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Patent License Agreement

This Patent License Agreement is made on [AGREEMENT DATE][ (the "Effective Date")] between [LICENSOR NAME], a [CORPORATE JURISDICTION] corporation with its principal place of business at [LICENSOR ADDRESS] (the "Licensor") and [LICENSEE NAME], a [CORPORATE JURISDICTION] corporation with its principal place of business at [COMPANY ADDRESS] (the "Licensee").

The parties agree to the following (the capitalized terms used in this agreement, in addition to those above, being defined in section 23 (Definitions)):

1. Grant of License

1.1. Exclusive Grant. The Licensor grants to the Licensee an exclusive, non-transferable license to

(a) develop and commercialize the Licensed Products,

(b) to market and sell Licensed Products anywhere in the Licensed Territory, and

(c) sub-license the Licensed Patents,

in accordance with the terms of this agreement.

1.2. Licensee's Use of Licensed Patents. The Licensee shall use the Licensed Patents only in accordance with this agreement.

1.3. Reservation of Rights. Any rights not expressly granted to the Licensee in this agreement are reserved to the Licensor. The Licensee does not acquire any interest other than the rights to the Licensed Patents granted under this agreement.

2. Key Terms:

2.1. Territory: [TERRITORY]

2.2. Term: To expiration date of last Licensed Patent

2.3. License Fee: $[LICENSE FEE]

2.4. Milestone Fees: $

2.5. Royalties: [CALCULATION OF ROYALTIES]

3. Development Plan

3.1. Initial Development Plan. The Licensee shall deliver to the Licensor a copy of the initial Development Plan no later than [INITIAL DEVELOPMENT PLAN DATE].

3.2. Annual Development Plans. Thereafter, the Licensee shall deliver to the Licensor, no later than [December 1st] of each year, an updated Development Plan for the coming year.

3.3. Purpose. The purpose of the Development Plan is to

(a) demonstrate the Licensee's capability to bring the Licensed Patents to commercialization and then to market and sell them,

(b) project the timeline for completing all necessary tasks, and

(c) measure the Licensee's progress against its projections.

3.4. Content. The Licensor shall include in the Development Plan, at a minimum, the information listed in Schedule B (Detailed Development Plan).

4. Development and Commercialization

4.1. Licensee's Efforts. The Licensee shall use reasonable efforts to

(a) develop, commercialize, market, and sell Licensed Products in a manner consistent with the applicable Development Plan, and

(b) achieve each of the milestones listed in the table below by the applicable completion date listed for the first Licensed Product:

[INSERT TABLE1]

4.2. Expenditures for First Commercial Sale. Until the commercial Sale of the first Licensed Product, the Licensee, in developing and commercializing the Licensed Products, shall spend not less than the minimum amounts specified in the table below in each 12-month period following the Effective Date:

[INSERT TABLE 2]

4.3. Development and Commercialization Expenditures. The Licensee's expenditures for development and commercialization of the Licensed Products will include the following:

(a) all of the Licensee's research and development expenditures and overhead,

(b) any sponsored research agreement between the parties,

(c) any sponsored research agreement between the Licensee and a third party,

(d) regulatory compliance expenses, and

(e) documented external consulting payments.

4.4. Shortfall. If the Licensee's total expenditures for development and commercialization of Licensed Products in any 12-month period do not meet or exceed the applicable diligence minimum, then the Licensee shall pay the Licensor the amount of the shortfall.

4.5. Shortfall Payments. The Licensee shall pay the Licensor any shortfall amounts at the time of the next annual Development Plan.

4.6. Accumulation. If the Licensee's total expenditures for development and commercialization of the Licensed Products in any 12-month period exceed the applicable diligence minimum, the excess amount will be cumulated and credited toward the applicable diligence minimums for subsequent years.

5. Reports

5.1. Royalty Reports. Within [ROYALTY REPORT DELIVERY DAYS] Business Days of the end of each quarter following the Effective Date, the Licensee shall provide the Licensor with a Royalty Report.

5.2. Progress Report and Commercialization Plan. Within [PROGRESS REPORT DELIVERY DAYS] Business Days of the end of each calendar year, the Licensee shall provide the Licensor with a Progress Report and Commercialization Plan.

6. Payment Obligations

6.1. Fees

(a) License Fee. The Licensee shall pay to the Licensor a non-creditable, nonrefundable, up-front license fee of $[INITIAL LICENSE FEE] upon signature of this agreement.

(b) Reissue Fees. The Licensee shall, on each anniversary of the Effective Date, beginning on the first anniversary, pay to the Licensor an annual license reissue fee of $[REISSUE FEE].

6.2. Milestone Fees. The Licensee shall pay to the Licensor milestone fees according to the table below, which are due and payable within [MILESTONE PAYMENT DEADLINE] Business Days of each milestone event:

[INSERT TABLE 3]

6.3. Royalties

(a) Minimum Yearly Royalty. The Licensee shall pay to the Licensor on [DUE DATE OF MINIMUM ROYALTY] a minimum yearly royalty payment of $[YEARLY ROYALTY].

(b) Earned Royalty. The Licensee shall pay to the Licensor on [DUE DATE OF RUNNING ROYALTY] a running royalty payment equal to [RUNNING ROYALTY PERCENT]% of Net Sales.

6.4. Completion of Sale. For the purposes of payment calculations, a Sale will be deemed to be completed at the time that the Licensee, its Affiliate, or a Sub-licensee invoices, ships, or receives payment for the particular Licensed Product, whichever occurs first.

6.5. Payment Net of Taxes. All payments owed by the Licensee are exclusive of taxes. The Licensee shall pay, and the Licensor shall collect and remit, any taxes payable in connection with the Licensed Products.

6.6. Late Payments. Any amount not paid when due will bear interest from the due date until paid at a rate equal to [MONTHLY INTEREST RATE]% per month ([ANNUAL INTEREST RATE]% annually) or the maximum allowed by Law, whichever is less.

7. Term. This agreement will begin on [START DATE] and continue until the expiration date of the last issued Licensed Patent.

8. Licensee's Representations

8.1. No Conflicts. The Licensee is under no restriction or obligation that may affect the performance of its obligations under this agreement.

9. Licensor's Representations

9.1. Ownership of Licensed Patents. The Licensor is the sole owner of the Licensed Patents, free of any claims by any other Person.

9.2. Right to License. The Licensor has the[ exclusive] right to use and grant rights to use the Licensed Patents in the Licensed Territory.

9.3. [No Assignment. The Licensor has not assigned, or agreed to assign, the Licensed Patents to any other Person in the Licensed Territory.]

9.4. No Conflicts. The Licensor is under no restriction or obligation that may affect the performance of its obligations under this agreement.

9.5. No Breach. The Licensor's execution, delivery, and performance of its obligations under this agreement do not and will not breach or result in a default under

(a) [its articles, by-laws, or any unanimous shareholders agreement,

(b) any Law to which it is subject,

(c) any judgment, order, or decree of any Governmental Authority to which it is subject, or]

(d) any agreement to which it is a party or by which it is bound.

9.6. No Infringement by Licensor's Use. The Licensor's use of the Licensed Patents in the Territory does not infringe upon the intellectual property or other proprietary or personal rights of any Person.

10. Warranties

10.1. No Infringement by Licensee's Use. The Licensee's use of the Licensed Patents in the Territory will not infringe upon the intellectual property or other proprietary or personal rights of any Person.

10.2. Disclaimer of Warranties. The Licensor makes no representation or warranty to the Licensee regarding any of the Licensed Marks other than those contained in this agreement.

10.3. Release of Claims. The Licensee hereby waives and releases any right or claim it might otherwise have against the Licensor in connection with any of the Licensed Patents other than those relating to the rights expressly granted under this agreement.

11. Licensee's Actions

11.1. Patent Markings. The Licensee shall mark all Licensed Products and their containers in accordance with applicable patent marking Laws.

11.2. Use of Name. The Licensee shall not use the Licensor's name, trademarks, or other marks without the Licensor's prior written approval.

12. Patent Registrations

12.1. Registrations of Licensed Patents. The Licensor shall, at its own expense, keep current all registrations necessary to maintain its rights in and to the Licensed Patents.

12.2. Evidence of Current Registrations. The Licensor shall provide the Licensee, at its request, with copies of relevant documentation so that the Licensee may be satisfied as to the continuing registration of the Licensed Patents.

13. Confidentiality

13.1. Confidentiality Obligations. The Licensee shall hold all Confidential Information in confidence in accordance with the terms of, and solely for the purpose of, this agreement.

13.2. Permitted Disclosure. The Licensee may disclose Confidential Information to its Representatives but only

(a) to the extent necessary to carry out the purpose of this agreement,

(b) if the Licensee first informs them of, and directs them to maintain, its confidential nature in accordance with the terms of this agreement[, and

(c) upon the disclosing party's request in connection with any of the Licensee's Representatives[ other than a director, officer, shareholder, partner, or employee], if they each first enter into separate written agreements to that effect[ in a form acceptable to the disclosing party].

13.3. Required Disclosure. The Licensee may disclose Confidential Information to a third party if it is required to do so by Law but only if, before that disclosure, the Licensee, to the extent permitted by Law,

(a) gives the disclosing party Notice to allow it a reasonable opportunity to either seek a protective order or other appropriate remedy or waive the Licensee's compliance with this section,

(b) reasonably cooperates with the disclosing party[, at the disclosing party's expense,] in its reasonable efforts to obtain a protective order or other appropriate remedy,

(c) discloses only that portion of the Confidential Information that[, having consulted with its counsel,] it is legally required to disclose, and

(d) uses reasonable efforts to obtain reliable written assurance from the third party that the Confidential Information will be kept confidential.

13.4. Value and Nature of Confidential Information. The parties acknowledge that the Confidential Information is proprietary and has competitive value to the Licensor. Accordingly, any disclosure to its competitors or to the public would be detrimental to the best interests of the Licensee, which may incur losses, costs, and damages as a result.

13.5. Burden of Proof re Confidential Information. The Licensee will bear the burden of proof in any dispute between the parties as to whether specific information falls within one or more of the exceptions to the definition of Confidential Information.[ The Licensee may rely on its own written records in support of its position.]

14. Compliance

14.1. Compliance with Laws. The Licensee shall comply with all applicable Laws[ and industry regulations] relating to the development, manufacture, and sale of the Licensed Products.

14.2. Export Permits. The Licensee shall obtain all export licenses, permits, or other authorizations required from time to time by any Governmental Authority. The Licensor shall provide the Licensee with reasonable assistance in obtaining them.

15. Books and Records

15.1. Recordkeeping. The Licensee shall keep at its principal office complete, accurate, and commercially reasonable records of the operations relating to its manufacture, distribution, and sale of the Licensed Products, together with all reasonably necessary related documents required to accurately calculate the amounts owing to the Licensor under this agreement.

15.2. Copies of Financial Statements. At the Licensor's request, the Licensee shall, at its own expense, provide to the Licensor either a reviewed or an audited profit-and-loss statement and balance sheet relating to the Licensed Patents within [60] days of the end of each fiscal year.

15.3. Records Retention. The Licensee shall retain all financial information relating to the Licensed Patents for at least [two] years following a given reporting period.

15.4. Confidentiality of Financial Information. The Licensor shall keep confidential all financial information that the Licensee provides to it under this section, except as may be required to exercise its rights under this agreement.

16. Insurance

16.1. Coverage. The Licensee shall obtain and maintain

(a) workers' compensation insurance in the amount required by law,

(b) product liability insurance coverage appropriate to the risk involved in development, manufacture, and sale of the Licensed Products, which in no event will be less than $[MINIMUM INSURANCE AMOUNT], and

(c) comprehensive general liability insurance with coverage of at least $[INSURANCE COVERAGE] per occurrence for bodily injury, property damage, or other losses.

16.2. Additional Insured. The Licensee shall ensure that its insurance coverage will list the Licensor as an additional insured and as a loss payee.

16.3. Proof of Insurance. At the Licensor's request, the Licensee shall provide it with

(a) certificates or other acceptable evidence of insurance evidencing its coverage, and

(b) at least [30] days' prior Notice of any change in or cancellation of the insurance coverage.

17. Sub-licensing

17.1. Sub-licensees. The Licensee may grant sub-licenses of the Patent Rights to Sub-licensees, but only with the Licensor's prior written consent, which the Licensor may not unreasonably withhold or delay.

17.2. Responsibility for Sub-licensees. For the purpose of this agreement,

(a) the Licensee will be responsible for the conduct of all Sub-licensees, and

(b) the operations of all Sub-licensees will be deemed to be the operations of the Licensee.

18. Inspection and Audit

18.1. Inspection. The Licensee shall, upon reasonable Notice from the Licensor, provide access to its offices during normal business hours for the purpose of conducting an inspection to verify that the Licensee's compliance with the terms of this agreement. The Licensee shall cooperate with the Licensor in its inspection.

18.2. Conduct of Inspection. The Licensor shall conduct any inspection in a manner so as not to unreasonably disrupt the Licensee's business. The Licensor shall restrict the scope, manner, and duration of any inspection to that reasonably necessary to achieve its purpose.

18.3. Audit. The Licensor may also, on one or more occasions and at its own expense, conduct an audit of the Licensee's records relating to the manufacture, distribution, and sale of the Licensed Products and the payments received for Sales, upon the same terms as any inspection.

18.4. Confidentiality of Information. The Licensor shall keep confidential any information about the Licensee and its business that it obtains from any inspection or audit, except as may be required to exercise its rights under this agreement.

18.5. Continuing Rights. The Licensor's rights and the Licensee's obligations under this section (Inspection and Audit) continue for a period of [two] years following the termination or expiration of this agreement.

19. Foreseeability. Neither party will be liable for breach-of-contract damages that the breaching party could not reasonably have foreseen on entering into this agreement.

20. Third Party Infringement

20.1. Notice to Licensor. The Licensee shall promptly give Notice to the other when it becomes aware of any actual, suspected, or threatened Infringement of the Proprietary Marks by a third party in the Territory. The Licensor may, in that case, take any steps it considers appropriate to enforce its rights in the Proprietary Marks. The Licensee[, at its own expense,] shall cooperate with the Licensor to the fullest possible extent.

20.2. Licensee's Rights. If, within [10] Business Days of receipt of the Licensee's Notice, the Licensor either fails to respond to the Licensee's Notice or gives Notice to the Licensee that it elects not to take any steps to enforce its rights, the Licensee may, upon Notice to the Licensor, take any steps it considers appropriate in the circumstances in the name and on behalf of the Licensor. The Licensee may then keep any damages or proceeds of settlement it obtains as a result.

21. Claim of Infringement against Licensee

21.1. Notice to Licensor. The Licensee shall promptly give Notice to the Licensor of any action, claim, or demand brought or threatened by a third party against it arising out of its use of the Proprietary Marks in accordance with this agreement. The Licensor shall, in that case, take all steps it considers appropriate, at its own expense, to defend the Licensee and the Proprietary Marks (including settling any legal actions in the Licensee's name). The Licensee shall, at its own expense, cooperate with the Licensor to the fullest possible extent.

21.2. Claims Resulting from Licensee's Breach. If it is established that the third party's action, claim, or demand resulted from a material breach of the Licensee's obligations under this agreement, the Licensee shall reimburse the Licensor for all costs and expenses (including legal fees) incurred in defending the Licensee and the Proprietary Marks.

22. Indemnification

22.1. Licensor's Indemnity. The Licensor shall indemnify the the Licensee and its directors, officers, employees, and agents against all claims, liability, costs, and expenses (including attorneys' fees) arising from any third party claim or proceeding brought against the Licensee arising out of, or resulting from, the proper exercise by the Licensee of the rights to the Licensed Patents granted to it under this agreement.

22.2. Licensee's Indemnity. The Licensee shall indemnify the the Licensor and its directors, officers, employees, and agents against all claims, liability, costs, and expenses (including attorneys' fees) arising from any third party claim or proceeding brought against the Licensor arising out of, or resulting from, the exercise by the Licensee of the rights to the Licensed Patents in breach of its obligations under this agreement.

22.3. Mutual Indemnity. Each party shall indemnify the other party[ and its directors, officers, employees, shareholders, partners, agents, and Affiliates,] against all claims, liability, costs, and expenses (including attorneys' fees) arising from any third party claim or proceeding brought against one party that alleges any negligent act or omission or willful conduct of the other party[ or its directors, officers, employees, shareholders, partners, agents, or Affiliates].

22.4. Notice of Claim. A party shall give prompt Notice to the other party of any claim or potential claim for indemnification under this section.

22.5. Exclusive Remedies. The rights granted under this section 22 (Indemnification) are the exclusive remedies available under this agreement in connection with the claims and losses that this section addresses.

23. Limitations of Liability

23.1. Foreseeability. Neither party will be liable for breach-of-contract damages that the breaching party could not reasonably have foreseen on entering into this agreement.

23.2. Maximum Liability. In no event will the Licensor's liability under this agreement exceed [$[MAXIMUM LIABILITY] OR the total amount of fees and royalties that the Licensee has paid to it under this agreement [in the preceding [LIMITATION OF LIABILITY TERM] months]. The existence of more than one claim will not enlarge or extend this limit.

24. Termination

24.1. Termination upon Notice. Either party may terminate this agreement for any reason or for no reason upon [TERMINATION FOR CONVENIENCE NOTICE] Business Days' Notice to the other party.

24.2. Termination upon Breach

(a) Failure to Pay. If the Licensee fails to pay when due any amount owing under this agreement and that failure continues for [five] Business Days, the Licensor may terminate this agreement, with immediate effect, by giving Notice to the other party.

(b) Any Other Breach. If one party

(i) commits any material breach or material default in the performance of any obligation under this agreement (other than the Licensee's obligation to pay money), and

(ii) the breach or default continues for a period of [CURE PERIOD] Business Days after the other party delivers Notice to it reasonably detailing the breach or default,

then the other party may terminate this agreement, with immediate effect, by giving Notice to the first party.

24.3. Termination upon Insolvency Event. This agreement will terminate immediately upon the occurrence of an Insolvency Event.

24.4. Effect of Termination. Upon termination or expiration of this agreement,

(a) the Licensor shall immediately pay to the Licensee all amounts outstanding as of the date of, and any amounts outstanding as a result of, termination,

(b) the license granted to the Licensee under this agreement will terminate immediately without Notice,

(c) the Licensee shall cease all use of the Licensed Patents, and

(d) the Licensee shall return to the Licensor all Licensor property, both originals and copies, under its direct or indirect control.

25. Definitions

25.1. "Affiliate" at the time the determination is made, any Person other than the Licensee that, directly or indirectly, Controls, is Controlled by, or is under common Control with the Licensee.

25.2. "Business Day" means a day other than a Saturday, a Sunday, or any other day on which the principal banks located in New York, New York are not open for business.

25.3. "Confidential Information" means all information, written or oral, whether or not it is marked as confidential, relating to the Licensed Patents that the Licensor or any of its Representatives discloses or makes available, directly or indirectly, through any means of communication or observation to the Licensee, its Affiliates, or any of its Representatives, but does not include information that

(a) is or becomes publicly known through no wrongful act of the Licensee,

(b) the Licensee received in good faith on a non-confidential basis from a source other than the Licensor or its Representatives,

(c) was in the Licensee's possession before its disclosure by the Licensor or its Representatives,

(d) the Licensee developed independently without breach of this agreement, or

(e) the Licensor has explicitly approved, by Notice to the License, for release to a third party.

25.4. "Control" means, for a Person, the ownership interest in an entity that has the practical effect of giving that Person, either alone or with others, the majority voting interest in that entity, and the terms "Controlled" and "Controlling" have comparable meanings.

25.5. "Development Plan" means the Licensee's development plan for the Licensed Patents.

25.6. "Governmental Authority" means

(a) the government of the United States or any other nation, or any of its or their geographical or political units or subdivisions, and

(b) any body, agency, tribunal, arbitrator, court, authority, or other entity that exercises executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of, or relating to, government.

25.7. "Insolvency Event" means any of the following:

(a) Insolvency. The Licensee admits in writing that it is insolvent or unable to pay its debts, or fails generally to pay its debts as they become due.

(b) Bankruptcy. The Licensee files a voluntary petition, or one or more of its creditors file a petition, seeking its rehabilitation, liquidation, or reorganization under any Law relating to bankruptcy, insolvency, or other relief of debtors and the petition is not removed within [60] Business Days of filing.

(c) Receivership. A receiver or other custodian is appointed to take possession of substantially all of [the assets of the Licensee's assets.

(d) Voluntary Dissolution. The Licensee takes any action toward the dissolution or winding up of its affairs or the cessation or suspension of its activities.

(e) Liquidation. A court of competent jurisdiction enters a decree or order directing the winding up or liquidation of the Licensee or of all or substantially all of its assets.

(f) General Assignment. The Licensee makes a general assignment for the benefit of its creditors.

(g) Attachment. Any attachment, execution, or other judicial seizure is levied against all or substantially all of the Licensee's assets.

25.8. "Law" means

(a) any law (including the common law), statute, by-law, rule, regulation, order, ordinance, treaty, decree, judgment, and

(b) any official directive, protocol, code, guideline, notice, approval, order, policy, or other requirement of any Governmental Authority having the force of law.

25.9. "Licensed Field" means all applications relating to [BUSINESS OR ACTIVITY].

25.10. "Licensed Patents" means

(a) the United States patent applications and patents listed in Schedule A (List of Licensed Patents),

(b) any corresponding foreign patent applications and patents, and

(c) any improvements, divisionals, continuations, reissues, and reexaminations.

25.11. "Licensed Product" means any product

(a) whose manufacture, use, or Sale is covered by any Valid and Issued Claim of the Licensed Patents, or

(b) that is made using a process or machine covered by a Valid and Issued Claim of the Licensed Patents, or

(c) that is made at least in part, using Valid or Issued Claims of the Licensed Patents,

and includes any service rendered through the use of a product, process or machine covered by any Valid and Issued Claim of the Licensed Patent.

25.12. "Licensed Territory" means the [entire world /DEFINED TERRITORY], subject to any applicable requirements of any export Laws of the United States.

25.13. "Net Sales" means the revenue, whether in cash or otherwise, that the Licensee or any Affiliate or Sub-licensee receives or expects to receive from a Sale, less the following items that are directly attributable to the Sale, specifically identified on the applicable invoice, and borne by the seller:

(a) discounts, rebates, or returns,

(b) sales, use, customs, duties, or other similar taxes actually paid by the seller

(c) handling charges and allowances, and

(d) outbound transportation expenses.

25.14. "Notice" means any notice, request, direction, or other document that a party can or must make or give under this agreement.

25.15. "Person" includes

(a) any corporation, company, limited liability company, partnership, Governmental Authority, joint venture, fund, trust, association, syndicate, organization, or other entity or group of persons, whether incorporated or not, and

(b) any individual.

25.16. "Progress Report and Commercialization Plan" means the progress report and commercialization plan that the Licensee prepares detailing the progress made and steps taken during a given year in promoting and marketing the Licensed Products, substantially in the form of Schedule B (Detailed Development Plan).

25.17. "Representative" means, for any Person,

(a) each director, officer, shareholder, partner, employee, agent, or professional advisor[ in connection with the transactions contemplated in this agreement], and any other authorized representative, and

(b) that Person's Affiliates and the directors, officers, shareholders, partners, employees, agents, or professional advisors[ in connection with the transactions contemplated in this agreement] of those Affiliates.

25.18. "Royalty Report" means the written report that the Licensee prepares detailing the number of Licensed Products sold by the Licensee, its Affiliates, and Sub-licensees and the amount of royalties due to the Licensor, substantially in the form set forth in Exhibit A.

25.19. "Sale" means any bona fide transaction for which value is received or expected from the sale, lease, transfer, or other disposition of Licensed Product(s).

25.20. "Sub-licensee" means any Person other than an Affiliate that enters into an agreement or arrangement with the Licensee in accordance with the terms of this agreement to manufacture, have manufactured, offer for sale, sell, lease, or import any of the Licensed Products.

25.21. "Valid and Issued Claim" means a valid claim that

(a) is included in a patent issued and approved from the relevant patent authority in the relevant territory, and

(b) is included in the Licensed Patents.

26. General

26.1. Entire agreement. This agreement contains all the terms agreed to by the parties relating to its subject matter. It replaces all previous discussions, understandings, and agreements.

26.2. Further Assurances. Each party, upon receipt of Notice from the other party, shall sign (or cause to be signed) all further documents, do (or cause to be done) all further acts, and provide all assurances as may reasonably be necessary or desirable to give effect to the terms of this agreement.

26.3. Amendment. This agreement may only be amended by a written document signed by both parties.

26.4. Assignment. The Licensee may not assign this agreement or any of their rights or obligations under this agreement without the Licensor's prior written consent. The Licensor may assign this agreement or any of its rights or obligations under this agreement, effective upon Notice to the Licensee.

26.5. No Partnership. Nothing contained in this agreement creates a partnership, joint venture,[ employer/employee,] principal-and-agent, or any similar relationship between the parties.

26.6. Third Party Beneficiaries. The Indemnification terms of this agreement confer rights and remedies upon the parties' directors, officers, employees, shareholders, partners, agents or Affiliates. No person other than the parties themselves and those beneficiaries has any rights or remedies under this agreement.

26.7. Payment of Costs. Each party is responsible for all costs (including legal fees) and expenses that it incurs in connection with the negotiation and preparation of this agreement.

26.8. Notices

(a) Form of Notice. All notices and other communications between the parties must be in writing.

(b) Method of Notice. Notices must be given by (i) personal delivery, (ii) a nationally-recognized, next-day courier service, (iii) first-class registered or certified mail, postage prepaid[, (iv) fax][ or (v) electronic mail] to the party's address specified in this agreement, or to the address that a party has notified to be that party's address for the purposes of this section.

(c) Receipt of Notice. A notice given in accordance with this agreement will be effective upon receipt by the party to which it is given or, if mailed, upon the earlier of receipt and the fifth day following mailing.

26.9. Remedies Cumulative. Except as provided in section 22.5 (Exclusive Remedies), the rights and remedies provided to a party under this agreement are cumulative and in addition to, not exclusive of or in substitution for, any rights or remedies otherwise available to that party.

26.10. Survival. Sections 6 (Payment Obligations), 11.1 (Use of Name), 13 (Confidentiality), 15.4 (Confidentiality of Financial Information), 17.2 (Responsibility for Sub-licensees), 18.5 (Continuing Rights), 22 (Indemnification), and 24.4 (Effect of Termination) survive the termination or expiration of this agreement.

26.11. Severability. If any part of this agreement is declared unenforceable or invalid, the remainder will continue to be valid and enforceable.

26.12. Waiver. A party's failure or neglect to enforce any of rights under this agreement will not be deemed to be a waiver of that party's rights.

26.13. Equitable Relief. The Licensee acknowledges that its breach or threatened breach of any its obligations under section 13 (Confidentiality) would not be susceptible to adequate relief by way of monetary damages only. Accordingly, the Licensor may, in that case, apply to court for any applicable equitable remedies (including injunctive relief), without the need to post any security.

26.14. Governing Law. This agreement will be governed by and construed in accordance with the laws of the State of [GOVERNING LAW STATE ], without regard to its conflict of laws rules.

26.15. Waiver of Jury Trial. Each party irrevocably waives its rights to trial by jury in any action or proceeding arising out of or relating to this agreement or the transactions relating to its subject matter.

26.16. Attorney Fees. If either party brings legal action to enforce any of its rights under this agreement, the prevailing party will be entitled to recover its costs and expenses (including reasonable attorneys' fees) incurred in connection with the action and any appeal.

26.17. Interpretation

(a) Currency. Unless otherwise specified, all dollar amounts expressed in this agreement refer to American currency.

(b) Number and Gender. Unless the context requires otherwise, words importing the singular number include the plural and vice versa; words importing gender include all genders.

(c) Headings. The headings used in this agreement and its division into sections and other subdivisions do not affect its interpretation.

(d) Internal References. References in this agreement to sections and other subdivisions are to those parts of this agreement.

26.18. Schedules and Exhibits. The following are attached to and form part of this agreement:

(a) Schedule A: List of Licensed Patents

(b) Schedule B: Detailed Development Plan

(c) Exhibit 1: Form of Royalty Report

26.19. Counterparts. This agreement may be signed in any number of counterparts, each of which is an original and all of which taken together form one single document.

26.20. Effective Date. This agreement is effective as of the Effective Date, even if any signatures are made after that date.

This agreement has been signed by the parties.

[SIGNATURES ON NEXT PAGE]

[LICENSOR NAME]

By:___________________________________

Name:

Title:

Date:

[LICENSEE NAME]

By:___________________________________

Name:

Title:

Date:

Schedule A

List of Licensed Patents

Schedule B

Detailed Development Plan

Exhibit A

Form of Royalty Report

Overview

A Patent License Agreement is a contract between the patent owner, the licensor, and another, the licensee, that grants to the licensee the right to use, develop, manufacture, or sell the patented technology or process, rights otherwise exclusive to the patent owner. A patent grants its owner the exclusive rights to make, use, offer to sell, and sell the patented technology or process. See 35 U.S.C. §154. The licensor may grant one or all of these rights. A license is not a sale, and the Licensor remains the owner of the patent. Thus, patent licenses allow an inventor to bring her invention to market, to commercialize it, to produce it at levels beyond her individual capabilities, thus maximizing the earning potential from a new technology or process.

The Patent License Agreement governs the relationship between licensor and licensee: it establishes the rights granted to the licensee, the compensation to the licensor, which party will be responsible for enforcing the patent against infringement, how improvements to the patented technology or process, whether by the licensor or licensee, will be handled, and the conditions for terminating the license prematurely. A Patent License Agreement is governed by contract law and patent law, and by state, federal, and even international law. Additionally, because a patent grants monopoly power over new, useful inventions, the potential to stifle innovation and competition is inherent in patents and patent licenses. Therefore, parties should be careful not to include any provisions that unreasonably restrain competition or innovation, to ensure the agreement does not face antitrust scrutiny.

Key considerations in a Patent License Agreement:

  • Commercialization and Development Plans: Especially with regards to exclusive licenses, where the licensor is foregoing the possibility of licensing her patented technology or process to other licensees, the Licensor will want detailed Commercialization and Development Plans that outline the expectations for the licensee to develop and commercialize the patented technology or process, as well as a strong Licensee’s Efforts Clause obligating the licensee to make all commercially-reasonable efforts to meet the expectations of the Commercialization and Development Plans.The Termination Clause should include the right to terminate the license if the licensee fails to meet these expectations.
  • Patent Markings: 35 U.S.C. § 287(a) bars an infringement claim against a third-party who did not have notice of the patent. Correctly marking the patented product, or products incorporating the patented technology or process is the easiest way to satisfy the marking requirement. Therefore, it is important that the license requires adequate marking by the licensee.
  • Grant-Backs and Improvements: It is likely that during the life of the license, improvements on the patented technology or process will be made by the licensor or licensee. The license agreement should provide for how these improvements be handled. Will improvements by the licensor automatically license to the licensee? Will royalty rate increase? Will improvements by the licensee by assigned to the licensor, with a “grant-back” to the licensee? Would the licensee be compensated for their improvement?