INTERINSTITUTIONAL AGREEMENT FOR COMMERCIALIZATION OF
PATENT RIGHTS
This AGREEMENT is effective this ______ day of ______, 200__ (“Effective Date”) by and between the University of South Alabama, an Alabama public body corporate having an address at 307 University Boulevard, AD 122, Mobile, AL 36688-0002 (hereinafter “USA”) and the
University of _______________________, having an address at ______________ (hereinafter
"UNIVERSITY").
WHEREAS, USA and UNIVERSITY hold rights collectively to the PATENT RIGHTS as listed in Schedule I of this Agreement and hereinafter defined; and
WHEREAS, USA and/or UNIVERSITY may conduct additional research in support of the
PATENT RIGHTS, collectively or in conjunction with outside third parties; and
WHEREAS, USA and UNIVERSITY anticipate that such additional research may result in
IMPROVEMENTS (as hereinafter defined) and wish to include any such IMPROVEMENTS in the scope of rights to be offered to prospective third party commercial partners; and
WHEREAS, USA wishes to appoint UNIVERSITY as its agent for the purposes of entering into licenses or options on the PATENT RIGHTS; and
WHEREAS, USA wishes to appoint UNIVERSITY as its agent for the purpose of seeking and maintaining patent protection for the PATENT RIGHTS;
NOW THEREFORE, in consideration of the mutual obligations set forth below, USA and
UNIVERSITY agree as follows:
1. Definitions.
(a) "PATENT RIGHTS" means (i) any United States or foreign patent applications or patents issuing thereon which are listed in Schedule I attached hereto, and (ii) all patent applications and patents which are provisional conversions, divisions, continuations, continuations-in-part, reissues, renewals, re-examinations, substitutions, or extensions of or to any patent applications or patents listed in Schedule I, or (iii) any United States or foreign patent applications or patents issuing thereon which may be filed on IMPROVEMENTS.
(b) “IMPROVEMENTS” means new discoveries and inventions that are originated, conceived and developed jointly by Professor _______________. at USA and at least one coinventor at UNIVERSITY and which could not be practiced commercially but for rights to
PATENT RIGHTS.
(c) "PATENT COSTS" means the out-of-pocket expenses incurred by UNIVERSITY and
USA in connection with the preparation, filing, prosecution, and maintenance of the patents under the PATENT RIGHTS, including without limitation, the fees and expenses of attorneys and patent agents, filing fees, and maintenance fees.

(d) "NET REVENUES" means gross proceeds received by UNIVERSITY from the licensing of PATENT RIGHTS less any PATENT COSTS incurred by UNIVERSITY and USA.
2. Grant of Agency
(a) USA hereby appoints UNIVERSITY, and UNIVERSITY hereby accepts the appointment, as the sole and exclusive agent of USA for the worldwide commercialization of the
PATENT RIGHTS, on the terms and subject to the conditions set forth in this AGREEMENT.
UNIVERSITY shall have no right to bind USA to any option or license arrangement without its express written approval, which approval shall not be unreasonably withheld.
(b) During the term of this AGREEMENT, UNIVERSITY agrees to use its reasonable efforts to license the PATENT RIGHTS in a commercially reasonable manner for the benefit of
USA, but no failure of UNIVERSITY to consummate any successful license arrangements shall be deemed a breach of UNIVERSITY's obligations hereunder.
(c) Subject to the terms of this AGREEMENT and so long as at least one inventor is a current or former employee of UNIVERSITY, UNIVERSITY shall (i) negotiate the terms of any option or license arrangements for the PATENT RIGHTS, (ii) collect all NET REVENUES paid pursuant to any such license arrangements, and (iii) account to USA for its portion of all NET
REVENUES so received and pay such portion of NET REVENUES to USA as required by this
AGREEMENT.
(d) USA and UNIVERSITY assert that, to the best of their knowledge, they have not previously granted to any entity any rights in or to the PATENT RIGHTS. USA and UNIVERSITY agree that during the term of this AGREEMENT they will not grant any options or licenses or other rights with respect to the PATENT RIGHTS except in accordance with this AGREEMENT.
(e) Neither USA nor UNIVERSITY shall exercise their respective rights to grant any option(s) or license(s) of the PATENT RIGHTS except in accordance with the terms of this
AGREEMENT and with the concurrence of the other Party.
3. Revenue Sharing
(a) USA and UNIVERSITY agree that all NET REVENUES with respect to the licensing of all the PATENT RIGHTS hereunder shall be distributed as soon as reasonably possible, but in no case longer than sixty (60) days after receipt of such NET REVENUES by UNIVERSITY.
(b) If the PATENT RIGHTS are licensed without any other separate intellectual property of either USA or UNIVERSITY, then such distribution of NET REVENUES shall be based on an equal division among the number of named inventors on each patent, with USA and UNIVERSITY each entitled to receive the distribution allocable to the number of named inventors from each university. As an example, if a patent has ____ inventors, one from USA and XX from
UNIVERSITY; USA is entitled to receive 1/XX of any such NET REVENUES.
(c) If the PATENT RIGHTS are licensed as a package in combination with any other separate intellectual property individually owned by either USA or UNIVERSITY, then USA and
UNIVERSITY agree to negotiate an appropriate division of NET REVENUES according to the
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relative value of each patent to the entire package rather than solely the number of inventors on all of the patents.
(d) Each university will distribute NET INCOME according to its own intellectual property policies.
4. Prosecution and Maintenance of Patents
(a) UNIVERSITY shall consult with and receive approval from USA on whether and how to prepare, file, prosecute and thereafter maintain any patent applications and issued patents under the PATENT RIGHTS. With respect to the PATENT RIGHTS:
(i) USA and UNIVERSITY agree to share all PATENT COSTS which are not reimbursed by an optionee or licensee in proportion to the number of named inventors from each institution; and
(ii) UNIVERSITY shall pay all PATENT COSTS and USA shall reimburse
UNIVERSITY for its proportionate share of all PATENT COSTS incurred by
UNIVERSITY promptly upon presentation to USA of evidence of such costs and expenses, provided such expenses have not been reimbursed by an optionee or licensee; and
(iii) If PATENT COSTS are reimbursed by an optionee or licensee, UNIVERSITY will reimburse USA for its proportionate share of PATENT COSTS that USA has paid as of the effective date of the license; and
(iv) If, after consultation with USA, UNIVERSITY determines not to prepare or file a patent application under the PATENT RIGHTS or chooses not to prosecute or maintain a patent application or issued patent under the PATENT RIGHTS, it shall notify USA in writing; and
(v) The provisions of this section shall apply retroactively to the PATENT COSTS incurred in establishing the PATENT RIGHTS listed on Schedule I filed prior to the execution of this Agreement. USA will promptly reimburse UNIVERSITY for its proportionate share of such PATENT COSTS upon provision by UNIVERSITY of appropriate documentation.
(b) In the event there is no optionee or licensee at the time the national stage filings become due, USA and UNIVERSITY agree to discuss progress on commercialization of the PATENT
RIGHTS for the purpose of determining whether UNIVERSITY should proceed with national stage foreign filings and to discuss next steps in relation to the prosecution of PATENT RIGHTS.
(c) UNIVERSITY shall provide USA promptly with copies of all office actions and other communications it or its patent counsel shall receive from the U.S. Patent and Trademark Office with respect to PATENT RIGHTS.
(d) Inventorship on any patent applications filed on IMPROVEMENTS will be determined according to US patent law.
5. Records
UNIVERSITY shall keep records of all NET REVENUES received pursuant to this
AGREEMENT for at least three (3) years following the end of the calendar year to which they
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pertain. UNIVERSITY shall permit USA to examine such records during normal business hours at
USA's request and sole expense.
6. Cooperation.
USA agrees to cooperate with UNIVERSITY in its preparation, filing, prosecution, and maintenance of patent applications and patents PATENT RIGHTS by disclosing such information as may be necessary and promptly executing such documents as UNIVERSITY may reasonably request. USA shall bear its own costs in connection with its cooperation with UNIVERSITY under this Section.
7. Confidentiality.
(a) Except as required by law or court or administrative agency order, and subject to each party's governing law, UNIVERSITY and USA agree that each will hold the other's proprietary business and patent prosecution information in confidence, using at least the same degree of care as each uses to protect its own proprietary information of a like nature. The disclosing party shall label or mark confidential, or as otherwise appropriate, all proprietary information. If proprietary information is orally disclosed, the disclosing party shall reduce the proprietary information to writing or to some other physically tangible form and deliver it to the receiving party within thirty
(30) days of the oral disclosure, marked and labeled as set forth above.
(b) Nothing in this AGREEMENT in any way restricts or impairs the right of USA or
UNIVERSITY to use, disclose, or otherwise deal with any information or data that:
(i) recipient can demonstrate by written records was previously known to it;
(ii) is now, or becomes in the future, public knowledge other than through acts or omissions of recipient;
(iii) is lawfully obtained without restrictions by recipient from sources independent of the disclosing party;
(iv) was made independently without the use of proprietary information received hereunder;
(v) is required by law to be disclosed;
(vi) or is disclosed for the purpose of verifying UNIVERSITY’s appointment hereunder to a prospective licensee.
(c) In the event either UNIVERSITY or USA shall desire to publish a manuscript relating to the PATENT RIGHTS, the publishing party shall provide the other party with a copy of such manuscript thirty (30) days prior to submission of such manuscript for publication for purposes of protecting proprietary or intellectual property that might be contained in such manuscript.
(d) The obligations of UNIVERSITY and USA under this Section 7 shall survive the expiration or earlier termination of all or any part of this AGREEMENT.
8. Infringement.
(a) In the event that USA or UNIVERSITY becomes aware of the infringement or claim of infringement of any patent under the PATENT RIGHTS in whatever territory those PATENT
RIGHTS exist, each shall inform the other in writing of all details available. Thereafter,
UNIVERSITY and USA shall confer with the intent of reaching mutual agreement on whether and in what manner to enforce the rights of the parties thereto, whether by appropriate legal proceedings
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or otherwise (including, without limitation, the settlement or abandonment of any claim either of them may have against any third party). USA and UNIVERSITY shall share all costs relating to any such agreed upon enforcement action in accordance with Section 4a(ii) and (iii) of this Agreement.
Any sums recovered with respect to any such action shall be applied first to reimburse out-of-pocket expenses incurred by USA and UNIVERSITY relating to the enforcement action and the remaining sums shall be deemed NET REVENUES hereunder and shall be shared USA and UNIVERSITY as set forth in section 3 above.
(b) If either USA or UNIVERSITY elect not to enforce their rights in an infringement action, one shall notify the other in writing. Under such circumstances, the other party may elect to prosecute the infringers at its sole expense provided that (i) the party electing to prosecute shall pay all costs and expenses arising out of such prosecution, (ii) the party electing to prosecute shall not have any right to surrender the other's rights or to grant any infringer any rights other than a sublicense subject to the conditions which would apply to the grant of any other sublicense, and (iii) any sums recovered with respect to any such action shall be applied first to reimburse out-of-pocket expenses incurred by the party relating to enforcement action, and the remaining sums shall be shared by UNIVERSITY and USA in proportion to their financial contribution toward said enforcement action.
(c) In any infringement suit instituted to enforce the PATENT RIGHTS pursuant to this
AGREEMENT, each party shall, at the request and expense of the party initiating such suit, cooperate in all respects and, to the extent possible, have its employees testify when requested and make available relevant record, papers, information, samples, and the like.
(d) If USA or UNIVERSITY, or any licensee under this AGREEMENT, is charged with or sued for infringement of any patent of another because of acts undertaken in practicing the PATENT
RIGHTS, or if the validity of any PATENT RIGHTS is challenged by another, except as provided otherwise in a licensing agreement, USA and UNIVERSITY will share all costs relating to any such agreed upon enforcement action in accordance with Section 4a(ii) and (iii) of this Agreement in the expense of such action, and confer to assign responsibility for and control of the defense of any such action. Legal counsel may be retained under this provision only with the written approval of USA and UNIVERSITY.
9. Termination.
(a) This AGREEMENT is in full force and effect from the effective date and remains in effect for the life of the last-to-expire patent in PATENT RIGHTS, unless otherwise terminated by operation of law or by acts of the parties in accordance with the terms of this AGREEMENT.
(b) If three years have passed from the effective date of this AGREEMENT and no license or option agreement is in effect or has been agreed upon as to all material financial terms, either
Party may terminate this AGREEMENT for any reason upon at least sixty (60) days written notice to the other, but in any event not less than sixty (60) days prior to the date on which responses to any pending Patent Office actions need to be taken to preserve PATENT RIGHTS. Apart from the obligation to share patent costs (Article 4) and confidentiality obligations (Article 7) and specific obligations accrued prior to termination, the parties will have no further rights or obligations under this AGREEMENT after effective termination.
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10. Miscellaneous.
(a) This AGREEMENT may not be assigned by either USA or UNIVERSITY without the written consent of the other party, which consent may be granted or withheld in such party's sole and absolute discretion.
(b) In the event of disputes between UNIVERSITY and USA arising out of or in connection with this AGREEMENT, an attempt to resolve such disputes first shall be made by good faith discussions by and among the authorized representatives of each institution. UNIVERSITY and
USA shall be entitled to pursue any legal remedies available.
(c) This AGREEMENT contains the entire understanding of UNIVERSITY and USA with respect to the subject matter hereof, and may be amended only by a writing duly executed by
UNIVERSITY and USA. The waiver of a breach hereunder shall not constitute a waiver of any other breach.
(d) Any notice required or permitted to be given to the parties hereto is properly given if delivered in writing, in person, sent by first-class certified mail, or by overnight carrier to the addresses listed above, or to such other addresses as may be designated in writing by the parties from time to time during the term of this AGREEMENT.
(e) The scope and validity of any patent or patent application under the PATENT RIGHTS are governed by applicable laws of the country of that patent or patent application.
IN WITNESS WHEREOF, the parties have caused this AGREEMENT to be executed by their respective duly authorized officers or representatives on the date first above written.
University of South Alabama
By_______________________
Name_____________________
Title______________________
Date_______________________
University of _______________
By_______________________
Name_____________________
Title_______________________
Date_______________________
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SCHEDULE I – PATENTS & PATENT APPLICATIONS
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