1
Exhibit 10.17
PATENT LICENSE AGREEMENT
AGREEMENT dated this 1st day of June 1999, between Microsoft
Corporation, a corporation organized and existing under the laws of the State of
Washington ("Microsoft"), and Timeline, Inc., a corporation organized and
existing under the laws of the State of Washington ("Timeline");
WHEREAS, Timeline warrants that it is the owner of all right, title and
interest in United States Patent 5,802,511 (the "'511 Patent"), and that it has
not granted and is under no obligation to grant rights in the `511 Patent to any
other entity or person;
WHEREAS, Microsoft acknowledges that Timeline is the owner of all right,
title and interest in the `511 Patent, and further acknowledges that Microsoft
has no ownership interest in the `511 Patent;
WHEREAS, Microsoft desires to obtain a license to the `511 Patent, and
Timeline is willing to grant to Microsoft such a license upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Microsoft and Timeline agree as follows:
1. Definitions
1.1 "Licensed Patent(s)" shall mean (i) United States Patent 5,802,511, for
"Data Retrieval Method and Apparatus With Multiple Source Capability," issued on
September 1, 1998, (ii) all other patents and patent applications filed as of
the Effective Date that are owned, controlled or licensable, in whole or in
part, by Timeline relating to the subject matter thereof, and (iii) all parents,
divisions, continuations, continuations-in-part, reexaminations, reissues,
foreign, European Patent Convention
2
and Patent Cooperation Treaty counterparts (if any), and extensions of the
patents and applications identified in the foregoing subsections (i) and (ii).
1.2 "Subsidiary" and "Affiliates" shall mean and include any corporation,
company, joint venture, partnership, firm or other entity in which Microsoft or
its Subsidiaries (as defined herein), now or hereafter, directly or indirectly,
owns or controls:
1.2.1 in the case of corporate entities, fifty percent (50%) or more of
the stock or participating shares entitled to vote for the election of
directors; and
1.2.2 in the case of non-corporate entities, fifty percent (50%) or more
of the equity interest with power to direct management policies of such
non-corporate entities.
1.3 "Affiliate" shall also mean any of MSNBC, Dreamworks Interactive L.L.C.,
and MSFDC, L.L.C., if and so long as Microsoft or its Subsidiaries retain at
least as much ownership and control thereof as Microsoft and its Subsidiaries
have as of the Effective Date.
1.4 "Licensed Product(s)" shall mean any current or future product or
service developed, manufactured, offered or distributed by or for Microsoft or
its current or future Subsidiaries and Affiliates, and used, leased, licensed,
marketed, sold or otherwise transferred by or for Microsoft under a trademark
owned by Microsoft or its Subsidiaries or Affiliates.
1.5 "Effective Date" shall mean the later of: (a) the date (or the last of
the dates, if they are different) on which this Agreement is executed by
Microsoft and Timeline, and (b) the date Microsoft pays to Timeline the sum
stated in Section 4.1(a), which Effective Date will be entered in the preamble
of this Agreement.
1.6 "Microsoft Licensees" shall mean those persons or entities licensed by
Microsoft, or its Subsidiaries or Affiliates, including end users, distributors,
dealers, customers, Original Equipment Manufacturers (OEMs), private label
customers, independent software vendors (ISVs), value-added resellers (VARs),
replicators and the like who
CONFIDENTIAL 2
3
purchase, license, acquire or otherwise obtain Licensed Product(s) from
Microsoft, or its Subsidiaries, Affiliates or other Microsoft Licensees.
1.7. "Infringement" shall include direct infringement, contributory
infringement and inducement to infringe.
2. License
2.1 Timeline hereby grants to Microsoft, and its Subsidiaries and Affiliates
and Microsoft Licensees, a non-exclusive, perpetual, irrevocable, fully paid,
worldwide right and license, under the Licensed Patents, to make, have made,
use, sell, import, lease, license, reproduce, distribute, transfer or
commercially exploit the Licensed Products.
2.2 Timeline hereby further grants to Microsoft, and its Subsidiaries and
Affiliates, a limited right to grant sublicenses of the license granted to the
Licensed Patents under Section 2.1 only to Microsoft's Licensees but only for
the manufacture, use, sale, license, importation, lease or other distribution or
transfer of Licensed Products and for the formation, use, sale, license,
importation, lease or other distribution or transfer of any combination which
includes a Licensed Product, provided, however, that such sublicensing rights
shall not cover or extend to any third party product in such combination if that
third party product itself directly infringes or contributorily infringes a
Licensed Patent. No license is granted herein to expressly or impliedly
sublicense any person or entity to add any software code or software product to
or in combination with any Licensed Product in a way that constitutes
Infringement of a Licensed Patent.
3. Release and Covenant
3.1 Timeline hereby irrevocably releases, acquits and forever discharges
Microsoft, its Subsidiaries and Affiliates, and Microsoft Licensees, from any
and all claims of infringement of the Licensed Patents, with respect to the
manufacture, use, offer to sell, sale, importation, lease, licensing,
reproduction, distribution, transfer, or commercial
CONFIDENTIAL 3
4
exploitation of the Licensed Products occurring before the Effective Date of
this Agreement.
3.2 Timeline hereby irrevocably and without fee covenants not to xxx and
releases, acquits and forever discharges Microsoft, its Subsidiaries and
Affiliates from any and all claims of Infringement of the Licensed Patents with
respect to the manufacture, use, offer to sell, sale, importation, lease,
licensing, reproduction, distribution, transfer, or commercial exploitation of
the Licensed Products occurring before, on or after the Effective Date of this
Agreement. Timeline also hereby irrevocably covenants not to xxx Microsoft
Licensees for infringement of the Licensed Patents who use the Licensed Products
as designed.
3.3 No release, acquit, covenant not to xxx or discharge is granted herein
to any Microsoft Licensee to add any software code or software product to or in
combination with a Licensed Product in a way that constitutes Infringement of a
Licensed Patent.
4. Payment
4.1 In consideration of the license granted under Section 2, Microsoft:
(a) shall pay Timeline, within 48 hours of the execution of this
Agreement, a fully paid-up, non-refundable license fee of Five Million
Dollars (US $5,000,000);
(b) shall enter into a Seventh Amendment with Timeline to that certain
Microsoft Corporation Software Development and License Agreement between
Microsoft Corporation and Timeline, Inc. dated June 20, 1995,
concurrently with the Effective Date hereof; and
(c) shall afford to Timeline "Partner" status in the Microsoft Solution
Providers program (or its successors or equivalents) for a period of 60
calendar months starting June 1, 1999. As such, Timeline shall be
entitled during such period to all the rights and privileges associated
with such status, most particularly
CONFIDENTIAL 4
5
development software and support and marketing support as is then normal
and customary for firms of such status under Microsoft's then-standard
program (or its successors or equivalents).
4.2 The payment and other consideration set forth in Section 4.1 constitute
the total consideration due to Timeline under this Agreement. Microsoft affirms
that it will receive the benefits for which it has or will provide such
consideration, regardless of whether the Licensed Patents, or any of them, are
terminated or invalidated prior to their scheduled expiration.
5. Term
The term of the licenses and covenants granted herein shall be from the
Effective Date of this Agreement until the expiration of the last to expire
rights of the Licensed Patents.
6. Confidentiality
This Agreement, its terms and conditions, as well as the course and
content of negotiations leading thereto, shall remain confidential and shall not
be disclosed to other parties, except as may be required to carry out the terms
of this Agreement, to enforce its provisions, to comply with court process or
requirements of law, or as expressly permitted in this paragraph. Timeline may
disclose to third parties the fact that Microsoft has taken a license under the
Licensed Patents and been extended a covenant not to xxx, and the nature and
scope of that license and covenant. Timeline may also disclose the amount of
payment by Microsoft to Timeline under this Agreement to the appropriate
regulatory, legal or governmental agency or entity, but solely to the extent
required under the securities laws or other law or regulation or in a legal
proceeding pursuant to a court approved protective order with appropriate
safeguards of confidentiality. Microsoft and its respective Subsidiaries and
Affiliates shall have the right (a) to refer to the existence of this Agreement,
and (b) to disclose the substance thereof in response to any inquiry,
CONFIDENTIAL 5
6
whether direct or indirect, immediate or remote, by any actual or potential
Microsoft Licensee.
7. Representations and Warranties
7.1 Timeline represents and warrants that it has the full right and power to
enter into this Agreement, and to grant all rights, licenses, releases, and
covenants as set forth herein. Timeline further represents and warrants that it
is the owner of all right, title and interest in the Licensed Patents, and that
it has not granted and is under no obligation to grant rights in the Licensed
Patents to any other entity or person.
7.2 Timeline further warrants and represents (a) that there are no
outstanding liens, conveyances, mortgages, assignments, encumbrances or other
agreements inconsistent with the provisions of the foregoing license and release
or with any other provision of this Agreement, or which would prevent or impair
the full and complete exercise of all substantive rights, license, releases and
covenants granted by Timeline to Microsoft, its Subsidiaries and Affiliates, and
Microsoft Licensees, pursuant to the terms and conditions of this Agreement; (b)
that this Agreement does not violate or otherwise breach any license or other
agreement arising from or relating to the Licensed Patents that pre-dates the
Effective Date of this Agreement; (c) that no such prior license or other
agreement violates or otherwise breaches any of the rights, license, releases
and covenants granted in this Agreement, and (d) that Timeline will not enter
into any license or other agreement that violates or otherwise breaches any of
the rights, license, releases and covenants granted in this Agreement during the
full term of the Agreement.
7.3 Timeline further warrants and represents that if any claim is made by
any person or entity that this Agreement violates or otherwise breaches any
license or other agreement to which Timeline or any assignee, licensee, agent or
affiliate of Timeline is a party, then Timeline will indemnify Microsoft, and
its Subsidiaries and Affiliates, and Microsoft Licensees, and hold them harmless
from any such claim, including payment of
CONFIDENTIAL 6
7
Microsoft's and its Subsidiaries', Affiliates', and Microsoft Licensees'
attorneys fees in responding to such claims.
7.4 Timeline warrants and represents that as of the Effective Date of this
Agreement, it does not, to the best of its knowledge, own, control, or have the
right to license or assign any rights in any patent application or patent (other
than the Licensed Patents) or inventions conceived but not yet filed as a patent
application which could be asserted against Microsoft, or any of its respective
Subsidiaries or Affiliates, with respect to any products or services provided
by, for, or to Microsoft, or its respective Subsidiaries or Affiliates.
8. Notices and Other Communications
8.1 Any notice or other communication required or permitted to be made or
given to either party hereto pursuant to this Agreement shall be deemed to have
been given upon posting if sent to such party by registered or certified mail,
postage prepaid, addressed to it at its address set forth below, or to such
other address as it shall designate by written notice given to the other party
in conformity with this Section 8:
In the case of Microsoft,
Associate General
Counsel, Intellectual Property
Microsoft Corporation
Xxx Xxxxxxxxx Xxx
Xxxxxxx,XX 00000
Xx the case of Timeline,
Xxxxxxx Xxxxxxxxx, CEO
Timeline, Inc.
0000 000xx Xxxxxx XX
Xxxxxxxx, XX 00000
9. Assignments
9.1 Timeline shall not assign any rights in the Licensed Patents, unless
such assignment is specifically made subject to the terms and conditions of this
Agreement.
CONFIDENTIAL 7
8
Any attempted assignment in derogation of this Agreement or this Section shall
be null and void.
9.2 This Agreement shall extend to and be binding upon the parties'
successors, estates, assigns and transferees.
10. Applicable Law
This Agreement shall be construed, and the legal relations between the
parties hereto shall be determined, in accordance with the domestic law of the
State of Washington. The parties each consent to exclusive jurisdiction and
venue in the federal courts sitting in King County, Washington, unless no
federal subject matter jurisdiction exists, in which case each party consents to
exclusive jurisdiction and venue in the Superior Court of King County,
Washington. The parties each waive all defenses of lack of personal jurisdiction
and forum nonconveniens.
11. Disclaimer of Agency
This Agreement shall not establish that Timeline or Microsoft is the
legal representative or agent of any other party to this Agreement. Neither
Timeline nor Microsoft shall have the right or authority to assume, create, or
incur any liability or any obligations of any kind, express or implied, against
or in the name of or on behalf of any other party hereto except as specifically
provided in this Agreement.
12. Miscellaneous
12.1 This Agreement will not be binding upon the parties until it has been
signed, below, by or on behalf of each party. No amendment or modification
hereof shall be valid or binding upon the parties unless made in writing and
signed as aforesaid. This Agreement sets forth the entire agreement and
understanding between the parties with respect to the subject matter hereof and
merges all prior discussions between them, and none of the parties shall be
bound by any conditions, definitions, warranties, understandings, or
representations with respect to the Licensed Patents or any other
CONFIDENTIAL 8
9
subject matter hereof other than as expressly provided herein or as duly set
forth on, or subsequent to, the date hereof in writing and signed by the party
bound thereby or its duly authorized representative. Both Microsoft and Timeline
have prepared this Agreement, and no ambiguity shall be resolved against any of
them by virtue of its role in drafting this Agreement.
12.2 If any provision or provisions of this Agreement shall be held to be
illegal, invalid or unenforceable, the legality, validity and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
12.3 The headings of the several Sections are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
CONFIDENTIAL 9
10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
on their behalf as of the date first above written.
MICROSOFT CORPORATION
/s/ Xxxx Xxxxxx
------------------------------------
By: Xxxx Xxxxxx
--------------------------------
Title: Vice President
-----------------------------
Date: June 2, 1999
TIMELINE, INC.
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
By: Xxxxxxx X. Xxxxxxxxx
--------------------------------
Title: President
-----------------------------
Date: June 3, 1999
CONFIDENTIAL 10
