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EXHIBIT 10.27
[Confidential treatment has been requested for portions of this exhibit. The
confidential portions have been redacted and are denoted by [**]. The
confidential portions have been separately filed with the commission.]
NIH Office of Technology Transfer 910221 - September 8, 1991
NATIONAL INSTITUTES OF HEALTH
ALCOHOL, DRUG ABUSE AND MENTAL HEALTH ADMINISTRATION
CENTERS FOR DISEASE CONTROL
PATENT LICENSE AGREEMENT -- EXCLUSIVE
COVER PAGE
For XXX internal use only:
Patent License Number: ________________
Serial Numbers of Licensed Patents: 06/410,965
Licensee: Cancer Therapy and Research Center
CRADA Number (if applicable): ___________
Additional Remarks:________________________________________
___________________________________________________________
This Patent License Agreement, hereinafter referred to as the "Agreement"
consists of this Cover Page, an attached Agreement, a Signature Page, Appendix
A (Patent or Patent Application), Appendix B (Fields of Use and Territory),
Appendix C (Royalties) and Appendix D (Modifications). This Cover Page serves
to identify the Parties to this Agreement:
(1) the National Institutes of Health ("NIH") or the Centers for Disease
Control (CDC), or the Alcohol, Drug Abuse and Mental Health Administration
("ADAMHA"), hereinafter singly or collectively referred to as "PHS," agencies
of the United States Public Health Service within the Department of Health and
Human Services ("DHHS"); and
(2) The person, corporation or institution identified on the Signature
Page, having offices at the address indicated on the Signature Page,
hereinafter referred to as "LICENSEE."
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NIH Office of Technology Transfer 910221 - September 8, 1991
PHS PATENT LICENSE AGREEMENT -- EXCLUSIVE
PHS and LICENSEE agree as follows:
1. BACKGROUND
1.01 In the course of conducting biomedical and behavioral
research, PHS investigators conceived and reduced to practice inventions that
may have commercial applicability.
1.02 By assignment of rights from PHS employees and other
inventors, DHHS, on behalf of the United States Government, owns the
intellectual property rights claimed in any United States and foreign patent
applications or patents corresponding to the assigned inventions. DHHS also
owns any tangible embodiments of these inventions actually reduced to practice
by PHS.
1.03 The Assistant Secretary for Health of DHHS has delegated to
PHS the authority to enter into this Agreement for the licensing of rights to
these inventions under the patent law, 35 U.S.C. Sections 200-212 and the
Federal Technology Transfer Act of 1986, 15 U.S.C. Section 3710a.
1.04 PHS desires to transfer these inventions to the private sector
through commercialization licenses to facilitate the commercial development of
products and processes for public use and benefit.
2. DEFINITIONS
2.01 Licensed Patent Rights refers collectively to identified claim
subject matter in:
(a) U.S. patent applications and patents listed in
Appendix A, divisionals and continuations of these
applications, and their counterpart foreign patent
applications;
(b) any other foreign patent applications and patents
listed in Appendix A;
(c) U.S. and counterpart foreign patents issued from the
patent applications in (a) and (b) above;
(d) U.S. continuation-in-part patent applications and
counterpart foreign patent applications, and the resulting
patents, only to the extent that their claims are encompassed
by the identical claim in (a) and (b) above; and
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(e) any reissues, reexaminations and extensions of U.S.
patents described in (a), (c), and (d) above.
2.02 Licensed Product(s) means tangible materials which, in the
course of manufacture, use or sale would, in the absence of this Agreement,
infringe one or more claims of the Licensed Patent Rights that have not been
held invalid or unenforceable by an unappealed or unappealable judgment of a
court of competent jurisdiction.
2.03 Licensed Process(es) means processes which, in the course of
being practiced would, in the absence of this Agreement, infringe one or more
claims of the Licensed Patent Rights that have not been held invalid or
unenforceable by an unappealed or unappealable judgment of a court of competent
jurisdiction.
2.04 Licensed Territory means the geographical area identified in
Appendix B.
2.05 Net Sales means the total gross receipts for sales of Licensed
Products or practice of Licensed Processes by LICENSEE, its Affiliates, or
sublicensees, and from leasing, renting, or otherwise making Licensed Products
available to others without sale or other dispositions, whether invoiced or
not, less returns and allowances actually granted, packing costs, insurance
costs, freight out, taxes or excise duties imposed on the transaction (if
separately invoiced), and wholesaler and cash discounts in amounts customary in
the trade. No deductions shall be made for commissions paid to individuals,
whether they be with independent sales agencies or regularly employed by
LICENSEE, its Affiliates, or sublicensees, and on their payroll, or for the
cost of collections.
2.06 Net Sales Price means the Net Sales divided by the quantity of
Licensed Product sold or Licensed Process practiced.
2.07 Combined Product means a product that contains a Licensed
Product along with at least one other active component or ingredient not
covered by the Licensed Patent Rights.
2.08 First Commercial Sale means the initial transfer by LICENSEE,
its Affiliates or sublicensees, of Licensed Products in exchange for cash or
some equivalent to which value can be assigned for the purpose of determining
Net Sales, and First Commercial Use means the initial practice of a Licensed
Process by LICENSEE, its Affiliates or sublicensees.
2.09 Affiliate means any corporation or other business entity
controlled by, controlling, or under common control with LICENSEE. For this
purpose, "control" means direct or indirect beneficial ownership of at least
[**] percent of the voting stock, or at least [**] percent interest
in the income of such corporation or other business.
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2.10 Government means the United States Government.
2.11 Licensed Fields of Use means the fields of use identified in
Appendix B.
2.12 Exclusive Commercialization License means that PHS will not
grant further licenses for commercial exploitation of the Licensed Patent
Rights in the Licensed Fields of Use in the Licensed Territory, so long as the
LICENSEE complies with the terms of this Agreement.
3. GRANT OF RIGHTS
3.01 PHS hereby grants and LICENSEE accepts, subject to the terms
and conditions of this Agreement, an Exclusive Commercialization License under
the Licensed Patent Rights in the Licensed Territory to make and have made, to
use and have used and to sell and have sold any Licensed Products in the
Licensed Fields of Use and to practice and have practiced any Licensed
Processes in the Licensed Fields of Use.
3.02 This Agreement is effective when signed by all parties and
shall extend to the expiration of the last to expire of the Licensed Patent
Rights unless sooner terminated as provided in Article 13 below.
3.03 PHS agrees, if such materials are available to PHS, to provide
LICENSEE with samples of the materials claimed in the Licensed Patent Rights
and to replace such materials in the event of their unintentional destruction.
LICENSEE shall not distribute or release these materials to others except to
further the purposes of this Agreement.
3.04 This Agreement confers no license or rights by implication,
estoppel or otherwise under any patent applications or patents of PHS other
than Licensed Patent Rights regardless of whether such patents are dominant or
subordinate to Licensed Patent Rights. PHS shall endeavor to notify LICENSEE of
any improvement or related patent applications and patents that may become
available for licensing.
3.05 The research results of PHS investigators generally are
disseminated freely through publication in the scientific literature and
presentations at public fora. PHS reserves the right to provide the data or
research products developed in Government laboratories to third parties for
research purposes.
3.06 PHS acknowledges that information related to the Licensed
Patent Rights may be of assistance to LICENSEE in its commercialization
efforts. Accordingly, PHS will consider reasonable requests by LICENSEE for
access to the inventors of the Licensed Patent Rights.
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4. SUBLICENSING
4.01 LICENSEE may enter into sublicensing agreements under the
Licensed Patent Rights.
4.02 LICENSEE agrees that any sublicenses granted by it shall
provide that the obligations to PHS of Paragraphs 5.01, 5.02, 5.04, 7.01, 7.02,
9.01, 12.05, and 14.07-14.10 of this Agreement shall be binding upon the
sublicensee as if it were a party to this Agreement. LICENSEE further agrees to
attach copies of these Paragraphs to all sublicense agreements.
4.03 Any sublicenses granted by LICENSEE shall provide for the
termination of the sublicense, or the conversion to a license directly between
such sublicensees and PHS, at the option of the sublicensee, upon termination
of this Agreement under Article 13. Such conversion is contingent upon
acceptance by the sublicensee of the remaining provisions of this Agreement.
4.04 LICENSEE agrees to forward to PHS a copy of each fully
executed sublicense agreement postmarked within sixty (60) days of the
execution of such agreement, and further agrees to forward semiannually to PHS,
along with the royalty reports of LICENSEE to PHS under Article 10, a copy of
such reports received by LICENSEE from its sublicensees during the preceding
half year period under the sublicense as shall be pertinent to a royalty
accounting to PHS by LICENSEE for activities under the sublicenses.
5. STATUTORY REQUIREMENTS, RESERVED GOVERNMENT
RIGHTS AND PHS REQUIREMENTS
5.01 PHS reserves on behalf of the Government an irrevocable,
nonexclusive, nontransferable, royalty-free license for the practice of all
inventions licensed under the Licensed Patent Rights throughout the world by or
on behalf of the Government and on behalf of any foreign government or
international organization pursuant to any existing or future treaty or
agreement to which the Government is a signatory.
5.02 LICENSEE agrees that products used or sold in the United
States embodying Licensed Products or produced through use of Licensed
Processes shall be manufactured substantially in the United States, unless a
written waiver is obtained in advance from PHS.
5.03 LICENSEE acknowledges that PHS may enter into a future
Cooperative Research and Development Agreement ("CRADA") under the Federal
Technology Transfer Act of 1986 that relates to the subject matter of this
Agreement. LICENSEE agrees not to unreasonably deny requests for sublicense or
cross license rights from such future collaborators with PHS when acquiring
such derivative rights is necessary in order to make a CRADA project feasible.
PHS will endeavor to give LICENSEE a
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reasonable opportunity to join as a party to the proposed CRADA prior to its
initiation, and to obtain reciprocal patent rights in any resultant inventions.
5.04 DHHS has responsibility for funding basic biomedical research,
for funding medical treatment through programs such as Medicare and Medicaid,
for providing direct medical care and, more generally, for protecting the
health and safety of the public. Because of these responsibilities, and the
public investment in the research that culminated in the Licensed Patent
Rights, PHS may require LICENSEE to submit documentation in confidence showing
a reasonable relationship between the pricing of a Licensed Product, the public
investment in that product and the health and safety needs of the public. This
paragraph shall not restrict the right of LICENSEE to price a Licensed Product
or Licensed Process so as to obtain a reasonable profit for its sale or use.
This Paragraph 5.04 does not permit PHS or any other government agency to set
or dictate prices for Licensed Products or Licensed Processes.
5.05 PHS reserves the right to grant nonexclusive licenses to make
and to use the inventions defined by the Licensed Patent Rights for purposes of
research involving the inventions themselves, and not for purposes of
commercial manufacture or in lieu of purchase if the inventions are available
as commercial products for research purposes. The purpose of this research
license is to encourage basic research, whether conducted at an academic or
corporate facility. In order to safeguard the Licensed Patent Rights, however,
PHS shall obtain the consent of LICENSEE before granting to commercial entities
a research license or providing to them research samples of the materials
claimed in the Licensed Patent Rights, which consent shall not be unreasonably
withheld. Any such license shall be limited to research for non- commercial
purposes.
6. ROYALTIES AND REIMBURSEMENT
6.01 LICENSEE agrees to pay to PHS a noncreditable, nonrefundable
License Issue Royalty as set forth in Appendix C within thirty (30) days from
the date that this Agreement becomes effective.
6.02 LICENSEE agrees to pay to PHS a nonrefundable Minimum Annual
Royalty as set forth in Appendix C. The Minimum Annual Royalty is due and
payable on January 1 of each calendar year, and may be credited against any
Earned Royalty due for sales made in that year. The Minimum Annual Royalty due
for the first calendar year of this Agreement may be prorated according to the
fraction of the calendar year remaining between the effective date of this
Agreement and the next subsequent January 1.
6.03 LICENSEE agrees to pay PHS Earned Royalties as set forth in
Appendix C.
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6.04 LICENSEE agrees to pay PHS Benchmark Royalties as set forth in
Appendix C.
6.05 LICENSEE agrees to pay PHS Sublicensing Royalties as set forth
in Appendix C.
6.06 A claim of a patent application licensed under this Agreement
shall cease to fall within the Licensed Patent Rights for purposes of computing
the Minimum Annual Royalty and Earned Royalty payments in any given country on
the earliest of the dates that it: (a) has been abandoned but not continued, or
(b) has been pending (including the pendency time of any parent cases) but not
allowed for more than six (6) years from its effective filing date; but shall
be reinstated for purposes of computing these royalty payments on the date that
a patent issues thereon. A claim of a patent licensed under this Agreement
shall cease to fall within the Licensed Patent Rights for the purpose of
computing the Minimum Annual Royalty and Earned Royalty payments in any given
country on the earliest of the dates that: (a) the patent expires, (b) the
patent is no longer maintained by the Government, or (c) all claims of the
Licensed Patent Rights have been held to be invalid or unenforceable by an
unappealed or unappealable decision of a court of competent jurisdiction or
administrative agency.
6.07 No multiple royalties shall be payable because any Licensed
Products or Licensed Processes are covered by more than one of the Licensed
Patent Rights.
6.08 If the LICENSEE sells a Combined Product, the Net Sales Price
for purposes of earned royalty determination under this Article 6 shall be the
market price of the Licensed Product content of the Combined Product when sold
separately. If the Licensed Product is not sold separately, then Net Sales
Price upon which a royalty is paid shall be the greater of (a) the market price
at which the Licensed Product reasonably could be sold as a separate item, or
(b) Net Sales Price of the Combined Product multiplied by a factor 1/x where x
is the number of active components or ingredients contained in the Combined
Product up to a maximum of x-3.
6.09 On sales of Licensed Products between LICENSEE and its
Affiliates, or on sales made in other than an arm's length transaction, the Net
Sales Price attributed under this article 6 to such a transaction shall be that
which would have been received in an arm's length transaction, based on sales
of like quantity and quality products on or about the time of such transaction.
6.10 LICENSEE agrees to reimburse PHS, within sixty (60) days of
their submission of a statement and request for reimbursement, for all
reasonable expenses previously incurred by PHS in the preparation, filing,
prosecution and maintenance of Licensed Patent Rights and further agrees to
reimburse PHS within sixty (60) days after written notice for all such future
expenses. [**] percent of the cumulated amount of such reimbursement may
be credited against Royalties due under Paragraph 6.03, however, the net
royalty payment in any calendar year may not be lower than the
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Minimum Annual Royalty specified in Appendix B. LICENSEE may elect to surrender
its rights in any country of the Licensed Territory under any Licenses Patent
Rights upon sixty (60) days written notice to PHS and owe no reimbursement
obligation under this Paragraph for subsequent patent-related expenses incurred
in that country. LICENSEE may pursue intellectual property rights at its own
expense in countries requested by LICENSEE where the PHS chooses not to seek
such protection.
7. REASONABLE BEST EFFORTS
7.01 LICENSEE shall use its reasonable best efforts to introduce
the Licensed Products into the commercial market or apply the Licensed
Processes to commercial use as soon as practicable, consistent with sound and
reasonable business practices and judgment. LICENSEE agrees to apply at least
the same level of effort that it applies to the commercial development of its
own products and processes. The efforts of a sublicensee shall be considered
the efforts of LICENSEE.
7.02 Upon the First Commercial Sale of Licensed Products or the
First Commercial Use of Licensed Processes, until the expiration of this
Agreement, LICENSEE shall use its reasonable best efforts to keep Licensed
Products and Licensed Processes available to the public.
8. DOMESTIC AND FOREIGN PATENT FILING,
PROSECUTION AND MAINTENANCE
8.01 PHS agrees to take responsibility for, but to consult with the
LICENSEE in, the preparation, filing, prosecution and maintenance of any and
all patent applications or patents included in the Licensed Patent Rights and
shall furnish copies of relevant patent-related documents to LICENSEE. PHS may
agree to permit LICENSEE to handle the prosecution of some or all of the
Licensed Patent Rights.
8.02 Each party shall provide to the other prompt notice as to all
matters that come to its attention that may affect the preparation, filing,
prosecution or maintenance of the Licensed Patent Rights and permit each other
to provide comments and suggestions with respect to the preparation, filing,
and prosecution of Licensed Patent Rights, which comments and suggestions shall
be considered by the other party.
9. RECORD KEEPING
9.01 LICENSEE agrees to keep, and to require that its Affiliates
and sublicensees keep, accurate and correct records of Licensed Products made,
used or sol and Licensed Processes practiced under this Agreement appropriate
to determine the amount of royalties due PHS. Such records shall be retained
for at least three (3) years following a given reporting period. They shall be
available during normal business hours for inspection at the expense of PHS by
an accountant or other designated auditor selected by PHS for the sole purpose
of verifying reports and payments
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hereunder. The accountant shall only disclose to PHS information relating to
the accuracy of reports and payments made under this Agreement. If an
inspection shows an underreporting or underpayment in excess of ten percent
(10%) for any twelve (12) month period, then LICENSEE shall reimburse PHS for
the cost of the inspection.
10. REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS
10.01 Prior to signing this Agreement, LICENSEE has provided to PHS
a written commercialization plan under which LICENSEE intends to bring the
subject matter of the Licensed Patent Rights into commercial use upon execution
of this Agreement. The written commercialization plan is hereby incorporated by
reference into this Agreement. The plan indicates the amount of funding, number
and kind of personnel and time estimated for each phase of development of the
Licensed Products and Licensed Processes. The plan also includes statements of
commitments and estimated application dates to obtain any necessary regulatory
approvals, ultimate projections of sales and proposed marketing efforts. Based
on this plan, performance benchmarks are determined.
10.02 LICENSEE shall provide written annual reports on its product
development progress or efforts to commercialize under the commercialization
plan of Paragraph 10.01 for each of the Licensed Fields of Use within sixty
(60) days after December 31 of each calendar year. These progress reports shall
include, but not be limited to: progress on research and development, status of
applications for regulatory approvals, manufacturing, sublicensing, marketing
and sales during the preceding calendar year, as well as plans for the present
calendar year. If reported progress differs from that projected in the
commercialization plan submitted and benchmarks determined under Paragraph
10.01, LICENSEE shall explain the reasons for such differences. LICENSEE may
propose amendments in any such annual report to the plan submitted under
Paragraph 10.01, acceptance of which by PHS may not unreasonably be denied.
LICENSEE agrees to provide any additional data reasonably required by PHS to
evaluate LICENSEE's performance. LICENSEE may amend the plan of Paragraph 10.01
at any time and shall do so at the request of PHS to address any Licensed
Fields of Use not specifically addressed in the plan originally submitted.
10.03 LICENSEE shall report to PHS the date of the First Commercial
Sale of Licensed Products or the First Commercial Use of Licensed Processes in
each country in the Licensed Territory within thirty (30) days of such
occurrence.
10.04 LICENSEE shall submit to PHS within sixty (60) days after each
calendar half year ending June 30 and December 31, a royalty report setting
forth for the preceding half year period the amount of the Licensed Products
sold or Licensed Processes practiced by LICENSEE, its Affiliates and
sublicensees in each country within the Licensed Territory, the Net Sales, and
the amount of royalty accordingly due. With each such royalty report, LICENSEE
shall submit payment of the earned royalty due. If no earned royalties are due
to PHS for any reporting period, the written
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report shall so state. The royalty report shall be certified as correct by an
authorized officer of LICENSEE and shall include a detailed listing of all
deductions made under Paragraph 2.05 to determine the Net Sales or made under
Article 6 to determine royalties due.
10.05 Royalties due under Article 6 shall be paid in U. S. dollars
in Bethesda, Maryland or at such other place as PHS may reasonably designate,
consistent with the laws and regulations controlling in any foreign country.
For conversion of foreign currency to U. S. dollars, the conversion rate shall
be the rate quoted in the Wall Street Journal on the day that the payment is
due. All checks and bank drafts shall be drawn on United States banks and shall
be payable to NIH/Patent Licensing. Any loss of exchange, value, taxes or other
expenses incurred in the transfer or conversion to U. S. dollars shall be paid
entirely by LICENSEE.
10.06 Late charges will be applied to any overdue payments as
required by the U. S. Department of Treasury in the Treasury Fiscal
Requirements Manual, Section 8020.20. The payment of such late charges shall
not prevent PHS from exercising any other rights it may have as a consequence
of the lateness of any payment.
10.07 All plans and reports required by this Article 10 shall be
treated by PHS as commercial and financial information obtained from a person
and as privileged and confidential and not subject to disclosure under the
Freedom of Information Act, 5 U.S.C. Section 552.
11. INFRINGEMENT AND PATENT ENFORCEMENT
11.01 PHS and LICENSEE agree to notify each other promptly of each
infringement or possible infringement, as well as any facts which may affect
the validity, scope or enforceability of the Licensed Patent Rights of which
either Party becomes aware.
11.02 LICENSEE is empowered pursuant to this Agreement and the
provisions of Chapter 29 of Title 35, United States Code or other statutes to:
(a) bring suit in its name, at its own expense, and on its own behalf for
infringement of presumably valid claims in a Licensed Patent; (b) in any such
suit, to enjoin infringement and to collect for its use, damages, profits and
awards of whatever nature recoverable for such infringement; and (c) settle any
claim or suit for infringement of the Licensed Patent Rights--provided,
however, that PHS and appropriate Government authorities shall have a
continuing right to intervene in such suit. LICENSEE shall take no action to
compel the Government either to initiate or to join in any such suit for patent
infringement unless such action is ultimately necessary to avoid dismissal of
its suit. Should the Government be made a party to any such suit by motion or
any other action of LICENSEE, LICENSEE shall reimburse the Government for any
costs, expenses or fees which the Government incurs as a result of such motion
or other action, including
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any and all costs incurred by the Government in opposing any such joinder
motion. Upon LICENSEE's payment of all costs incurred by the Government as a
result of LICENSEE's joinder motion or other action, these actions by LICENSEE
will not be considered a default in the performance of any material obligation
under this Agreement. In any event, LICENSEE agrees to keep PHS reasonably
apprised of the status and progress of any litigation. Before LICENSEE
commences an infringement action, LICENSEE shall notify PHS and give careful
consideration to the views of PHS an to any potential effects of the litigation
on the public health in deciding whether to xxx.
11.03 In any infringement action commenced under Paragraph 11.02,
the expenses including costs, fees, attorney fees and disbursements, shall be
paid by LICENSEE. Up to fifty (50) percent of such expenses may be credited
against the royalties payable to PHS under the Licensed Patent Rights in the
country in which such a suit is filed. In the event that fifty (50) percent of
such expenses exceed the amount of royalties withheld by LICENSEE in any
calendar year, the expenses in excess may be carried over as a credit on the
same basis into succeeding calendar years. A credit against litigation
expenses, however, may not reduce the royalties due in any calendar year to
less than the Minimum Annual Royalty. Any recovery made by LICENSEE, through
court judgment or settlement, first shall be applied to reimburse PHS for
royalties withheld as a credit against litigation expenses and then to
reimburse LICENSEE for its litigation expense. Any remaining recoveries shall
be shared equally by LICENSEE and PHS.
11.04 PHS shall cooperate fully with LICENSEE in connection with an
infringement action initiated under Paragraph 11.02. PHS agree promptly to
provide access to all necessary documents and to render reasonable assistance
in response to a request by LICENSEE.
11.05 PHS shall have the right to xxx for infringement of the
Licensed Patent Rights in the event that LICENSEE elects not to do so under
Paragraph 11.02.
11.06 In the event that a declaratory judgment action alleging
invalidity or non-infringement of any of the Licensed Patent Rights shall be
brought against LICENSEE or raised by way of counterclaim or affirmative
defense in an infringement suit brought by LICENSEE under Paragraph 11.02,
LICENSEE is empowered pursuant to this Agreement and the provisions of Chapter
29 of Title 35, United States Code or other statutes to: (a) defend the suit
in its own name, at its own expense, and on its own behalf for presumably valid
claims in the Licensed Patent Rights; (b) in any such suit, ultimately to
enjoin infringement and to collect for its use, damages, profits and awards of
whatever nature recoverable for such infringement; and (c) settle any claim or
suit for declaratory judgment involving the Licensed Patent Rights--provided,
however, that PHS and appropriate Government authorities shall have a
continuing right to intervene in such suit. LICENSEE shall take no action to
compel the Government authorities either to initiate or to join in any such
declaratory judgment
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action unless such action is ultimately necessary to avoid dismissal of its
suit. Should the Government be made a party to any such suit by motion or any
other action of LICENSEE, LICENSEE shall reimburse the Government for any
costs, expenses or fees which the Government incurs as a result of such motion
or other action. Upon LICENSEE's payment of all costs incurred by the
Government as a result of LICENSEE's joinder motion or other action, these
actions by LICENSEE will not be considered a default in the performance of any
material obligation under this Agreement. If LICENSEE elects not to defend
against such declaratory judgment action, PHS, at its option, may do so at its
own expense. In any event, LICENSEE agrees to keep PHS reasonably apprised of
the status and progress of any litigation. Before LICENSEE commences an
infringement action, LICENSEE shall notify PHS and give careful consideration
to the views of PHS and to any potential effects of the litigation on the
public health in deciding whether to xxx.
12. NEGATION OF WARRANTIES AND INDEMNIFICATION
12.01 PHS offers no warranties other than those specified in
Article 1.
12.02 PHS does not warrant the validity of the Licensed Patent
Rights, and makes no representations whatsoever with regard to the scope of the
Licensed Patet Rights, or that the Licensed Patet Rights may be exploited
without infringing other patents or other intellectual property rights of third
parties.
12.03 PHS MAKE NO WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE of any subject matter defined by the claims
of the Licensed Patent Rights or of any material provided to LICENSEE under
Paragraph 3.03.
12.04 PHS does not represent that they will commence legal actions
against third parties infringing the Licensed Patent Rights.
12.05 LICENSEE shall defend, indemnify and hold PHS and its
employees, students, fellows, agents and consultants harmless from and against
all liability, demands, damages, expenses and losses, including but not limited
to death, personal injury, illness or property damage in connection with or
arising out of (a) the use by LICENSEE, its Affiliates and sublicensees,
directors, employees or third parties of any Licensed Patent Rights, or (b) the
design, manufacture, distribution or use of any Licensed Products, Licensed
Processes or materials provided under Article 3.03, or other products or
processes developed in connection or arising out of the Licensed Patent Rights.
LICENSEE agrees to maintain a liability insurance program consistent with sound
business practice.
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13. TERMINATION AND MODIFICATION OF RIGHTS
13.01 In the event that LICENSEE is in default in the performance of
any material obligations under this Agreement, and if the default has not been
remedied within ninety (90) days after the date of notice in writing of such
default, PHS may terminate this Agreement by written notice.
13.02 At least 30 days prior to filing a petition in bankruptcy
LICENSEE must inform PHS of its intention to file the petition in bankruptcy or
of a third party's intention to file an involuntary petition in bankruptcy.
13.03 In the event that LICENSEE becomes insolvent, makes an
assignment of Licensed Patent Rights for the benefits of creditors, files a
petition in bankruptcy, has such a petition filed against it, notifies PHS of
its intention to file the petition in bankruptcy, or notifies PHS of a third
party's intention to file an involuntary petition in bankruptcy, PHS shall have
the right to terminate this Agreement by giving LICENSEE written notice.
Termination of this Agreement is effective upon Licensee's receipt of the
written notice.
13.04 LICENSEE shall have a unilateral right to terminate this
Agreement and/or any licenses in any country by giving PHS sixty (60) days
written notice to that effect.
13.05 PHS shall specifically have the right to terminate or render
this Agreement nonexclusive as to any Licensed Fields of Use, if LICENSEE: (1)
has not used reasonable best efforts under the circumstances to put the
Licensed Products or Licensed Processes into commercial use in the country or
countries where licensed, directly or through a sublicense; (2) has not
achieved the benchmarks established in the commercialization plan of Paragraph
10.01 as may be modified under Paragraph 10.02; (3) after commercial use
commences, is not keeping Licensed Products or Licensed Process reasonably
available to the public; (4) cannot reasonably satisfy unmet health and safety
needs; or (5) cannot reasonably justify a failure to comply with the domestic
production requirement of Paragraph 5.02 unless waived. In making this
determination, PHS will take into account the normal course of such commercial
development programs conducted with sound and reasonable business practices and
judgment and the annual reports submitted by LICENSEE under Paragraph 10.02.
Prior to invoking this right, PHS shall give written notice to LICENSEE
providing LICENSEE specific notice of and a ninety (90) day opportunity to
satisfy PHS's concerns as to the previous items (1) to (5). If LICENSEE fails
to satisfy or reasonably begin to rectify such concerns within the ninety (90)
day period, PHS may terminate this AGREEMENT or render this AGREEMENT
nonexclusive to any Licensed Fields of Use.
13.06 When the public health and safety so require, and after
written notice to LICENSEE providing LICENSEE a sixty (60) day opportunity to
respond, PHS shall
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have the right to require LICENSEE to grant sublicenses to responsible
applicants, on reasonable terms, in any Licensed Fields of Use under the
Licensed Patent Rights that are not being adequately commercially exploited by
LICENSEE, or adequately addressed in the commercialization plan of Paragraph
10.01 as amended under Paragraph 10.02, unless LICENSEE can reasonably
demonstrate that such a sublicense would be contrary to sound and reasonable
business practice or that the granting of the sublicense would not materially
increase the availability to the public of the subject matter of the Licensed
Patent Rights. PHS will not require the granting of a sublicense unless the
responsible applicant has first negotiated in good faith with LICENSEE.
13.07 PHS reserves the right according to 35 U.S.C. Section
209(f)(4) to terminate or modify this Agreement if it is determined that such
action is necessary to meet requirements for public use specified by Federal
regulations issued after the date of the license and such requirements are not
reasonably satisfied by LICENSEE.
13.08 Within thirty (30) days of receipt of written notice of PHS's
unilateral decision to modify or terminate this Agreement, LICENSEE may,
consistent with the provisions of 37 C.F.R. Section 404.11, appeal the
decision by written submission to the Assistant Secretary for Health or
designee. The Assistant Secretary for Health or designee's decision shall be
the final agency decision. LICENSEE may thereafter exercise any and all
administrative or judicial remedies that may be available.
13.09 Within ninety (90) days of termination of this AGREEMENT under
this Article 13 or expiration under Paragraph 3.02, a final report shall be
submitted by LICENSEE. Any royalty payments and unreimbursed patent expenses
due to PHS become immediately due and payable upon termination or modification.
If terminated under Article 13, sublicensees may elect to convert their
sublicenses to direct licenses with PHS pursuant to Paragraph 4.03.
13.10 Paragraphs 4.03, 6.07, 9.01, 10.05, 10.06, 12.05 and 13.09 of
this Agreement shall survive termination of this AGREEMENT.
14. GENERAL PROVISIONS
14.01 Neither Party may waive or release any of its rights or
interests in this Agreement except in writing. The failure of either Party to
assert a right hereunder or to insist upon compliance with any term or
condition of this Agreement shall not constitute a waiver of that right or
excuse a similar subsequent failure to perform any such term or condition by
the other party.
14.02 This Agreement constitutes the entire agreement between the
parties relating to the subject matter of the Licensed Patent Rights, and all
prior negotiations, representations, agreements and understandings are merged
into, extinguished by and completely expressed by this Agreement.
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14.03 The provisions of this Agreement are severable, and in the
event that any provision of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of law, such determination shall not
in any way affect the validity or enforceability of the remaining provisions of
this Agreement.
14.04 If either Party desires a modification to this Agreement, the
Parties shall, upon reasonable notice of the proposed modification by the Party
desiring the change, confer in good faith to determine the desirability of such
modification. No modification will be effective until a written amendment is
signed by the signatories to this Agreement or their designees.
14.05 The construction, validity, performance and effect of this
Agreement shall be governed by Federal law as applied by the Federal Courts in
the District of Columbia.
14.06 All notices required or permitted by this Agreement shall be
given by prepaid registered or certified mail properly addressed to the other
Party at the address designated on the following signature page, or to such
other address as may be designated in writing by such other Party and shall be
effective as of the date of the postmark of such notice.
14.07 This Agreement shall not be assigned by LICENSEE except (a)
with the prior written consent of PHS, such consent to be reasonably given; or
(b) as part of a sale or transfer of substantially the entire business of
LICENSEE relating to operations which concern this Agreement.
14.08 LICENSEE agrees in its practice of the Licensed Patent Rights
to comply with all applicable Public Health Service and NIH/ADAMHA regulations
and guidelines including, for example, those relating to research involving
human or animal subjects or recombinant DNA.
14.09 LICENSEE acknowledges that it is subject to and agrees to
abide by the United States laws and regulations (including the Export
Administration Act of 1979 and Arms Export Control Act) controlling the export
of technical data, computer software, laboratory prototypes, biological
material and other commodities. The transfer of such items may require a
license from the cognizant agency of the U. S. Government or written assurances
by LICENSEE that it shall not export such items to certain foreign countries
without prior approval of such agency. PHS neither represent that a license is
or is not required or that, if required, it shall be issued.
14.10 LICENSEE agrees to xxxx the Licensed Products or their
packaging sold in the United States with all applicable U. S. patent numbers
and similarly to indicate "Patent Pending" status. All Licensed Products
manufactured in, shipped to or sold in other countries shall be marked in such
a manner as to preserve PHS patent right in such countries.
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14.11 by entering into this Agreement, PHS does not directly or
indirectly endorse any product or service provided, or to be provided, by
LICENSEE whether directly or indirectly related to this Agreement. LICENSEE
shall not state or imply that this Agreement is an endorsement by the
Government, PHS, any other Government organizational unit, or any Government
employee. Additionally, LICENSEE shall not use the names of NIH or ADAMHA or
their employees in any advertising, promotional or sales literature without the
prior written consent of PHS.
14.12 The Parties agree to attempt to settle amicably any
controversy or claim arising under this Agreement or a breach of the Agreement,
except for appeals of modification or termination decisions provided for in
Article 13. LICENSEE agrees first to appeal any such unsettled claims or
controversies to the Director of NIH, whose decision shall be considered the
final agency decision. Thereafter, LICENSEE may exercise any administrative or
judicial remedies that may be available.
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NIH Office of Technology Transfer 910221 - September 8, 1991
PHS PATENT LICENSE AGREEMENT - EXCLUSIVE
SIGNATURE PAGE
FOR PHS:
--------------------------------------- ------------------------------
Reid G. Xxxxx, X.X. Date
Director, Office of Technology Transfer
National Institutes of Health
Mailing Address for Notices:
Director
Office of Technology Transfer
Box XXX
National Institutes of Health
Xxxxxxxx, Xxxxxxxx 00000
FOR LICENSEE (The undersigned expressly certifies or affirms that the contents
of any statements of LICENSEE made or referred to in this document are truthful
and accurate.)
------------------------------ ------------------------------
Name Date
------------------------------
Title
Mailing Address for Notices:
------------------------------
------------------------------
------------------------------
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NIH Office of Technology Transfer 910221 - September 8, 1991
APPENDIX A - PATENT OR PATENT APPLICATION
PATENT OR PATENT APPLICATION:
U.S. Patent No. 4,520,031, issued May 28, 1985 (serial Number 06/410,965, filed
August 24, 1982) entitled "Method for Reducing Toxic Effects of Methyl-Glyoxal
Bis-Guanylhydrazone"
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NIH Office of Technology Transfer 910221 - September 8, 0000
XXXXXXXX X - LICENSED FIELDS OF USE AND TERRITORY
LICENSED TERRITORY:
United States of America, its territories, possessions and commonwealths.
LICENSED FIELDS OF USE:
A method for reducing the toxic effects of methyl-glyoxal bis-guanylhydrazone
in a patient encompassed within the scope of a claim in the Licensed Patent.
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NIH Office of Technology Transfer 910221 - September 8, 1991
APPENDIX C - ROYALTIES
ROYALTIES:
LICENSEE agrees to pay to PHS a noncreditable, nonrefundable License
Issue Royalty in the amount of ($ [**] ).
LICENSEE agrees to pay to PHS a nonrefundable Minimum Annual Royalty
in the amount of ($ [**] ) which will be credited towards
earned royalties.
LICENSEE agrees to pay PHS Earned Royalties as follows:
Licensee shall pay NIH a royalty on the Net Sales of Licensee and its
included affiliates and Sublicensees of [**] ([**] %).
LICENSEE agrees to pay PHS Benchmark Royalties as follows:
Licensee agrees to pay PHS Sublicensing Royalties as follows:
[**] ([**] %) of Net Sales of Licensed Products
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NIH Office of Technology Transfer 910221 - September 8, 0000
XXXXXXXX X - MODIFICATIONS
PHS and LICENSEE agree to the following modifications to the Articles and
Paragraphs of this Agreement:
1. Add the following language to the end of Paragraph 6.02:
"The Minimum Annual Royalty due for the first calendar year of this
Agreement may be prorated according to the fraction of the calendar
year remaining between the effective date of this Agreement and the
next subsequent January 1, and is due and payable within sixty (60)
days of the effective date of this Agreement, with the royalty report
required in Section 10.04 of this Agreement."
2. Add paragraph 6.11 as follows:
"If licensee sells a licensed product to an affiliate or sublicense
for resale, royalties will only be due on final sales by sublicensee
or affiliate."
3. Replace paragraph 7.01 with the following language:
"LICENSEE shall use its reasonable best efforts to introduce the
Licensed Products into the commercial market or apply the Licensed
Processes to commercial use as soon as practicable, consistent with
sound and reasonable business practices and judgment. "Reasonable best
efforts" for the purposes of this provision shall include, but not be
limited to, adherence to the Commercial Development Plan (defined in
Paragraph 10.01) and performance of the Benchmarks (defined in
Paragraph 10.01 and set forth in Appendix E). LICENSEE agrees to apply
at least the same level of effort that it applies to the commercial
development of its own products and processes. The efforts of a
sublicensee shall be considered the efforts of LICENSEE.
4. Replace paragraph 10.01 with the following language:
Prior to signing this Agreement, LICENSEE has provided to PHS a
written commercialization plan ("Commercial Development Plan") under
which LICENSEE intends to bring the subject matter of the Licensed
Patent Rights into commercial use upon execution of this Agreement.
The Commercial Development Plan is hereby incorporated by reference
into this Agreement. The plan indicates the amount of funding, number
and kind of personnel and time estimated for each phase of development
of the Licensed Products and Licensed Processes. The plan also
includes statements of commitments and estimated application dates to
obtain any necessary regulatory approvals, ultimate projections of
sales and proposed marketing efforts. Based on this plan,
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NIH Office of Technology Transfer 910221 - September 8, 1991
performance benchmarks ("Benchmarks") have been determined and are
attached hereto as Appendix E.
5. Replace paragraph 10.02 with the following language:
LICENSEE shall provide written annual reports on its product
development progress or efforts to commercialize under the Commercial
Development Plan for each of the Licensed Fields of Use within sixty
(60) days after December 31 of each calendar year. These progress
reports shall include, but not be limited to: progress on research
and development, status of applications for regulatory approvals,
manufacturing, sublicensing, marketing and sales during the preceding
calendar year, as well as plans for the present calendar year. If
reported progress differs from that projected in the Commercial
Development Plan and Benchmarks, LICENSEE shall explain the reasons
for such differences. LICENSEE may propose amendments in any such
annual report to the plan submitted under Paragraph 10.01, acceptance
of which by PHS may not unreasonably be denied. LICENSEE agrees to
provide any additional data reasonably required by PHS to evaluate
LICENSEE's performance. LICENSEE may amend the Commercial Development
Plan at any time, and shall do so at the request of PHS, to address
any Licensed Fields of Use not specifically addressed in the plan
originally submitted. LICENSEE may amend the Benchmarks at any time
upon written consent by PHS. PHS shall not unreasonably withhold
approval of any request of LICENSEE to extend the time periods of this
schedule if such request is supported by a reasonable showing by
LICENSEE of due diligence toward bringing the Licensed Products to the
point of practical application.
6. Replace Paragraph 13.05 with the following language:
PHS shall specifically have the right to terminate or render this
Agreement nonexclusive as to any Licensed Fields of use, if LICENSEE:
(1) has not used reasonable best efforts under the circumstances to
put the Licensed Products or Licensed Processes into commercial use in
the country or countries where licensed, directly or through a
sublicensee; (2) has not achieved the Benchmarks as may be modified
under Paragraph 10.02; (3) after commercial use commences, is not
keeping Licensed Products or Licensed Processes reasonably available
to the public; (4) cannot reasonably satisfy unmet health and safety
needs; or (5) cannot reasonably justify a failure to comply with the
domestic production requirement of Paragraph 5.02 unless waived. Prior
to invoking this right, PHS shall give written notice to LICENSEE
providing LICENSEE specific notice of and a ninety (90) day
opportunity to satisfy PHS's concerns as to the previous item (1) to
(5). If LICENSEE fails to satisfy or reasonably begin to rectify such
concerns within the ninety (90) day period, PHS may terminate this
AGREEMENT or render this AGREEMENT nonexclusive to any Licensed Fields
of Use.
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NIH Office of Technology Transfer 910221 - September 8, 0000
XXXXXXXX X-XXXXXXXXXX
BENCHMARKS:
Licensee shall apply for orphan drug status for licensed field use in
1992.
Licensee shall initiate NDA directed studies for of use in the second
half of 1992.
Licensee shall submit NDA to the FDA for field of use in 1994.
Licensee shall launch product for field of use in within six months
after receiving marketing approval by the FDA.
