EXHIBIT 10.15
PATENT LICENSE AGREEMENT
THIS PATENT LICENSE AGREEMENT (the "Agreement"), effective as of January 30,
1998 (the "Effective Date"), is entered by and between Medtronic, Inc., with an
address at 0000 Xxxxxxx Xxxxxx XX, Xxxxxxxxxxx, Xxxxxxxxx 00000 ("MEDTRONIC")
and SOMNUS, Inc., a Delaware corporation, with principal offices at 000 Xxxxx
Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxx 00000 ("SOMNUS").
WHEREAS, MEDTRONIC is the sole and exclusive owner of U.S. Patent Number
5,573,533, entitled METHOD AND SYSTEM FOR RADIOFREQUENCY ABLATION OF CARDIAC
TISSUE attached as Exhibit A hereto and Patent Rights associated therewith; and
WHEREAS, SOMNUS desires to obtain an exclusive license to the Patent Rights
thereto, and MEDTRONIC desires to grant such a license to SOMNUS, on the terms
and conditions herein.
NOW, THEREFORE, MEDTRONIC and SOMNUS agree as follows:
1. DEFINITIONS
1.1 "Affiliate" means any corporation or other entity which is directly or
indirectly controlling, controlled by or under the common control with SOMNUS.
For the purpose of this Agreement, "control" shall mean the direct or indirect
ownership of at least 50% of the outstanding shares or other voting rights of
the subject entity to elect directors.
1.2 "Licensed Product" means any product, the manufacture, use, import, offer
for sale or sale of which by an unlicensed third party would constitute an
infringement of a Valid Claim in the country for which such Licensed Products
are manufactured, used or sold. By way of example and not limitation, each of
the radiofrequency power generator and the catheter defined by a Valid Claim are
Licensed Products.
1.3 "Patent Rights" means the rights associated with U.S. Patent Number
5,573,533 owned by MEDTRONIC described in Exhibit A hereto, and all foreign
patents issuing on patent applications corresponding to U.S. Patent Number
5,573,533.
1.4 "Valid Claim" means any of claims 10-15 of U.S. Patent Number 5,573,533.
2. LICENSE
2.1 License Grant. MEDTRONIC hereby grants to SOMNUS a non-exclusive,
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worldwide, fully-paid (subject to Section 3.2) license under the Patent Rights
to make, have made, import, use, offer for sale, sell and otherwise distribute
and exploit the Licensed Products but only in the field of radio frequency
ablation for the treatment of upper airway disorders.
2.2 Ownership. SOMNUS acknowledges and agrees that MEDTRONIC is and shall
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remain the sole and exclusive owner of the Patent Rights and that SOMNUS
acquires no rights in or to any of the foregoing, other than the license rights
specifically granted in Section 2.1.
[*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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3. PAYMENTS
3.1 Royalty. SOMNUS will pay MEDTRONIC a royalty of [*].
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3.2 Partial Payments. SOMNUS will pay MEDTRONIC a first partial payment of
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[*] on the Effective Date, and a second partial payment of [*] no later than six
months after the Effective Date.
4. CONFIDENTIALITY
4.1 General. MEDTRONIC and SOMNUS shall each hold in confidence and not
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disclose to any third party unless authorized in advance in writing any product,
technical, manufacturing, process, marketing, financial, business or other
information, ideas, or know-how delivered by the other party and identified in
writing as confidential or oral information disclosed by one party to another
pursuant to this Agreement, provided that such information is designated as
confidential at the time of disclosure and within thirty (30) days after its
oral disclosure is reduced to a written summary by the disclosing party, which
summary is marked in a manner to indicate its confidential nature and delivered
to the receiving party (collectively "Confidential Information").
4.2 Protection of Confidential Information. Each party shall implement
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reasonable procedures to prohibit the disclosure, unauthorized duplication, use
or removal of such Confidential Information and shall not disclose Confidential
Information received from the disclosing party to any third party except as may
be necessary and required in connection with the rights and obligations of such
party under this Agreement, and subject to confidentiality obligations at least
as protective as those set forth herein. Without limiting the foregoing, each
of the parties shall use at least the same procedures and degree of care which
it uses to prevent the disclosure of its own proprietary information to prevent
the disclosure of Confidential Information.
4.3 Exceptions. Notwithstanding the above, Confidential Information shall not
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include information which: (i) was generally known and available in the public
domain at the time it was disclosed, or becomes generally known and available in
the public domain through no fault or act of the receiving party; (ii) was known
to the receiving party at the time of disclosure, as shown by written records;
(iii) is disclosed with the prior written approval of the disclosing party; (iv)
was independently developed by the receiving party without the use of or
reliance on any Confidential Information, as shown by written records prepared
contemporaneously with such independent development; (v) becomes known to the
receiving party from a third party without any obligation of confidentiality to
the disclosing party; (vi) is disclosed pursuant to the order or requirement of
a court, administrative agency, or other governmental body; provided, that the
receiver shall provide reasonable advance notice thereof to enable the owner to
seek a protective order or otherwise prevent such disclosure; or (vi) is
disclosed to accountants, banks, or another financing source (or their advisors)
or in connection with a merger, acquisition or securities offering, subject to a
non-disclosure agreement containing the same terms and conditions of Sections
4.1, 4.2 and this Section 4.3.
[*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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5. REPRESENTATIONS AND WARRANTIES
5.1 MEDTRONIC represents and warrants that: (i) MEDTRONIC is the sole and
exclusive owner of all title and interest in the Patent and Patent Rights; (ii)
the Patent and Patent Rights are free and clear of any lien, encumbrance,
security interest and restriction on license; (iii) MEDTRONIC has not previously
granted, and will not grant during the term of this Agreement, any right,
license or interest in and to the Patent and Patent Rights, or any portion
thereof, inconsistent with the license granted to SOMNUS herein; and (vi) there
are no actions, suits, investigations, claims or proceedings pending or
threatened in any way relating to the Patent and Patent Rights.
5.2 SOMNUS represents and warrants that (i) it is a corporation duly organized
validly existing and in good standing under the laws of the State of Delaware;
and (ii) the execution, delivery and performance of this Agreement have been
duly authorized by all necessary corporate action on the part of SOMNUS.
5.3 Effect of Representations and Warranties. It is understood that if the
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representations and warranties made by a party under this Article 5 are not true
and accurate, and the other party incurs damages, liabilities, costs or other
expenses as a result of such falsity, the party making such representations and
warranties shall indemnify and hold the other party harmless from and against
any such damages, liabilities, costs or other expenses incurred as a result of
such falsity.
6. PATENT ENFORCEMENT
6.1 Enforcement. If either party hereto becomes aware that any Patent Rights
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are being or have been infringed by any third party, or become involved in a
declaratory judgment action, interference or opposition, such party shall
promptly notify the other party hereto in writing describing the facts relating
thereto in reasonable detail. MEDTRONIC shall have the initial right, but not
the obligation, to institute, prosecute and control any action, suit or
proceeding (an "Action") with respect to such Action, including any declaratory
judgment action, at its expense, using counsel of its choice. SOMNUS shall
cooperate reasonably with MEDTRONIC, at MEDTRONIC's request, in connection with
any such Action. SOMNUS shall not make any admission regarding the invalidity
or unenforceability of the Patent Rights without MEDTRONIC's prior written
consent.
6.2 Infringement Claims. If the practice by SOMNUS of the license granted
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herein results in any claim of infringement of a patent right of a third party
against SOMNUS, SOMNUS shall have the exclusive right to defend any such claim,
suit or proceeding, at its own expense, by counsel of its own choice and shall
have the sole right and authority to settle any such suit; provided, however,
MEDTRONIC shall cooperate with SOMNUS, at SOMNUS's reasonable request, in
connection with the defense of such claim.
7. ARBITRATION
7.1 MEDTRONIC and SOMNUS agree that any dispute or controversy arising out of,
in relation to, or in connection with this Agreement, or the validity,
enforceability, construction,
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performance or breach thereof, may, with mutual consent, be finally settled by
binding arbitration in San Francisco, California, United States of America,
under the then-current Licensing Agreement Rules of the American Arbitration
Association by one (1) arbitrator appointed in accordance with such Rules. The
rules of discovery determined by the arbitrator shall apply thereto. The parties
agree that judgment upon the decision and/or award rendered by the decision may
be entered in any court of competent jurisdiction. The parties agree that, any
provision of applicable law notwithstanding, they will not request, and the
arbitrator shall have no authority to award, punitive or exemplary damages
against any party. The costs of the arbitration, including administrative fees
and fees of the arbitrator, shall be shared equally by the parties. Each party
shall bear the cost of its own attorneys' fees and expert fees.
8. TERM AND TERMINATION
8.1 Term. This Agreement shall become effective on the Effective Date and
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shall remain in full force and effect until the expiration of the last-to-expire
patent included within the Patent Rights, or until this Agreement is otherwise
terminated as provided by this Agreement.
8.2 Termination for Cause. If either party materially breaches this Agreement,
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the other party may elect to give the breaching party written notice describing
the alleged breach. If the breaching party has not cured such breach within
sixty (60) days after receipt of such notice, the notifying party will be
entitled, in addition to any other rights it may have under this Agreement, to
terminate this Agreement effective immediately; provided, however, if either
party receives notification from the other of a material breach and if the party
alleged to be in default notifies the other party in writing within thirty (30)
days of receipt of such default notice that it disputes the asserted default,
the matter may be submitted to arbitration as provided in Article 7 of this
Agreement. In such event, the nonbreaching party shall not have the right to
terminate this Agreement until it has been determined in such arbitration
proceeding that the other party materially breached this Agreement, and the
breaching party fails to cure such breach within ninety (90) days after the
conclusion of such arbitration proceeding.
8.3 Termination for Insolvency. MEDTRONIC may terminate this Agreement if
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SOMNUS becomes the subject of a voluntary or involuntary petition in bankruptcy
or any proceeding relating to insolvency, receivership, liquidation, or
composition or the benefit of creditors, if that petition or proceeding is not
dismissed with prejudice within sixty (60) days after filing.
8.4 Permissive Termination. SOMNUS may terminate this Agreement with respect
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to any country or any Patent Right with thirty (30) days written notice to
MEDTRONIC.
8.5 Licenses. Upon any expiration or termination of this Agreement, all rights
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and licenses granted to SOMNUS hereunder shall terminate, and each party shall
return to the other all documents in its possession, or in the possession of its
Affiliates or sublicensees, embodying, evidencing, or derived from Confidential
Information of the other party.
8.6 Accrued Rights. Termination of this Agreement shall not release either
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party from any obligation theretofore accrued.
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8.7 Survival. Articles 4, 5, 7, and 9 of this Agreement shall survive
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termination of this Agreement for any reason.
9. MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of California, without reference to
conflict of laws principles.
9.2 Independent Contractors. The relationship of MEDTRONIC and SOMNUS
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established by this Agreement is that of independent contractors. Nothing in
this Agreement shall be construed to create any other relationship between
SOMNUS and MEDTRONIC. Neither party shall have any right, power or authority to
assume, create or incur any expense, liability or obligation, express or
implied, on behalf of the other.
9.3 Assignment. The parties agree that their rights and obligations under this
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Agreement may not be delegated, transferred or assigned to a third party without
prior written consent of the other party hereto. Notwithstanding the foregoing,
SOMNUS may, after receipt of written approval that MEDTRONIC will not
unreasonably withhold, transfer or assign its rights and obligations under this
Agreement to a successor to all or substantially all of its business or assets
relating to this Agreement whether by sale, merger, operation of law or
otherwise. In such event, SOMNUS will provide MEDTRONIC at least thirty days
notice of the intent to transfer substantially all SOMNUS business or assets,
including identification of the intended transferee. MEDTRONIC will reply to
SOMNUS within fifteen days of receipt of the notice of intent to transfer.
Notwithstanding the foregoing, MEDTRONIC may assign part or all of its rights
with respect to the receipt of royalties from SOMNUS to a trust or other entity
for the payment thereof to beneficiaries.
9.4 This Agreement shall be binding upon and accrue to the benefit of the
successors, heirs and permitted assigns of the parties hereto.
9.5 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
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ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OF THIS
AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY.
9.6 Right to Develop Independently. Nothing in this Agreement will impair
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SOMNUS's right to independently acquire, license, develop for itself, or have
others develop for it, technology performing similar functions as the Patent
Rights or to market and distribute products based on such other technology.
9.7 Notices. Any required notices hereunder shall be given in writing by
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certified mail or overnight express delivery service (such as DHL) at the
address of each party below, or to such other address as either party may
substitute by written notice. Notice shall be deemed served when delivered or,
if delivery is not accomplished by reason or some fault of the addressee, when
tendered.
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If to MEDTRONIC: MEDTRONIC, Inc.
0000 Xxxxxxx Xxxxxx XX
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: General Counsel
If to SOMNUS: SOMNUS Medical Technologies, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
9.8 Confidential Terms. Except as expressly provided herein, each party agrees
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not to disclose any terms of this Agreement to any third party without the
consent of the other party, except as required by securities or other applicable
laws, to prospective investors and to such party's accountants, attorneys, other
professional advisors and to the beneficiaries referenced in Section 9.3 above.
9.9 Force Majeure. Neither party will be responsible to the other party for
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nonperformance or delay in performance of any terms or conditions of this
Agreement due to acts of God, earthquake, fire, acts of government, wars, riots,
strikes, accidents in transportation, or other causes beyond its reasonable
control.
9.10 Compliance with Laws. Each party shall perform this Agreement in
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compliance with all applicable federal, national, state and local laws, rules
and regulations and shall indemnify the other party and its customers for loss
or damage sustained because of such party's noncompliance with any such law,
rule or regulation. Each party shall furnish to the other party any information
requested or required by that party during the term of this Agreement or any
extensions hereof to enable that party to comply with the requirements of any
U.S. or foreign federal, state and/or government agency.
9.11 Severability. In the event that any provisions of this Agreement are
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determined to be invalid or unenforceable by a court of competent jurisdiction,
the remainder of the Agreement shall remain in full force and effect without
said provision. The parties shall in good faith negotiate a substitute clause
for any provision declared invalid or unenforceable, which shall most nearly
approximate the intent of the parties in entering this Agreement.
9.12 Further Assurances. At any time or from time to time on and after the
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date of this Agreement, either party shall at the request of the other party (i)
deliver to the other party such records, data or other documents consistent with
the provisions of this Agreement, (ii) execute, and deliver or cause to be
delivered, all such consents, documents or further instruments of transfer or
license, and (iii) take or cause to be taken all such reasonable actions, as the
other party may reasonably deem necessary or desirable in order for the other
party to obtain the full benefits of this Agreement and the transactions
contemplated hereby.
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9.13 Modification; Waiver. This Agreement may not be altered, amended or
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modified in any way except by a writing signed by both parties. The failure of
a party to enforce any provision of the Agreement shall not be construed to be a
waiver of the right of such party to thereafter enforce that provision or any
other provision or right.
9.14 Entire Agreement. The parties hereto acknowledge that this Agreement and
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its Exhibits set forth the entire agreement and understanding of the parties
hereto as to the subject matter hereof, and supersedes all prior discussions,
agreements and writings in respect hereto.
9.15 Counterparts. This Agreement may be executed in two or more counterparts,
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each of which shall be deemed an original and which together shall constitute
one instrument.
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IN WITNESS WHEREOF, MEDTRONIC and SOMNUS have executed this Agreement by their
respective duly-authorized representatives.
SOMNUS MEDICAL TECHNOLOGIES, INC. MEDTRONIC, INC.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx X. Xxxxxxx Xxxxxx Xxxxxxxx
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(Print) (Print)
Title: President, CEO Title: VP Sales & Marketing
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Medtronic CardioRhythm
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EXHIBIT A
US. PATENT NUMBER 5,573,533
METHOD AND SYSTEM FOR RADIOFREQUENCY ABLATION OF CARDIAC TISSUE
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