CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
EXHIBIT 10.6
103095 AGREEMENT with an effective date of
October 31, 1995 between
INTERNATIONAL BUSINESS MACHINES
CORPORATION, a New York corporation
(hereinafter called IBM), and
APPLIED SCIENCE FICTION, a Delaware
corporation (hereinafter called
LICENSEE).
IBM has the right to license others under certain patents.
LICENSEE desires to acquire a nonexclusive license under those
patents. In consideration of the premises and mutual covenants
herein contained, IBM and LICENSEE agree as follows:
Section 1. Definitions
1.1 "Information Handling System" shall mean any instrumentality
or aggregate of instrumentalities primarily designed to compute,
classify, process, transmit, receive, retrieve, originate,
switch, store, display, manifest, measure, detect, record,
reproduce, handle or utilize any form of information,
intelligence or data for business, scientific, control or other
purposes.
1.2 "IHS Product" shall mean:
1.2.1 an Information Handling System; or
1
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
1.2.2 any instrumentality or aggregate of instrumentalities (including, without
limitation, any component, subassembly or program) designed for
incorporation into an Information Handling System. An apparatus primarily
designed for use in the fabrication (including testing) of an IHS Product
shall not be considered an IHS Product even if it otherwise meets the
above definition.
1.3 "Type Number" shall mean the combination of numbers, letters or words
utilized by LICENSEE to identify each type or model of Licensed Product.
1.4 "Licensed Patents" shall mean the patents listed in Exhibit 1 to this
Agreement, any patents issuing on the applications listed in Exhibit 1, any
patents of other countries corresponding to the listed patents and applications,
and any reissues, divisions, continuations, or extensions of the foregoing
patents and applications.
1.5 "Licensed Products" shall mean IHS Products which capture, create, process,
handle, transmit, store, or output images.
1.6 "Patented Portion" shall mean that portion of a Licensed Product which
embodies or uses all of the elements or steps recited in one claim of one
Licensed Patent or which is
2
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
manufactured by the use of all of the steps recited in one claim of one Licensed
Patent or which is capable of being used to practice the method recited in one
claim of one Licensed Patent. A Licensed Product which embodies or uses all of
the elements or steps recited in more than one claim of one Licensed Patent or
in the claims of more than one Licensed Patent shall have more than one Patented
Portion.
1.7 "Subsidiary" shall mean a corporation, company or other entity:
1.7.1 more than fifty percent (50%) of whose outstanding shares or securities
(representing the right to vote for the election of directors or other
managing authority) are, now or hereafter, owned or controlled, directly
or indirectly, by a party hereto, but such corporation, company or other
entity shall be deemed to be a Subsidiary only so long as such ownership
or control exists; or
1.7.2 which does not have outstanding shares or securities, as may be the case
in a partnership, joint venture or unincorporated association, but more
than fifty percent (50%) of whose ownership interest representing the
right to make the decisions for such corporation, company or other entity
is now or hereafter, owned or controlled, directly or indirectly, by a
party hereto, but such corporation, company or other entity shall be
3
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
deemed to be a Subsidiary only so long as such ownership or control
exists.
1.8 "LICENSEE's Selling Price" for each Licensed Product sold by LICENSEE to
other than its affiliate shall mean the bona fide selling price, after prompt
payment discounts and quantity discounts actually allowed, at which LICENSEE
sold said Licensed Product. If said selling price includes the following items,
they may be deducted only if separately invoiced to LICENSEE's customer:
packing, transportation and insurance charges; import, export, excise, sales and
value added taxes; and customs duties. "LICENSEE's Selling Price" for each
Licensed Product sold by LICENSEE to one of its affiliates shall be equal to the
average of the LICENSEE's Selling Prices for all Licensed Products identical to
said Licensed Product which were sold to other than LICENSEE's affiliates in the
relevant semiannual accounting period.
Section 2. License
2.1 IBM grants to LICENSEE a nonexclusive license under the Licensed Patents:
2.1.1 to make, use, import, and lease, sell and otherwise transfer Licensed
Products; and
2.1.2 to use any apparatus in the manufacture of Licensed Products and practice
any method or process in the manufacture or use of Licensed Products.
4
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
The license granted in this Section 2.1 for any particular Licensed Product
shall be only under claims of Licensed Patents which claims define a Patented
Portion for said particular Licensed Product and which are claims of Licensed
Patents of the countries of manufacture, use, importation, or lease, sale or
other transfer by LICENSEE.
A particular Licensed Product is licensed under a Licensed Patent when and only
when:
2.1.3 such Licensed Patent defines a Patented Portion of such Licensed Product;
2.1.4 such Licensed Patent was identified in a report, as specified in Section
5.5, as covering such Licensed Product; and
2.1.5 the royalty attributable to such Licensed Product was either timely paid
as required by Section 5.4 or a late payment was made and accepted by IBM
pursuant to Section 5.2.
2.2 No license, immunity or other right is granted by IBM either directly or by
implication, estoppel, or otherwise:
2.2.1 other than under the Licensed Patents;
2.2.2 to have Licensed Products made by a third party for
LICENSEE;
2.2.3 with respect to any Licensed Product which does not fully include a
Patented Portion;
5
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
2.2.4 with respect to any item other than a Licensed Product notwithstanding
that such other item may incorporate one or more Licensed Products; or
2.2.5 to parties acquiring any item from LICENSEE for the combination of such
acquired item with any other item, including other items provided by
LICENSEE, or for the use of any such combination even if such acquired
item has no substantial use other than as part of such combination.
Section 3. Extension of License to Subsidiaries
3.1 The license granted herein by IBM is also granted to LICENSEE's
Subsidiaries, provided that:
3.1.1 each Subsidiary so licensed shall be bound by the terms and conditions of
this Agreement as if it were named herein in the place of LICENSEE; and
3.1.2 LICENSEE shall pay and account to IBM for royalties hereunder in respect
of the exercise by any Subsidiary of any license granted to it hereunder.
Any license granted to a Subsidiary shall terminate on the date such Subsidiary
ceases to be a Subsidiary.
Section 4. Royalty and Other Payment
4.1 LICENSEE shall pay, as hereinafter provided, royalties to IBM in respect of
each Licensed Product having one or more Patented Portions by virtue of one or
more Licensed Patents of
6
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
the countries of manufacture, use, or lease, sale, or other transfer.
4.2 Subject to Sections 4.3, 4.5 and 4.6, for each Licensed Product which
includes one or more Patented Portions and which is manufactured, used, or
leased, sold or otherwise transferred in any country by or for LICENSEE,
LICENSEE shall pay a royalty at a rate computed at the following percentages of
LICENSEE's Selling Price of such Licensed Product:
Number of Licensed Patents Percentage of Licensee's
Defining Patented Portions Selling Price
-------------------------- ------------------------
1 [*]
2 [*]
3 [*]
4 [*]
5 or more [*]
For the purposes of this Section 4.2, a Licensed Patent and its corresponding
patents shall be deemed to be one Licensed Patent.
4.3 In computing royalties on a Licensed Product, LICENSEE may exclude from the
number of Licensed Patents used to compute royalties under Section 4.2, any
Licensed Patent that defines one or more Patented Portions which are fully
included in an item that is part of the Licensed Product and which was purchased
by Licensee directly or indirectly from a third party who was authorized by IBM
to sell such item. If, however, a Licensed
7
-----------
[*] Indicates that material has been omitted and confidential treatment
requested therefor. All such material has been filed separately with the
Commission pursuant to Rule 406.
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
Patent also defines another Patented Portion not fully included in such
purchased item, that particular Licensed Patent must be counted in the number of
Licensed Patents used to compute the percentage of LICENSEE's Selling Price of
the Licensed Product in accordance with Section 4.2.
4.4 If LICENSEE purchases from a third party portions of a Licensed Product and
combines such portions with each other and/or with other portions such that the
combination is itself a Licensed Product which includes a Patented Portion not
fully included in any individual purchased portion, then royalty shall be due
for the combination in accordance with this Section 4, notwithstanding the fact
that said third party is authorized by IBM to sell said purchased portions.
4.5 No royalties shall be paid by LICENSEE for Licensed Products which LICENSEE
manufactures for a third party where:
4.5.1 the third party is licensed by IBM to have such Licensed Product
manufactured for it; and
4.5.2 LICENSEE received prior authorization from such third party under such
party's license from IBM for such manufacture.
4.6 For royalties accruing through December 31, 1995, if a Licensed Product is
covered by more than four (4) Licensed Patents, LICENSEE may, at his election,
pay a royalty of four
8
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
percent (4%) of the LICENSEE's Selling Price of said Licensed Product. On
January 1, 1996, this Section 4.6 and the reference to it contained in Section
4.2 shall be deemed to have been automatically deleted from this Agreement.
4.7 LICENSEE shall bear and pay all taxes (including, without limitation, sales
and value added taxes) imposed by the national government (including any
political subdivision thereof) of any country in which LICENSEE is doing
business, as the result of the existence of this Agreement or the exercise of
rights hereunder.
Section 5. Accruals, Records, Reports and Other Information
5.1 Royalties shall accrue when a Licensed Product, with respect to which
royalty payments are required by this Agreement, is first sold or otherwise
transferred (including, except as otherwise agreed in writing by IBM, sold or
otherwise transferred to IBM or any of its Subsidiaries), or first used or
leased in each country of use or lease, by or for LICENSEE, or when a newly
issued or acquired Licensed Patent covers any portion of a Licensed Product in
use or on lease by or for LICENSEE on which portion the royalties provided for
in Section 4.1 have not previously accrued.
5.2 IBM may accept a late payment provided such payment includes all overdue
royalties or other payment plus an interest penalty. The interest penalty on any
overdue royalty or other payment
9
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
shall be calculated commencing on the date such royalty or other payment became
due, using an annual rate which is the greater of ten percent (10%) or one
percentage point higher than the prime interest rate as quoted by the head
office of Citibank N.A., New York, at the close of banking on such date, or on
the first business day thereafter if such date falls on a non-business day. If
such interest rate exceeds the maximum legal rate in the jurisdiction where a
claim therefor is being asserted, the interest rate shall be reduced to such
maximum legal rate.
5.3 LICENSEE shall pay all royalties and other payments due hereunder in United
States dollars. All royalties for an accounting period computed in other
currencies shall be converted into United States dollars at the exchange rate
for bank transfers from such currency to United States dollars as quoted by the
head office of Citibank N.A., New York, at the close of banking on the last day
of such accounting period (or the first business day thereafter if such last day
shall be a non-business day).
5.4 LICENSEE's accounting period shall be semiannual and shall end on the last
day of each June and December during the term of this Agreement. Within sixty
(60) days after the end of each such period LICENSEE shall furnish to IBM a
written report containing the information specified in Section 5.5 and shall pay
10
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
to IBM all unpaid royalties accrued hereunder to the end of each such period.
5.5 LICENSEE's written report shall be certified by an officer of LICENSEE and
shall contain the following information:
5.5.1 for each Type Number of each Licensed Product upon which royalty has
accrued, the Type Number, a description of said Licensed Product, the
quantity sold or otherwise transferred during the accounting period, and
the total LICENSEE Selling Price for such quantity;
5.5.2 each country in which the Licensed Products identified pursuant to Section
5.5.1 were manufactured or leased, sold or otherwise transferred;
5.5.3 each Licensed Patent covering each such Licensed Product upon which
LICENSEE is paying royalties. However, if LICENSEE pays royalties for the
use of five (5) or more Licensed Patents for a particular Licensed Product
pursuant to Section 4, LICENSEE shall have no obligation to identify the
Licensed Patents for that Licensed Product;
5.5.4 the amount of royalties due for each Licensed Product;
5.5.5 the aggregate amount of all royalties due;
5.5.6 on IBM's request, the name and address of any third party providing items
as described in Section 4.3;
5.5.7 for each Type Number of Licensed Product which LICENSEE has delivered
during such accounting period to a third
11
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
party and which is exempt from royalty under Section 4.5, the quantity
delivered, a description of such Licensed Product, and the name of such
third party; and
5.5.8 in the event that any of Sections 5.5.1 through 5.5.7 do not apply to an
accounting period, LICENSEE shall so state as to each such Section.
In the event no royalties are due, LICENSEE'S report shall so state.
5.6 For the purpose of determining obligations under IBM patents, LICENSEE
shall, within thirty (30) days of a written request by IBM:
5.6.1 provide to or make available for inspection by IBM or its designee a copy
of any materials (including, but not limited to, brochures and service,
use and other technical manuals) relevant to any product identified by
IBM;
5.6.2 sell, license or otherwise transfer and deliver to IBM any product at any
time offered for sale or license or otherwise marketed or transferred by
LICENSEE or, at IBM's option, make such product available to IBM for
inspection on LICENSEE'S premises. Such sale, license or transfer shall
occur under LICENSEE'S generally available terms and conditions, subject
to the time requirement specified in this Section 5.6; and
12
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
5.6.3 provide to IBM or its designee access to those manufacturing processes
used by LICENSEE in the manufacture of LICENSEE's products.
5.7 LICENSEE shall keep records in accordance with generally accepted accounting
principles and in sufficient detail to permit the determination of products
subject to this Agreement, the royalties due IBM, and the accuracy of the
information on LICENSEE's written reports. Such records shall include, but not
be limited to, detailed records supporting the information provided under
Section 5.5.
Such records shall be kept for six (6) years following the due date for the
report relating to the reporting period to which such records pertain.
Upon IBM's written request for an audit, LICENSEE shall permit auditors
designated by IBM, together with such legal and technical support as IBM deems
necessary, to examine, during ordinary business hours, records, materials, and
manufacturing processes of LICENSEE for the purpose of determining royalties due
IBM.
Such audit shall be restricted to an audit of those records, materials, and
manufacturing processes related to Licensed Products or Licensed Patents. Such
records and materials shall
13
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
be deemed to include general financial information to provide a cross-check for
the amount of royalties reported. Such general financial information shall
include, but not be limited to, records on the total revenue for the period
covered by the audit with documentation supporting the fact that the part of
LICENSEE's total revenue which exceeds the reported total of LICENSEE's Selling
Price for Licensed Product was derived from activities other than the sale,
lease or other transfer of Licensed Products.
LICENSEE shall provide its full cooperation in such audit. Such cooperation
shall include, but not be limited to, providing sufficient time for such
examination and convenient access to relevant personnel and records.
Each party shall pay the costs that it incurs in the course of the audit.
However, in the event that the audit establishes underpayment greater than or
equal to the lesser of: five percent (5%) of the royalties which should have
been paid for the accounting periods being audited or the cost of the audit,
then LICENSEE shall reimburse IBM for the costs IBM incurred in conducting such
audit. However, such costs shall not include salaries paid to IBM employees
associated with such audit and such reimbursement shall not exceed the amount of
underpayment.
14
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
5.8 In the event an audit under the provisions of Section 5.7 identifies an
underpayment of royalties by LICENSEE, LICENSEE shall pay an amount equal to the
sum of such underpayment, any interest due under the provisions of Section 5.2,
and any reimbursement to IBM for the costs IBM incurred in conducting such audit
as specified by Section 5.7, within sixty (60) days of IBM's written request.
Such amounts shall be subject to interest under the provisions of Section 5.2.
Section 6. Term of Agreement; Termination
6.1 The term of this Agreement shall be from the effective date of this
Agreement until five (5) years after said date.
6.2 LICENSEE may terminate the license granted herein, in whole or as to any
specified Licensed Patent by giving notice in writing to IBM, provided, however,
that termination of the license as to any specified Licensed Patent shall
include termination of the license as to all Licensed Patents in other countries
which correspond to such specified License Patent. Such termination shall be
effective on the date such notice is mailed unless the notice specifies a later
date. Any such termination shall be irrevocable.
6.3 IBM shall have the right to terminate this Agreement, or LICENSEE's license
granted hereunder, if LICENSEE:
6.3.1 fails, at any time:
15
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
6.3.1.1 to make a report which meets the requirements of Section 5.5;
6.3.1.2 to pay any accrued royalties;
6.3.1.3 to make any other payment required herein;
6.3.1.4 to permit an audit pursuant to Section 5.7; or
6.3.1.5 to comply with the provisions of Section 5.6; and
6.3.2 does not cure such failure (including the payment of any interest due
pursuant to Section 5.2) within sixty (60) days after written notice from
IBM to LICENSEE specifying the nature of such failure.
IBM's termination of this Agreement or of LICENSEE's license shall be given by
written notice to LICENSEE by mail or by facsimile transmission, effective on
the date of mailing or transmission.
6.4 IBM shall notify LICENSEE in the event IBM identifies an underpayment of
accrued royalties. IBM shall provide to LICENSEE the basis on which it has
identified such underpayment. If LICENSEE cannot show that the basis used is
substantially incorrect, IBM may, in its sole discretion, terminate LICENSEE's
license. In such event, IBM shall institute an audit. If such audit shows that
the LICENSEE's payments of royalties are substantially correct for the period
being audited, LICENSEE's license shall be reinstated effective as of the date
of its termination.
16
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
6.5 In the event this Agreement or the license granted hereunder, in whole or as
to any specified patent or claim, shall be terminated pursuant to this Section
6, the corresponding licenses granted to Subsidiaries of LICENSEE pursuant to
Section 3 shall likewise terminate, but no notices need be given by IBM to such
Subsidiaries.
6.6 In the event that more than fifty percent (50%) of LICENSEE's outstanding
shares or securities (representing the right to vote for the election of
directors or other managing authority) are now, or hereafter become, owned or
controlled, directly or indirectly, by a third party, LICENSEE's license shall
terminate unless IBM agrees otherwise in a signed writing.
6.7 No termination pursuant to this Section 6, Section 3.1 or Section 12.9 shall
relieve LICENSEE of any obligation or liability accrued hereunder prior to such
termination, or rescind or give rise to any right to rescind anything done by
LICENSEE or any payments made or other consideration given to IBM hereunder
prior to the time such termination becomes effective. Such termination shall not
affect in any manner any rights of IBM arising under this Agreement prior to
such termination, even though the exercise of such rights occurs after such
termination.
Section 7. Options for Other Licenses
17
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
7.1 LICENSEE grants to IBM the right to obtain, at any time, and from time to
time, during the term of this Agreement, a license upon terms and conditions,
including royalty rates, no less favorable than those granted to LICENSEE herein
or in any amendment hereto. Said right shall be with respect to any IHS Product
and any patent, including utility models and including design patents for type
fonts and registrations for type fonts (but not including any other design
patents or registrations), issued prior to the termination of this Agreement,
which patent covers an invention applicable to IHS Products or any method or
process involved in the manufacture or use of such IHS Product and under which
patent, or the application therefor, LICENSEE or any of its Subsidiaries has the
right, at any time during the term of this Agreement, to grant licenses to third
parties (other than Subsidiaries). Said right of IBM shall be exercisable with
respect to any such patents whether or not issued and whether or not the
applications therefor exist at the time such right is exercised. If IBM
exercises said right, IBM shall pay to LICENSEE the sum of five thousand United
States dollars ($5,000) if such license is for a single patent of one country
and its corresponding patents, or twenty-five thousand United States dollars
($25,000) if such license is for two or more patents, which sum shall be
creditable against royalties payable by IBM under the provisions of said license
agreement. The date of said license agreement shall be the date on which IBM
requests such license.
18
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
Section 8. Warranty
8.1 IBM represents and warrants that it has the full right and power to grant
the license set forth in Section 2, and that there are no outstanding
agreements, assignments, or encumbrances inconsistent with the provisions of
said license or with any other provisions of this Agreement. IBM makes no other
representations or warranties, express or implied, nor does IBM assume any
liability, in respect of any infringement of patents or other rights of third
parties due to LICENSEE's operation under the license herein granted.
8.2 IBM does not warrant nor does it represent that LICENSEE will not require a
license under other patents (owned by IBM or by third parties) to make, use,
import, or lease, sell or otherwise transfer Licensed Products.
Section 9. Means of Payments and Communications
9.1 Payment shall be made by electronic funds transfer. Any notice or other
communication required or permitted to be made or given to either party hereto
pursuant to this Agreement shall be sent to such party by facsimile or by
registered airmail (except that registered or certified mail may be used where
delivery is in the same country as mailing), 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. Payments shall be deemed to be made on
the date of electronic
19
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
funds transfer. Notices or other communications shall be deemed to have been
given or provided on the date of sending. The addresses are as follows:
9.1.1 For electronic funds transfers of payments:
IBM Director of Licensing
The Bank of New York
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx xx Xxxxxxx
Credit Account No. 000-0000-000
ABA No. 0000-0000-0
9.1.2 For mailing to IBM:
Director of Licensing
International Business Machines Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx xx Xxxxxxx
9.1.3 For facsimile transmission to IBM:
(000) 000-0000
9.1.4 For mailing to LICENSEE:
Controller
Applied Science Fiction
0000 Xxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
9.1.5 For facsimile transmission to ASF:
(000) 000-0000
Section 10. Trade Secrets, Know-How and Copyrights
10.1 No license or other right is granted herein to either party, directly or by
implication, estoppel or otherwise, with respect to any trade secrets or know-
how, and no such license or other
20
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
right shall arise from the consummation of this Agreement or from any acts,
statements or dealings leading to such consummation. Except as specifically
provided herein, neither party is required hereunder to furnish or disclose to
the other any technical or other information.
10.2 No license or other right is granted herein to either party, directly or by
implication, estoppel or otherwise to or under copyrights, or mask work or
similar rights.
Section 11. Assignments
11.1 IBM shall neither assign nor grant any right under any of its Licensed
Patents, and LICENSEE shall neither assign nor grant any right under any of its
patents which are subject to IBM's rights pursuant to Section 7, unless such
assignment or grant is made subject to the terms and conditions of this
Agreement. LICENSEE shall neither sublicense nor assign any of its rights or
privileges hereunder without the prior written consent of IBM. Any attempted
sublicense, assignment, or grant in derogation of the foregoing shall be void.
Section 12. Miscellaneous
12.1 Nothing contained in this Agreement shall be construed as conferring on
either party any license or other right to copy the exterior design of the
products of the other party.
21
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
12.2 Nothing contained in this Agreement shall be construed as conferring any
right to use in advertising, publicity, or other promotional activities any
name, trade name, trademark or other designation of either party hereto
(including any contraction, abbreviation or simulation of any of the foregoing).
Each party hereto agrees not to use or refer to this Agreement or any provision
thereof in any promotional activity associated with products licensed hereunder,
without the express written approval of the other party.
12.3 Nothing contained in this Agreement shall be construed as limiting the
rights which the parties have outside the scope of the license granted
hereunder, or restricting the right of either party or any of its Subsidiaries
to make, have made, use, or lease, sell or otherwise dispose of any particular
product or products not herein licensed.
12.4 Neither party nor any of its Subsidiaries shall be required hereunder to
file any patent application, or to secure any patent or patent rights, or to
maintain any patent in force, or to provide copies of patent applications to the
other party or its Subsidiaries, or to disclose any inventions described or
claimed in such patent applications.
12.5 IBM shall not have any obligation hereunder to institute any action or suit
against third parties for infringement of any
22
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
patent applications or Licensed Patents or to defend any action or suit brought
by a third party which challenges or concerns the validity of any patent
applications or Licensed Patents. In addition, LICENSEE shall not have any right
to institute any action or suit against third parties for infringement of any
patent applications or Licensed Patents.
12.6 In the event IBM prevails in any claim, proceeding or suit against LICENSEE
based upon this Agreement, including, but not limited to, actions for the
recovery of royalties due, LICENSEE shall pay all of IBM's associated costs and
attorneys' fees.
12.7 This Agreement shall not be binding upon the parties nor shall it obligate
either of the parties until it has been signed hereinbelow by or on behalf of
each party, in which event it shall be effective as of the date of this
Agreement first above written. No amendment or modification hereof shall be
valid or binding upon the parties unless made in writing and signed as
aforesaid. This Agreement and its Exhibit I embody the entire understanding of
the parties with respect to the Licensed Patents hereof and merges all prior
discussions between them, and neither of the parties shall be bound by any
conditions, definitions, warranties, understandings or representations with
respect to the subject matter hereof other than as expressly provided herein.
23
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
12.8 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.
12.9 If any Section of this Agreement is found by competent authority to be
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such Section in every other respect and the
remainder of this Agreement shall continue in effect so long as the Agreement
still expresses the intent of the parties. If the intent of the parties cannot
be preserved, this Agreement shall be either renegotiated or terminated.
12.10 This Agreement shall be construed, and the legal relations between the
parties hereto shall be determined, in accordance with the law of the State of
New York, United States of America.
24
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly signed as of the date first above written.
INTERNATIONAL BUSINESS
MACHINES CORPORATION
Witness: By /s/ X. X. Xxxxxx, Xx.
-----------------------------
/s/ X. X. Xxxxxxxx X. X. Xxxxxx, Xx.
------------------------- Vice President
APPLIED SCIENCE FICTION
By /s/ Xxxx Xxxxxx
-----------------------------
Xxxx Xxxxxx
President
Witness:
/s/ ?????????????????
-------------------------
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
EXHIBIT I
----------
Licensed Patents
1. Issued US Patents
Patent Number Issue Date
------------- ----------
[*] [*]
2. Filed US Patent Applications
Serial Number Date Filed Title
------------- ---------- -----
[*] [*] [*]
-----------
[*] Indicates that material has been omitted and confidential treatment
requested therefor. All such material has been filed separately with the
Commission pursuant to Rule 406.
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
EXHIBIT 1 (CONT'D)
Serial Number Date Filed Title
------------- ---------- -----
[*] [*] [*]
-----------
[*] Indicates that material has been omitted and confidential treatment
requested therefor. All such material has been filed separately with the
Commission pursuant to Rule 406.
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
021997
AMENDMENT No. I dated January 1, 1997
between INTERNATIONAL BUSINESS
MACHINES CORPORATION a New York
corporation (hereinafter "IBM") and
APPLIED SCIENCE FICTION a Delaware
corporation (hereinafter "ASF").
IBM and ASF entered into a patent license agreement "Agreement" effective
October 31, 1995 in which IBM granted ASF certain rights under Licensed Patents
as defined in Agreement.
ASF now desires, and IBM wishes to grant, the right to ASF to have Licensed
Products made by others:
In consideration of the premises and the mutual covenants herein contained, IBM
and LICENSEE agree as follows:
Delete section 2.1 and replace with new section 2.1 as follows:
Section 2. License
2.1 IBM grants to LICENSEE a nonexclusive license under the Licensed Patents:
2.1.1 to make, use, import, and lease, sell and otherwise transfer Licensed
Products; and
2.1.2 to use any apparatus in the manufacture of Licensed Products and practice
and method or process in the manufacture or use of Licensed Products.
2.1.3 to have Licensed Products made by another manufacturer for the use and/or
lease, sale or other transfer by LICENSEE provided:
(a) the specifications for Licensed Products were created by LICENSEE (either
solely or jointly with one or more third parties);
and further provided that the license to have made products granted in this
Section 2.1.3
(b) shall only be under claims of the Licensed Patents, the infringement of
which would be necessitated by compliance with such specifications;
(c) shall not be under claims for a method or process unless such method or
process is based upon technology created by LICENSEE (either solely or
jointly with one or more third parties); and
(d) shall not apply to any products in the form manufactured or marketed by
said other manufacturer prior to LICENSEE's furnishing of said
specifications.
Unless LICENSEE informs IBM to the contrary, LICENSEE shall be deemed to have
authorized said other manufacturer to make Licensed Products under the license
granted to LICENSEE in this section 2.1.3 when the conditions specified herein
2.1.3 are fulfilled. In response to a written request identifying a product and
a manufacturer, LICENSEE shall in a timely manner inform IBM of the quantity of
such product, if any, manufactured by such manufacturer pursuant to the license
granted in this Section 2.1.3.
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b) (4),
200.83 AND 230.496
The license granted in this Section 2.1 for any particular Licensed Product
shall be only under claims of Licensed Patents which claims define a Patented
Portion for said particular Licensed Product and which are claims of Licensed
Patents of the countries of manufacture, use, importation, or lease, sale or
other transfer by LICENSEE.
A particular Licensed Product is licensed under a Licensed Patent when and only
when:
2.1.4 such Licensed Patent defines a Patented Portion of such Licensed Product;
2.1.5 such Licensed Patent was identified in a report, as specified in Section
5.5, as covering such Licensed Product; and
2.1.6 the royalty attributable to such Licensed Product was either timely paid
as required by Section 5.4 or a late payment was made and accepted by IBM
pursuant to Section 5.2.
Add new Section 6.8 as follows:
6.8 Each party agrees to promptly enter into good faith negotiations for a new
license on terms and conditions no less favorable then the terms and conditions
of this Agreement, upon written request received no more than six months prior
to the expiration of this Agreement.
Delete Sections 9.1.4 and 9.1.5 and replace with new sections 9.1.4 and 9.1.5,
respectively, as follows:
9.1.4 For mailing to LICENSEE:
Intellectual Property Counsel
Applied Science Fiction
0000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
9.1.5 For facsimile transmission to ASF:
(000) 000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly signed as of the date first above written.
Agreed to: Agreed to:
International Business
Machines Corporation
By: /s/ Xxxx Xxxxxx By: /s/ X. X. Xxxxxx, Xx.
-------------------------- -------------------------
Name: Xxxx Xxxxxx X. X. Xxxxxx, Xx.
Title: President & CEO Vice President
Witness: Xxx X. Xxxx Xxxxxxx: Xxxxx Xxxxxxx
---------------------- --------------------
2
