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Exhibit 10.14
PHS PATENT LICENSE AGREEMENT - NONEXCLUSIVE
PHS and LICENSEE agree as follows:
1. BACKGROUND
1.01 In the course of conducting biomedical and behavioral
research, PHS investigators made inventions that may have
commercial applicability.
1.02 By assignment of rights from PHS employees and other
inventors, DHHS, on behalf of the United States Government,
owns intellectual property rights claimed in any United
States and foreign patent applications or patents
corresponding to the assigned inventions. DHHS also owns any
tangible embodiments of these inventions actually reduced to
practice by PHS.
1.03 The Assistant Secretary for Health of DHHS has delegated to
PHS the authority to enter into this AGREEMENT for the
licensing of the rights to these inventions under 35 U.S.C.
Sections 200-212, the Federal Technology Transfer Act of 1986,
15 U.S.C. Section 3710a, and/or the regulations governing the
licensing of Government-owned inventions, 37 CFR Part 404.
1.04 PHS desires to transfer these inventions to the private sector
through commercialization licenses to facilitate the
commercial development of products and processes for public
use and benefit.
1.05 LICENSEE desires to acquire commercialization rights to
certain of these inventions in order to develop processes,
methods, or marketable products for public use and benefit.
2. DEFINITIONS
2.01 "LICENSED PATENT RIGHTS" shall mean:
a) U.S. patent applications and patents listed in
Appendix A, all divisions and continuations of these
applications, all patents issuing from such
applications, divisions, and continuations, and any
reissues, reexaminations, and extensions of all such
patents;
b) to the extent that the following contain one or more
claims directed to the invention or inventions
claimed in a) above: i) continuations-in-part of a)
above; ii) all divisions and continuations of these
continuations-in-part; iii) all patents issuing from
such continuations-in-part, divisions, and
continuations; and iv) any reissues, reexaminations,
and extensions of all such patents;
c) to the extent that the following contain one or more
claims directed to the invention
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or inventions claimed in a) above: all counterpart
foreign applications and patents to a) and b) above,
including those listed in Appendix A.
LICENSED PATENT RIGHTS shall not include b) or c)
above to the extent that they contain one or more
claims directed to new matter which is not the
subject matter of a claim in a) above.
2.02 "LICENSED PRODUCT(S)" means tangible materials which, in the
course of manufacture, use, or sale would, in the absence of
this AGREEMENT, infringe one or more claims of the LICENSED
PATENT RIGHTS that have not been held invalid or unenforceable
by an unappealed or unappealable judgment of a court of
competent jurisdiction.
2.03 "LICENSED PROCESS(ES)" means processes which, in the course of
being practiced would, in the absence of this AGREEMENT,
infringe one or more claims of the LICENSED PATENT RIGHTS that
have not been held invalid or unenforceable by an unappealed
or unappealable judgment of a court of competent jurisdiction.
2.04 "LICENSED TERRITORY" means the geographical area identified in
Appendix B.
2.05 "NET SALES" means the total gross receipts for sales of
LICENSED PRODUCTS or practice of LICENSED PROCESSES by or on
behalf of LICENSEE and from leasing, renting, or otherwise
making LICENSED PRODUCTS available to others without sale or
other dispositions, whether invoiced or not, less returns and
allowances actually granted, packing costs, insurance costs,
freight out, taxes or excise duties imposed on the transaction
(if separately invoiced), and wholesaler and cash discounts in
amounts customary in the trade. No deductions shall be made
for commissions paid to individuals, whether they be with
independent sales agencies or regularly employed by LICENSEE
and on its payroll, or for the cost of collections.
2.06 "FIRST COMMERCIAL SALE" means the initial transfer by or on
behalf of LICENSEE of LICENSED PRODUCTS or the initial
practice of a LICENSED PROCESS in exchange for cash or some
equivalent to which value can be assigned for the purpose of
determining NET SALES.
2.07 "GOVERNMENT" means the government of the United States of
America.
2.08 "LICENSED FIELDS OF USE" means the fields of use identified in
Appendix B.
3. GRANT OF RIGHTS
3.01 PHS hereby grants and LICENSEE accepts, subject to the terms
and conditions of this AGREEMENT, a nonexclusive license to
LICENSEE under the LICENSED PATENT RIGHTS in the LICENSED
TERRITORY to make and have made, to use and have used, and to
sell and have sold any LICENSED PRODUCTS in the LICENSED
FIELDS OF USE and to practice and have practiced any LICENSED
PROCESSES in the LICENSED FIELDS OF USE.
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3.02 LICENSEE has no right to grant sublicenses.
3.03 This AGREEMENT confers no license or rights by implication,
estoppel, or otherwise under any patent applications or
patents of PHS other than the LICENSED PATENT RIGHTS
regardless of whether such patents are dominant or subordinate
to LICENSED PATENT RIGHTS.
4. STATUTORY AND PHS REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS
4.01 LICENSEE agrees that products used or sold in the United
States embodying LICENSED PRODUCTS or produced through use of
LICENSED PROCESSES shall be manufactured substantially in the
United States, unless a written waiver is obtained in advance
from PHS.
5. ROYALTIES AND REIMBURSEMENT
5.01 LICENSEE agrees to pay to PHS a noncreditable, nonrefundable
license issue royalty as set forth in Appendix C within thirty
(30) days from the date that this AGREEMENT becomes effective.
5.02 LICENSEE agrees to pay to PHS a nonrefundable minimum annual
royalty as set forth in Appendix C. The minimum annual royalty
is due and payable on January 1 of each calendar year and may
be credited against any earned royalties due for sales made in
that year. The minimum annual royalty for the first calendar
year of this AGREEMENT is due and payable within thirty (30)
days from the effective date of this AGREEMENT and may be
prorated according to the fraction of the calendar year
remaining between the effective date of this AGREEMENT and the
next subsequent January 1.
5.03 LICENSEE agrees to pay PHS benchmark royalties as set forth in
Appendix C.
5.04 LICENSEE agrees to pay PHS earned royalties as set forth in
Appendix C.
5.05 A claim of a patent licensed under this AGREEMENT shall cease
to fall within the LICENSED PATENT RIGHTS for the purpose of
computing the minimum annual royalty and earned royalty
payments in any given country on the earliest of the dates
that a) the claim has been abandoned but not continued, b) the
patent expires, c) the patent is no longer maintained by the
Government, or d) all claims of the LICENSED PATENT RIGHTS
have been held to be invalid or unenforceable by an unappealed
or unappealable decision of a court of competent jurisdiction
or administrative agency.
5.06 No multiple royalties shall be payable because any LICENSED
PRODUCTS or LICENSED PROCESSES are covered by more than one of
the LICENSED PATENT RIGHTS.
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5.07 On sales of LICENSED PRODUCTS by LICENSEE in other than an
arm's-length transaction, the value of the NET SALES
attributed under this Article 5 to such a transaction shall be
that which would have been received in an arm's-length
transaction, based on sales of like quantity and quality
products on or about the time of such transaction.
5.08 As an additional royalty, LICENSEE agrees to pay PHS, within
(60) days of PHS's submission of a statement and request for
payment, an amount equivalent to all patent expenses
previously incurred by PHS in the preparation, filing,
prosecution, and maintenance of LICENSED PATENT RIGHTS, to be
divided equally among all nonexclusive commercialization
licensees of record as of the date the statement and request
for payment is sent by PHS to LICENSEE. LICENSEE further
agrees to pay PHS annually, within sixty (60) days of PHS's
submission of a statement and request for payment, a royalty
amount equivalent to all such future patent expenses incurred
during the previous calendar year divided equally among all
nonexclusive commercialization licensees of record as of the
date the statement and request for payment are sent by PHS to
LICENSEE. Fifty percent (50%) of the cumulative amount of the
payments due under this Paragraph 5.08 may be credited against
royalties due under Paragraph 5.04; however, the net royalty
payment in any calendar year may not be lower than the minimum
annual royalty specified in Appendix C. LICENSEE may elect to
surrender its rights in any country of the LICENSED
TERRITORY under any LICENSED PATENT RIGHTS upon sixty (60)
days' written notice to PHS and owe no payment obligation
under this Paragraph for subsequent patent-related expenses
incurred in that country.
6. RECORD KEEPING
6.01 LICENSEE agrees to keep accurate and correct records of
LICENSED PRODUCTS made, used, or sold and LICENSED PROCESSES
practiced under this AGREEMENT appropriate to determine the
amount of royalties due PHS. Such records shall be retained
for at least five (5) years following a given reporting
period. They shall be available during normal business hours
for inspection at the expense of PHS by an accountant or other
designated auditor selected by PHS for the sole purpose of
verifying reports and payments hereunder. The accountant or
auditor shall only disclose to PHS information relating to the
accuracy of reports and payments made under this AGREEMENT. If
an inspection shows an underreporting or underpayment in
excess of five percent (5%) for any twelve (12) month period,
then LICENSEE shall reimburse PHS for the cost of the
inspection at the time LICENSEE pays the unreported royalties,
including any late charges as required by Paragraph 7.06 of
this AGREEMENT. All payments required under this Paragraph
shall be due within thirty (30) days of the date PHS
provides LICENSEE notice of the payment due.
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7. REPORTS ON PROGRESS, SALES, AND PAYMENTS
7.01 Prior to signing this AGREEMENT, LICENSEE has provided to PHS
a written commercialization plan ("COMMERCIAL DEVELOPMENT
PLAN") under which LICENSEE intends to bring the subject
matter of the LICENSED PATENT RIGHTS into commercial use. The
COMMERCIAL DEVELOPMENT PLAN is hereby incorporated by
reference into this AGREEMENT.
7.02 LICENSEE shall provide written annual reports on its product
development progress or efforts to commercialize under the
COMMERCIAL DEVELOPMENT PLAN for each of the LICENSED FIELDS OF
USE within sixty (60) days after December 31 of each calendar
year. These progress reports shall include, but not be limited
to: progress on research and development, status of
applications for regulatory approvals, manufacturing,
marketing, and sales during the preceding calendar year, as
well as plans for the present calendar year. LICENSEE agrees
to provide any additional data reasonably required by PHS to
evaluate LICENSEE'S performance.
7.03 LICENSEE shall report to PHS the date of the FIRST COMMERCIAL
SALE in each country in the LICENSED TERRITORY within thirty
(30) days of such occurrence.
7.04 LICENSEE shall submit to PHS within sixty (60) days after each
calendar half-year ending June 30 and December 31 a royalty
report setting forth for the preceding half-year period the
amount of the LICENSED PRODUCTS sold or LICENSED PROCESSES
practiced by or on behalf of LICENSEE in each country within
the LICENSED TERRITORY, the NET SALES, and the amount of
royalty accordingly due. With each such royalty report,
LICENSEE shall submit payment of the earned royalties due. If
no earned royalties are due to PHS for any reporting period,
the written report shall so state. The royalty report shall
be certified as correct by an authorized officer of LICENSEE
and shall include a detailed listing of all deductions made
under Paragraph 2.05 to determine NET SALES made under Article
5 to determine royalties due.
7.05 Royalties due under Article 5 shall be paid in U.S. dollars.
For conversion of foreign currency to U.S. dollars, the
conversion rate shall be the rate quoted in The Wall Street
Journal on the day that the payment is due. All checks and
bank drafts shall be drawn on United States banks and shall be
payable to NIH/Patent Licensing at the address shown on the
Signature Page below. Any loss of exchange, value, taxes, or
other expenses incurred in the transfer or conversion to U.S.
dollars shall be paid entirely by LICENSEE. All royalty
payments due under this AGREEMENT shall be mailed to the
following address: NIH, X.X. Xxx 000000, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000-0000. The royalty report required by
paragraph 7.04 of this AGREEMENT shall accompany each such
payment and a copy of such report shall also be mailed to PHS
at its address for notices indicated on the Signature Page of
this AGREEMENT.
7.06 Late charges will be applied to any overdue payments as
required by the U.S. Department of Treasury in the Treasury
Fiscal Requirements Manual, Section 8025.40. The payment
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of such late charges shall not prevent PHS from exercising any
other rights it may have as a consequence of the lateness of
any payment.
7.07 All plans and reports required by this Article 7 and marked
"confidential" by LICENSEE shall be treated by PHS as
commercial and financial information obtained from a person,
and as privileged and confidential and, to the extent
permitted by law, shall not be subject to disclosure under the
Freedom of Information Act, 5 U.S.C. Section 552.
8. PERFORMANCE
8.01 LICENSEE shall use its reasonable best efforts to introduce
the LICENSED PRODUCTS into the commercial market or apply the
LICENSED PROCESSES to commercial use as soon as practicable.
"Reasonable best efforts" for the purpose of this provision
shall include, but not be limited to, adherence to the
COMMERCIAL DEVELOPMENT PLAN.
8.02 Upon the FIRST COMMERCIAL SALE, until the expiration of this
AGREEMENT, LICENSEE shall use its reasonable best efforts to
keep LICENSED PRODUCTS and LICENSED PROCESSES reasonably
accessible to the public.
9. INFRINGEMENT AND PATENT ENFORCEMENT
9.01 PHS and LICENSEE agree to notify each other promptly of each
infringement or possible infringement, as well as any facts
which may affect the validity, scope, or enforceability of the
LICENSED PATENT RIGHTS of which either Party becomes aware.
9.02 If PHS has been unable to eliminate a substantial infringement
within one (1) year of written notification to the Office of
Technology Transfer from LICENSEE of the existence of a
substantial infringement and has not instituted infringement
litigation, LICENSEE shall be excused from the payment of the
minimum annual royalty and earned royalties in any country in
which the substantial infringement continues to occur.
Thereafter, when the substantial infringement has ceased or an
infringement suit has been initiated, PHS shall so notify the
LICENSEE in writing, at which time LICENSEE'S obligation to
pay such royalties shall resume as of the date of such
notification.
9.03 In the event that a declaratory judgment action alleging
invalidity of any of the LICENSED PATENT RIGHTS shall be
brought against PHS, PHS agrees to notify LICENSEE that an
action alleging invalidity has been brought. PHS does not
represent that it will commence legal action to defend against
a declaratory action alleging invalidity. LICENSEE shall take
no action to compel the GOVERNMENT either to initiate or to
join in any such declaratory judgment action. Should the
GOVERNMENT be made a party to any such suit by motion or any
other action of LICENSEE, LICENSEE shall reimburse the
GOVERNMENT for any costs, expenses, or fees which the
GOVERNMENT incurs as a result of its defending against such
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motion or other action taken in response to the motion. Upon
LICENSEE'S payment of all costs incurred by the GOVERNMENT as
a result of LICENSEE'S joinder motion or other action, these
actions by LICENSEE will not be considered a default in the
performance of any material obligation under this AGREEMENT.
10. NEGATION OF WARRANTIES AND INDEMNIFICATION
10.01 PHS offers no warranties other than those specified in
Article 1.
10.02 PHS does not warrant the validity of the LICENSED PATENT
RIGHTS and makes no representations whatsoever with regard to
the scope of the LICENSED PATENT RIGHTS, or that the LICENSED
PATENT RIGHTS may be exploited without infringing other
patents or other intellectual property rights of third
parties.
10.03 PHS MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY
SUBJECT MATTER DEFINED BY THE CLAIMS OF THE LICENSED PATENT
RIGHTS.
10.04 PHS does not represent that it will commence legal actions
against third parties infringing the LICENSED PATENT RIGHTS.
10.05 LICENSEE shall indemnify and hold PHS, its employees,
students, fellows, agents, and consultants harmless from and
against all liability, demands, damages, expenses, and losses,
including but not limited to death, personal injury, illness,
or property damage in connection with or arising out of a) the
use by or on behalf of LICENSEE or its directors, employees,
or third parties of any LICENSED PATENT RIGHTS, or b) the
design, manufacture, distribution, or use of any LICENSED
PRODUCTS, LICENSED PROCESSES, or other products or processes
developed in connection with or arising out of the LICENSED
PATENT RIGHTS. LICENSEE agrees to maintain a liability
insurance program consistent with sound business practice.
11. TERMINATION AND MODIFICATION OF RIGHTS
11.01 This AGREEMENT is effective when signed by all parties and
shall extend to the expiration of the last to expire of the
LICENSED PATENT RIGHTS unless sooner terminated as provided in
this Article 11.
11.02 In the event that Licensee is in default in the performance of
any material obligations under this AGREEMENT, and if the
default has not been remedied within ninety (90) days after
the date of notice in writing of such default, PHS may
terminate this AGREEMENT by written notice.
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11.03 At least thirty (30) days prior to filing a petition in
bankruptcy, LICENSEE must inform PHS in writing of its
intention to file the petition in bankruptcy or of a third
party's intention to file an involuntary petition in
bankruptcy.
11.04 In the event that LICENSEE becomes insolvent, files a petition
in bankruptcy, has such a petition filed against it,
determines to file a petition in bankruptcy, or receives
notice of a third party's intention to file an involuntary
petition in bankruptcy, LICENSEE shall immediately notify PHS
in writing. Furthermore, PHS shall have the right to terminate
this AGREEMENT by giving LICENSEE written notice. Termination
of this AGREEMENT is effective upon LICENSEE'S receipt of the
written notice.
11.05 LICENSEE shall have a unilateral right to terminate this
AGREEMENT and/or its rights in any country by giving PHS sixty
(60) days' written notice to that effect.
11.06 PHS shall specifically have the right to terminate or modify,
at its option, this AGREEMENT, if PHS determines that the
LICENSEE: 1) is not executing the COMMERCIAL DEVELOPMENT PLAN
submitted with its request for a license and the LICENSEE
cannot otherwise demonstrate to PHS's satisfaction that the
LICENSEE has taken, or can be expected to take within a
reasonable time, effective steps to achieve practical
application of the LICENSED PRODUCTS or LICENSED PROCESSES; 2)
has willfully made a false statement of, or willfully omitted,
a material fact in the license application or in any report
required by the license agreement; 3) has committed a
substantial breach of a covenant or agreement contained in the
license; 4) is not keeping LICENSED PRODUCTS or LICENSED
PROCESSES reasonably available to the public after commercial
use commences; 5) cannot reasonably satisfy unmet health and
safety needs; or 6) cannot reasonably justify a failure to
comply with the domestic production requirement of Paragraph
4.01 unless waived. In making this determination, PHS will
take into account the normal course of such commercial
development programs conducted with sound and reasonable
business practices and judgment and the annual reports
submitted by LICENSEE under Paragraph 7.02. Prior to invoking
this right, PHS shall give written notice to LICENSEE
providing LICENSEE specific notice of, and a ninety (90) day
opportunity to respond to, PHS's concerns as to the previous
items 1) to 6). If LICENSEE fails to alleviate PHS's concerns
as to the previous items I) to 6) or fails to initiate
corrective action to PHS's satisfaction, PHS may terminate
this AGREEMENT.
11.07 PHS reserves the right according to 35 U.S.C. Section
209(f)(4) to terminate or modify this AGREEMENT if it is
determined that such action is necessary to meet requirements
for public use specified by Federal regulations issued after
the date of the license and such requirements are not
reasonably satisfied by LICENSEE.
11.08 Within thirty (30) days of receipt of written notice of PHS's
unilateral decision to terminate this AGREEMENT, LICENSEE
may, consistent with the provisions of 37 CFR Section 404.11,
appeal the decision by written submission to the Director of
NIH or designee. The
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decision of the NIH Director or designee shall be the final
agency decision. LICENSEE may thereafter exercise any and all
administrative or judicial remedies that may be available.
11.09 Within ninety (90) days of termination of this AGREEMENT under
this Article 11 or expiration under Paragraph 11.01, a final
report shall be submitted by LICENSEE. Any royalty payments
and unreimbursed patent expenses due to PHS become immediately
due and payable upon termination or expiration of this
AGREEMENT, and LICENSEE shall return all LICENSED PRODUCTS or
other materials included within the LICENSED PATENT RIGHTS to
PHS or provide PHS with certification of their destruction.
11.10 Paragraphs 6.01, 7.05-7.07, 10.01, 10.03, 10.05, and 11.08 of
this AGREEMENT shall survive termination of this AGREEMENT.
12. GENERAL PROVISIONS
12.01 Neither Party may waive or release any of its rights or
interests in this AGREEMENT except in writing. The failure of
the GOVERNMENT to assert a right hereunder or to insist upon
compliance with any term or condition of this AGREEMENT shall
not constitute a waiver of that right by the GOVERNMENT or
excuse a similar subsequent failure to perform any such term
or condition by LICENSEE.
12.02 This AGREEMENT constitutes the entire agreement between the
Parties relating to the subject matter of the LICENSED PATENT
RIGHTS, and all prior negotiations, representations,
agreements, and understandings are merged into, extinguished
by, and completely expressed by this AGREEMENT.
12.03 The provisions of this AGREEMENT are severable, and in the
event that any provision of this AGREEMENT shall be determined
to be invalid or unenforceable under any controlling body of
law, such determination shall not in any way affect the
validity or enforceability of the remaining provisions of this
AGREEMENT.
12.04 If either Party desires a modification to this AGREEMENT, the
Parties shall, upon reasonable notice of the proposed
modification by the Party desiring the change, confer in good
faith to determine the desirability of such modification. No
modification will be effective until a written amendment is
signed by the signatories to this AGREEMENT or their
designees.
12.05 The construction, validity, performance, and effect of this
AGREEMENT shall be governed by Federal law as applied by the
Federal courts in the District of Columbia.
12.06 All notices required or permitted by this AGREEMENT shall be
given by prepaid, first class, registered or certified mail
properly addressed to the other Party at the address
designated on the following Signature Page, or to such other
address as may be designated in writing by such other Party,
and shall be effective as of the date of the postmark of such
notice.
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12.07 This AGREEMENT shall not be assigned by LICENSEE except a)
with the prior written consent of PHS; or b) as part of a sale
or transfer of substantially the entire business of LICENSEE
relating to operations which concern this AGREEMENT. LICENSEE
shall notify PHS within ten (10) days of any assignment of
this AGREEMENT by LICENSEE.
12.08 LICENSEE agrees in its use of any PHS-supplied materials to
comply with all applicable statutes, regulations, and
guidelines, including Public Health Service and National
Institutes of Health regulations and guidelines. LICENSEE
agrees not to use the materials for research involving human
subjects or clinical trials in the United States without
complying with 21 CFR Part 50 and 45 CFR Part 46. LICENSEE
agrees not to use the materials for research involving human
subjects or clinical trials outside of the United States
without notifying PHS, in writing, of such research or trials
and complying with the applicable regulations of the
appropriate national control authorities. Written notification
to PHS of research involving human subjects or clinical trials
outside of the United States shall be given no later than
sixty (60) days prior to commencement of such research or
trials.
12.09 LICENSEE acknowledges that it is subject to and agrees to
abide by the United States laws and regulations (including the
Export Administration Act of 1979 and Arms Export Control Act)
controlling the export of technical data, computer software,
laboratory prototypes, biological material, and other
commodities. The transfer of such items may require a license
from the cognizant agency of the U.S. GOVERNMENT or written
assurances by LICENSEE that it shall not export such items to
certain foreign countries without prior approval of such
agency. PHS neither represents that a license is or is not
required or that, if required, it shall be issued.
12.10 LICENSEE agrees to xxxx the LICENSED PRODUCTS or their
packaging sold in the United States with all applicable U.S.
patent numbers and similarly to indicate "Patent Pending"
status. All LICENSED PRODUCTS manufactured in, shipped to, or
sold in other countries shall be marked in such a manner as to
preserve PHS patent rights in such countries.
12.11 By entering into this AGREEMENT, PHS does not directly or
indirectly endorse any product or service provided, or to be
provided, by LICENSEE whether directly or indirectly related
to this AGREEMENT. LICENSEE shall not state or imply that this
AGREEMENT is an endorsement by the GOVERNMENT, PHS, any other
GOVERNMENT organizational unit, or any GOVERNMENT employee.
Additionally; LICENSEE shall not use the names of PHS NIH, or
CDC or their employees in any advertising, promotional, or
sales literature without the prior written consent of PHS.
12.12 The Parties agree to attempt to settle amicably any
controversy or claim arising under this AGREEMENT or a breach
of this AGREEMENT, except for appeals of modification or
termination decisions provided for in Article 11. LICENSEE
agrees first to appeal any such unsettled claims or
controversies to the Director of NIH, or designee, whose
decision shall
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be considered the final agency decision. Thereafter, LICENSEE
may exercise any administrative or judicial remedies that may
be available.
12.13 Nothing relating to the grant of a license, nor the grant
itself, shall be construed to confer upon any person any
immunity from or defenses under the antitrust laws or from a
charge of patent misuse, and the acquisition and use of rights
pursuant to 37 CFR Part 404 shall not be immunized from the
operation of state or Federal law by reason of the source of
the grant.
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