective as of the Effective Date, and except as expressly set forth in Section 8.2, will continue in full force and effect until the end of the
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Agreement Term, after which it will expire, subject to Sections 8.2.1 and 8.5. Except as expressly set forth in Section 8.2, neither Party shall have the right, during the Agreement Term, to terminate this Agreement, any of its obligations hereunder, or any of the rights, licenses, immunities, or additional commitments granted or extended by such Party hereunder.
8.2 Expiration/Termination of Licenses.
8.2.1 Expiration of License Term. Except as otherwise set forth in Sections 2.8.4 and 8.2.2 of this Agreement, and notwithstanding any breach of this Agreement other than non-payment and failure to cure such non-payment as set forth in Section 8.2.2, (a) the licenses and rights granted in Sections 2.1 and 2.2 to each Party and its Subsidiaries under the other Party’s Class B Patents shall terminate on the expiration of the License Term, (b) the rights and licenses granted in Sections 2.1 and 2.2 to each Party and its Subsidiaries under each of the other Party’s Class A Patents shall continue until the expiration of such Class A Patent, notwithstanding the expiration of the License Term or Agreement Term, and (c) the immunities and additional commitments under Sections 2.7, 2.9, 3 and 4 shall continue as provided in those Sections, respectively.
8.2.2 Non-Payment By Zeiss SMT or ASML. If ASML fails to pay to Nikon any of the payment installments set forth in Section 5.1 on the due dates thereof or if Zeiss SMT fails to pay to Nikon any of the outstanding payments described in Section 5.1 of the Nikon-Zeiss Patent Cross-License Agreement (in the form in which such agreement exists as of the Effective Date) by the due dates thereof (the “ZEISS SMT PAYMENTS”), then Nikon shall provide written notice of such non-payment to both ASML and Zeiss SMT. If neither ASML nor Zeiss SMT pays all delinquent amounts identified in such notice to Nikon within thirty (30) days after Nikon’s written notice of such non-payment, then Nikon shall have the right to terminate the rights, licenses, immunities, and additional commitments granted to ASML and its Subsidiaries and their respective Covered Entities, vendors and Glass Suppliers in Sections 2, 3, and 4. For purposes of clarification, no termination of such rights, licenses, immunities, and additional commitments shall terminate or otherwise affect the rights, licenses, immunities, and additional commitments granted to Nikon and its Subsidiaries, and their respective Covered Entities, vendors, and Glass Suppliers in Sections 2, 3, and 4. Notwithstanding anything to the contrary in this Section 8.2.2, once all payments set forth in Section 5.1 and all Zeiss SMT Payments have been paid to Nikon in full (regardless of whether such payments are made by Zeiss SMT or ASML), Nikon shall have no right to terminate the rights, licenses and immunities granted by Nikon and its Subsidiaries to ASML and its Subsidiaries hereunder.
8.3 Change of Control of Subsidiaries. If a Subsidiary of a Party ceases to be a Subsidiary of such Party (“CHANGE OF STATUS”), (a) the licenses, rights, immunities, and additional commitments granted to such Subsidiary and Covered Entities, vendors, or Glass Suppliers of such Subsidiaries under Sections 2, 3, and 4 shall immediately terminate upon the consummation of such Change of Status, without limiting the immunity, as provided in Sections 2.7, 3.1, 3.2, 3.3, and 4.3, as applicable, of the relevant Covered Entities to which such Covered Entities were entitled as of the date of such termination, and (b) the licenses, rights and immunities granted in this Agreement under the Licensed Patents of such Subsidiaries will remain in effect, in accordance with the terms and conditions of this Agreement, with respect to such of those Licensed Patents that have an Effective Application Date prior to the consummation of such Change of Status, but not with regard to any Patents that have an Effective Application Date after the consummation of such Change of Status.
8.4 Continuing Liability. The expiration of this Agreement shall not release either Party from any liability, obligation or agreement which has already accrued under this Agreement at the time of such expiration. The expiration of this Agreement shall not constitute a waiver or release of, or otherwise be deemed to prejudice or adversely affect, any rights, remedies or claims, whether for damages or otherwise, which a Party may have hereunder, at law or otherwise.
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8.5 Survival. The provisions of Sections 1, 2.1 (only with respect to Class A Patents that are Licensed Patents as provided in Section 8.2.1), 2.2 (only with respect to Class A Patents that are Licensed Patents as provided in Section 8.2.1), 2.4 (only with respect to Class A Patents), 2.5 (for the periods set forth therein), 2.6, 2.7 (as set forth therein), 2.8, 2.9.2, 2.9.3, 3.1 (only as set forth therein), 3.2 (only as set forth therein), 3.3 (only as set forth therein), 4.1, 4.2 (only as set forth therein), 4.3 (only as set forth therein), 5 (as applicable), 6.7, 7, 8.2, 8.3, 8.4, 8.5, 9, and 10, and any other sections of this Agreement to the extent expressly provided herein, shall survive, to the extent applicable, the expiration of this Agreement.
9. ASSIGNMENT
9.1 Sale of Lithography Business. Either Party may assign this Agreement, together with all of its rights and obligations hereunder as well as all of the rights sublicensed to ASML and its Subsidiaries (and the other benefits extended) pursuant to Section 2.2 of the Nikon-Zeiss Patent Cross-License Agreement, to any Person that acquires all of such Party’s rights in the Lithography Patents included within the Licensed Patents of such Party and all or substantially all of the other assets of the business of manufacturing and selling Licensed Products of the assigning Party or its Subsidiary, as applicable, provided, however, that the assigning Party shall remain liable for the performance of all of its obligations under this Agreement.
9.2 No Other Assignment. Except as permitted under Section 9.1, neither Party may assign, delegate, or otherwise transfer any of its rights or obligations under this Agreement to any other Person without the prior written consent of the other Party. Any purported or attempted assignment, delegation or other transfer of any rights or obligations under this Agreement in contravention of the foregoing sentence shall be null and void.
9.3 Transfer of Patents. In the event of any sale, assignment, transfer, exclusive license, or other conveyance of any ownership interest in a Party’s Licensed Patents (“TRANSFER”), such Party shall (i) ensure that the purchaser, assignee, transferee, or exclusive licensee (“TRANSFEREE”) shall be bound by all applicable licenses, immunities, covenants, and restrictions contained in this Agreement, (ii) require that such Transferee agree in writing prior to any such Transfer to be bound by all licenses, immunities, covenants, and other restrictions hereunder, and (iii) ensure that such Transfer does not affect such Party’s right and ability to perform all of its obligations under this Agreement. In no event shall such Party be relieved or excused from any of its obligations under this Agreement as a result of such Transfer. Notwithstanding anything to the contrary contained in Section 10.12, each Party shall have the right to file this Agreement, and ASML shall have the right to file any sublicense agreement with Zeiss SMT (including, to the extent attached thereto, the Nikon-Zeiss SMT Patent Cross-License Agreement) or any summary or translation hereof or thereof with any patent office or other Governmental Authority in order to notify potential Transferees of the existence and terms of this Agreement or such sublicense as it relates to any Licensed Patents proposed to be Transferred, provided that prior to any such filing the other Party shall be given an opportunity to propose reasonable redactions to be made to the filed version of this Agreement or such sublicense and the Parties shall cooperate with respect to agreeing on such redactions. Each Party shall provide all reasonable cooperation requested by the filing Party, at the filing Party’s expense, including, without limitation, the execution, delivery and filing of any applicable instruments, notifications, forms, affidavits and the like.
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9.4 Successors and Assigns. Subject to the other provisions of this Section 9, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns.
10. MISCELLANEOUS
10.1 Limitation. Nothing contained in this Agreement shall be construed as:
10.1.1 a warranty or representation by either Party as to the validity, enforceability or scope of any Patents; or
10.1.2 conferring upon any Person any license, right or immunities under any Patents except the licenses, rights and immunities expressly granted hereunder; or
10.1.3 a warranty or representation that any acts licensed hereunder will be free from infringement or other violation of Patents, copyrights, mask work rights, trade secrets or other intellectual property rights, other than infringement of those Licensed Patents under which licenses, rights and immunities have been expressly granted hereunder; or
10.1.4 an obligation of either Party or its Subsidiaries to file or maintain any patent application, secure any Patent or maintain any Patent in force; or
10.1.5 an arrangement to ▇▇▇ third parties for infringement of any Patent or other intellectual property right or conferring any right to ▇▇▇ third parties for infringement of any Patent or other intellectual property right.
10.2 Relationship of the Parties. In the exercise of their respective rights, and the performance of their respective obligations hereunder, the Parties are and will remain independent contractors. Nothing in this Agreement will be construed to constitute the Parties as partners, or principal and agent for any purpose whatsoever. Neither Party will bind, or attempt to bind, the other Party to any contract or other obligation, and neither Party will represent to any third party that it is authorized to act on behalf of the other Party.
10.3 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York, United States of America (without application of any choice or conflicts of laws rules or principles that would require the application of the laws of any other jurisdiction).
10.4 Dispute Resolution. The Parties hereby agree that any controversy, claim or dispute arising out of or relating to this Agreement or the breach hereof shall be resolved in accordance with the terms and conditions of the Arbitration Agreement. Except as permitted under the Arbitration Agreement, the Parties hereby give up and waive any rights they might have to have such disputes decided in a court or jury trial.
10.5 Language. This Agreement is in the English language only, which language shall be controlling in all respects, and all versions hereof in any other language shall be for accommodation only and shall not be binding upon the Parties. All communications and notices to be made or given pursuant to this Agreement shall be in the English language.
10.6 Entire Agreement; Amendment; Waiver. This Agreement (including the Schedules hereto), the Arbitration Agreement, the Patent Cooperation Agreement between Nikon and
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ASML of even date herewith, and the Nikon-ASML Settlement and Release Agreement (together the “TRANSACTION AGREEMENTS”) constitute the full and entire understanding and agreement between Nikon and ASML with regard to the subject matter hereof, and supersede any communications, representations, understandings and agreements (including the MOU), either oral or written, between Nikon and ASML prior to, but not on, the date hereof, with respect to such subject matter. This Agreement may not be altered or amended except by a written instrument signed by authorized legal representatives of both Parties. Any waiver of the provisions of this Agreement or of a Party’s rights or remedies under this Agreement must be in writing to be effective. Failure, neglect or delay by a Party to enforce the provisions of this Agreement or its rights or remedies at any time will not be construed and will not be deemed to be a waiver of such Party’s rights under this Agreement and will not in any way affect the validity of the whole or any part of this Agreement or prejudice such Party’s right to take subsequent action. No single or partial exercise of any right, power or privilege granted under this Agreement shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as expressly set forth in this Agreement, the rights and remedies provided in this Agreement are cumulative and are not exclusive of any rights or remedies provided by law or in any other agreement between the Parties.
10.7 Notices and Other Communications. All notices required or permitted under this Agreement shall refer to this Agreement and will be deemed given: (a) when delivered personally; (b) when sent by confirmed facsimile; or (c) three (3) business days after deposit with an internationally recognized commercial overnight carrier specifying next-day delivery, with written verification of receipt. All such notices, requests, demands and other communications shall be addressed as follows:
If to Nikon:
Nikon Corporation
▇-▇, ▇▇▇▇▇-▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇▇▇▇-▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇
Attn: General Manager, Intellectual Property Department
Fax: ▇▇▇-▇-▇▇▇▇-▇▇▇▇
With a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: ▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
If to ASML:
ASML Holding N.V.
De Run 6501
5504 DR Veldhoven
The Netherlands
Attn: General Counsel
Fax: ▇▇▇ (▇▇) ▇▇▇-▇▇▇▇
With a copy to (which shall not constitute notice):
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Fax: ▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
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or to such other address or facsimile number as a Party may have specified to the other Party in writing delivered in accordance with this Section 10.7. 10.8 Expenses. Except as otherwise expressly set forth in this Agreement, each Party will bear its own costs and expenses, including fees and expenses of legal counsel and other representatives used or hired in connection with the transactions described in this Agreement.
10.8 Severability. If any provision in this Agreement is found or held to be invalid or unenforceable, then the meaning of such provision will be construed, to the extent feasible, so as to render the provision enforceable and still achieve the Parties’ intent in entering into this Agreement, and if no feasible interpretation would save such provision, it will be severed from the remainder of this Agreement, which will remain in full force and effect. In such event, the Parties and Zeiss SMT will use all reasonable efforts to negotiate, in good faith, a substitute, valid and enforceable provision or agreement which most nearly effects the Parties’ intent in entering into this Agreement.
10.9 Construction. This Agreement shall be deemed to have been drafted by both Parties and, in the event of a dispute, neither Party shall be entitled to claim that any provision should be construed against the other Party by reason of the fact that it was drafted by the other Party.
10.10 Execution. This Agreement may be executed in counterparts, each of which so executed will be deemed to be an original and such counterparts together will constitute one and the same agreement. Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile signature of a Party shall constitute a valid and binding execution and delivery of this Agreement by such Party.
10.11 Confidentiality of Terms. Neither Party shall (and shall ensure that none of its agents, representatives or attorneys shall) disclose the terms of this Agreement to any third parties, except that either Party may disclose the existence of this Agreement to third parties, and may disclose the terms of this Agreement (a) to the extent reasonably necessary, in confidence, to its legal counsel and accountants, (b) to Governmental Authorities as required by any applicable Law or the applicable rules or regulations of any securities exchange on which any of such Party’s securities are listed (in either case, as determined by such Party upon advice of counsel), provided that prior to any such required disclosure, the disclosing Party gives the non-disclosing Party reasonable advance notice of such disclosure, minimizes the scope of such disclosure (including by making redactions to documents provided as part of such disclosure and by cooperating with the non-disclosing Party to obtain protective orders) to the extent permitted under applicable Law, and otherwise coordinates with the non-disclosing Party with respect to the scope of such disclosure, (c) in connection with the enforcement of this Agreement or any other Transaction Agreement, or (d) as permitted under Section 9.3. Notwithstanding the foregoing, neither Party will be prohibited from disclosing, in their entirety, the terms of any of Sections 2.8, 3.1, 3.2, 3.3, 4.2 or 4.3, and the obligations of the Parties under this Section 10.12 shall not apply to any terms of this Agreement that have been disclosed by either Party as permitted by subclauses (a)-(d) above.
10.12 Publicity. No Party shall (and shall ensure that none of its agents, representatives or attorneys shall) originate any publicity, news release, or other public announcement, written or oral, relating to this Agreement without the prior written approval of each other Party except as otherwise required by Law. Such approval shall not be unreasonably withheld. Notwithstanding the foregoing, nothing in this Section 10.13 shall prevent or prohibit, or be construed to require approval by any Party for, (a) any disclosure of information or matters relating to this Agreement to a Party’s customers, resellers, or suppliers in the ordinary course of business where, with respect to information that constitutes confidential information of another Party under one or more of the Transaction Agreements,
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*** - indicates material omitted pursuant to a confidential treatment request and filed separately with the Securities and Exchange Commission.
such disclosure is subject to the terms of a non-disclosure agreement in customary form, or (b) any publicity, news release or other public announcement of information that (i) is or becomes available to the general public other than in violation of Section 10.12 or obligations of confidentiality under any other Transaction Agreement, or (ii) otherwise does not constitute confidential information of another Party under the Transaction Agreements.
10.13 Section 365(n). Each Party, as licensor, acknowledges and agrees that the licenses, immunities and rights granted under this Agreement to the other Party and its Subsidiaries by such licensor are licenses, immunities and rights as to “intellectual property” within the definition of Section 101(35A) of the United States Bankruptcy Code (the “CODE”). The Parties hereto further agree that, in the event of the commencement of a bankruptcy proceeding by or against the licensor Party under the Code, the licensee Party and its Subsidiaries shall be entitled, at such licensee Party’s option, to retain all their licenses, immunities and rights under this Agreement, including without limitation the licenses and immunities granted under Sections 2.1 and 2.2, respectively, pursuant to Code Section 365(n). To the extent that United States law is held by a court of competent jurisdiction not to apply with respect to a non-US bankruptcy proceeding of a Party, each Party shall take all actions that are reasonably necessary to effectuate the intent of the foregoing provisions in the country in which it and each Subsidiary holding any rights with respect to its Licensed Patents is incorporated or conducts its business, subject to any mandatory provisions of applicable law. Without limiting the generality of the foregoing, Nikon agrees to take all reasonable measures necessary to ensure the survival of the rights, immunities, and licenses granted to ASML and its Subsidiaries in the event that Nikon or any of its Subsidiaries is subject to a bankruptcy proceeding under the laws of Japan, and ASML agrees to take all reasonable measures necessary to ensure the survival of the rights, immunities, and licenses granted to Nikon and its Subsidiaries in the event that ASML or any of its Subsidiaries is subject to a bankruptcy proceeding under the laws of the Netherlands, in each case in accordance with applicable law.
10.14 Nikon-Zeiss Patent Cross-License Agreement. Nikon agrees that it shall not, without the prior written consent of ASML, agree or consent to any amendment, modification, or termination of the Nikon-Zeiss Patent Cross License Agreement that limits in scope or duration Zeiss SMT’s rights to grant sublicenses to ASML and its Subsidiaries (and to extend to ASML, its Subsidiaries and their respective Covered Entities benefits of immunities, covenants not to ▇▇▇, and additional commitments) under Section 2.2 of the Nikon-Zeiss Patent Cross License Agreement as of the Effective Date hereof.
10.15 Further Assurances. Each Party agrees (a) to furnish upon request to the other Party such further information, (b) to execute and deliver to the other Party such other documents, and (c) to do such other acts and things, in each case as the Party may reasonably request for the purpose of carrying out the purposes, terms and conditions of this Agreement.
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*** - indicates material omitted pursuant to a confidential treatment request and filed separately with the Securities and Exchange Commission.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered by their respective duly authorized representatives as of the date first above written.
| NIKON CORPORATION | ASML HOLDING N.V. | |||||||
| By: | /s/ Kenzi Enya | By: | /s/ Ton ▇▇▇ ▇▇▇▇ | |||||
| Name: | Kenzi Enya | Name: | Ton ▇▇▇ ▇▇▇▇ | |||||
| Title: | Vice Chairman and Chief Financial Officer | Title: | VP and Chief IP Counsel | |||||
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*** - indicates material omitted pursuant to a confidential treatment request and filed separately with the Securities and Exchange Commission.
SCHEDULE A
EXCLUDED CLAIMS LIST
To be added pursuant to Section 2.3.1.
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*** - indicates material omitted pursuant to a confidential treatment request and filed separately with the Securities and Exchange Commission.
SCHEDULE B-1
ASML DISCLOSURES PURSUANT TO SECTION 6.3.1(a)
None.
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*** - indicates material omitted pursuant to a confidential treatment request and filed separately with the Securities and Exchange Commission.
SCHEDULE B-2
ASML DISCLOSURES PURSUANT TO SECTION 6.3.1(b)
| COUNTRY NAME | FILING NR | FILING DATE | PATENT NR | ASSIGNEE | ||||||||||||
| European (E.P.O.) | 12/19/2001 | 1 217 450 | ▇▇▇▇ Zeiss Stiftung | |||||||||||||
| GermanyDE | 10061480.9 | 12/8/2000 | ▇▇▇▇ Zeiss Stiftung | |||||||||||||
| Germany | 10144246.7 | 9/5/2001 | ▇▇▇▇ Zeiss Stiftung | |||||||||||||
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*** - indicates material omitted pursuant to a confidential treatment request and filed separately with the Securities and Exchange Commission.
SCHEDULE C-1
NIKON DISCLOSURES PURSUANT TO SECTION 6.3.2(a)
All Patents that are based on the same priority document as the Patents listed in the following table shall be deemed part of Schedule C-1 without being expressly listed in the following table.
| COUNTRY NAME |
APPLICATION NUMBER |
DATE OF FILING |
LAID OPEN NUMBER |
DATE LAID OPEN |
PATENT NUMBER |
COUNTERPART PATENTS | ||||||
| [***] | ||||||||||||
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*** - indicates material omitted pursuant to a confidential treatment request and filed separately with the Securities and Exchange Commission.
SCHEDULE C-2
NIKON DISCLOSURES PURSUANT TO SECTION 6.3.2(b)
[***]
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*** - indicates material omitted pursuant to a confidential treatment request and filed separately with the Securities and Exchange Commission.
SCHEDULE D
SCHEDULE D PATENTS
The three Patent applications having international publication numbers:
[***]
[***]
[***]
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*** - indicates material omitted pursuant to a confidential treatment request and filed separately with the Securities and Exchange Commission.
SCHEDULE E
DESIGNATED NIKON PATENTS
The three Patent applications having international publication numbers:
[***]
[***]
[***]
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*** - indicates material omitted pursuant to a confidential treatment request and filed separately with the Securities and Exchange Commission.
SCHEDULE F
SPECIFIED ENTITY
[***], a corporation organized under the laws of [***].
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