1-9. Model nonexclusive patent license (Janicke)
AGREEMENT
1. Parties and consideration
1.1 This agreement is between Super Corp. (hereafter “SUPER”), a Delaware corporation
having a place of business at ______ , and Acme Corp. (hereafter “ACME”), a New
York corporation having a place of business at ______.
1.2 The consideration for this agreement consists of the representations and undertakings
expressed herein. Neither party is relying on any other representation or understanding
not expressed herein.
2. Definitions
The following definitions apply to the terms used herein:
2.1 “Licensed Patents” means the following United States patents, foreign counterparts
thereof, any reissues thereof, any reexamination certificates thereof, and any patents
issued upon applications claiming the benefit of the filing date of an application on which
the following patents are based:
(1) U.S. 4,000,000, issued 1/2/93 having an effective US filing date of 1/2/91;
(2) U.S. 4,500,000, issued 1/2/95 having an effective US filing date of 1/2/90;
(3) U.S. 5,000,000, issued 1/2/97 having an effective US filing date of 1/2/94;
(4) U.S. 5,500,000 issued 1/2/01 having an effective US filing date of 1/2/98;
(5) U.S. 6,000,000 issued 1/2/02 having an effective US filing date of 1/2/97
2.2 “Subsisting claim” means any claim of any Licensed Patent, which claim has not:
expired, been declared invalid in a final judgment from which no further right of appeal
lies at a given time, been awarded to another in an interference, or been disclaimed. A
claim shall be deemed to subsist only in the country of its issuance.
2.3 “Acme Product” means any product designed primarily by Acme and intended to be
sold by Acme under its trademarks and under its warranty. A product whose design is
controlled by another entity is not an Acme Product even if it is made by Acme.
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2.4 “Licensed Product” means any Acme Product covered by a subsisting apparatus
claim, or whose manufacture or use involves a method or composition covered by a
subsisting claim.
2.5 “Net selling price” means the actual price charged to an ACME customer for a
product packed ready for shipment, excluding freight, sales taxes, and insurance. If such
price is not in U.S. dollars, payments hereunder shall be calculated based upon the
average currency exchange rate for the date in question, as appearing in the New York
Times.
3. Representations
3.1 SUPER represents that it the owner of all right, title and interest in and to the
Licensed Patents.
3.2 ACME represents that it is engaged in the business of manufacturing and selling copy
machines, that it has never been the subject of a bankruptcy petition, and that it has never
been insolvent.
4. Nonexclusive license grant
4.1 SUPER hereby grants to ACME a nonexclusive license:
(a) With respect to any apparatus covered by a subsisting claim of a Licensed
Patent, to make, have made, sell, offer to sell, import, and use such apparatus.
(b) With respect to any method covered by a subsisting claim of a Licensed Patent,
to use such method and to sell the product of such method.
(c) With respect to any composition covered by a subsisting claim of a Licensed
Patent, to make, use, and import such composition.
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1-9. Model nonexclusive patent license (Janicke)
Provided, however, the licenses granted in this paragraph 4.1 are licenses with respect to
ACME PRODUCTS only.
4.2 The benefit of this license shall inure to wholly owned or majority owned subsidiaries
of ACME, unless ACME gives written notice to the contrary with respect to a particular
subsidiary. The license granted herein shall not be otherwise transferable or sublicensable
without the consent of SUPER. In the event of a merger of ACME, or a sale or transfer of
substantially all of ACME’s copy machine business to another entity, SUPER’s consent
to transfer of this agreement to such other entity shall not be unreasonably withheld.
5. Payments
5.1 Initial payment. Upon the effective date of this agreement ACME shall pay to SUPER
the sum of $10,000.
5.2 Further payment obligations. ACME shall make the following payments to SUPER in
U.S. dollars during the term hereof, for transactions by ACME or such of its subsidiaries
as have the benefit of this agreement pursuant to paragraph 4.2:
(a) Where a Licensed Product or its method of manufacture is covered by a
subsisting claim of only one Licensed Patent, 5% of net selling price of the Licensed
Product
(b) Where a Licensed Product or its method of manufacture is covered by a
subsisting claim of only two Licensed Patents, 6% of net selling price of the Licensed
Product
(c) Where a Licensed Product or its method of manufacture is covered by a
subsisting claim of only three Licensed Patents, 7% of net selling price of the Licensed
Product
(d) Where a Licensed Product or its method of manufacture is covered by a
subsisting claim of only four Licensed Patents, 8% of net selling price of the Licensed
Product
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1-9. Model nonexclusive patent license (Janicke)
(e) Where a Licensed Product or its method of manufacture is covered by a
subsisting claim of five or more Licensed Patents, 9% of net selling price of the Licensed
Product
(f) Where materials used in the production of a Licensed Product are covered by a
subsisting claim of one or more Licensed Patents, but the product does not otherwise fall
under any of subparagraphs (a) through (e) hereof, 5% of the fair market value of the
materials at the time of such production. If such materials are purchased from SUPER or
a source authorized by SUPER, this subparagraph (f) shall not apply.
(g) Notwithstanding any of the above provisions for additional payments, during
any year in which payment accruals exceed $300,000, subsequent royalty accruals during
that year shall be calculated at one-half the rates stated above.
(h) Notwithstanding any of the above provisions for additional payments, when
total payments for all years under this agreement have reached $4,000,000 dollars, all
licenses hereunder shall become paid up, and no further payments shall be required.
5.3 Time for accrual of payment obligations. A payment obligation for a product does not
accrue until the product is sold, even though other activities are licensed, e.g., making,
offering to sell. Only one payment is due for each Licensed Product, regardless of how
many licensed acts may have been performed with respect to it. A sale is deemed to occur
whenever it is booked as such by ACME, but in no event later than the date of physical
delivery of the product to the customer. A lease or other possessory arrangement with a
customer shall be regarded as a sale for purposes of this paragraph, and in that event all
monies received by ACME from the customer shall be regarded as parts of the selling
price.
5.4 Times for payments. Payments obligations accruing under paragraph 5.3 shall be
made based on accrual time periods. The first accrual period shall be the period from the
effective date of this agreement to the end of the next full calendar quarter. From then on
each accrual period shall be each calendar quarter during the term hereof. Payment for an
accrual period shall be made within thirty days of the close of that accrual period.
5.5 Reports. Each payment under paragraphs 5.2 through 5.4 hereof shall be accompanied
by a report stating the manner of calculation of the amount due. ACME shall maintain
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1-9. Model nonexclusive patent license (Janicke)
accurate records from which the correctness of each report can be verified. SUPER shall
have the right to audit such records at reasonable times. If an audit reveals underpayment
by 5% or more, ACME shall, in addition to promptly paying the difference, reimburse
SUPER for the cost of the audit.
5.6 Future licenses to other entities. If after the effective date of this agreement a SUPER
should grant a nonexclusive license, structured essentially as is this agreement, to another
entity, under different provisions as to periodic payments, SUPER shall promptly
disclose such different periodic payment provisions to ACME. ACME shall have sixty
days in which to elect, from the date of election forward, to substitute such different
payment provisions for those of paragraph 5.2. This paragraph shall not apply to any
lump-sum payments or payments for releases from past liability in the agreement with the
other entity; and this paragraph shall not apply at all if the agreement with the other entity
is a cross-license arrangement or involves the grant of licenses beyond the Licensed
Patents. Any election under this paragraph by ACME shall operate in futuro only and
shall have no effect on amounts theretofore accrued for payment hereunder by ACME.
Failure of SUPER to pursue infringers shall not be regarded as a license to such
infringers for purposes of this paragraph.
6. Term
6.1 The term of this agreement shall begin on the date when this agreement is signed by
both parties, which date shall be the effective date hereof. Unless sooner terminated as
herein provided, the term shall end when no claim of any Licensed Patent is subsisting.
6.2 If ACME shall default on any obligation hereunder, SUPER shall have the right to
send a written notice thereof, which shall be effective upon dispatch. ACME shall have
thirty days in which to cure such default. Upon ACME’s failure to timely cure the
default, SUPER shall be entitled to terminate this agreement by sending written notice of
termination, which shall be effective on dispatch.
6.3 No waiver by SUPER of an ACME default hereunder on a particular occasion shall
operate as a waiver in the case of any subsequent default by ACME.
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6.4 ACME shall have the right to terminate this agreement, either entirely or with respect
to one or more Licensed Patents, by giving written notice to that effect to SUPER at least
one accrual period before the effective date of such termination. No termination shall
affect any already-accrued payment obligation.
7. Warranties
7.1 Each party warrants that it has the legal right to enter this agreement.
7.2 SUPER does not warrant that the Licensed Patents are valid or that ACME’s
operating under subsisting claims thereof will not infringe patents of others. There is no
warranty by SUPER with respect to any patents other than Licensed Patents.
7.3 In the event a third party shall during the term hereof be infringing any of the
Licensed Patents, ACME may give notice of that situation to SUPER, and SUPER may
take such action as it deems, in its sole discretion, appropriate. Unlicensed activity by a
third party shall not be ground for alteration of the payment obligations of ACME as
specified herein.
8. Notices and miscellaneous
8.1 Notice to ACME shall be sufficient hereunder if in a writing addressed to ACME as
follows: ______________. Notice to SUPER shall be sufficient if in a writing addressed
to SUPER at __________.
8.2 Except for terminations as provided for herein, this agreement may be modified only
by a writing signed by both parties.
IN WITNESS WHEREOF, the parties have caused their duly authorized representatives
to execute this agreement on their respective behalfs.
Super Corp.
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Acme Corp.
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By: __________________
By: __________________
Title: _________________
Title: _________________
Date: _________________
Date: _________________
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