1
EXHIBIT 10.19
*Certain information in this document has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
INTELLECTUAL PROPERTY LICENSE AGREEMENT
IMMERSION CORPORATION AND LOGITECH, INC.
This Intellectual Property License Agreement (the "Agreement") between
Immersion Corporation, a California corporation, with principal offices in San
Jose, California (hereinafter "Immersion") and Logitech Inc., a California
corporation, with principal offices in Fremont, California (hereinafter
"Logitech"), is entered into as of April 13, 1998 (the "Effective Date").
RECITALS
A. Immersion is the owner of several United States patent applications
and several issued United States patents relating to certain force-feedback
technology.
B. Concurrently with this Agreement, Immersion and Logitech are entering
into a Technology Product Development Agreement and an OEM Purchase Agreement,
each of which are dated the same date as this Agreement. Pursuant to the
Technology Product Development Agreement, Immersion will develop and deliver to
Logitech certain deliverables which are covered by copyrights and trade secret
rights owned by Immersion, as well as patents now held or that may issue to
Immersion in the future. Pursuant to the OEM Purchase Agreement, Immersion will
supply certain components to Logitech to be used in peripheral devices produced
by Logitech.
C. Logitech intends to develop "Planar Force Feedback Cursor Control
Devices" (as defined below) which may or may not incorporate or utilize the
deliverables to be delivered under the Technology Product Development Agreement.
D. The parties desire that Immersion grant a license to Logitech under
the foregoing intellectual property rights of Immersion to develop and
distribute Planar Force Feedback Cursor Control Devices, which incorporate or
utilize the deliverables to be delivered under the Technology Product
Development Agreement, all on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the promises and agreements set
forth below and the other consideration cited herein, the parties agree as
follows.
1. DEFINITIONS
In this Agreement the following words and expressions shall have the
following meanings:
1.1 AFFILIATES. This means any corporation or business entity which is
controlled by, controls, or is under common control of a Party. For this
purpose, the meaning of the word "control" shall include, without limitation,
direct or indirect ownership of more than fifty percent (50%) of the voting
shares of interest of such corporation or business entity.
2
1.2 DEFECT CORRECTION. This means either a modification or addition that
eliminates or works around a Defect in a non-software Deliverable so as to cause
the non-software Deliverable to comply with the applicable then-current
Specification.
1.3 DEFECT. This means, with respect to any non-software Deliverable,
failure to materially conform to the applicable then-current Specifications for
such non-software Deliverable.
1.4 DELIVERABLES. This means the various deliverables, which are
tangible implementations or items including interim deliverables or final
prototype deliverables, identified as such and described in any development
schedule to the Development Agreement and delivered to Logitech thereunder.
1.5 DEVELOPMENT AGREEMENT. This means the Technology Product Development
Agreement between Immersion and Logitech dated the same date as this Agreement.
1.6 ENHANCEMENT OR ENHANCEMENTS. This means any force-feedback
modification or addition made by Immersion, under the terms of Section 6.7
("Other Development") and Section 7.2 ("Enhancements by Immersion") of the
Development Agreement for the Planar Force Feedback Cursor Control Field of Use,
and which is a tangible implementation other than a Defect Correction or Error
Correction, that when incorporated into the Planar Force Feedback Cursor Control
Device, materially reduces product costs of a Planar Force Feedback Cursor
Control Device or materially changes the functional capability or form factor.
1.7 ERROR CORRECTION. This means either a modification or addition that
eliminates or works around an Error in the software Deliverable so as to cause
the software Deliverable to comply with the then-current Specification.
1.8 ERROR. This means, with respect to any software Deliverable, failure
of any such software Deliverable to materially conform to the applicable
then-current Specification for such software Deliverable.
1.9 FEELIT MOUSE PRODUCT. This means the final production version of the
mouse product described in the Specification in the first Exhibit A
("Specifications") of the Development Agreement which utilizes and/or contains
Immersion Product Model Technology, including but not limited to the applicable
Immersion Software, documentation, Defect Corrections and Error Corrections
thereto.
1.10 FINAL PROTOTYPE. This means a Deliverable which is the final
functional form of the Planar Force Feedback Cursor Control Device, if any,
including software and hardware, produced by Immersion under a development
schedule to the Development Agreement, which prototype serves as a model for the
final production version of the Planar Force Feedback Cursor Control Device, if
any, and which conforms to the applicable Specification.
1.11 IMMERSION PRODUCT MODEL TECHNOLOGY. This means that subset of
Immersion Technology delivered as a Deliverable under the terms of a development
schedule of the
2
3
Development Agreement, or as an Enhancement or New Technology, which is actually
utilized in or in connection with and/or embedded in the final production
version of the FEELit Mouse Product, any subsequent Product Model of the FEELit
Mouse Product or any Product Model of any Planar Force Feedback Cursor Control
Device.
1.12 IMMERSION SOFTWARE. This means the driver software and computer
firmware subset of the Immersion Product Model Technology actually utilized in
or in connection with and/or embedded in the final production version of the
FEELit Mouse Product, any subsequent Product Model of the FEELit Mouse Product
or any Product Model of any Planar Force Feedback Cursor Control Device that
acts as an interface to and controls the FEELit Mouse Product, any subsequent
Product Model of the FEELit Mouse Product or any Planar Force Feedback Cursor
Control Device.
1.13 IMMERSION TECHNOLOGY. This means any and all technology created or
acquired by Immersion, or licensed to Immersion by third parties, including but
not limited to software created by employees or consultants of Immersion, (i)
first developed or reduced to practice before or after the Effective Date solely
by Immersion independent of the scope of the work under the Development
Agreement or (ii) first developed or reduced to practice after the Effective
Date and within the scope of a Deliverable developed solely by Immersion (a)
under a development schedule in effect under the terms of the Development
Agreement, (b) as an Enhancement or (c) as New Technology.
1.14 INTELLECTUAL PROPERTY RIGHTS. This means the Licensed Patents and
utility models, copyrights and mask work rights, including without limitation
all applications and registrations with respect thereto, rights in trade
secrets, know-how, and all other intellectual property rights, excluding
trademarks and tradenames and patents other than the Licensed Patents.
1.15 LICENSED PATENTS. This means any and all patents owned or
licensable by Immersion at any time during the term of this Agreement containing
one or more claims which cover any Planar Force Feedback Cursor Control Device.
1.16 PLANAR FORCE FEEDBACK CURSOR CONTROL FIELD OF USE. This means the
market for Planar Force Feedback Cursor Control Devices which are not targeted
for use in specific applications or designed for specific applications. The
Planar Force Feedback Cursor Device Field of Use does not include the market for
products specifically targeted for use in gaming, medical, industrial, human
disabilities, military, automotive, scientific and arcade products and
applications.
1.17 PLANAR FORCE FEEDBACK CURSOR CONTROL DEVICE(S). This means (i) a
force feedback computer cursor control device having the capability of tracking
position of an endpoint in a two dimensional plane and applying two dimensional
planar forces upon the user through said endpoint and (ii) one dimensional force
feedback cursor control embodiments, including but not limited to a force
feedback roller for "roller mouse" cursor control embodiments. Planar Force
Feedback Cursor Control Devices include but are not limited to the FEELit Mouse
Product. The endpoint may be a mouse handle, stylus, finger tip receptacle,
ball,
3
4
or other manipulandum that can be moved by the user in two dimensional plane. A
Planar Force Feedback Cursor Control Device can be mounted in any housing
including but not limited to a housing shared by a keyboard, track ball or other
interface peripheral that provides additional functionality. Planar Force
Feedback Cursor Control Devices specifically do not include (i) devices that can
apply three dimensional forces through the device or (ii) a "Gaming Device" as
that term is defined in the Intellectual Property License Agreement between
Immersion and Logitech dated April 2, 1997.
1.18 NET RECEIPTS. This means the gross receipts received by Logitech
and its Affiliates without taking into account any foreign withholding taxes
that may apply to transfers between Logitech and its affiliates upon any sales
of Royalty Bearing Products to unaffiliated third parties, less any actual
returns and/or credits actually credited to a customer's account in accordance
with Logitech's standard accounting practices applied in good faith. Net
Receipts shall not include freight, insurance and taxes. No other costs incurred
in the manufacture, sale, distribution, or exploitation of Royalty Bearing
Products shall be deducted from gross receipts in the calculation of Net
Receipts. If Royalty Bearing Products are bundled with other items sold by
Logitech or its Affiliates and are not invoiced separately, royalties will be
paid based on Logitech's then-current average sales price for each such Royalty
Bearing Product (or if no Logitech averages sales price exists, the applicable
Affiliate average sales price) when sold as a separate item (averaged for the
applicable Quarter in which the Net Receipts are received by Logitech or its
Affiliates, as applicable, for the country in which the sale was made) in like
quantities in arms length transactions to unrelated third parties other than
Logitech or Logitech Affiliates).
1.19 NEW TECHNOLOGY. This means any force-feedback technology
modification or addition made by Immersion, for the Planar Force Feedback Cursor
Control Field of Use, other than a Defect Correction or Error Correction, that
when incorporated into the FEELit Mouse Product or other Planar Force Feedback
Cursor Control Device, materially changes the utility, efficiency, market value,
functional capability or application, and which is developed by Immersion on a
non-exclusive basis and made "generally available" for use in Planar Force
Feedback Cursor Control Devices in the Planar Force Feedback Cursor Control
Field of Use and which is delivered by Immersion to Logitech as a tangible
implementation pursuant to the terms of Section 7.4 ("New Technology") of the
Development Agreement. For purposes of this definition, "generally available"
shall mean offered under nonexclusive license to any one unaffiliated third
party (other than the original third party for whom the technology, modification
or addition was originally developed) for use in Planar Force Feedback Cursor
Control Devices in the Planar Force Feedback Cursor Control Field of Use.
1.20 OEM OR OEMS. This means any third party (not including Affiliates)
that does not manufacture Planar Force Feedback Cursor Control Devices and that
wishes to purchase finished Planar Force Feedback Cursor Control Devices for
sale in the Planar Force Feedback Cursor Control Field of Use under its own
brand name.
1.21 PARTY OR PARTIES. This means Immersion and/or Logitech.
4
5
1.22 PRODUCT LAUNCH. This means the date on which first commercial-level
shipping of the FEELit Mouse Product or any Product Model commences to third
party unaffiliated customers of Logitech or a Logitech Affiliate.
1.23 PRODUCT MODEL. This means a single model of the FEELit Mouse
Product or any other Planar Force Feedback Cursor Control Device. "Product
Model" shall mean each variation of a FEELit Mouse Product or Planar Force
Feedback Cursor Control Device which (i) differs by virtue of addition of or
alteration through an Enhancement or (ii) constitutes a change in form factor or
(iii) incorporates a material change in force-feedback functionality made by a
party other than Immersion. Purely cosmetic alterations (e.g., color or styling)
to the physical appearance of the FEELit Mouse Product or a Planar Force
Feedback Cursor Control Device, or changes that do not alter the force-feedback
functionality but reduce manufacturing costs shall not be deemed a Product
Model.
1.24 QUARTER OR QUARTERS. This means Logitech's yearly fiscal quarters.
Specifically, Logitech's yearly fiscal quarters begin and end on the following
dates: first quarter, April 1 - June 30; second quarter, July 1 - September 30;
third quarter, October 1 - December 31; and fourth quarter, January 1 - March
31.
1.25 ROYALTY BEARING PRODUCT. This means a Planar Force Feedback Cursor
Control Device which either (1) incorporates or utilizes Immersion Product Model
Technology that is not otherwise made generally available to the public by
Immersion without charge or (2) is covered (a) by a Licensed Patent or (b) by a
copyright of Immersion embodied in any Immersion Product Model Technology that
is not otherwise made generally available to the public by Immersion without
charge.
1.26 SPECIFICATION(S). This means the FEELit Mouse Product specification
attached as the original Exhibit A ("Specification") to the Development
Agreement and each Planar Force Feedback Cursor Control Device specification
associated with a development schedule which is attached by amendment to the
Development Agreement.
1.27 YEAR. This means any full four-Quarter period.
1.28 Any reference to the words "PURCHASE," "SALE," or "SELL," when used
in connection with intellectual property, shall mean license.
2. GRANT OF LICENSES
2.1 GRANT WITH RESPECT TO THE LICENSED PATENTS. Subject to the terms of
this Agreement, Immersion grants to Logitech a worldwide, nonexclusive license
under the Licensed Patents to develop, make, have made, use, sell, lease,
license, demonstrate, market and distribute the FEELit Mouse Product and any
other Planar Force Feedback Cursor Control Devices in the Planar Force Feedback
Cursor Control Device Field of Use. Except as provided in Section 2.3 ("Right to
Sublicense"), no right to sublicense the Licensed Patents is granted by
Immersion to Logitech.
5
6
2.2 GRANT WITH RESPECT TO THE IMMERSION PRODUCT MODEL TECHNOLOGY.
Subject to the terms of this Agreement, Immersion grants to Logitech a
worldwide, nonexclusive license under any Intellectual Property Rights owned or
licensable by Immersion that cover the Immersion Product Model Technology,
excluding the New Technology except as separately licensed by Immersion to
Logitech in accordance with the terms of Section 7.4 ("New Technology") of the
Development Agreement, to use, copy, modify, and create derivative works based
upon the Immersion Product Model Technology and in order to develop, make, and
have made Planar Force Feedback Cursor Control Devices in the Planar Force
Feedback Cursor Control Field of Use, and to sell, lease, license, demonstrate,
perform, market and distribute such Planar Force Feedback Cursor Control Devices
in the Planar Force Feedback Cursor Control Field of Use. No access rights or
license to the source code for the Immersion Software are granted to Logitech
except (i) as provided under the terms of Section 13 ("Source Code Escrow") of
the Development Agreement and (ii) as provided under the terms of Section 2.2.1
("Firmware Source Code"). Logitech and its Affiliates have no right and Logitech
agrees not to disassemble or decompile any portion of the software portions of
the Immersion Product Model Technology.
2.2.1 FIRMWARE SOURCE CODE. Immersion may elect, from time to time,
and in its sole discretion, to (i) disclose portions of the Immersion firmware
to Logitech in source code form solely for informational purposes and as
Confidential Information under the terms of Section 16 ("Confidentiality") of
the Technology Product Development Agreement and (ii) to deliver portions of the
Immersion firmware (which is Immersion Product Model Technology and delivered as
a Deliverable or an Enhancement under the terms of the Technology Product
Development Agreement) to Logitech in source code form solely for informational
purposes and as Confidential Information under the terms of Section 16
("Confidentiality"). Such firmware source code, if delivered to Logitech, will
not be used by Logitech for other than informational purposes unless Immersion
notifies Logitech, in writing, that such specific firmware source code is
classified as "Authorized For Modification." With respect to firmware source
code which has been designated by Immersion as "Authorized For Modification,"
Immersion grants to Logitech a worldwide, nonexclusive license under any
Intellectual Property Rights owned or licensable by Immersion that cover the
firmware source code, to use, copy, modify, create derivative works based upon
the firmware source code, and to create an object code version of such firmware
derivative work for license as Immersion Product Model Technology under the
terms of Section 2.2 ("Grant With Respect to the Immersion Product Model
Technology"). No license to distribute the firmware source code in source code
form is granted herein.
2.3 RIGHT TO SUBLICENSE. Subject to the terms of Section 2.6 ("Trademark
License from Immersion"), Immersion grants to Logitech the right to sublicense
any of the rights set forth in Section 2.1 ("Grant With Respect to the Licensed
Patents") and Section 2.2 ("Grant With Respect to the Immersion Product Model
Technology") above subject to the limitations of this Agreement: (i) to any
Affiliate of Logitech and (ii) to any non-Affiliate third party of Logitech
solely for the purpose of assisting Logitech in the design or development of
Planar Force Feedback Cursor Control Devices in the Planar Force Feedback Cursor
Control Field of Use. Logitech agrees that any act or omission by a Logitech
Affiliate that is inconsistent with Logitech's obligations under the terms of
this Agreement shall be deemed to be an act or omission by Logitech and a breach
of this Agreement by Logitech.
6
7
2.4 DURATION. Subject to the obligation to pay royalties, the licenses
set forth above will extend to the full end of the term for which any Licensed
Patent is issued or any other Intellectual Property Right of Immersion licensed
hereunder is in force, unless sooner terminated as provided in this Agreement.
2.5 LABEL REQUIREMENTS. Subject to the terms of Section 2.6 ("Trademark
License for Immersion") and Section 2.7 ("Administration Procedure"), Logitech
shall place belly labels on Force Feedback Cursor Control Devices which are
Royalty Bearing Products which shall include the language and related logo:
"FEELitTM Force Feedback Technology Licensed from Immersion Corporation"
(hereinafter the "Legend"). Logitech shall also place or have placed the Legend
on retail manuals and boxes as designated in Exhibit B ("Immersion Package
Labeling Specification"). Logitech shall not remove Immersion's copyright
notices from any copies of the Immersion Software. The parties agree that in the
case of each Planar Force Feedback Cursor Control Device noticed by Logitech to
Immersion under the terms of Section 2.7 ("Administrative Procedures"),
Immersion will provide Logitech with a list of applicable Licensed Patents which
will identify the "Key Licensed Patents" which will be identified on the belly
label of the particular device and will also identify the "Document Patents"
which will be identified in the product documentation included with the device.
The language on the belly label for the Key Licensed Patents will read as
follows: "{List Key License Patents} and other patents listed in associated
documentation." If OEM customers object to belly label marking or the inclusion
of patents in the documentation as described above, the Parties will mutually
agree upon a reasonable solution in writing in advance.
2.6 TRADEMARK LICENSE FROM IMMERSION. Subject to the procedures set
forth in Section 2.7 ("Administrative Procedures") below and Immersion's prior
written approval, Immersion hereby grants to Logitech a nonexclusive,
nontransferable, worldwide license, to use in connection with marketing the
FEELit Mouse Product or any Planar Force Feedback Cursor Control Device, the
trademark(s) used by Immersion ("Marks") to identify the Immersion Product Model
Technology and/or Licensed Patents and Logitech agrees to use such Marks on and
in connection with Royalty Bearing Products except in the case of OEM products
where, if the OEM customer objects, the parties will mutually agree upon a
reasonable solution in writing, in advance. Logitech acknowledges that all use
of the Marks will inure to the benefit of Immersion. Logitech shall not register
Immersion's Marks in any jurisdiction and will not adopt any trademark for use
on the FEELit Mouse Product or Planar Force Feedback Cursor Control Device which
is confusingly similar to any trademark of Immersion or which includes a
prominent portion of any trademark of Immersion. At Immersion's reasonable
request, Logitech shall provide Immersion with samples of Logitech's use of
Immersion trademarks. Logitech agrees to abide by Immersion's reasonable written
trademark policies as issued and provided to Logitech from time to time. In any
case where the Marks are not used in compliance with Immersion's trademark
policies and such use has been approved in writing by Immersion, upon receipt of
written notice from Immersion, Logitech will promptly correct the non-compliance
and submit samples of compliant use to Immersion for approval.
2.7 ADMINISTRATIVE PROCEDURES. The Parties agree that in order to
provide Immersion with appropriate information necessary for the orderly
administration of the Licensed
7
8
Patents and Marks, Logitech will provide Immersion with prompt written notice
prior to Product Launch of each Product Model and will enclose an information
package which contains two prototypes or production units of the Product Model
sufficient to enable Immersion to determine which of the Licensed Patents cover
the Product Model and to review and approve the use of the Marks. If in any case
Immersion believes that the quality of the Product Model does not meet
Immersion's commercially reasonable standards, Logitech will not be permitted to
ship the Product Model with the Marks until the quality issue is resolved, but
Logitech may in is discretion ship such Product Model without the Marks and
shall be relieved of its obligation to use the Marks on that Product Model.
2.8 GRANT WITH RESPECT TO KNOW-HOW. Subject to the terms of this
Agreement, each party grants to the other a worldwide, nonexclusive license to
use any know-how of such party disclosed to the other party pursuant to the
Development Agreement.
3. ROYALTIES
3.1 NEW TECHNOLOGY ROYALTIES. As provided in Section 9.2 ("New
Technology Royalties") of the Development Agreement, New Technology will be
provided to Logitech subject to royalties which are mutually agreed upon in
writing by Immersion and Logitech.
3.2 PER PRODUCT MODEL ROYALTY. Except as provided by Section 3.1 ("New
Technology Royalties"), Logitech shall pay Immersion a royalty based on a
percentage of the Net Receipts for each Product Model of a Royalty Bearing
Product sold by Logitech or any Logitech Affiliates to unrelated third parties
(other than Logitech or Logitech Affiliates) in arms length transactions, in
accordance with the following. The royalty percentage for each Product Model
shall be five percent (5%) for all units of a Royalty Bearing Product sold.
Shipments of Royalty Bearing Products between Logitech and the Logitech
Affiliates or between Logitech Affiliates will not be considered to be sold or
otherwise transferred until sold to an unrelated customer of Logitech or a
Logitech Affiliate.
3.3 MOST FAVORABLE ROYALTIES. Immersion agrees that, in the event that
the royalty rates contained in any license agreement entered into by Immersion
and any third party governing the license of substantially similar Immersion
Product Model Technology for use in any Planar Force Feedback Cursor Control
Device in the Planar Force Feedback Cursor Control Field of Use that has
substantially similar force feedback functionality to a Planar Force Feedback
Cursor Control Device commercially released by Logitech, are less than the
applicable rates for such Planar Force Feedback Cursor Control Device herein,
Immersion hereby agrees that it will advise Logitech of such lesser royalty
rates as of the date such lesser royalties became effective for such other third
party. Such comparison will be on the basis of cash royalty rates only and will
not apply in situations where part of the consideration is a cross-license which
is taken into account in setting the cash royalty. Logitech shall have the right
to have an independent auditor mutually agreed upon by Logitech and Immersion
audit Immersion business records related to the performance of its obligations
under this Section 3.3 on an annual basis. Logitech shall pay the costs of such
audit, unless such audit reveals that Immersion is not in compliance with this
Section 3.3, in which case other than termination Logitech's sole and
8
9
exclusive remedy will be, at Logitech's option, Immersion shall promptly credit
Logitech's account or repay any overpayment, the parties will amend the
Agreement to reflect the most favorable Royalty Rate and Immersion shall pay the
reasonable costs of such audit. Such audit shall be preceded by at least five
(5) business days advance written notice and shall be performed during normal
business hours by the auditor. The auditor shall have access to only those books
and records of Immersion that are reasonably necessary to determine the
compliance by Immersion with this Agreement. Any and all non-public information
related to Immersion or its business revealed in the course of such audit shall
be kept confidential by the auditor and by Logitech, and shall not be disclosed
by the auditor to anyone other than employees or professional advisors of
Logitech who have a reasonable need to know in connection with such audit, or
used for any purpose, except to the extent reasonably necessary to determine
whether Immersion is in compliance with this Agreement.
3.4 PAYMENTS AND REPORTS. The royalties to be paid by Logitech to
Immersion hereunder shall be due forty-five (45) days after the close of each
Quarter. Royalty reports setting forth the royalty calculation by Product Model
and identifying whether the sales were made by Logitech or Logitech Affiliates
shall be included with such payments. Logitech will pay and account to Immersion
for royalties due hereunder with respect to sales or other disposition of
Royalty Bearing Products by any Logitech Affiliates, and for that purpose, sales
of Royalty Bearing Products by any Logitech Affiliate (other than sales or other
disposition by an Affiliate to Logitech or to another Logitech Affiliate) will
be deemed to be sales by Logitech.
3.5 AUDIT RIGHTS OF ROYALTY PAYMENTS. Immersion shall have the right to
have an independent auditor mutually agreed by Logitech and Immersion audit the
method used to calculate the average sales price, as well as the sales data
pursuant to Section 1.19 ("Net Receipts") and the royalty payments of Logitech
for itself and its Affiliates on an annual basis, but shall pay the costs of
such audit, unless such audit reveals any underpayment of royalties in an amount
greater than five percent (5%) of actual royalties due for any Year, in which
case Logitech shall promptly remit an amount equal to the underpayment and shall
pay the reasonable costs of such audit. Such audit shall be preceded by at least
five (5) business days advance written notice and shall be performed during
normal business hours by the auditor. The auditor shall have access to only
those books and records of Logitech which are reasonably necessary to determine
the relevant sales royalties due for Royalty Bearing Products for Logitech
itself and its Affiliates and the correctness of the royalty payments hereunder.
Any and all non-public information related to Logitech, its Affiliates, or their
business revealed in the course of such audit shall be kept confidential by the
auditor and by Immersion, and shall not be disclosed by the auditor to anyone
other than employees or professional advisors of Immersion who have a reasonable
need to know in connection with such audit, or used for any purpose, except to
the extent reasonably necessary to determine the correctness of royalty payments
made hereunder.
4. TERM AND TERMINATION
4.1 TERM. Unless earlier terminated in accordance with the provisions of
this Agreement, this Agreement will extend until the last to expire of the
Licensed Patents or any other Intellectual Property Right of Immersion licensed
hereunder.
9
10
4.2 TERMINATION BY LOGITECH.
4.2.1 TERMINATION WITHOUT CAUSE. Logitech may terminate this
Agreement without cause upon ninety (90) days written notice, and such written
notice under the terms of this Agreement shall also serve as written notice of
the termination of the Development Agreement, if such Agreement is still in
effect at such time, and the Development Agreement will then terminate within
sixty (60) days of such notice pursuant to the terms of Section 12.1
("Termination by Logitech Without Cause") and such termination shall be deemed
to be a termination without cause by Logitech and will be construed in
accordance with the terms of Section 12.3 ("Effect of Termination") therein.
4.2.2 TERMINATION WITH CAUSE. Logitech may terminate this Agreement
by written notice to Immersion if Immersion has materially breached the terms of
this Agreement and fails to cure the breach after written notice of breach to
Immersion and a thirty (30) day time period to cure.
4.3 TERMINATION BY IMMERSION FOR FAILURE TO PAY ROYALTIES. Immersion may
terminate this Agreement by written notice to Logitech in the event that
Logitech or any Logitech Affiliate breaches the terms of Section 3 ("Royalties")
including but not limited to any failure to pay any royalties due and payable by
Logitech and/or any of the Logitech Affiliates under this Agreement and Logitech
fails to cure such breach after written notice of breach and a thirty (30) day
time period to cure.
If Immersion issues a written notice of termination to Logitech under the terms
of this Section 4.3 ("Termination by Immersion for Failure to Pay Royalties")
such notice shall also serve as written notice of termination for cause by
Immersion under the terms of Section 12.2 ("Termination for Cause") of the
Development Agreement, if such Agreement is still in effect at such time. If the
breach described in the aforementioned written notice of termination is not
cured in accordance with the terms of this Section 4.3 ("Termination by
Immersion for Failure to Pay Royalties"), the Development Agreement will then
terminate within thirty (30) days of such notice pursuant to the terms of
Section 12.2 ("Termination for Cause") and such termination will be deemed to be
a termination for cause by Immersion for purposes of Section 12.3 ("Effect of
Termination") and the effects of termination will be construed in accordance
with the terms of Section 12.3 ("Effect of Termination") therein.
4.4 TERMINATION BY IMMERSION FOR BREACH OF PATENT LICENSE. Immersion may
terminate this Agreement in the event that Logitech engages in activity which
exceeds the scope of the patent license granted in Section 2.1 ("Grant With
Respect to the Licensed Patents") or breaches the labeling requirement of
Section 2.5 ("Label Requirements") and fails to cure the breach after written
notice of breach and a sixty (60) day time period to cure. Except as set forth
in this Section 4.4 or Section 4.3 ("Termination by Immersion for Failure to Pay
Royalties"), the patent license granted in Section 2.1 ("Grant With Respect to
the Licensed Patents") shall not be terminable by Immersion. If Immersion issues
a written notice of termination to Logitech under the terms of this Section 4.4
("Termination by Immersion for Breach") such notice shall also serve as written
notice of termination for cause by Immersion under the terms of Section 12.2
10
11
("Termination for Cause") of the Development Agreement, if such Development
Agreement is still in effect at such time. If the breach described in the
aforementioned written notice of termination is not cured in accordance with the
terms of this Section 4.4 ("Termination by Immersion for Breach"), the
Development Agreement will then terminate within sixty (60) days of such notice
pursuant to the terms of Section 12.2 ("Termination for Cause") and such
termination will be deemed to be a termination for cause by Immersion for
purposes of Section 12.3 ("Effect of Termination") and the effects of
termination will be construed in accordance with the terms of Section 12.3
("Effects of Termination") therein.
4.5 TERMINATION OF LICENSES TO IMMERSION PRODUCT MODEL TECHNOLOGY BY
IMMERSION FOR BREACH. Immersion may terminate the licenses granted with respect
to Immersion Product Model Technology in Section 2.2 ("Grant With Respect to the
Licensed Patents") in the event that Logitech engages in activity which exceeds
the scope of such license or breaches the terms of Section 2.3 ("Right to
Sublicense") or the labeling requirement of Section 2.5 ("Label Requirements")
and fails to cure the breach after written notice of breach and a sixty (60) day
time period to cure. Termination of the licenses with respect to the Immersion
Product Model Technology shall not affect the patent licenses granted hereunder.
Except as set forth in this Section 4.5 ("Termination of Licenses to Immersion
Product Model Technology by Immersion for Breach") or Section 4.3 ("Termination
by Immersion for Failure to Pay Royalties"), the licenses granted in Section 2.2
("Grant With Respect to the Licensed Patents") shall not be terminable by
Immersion.
4.6 EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement for any reason, Logitech agrees to pay Immersion for royalties due
under this Agreement from Logitech or any Logitech Affiliate. Upon a termination
of this Agreement for cause or without cause, Logitech and each Affiliate shall
have one hundred and twenty (120) days to distribute any remaining inventory in
process and in existence as of the effective date of the termination, subject to
the obligation for Logitech to pay royalties hereunder for any such distribution
by Logitech and/or any Logitech Affiliates. EXCEPT FOR DIRECT DAMAGES RESULTING
FROM A BREACH OF THE TERMS OF THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO A
BREACH BY LOGITECH OR ANY LOGITECH AFFILIATE OF SECTION 2 ("GRANT OF LICENSES"),
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR DAMAGES OF ANY SORT AS A RESULT
OF TERMINATING THIS AGREEMENT IN ACCORDANCE WITH THE TERMS OF THE AGREEMENT.
5. WARRANTY
Immersion represents and warrants that Immersion either has ownership
of, or sufficient rights in, the Immersion Product Model Technology to be
delivered under the terms of the Development Agreement and the Licensed Patents
to enter into this Agreement and grant all the rights set forth herein. As of
the Effective Date of the Agreement, Immersion is not aware of and has not
received any notice of any claim by a third party that the copyrights, patents,
trade secrets, trademarks or other intellectual property rights of any third
party are infringed by the Immersion Product Model Technology that Immersion, in
its sole discretion intends to, as of the Effective Date, use to comply with
Immersion's development obligations under the terms of the
11
12
Development Agreement, except as disclosed to Logitech in writing prior to the
date of this Agreement. Immersion further represents and warrants that it
neither holds nor has applied for a patent that is dominant to the Licensed
Patents.
6. INDEMNIFICATION
6.1 TRADEMARK INFRINGEMENT INDEMNIFICATION BY IMMERSION. Subject to the
limitations on cumulative liability under Section 7.1 ("Disclaimers of Certain
Types of Damages") and Section 7.3 ("Limitations of Liability with Respect to
Indemnity Obligations"), and Immersion's approval for Logitech to use the Legend
and the Marks pursuant to Section 2.5 ("Label Requirements"), Section 2.6
("Trademark License") and Section 2.7 ("Administrative Procedures") and further
subject to prompt notification by Logitech, cooperation by Logitech and control
of all litigation and/or settlement by Immersion, Immersion shall indemnify,
defend and hold Logitech harmless from and against any and all claims, damages,
liabilities, judgments, settlements, losses, costs and expenses (including court
costs and reasonable attorneys' and experts' fees) (collectively, "Costs")
suffered or incurred by Logitech arising out of a claim of infringement of any
Immersion Xxxx or Legend used by Logitech on a Planar Force Feedback Cursor
Control Device in the Planar Force Feedback Cursor Control Field of Use which is
based on Logitech's use under the labeling requirement of Section 2.5 ("Label
Requirements") and/or the terms of Section 2.6 ("Trademark License") and Section
2.7 ("Administrative Procedures"). In the case of an infringement or alleged
infringement by any such Immersion Xxxx or Legend used by Logitech on a Planar
Force Feedback Cursor Control Device in the Planar Force Feedback Cursor Control
Field of Use: (i) Logitech will have the right to remove such Marks and/or
Legend from Logitech Planar Force Feedback Cursor Control Devices while any
dispute or litigation concerning the same is pending, and shall begin using such
marks again only after such infringement claims or disputes have been settled or
dismissed with prejudice, and (ii) Immersion will have the right to require
Logitech to stop using such Marks and/or Legend and will provide a new trademark
to be used in connection with the Immersion Product Model Technology and/or
Licensed Patents, as applicable. Each party agrees to notify the other promptly
of any matters in respect to which the foregoing indemnity in this Section 6.1
("Trademark Infringement indemnification by Immersion") may apply. If notified
in writing of any action or claim for which Immersion is to provide indemnity,
Immersion shall defend, subject to the limitations of liability set forth in
Section 7.1 ("Disclaimer of Certain Types of Damages") and 7.3 ("Limitations of
Liability With Respect to Indemnity Obligations"), those actions or claims at
Immersion's expense and pay the Costs awarded against Logitech in any such
action, or pay any settlement of such action or claim entered into by Immersion.
6.2 COPYRIGHT INFRINGEMENT AND TRADE SECRET MISAPPROPRIATION
INDEMNIFICATION BY IMMERSION.
6.2.1 SCOPE. Subject to the limitations of cumulative liability
under Section 7.1 ("Disclaimer of Certain Types of Damages") and Section 7.3
("Limitations of Liability With Respect to Indemnity Obligations") and further
subject to prompt notification by Logitech, cooperation by Logitech and control
of all litigation and/or settlement by Immersion, Immersion shall indemnify,
defend and hold Logitech harmless from and against any and all Costs suffered
12
13
or incurred by Logitech as a result of any third party claim that any Immersion
Product Model Technology delivered by Immersion to Logitech infringes any
copyright or misappropriates any trade secret of any third party. In the case of
any third party claim involving the Immersion Software portion of the Immersion
Product Model Technology, Immersion may, in its sole discretion, provide
Logitech with a modification to the affected Immersion Software so that the
Immersion Software portion of the Immersion Product Model Technology becomes
noninfringing or in the alternative, may provide Logitech other software which
is functionally equivalent. Each party agrees to notify the other promptly of
any matters in respect to which the foregoing indemnity in this Section 6.2
("Copyright Infringement and Trade Secret Misappropriation Indemnification by
Immersion") may apply. If notified in writing of any action or claim for which
Immersion is to provide indemnity, Immersion shall defend, subject to the
limitations of liability set forth in Section 7.1 ("Disclaimer of Certain Types
of Damages") and 7.3 ("Limitations of Liability With Respect to Indemnity
Obligations"), those actions or claims at Immersion's expense and pay the Costs
awarded against Logitech in any such action, or pay any settlement of such
action or claim entered into by Immersion.
6.2.2 EXCEPTIONS. The foregoing indemnity will not apply to any
infringement claim to the extent it arises from (i) any modification of any
Immersion Product Model Technology by parties other than Immersion or Immersion
subcontractors under contract with Immersion, (ii) use of any Immersion Product
Model Technology in conjunction with other non-Immersion products or components
where there would be no infringement absent such use with such other products or
components or (iii) an infringement which would not occur in the Immersion
Product Model Technology or any Final Prototype in which such Immersion Product
Model Technology is incorporated but which does occur in the final production
version of a Planar Force Feedback Cursor Control Device.
6.3 PERSONAL INJURY AND PROPERTY DAMAGE CLAIMS. Neither party shall have
any obligation to indemnify, protect, defend and hold the other party harmless
from any Costs suffered or incurred by the other party to the extent such third
party claim or threatened claim arises from a personal or alleged personal
injury or damage or alleged damage to property arising out of the third party's
use of Planar Force Feedback Cursor Control Devices.
6.4 PRODUCT LIABILITY INSURANCE. The Parties agree that they shall each
secure insurance covering product liability. Such insurance shall provide
coverage of at least ONE MILLION DOLLARS ($1,000,000) per occurrence and shall
remain in effect during the term of this Agreement. Each party will promptly
cause the other party to be named as an additional insured.
6.5 PATENT INFRINGEMENT INDEMNIFICATION BY IMMERSION.
6.5.1 SCOPE. Subject to the limitations of cumulative liability
under Section 7.1 ("Disclaimer of Certain Types of Damages") and Section 7.3
("Limitations of Liability With Respect to Indemnity Obligations"), and further
subject to prompt notification by Logitech, cooperation by Logitech and control
of all litigation and/or settlement by Immersion, Immersion shall indemnify,
defend and hold harmless Logitech from and against any and all Costs (except
13
14
as provided in Section 6.5.3 ("Exceptions With Respect to Patents Issued After
the Effective Date")) suffered or incurred by Logitech as a result of any third
party claim that any Immersion Product Model Technology delivered by Immersion
(for which Logitech is currently paying royalties) infringes upon any United
States patent. Each Party agrees to notify the other promptly of any matters in
respect to which the foregoing indemnity in this Section 6.5 ("Patent
Infringement Indemnification by Immersion") may apply. If notified in writing of
any action or claim for which Immersion is to provide indemnity, Immersion shall
defend, subject to the limitations of liability set forth in Section 7.1
("Disclaimer of Certain Types of Damages") and 7.3 ("Limitations of Liability
With Respect to Indemnity Obligations") and the provisions of Section 6.5.3
("Exceptions With Respect to Patents Issued After the Effective Date"), those
actions or claims at its expense and pay the Costs awarded against Logitech in
any such action, or pay any settlement of such action or claim entered into by
Immersion. In any such action, Logitech will make available to Immersion all
defenses against such action or claim known or available to Logitech.
6.5.2 EXCEPTIONS TO THE SCOPE OF THE INDEMNITY. Immersion shall have
no liability or obligation with respect to any claim of patent infringement to
the extent it arises from (a) Immersion's compliance with the Specifications in
Exhibit A of the Development Agreement for a Planar Force Feedback Cursor
Control Device, to the extent such infringement would not have arisen but for
compliance with such Specifications, (b) use of Immersion Product Model
Technology by Logitech or its customers, subcontractors or any third party in or
with an application, embodiment or environment other than that for which the
Immersion Product Model Technology was designed as set forth in the applicable
Specifications; (c) modification of Immersion Product Model Technology by
Logitech or its customers, subcontractors or any third party; (d) the operation
or use of any Immersion Product Model Technology in combination with any Planar
Force Feedback Cursor Control Device, equipment or technology not delivered by
Immersion or recommended by Immersion pursuant to a specific written obligation
in the Specifications in Exhibit A of the Development Agreement to make a
recommendation; or (e) Immersion's compliance with a Specification or any
aspects or portions of the Specification which "inherently" (as defined below)
infringes any patent. For the purposes of this Agreement "inherently" means that
any device or aspect or portion of a device which was in conformance with the
Specification would infringe such patent.
6.5.3 EXCEPTIONS WITH RESPECT TO PATENTS ISSUED AFTER THE EFFECTIVE
DATE. The provisions of this Section 6.5.3 ("Exceptions With Respect to Patents
Issued After the Effective Date") shall apply only with respect to a United
States patent issued after the Effective Date (an "After-Issued Patent").
(a) NOTICE BY IMMERSION AND SUPPLY OF MODIFIED OR SUBSTITUTE
TECHNOLOGY. Logitech agrees to promptly notify Immersion if Logitech becomes
aware of an After-Issued Patent which Logitech reasonably believes is infringed
by any Immersion Product Model Technology that is the subject of an indemnity
obligation by Immersion hereunder. If upon receipt of notice from Logitech or
independently, Immersion becomes aware of an After-Issued Patent which Immersion
reasonably believes is infringed by any Immersion Product Model Technology that
is the subject of an indemnity obligation by Immersion hereunder, then
14
15
Immersion will notify Logitech in writing of such patent (the date of such
notice being referred to as the "Notice Date"). Within fifteen (15) days after
the Notice Date, Immersion shall supply Logitech with a written description and
cost estimate of a proposed redesign of the infringing Immersion Product Model
Technology to avoid the infringement. As reasonably promptly thereafter as
possible, Immersion shall supply Logitech with a modification to the affected
Immersion Product Model Technology so that the incorporated Immersion Product
Model Technology becomes noninfringing or substitute for the infringing
Immersion Product Model Technology other technology that conforms to the
Specifications in Exhibit A of the Development Agreement (which shall itself be
deemed to be Immersion Product Model Technology) or, if neither of the foregoing
are reasonably possible, procure for Logitech the right to continue to use such
Immersion Product Model Technology. If Immersion is unable to procure for
Logitech the right to continue to use such Immersion Product Model Technology
under commercially reasonable terms, as determined by Immersion, Immersion may,
in the alternative, refund to Logitech all royalties received by Immersion under
the Agreement relating to the allegedly infringing Immersion Product Model
Technology (reflecting any discounts granted to Logitech, less an amount for
depreciation calculated in a straight-line basis over an assumed useful life of
three (3) years).
(b) COSTS NOT COVERED BY INDEMNITY FOR AFTER-ISSUED PATENTS.
Immersion shall have no obligation to indemnify Logitech for infringement of
such After-Issued Patents with respect to any units of a Planar Force Feedback
Cursor Control Device which are distributed or used by Logitech after the Notice
Date. Immersion shall have no liability hereunder to reimburse Logitech for any
lost inventory, retooling or other manufacturing costs incurred by Logitech that
result from Logitech's incorporation of such modified or substitute technology
in order to avoid infringement of an After-Issued Patent.
(c) ELECTION BY LOGITECH OF ALTERNATIVE REMEDY.
Notwithstanding the foregoing provisions, in any instance in which Immersion is
prepared and capable of supplying to Logitech modified or substitute technology
to avoid infringement of an After-Issued Patent, Logitech may, within a
reasonable time after receiving Immersion's written description and cost
estimate of Immersion's proposed redesign, elect either (i) to request, in
writing, that Immersion pursue a license under the After-Issued Patents on
behalf of Logitech to continue using the affected Immersion Product Model
Technology, in which event if such license would cost Immersion more than the
cost estimate provided by Immersion to Logitech, under the terms of (a) above,
to supply modified or substitute technology to avoid infringement, then Logitech
shall pay the difference between such costs, or (ii) to request, in writing,
that Logitech be allowed to continue to use the Immersion Product Model
Technology in unaltered form, in which event Immersion shall have no obligations
of indemnity or defense hereunder with respect to any infringement of the
After-Issued Patents resulting from units of Planar Force Feedback Cursor
Control Devices incorporating the unaltered Immersion Product Model Technology
used or distributed by Logitech after the Notice Date. If Immersion pursues the
license described in (i) above, and is unable to procure such a license,
Immersion will not be in breach of this Agreement.
15
16
6.6 REMEDIES IN THE EVENT OF PROHIBITION OF USE. The provisions and
remedies set forth in this Section 6.6 ("Remedies In the Event of Prohibition of
Use") shall continue to be applicable with respect to any copyright infringement
or trade secret misappropriation under the terms of Section 6.2 ("Copyright
Infringement and Trade Secret Misappropriation"), and any After-Issued Patents
for which Immersion does not supply written notice to Logitech in accordance
with Section 6.5.3 (a) ("Notice by Immersion and Supply of Modified or
Substitute Technology") and any U.S. Patents issued prior to the Effective Date
of this Agreement. If a preliminary or final judgment shall be obtained against
Logitech's use, sale or distribution of a Planar Force Feedback Cursor Control
Device that incorporates any Immersion Product Model Technology based
infringement within the scope of the indemnity set forth in Section 6.1
("Trademark Infringement indemnification by Immersion"), 6.2 ("Copyright
Infringement and Trade Secret Misappropriation Indemnification by Immersion") or
6.5 (Patent Infringement Indemnification by Immersion") (subject to the
exceptions set forth therein), or if any Immersion Product Model Technology is,
or in Immersion's opinion, is likely to become, subject to a claim for such
infringement, then Immersion shall, at its expense, either (a) modify the
Immersion Product Model Technology so that the incorporated Immersion Product
Model Technology becomes noninfringing, or (b) procure for Logitech the right to
continue to use such Immersion Product Model Technology, or (c) substitute for
the infringing Immersion Product Model Technology other technology that conforms
to the Specifications in Exhibit A of the Development Agreement (which shall
itself be deemed to be Immersion Product Model Technology). If (a), (b) or (c)
above are not commercially reasonable alternatives in Immersion's opinion,
Immersion shall refund to Logitech all royalties received by Immersion under
this Agreement relating to the allegedly infringing Immersion Product Model
Technology (reflecting any discounts granted to Logitech, less an amount for
depreciation calculated in a straight-line basis over an assumed useful life of
three (3) years).
6.7 INDEMNITY BY LOGITECH. Subject to the limitations of liability set
forth in Section 7 ("Limitations of Liability"), and subject to prompt
notification by Immersion, cooperation by Immersion and control of all
litigation and/or settlement by Logitech, Logitech shall indemnify, defend and
hold harmless Immersion from and against any and all Costs suffered or incurred
by Immersion to the extent such Costs are suffered or incurred by Immersion in
the situations listed in the exceptions (i) through (iii) enumerated in Section
6.2.2 ("Exceptions"), and in the exceptions (a) through (e) enumerated in
Section 6.5.2 ("Exceptions to the Scope of Indemnity"), and/or in the situation
where Logitech and Immersion agree that Logitech will be allowed to continue to
use the Immersion Product Model Technology in unaltered form in accordance with
subsection (ii) of Section 6.5.3 (c) ("Election by Logitech of Alternative
Remedy"), provided that such situations arise because of Logitech's, its
subcontractors' or affiliates' use and modifications.
7. LIMITATIONS OF LIABILITY
7.1 DISCLAIMER OF CERTAIN TYPES OF DAMAGES. IN NO EVENT WILL LOGITECH OR
IMMERSION BE LIABLE FOR LOST PROFITS, OR ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, ARISING IN
ANY WAY IN CONNECTION WITH THIS
16
17
AGREEMENT. THIS LIMITATION WILL APPLY EVEN IF LOGITECH AND IMMERSION HAVE BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING ANY FAILURE OF
ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
7.2 LIMITATIONS OF LIABILITY OTHER THAN INDEMNITY OBLIGATIONS. EXCEPT
WITH RESPECT TO THE PARTIES' OBLIGATIONS OF INDEMNITY, INCLUDING, BUT NOT
LIMITED TO COSTS OF DEFENSE AND "COSTS" (AS DEFINED ABOVE) SET FORTH IN SECTION
6 ("INDEMNIFICATION") WHICH ARE LIMITED BY THE TERMS OF SECTION 7.3
("LIMITATIONS OF LIABILITY WITH RESPECT TO INDEMNITY OBLIGATIONS") AND WITH
RESPECT TO ANY ROYALTIES DUE AND PAYABLE BY LOGITECH HEREUNDER, IN NO CASE WILL
EITHER PARTY'S TOTAL CUMULATIVE LIABILITY OR OBLIGATIONS UNDER THE TERMS OF OR
ARISING OUT OF THIS AGREEMENT EXCEED $1,000,000.
7.3 LIMITATIONS OF LIABILITY WITH RESPECT TO INDEMNITY OBLIGATIONS. IN
NO CASE WILL EITHER PARTY'S TOTAL CUMULATIVE LIABILITY WITH RESPECT TO ITS
OBLIGATIONS OF INDEMNITY INCLUDING, BUT NOT LIMITED TO COSTS OF DEFENSE AND
"COSTS" (AS DEFINED ABOVE) UNDER SECTION 6 ("INDEMNIFICATION") EXCEED THE
GREATER OF (i) $500,000 OR (ii) ROYALTIES PAID OR PAYABLE BY LOGITECH TO
IMMERSION HEREUNDER FOR THE THIRTY-SIX (36) MONTHS PRECEDING THE EVENT FIRST
GIVING RISE TO SUCH OBLIGATIONS.
7.4 NEGATION OF WARRANTIES AND OTHER OBLIGATIONS.
7.4.1 Nothing in this Agreement shall be construed:
(i) as a warranty or representation by Immersion as to the
validity or scope of any Licensed Patents;
(ii) as a warranty or representation that anything made,
used, sold or otherwise disposed of under any license
granted in this Agreement is or will be free from
infringement by patents, copyrights, trade secrets,
trademarks, or other rights of third parties;
(iii) as granting by implication, estoppel or otherwise any
licenses or rights under patents or other Intellectual
Property Rights of Immersion other than expressly
granted herein, regardless of whether such patents are
dominant or subordinate to any Licensed Patents, or
(iv) (a) to require Immersion to file any patent application
relating to force-feedback in Planar Force Feedback
Cursor Control Devices, (b) a warranty that Immersion
will be successful in securing the grant of any patent
relating to force- feedback in Planar Force
17
18
Feedback Cursor Control Devices or any reissue or
extensions thereof, and (c) to require Immersion to pay
any maintenance fees or take any other steps to
maintain Immersion's patent rights relating to force
feedback in Planar Force Feedback Cursor Control
Devices, provided, however, that in the event Immersion
elects not to pay any maintenance fee or take any step
to maintain such patents, Immersion shall so notify
Logitech a reasonable period in advance and Logitech
may, at its option, pay such maintenance fee or take
such steps.
7.4.2 Except for Immersion's obligations of indemnity set forth
herein, Immersion does not assume any responsibility for the definition of the
Specifications, the manufacture of the Planar Force Feedback Cursor Control
Devices, or use of any Planar Force Feedback Cursor Control Device which is
manufactured or sold by or for Logitech or the Logitech Affiliates under the
Licensed Patent licenses granted herein. All warranties in connection with such
Planar Force Feedback Cursor Control Devices shall be made by Logitech or the
Logitech Affiliates as manufacturers or sellers of such Planar Force Feedback
Cursor Control Devices and such warranties shall not directly or by implication
obligate Immersion in any way.
8. THIRD PARTY ENFORCEMENT
Immersion shall not have any obligation or duty under this Agreement to
any party, including but not limited to Logitech to enforce any patents or
Licensed Patents against any third party infringing any claim or claims of any
patent and/or the Licensed Patents provided, however, that should Logitech
become aware of any actual infringement of the Licensed Patents by a Planar
Force Feedback Cursor Control Device distributed in the Planar Force Feedback
Cursor Control Field of Use by a third party, which Planar Force Feedback Cursor
Control Device directly competes with a Planar Force Feedback Cursor Control
Device currently shipped by Logitech as a formal product release which is
covered by the Licensed Patents, Logitech will promptly communicate the details
to Immersion. Immersion shall thereupon, within thirty (30) days of being made
aware by Logitech of such infringement, send copies of the relevant Licensed
Patents to such third party, however, Immersion shall have the right to take no
further action or whatever action Immersion deems necessary, including cease and
desist letters, negotiation, the filing of lawsuits, and/or settlement to
terminate such infringement and the strategy and/or conclusion of such action or
settlement shall be within Immersion's sole discretion. Logitech shall cooperate
with Immersion if Immersion takes any such action but all expenses of Immersion
shall be borne by Immersion. If Immersion recovers any damages or compensation
for any action Immersion takes hereunder, including any settlement, Immersion
shall retain one hundred percent (100%) of such damages. If Immersion does not
elect to take such further action hereunder within ninety (90) days of being
made aware of such infringement by Logitech, then Logitech shall have the right,
but not the obligation, to provide Immersion with a Patent Enforcement
Justification, as defined below, and if the proposed enforcement action meets
the Patent Enforcement Justification criteria, Logitech may take and control any
such action, subject to Immersion's absolute right to control any and all
assertions or admissions
18
19
which relate to the scope or validity of Immersion's Licensed Patents. For
purposes of this Section 8 ("Third Party Enforcement"), a Patent Enforcement
Justification is a written report prepared by Logitech which includes: (i) the
name and address of the entity manufacturing the Planar Force Feedback Cursor
Control Device that is allegedly infringing the Licensed Patents and the names
and addresses of any entities distributing such Planar Force Feedback Cursor
Control Device, (ii) an analysis of which of the Licensed Patent claims are
infringed, (iii) a comparison of the allegedly infringing Planar Force Feedback
Cursor Control Device and the affected Planar Force Feedback Cursor Control
Device distributed by Logitech with which such allegedly infringing Planar Force
Feedback Cursor Control Device competes (which comparison analyzes the
competitive threat as to (a) feature and function, (b) positioning, and (c)
price point), (iv) the number of units of the Planar Force Feedback Cursor
Control Device sold by Logitech in the most recent four (4) full Quarters and,
if known or reasonably estimable, the number or estimate of the number of units
of the allegedly infringing Planar Force Feedback Cursor Control Device sold in
the most recent four (4) full Quarters, on a geographic area basis. The criteria
which must be met by such report, in order to permit Logitech to "justify" and
to go forward with an infringement action, as are follows:
(i) Logitech must be selling over 150,000 units of the
affected Planar Force Feedback Cursor Control Device in the market in which the
infringement is occurring during the most recent four (4) full Quarters or, if
the Product Launch occurred during the most recent four (4) full Quarters,
Logitech reasonably estimates in good faith that it will sell over 150,000 units
of the affected Planar Force Feedback Cursor Control Device in the market in
which the infringement is occurring during the next four (4) full Quarters;
(ii) the allegedly infringing Planar Force Feedback
Cursor Control Device must be substantially similar to the affected Planar Force
Feedback Cursor Control Device as to features and functions such that the
allegedly infringing Planar Force Feedback Cursor Control Device is having or
reasonably will have a serious impact on the sales of the affected Logitech
Planar Force Feedback Cursor Control Device;
(iii) the Licensed Patents to be enforced against the
allegedly infringing Planar Force Feedback Cursor Control Device also cover the
affected Logitech Planar Force Feedback Cursor Control Device;
(iv) the number of units of the allegedly infringing
Planar Force Feedback Cursor Control Device sold in the market in which the
infringement is occurring in the most recent four (4) full Quarters or
reasonably estimated in good faith to be sold in the next four (4) full Quarters
must meet or exceed 150,000 units; and
(v) Logitech has included the applicable Licensed Patent
numbers on the affected Planar Force Feedback Cursor Control Device in
accordance with the terms of Section 2.5 ("Label Requirements").
If the aforementioned criteria are met, Immersion will cooperate with Logitech,
at Logitech's expense, including but not limited to joining any legal
proceedings as a named plaintiff to the extent required to confer jurisdiction,
and all of Logitech's expenses will be borne by Logitech.
19
20
Immersion may elect to have counsel of its own choosing participate at
Immersion's sole expense in any legal proceedings instituted by Logitech, but
Logitech shall retain one hundred percent (100%) of any damages Logitech
recovers for any such proceedings including any settlement, provided however
that (i) Logitech shall first reimburse Immersion for Immersion's Costs to
participate in such action out of any recovery which exceeds Logitech's Costs
for such action. Immersion must agree to any settlement of any infringement or
of any action brought hereunder by Logitech, which consent will not be
unreasonably withheld.
9. GENERAL
9.1 ENTIRE AGREEMENT. This Agreement, together with the Development
Agreement and its Exhibits, constitutes the complete agreement of the parties
and supersedes any other agreements, written or oral (including all
correspondence, emails and the letter regarding Phase 0 dated February 20, 1998
concerning the subject matter hereof and such materials do not have any effect
upon the rights and obligations of the Parties under this Agreement. This
Agreement and the Development Agreement in no way supersede or affect the
Intellectual Property License Agreement between Immersion and Logitech dated
April 2, 1997 and/or the Technology Product Development Agreement between
Immersion and Logitech dated April 2, 1997.
9.2 SUCCESSION AND ASSIGNMENT. Either party may assign this Agreement
provided that the other party has consented in writing to the assignment or
delegation and provided, further, that the rights and obligations of the parties
may be assigned to a corporate successor in interest in the case of a merger or
acquisition or in the case of a sale of assets without the prior approval of the
other party. In the case of any permissible assignment of this Agreement by
Immersion, the obligation for Logitech to include the phrase "from Immersion
Corporation" at the end of the Legend will be waived. Any attempt to assign this
Agreement in violation of the provisions of this Section 9.2 ("Succession and
Assignment") shall be void.
9.3 NOTICES. Notices required under this Agreement shall be addressed as
follows, except as otherwise revised by written notice:
TO IMMERSION: TO LOGITECH:
Xxxxx X. Xxxxxxxxx, Ph. D. General Counsel
President Logitech, Inc.
Immersion Corporation 0000 Xxxxxx Xxxxx
0000 Xxxxxxx Xxxxx Xxxxxxx, XX 00000-0000
Xxx Xxxx, XX 00000
9.4 GOVERNING LAW. The validity, interpretation and performance of this
Agreement shall be governed by the substantive laws of the State of California,
without the application of any principle that leads to the application of the
laws of any other jurisdiction.
9.5 NO AGENCY. Neither party is to be construed as the agent, partner,
or joint venturer or to be acting as the agent, partner or joint venturer of the
other party hereunder in any respect.
20
21
9.6 NO RECRUITMENT. During the term of this Agreement and for one (1)
year after the termination or expiration of this Agreement, each Party agrees
not to recruit any employee of the other Party.
9.7 MULTIPLE COUNTERPARTS. This Agreement may be executed in several
counterparts, all of which taken together shall constitute one single Agreement
between the parties.
9.8 NO WAIVER. No delay or omission by either Party hereto to exercise
any right or power occurring upon any noncompliance or default by the other
Party with respect to any of the terms of this Agreement shall impair any such
right or power or be construed to be a waiver thereof. A waiver by either of the
Parties hereto of any of the covenants, conditions, or agreements to be
performed by the other shall not be construed to be a waiver of any succeeding
breach thereof or of any covenant, condition, or agreement herein contained.
Unless stated otherwise, all remedies provided for in this Agreement shall be
cumulative and in addition to and not in lieu of any other remedies available to
either party at law, in equity, or otherwise.
9.9 SEVERABILITY. If any one or more of the provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
9.10 AMENDMENTS IN WRITING. Any amendment to this Agreement shall be in
writing and signed by both parties hereto.
9.11 INTERPRETATION. Since this Agreement was prepared by both parties
hereto, it shall not be construed against any one party as the drafting party.
9.12 DISPUTE RESOLUTION. Except in the case of a breach of an obligation
related to a Party's Intellectual Property Rights, in the event either Party
concludes that it is in its best interest to file any legal action against the
other, the Party shall contact the other Party's management and at least two (2)
senior managers from each Party shall meet without legal counsel or interruption
for a minimum amount of three (3) eight (8) hour periods and diligently attempt
to resolve all disputed matters. If the Parties are unable to resolve their
difference and either Party desires to file a legal action against the other, at
least two (2) senior managers from each Party and their respective counsels
shall meet for three (3) eight (8) hour periods and diligently attempt to
resolve all disputed matters. Either Party may request that an independent third
party bound to mutually agreed upon obligations of confidentiality attend such
meeting in order to assist the Parties in reaching a reasonable resolution. All
oral and written information exchanged in these meetings shall be exchanged in
an effort to settle all disputed matters. If either Party still desires to file
a legal action against the other after these prescribed meetings, such Party may
file a legal action against the other Party as allowed by applicable law in
Santa Xxxxx County state court or in the federal court. The Parties agree that
if a Party does not attend all of the prescribed meetings it waives its rights
to any monetary damages in the legal action(s) it files.
21
22
9.13 SURVIVAL. Sections 3.2 ("Per Product Model Royalty"), 3.4
("Payments and Reports"), 3.5 ("Audit Rights of Royalty Payment"), 4.6 ("Effect
of Termination"), 5 ("Warranty"), 7 ("Limitations of Liability") and 9
("General") shall survive any termination or expiration of this Agreement. In
addition, the provisions of Sections 6.1 ("Trademark Infringement
Indemnification by Immersion"), 6.2 ("Copyright Infringement and Trade Secret
Misappropriation Indemnification by Immersion"), 6.5 ("Patent Infringement
Indemnification by Immersion"), 6.6 ("Remedies In the Event of Prohibition of
Use") and 6.7 ("Indemnity by Logitech") shall survive with respect to any units
of a Product Model of Royalty Bearing Products sold or otherwise distributed by
Logitech before the termination or expiration of this Agreement, provided,
however, that Immersion's obligations of indemnity under Sections 6.1
("Trademark Infringement Indemnification by Immersion"), 6.2 ("Copyright
Infringement and Trade Secret Misappropriation Indemnification by Immersion"),
6.5 ("Patent Infringement Indemnification by Immersion"), and 6.6 ("Remedies In
the Event of Prohibition of Use") shall not survive in the event Immersion
terminates this Agreement for cause, including but not limited to, failure by
Logitech to pay royalties due hereunder.
FORCE MAJEURE. With the exception of the obligation to pay monies due
and owing, each Party hereto shall be excused from performance hereunder for any
period and to the extent that it is prevented from performing any services
pursuant hereto, in whole or in part, as a result of delays caused by the other
Party or an act of God, war, civil disturbance, court order, governmental
action, laws, orders, regulations, directions or requests, or as a result of
events such as acts of public enemies, earthquakes, fires, floods, strikes or
other labor disturbances of the other Party or any third party, or other cause
beyond its reasonable control and which it could not have prevented by
reasonable precautions, and such nonperformance shall not be a default hereunder
or a ground for termination hereof.
IN WITNESS WHEREOF, the authorized representatives of the parties hereto
have signed this Agreement as of the date and year last set forth below.
Logitech: Immersion:
LOGITECH, INC. IMMERSION CORPORATION
By: /s/ By: /s/ Xxxxx Xxxxxxxxx
-------------------------------- ----------------------------------
Title: S.V.P./ G.M. Title: President
----------------------------- --------------------------------
Date: April 13, 1998 Date: April 13, 1998
------------------------------ --------------------------------
22
23
EXHIBIT A
SPECIFICATION
Immersion shall develop a Mouse Product to conform to the following
basic specifications: The Mouse Product shall be a two degree of freedom mouse
controller with active force feedback functionality along each of the two
displacement axes. The Mouse Product will be fixed by a linkage to a mouse pad
that houses the actuators and sensors. The Mouse Product will allow both
absolute position data and relative position data to be reported to the host
computer. The Mouse Product must be compatible with Intel based personal
computers (or equivalent) running Microsoft Windows 98 and NT operating systems.
It must connect to the PC through a universal Serial Bus ("USB") interface using
the USB communication protocol for "HID" and/or "PID" class devices (or HID
equivalent). In addition to receiving position data and button press data from
the Mouse Product across the USB, the host computer will command force
sensations on the Mouse Product by sending a high level force command with
command parameters across the USB. The completed work must include host drivers,
firmware and electromechanical hardware that work together to allow cursor
related force feedback sensations to be generated by a processor on-board the
Mouse Product (for example, physical detent sensations when traversing a menu
item). Said sensations must be appropriately coordinated with events running in
host software applications. The programming of coordination between force
sensations and software events will be achieved using a high-level Application
Programming Interface ("API") that allows software developers to command force
feedback sensations from their applications. For gaming applications, the
Windows API will use the "DirectX" force feedback implementation as its core and
the Mouse Product must have compatible firmware that locally produces all key
features supported by the then current DirectX 6.0 (Direct-Input) specification.
For non-gaming applications, API will also enable advanced features not
necessarily specified by DirectX as included in the current FEELit API
specification. The device must be able to provide mouse functionality (no force
feedback) when powered by USB only, in low power mode (4.4V, 100 mA) to comply
with the USB Specification at power up.
Requirement Overview: The Mouse Product must be a high quality, premium
cursor control peripheral capable of providing accurate positioning data
and producing realistic force feedback sensations. The product must
consist of the following subsystems:
Mouse Handle: Logitech to provide the design. A deadman switch is not
currently provided from Immersion but may be included by Logitech if it
proves necessary.
Base Enclosure/Support: Immersion to provide the basic mouse pad housing
concept and recommendations. Logitech to provide the industrial design.
Logitech to do detailed design with input from Immersion. The support
must carry the mouse loads, both user loads and force feedback loads,
without introducing excessive friction or binding. The support must
include a hard stop around the peripheral of the mouse workspace. Range
of motion provided for the Mouse Product is specified at the end of this
section.
Transmission: Immersion to provide a parallel linkage design. The
transmission will be a five-bar linkage structure that conveys
mechanical power from actuators to the Mouse Handle.
23
24
Actuator: Immersion to provide the full design of custom flat actuators
(voice coils) optimized for the Mouse Product embodiment. Logitech will
produce the actuator coils but Immersion will supply the Magnet Assembly
as a separate component governed by a separate Component Supply
Agreement.
Spring Centering: Physical springs are not needed for this product. All
spring centering for gaming applications will be simulated by the local
processor.
Power Electronics: Immersion must provide the initial design. There will
be an external power source (brick) in the initial product. [****]
Product will draw non-force feedback power from USB.
Microprocessor and Interface Electronics: Immersion must provide the
board design for controller electronics, to be industrialised by
Logitech. Immersion will supply the FEELit Chip processor under a
separate OEM agreement, said processor including firmware to create
local force feedback sensations. Design will be USB high speed
compatible. It is currently estimated that the COG for the die-shrink
version of the FEELit Chip in production volumes (100,000 units per
year) will be [****] or less.
Sensors: Immersion provides recommendation and design implementation for
sensors that monitor the motion of the mouse and report such data back
to the host across USB via the microprocessor. It is currently estimated
that the COG for the sensing electronics will be less than [****].
Sensitivity: Mouse to support basic mouse ballistic scaling algorithms
wherein mouse position sensitivity is varied with velocity of mouse
movement. [****].
Embedded Software: Immersion must provide the HEX code. The embedded
software will be Direct-X and FEELit compatible and USB enabled.
Logitech will not have access to any parts of the source code (including
but not limited to the force feedback core) except as provided in
Section 2.2.1 ("Firmware Source Code"). [****] After the final firmware
is delivered, Immersion will provide access to several sections of the
firmware including those related to [****]
Host Software: Immersion will provide drivers that manage force feedback
of the device in Windows 98 and NT. The driver will support the
DirectInput API and the FeelIt API. A custom interface may be needed to
communicate with existing Logitech MouseWare drivers. This custom
interface would be developed between Logitech and Immersion. The general
breakdown of the software should be such that Immersion manages the
Force Feedback components, and Logitech's MouseWare manages the button
programmability, wheel support, port management, and sensor and button
reporting for cursor movement control as well as gaming movement control
through DirectX.
*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.
24
25
Switches and Buttons: The product will support three standard moue
buttons plus [****], all processed by the FEELit Chip if possible.
Compliance: The Immersion/Logitech design must comply with 761325-0000
Rev A Logitech EMI standard. Exceptions to this standard must be duly
approved by Logitech. GOI-740329-00 Rev B is the current generic
reference for reliability. Applicable standards are the following:
Drop: 90 cm
Light immunity: 100 kLux
Environmental: -40.. +70C (non Operating, 53 Hours cycle)
0C (operating, 8 hours)
+40C (operating, 90% RH, 8 hours)
+40C (operating, 10% RH, 8 hours)
Vibration: refer to GOI-740329-00
Shock: refer to GOI-740329-00
Product Details: The product must perform as follows:
Range of Motion: No less than [****]
Force Output: A minimum of [****] grams (peak)
Dimensions: The size shall be minimized within the constraints of
packaging.
Power Consumption: No more than [****] xxxxx peak.
Tracking: Allows [****].
Target Cost: Logitech desires a product with a suggested retail price of
$99 assuming China based labor costs, approximately [****] Logitech margin, and
approximately [****] in nine-level costs. While many of the component costs,
labor costs, and other factors that affect Logitech's ability to hit any given
price target are not related to Immersion's obligations under this contract,
there are currently unknown component costs that do depend upon Immersion's
design. These unknown component costs are the cost of goods for the sensor
electronics and actuator subsystem. At the present time, the preliminary sensor
electronics component costs are estimated at [****] and the preliminary actuator
component costs are estimated at [****]. Based upon the current specification,
Immersion has informed Logitech that it expects that [****] to [****] can be cut
from the combined component costs of the sensor electronics and actuator
subsystem. Note: all costs are based upon the production volume target of
100,000 units per year.
*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.
25
26
EXHIBIT B
Immersion Packaging Labeling Specification
Logitech must place or have placed the following notice or other similar xxxx,
at Immersion's request, on the underside (exterior) of those products which
incorporate Licensed Technology as well as on the packaging and manuals for such
products:
"FEELit(TM) Force Feedback Technology Licensed from Immersion
Corporation".
Logitech must also place or have placed the following FEELit Mouse logo (or
future derivative of the xxxx as reasonably approved by Logitech) at Immersion's
request, prominently on retail packaging and manuals such that the logo is
clearly legible and occupies a rectangular area of no less than 0.70 inches by
0.825 inches. The xxxx must be displayed on at least two surfaces of the retail
packaging, including the front surface and specifically not including the bottom
surface.
[FEELit LOGO] [DIAGRAM]
26
