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EXHIBIT 10.18
INTELLECTUAL PROPERTY LICENSE AGREEMENT
IMMERSION CORPORATION AND LOGITECH, INC.
This Intellectual Property License Agreement (the "Agreement") between
Immersion Corporation, a California corporation, with principal offices in San
Jose, California (hereinafter "Immersion") and Logitech Inc., a California
corporation, with principal offices in Fremont, California (hereinafter
"Logitech"), is entered into as of [****] (the "Effective Date").
RECITALS
A. Immersion is the owner of several United States patent applications and
one issued United States patent relating to certain force-feedback technology.
B. Concurrently with this Agreement, Immersion and Logitech are entering
into a Technology Product Development Agreement dated the same date as this
Agreement. Pursuant to the Technology Product Development Agreement, Immersion
will develop and deliver to Logitech certain deliverables which are covered by
copyrights and trade secret rights owned by Immersion, as well as patents now
held or that may issue to Immersion in the future.
C. Logitech intends to develop "[****]" (as defined below) which may or
may not incorporate or utilize the deliverables to be delivered under the
Technology Product Development Agreement.
D. The parties desire that Immersion grant a license to Logitech under the
foregoing intellectual property rights of Immersion to develop and distribute
[****], whether or not they incorporate or utilize the deliverables to be
delivered under the Technology Product Development Agreement, all on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the promises and agreements set forth
below and the other consideration cited herein, the parties agree as follows.
1. DEFINITIONS
In this Agreement the following words and expressions shall have the
following meanings:
1.1 AFFILIATES. This means any corporation or business entity which is
controlled by, controls, or is under common control of a Party. For this
purpose, the meaning of the word "control" shall include, without limitation,
direct or indirect
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ownership of more than fifty percent (50%) of the voting shares of interest of
such corporation or business entity.
1.2 DEFECT. This means, with respect to any non-software Deliverable,
failure to materially conform to the applicable then-current Specifications for
such non-software Deliverable.
1.3 DEFECT CORRECTION. This means either a modification or addition that
eliminates or works around a Defect in a non-software Deliverable so as to cause
the non-software Deliverable to comply with the applicable then-current
Specification.
1.4 DELIVERABLES. This means the various deliverables, which are tangible
implementations or items including interim deliverables or final prototype
deliverables, identified as such and described in any development schedule to
the Development Agreement and delivered to Logitech thereunder.
1.5 DEVELOPMENT AGREEMENT. This means the Technology Product Development
Agreement between Immersion and Logitech dated the same date as this Agreement.
1.6 ENHANCEMENT OR ENHANCEMENTS. This means any force-feedback
modification or addition made by Immersion, under the terms of Section 6.7
("Other Development") and Section 7.2 ("Enhancements by Immersion") of the
Development Agreement for the [****], and which is a tangible implementation
other than a Defect Correction or Error Correction, that when incorporated into
the [****], materially reduces product costs of a [****] or materially changes
the functional capability or form factor (e.g., joystick to steering wheel).
1.7 ERROR. This means, with respect to any software Deliverable, failure
of any such software Deliverable to materially conform to the applicable
then-current Specification for such software Deliverable.
1.8 ERROR CORRECTION. This means either a modification or addition that
eliminates or works around an Error in the software Deliverable so as to cause
the software Deliverable to comply with the then-current Specification.
1.9 FINAL PROTOTYPE. This means a Deliverable which is the final
functional form of the [****], if any, including software and hardware, produced
by Immersion under a development schedule to the Development Agreement, which
prototype serves as a model for the final production version of the [****], if
any, and which conforms to the applicable Specification.
1.10 [****]
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1.11 [****]
1.12 IMMERSION PRODUCT MODEL TECHNOLOGY. This means that subset of
Immersion Technology delivered as a Deliverable under the terms of a development
schedule of the Development Agreement, or as an Enhancement or New Technology,
which is actually utilized in or in connection with and/or embedded in the final
production version of the Joystick Product, any subsequent Product Model of the
Joystick Product or any Product Model of any [****].
1.13 [****]
1.14 IMMERSION TECHNOLOGY. This means any and all technology created or
acquired by Immersion, or licensed to Immersion by third parties, including but
not limited to software created by employees or consultants of Immersion, (i)
first developed or reduced to practice before or after the Effective Date solely
by Immersion independent of the scope of the work under the Development
Agreement or (ii) first developed or reduced to practice after the Effective
Date and within the scope of a Deliverable developed solely by Immersion (a)
under a development schedule in effect under the terms of the Development
Agreement, (b) as an Enhancement or (c) as New Technology.
1.15 INTELLECTUAL PROPERTY RIGHTS. This means the Licensed Patents and
utility models, copyrights and mask work rights, including without limitation
all applications and registrations with respect thereto, rights in trade
secrets, know-how, and all other intellectual property rights, excluding
trademarks and tradenames and patents other than the Licensed Patents.
1.16 JOYSTICK PRODUCT. This means the final production version of the
joystick described in the Specification in the first Exhibit A
("Specifications") of the Development Agreement which utilizes and/or contains
Immersion Product Model Technology, including but not limited to the applicable
[****], documentation, Defect Corrections and Error Corrections
thereto.
1.17 LICENSED PATENTS. This means (i) United States patent no. 5,576,727,
titled "Electricalmechanical Human-Computer Interface with Force Feedback", (ii)
all
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patents that may issue based upon any of the United States patent applications
listed in Schedule A1 and A2 hereto or upon any corresponding foreign patent
applications that have been or may be filed, or upon any continuations,
continuations-in-part, or divisional applications related to any of the
foregoing that have been or may be filed, and (iii) any divisions, reissues and
reexaminations based on any of the foregoing.
1.18 NET RECEIPTS. This means the gross receipts received by Logitech and
its Affiliates without taking into account any foreign withholding taxes that
may apply to transfers between Logitech and its affiliates upon any sales of
Royalty Bearing Products to unaffiliated third parties, [****] No other costs
incurred in the manufacture, sale, distribution, or exploitation of Royalty
Bearing Products shall be deducted from gross receipts in the calculation of Net
Receipts. If Royalty Bearing Products are bundled with other items sold by
Logitech or its Affiliates and are not invoiced separately, royalties will be
paid based on Logitech's (or if no Logitech averages sales price exists, the
applicable Affiliate average sales price) then-current average sales price for
each such Royalty Bearing Product when sold as a separate item (averaged for the
applicable Quarter in which the Net Receipts are received by Logitech or its
Affiliates, as applicable, for the country in which the sale was made) in like
quantities in arms length transactions to unrelated third parties other than
Logitech or Logitech Affiliates).
1.19 NEW TECHNOLOGY. This means any force-feedback technology modification
or addition made by Immersion, for the [****], other than a Defect Correction or
Error-Correction, that when incorporated into the Joystick Product or other
[****], materially changes the utility, efficiency, market value, functional
capability or application, and which is developed by Immersion on a
non-exclusive basis and made "generally available" for use in [****] in the
[****] and which is delivered by Immersion to Logitech as a tangible
implementation pursuant to the terms of Section 7.4 ("New Technology") of the
Development Agreement. For purposes of this definition, "generally available"
shall mean offered under nonexclusive license to any one unaffiliated third
party (other than the original third party for whom the technology, modification
or addition was originally developed) for use in [****] in the [****].
1.20 OEM OR OEMS. This means any third party (not including Affiliates)
that does not manufacture [****] and that wishes to purchase finished [****] for
sale in the [****] under its own brand name.
1.21 PARTY OR PARTIES. This means Immersion and/or Logitech.
1.22 PRODUCT LAUNCH. This means the date on which first commercial-level
shipping of the Joystick Product or any Product Model commences to third party
unaffiliated customers of Logitech or a Logitech Affiliate.
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1.23 PRODUCT MODEL. This means a single model of the Joystick Product or
any other [****]. "Product Model" shall mean each variation of a Joystick
Product or [****] which (i) differs by virtue of addition of or alteration
through an Enhancement or (ii) constitutes a change in form factor (e.g.
joystick to steering wheel) or (iii) incorporates a material change in
force-feedback functionality made by a party other than Immersion. Purely
cosmetic alterations (e.g., color or styling) to the physical appearance of the
Joystick Product or a [****], or changes that do not alter the force-feedback
functionality but reduce manufacturing costs shall not be deemed a Product
Model.
1.24 ROYALTY BEARING PRODUCT. This means a [****] which either (1)
incorporates or utilizes Immersion Product Model Technology that is not
otherwise made generally available to the public by Immersion without charge or
(2) is covered (a) by a Licensed Patent or (b) by a copyright of Immersion
embodied in any Immersion Product Model Technology that is not otherwise made
generally available to the public by Immersion without charge.
1.25 QUARTER OR QUARTERS. This means Logitech's yearly fiscal quarters.
Specifically, Logitech's yearly fiscal quarters begin and end on the following
dates: first quarter, April 1 - June 30; second quarter, July 1 - September 30;
third quarter, October 1 - December 31; and fourth quarter, January 1 - March
31.
1.26 SPECIFICATION(S). This means the Joystick Product specification
attached as the original Exhibit A ("Specification") to the Development
Agreement and each [****] specification associated with a development schedule
which is attached by amendment to the Development Agreement.
1.27 YEAR. This means any full four-Quarter period.
1.28 Any reference to the words "PURCHASE," "SALE," or "SELL," when used
in connection with intellectual property, shall mean license.
2. GRANT OF LICENSES
2.1 GRANT WITH RESPECT TO THE LICENSED PATENTS. Subject to the terms of
this Agreement, Immersion grants to Logitech a [****]. Except as provided in
Section 2.3 ("Right to Sublicense"), no right to sublicense the Licensed Patents
is granted by Immersion to Logitech.
2.2 GRANT WITH RESPECT TO THE IMMERSION PRODUCT MODEL TECHNOLOGY. Subject
to the terms of this Agreement, Immersion grants to Logitech a [****].
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No access rights or license to the source code for the [****] are granted to
Logitech except as provided under the terms of Section 13 ("Source Code Escrow")
of the Development Agreement. Logitech and its Affiliates have no right and
Logitech agrees not to disassemble or decompile any portion of the software
portions of the Immersion Product Model Technology.
2.3 RIGHT TO SUBLICENSE. Subject to the terms of Section 2.6 ("Trademark
License from Immersion"), Immersion grants to Logitech the right to [****].
Logitech agrees that any act or omission by a Logitech Affiliate that is
inconsistent with Logitech's obligations under the terms of this Agreement shall
be deemed to be an act or omission by Logitech and a breach of this Agreement by
Logitech.
2.4 DURATION. Subject to the obligation to pay royalties, the licenses set
forth above will extend to the full end of the term for which any Licensed
Patent is issued or any other Intellectual Property Right of Immersion licensed
hereunder is in force, unless sooner terminated as provided in this Agreement.
2.5 LABEL REQUIREMENTS. Subject to the terms of Section 2.6 ("Trademark
License for Immersion") and Section 2.7 ("Administration Procedure"), Logitech
shall place belly labels on [****] which are Royalty Bearing Products which
shall include the language and related logo: "I-Force(TM) Force Feedback
Technology Licensed from Immersion Corporation" (hereinafter the "Legend").
Logitech shall also place or have placed the Legend on retail manuals and boxes
as designated in Exhibit B ("Immersion Package Labeling Specification"). If OEM
customers object to belly label marking, the Parties will mutually agree upon a
reasonable solution in writing in advance. Logitech shall not remove Immersion's
copyright notices from any copies of the [****].
2.6 TRADEMARK LICENSE FROM IMMERSION. Subject to the procedures set forth
in subsection 2.7 below and Immersion's prior written approval, Immersion hereby
grants to Logitech a nonexclusive, nontransferable, worldwide license, to use in
connection with marketing the Joystick Product or any [****], the trademark(s)
used by Immersion ("Marks") to identify the Immersion Product Model
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Technology and/or Licensed Patents and Logitech agrees to use such Marks on and
in connection with Royalty Bearing Products except in the case of OEM products
where, if the OEM customer objects, the parties will mutually agree upon a
reasonable solution in writing, in advance. Logitech acknowledges that all use
of the Marks will inure to the benefit of Immersion. Logitech shall not register
Immersion's Marks in any jurisdiction and will not adopt any trademark for use
on the Joystick Product or [****] which is confusingly similar to any trademark
of Immersion or which includes a prominent portion of any trademark of
Immersion. At Immersion's reasonable request, Logitech shall provide Immersion
with samples of Logitech's use of Immersion trademarks. Logitech agrees to abide
by Immersion's reasonable written trademark policies as issued and provided to
Logitech from time to time. In any case where the Marks are not used in
compliance with Immersion's trademark policies and such use has been approved in
writing by Immersion, upon receipt of written notice from Immersion, Logitech
will promptly correct the non-compliance and submit samples of compliant use to
Immersion for approval.
2.7 ADMINISTRATIVE PROCEDURES. The Parties agree that in order to provide
Immersion with appropriate information necessary for the orderly administration
of the Licensed Patents and Marks, Logitech will provide Immersion with prompt
written notice prior to Product Launch of each Product Model and will enclose an
information package which contains two prototypes or production units of the
Product Model sufficient to enable Immersion to determine which of the Licensed
Patents cover the Product Model and to review and approve the use of the Marks.
If in any case Immersion believes that the quality of the Product Model does not
meet Immersion's commercially reasonable standards, Logitech will not be
permitted to ship the Product Model with the Marks until the quality issue is
resolved, but Logitech may in is discretion ship such Product Model without the
Marks and shall be relieved of its obligation to use the Marks on that Product
Model.
2.8 GRANT WITH RESPECT TO KNOW-HOW. Subject to the terms of this
Agreement, each party grants to the other a worldwide, nonexclusive license to
use any know-how of such party disclosed to the other party pursuant to the
Development Agreement.
3. ROYALTIES
3.1 NEW TECHNOLOGY ROYALTIES. As provided in Section 9.6 ("New
Technology") of the Development Agreement, New Technology will be provided to
Logitech subject to royalties which are mutually agreed upon in writing by
Immersion and Logitech.
3.2 PER PRODUCT MODEL ROYALTY. Except as provided by Section 3.1 above,
Logitech shall pay Immersion a royalty based on a percentage of the Net Receipts
for each Product Model of a Royalty Bearing Product sold by Logitech or any
Logitech
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Affiliates to unrelated third parties (other than Logitech or Logitech
Affiliates) in arms length transactions, in accordance with the following.
[****] Shipments of Royalty Bearing Products between Logitech and the Logitech
Affiliates or between Logitech Affiliates will not be considered to be sold or
otherwise transferred until sold to an unrelated customer of Logitech or a
Logitech Affiliate.
3.3 [****]
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3.4 PAYMENTS AND REPORTS. The royalties to be paid by Logitech to
Immersion hereunder shall be due [****] days after the close of each Quarter.
Royalty reports setting forth the royalty calculation by Product Model and
identifying whether the sales were made by Logitech or Logitech Affiliates shall
be included with such payments. Logitech will pay and account to Immersion for
royalties due hereunder with respect to sales or other disposition of Royalty
Bearing Products by any Logitech Affiliates, and for that purpose, sales of
Royalty Bearing Products by any Logitech Affiliate (other than sales or other
disposition by an Affiliate to Logitech or to another Logitech Affiliate) will
be deemed to be sales by Logitech.
3.5 AUDIT RIGHTS OF ROYALTY PAYMENTS. Immersion shall have the right to
have an independent auditor mutually agreed by Logitech and Immersion audit the
method used to calculate the average sales price, as well as the sales data
pursuant to Section 1.19 ("Net Receipts") and the royalty payments of Logitech
for itself and its Affiliates on an annual basis, but shall pay the costs of
such audit, unless such audit reveals any underpayment of royalties in an amount
greater than [****] of actual royalties due for any Year, in which case Logitech
shall promptly remit an amount equal to the underpayment and shall pay the
reasonable costs of such audit. Such audit shall be preceded by at least five
(5) business days advance written notice and shall be performed during normal
business hours by the auditor. The auditor shall have access to only those books
and records of Logitech which are reasonably necessary to determine the relevant
sales royalties due for Royalty Bearing Products for Logitech itself and its
Affiliates and the correctness of the royalty payments hereunder. Any and all
non-public information related to Logitech, its Affiliates, or their business
revealed in the course of such audit shall be kept confidential by the auditor
and by Immersion, and shall not be disclosed by the auditor to anyone other than
employees or professional advisors of Immersion who have a reasonable need to
know in connection with such audit, or used for any purpose, except to the
extent reasonably necessary to determine the correctness of royalty payments
made hereunder.
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4. TERM AND TERMINATION
4.1 TERM. Unless earlier terminated in accordance with the provisions of
this Agreement, this Agreement will extend until the [****]
4.2 TERMINATION BY LOGITECH.
4.2.1 TERMINATION WITHOUT CAUSE. Logitech may terminate this
Agreement without cause upon [****] written notice, and such written notice
under the terms of this Agreement shall also serve as written notice of the
termination of the Development Agreement, if such Agreement is still in effect
at such time, and the Development Agreement will then terminate within [****] of
such notice pursuant to the terms of Section 12.1 ("Termination by Logitech
Without Cause") and such termination shall be deemed to be a termination without
cause by Logitech and will be construed in accordance with the terms of Section
12.3 ("Effect of Termination") therein.
4.2.2 TERMINATION WITH CAUSE. Logitech may terminate this Agreement
by written notice to Immersion if Immersion has materially breached the terms of
this Agreement and fails to cure the breach after written notice of breach to
Immersion and a [****] time period to cure.
4.3 TERMINATION BY IMMERSION FOR FAILURE TO PAY ROYALTIES. Immersion may
terminate this Agreement by written notice to Logitech in the event that
Logitech or any Logitech Affiliate breaches the terms of Section 3 ("Royalties")
including but not limited to any failure to pay any royalties due and payable by
Logitech and/or any of the Logitech Affiliates under this Agreement and Logitech
fails to cure such breach after written notice of breach and a [****] time
period to cure. If Immersion issues a written notice of termination to Logitech
under the terms of this Section 4.3 ("Termination by Immersion for Failure to
Pay Royalties") such notice shall also serve as written notice of termination
for cause by Immersion under the terms of Section 12.2 ("Termination for Cause")
of the Development Agreement, if such Agreement is still in effect at such time.
If the breach described in the aforementioned written notice of termination is
not cured in accordance with the terms of this Section 4.3 ("Termination by
Immersion for Failure to Pay Royalties"), the Development Agreement will then
terminate within [****] of such notice pursuant to the terms of Section 12.2
("Termination for Cause") and such termination will be deemed to be a
termination for cause by Immersion for purposes of Section 12.3 ("Effect of
Termination") and the effects of termination will be construed in accordance
with the terms of Section 12.3 ("Effects of Termination") therein.
4.4 TERMINATION BY IMMERSION FOR BREACH OF PATENT LICENSE. Immersion may
terminate this Agreement in the event that Logitech engages in activity which
exceeds the scope of the patent license granted in Section 2.1 or breaches the
labeling
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requirement of Section 2.5 and fails to cure the breach after written notice of
breach and a [****] time period to cure. Except as set forth in this Section 4.4
or Section 4.3, the patent license granted in Section 2.1 shall not be
terminable by Immersion. If Immersion issues a written notice of termination to
Logitech under the terms of this Section 4.4 ("Termination by Immersion for
Breach") such notice shall also serve as written notice of termination for cause
by Immersion under the terms of Section 12.2 ("Termination for Cause") of the
Development Agreement, if such Agreement is still in effect at such time. If the
breach described in the aforementioned written notice of termination is not
cured in accordance with the terms of this Section 4.4 ("Termination by
Immersion for Breach"), the Development Agreement will then terminate within
[****] of such notice pursuant to the terms of Section 12.2 ("Termination for
Cause") and such termination will be deemed to be a termination for cause by
Immersion for purposes of Section 12.3 ("Effect of Termination") and the effects
of termination will be construed in accordance with the terms of Section 12.3
("Effects of Termination") therein.
4.5 TERMINATION OF LICENSES TO IMMERSION PRODUCT MODEL TECHNOLOGY BY
IMMERSION FOR BREACH. Immersion may terminate the licenses granted with respect
to Immersion Product Model Technology in Section 2.2 above in the event that
Logitech engages in activity which exceeds the scope of such license or breaches
the terms of Section 2.3 or the labeling requirement of Section 2.5 and fails to
cure the breach after written notice of breach and a [****] time period to cure.
Termination of the licenses with respect to the Immersion Product Model
Technology shall not affect the patent licenses granted hereunder. Except as set
forth in this Section 4.5 or Section 4.3, the licenses granted in Section 2.2
shall not be terminable by Immersion.
4.6 EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement for any reason, Logitech agrees to pay Immersion for royalties due
under this Agreement from Logitech or any Logitech Affiliate. Upon a termination
of this Agreement for cause or without cause, Logitech and each Affiliate shall
have [****] to distribute any remaining inventory in process and in existence as
of the effective date of the termination, subject to the obligation for Logitech
to pay royalties hereunder for any such distribution by Logitech and/or any
Logitech Affiliates. EXCEPT FOR DIRECT DAMAGES RESULTING FROM A BREACH OF THE
TERMS OF THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO A BREACH BY LOGITECH OR
ANY LOGITECH AFFILIATE OF SECTION 2 ("GRANT OF LICENSES"), NEITHER PARTY SHALL
BE LIABLE TO THE OTHER FOR DAMAGES OF ANY SORT AS A RESULT OF TERMINATING THIS
AGREEMENT IN ACCORDANCE WITH THE TERMS OF THE AGREEMENT.
5. WARRANTY
Immersion represents and warrants that Immersion either has ownership of,
or sufficient rights in, the Immersion Product Model Technology to be delivered
under the terms of the Development Agreement and the Licensed Patents to enter
into this
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Agreement and grant all the rights set forth herein. As of the Effective Date of
the Agreement, Immersion is not aware of and has not received any notice of any
claim by a third party that the copyrights, patents, trade secrets, trademarks
or other intellectual property rights of any third party are infringed by the
Immersion Product Model Technology that Immersion, in its sole discretion
intends to, as of the Effective Date, use to comply with Immersion's development
obligations under the terms of the Development Agreement, except as disclosed to
Logitech in writing prior to the date of this Agreement. Immersion further
represents and warrants that (i) it neither holds nor has applied for a patent
that is dominant to the Licensed Patents and (ii) that Schedule A contains all
patent applications filed or contemplated to be filed as of the Effective Date
that relate to force-feedback technology.
6. INDEMNIFICATION
6.1 TRADEMARK INFRINGEMENT INDEMNIFICATION BY IMMERSION. Subject to the
limitations on cumulative liability under Section 7.1 ("Disclaimers of Certain
Types of Damages") and Section 7.3 ("Limitations of Liability with Respect to
Indemnity Obligations"), and Immersion's approval for Logitech to use the Legend
and the Marks pursuant to Section 2.5 ("Label Requirements"), Section 2.6
("Trademark License") and Section 2.7 ("Administrative Procedures") and further
subject to prompt notification by Logitech, cooperation by Logitech and control
of all litigation and/or settlement by Immersion, Immersion shall indemnify,
defend and hold Logitech harmless from and against any and all claims, damages,
liabilities, judgments, settlements, losses, costs and expenses (including court
costs and reasonable attorneys' and experts' fees) (collectively, "Costs")
suffered or incurred by Logitech arising out of a claim of infringement of any
Immersion Xxxx or Legend used by Logitech on a [****]in the [****] which is
based on Logitech's use under the labeling requirement of Section 2.5 ("Label
Requirements") and/or the terms of Section 2.6 ("Trademark License") and Section
2.7 ("Administrative Procedures"). In the case of an infringement or alleged
infringement by any such Immersion Xxxx or Legend used by Logitech on a [****]
in the [****]: (i) Logitech will have the right to remove such Marks and/or
Legend from Logitech [****] while any dispute or litigation concerning the same
is pending, and shall begin using such marks again only after such infringement
claims or disputes have been settled or dismissed with prejudice, and (ii)
Immersion will have the right to require Logitech to stop using such Marks
and/or Legend and will provide a new trademark to be used in connection with the
Immersion Product Model Technology and/or Licensed Patents, as applicable. Each
party agrees to notify the other promptly of any matters in respect to which the
foregoing indemnity in this Section 6.1 may apply. If notified in writing of any
action or claim for which Immersion is to provide indemnity, Immersion shall
defend, subject to the limitations of liability set forth in Section 7.1
("Disclaimer of Certain Types of Damages") and 7.3 ("Limitations of Liability
With Respect to Indemnity Obligations"), those actions or claims at Immersion's
expense and pay the Costs awarded against Logitech in any such action, or pay
any settlement of such action or claim entered into by Immersion.
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6.2 COPYRIGHT INFRINGEMENT AND TRADE SECRET MISAPPROPRIATION
INDEMNIFICATION BY IMMERSION.
6.2.1 SCOPE. Subject to the limitations of cumulative liability
under Section 7.1 ("Disclaimer of Certain Types of Damages") and Section 7.3
("Limitations of Liability With Respect to Indemnity Obligations") and further
subject to prompt notification by Logitech, cooperation by Logitech and control
of all litigation and/or settlement by Immersion, Immersion shall indemnify,
defend and hold Logitech harmless from and against any and all Costs suffered or
incurred by Logitech as a result of any third party claim that any Immersion
Product Model Technology delivered by Immersion to Logitech infringes any
copyright or misappropriates any trade secret of any third party. In the case of
any third party claim involving the [****] portion of the Immersion Product
Model Technology, Immersion may, in its sole discretion, provide Logitech with a
modification to the affected [****] so that the [****] portion of the Immersion
Product Model Technology becomes noninfringing or in the alternative, may
provide Logitech other software which is functionally equivalent. Each party
agrees to notify the other promptly of any matters in respect to which the
foregoing indemnity in this Section 6.2 ("Copyright Infringement and Trade
Secret Misappropriation Indemnification by Immersion") may apply. If notified in
writing of any action or claim for which Immersion is to provide indemnity,
Immersion shall defend, subject to the limitations of liability set forth in
Section 7.1 ("Disclaimer of Certain Types of Damages") and 7.3 ("Limitations of
Liability With Respect to Indemnity Obligations"), those actions or claims at
Immersion's expense and pay the Costs awarded against Logitech in any such
action, or pay any settlement of such action or claim entered into by Immersion.
6.2.2 EXCEPTIONS. The foregoing indemnity will not apply to any
infringement claim to the extent it arises from (i) any modification of any
Immersion Product Model Technology by parties other than Immersion or Immersion
subcontractors under contract with Immersion, (ii) use of any Immersion Product
Model Technology in conjunction with other non-Immersion products or components
where there would be no infringement absent such use with such other products or
components or (iii) an infringement which would not occur in the Immersion
Product Model Technology or any Final Prototype in which such Immersion Product
Model Technology is incorporated but which does occur in the final production
version of a [****].
6.3 PERSONAL INJURY AND PROPERTY DAMAGE CLAIMS. Neither party shall have
any obligation to indemnify, protect, defend and hold the other party harmless
from any Costs suffered or incurred by the other party to the extent such third
party claim or threatened claim arises from a personal or alleged personal
injury or damage or alleged damage to property arising out of the third party's
use of [****].
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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6.4 PRODUCT LIABILITY INSURANCE. The Parties agree that they shall each
secure insurance covering product liability. Such insurance shall provide
coverage of at least [****] per occurrence and shall remain in effect during the
term of this Agreement. Each party will promptly cause the other party to be
named as an additional insured.
6.5 PATENT INFRINGEMENT INDEMNIFICATION BY IMMERSION.
6.5.1 SCOPE. Subject to the limitations of cumulative liability
under Section 7.1 ("Disclaimer of Certain Types of Damages") and Section 7.3
("Limitations of Liability With Respect to Indemnity Obligations"), and further
subject to prompt notification by Logitech, cooperation by Logitech and control
of all litigation and/or settlement by Immersion, [****] Each Party agrees to
notify the other promptly of any matters in respect to which the foregoing
indemnity in this Section 6.5 may apply. If notified in writing of any action or
claim for which Immersion is to provide indemnity, Immersion shall defend,
subject to the limitations of liability set forth in Section 7.1 ("Disclaimer of
Certain Types of Damages") and 7.3 ("Limitations of Liability With Respect to
Indemnity Obligations") and the provisions of Section 6.5.3 below, those actions
or claims at its expense and pay the Costs awarded against Logitech in any such
action, or pay any settlement of such action or claim entered into by Immersion.
In any such action, Logitech will make available to Immersion all defenses
against such action or claim known or available to Logitech.
6.5.2 EXCEPTIONS TO THE SCOPE OF THE INDEMNITY. Immersion shall have
no liability or obligation with respect to any claim of patent infringement to
the extent it arises from [****]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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6.5.3 [****]
(a) [****]
(b) [****]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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(c) [****]
6.6 REMEDIES IN THE EVENT OF PROHIBITION OF USE. The provisions and
remedies set forth in Section 6.6 shall continue to be applicable with respect
to any copyright infringement or trade secret misappropriation under the terms
of Section 6.2 ("Copyright Infringement and Trade Secret Misappropriation"), and
any After-Issued Patents for which Immersion does not supply written notice to
Logitech in accordance with Section 6.5.3(a) above and any U.S. Patents issued
prior to the Effective Date of this Agreement. If a preliminary or final
judgment shall be obtained against Logitech's use, sale or distribution of a
[****] that incorporates any Immersion Product Model Technology based
infringement within the scope of the indemnity set forth in Section 6.1, 6.2 or
6.5 (subject to the exceptions set forth therein), or if any Immersion Product
Model Technology is, or in Immersion's opinion, is likely to become, subject to
a claim for such infringement, then Immersion shall, at its expense, either (a)
modify the Immersion Product Model Technology so that the incorporated Immersion
Product Model Technology becomes noninfringing, or (b) procure for Logitech the
right to continue to use such Immersion Product Model Technology, or (c)
substitute for the infringing Immersion Product Model Technology other
technology that conforms to the Specifications in Exhibit A of the development
agreement (which shall itself be deemed to be Immersion Product Model
Technology). [****]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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6.7 INDEMNITY BY LOGITECH. Subject to the limitations of liability set
forth in Section 7 below, and subject to prompt notification by Immersion,
cooperation by Immersion and control of all litigation and/or settlement by
Logitech, Logitech shall [****]
7. LIMITATIONS OF LIABILITY
7.1 DISCLAIMER OF CERTAIN TYPES OF DAMAGES. IN NO EVENT WILL LOGITECH OR
IMMERSION BE LIABLE FOR LOST PROFITS, OR ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, ARISING IN
ANY WAY IN CONNECTION WITH THIS AGREEMENT. THIS LIMITATION WILL APPLY EVEN IF
LOGITECH AND IMMERSION HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
7.2 LIMITATIONS OF LIABILITY OTHER THAN INDEMNITY OBLIGATIONS. EXCEPT WITH
RESPECT TO THE PARTIES' OBLIGATIONS OF INDEMNITY, INCLUDING, BUT NOT LIMITED TO
COSTS OF DEFENSE AND "COSTS" (AS DEFINED ABOVE) SET FORTH IN SECTION 6 ABOVE
WHICH ARE LIMITED BY THE TERMS OF SECTION 7.3 ("LIMITATIONS OF LIABILITY WITH
RESPECT TO INDEMNITY OBLIGATIONS") AND WITH RESPECT TO ANY ROYALTIES DUE AND
PAYABLE BY LOGITECH HEREUNDER, IN NO CASE WILL EITHER PARTY'S TOTAL CUMULATIVE
LIABILITY OR OBLIGATIONS UNDER THE TERMS OF OR ARISING OUT OF THIS AGREEMENT
EXCEED [****]
7.3 LIMITATIONS OF LIABILITY WITH RESPECT TO INDEMNITY OBLIGATIONS. IN NO
CASE WILL EITHER PARTY'S TOTAL CUMULATIVE LIABILITY WITH RESPECT TO ITS
OBLIGATIONS OF INDEMNITY INCLUDING, BUT NOT LIMITED TO COSTS OF DEFENSE AND
"COSTS" (AS DEFINED ABOVE) UNDER SECTION 6 ABOVE EXCEED THE GREATER OF [****]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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7.4 NEGATION OF WARRANTIES AND OTHER OBLIGATIONS.
7.4.1 Nothing in this Agreement shall be construed:
(i) as a warranty or representation by Immersion as to
the validity or scope of any Licensed Patents;
(ii) as a warranty or representation that anything made,
used, sold or otherwise disposed of under any license
granted in this Agreement is or will be free from
infringement by patents, copyrights, trade secrets,
trademarks, or other rights of third parties;
(iii) as granting by implication, estoppel or otherwise any
licenses or rights under patents or other Intellectual
Property Rights of Immersion other than expressly
granted herein, regardless of whether such patents are
dominant or subordinate to any Licensed Patents, or
(iv) (a) to require Immersion to file any patent
application relating to force-feedback in [****], (b)
a warranty that Immersion will be successful in
securing the grant of any patent relating to force-
feedback in [****] or any reissue or extensions
thereof, and (c) to require Immersion to pay any
maintenance fees or take any other steps to maintain
Immersion's patent rights relating to force feedback
in [****], provided, however, that in the event
Immersion elects not to pay any maintenance fee or
take any step to maintain such patents, Immersion
shall so notify Logitech a reasonable period in
advance and Logitech may, at its option, pay such
maintenance fee or take such steps.
7.4.2 Except for Immersion's obligations of indemnity set forth
herein, Immersion does not assume any responsibility for the definition of the
Specifications, the manufacture of the [****], or use of any [****] which is
manufactured or sold by or for Logitech or the Logitech Affiliates under the
Licensed Patent licenses granted herein. All warranties in connection with such
[****] shall be made by Logitech or the Logitech Affiliates as manufacturers or
sellers of such [****] and such warranties shall not directly or by implication
obligate Immersion in any way.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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8. THIRD PARTY ENFORCEMENT
Immersion shall not have any obligation or duty under this Agreement to
any party, including but not limited to Logitech, to enforce any patents or
Licensed Patents against any third party infringing any claim or claims of any
patent and/or the Licensed Patents provided, however, that should Logitech
become aware of any actual infringement of the Licensed Patents by a [****]
distributed in the [****] by a third party, which [****] directly competes (e.g.
Joystick to Joystick or wheel to wheel) with a [****] currently shipped by
Logitech which is covered by the Licensed Patents, Logitech will promptly
communicate the details to Immersion. Immersion shall thereupon have the right
to take no action or whatever action Immersion deems necessary, including cease
and desist letters, negotiation, the filing of lawsuits, and/or settlement to
terminate such infringement and the strategy and/or conclusion of such action or
settlement shall be within Immersion's sole discretion. Logitech shall cooperate
with Immersion if Immersion takes any such action but all expenses of Immersion
shall be borne by Immersion. If Immersion recovers any damages or compensation
for any action Immersion takes hereunder, including any settlement, Immersion
shall retain [****] of such damages. If Immersion does not elect to take any
action hereunder within [****] days of being made aware of such infringement by
Logitech, then Logitech shall have the right, but not the obligation, to provide
Immersion with a Patent Enforcement Justification, as defined below, and if the
proposed enforcement action meets the Patent Enforcement Justification criteria,
Logitech may take and control any such action, subject to Immersion's absolute
right to control any and all assertions or admissions which relate to the scope
or validity of Immersion's Licensed Patents. For purposes of this Section 8, a
Patent Enforcement Justification is a written report prepared by Logitech which
includes: (i) the name and address of the entity manufacturing the [****] that
is allegedly infringing the Licensed Patents and the names and addresses of any
entities distributing such [****], (ii) an analysis of which of the Licensed
Patent claims are infringed, (iii) a comparison of the allegedly infringing
[****] and the affected [****] distributed by Logitech with which such allegedly
infringing [****] competes (which comparison analyzes the competitive threat as
to (a) feature and function, (b) positioning, and (c) price point), (iv) the
number of units of the [****] sold by Logitech in the most recent [****] full
Quarters and, if known or reasonably estimable, the number or estimate of the
number of units of the allegedly infringing [****] sold in the most recent
[****] full Quarters, on a geographic area basis. The criteria which must be met
by such report, in order to permit Logitech to "justify" and to go forward with
an infringement action, as are follows:
(i) Logitech must be selling over [****] units of the affected [****] in
the market in which the infringement is occurring during the most
recent [****] full Quarters or, if the Product Launch occurred
during the most recent [****] full Quarters, Logitech reasonably
estimates in good faith that it will sell over [****] units of the
affected [****] in the
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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market in which the infringement is occurring during the next [****]
full Quarters;
(ii) the allegedly infringing [****] must be substantially similar to the
affected [****] as to features and functions such that the allegedly
infringing [****] is having or reasonably will have a serious impact
on the sales of the affected Logitech [****];
(iii) the Licensed Patents to be enforced against the allegedly infringing
[****] also cover the affected Logitech [****]; and
(iv) the number of units of the allegedly infringing [****] sold in the
market in which the infringement is occurring in the most recent
[****] full Quarters or reasonably estimated in good faith to be
sold in the next [****] full Quarters must meet or exceed [****]
units.
If the aforementioned criteria are met, Immersion will cooperate with Logitech,
at Logitech's expense, including but not limited to joining any legal
proceedings as a named plaintiff to the extent required to confer jurisdiction,
and all of Logitech's expenses will be borne by Logitech. Immersion may elect to
have counsel of its own choosing participate at Immersion's sole expense in any
legal proceedings instituted by Logitech, but Logitech shall retain [****] of
any damages Logitech recovers for any such proceedings including any settlement,
provided however that (i) Logitech shall first reimburse Immersion for
Immersion's Costs to participate in such action out of any recovery which
exceeds Logitech's Costs for such action. Immersion must agree to any settlement
of any infringement or of any action brought hereunder by Logitech, which
consent will not be unreasonably withheld.
9. GENERAL
9.1 ENTIRE AGREEMENT. This Agreement and its Appendices, together with the
Development Agreement and its Exhibits, constitutes the complete agreement of
the parties and supersedes any other agreements, written or oral (including all
correspondence, emails and the letter regarding [****] and the letter regarding
[****], and the two letters each dated [****] regarding extension of the [****]
letter and continued business relationship between the Parties and all such
subsequent extension letters) concerning the subject matter hereof and such
materials do not have any effect upon the rights and obligations of the Parties
under this Agreement.
9.2 SUCCESSION AND ASSIGNMENT. Either party may assign this Agreement
provided that the other party has consented in writing to the assignment or
delegation and provided, further, that the rights and obligations of the parties
may be assigned to a corporate successor in interest in the case of a merger or
acquisition or in the case of a
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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sale of assets without the prior approval of the other party. Any attempt to
assign this Agreement in violation of the provisions of this Section 9.2 shall
be void.
9.3 NOTICES. Notices required under this Agreement shall be addressed as
follows, except as otherwise revised by written notice:
TO IMMERSION: TO LOGITECH:
Xxxxx X. Xxxxxxxxx, Ph. D. General Counsel
President Logitech, Inc.
Immersion Corporation 0000 Xxxxxx Xxxxx
0000 Xxxxxxx Xxxxx Xxxxxxx, XX 00000-0000
Xxx Xxxx, XX 00000
9.4 GOVERNING LAW. The validity, interpretation and performance of this
Agreement shall be governed by the substantive laws of the State of California,
without the application of any principle that leads to the application of the
laws of any other jurisdiction.
9.5 NO AGENCY. Neither party is to be construed as the agent, partner, or
joint venturer or to be acting as the agent, partner or joint venturer of the
other party hereunder in any respect.
9.6 NO RECRUITMENT. During the term of this Agreement and for one (1) year
after the termination or expiration of this Agreement, each Party agrees not to
recruit any employee of the other Party.
9.7 MULTIPLE COUNTERPARTS. This Agreement may be executed in several
counterparts, all of which taken together shall constitute one single Agreement
between the parties.
9.8 NO WAIVER. No delay or omission by either Party hereto to exercise any
right or power occurring upon any noncompliance or default by the other Party
with respect to any of the terms of this Agreement shall impair any such right
or power or be construed to be a waiver thereof. A waiver by either of the
Parties hereto of any of the covenants, conditions, or agreements to be
performed by the other shall not be construed to be a waiver of any succeeding
breach thereof or of any covenant, condition, or agreement herein contained.
Unless stated otherwise, all remedies provided for in this Agreement shall be
cumulative and in addition to and not in lieu of any other remedies available to
either party at law, in equity, or otherwise.
9.9 SEVERABILITY. If any one or more of the provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
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9.10 AMENDMENTS IN WRITING. Any amendment to this Agreement shall be in
writing and signed by both parties hereto.
9.11 INTERPRETATION. Since this Agreement was prepared by both parties
hereto, it shall not be construed against any one party as the drafting party.
9.12 DISPUTE RESOLUTION. Except in the case of a breach of an obligation
related to a Party's Intellectual Property Rights, in the event either Party
concludes that it is in its best interest to file any legal action against the
other, the Party shall contact the other Party's management and at least two (2)
senior managers from each Party shall meet without legal counsel or interruption
for a minimum amount of three (3) eight (8) hour periods and diligently attempt
to resolve all disputed matters. If the Parties are unable to resolve their
difference and either Party desires to file a legal action against the other, at
least two (2) senior managers from each Party and their respective counsels
shall meet for three (3) eight (8) hour periods and diligently attempt to
resolve all disputed matters. Either Party may request that an independent third
party bound to mutually agreed upon obligations of confidentiality attend such
meeting in order to assist the Parties in reaching a reasonable resolution. All
oral and written information exchanged in these meetings shall be exchanged in
an effort to settle all disputed matters. If either Party still desires to file
a legal action against the other after these prescribed meetings, such Party may
file a legal action against the other Party as allowed by applicable law in
Santa Xxxxx County state court or in the federal court. The Parties agree that
if a Party does not attend all of the prescribed meetings it waives its rights
to any monetary damages in the legal action(s) it files.
9.13 SURVIVAL. Sections 3.2, 3.4, 3.5, 4.6, 5, 7 and 9 shall survive any
termination or expiration of this Agreement. In addition, the provisions of
Sections 6.1, 6.2, 6.5, 6.6 and 6.7 shall survive with respect to any units of a
Product Model of Royalty Bearing Products sold or otherwise distributed by
Logitech before the termination or expiration of this Agreement, provided,
however, that Immersion's obligations of indemnity under Sections 6.1, 6.2, 6.5
and 6.6 shall not survive in the event Immersion terminates this Agreement for
cause, including but not limited to, failure by Logitech to pay royalties due
hereunder.
9.14 FORCE MAJEURE. With the exception of the obligation to pay monies due
and owing, each Party hereto shall be excused from performance hereunder for any
period and to the extent that it is prevented from performing any services
pursuant hereto, in whole or in part, as a result of delays caused by the other
Party or an act of God, war, civil disturbance, court order, governmental
action, laws, orders, regulations, directions or requests, or as a result of
events such as acts of public enemies, earthquakes, fires, floods, strikes or
other labor disturbances of the other Party or any third party, or other cause
beyond its reasonable control and which it could not have prevented by
reasonable precautions, and such nonperformance shall not be a default hereunder
or a ground for termination hereof.
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9.15 RESTRICTED USE OF SCHEDULE A. Logitech agrees to keep the serial
numbers of the pending patent applications set forth in Schedules A1 and A2
confidential until such applications issue or such information is otherwise made
available to the public by Immersion, and agrees not to use the information in
Schedule A for any purpose other than the performance or enforcement of this
Agreement, including but not limited to using the information to initiate
interference proceedings.
Upon execution of this Agreement, Schedule A1 shall be supplied by
Immersion to Logitech in an envelope marked "IMMERSION CONFIDENTIAL INFORMATION
SCHEDULE A1 TO INTELLECTUAL PROPERTY LICENSE AGREEMENT. TO BE SEEN BY LOGITECH
INC. PRESIDENT, CHAIRMAN OF THE BOARD, GENERAL COUNSEL AND OUTSIDE COUNSEL
ONLY." Schedule A1 shall include the serial numbers (for issued License Patents)
and the application numbers (of pending Licensed Patent applications), and the
jurisdictions where such patents have issued and where such applications have
been filed. Schedule A1 may only be reviewed by Logitech Inc.'s President,
Chairman, General Counsel and outside lawyers. Schedule A1 shall be maintained
in a sealed envelope in a secure location with Logitech.
Upon execution of the Agreement, Schedule A2 shall be supplied by
Immersion to Logitech in a sealed envelope marked "IMMERSION CONFIDENTIAL
INFORMATION SCHEDULE A2 TO INTELLECTUAL PROPERTY LICENSE AGREEMENT. TO BE SEEN
BY LOGITECH INC. PRESIDENT, CHAIRMAN OF THE BOARD, GENERAL COUNSEL AND OUTSIDE
COUNSEL ONLY." Schedule A2 shall include all the information included in
Schedule A1 as well as the titles and filing dates of the applications. Schedule
A2 will not be opened except as may be necessary to perform or enforce this
Agreement. Schedule A2 shall be maintained in a sealed envelope in a secure
location within Logitech.
IN WITNESS WHEREOF, the authorized representatives of the parties hereto
have signed this Agreement as of the date and year last set forth below.
LOGITECH, INC. IMMERSION CORPORATION
By: /s/ X. Xxxxxxxxxxx By: /s/ Xxxxx Xxxxxxxxx
-------------------------- ----------------------------------
Name: X. Xxxxxxxxxxx Name: Xxxxx Xxxxxxxxx
-------------------------- ----------------------------------
Title: CFO Title: President/CEO
-------------------------- ----------------------------------
Date: 4/2/97 Date: 4/2/97
-------------------------- ----------------------------------
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