Patent License Agreement – Digimarc Corp. and IV Digital Multimedia Inventions, LLC
CONFIDENTIAL PORTIONS OMITTED
PATENT
LICENSE AGREEMENT
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Licensor name: |
Digimarc Corporation |
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Licensor address: |
9405 SW Gemini Drive Beaverton, OR 97008 |
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Licensee name: |
IV Digital Multimedia Inventions, LLC |
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Licensee address: |
2711 Centerville Road, Suite 400 Wilmington, DE 19808 |
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License issue fee: |
Thirty-six million U.S. dollars (U.S. $36,000,000), payable quarterly over |
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Profit Participation percentage: |
20% |
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Effective Date |
October 5, 2010 |
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In witness whereof, intending to be legally bound, the parties have signed
below to enter the attached Patent License Agreement (this “Agreement”) as of
the Effective Date with the terms and conditions that follow. Capitalized terms
not otherwise defined are set forth in Section 10 of this Agreement.
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LICENSOR: |
LICENSEE: |
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DIGIMARC CORPORATION |
IV DIGITAL MULTIMEDIA |
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By: |
/s/ Bruce Davis |
By: |
/s/ Vincent Pluvinage |
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Bruce Davis, |
Vincent Pluvinage, |
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Chairman and CEO |
Authorized Person |
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[Signature Page to Patent License Agreement]
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PATENT LICENSE AGREEMENT
RECITALS
WHEREAS, Digimarc Corporation, an Oregon corporation
(“Licensor“) is a leading innovator and provider of
enabling technologies that create digital identities for all forms of media and
many everyday objects, including digital watermarking, and has developed one of
the world153s leading patent portfolios relating to these technologies;
WHEREAS, Invention Investment Fund II, LLC (“IV
Fund“) is the second of two funds in the “Intellectual Ventures”
family of funds that was formed to invest in intellectual property rights. As
provided in IV Fund153s operating agreement, the purpose of IV Fund is to [**];
and
WHEREAS, Licensor is willing to grant an exclusive license to certain patents
in Licensor153s patent portfolio, and IV Fund is willing to acquire such exclusive
license with an intent to license the Patents in an attempt to generate future
profits, on the terms set forth in this Patent License Agreement.
NOW, THEREFORE, the parties to this Patent License Agreement listed on the
previous page hereby agree as follows:
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1. |
GRANT OF |
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1.1 |
Exclusive Patent License |
Effective as of the Closing, Licensor hereby grants to Licensee the
exclusive, worldwide, transferable (as provided in subsection 11.3),
sublicensable license of all rights of any kind conferred by the Patents,
including, without limitation, the rights of any kind to, or conferred by, the
Patents to (a) use or otherwise practice any art, methods, processes, and
procedures covered by the Patents, (b) make, have made, use, offer to sell,
sell, import, and otherwise distribute or dispose of any inventions,
discoveries, products, services, or technologies covered by the Patents, (c)
otherwise exploit any rights granted in the Patents and/or any invention or
discovery described in the Patents, and (d) exclude other Persons from
exercising any of such rights.
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1.2 |
Sublicenses |
The exclusive license rights granted Licensee under the Patents include the
right to grant and authorize, from time to time and in Licensee153s sole and
absolute discretion, one or more sublicenses. No sublicense granted to any
Person pursuant to the terms of this Agreement will be terminable as a result of
the termination of the Term.
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1.3 |
Pre-Existing Encumbrances |
Licensee hereby acknowledges and agrees that the Patents are subject to the
Existing Encumbrances.
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1.4 |
Assignment of Causes of Action and Other Rights |
Effective as of the Closing, Licensor hereby assigns, transfers and conveys
to Licensee all right, title and interest in and to:
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(a) Rights to apply in any or all countries of the world for patents,
certificates of invention, utility models, industrial design protections, design
patent protections, or other governmental grants or issuances of any type
corresponding to any of the Patents and the inventions and discoveries therein;
(b) All causes of action and enforcement rights of any kind (whether such
claims, causes of action or enforcement rights are known or unknown; currently
pending, filed, to be filed; or otherwise) under the Patents and/or under or on
account of any of the Patents for past, current and future infringement of the
Patents, including without limitation, all rights to (i) pursue and collect
damages, profits and awards of whatever nature recoverable, (ii) injunctive
relief, (iii) other remedies, and (iv) compromise and/or settle all such claims,
causes of action and enforcement rights for such infringement by granting an
infringing party a sublicense or otherwise; and
(c) Rights to collect royalties or other payments under or on account of any
of the Patents or any of the foregoing, excluding the right to collect those
royalties and other payments payable to Licensor as set forth on
Schedule 1.4(c) pursuant to the Existing Encumbrances.
For purposes of clarity, the word “title” in the first sentence of this
subsection refers to title in the rights specified in this subsection, rather
than title to the Patents.
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1.5 |
No Implied Licenses |
Nothing contained in this Agreement or any of the other Transaction
Agreements should be construed as conferring, by implication, estoppel or
otherwise, a license to any other patents or patent applications other than the
Patents. For the avoidance of doubt: (a) there are no implied licenses granted
under this Agreement or other Transaction Agreements; and (b) nothing contained
in this Agreement or other Transaction Agreements provides a license to any
other patents or patent applications that do not fall within the definition of
Patents but which may read on any inventions, discoveries, products, services or
technologies covered by the Patents.
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2. |
PAYMENT |
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2.1 |
License Issue Fee |
Licensee will pay to Licensor a nonrefundable combined license issue fee and
past patent reimbursement (collectively, the “License Issue
Fee“) in the amount set forth on the cover page of this Agreement,
according to the schedule set forth on Schedule 2.1. Each of the payments
referenced in Schedule 2.1 will be made by wire transfer to a designated bank
account of Licensor. Prior to the Closing, Licensor will furnish Licensee with
all necessary information to make such wire transfers, and will notify Licensee
in writing of any changes to such wire transfer instructions at least twenty
(20) business days prior to the deadline for the next payment due according to
the above schedule.
In the event that Licensee attempts to wire such payment on or prior to the
applicable deadline in reliance on wire instructions in effect for the
immediately preceding payment and Licensor fails to provide timely written
notice of any change to the wire transfer instructions, then such payment shall
not be considered late so long as Licensee makes such payment by the later of
(i) the applicable payment deadline set forth in Schedule 2.1, or (ii) ten (10)
business days after receiving such modified wire transfer instructions.
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2.2 |
Profit Participation |
Licensor will receive a non-refundable amount equal to the percentage (the
“Profit Participation“) set forth on the cover page of
this Agreement of any Profit that is generated following the Closing. Licensor
expressly acknowledges and agrees that (i) neither IV Fund nor Licensee is
providing any assurance that any Profit will be generated, nor is there any
assurance regarding the amount and timing of any Profit, and (ii) any past
indication of performance of IV Fund should not be relied upon as an indication
of future performance.
The Profit Participation will be payable on the due dates for the reports
required by subsection 2.7 for Revenue received during the respective Reporting
Period.
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2.3 |
Portfolio Monetization; Allocation of Portfolio Profit to IP |
Licensor acknowledges and agrees that Licensee and/or its Affiliates may from
time to time sublicense, assert, litigate or otherwise exploit the Patents with
other patents or patent applications held or controlled by Licensee and/or its
Affiliates, at the discretion of Licensee and its Affiliates (a
“Portfolio Monetization”). The parties acknowledge and
agree that, unless a Portfolio Monetization specifies a particular royalty for
one or more of the patents or patent applications (including the Patents), the
Portfolio Profit will be determined according to the methodology set forth on
Schedule 2.3.
Any Monetization Expenses or IP Group Expenses for Reporting Periods that
exceed Revenue for that Reporting Period will be carried forward to the next
Reporting Period such that Profit will not be deemed to have occurred for any
Reporting Period until cumulative Revenues exceed cumulative Monetization
Expenses (whether of a Portfolio Monetization or a monetization event involving
solely the Patents) and cumulative IP Group Expenses in the current Reporting
Period and all prior Reporting Periods.
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2.4 |
Adjustments to Value Allocations |
Notwithstanding the foregoing Value Allocations, for any given Portfolio
Monetization, in the event that the formula set forth in Schedule
2.3 results in allocated per item Portfolio Profit in category R1
being less than the allocated per item Portfolio Profit in category R2, R3 or
R4, or the allocated per item Portfolio Profit in category R2 being less than
the allocated per item Portfolio Profit in category R3 or R4, or the allocated
per item Portfolio Profit in category R3 being less than the allocated per item
Portfolio Profit in category R4, then, in each such event, Licensee and/or its
Affiliates will appropriately adjust the formula such that the allocated per
item Portfolio Profit for each category is equal to or higher than the allocated
per item Portfolio Profit for each higher numbered category (for example, the
allocated per item Portfolio Profit in category R1 should be equal to or higher
than allocated per item Portfolio Profit in categories R2, R3 and R4, after the
adjustment). Furthermore, in the event that any patent category has no patents
or patent applications, then Licensee and/or its Affiliates will adjust the
Value Allocations to allocate the null category153s Value Allocation pro rata
(based on relative Value Allocations) among the other categories. For purposes
of this paragraph, an “item” will be a patent or a patent application included
in the given Portfolio Monetization.
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2.5 |
Good-Faith Allocations Final |
In allocating patents or patent applications among categories for purposes of
allocating Portfolio Profits, adjusting Value Allocations, and determining
Portfolio Profits, Licensee and its Affiliates will exercise their reasonable
business judgment, in good faith, without inequitable discrimination for or
against patents or patent applications held or controlled by Licensee or any of
its Affiliates. Any such allocation or adjustment that is not clearly and
materially inconsistent with the foregoing will be final, binding, and
conclusive.
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2.6 |
Pre-existing Agreements of Licensee |
Licensor understands, acknowledges and agrees that (a) certain pre-existing
agreements have been entered into prior to the Effective Date under which
sublicensees may receive sublicense rights to the Patents without Licensee
recognizing Revenue or generating Profit under the terms of this Agreement and
(b) no additional Profit Participation or other monetary obligation will be due
to Licensor as a result of rights granted pursuant to such pre-existing
agreements.
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2.7 |
Reports and Records |
As of each March 15 during the Term of this Agreement, Licensee will provide
to Licensor a report reasonably detailing the sublicensing activities of
Licensee and its Affiliates with respect to the Patents for the preceding twelve
(12) month period ending as of December 31 (each, a “Reporting
Period“) when there has been Revenue with respect to the Patents
in such Reporting Period. If no Revenue was generated during a Reporting Period,
such report will instead state that no Revenue was generated during such period,
but will state the total Monetization Expenses and the IP Group Expenses
incurred during such period.
The Profit Participation will be payable to Licensor within ten (10) business
days following the due dates for the reports required by this subsection 2.7 for
Revenue received during the respective Reporting Period.
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2.8 |
Books of Account |
Licensee and its Affiliates will keep accurate books of account containing
all particulars that may reasonably be deemed necessary for the purpose of
showing the Amounts payable to Licensor hereunder. All such books of account
shall be kept available by Licensee and its Affiliates for no less than three
(3) years after the end of each Reporting Period, or in the event of a dispute
between the parties involving in any way those books of account, until such time
as the dispute has been resolved, whichever is later.
Said books of account will be kept at Licensee153s or its Affiliates153 principal
place of business or, if notice thereof is given to Licensor, the principal
place of business of the appropriate division of Licensee to which this
Agreement relates. Not more than once during every twelve (12) month period and
upon Licensor153s advance request of at least thirty (30) days, Licensee and its
Affiliates will make said books and the supporting data available for inspection
by Licensor or its agents during normal business hours for the two most recent
Reporting Periods for the sole purpose of verifying Licensee153s calculations of
the Profit Participation under this Agreement. Should such inspection lead to
the discovery of a greater than [**] percent ([**]%) discrepancy in reporting to
Licensor153s detriment, Licensee agrees to pay the reasonable fees and expenses of
Licensor and/or its agents who conducted the inspection; provided however that
such audit payment provision shall only
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apply to discrepancies that constitute manifest errors (including errors in
data entry or calculations, but excluding disputes over methodology). Licensee
will promptly pay to Licensor all amounts appropriately determined by any audit
to be due to Licensor. Any and all disputes with respect to the Profit
Participation due under this Agreement or the calculation of Profit must be (a)
raised within ninety (90) days after completion of the associated audit, and (b)
resolved solely and exclusively pursuant to the provisions of subsection 11.9.
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2.9 |
Nondivision |
No Person will anticipate, alienate, hypothecate, divide, pledge, exchange,
encumber, or charge any right to payment of Profit Participation (if any) under
this Agreement, and any attempt to anticipate, alienate, hypothecate, divide,
pledge, exchange, encumber, or charge any right to payment of Profit
Participation under this Agreement will be void, except that Licensor shall be
entitled to pledge the payments due under Schedule 2.1 for credit. No creditor
of Licensor (or other similar Person) shall in any manner be entitled to claim
an interest in the right to Profit Participation hereunder as a result of the
debts, contracts, liabilities or torts of the Licensor or otherwise.
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2.10 |
Interest on Late Payments |
Licensor shall be entitled to charge, and Licensee shall pay, interest on any
amounts that are more than ten (10) business days overdue for payment under
Schedule 2.1, or payments determined by Licensee in accordance with subsections
2.3, 2.4, 2.5 and 2.7 to be due and payable under subsection 2.2, at the rate of
[**]% per month (or part thereof), or at such lower rate as may be the maximum
rate allowed under applicable law. This obligation of Licensee to pay interest
on its overdue obligations does not prevent Licensor from terminating this
Agreement for Payment Breach under subsection 11.4.
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2.11 |
Taxes |
All payments by Licensee shall be made free and clear of and without
deduction for or on account of any taxes or levies as may be payable by
Licensee. Licensor agrees that it shall bear full responsibility for any and all
taxes payable as a result of the payments made by Licensee hereunder.
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2.12 |
Currency |
All royalties, fees and payments under this Agreement shall be in U.S.
Dollars.
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3. |
CLOSING |
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3.1 |
Deliverables |
Licensor has provided to Licensee, or its legal counsel, the items identified
on Schedule D (the “Deliverables“). The lists of Live
Assets on Schedules A and B and the list of Abandoned Assets on Schedule C may
be revised by Licensee following the Closing to conform these lists to the
definition of Patents set forth in this Agreement (and these revisions may
therefore require the inclusion of additional provisional patent applications,
patent applications, and patents on Schedules A and B or Schedule C). With
respect to any originals of the Deliverables requested by Licensee for delivery
as specified on Schedule D that have not been delivered as of the date hereof,
Licensor will cause (i) such originals of
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the Deliverables to be sent to Licensee or Licensee153s representative promptly
once such originals are located, and (ii) with respect to any originals that
cannot be located after Licensor153s commercially reasonable efforts, Licensor
will deliver to Licensee a declaration, executed under penalty of perjury,
detailing Licensor153s efforts to locate such unavailable original documents and
details regarding how delivered copies were obtained.
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3.2 |
Closing |
The execution and delivery of this Agreement is contingent upon the
simultaneous execution and delivery of each of the other Transaction Agreements.
The closing of the transactions contemplated by this Agreement (the
“Closing“) shall occur simultaneously with the
execution of this Agreement, and shall be conditioned upon the simultaneous
closing of the transactions under the other Transaction Agreements. Upon the
Closing, Licensee shall pay Licensor the initial payment required as part of the
License Issue Fee, and Licensee may then record the Memoranda of Exclusive
License/Rights.
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3.3 |
Deliverables |
(a) Concurrently with the execution of this Agreement, Licensor shall deliver
to Licensee each of the following items:
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(i) |
Transmittal of Documents. Licensor will have delivered to Licensee all |
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(ii) |
Delivery of Executed Memorandum of Exclusive License/Rights and Transfer |
(b) Concurrently with the execution of this Agreement, Licensee shall deliver
to Licensor the Certificate of Formation of Licensee.
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3.4 |
Compliance with Laws |
Notwithstanding anything contained in this Agreement to the contrary, the
obligations of the parties with respect to the consummation of the transactions
contemplated by this Agreement shall be subject to all laws, present and future,
of any government having jurisdiction over the parties and this transaction, and
to orders, regulations, directions or requests of any such government.
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4. |
COVENANTS OF |
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4.1 |
Further Cooperation |
At the reasonable request of Licensee, Licensor will execute and deliver such
other instruments and do and perform such other acts and things as may be
reasonably necessary or desirable for effecting completely the consummation of
the transactions contemplated hereby, including, without limitation, execution,
acknowledgment and recordation of other such papers, and using reasonable
efforts to obtain the same from the respective inventors, as necessary or
desirable for fully perfecting and conveying unto Licensee the benefit of the
transactions contemplated hereby, including, without limitation, providing and
assisting in
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obtaining execution of any assignments, confirmations, powers of attorney,
inventor declarations, and other documents that Licensee may request for
prosecuting, maintaining, filing, obtaining issuance of, registering, enforcing,
defending, or bringing any proceeding relating to the Patents. To the extent any
attorney-client privilege or the attorney work-product doctrine applies to any
portion of the Prosecution History Files, Licensor will ensure that, if any such
portion of the Prosecution History File remains under Licensor153s possession or
control after the Closing, it is not disclosed to any third party unless (a)
disclosure is ordered by a court of competent jurisdiction, after all
appropriate appeals to prevent disclosure have been exhausted, and (b) Licensor
gave Licensee prompt notice upon learning that any third party sought or
intended to seek a court order requiring the disclosure of any such portion of
the Prosecution History File.
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5. |
FILING, |
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5.1 |
Costs |
After the Closing, Licensee will have the sole right and responsibility for,
but not the obligation for, the preparation, filing, prosecution, maintenance
and defense of all Patents (except to the extent of any portion of the Patents
abandoned by Licensee pursuant to the terms of this Agreement or otherwise
provided to Licensor under subsection 5.4). Subject to subsection 5.4, Licensee
may, but is not obliged to, consult with Licensor regarding execution of its
responsibility, and Licensor agrees to cooperate and assist Licensee in
connection therewith, as required by the terms of this Agreement.
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5.2 |
Copies of Prosecution Documents |
Licensee will, upon Licensor153s reasonable written request, provide Licensor
with a copy of documents received or filed by Licensee pertaining to the filing,
prosecution, maintenance or defense of Patents, including, without limitation,
each patent application, office action, response to office action, request for
terminal disclaimer, and request for reissue or reexamination of any patent
issuing from such patent application.
Licensee will provide Licensor access to the private Patent Application
Information Retrieval (PAIR) docket of the USPTO for the Patents for so long as
the Common Interest Agreement remains in effect.
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5.3 |
Conduct of Prosecution |
Subject to subsection 5.4, the conduct of the preparation, filing,
prosecution, maintenance, and defense of the Patents will be under Licensee153s
exclusive control and discretion. Licensee is authorized to execute and record,
on Licensor153s behalf, any document submitted to the USPTO or other governmental
patent office that pertains to filing, prosecution, maintenance, or defense of
the Patents, including, without limitation, consents to reissue applications,
and declarations. Licensee will consult with Licensor on such matters from time
to time on Licensor153s reasonable request. At the reasonable request of Licensee,
Licensor will execute and deliver to Licensee such other documents, and do and
perform such other acts and things, as may be reasonably necessary or desirable
for confirming in Licensee exclusive right to prosecute, maintain, defend, file,
obtain issuance, register, enforce, or bring any proceeding relating to the
Patents including, without limitation, execution, acknowledgment and recordation
of such documents necessary to convey to Licensee any right or power of attorney
in the USPTO or other governmental patent office,
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in respect to prosecution, maintenance, defense, filing, issuance, or
registration of the Patents.
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5.4 |
Abandonment |
(a) Licensee will at any time be entitled to abandon its license and other
rights to all or any of the Patents (including abandonment of the Patents
themselves, with respect to Patents to which Licensee acquires title).
(b) Licensor may request Licensee to notify Licensor whether or not Licensee
intends to abandon any particular Patent Family or Patent Families by delivering
written notice (an “Abandonment Inquiry“) of such
request to Licensee when Licensor identifies that Licensee has taken an action
or failed to take an action indicating that Licensee may be abandoning a Patent
Family. Licensee shall use reasonable efforts to notify Licensor of any
instruction or plan to abandon a particular Patent Family or Patent Families,
provided however that failure by Licensor to provide such notification shall not
subject Licensee or any Affiliate of Licensee to liability associated with
subsequent abandonment of such Patent Family or Patent Families. Licensee shall
respond to any such Abandonment Inquiry by delivering a written statement (an
“Abandonment Notice“) to Licensor within thirty (30)
days as to whether or not Licensee intends to abandon the Patent Family(ies)
specified in the Abandonment Inquiry. Any Patent Family or Patent Families
designated for abandonment in the Abandonment Notice shall be referred to as
“Released Patents“.
Licensor hereby agrees that provisions in subsections 5.4(b) and (c) shall
apply solely in the event that Licensee intends to abandon an entire Patent
Family, and that in the event Licensee intends to abandon a particular Patent or
Patents within a Patent Family, but to maintain other Patents within the Patent
Family, Licensee shall not be obligated to provide an Abandonment Notice nor to
assign the rights in such Patent or Patents to be abandoned to Licensor.
(c) Upon receipt of an Abandonment Notice listing any Released Patents,
Licensor shall be entitled to maintain all or any of such Released Patents,
provided that Licensor hereby agrees with Licensee as follows with respect to
such Released Patents: (i) Licensor shall assume, as of the date of the
Abandonment Notice, sole right and responsibility for the preparation, filing,
prosecution, maintenance and defense of each Released Patent, and, except as in
the last sentence of this subsection 5.4(c), Licensee shall have no further
obligation with respect to such Released Patents, (ii) each Released Patent
shall be released and/or assigned AS IS, without any express or implied
representation or warranty whatsoever with respect to such Released Patent, and
(iii) Licensor hereby agrees, and shall confirm in writing to Licensee, that the
Released Patents shall be subject to each sublicense, covenant not to sue or
other encumbrance granted by Licensee or any Affiliate of Licensee prior to the
date of the Abandonment Notice, which encumbrances will not be terminated,
altered or affected as a result of such intended abandonment by Licensee.
Except as in the last sentence of this subsection 5.4(c), with respect to
each Released Patent that was licensed hereunder to Licensee immediately prior
to the date of the Abandonment Notice, then Licensee153s and Licensor153s rights
hereunder and under the other Transaction Agreements with respect to such
Released Patents shall terminate as of the date of such Abandonment Notice.
With respect to each Released Patent to which Licensee has acquired title
pursuant to Sections 3 or 4 of the Patent Rights Agreement, then Licensee shall
use commercially
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reasonable efforts to assign all right, title and interest in such Released
Patent to Licensor as soon as reasonably practicable, subject to the first
sentence of this clause (c). Licensee agrees to reasonably cooperate with the
recording of transfer of title of any Released Patent to Licensor, provided that
Licensor shall bear all expenses (and shall reimburse Licensee for all of its
expenses) relating to such transfer.
For each Released Patent, Licensee shall continue to be obligated to pay
Licensee Profits, if any, generated by any Revenue that may be paid to Licensee
after a Patent becomes a Released Patent with respect to any such Released
Patent that was subject to a sublicense, covenant not to sue or other
encumbrance granted by Licensee or any Affiliate of Licensee prior to the date
the Patent becomes a Released Patent.
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5.5 |
Assistance by Licensor |
Licensor will provide Licensee with such advice and assistance as Licensee
reasonably requests in connection with the filing, prosecution, maintenance, or
defense of the Patents, as more fully set forth in the Work Agreement. Licensee
will not be responsible for any costs incurred by Licensor under Section 5
without Licensee153s prior written agreement to bear such costs.
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6. |
ENFORCEMENT OF |
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6.1 |
Enforcement |
Licensee will have the exclusive right, but not the obligation, to institute,
prosecute, and control any action or proceeding with respect to infringement of
the Patents, using counsel of its choice, including any declaratory judgment
action arising from such infringement. In the event Licensee exercises its right
to commence such action or proceeding, Licensee will use reasonable efforts to
advise Licensor prior to such commencement. Thereafter, on Licensor153s written
request no more frequently than every two (2) months, Licensee will report to
Licensor reasonable, nonprivileged information on the status of the action or
proceeding commenced by Licensee. Licensor shall not have and/or retain any
right to, and will not, institute any case, action or other enforcement
proceeding with respect to infringement of the Patents.
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6.2 |
Joinder; Cooperation in Litigation |
This Agreement transfers to Licensee all substantial rights under the Patents
and, as a result, Licensee has the right to bring any future action or
proceeding to enforce claims under the Patents in its own name, without naming
Licensor as a party thereto. However, if necessary or desirable in Licensee153s
sole discretion, Licensee may add Licensor as a named party in any action or
proceeding to enforce or defend the Patents, and Licensor will consent to be
added and will cooperate with Licensor in any such action or proceeding.
Licensee will be entitled to select counsel and will be entitled to control such
action or proceeding. If Licensee finds it necessary or desirable, Licensor will
execute all papers or perform any other acts or provide any assistance, at
Licensee153s expense (provided that Licensor shall be responsible for paying any
fees or expenses of its own outside counsel), toward pursuing such action or
proceeding, as reasonably required by Licensee. Licensor will use commercially
reasonable efforts to ensure that any Licensor personnel will be available to
cooperate, at Licensee153s expense for work of a nature contemplated by the Work
Agreement, toward pursuing such action.
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6.3 |
In Event of Breach |
Notwithstanding any material breach of this Agreement by Licensee, in no
event will Licensor be entitled to take any action or direct any proceeding with
respect to the Patents, other than the Released Patents, without Licensee153s
express consent and direction unless and until there has been a termination of
the Term pursuant to subsection 11.4 of this Agreement.
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7. |
REPRESENTATIONS |
Licensor represents and warrant to Licensee as of the Effective Date and as
of the Closing as follows:
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7.1 |
All Substantial Rights |
By this Agreement, Licensor intends to, and will, transfer to Licensee all
substantial rights under the Patents, other than those patents set forth on
Schedule 7.1. No Person other than Licensee will, as
of and immediately following the Closing, have or retain any right to license,
sublicense, or grant any other rights with respect to the Patents, either
generally or within any field of use or otherwise.
|
7.2 |
Organization; Authority and Approvals; Enforceability |
(a) Licensor is a company duly formed, validly existing, and in good standing
under the laws of the jurisdiction of its formation.
(b) Licensor has the full power and authority to enter into this Agreement
and the other Transaction Agreements and to carry out its obligations hereunder
and thereunder, including, without limitation, the assignment to Licensee of all
causes of action with respect to the Patents.
(c) The execution, delivery and performance by Licensor of this Agreement,
each of the other Transaction Agreements and all other transactions and actions
contemplated hereby and thereby have been duly and validly approved and
authorized by Licensor153s Board of Directors, and do not require the approval of
Licensor153s stockholders nor any other corporate action on the part of Licensor.
(d) No consent, approval, order or authorization of, notification to, action
by or registration, declaration or filing with, any governmental or regulatory
authority, or any other person, governmental or otherwise, is necessary to
enable Licensor to lawfully enter into, execute, deliver and perform its
obligations under this Agreement and each of the other Transaction Agreements,
or to consummate the transactions contemplated hereby and thereby.
(e) This Agreement and each of the other Transaction Agreements have been
duly executed and delivered by Licensor. Assuming due authorization, execution
and delivery by Licensee, this Agreement and each of the other Transaction
Agreements are valid and binding obligations of Licensor, enforceable against
each in accordance with their respective terms, subject to the effect of (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or limiting rights of creditors
generally and (ii) rules of law and equity governing specific performance,
injunctive relief and other equitable remedies.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
|
7.3 |
No Conflict |
Neither the execution and delivery of this Agreement or any of the other
Transaction Agreements by Licensor, nor the consummation of the transactions
contemplated hereby or thereby, will conflict with, or (with or without notice
or lapse of time, or both) result in a termination, breach, impairment or
violation of, give any rights of acceleration or cancellation under, or
constitute a default under: (a) any provision of the Certificate of
Incorporation or Bylaws of Licensor as currently in effect; (b) any law, rule,
regulation, order, ruling or other legal requirement applicable to Licensor or
any of the Patents; or (c) any material contract, agreement or understanding to
which Licensor is a party or is bound, or by which any of the Patents are bound.
Neither Licensor153s entering into this Agreement or any of the other Transaction
Agreements nor the consummation of the transactions contemplated hereby or
thereby will result in the creation of any encumbrance on any of the Patents or
give rise to, or trigger the application of, any rights of any third party that
would come into effect or become exercisable upon the consummation of the
transactions contemplated hereby or thereby.
|
7.4 |
Title and Contest |
(a) Immediately prior to the Closing, and subject to the Existing
Encumbrances, Licensor owns all right, title and interest in the Patents, and as
of the Closing Licensor will convey to Licensee, subject to the Existing
Encumbrances, all right, title and interest in each right conferred under this
Agreement with respect to the Patents (but not title to the Patents), including,
without limitation, all rights, title, and interest in and to the causes of
action assigned by this Agreement. Except as set forth on Schedule
7.4, Licensor has obtained and properly recorded previously
executed assignments for the Patents as necessary to fully perfect its rights
and title therein in accordance with governing law and regulation in each
jurisdiction.
(b) Each right conferred under this Agreement with respect to the Patents is
free and clear of all liens, mortgages, security interests, and restrictions on
transfer. As of the Closing, there are no actions, suits, investigations,
claims, or proceedings threatened, pending or in progress relating in any way to
any right conferred under this Agreement with respect to the Patents. There are
no existing contracts, agreements, options, commitments, proposals, bids,
offers, or rights with, to or in any Person to acquire any Patents.
|
7.5 |
Existing Licenses and Restrictions on Rights |
Except as specifically identified on Schedule 7.5,
(a) no license under the Patents has been granted by Licensor, any prior owner,
or inventors, and (b) after Closing, none of Licensor, any prior owner, or any
inventor will retain any rights or interest in the Patents or the related causes
of action, except that Licensor shall retain title in the Patents. Except as
specifically identified on Schedule 7.5, Licensee will
not be subject to any covenant not to sue or similar restrictions on its
enforcement or enjoyment of any of Patents or the related causes of action as a
result of the transactions contemplated in this Agreement or any prior
transaction related to the Patents or the Abandoned Assets. None of the licenses
listed on Schedule 7.5 is an exclusive grant or right,
unless specifically noted otherwise on Schedule 7.5.
Each license listed on Schedule 7.5 is nontransferable
and nonsublicensable, except as specifically noted otherwise on
Schedule 7.5. Notwithstanding anything to the contrary
herein, the parties acknowledge and agree that Licensor will retain
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
the right to collect any amounts that are or become due or owing to Licensor
as a result of payment obligations under any of the licenses listed on
Schedule 7.5.
|
7.6 |
Validity and Enforceability |
(a) None of the Patents or the Abandoned Assets has ever been found invalid,
unpatentable, or unenforceable for any reason in any judicial proceeding,
arbitration proceeding, opposition proceeding, interference proceeding, ex parte
reexamination proceeding, inter partes reexamination proceeding or other inter
partes proceeding.
(b) Except as in Schedule 7.6, Licensor neither knows of nor has received any
notice or information of any kind from any source suggesting the invalidity,
unpatentability, or unenforceability of any claimed subject matter within the
Patents or Abandoned Assets that has ultimately been allowed, granted, or
otherwise deemed patentable by a respective patent authority or patent office,
with the exception of rejections, objections or other deficiencies identified by
such patent authority or patent office, which were overcome to result in the
allowance, grant or patenting of such claimed subject matter.
(c) Except as in Schedule 7.6, Licensor neither knows of nor has received any
notice or information of any kind from any source suggesting the invalidity,
unpatentability or unenforceability of any of the pending patent applications or
pending provisional patent applications listed in Schedules A and/or B.
(d) If any of the Patents is terminally disclaimed to another patent or
patent application, all patents and patent applications subject to such terminal
disclaimer are included in this transaction.
(e) To the extent “small entity” fees at the time of such payment were paid
to the United States Patent and Trademark Office for any Patent, such reduced
fees were then appropriate because the payor qualified to pay “small entity”
fees and specifically had not licensed rights in any Patent to an entity that
was not a “small entity.”
|
7.7 |
Conduct; SSOs |
Neither Licensor nor any of its representative have engaged in any conduct,
or omitted to perform any necessary act, the result of which would invalidate
any of the Patents or hinder its enforcement, including, without limitation,
misrepresenting Licensor153s patent rights to a standard-setting organization.
There is no obligation imposed by a standards-setting organization on Licensor
to license any of the Patents on particular terms or conditions, nor will any
such obligation apply to Licensee following the Closing.
|
7.8 |
Enforcement |
Except for any notices or letters included in the Deliverables, Licensor has
not (a) provided to a third party notice of alleged actual or potential
infringement of any of the Patents or the Abandoned Assets or (b) initiated
enforcement action(s) with respect to any of the Patents or the Abandoned
Assets.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
|
7.9 |
Patent Office Proceedings |
Except as set forth on Schedule 7.9, none of the
Patents or the Abandoned Assets has been or is currently involved in any
reexamination, reissue, interference proceeding, or any similar proceeding, and
no such proceedings are pending or threatened.
|
7.10 |
Fees |
All maintenance fees, annuities and the like due or payable on each of the
Patents have been timely paid. For the avoidance of doubt, Licensor shall pay
any maintenance fees for which the fee is payable (e.g., the fee payment window
opens) on or prior to the Closing even if the surcharge date or final deadline
for payment of such fee would be after the Closing.
|
7.11 |
Abandoned Patents |
According to each applicable patent office, each of the Abandoned Assets has
expired, lapsed, or been abandoned or deemed withdrawn.
|
7.12 |
Brokers |
Except for Licensor153s obligations to [**], if any, neither Licensor nor any
Affiliate of Licensor is obligated for the payment of any fees or expenses of
any investment banker, broker, finder or similar party in connection with the
origin, negotiation or execution of this Agreement or in connection with the
transactions contemplated hereby. Licensee will not incur any liability, either
directly or indirectly, to any such investment banker, broker, finder or similar
party as a result of, this Agreement, the transactions contemplated hereby or
any act or omission of Licensor or any of its employees, officers, directors,
stockholders, agents or Affiliates.
|
8. |
REPRESENTATIONS |
Licensee represents and warrants to Licensor as of the Effective Date and the
Closing:
|
8.1 |
Organization; Authority and Approvals; Enforceability |
(a) Licensee is a company duly formed, validly existing, and in good standing
under the laws of the jurisdiction of its formation.
(b) Licensee has the full power and authority to enter into this Agreement
and the other Transaction Agreements and to carry out its obligations hereunder
and thereunder.
(c) Licensee is duly authorized to execute and deliver this Agreement and
each of the other Transaction Agreements and to perform its obligations
hereunder and thereunder. The individual executing this Agreement and each of
the other Transaction Agreements on Licensee153s behalf has been duly authorized
to do so by all requisite corporate action.
(d) No consent, approval, order or authorization of, notification to, action
by or registration, declaration or filing with, any governmental or regulatory
authority, or any other person, governmental or otherwise, is necessary to
enable Licensee to lawfully enter into, execute, deliver and perform its
obligations under this Agreement and each of the
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
other Transaction Agreements, or to consummate the transactions contemplated
hereby and thereby.
(e) This Agreement and each of the other Transaction Agreements have been
duly executed and delivered by Licensee. Assuming due authorization, execution
and delivery by Licensor, this Agreement and each of the other Transaction
Agreements are valid and binding obligations of Licensee, enforceable against
Licensee in accordance with their respective terms, subject to the effect of (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or limiting rights of creditors
generally and (ii) rules of law and equity governing specific performance,
injunctive relief and other equitable remedies.
|
8.2 |
No Conflict |
Neither the execution and delivery of this Agreement or any of the other
Transaction Agreements by Licensee, nor the consummation of the transactions
contemplated hereby or thereby, will conflict with, or (with or without notice
or lapse of time, or both) result in a termination, breach, impairment or
violation of, give any rights of acceleration or cancellation under, or
constitute a default under: (i) the applicable organizational documents of
Licensee, as currently in effect; (ii) any law, rule, regulation, order, ruling
or other legal requirement applicable to Licensee; or (iii) any material
contract, agreement or understanding to which Licensee is a party or is bound.
|
8.3 |
Brokers |
Neither Licensee nor any Affiliate of Licensee is obligated for the payment
of any fees or expenses of any investment banker, broker, finder or similar
party in connection with the origin, negotiation or execution of this Agreement
or in connection with the transactions contemplated hereby. Licensor will not
incur any liability, either directly or indirectly, to any such investment
banker, broker, finder or similar party as a result of, this Agreement, the
transactions contemplated hereby or any act or omission of Licensee or any of
its employees, officers, members, agents or Affiliates.
|
8.4 |
Covenants Relating to Obligations to [**] and [**] |
Licensor is required, pursuant to agreements between Licensor and each of
[**] (“[**]”) and [**] (“[**]”) to pay each of [**] and [**], respectively,
$[**] USD for each patent issuing anywhere in the world from a patent
application claiming priority to the patents that Licensor acquired from [**]
and [**]. Licensee hereby covenants and agrees with Licensor to make the
following payments in order to assist Licensor with satisfying the obligations
under Licensor153s agreements with [**] and [**]:
(a) Licensee hereby agrees to pay [**] $[**] USD for each patent issuing
anywhere in the world from a patent application claiming priority to the patent
rights that Licensor obtained from [**]. Currently pending patent applications
are identified on Schedule A to this Agreement. This payment obligation also
applies to patents issuing anywhere in the world from patent applications that
Licensee files after Closing that claim priority to these patent applications or
other patent rights that Licensor obtained from [**]. Such payments are required
within thirty (30) days following issuance of each such issued patent.
(b) Licensee hereby agrees to pay to pay US$[**] (net of any tax payable by
Licensee) for each patent issuing from a patent application claiming priority to
the patent rights that
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Licensor obtained from [**]. Currently pending patent applications are
identified on Schedule A to this Agreement. Licensee shall pay [**] ([**]) of
each such payment directly to [**] on behalf of [**], and shall pay the
remainder of each such payment to [**]. This payment obligation also applies to
U.S. patents issuing from patent applications that Licensee files after Closing
that claim priority to these patent applications or other patent rights that
Licensor obtained from [**].
(c) Licensee agrees to indemnify and hold harmless Licensor and its
directors, officers and employees of each of their Affiliates, from any losses,
liabilities, damages, claims, payments, liens, judgments, demands, costs and
expenses (including reasonable attorneys153 fees) arising out of failure by
Licensee to pay [**] or [**] as required under this subsection 8.4.
|
9. |
DISCLAIMER OF |
|
9.1 |
Disclaimer of Representations and Warranties |
NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY EXCEPT FOR THEIR
RESPECTIVE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTIONS 7 AND 8, AND
EACH PARTY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
LICENSEE GIVES LICENSOR NO ASSURANCE THAT ANY PROFIT (EITHER FROM A
MONETIZATION EVENT INVOLVING SOLELY THE PATENTS OR AS PART OF A PORTFOLIO
MONETIZATION) WILL BE GENERATED FOR LICENSOR.
LICENSOR ACKNOWLEDGES THAT ACCOUNTING FOR THIS TRANSACTION IS A MATTER SOLELY
BETWEEN OR AMONG LICENSOR AND ITS ACCOUNTANTS, AND ACKNOWLEDGE THAT THEY HAVE
NOT RELIED UPON ANY ADVICE OR REPESENTATION FROM LICENSEE TO DETERMINE THE
ACCOUNTING TREATMENT FOR THE LICENSE ISSUE FEE OR ANY OTHER PAYMENT TO BE MADE
BY LICENSEE TO LICENSOR.
EXCEPT AS EXPRESSLY SET FORTH IN SECTION 7, NEITHER PARTY GIVES THE OTHER
PARTY ANY ASSURANCE (A) REGARDING THE PATENTABILITY OF ANY CLAIMED INVENTION IN,
OR THE VALIDITY, OF ANY PATENT; OR (B) THAT MANUFACTURE, USE, SALE, OFFERING FOR
SALE, IMPORTATION, EXPORTATION OR OTHER DISTRIBUTION OF ANY PRODUCT OR METHOD
DISCLOSED AND CLAIMED IN ANY PATENT BY LICENSEE, ANY SUBLICENSEE OR ANYONE ELSE
WILL NOT CONSTITUTE AN INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF
OTHERS.
|
9.2 |
Limitation of Liability |
EXCEPT IN THE EVENT OF FRAUD OR INTENTIONAL MISREPRESENTATION OR THE BREACH
OF THE REPRESENTATIONS AND WARRANTIES MADE IN SUBSECTIONS 7.4 AND 7.5 OF THIS
AGREEMENT, THE COLLECTIVE LIABILITY OF LICENSOR, ON ONE HAND, AND LICENSEE, ON
THE OTHER, WILL IN EACH CASE NOT EXCEED AN AMOUNT EQUAL TO THE SUM OF ALL
PAYMENTS PAYABLE UNDER SUBSECTIONS 2.1 AND 2.2 OF THIS AGREEMENT. IN THE EVENT
OF BREACH OF ANY OF THE REPRESENTATIONS OR WARRANTIES MADE IN SUBSECTIONS 7.4
AND 7.5 OF THIS AGREEMENT, LICENSOR153S COLLECTIVE LIABILITY UNDER THIS AGREEMENT
WILL NOT EXCEED AN AMOUNT EQUAL TO THREE (3) TIMES THE
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
SUM OF ALL PAYMENTS PAYABLE UNDER SUBSECTIONS 2.1 AND 2.2 OF THIS AGREEMENT.
THE PARTIES ACKNOWLEDGE THAT THE FOREGOING LIMITATION ON POTENTIAL LIABILITY WAS
AN ESSENTIAL ELEMENT IN SETTING CONSIDERATION UNDER THIS AGREEMENT.
|
9.3 |
Exclusion of Certain Damages |
NEITHER PARTY WILL HAVE ANY OBLIGATION OR LIABILITY (WHETHER IN CONTRACT,
WARRANTY, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE), AND NOTWITHSTANDING ANY
FAULT, NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR IMPUTED), REPRESENTATION, STRICT
LIABILITY OR PRODUCT LIABILITY, FOR COVER OR FOR ANY INCIDENTAL, INDIRECT,
CONSEQUENTIAL, MULTIPLIED, PUNITIVE, SPECIAL, OR EXEMPLARY DAMAGES FOR LOSS OF
REVENUE, PROFIT (EXCEPT TO THE EXTENT PROFIT BECOMES DUE AND PAYABLE IN
ACCORDANCE WITH SUBSECTION 2.2 OF A PATENT LICENSE AGREEMENT), SAVINGS OR
BUSINESS ARISING FROM OR OTHERWISE RELATED TO THIS AGREEMENT, EVEN IF A PARTY OR
ITS REPRESENTATIVES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
LICENSOR UNDERSTANDS AND CONFIRMS THAT THERE MAY NOT BE ANY PROFIT PARTICIPATION
DISTRIBUTED UNDER THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THESE EXCLUSIONS
OF SUCH POTENTIAL DAMAGES WERE AN ESSENTIAL ELEMENT IN SETTING CONSIDERATION
UNDER THIS AGREEMENT.
|
10. |
DEFINITIONS |
Capitalized terms used in this Agreement that are not otherwise defined have
the meanings set forth in this Section.
“Abandoned Assets” means those specific provisional
patent applications, patent applications, patents and other governmental grants
or issuances listed on Schedule C (as such list may be
updated based on Licensee153s review pursuant to subsection 3.1).
“Acquisition Transaction” means (i) a merger,
consolidation or reorganization of a party with or into another Person (whether
or not such party is the surviving Entity), in which such party153s shareholders
holding the right to vote with respect to general matters immediately preceding
such transaction own less than fifty percent (50%) of the voting securities of
the surviving Entity; (ii) a sale, assignment, transfer, conveyance or other
disposition of all or substantially all of the assets of such party to another
Person; or (iii) another Person becoming the beneficial owner of more than fifty
percent (50%) of the outstanding voting securities of such party.
“Affiliate” means, with respect to any Person, any
Entity in whatever country organized that controls, is controlled by or is under
common control with such Person; provided however, that an Entity that qualifies
as an Affiliate but subsequently ceases to fall within this definition shall no
longer be considered an Affiliate hereunder. The term “control” means
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of an Entity, whether through the ownership of
voting securities, by contract or otherwise. For purposes of clarity, neither
TVAura LLC nor TVAura Mobile LLC shall be considered an “Affiliate” of Licensor
under this Agreement.
“Amounts“ as generally used in
this Agreement refers to cash amounts, and amounts that are not cash will be
valued by Licensee at their cash equivalent under customary valuation
techniques.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
“Assignment Agreements” mean the agreements
assigning to Licensor ownership of the Patents and the Abandoned Assets from the
inventors and/or any prior owners to Licensor.
“Closing” has the meaning set forth in subsection
3.2.
“Common Interest Agreement” means an agreement, in
the form set forth on Exhibit A, setting forth the
terms under which Licensor and Licensee will protect certain information
relating to the Patents under the common interest privilege.
“Docket” means Licensor153s, or its agents153, list or
other means of tracking information relating to the prosecution or maintenance
of the Patents throughout the world, including, without limitation, the names,
addresses, email addresses and phone numbers of prosecution counsel and agents,
and information relating to deadlines, payments, and filings, which list or
other means of tracking information is current as of the Effective Date.
“Effective Date” means the date set forth as the
Effective Date on the cover page of this Agreement.
“Entity” means any corporation, partnership,
limited liability company, association, joint stock company, trust, joint
venture, unincorporated organization, governmental entity (or any department,
agency, or political subdivision thereof) or any other legal entity.
“Excluded Assets“ means the patents and
applications listed in the attached Schedule 7.1, any
reissues or reexaminations thereof, and any other patent application (and
resulting patent) filed by Licensor after the Effective Date that either (a)
does not claim priority to any of the Live Assets or (b) claims priority to a
Live Asset only through an intermediate application or patent that is also
listed on Schedule 7.1.
“Existing Encumbrances“ means all licenses or other
encumbrances disclosed on Schedule 7.5.
“Grant-Back License Agreement“ means the Grant-Back
License Agreement between Licensor and Licensee dated of even date herewith.
“IV Fund“ means Invention Investment Fund II, LLC,
a Delaware limited liability company.
“IP Group Expenses” means the Amounts paid,
incurred, accrued, or allocated by or on behalf of Licensee in respect of
acquiring, holding, prosecuting, maintaining, managing, protecting, or enhancing
the Patents, including, without limitation, all such Amounts (other than Profit
Participation) paid under this Agreement to Licensor and all fees, costs,
commissions and expenses for legal, technical, advisory, and consulting services
and filing, issuance, annuity and maintenance payments.
“IP Group Expenses,” as used in this Agreement refers
to IP Group Expenses of the Patents.
“License Issue Fee” has the meaning set forth in
subsection 2.1.
“Live Assets” means the provisional patent
applications, patent applications, and patents listed on Schedule A
(as such lists may be updated based on License153s review pursuant
to subsection 3.1).
“Memoranda of Exclusive License/Rights” means one
or more documents in substantially the form of Schedule B,
which form may be adjusted for the requirements of
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
the particular government patent office, that memorialize the license and
other rights transferred to Licensee by this Agreement.
Memoranda of Exclusive License/Rights are created to comply with recordation
requirements related to this grant/transfer/assignment, but in no way are
intended by the parties to limit or expand the scope of the rights intended to
be granted, transferred and assigned.
“Monetization Expenses” means the Amounts paid,
incurred, accrued, or allocated by or on behalf of Licensee in respect of
commercializing, asserting, litigating, licensing, managing, or otherwise
capturing value, including, without limitation, fees, costs, commissions and
expenses for legal, technical, advisory, consulting and licensing services.
“Monetization Expenses,” as used in this Agreement, may refer to Monetization
Expenses of either a monetization event involving solely the Patents or a
Portfolio Monetization.
“Non-Exclusive License” means the Non-Exclusive
License Agreement between Licensor and Licensee dated on or about even date
herewith.
“Patent Rights Agreement” means the Patent Rights
Agreement in the form of Exhibit B.
“Patents” means, excluding the Abandoned Assets and
the Excluded Assets, all (a) Live Assets; (b) patents or patent applications (i)
to which any of the Live Assets directly or indirectly claims priority, (ii) for
which any of the Live Assets directly or indirectly forms a basis for priority,
and/or (iii) that were co-owned applications that incorporate by reference, or
are incorporated by reference into, the Live Assets; (c) reissues,
reexaminations, extensions, continuations, continuations in part, continuing
prosecution applications, requests for continuing examinations, divisions, and
registrations of any item in any of the foregoing categories (a) and (b); (d)
foreign patents, foreign patent applications and foreign counterparts relating
to any item in any of the foregoing categories (a) through (c), including,
without limitation, certificates of invention, utility models, industrial design
protection, design patent protection, and other governmental grants or
issuances; (e) items in any of the foregoing categories (b) through (d) whether
or not expressly listed as Live Assets and whether or not claims in any of the
foregoing have been rejected, withdrawn, cancelled, or the like; and (f) all
patentable inventions, invention disclosures, and patentable discoveries
described in any item in any of the foregoing categories (a) through (e) and all
other patent rights arising out of such inventions, invention disclosures, and
discoveries (each such Live Asset, together with patents and patent applications
in categories (b)(i), (b)(ii), (c), (d) and (e) above relating to such Live
Asset, is referred to collectively as a “Patent Family”).
“Person” means any individual or Entity.
“Portfolio Monetization” has the meaning set forth
in subsection 2.3.
“Portfolio Profit” means Revenue from, minus
Monetization Expenses of, a Portfolio Monetization.
“Profit” means
the total of the Portfolio Profit that is allocated under subsections 2.3
through 2.5 to the patents and patent applications among the Patents included in
a Portfolio Monetization;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
plus Revenue from, minus remaining Monetization Expenses of, monetization
events involving solely the Patents and which are not a Portfolio Monetization;
minus any remaining IP Group Expenses.
“Profit Participation” has the meaning set forth in
subsection 2.2.
“Prosecution History Files” means all files,
documents and tangible things, as those terms have been interpreted pursuant to
rules and laws governing the production of documents and things, constituting,
comprising or relating to the investigation, evaluation, preparation,
prosecution, maintenance, defense, filing, issuance, registration, assertion or
enforcement of the Patents.
“Reporting Period” has the meaning set forth in
subsection 2.7.
“Revenue” means Amounts received by or on behalf of
Licensee and recognized as revenue under generally accepted accounting
principles from (a) licensing and/or (b) damages awarded in litigation or other
proceedings, and/or (c) sale of the rights granted to Licensee under this
Agreement. “Revenue,“ as used in this Agreement, may refer to
Revenue from either a monetization event involving solely the Patents or a
Portfolio Monetization.
“Term” has the meaning set forth in subsection
11.4.
“Transaction Agreements” means this Agreement, the
Patent Rights Agreement (including the Patent Purchase Agreement attached as
Exhibit A), the letter agreement between Licensor and an Affiliate of Licensee
dated of even date herewith, the Work Agreement, the Common Interest Agreement,
the Grant-Back License Agreement and the Non-Exclusive License.
“Transmitted Copy” has the meaning set forth in
subsection 11.14.
“Work Agreement” means the Work Agreement entered
into between Licensor and Licensee concurrently herewith.
|
11. |
MISCELLANEOUS |
|
11.1 |
Confidentiality of Terms |
(a) Subject to subsection 11.1(b) below, the parties hereto will keep the
terms and existence of this Agreement and the identities of the parties hereto
and their Affiliates confidential and will not now or hereafter divulge any of
this information to any third party except (i) with the prior written consent of
the other party; (ii) as otherwise may be required by law (subject to Section
11.1(b) below) or legal process, including, without limitation, in confidence to
legal and financial advisors in their capacity of advising a party in such
matters; (iii) during the course of litigation, so long as the disclosure of
such terms and conditions is restricted in the same manner as is the
confidential information of other litigating parties; (iv) in confidence to its
legal counsel, accountants, banks and financing sources and their advisors
solely in connection with administering or complying with its obligations with
respect to this Agreement (including reporting by Licensee and its Affiliates to
its investors under existing confidentiality obligations between Licensee and
its Affiliates
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
and such investors); (v) by Licensee (and, upon Licensee153s request, by
Licensor), in order to perfect Licensee153s interest in the Patents or the
Abandoned Assets with any governmental patent office; (vi) to enforce Licensee153s
rights and interest in the Patents, the causes of action transferred under this
Agreement, or the Abandoned Assets; or (vii) by Licensor or Licensee under a
written obligation of confidentiality substantially similar as this subsection
11.1, to potential acquirers, licensees of or investors in Licensor or Licensee
or the Patents, including without limitation such third parties153 legal counsel,
accountants, banks, financing sources and advisors provided that such parties
are subject to such confidentiality obligations; provided, in (ii) and (iii)
above, (A) to the extent permitted by law, the disclosing party will use all
legitimate and legal means available to minimize the disclosure to third
parties, including, without limitation, seeking a confidential treatment request
or protective order whenever appropriate or available; and (B) the disclosing
party will provide the other party with at least ten (10) days153 prior written
notice of such disclosure. Without limiting the foregoing, Licensor will cause
its agents involved in this transaction to abide by the terms of this Section
11, including, without limitation, ensuring that such agents do not disclose or
otherwise publicize the existence of this transaction with actual or potential
clients in marketing materials or industry conferences.
(b) Disclosure of this Agreement, the financial impact of this Agreement and
the terms and conditions of this Agreement (both in summary form and through
exhibit filings) may be required under the Securities Exchange Commission
(“SEC”) regulations, stock market rules, or other laws. Licensor and Licensee
may rely in good faith on advice of counsel when determining whether such
disclosure is required; provided that Licensor and Licensee agree that such
disclosures shall be limited to only those that are required by law in reliance
on such opinion of counsel. Except as otherwise provided in this Section 11,
Licensor or Licensee will make no public announcements and will not issue press
releases relating to this Agreement without the prior written consent of the
other Parties, which consent will not be unreasonably withheld. Licensor and
Licensee have agreed to the text of a joint press release announcing the signing
of this Agreement and the transactions contemplated hereby, a copy of which is
attached hereto as Exhibit C. Licensor also agrees to
provide Licensee an opportunity to review and an opportunity to comment on the
Current Report on Form 8-K to be filed with the SEC and any script for investor
calls announcing this Agreement and the transactions contemplated hereby.
Licensor shall consult with Licensee before issuing or making, and shall provide
Licensee with reasonable opportunity to review and comment upon, and shall
consider in good faith and reasonably attempt to incorporate the views of
Licensee in connection with any other press release, public filing or other
public statement with respect to the transactions contemplated by this
Agreement; provided that (i) any such disclosure will be limited to the
specific information that is required by law to be disclosed, and (ii) Licensor
shall not be required to consult, and shall only be required to give reasonable
notice, of any public disclosure which is substantially similar in content to
the joint press release, the script for the investor call and the Current Report
on Form 8-K filed with respect to the transactions contemplated by this
Agreement, or any other subsequent or previously made public filing, with
respect to which Licensor has complied with the provisions of this subsection
11.1(b). Because Licensor has determined that this Agreement, the Patent Rights
Agreement and the Grant-Back License are required by applicable law to be filed
by Licensor as an exhibit to a Quarterly Report on Form 10-Q and/or Annual
Report on Form 10-K, or otherwise needs to be filed with the SEC, Licensor shall
(A) provide Licensee with at least ten (10) business days advance notice of such
intent to file this Agreement and such other Transaction Agreements, and provide
Licensee an opportunity to discuss and consider in good faith any input or
request made by Licensee, (B) file a request with the SEC for confidential
treatment of such portions of this Agreement and of such other Transaction
Agreements that Licensee requests in writing to Licensor at
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
least five (5) business days prior to the intended filing date that counsel
for Licensor, after consultation with counsel for Licensee, advises should be
eligible for confidential treatment, and provide Licensee with any updates and
consider in good faith any input from Licensee with respect to such confidential
treatment request, and (C) in any event, only file those portions of this
Agreement as counsel for Licensor, after consultation with and consideration in
good faith of the views of counsel for Licensee, determines are required to be
filed by applicable law.
(c) Effective upon the Closing, the Reciprocal Non-disclosure Agreement dated
as of July 13, 2009 between Licensor and an Affiliate of Licensee, together with
all amendments and addendums (the “NDA”), shall be
void and of no force or effect solely with respect to “Confidential Information”
(as that term is defined in the NDA) that has been disclosed by or on behalf of
Licensor and that relates to the Patents or Abandoned Assets; provided, however,
that to the extent Licensor has shared information relating to third-party
relationships with Licensee that is subject to a confidentiality obligation to a
third party, Licensee agrees to keep such information confidential subject to
the terms of the NDA except for disclosure to potential or actual licensees,
purchasers or investors in the Patents, potential or actual investors or
acquirers of Licensee or any Affiliate of Licensee, or any Licensee Affiliate153s
counsel, auditors, consultants or other similar parties that are subject to a
substantially similar confidentiality obligation to such Licensee Affiliate.
(d) In the event of any breach or default, threatened or otherwise, under
this Section 11, the parties acknowledge and agree that damages alone would be
insufficient to compensate for any such breach or default and that irreparable
harm would result from such breach or default. Consequently, in the event of any
such breach or default, or any threat of such breach or default by either party,
the other party will be entitled to temporary or permanent injunctive relief,
specific performance and such other equitable relief as may be appropriate in
the circumstances in order to restrain or enjoin such breach or default. These
remedies will not be the exclusive remedies for violation of the terms of the
confidentiality obligations contained in this Section 11 but will be in addition
to all other remedies available to the parties at law or in equity.
|
11.2 |
Relationship of Parties |
The parties hereto are independent contractors. Nothing in this Agreement
will be construed to create a partnership, joint venture, franchise, fiduciary,
employment or agency relationship between the parties. Neither party has any
express or implied authority to assume or create any obligations on behalf of
the other or to bind the other to any contract, agreement or undertaking with
any third party.
|
11.3 |
Assignment; Successors |
Any assignment of this Agreement by Licensor, on one hand, or by Licensee, on
the other, shall require the prior written consent of the other parties;
provided, however, that (a) without Licensor153s consent, Licensee may assign, in
whole or in part, this Agreement, and/or any license or other rights Licensee
acquires hereunder, to its Affiliates or to an unaffiliated Entity that is
managed and controlled by representatives of Licensee or its Affiliates, (b)
without the other party153s consent, Licensee may assign this Agreement to the
acquiring party pursuant to an Acquisition Transaction in which the ultimate
parent company of Licensee is the party being acquired or whose assets are being
acquired in such transaction and (c) without the other party153s consent, Licensor
may assign this Agreement to the
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
acquiring party pursuant to an Acquisition Transaction in which Licensor is
the party being acquired or whose assets are being acquired in such transaction.
Subject to the above provisions of this subsection 11.3, the terms and
conditions of this Agreement will inure to the benefit of Licensor, Licensee,
and their respective successors, assigns and other legal representatives, and
will be binding upon each of Licensor, Licensee and their respective successors,
assigns, and other legal representatives.
|
11.4 |
Term and Termination |
The term of this Agreement (the “Term“) will
commence on the Effective Date and will continue in effect until the last of the
Patents expires, or it will continue such longer time as may be necessary as
determined at Licensee153s sole and absolute discretion, to permit Licensee to
fully enforce and protect its rights under the Patents for any action or
proceeding for infringement arising before such expiration (provided that
Licensee153s obligation to pay Profit Participation, if any, in connection with
such action or proceeding shall likewise continue in effect).
Subject to the provisions of subsection 11.6, in the event of a Payment
Breach by Licensee, or of a material breach of this Agreement by Licensor, the
nonbreaching party will be entitled to terminate the Term by written notice to
the breaching party, if such breach is not cured within ten (10) business days
(for a Payment Breach) and sixty (60) days (for non-monetary breaches) after
written notice specifying the breach is given to the breaching party. Such
circumstances in the foregoing sentence shall be the sole basis for termination
of this Agreement by either party. For purposes of this provision, a “Payment
Breach” is defined as failure by Licensee or an Affiliate of Licensee (a) to
make the payments required to be made to Licensor under the schedule set forth
on Schedule 2.1, or (b) to make any payment that Licensee and/or its Affiliates
have determined, in accordance with subsections 2.3, 2.4, 2.5 and 2.7 of this
Agreement, is due and payable to Licensor.
|
11.5 |
Survival/Effect of Termination |
No termination of the Term will relieve a breaching party of its obligations
arising prior to such termination.
In the event of termination of this Agreement under subsection 11.4, (a) the
license set forth in subsection 1.1 of this Agreement will terminate with
respect to all Patents licensed thereunder, and (b) with respect to each Patent
to which Licensee has acquired title pursuant to Sections 3 or 4 of the Patent
Rights Agreement, Licensee shall use commercially reasonable efforts to assign
all right, title and interest in such Patent to Licensor as soon as reasonably
practicable, subject (in each case of clauses (a) and (b) above) to all of the
conditions set forth with respect to the release or assignment of Released
Patents in subsection 5.4(c) of this Agreement. Licensee agrees to reasonably
cooperate with the recording of transfer of title of such Patents to Licensor,
provided that Licensor shall bear all expenses (and shall reimburse Licensee for
all of its expenses) relating to such transfer.
In the event of termination of this Agreement by Licensor following a Payment
Breach by Licensee, Licensee shall continue to be obligated to pay Licensee
Profits, if any, generated by any Revenue that may be paid to Licensee after
such termination with respect to any sublicenses, covenants not to sue or other
encumbrances under the Patents granted by Licensee or any Affiliate of Licensee
at or after the Closing and prior to such termination.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
|
11.6 |
Remedies |
Licensor153s sole and exclusive remedy in the event of any claim, dispute, or
controversy under this Agreement, other than a Payment Breach, will be the
recovery of money damages, subject to the disclaimer and limitations set forth
in this Agreement, including, without limitation, those in subsections 9.1, 9.2
and 9.3.
|
11.7 |
Export Controls |
It is understood and agreed that to the extent Licensor is subject to United
States laws and regulations controlling the export of technical data, computer
software, laboratory prototypes, and other commodities (including the Arms
Export Control Act, as amended, and the Export Administration Act of 1979), its
obligations hereunder are contingent on compliance with applicable United States
export laws and regulations. The transfer of certain technical data and
commodities may require a license from the cognizant agency of the United States
Government and/or written assurances by Licensee that Licensee will not export
data or commodities to certain foreign countries without prior approval of such
agency. Licensor neither represents that a license will not be required nor
that, if required, it will be issued.
|
11.8 |
Governing Law |
Any claim arising under or relating to this Agreement will be governed by the
laws of the State of Delaware, without regard to choice of law principles to the
contrary.
|
11.9 |
Dispute Resolution |
Except for the payment of the License Issue Fee set forth in subsection 2.1
and as provided under subsection 11.1, the parties hereby waive their respective
rights to seek remedies in court, and will resolve any and all claims, disputes,
or controversies relating in any way to, or arising out of, this Agreement,
including, without limitation, any breach or threatened breach of this
Agreement, the amount of the Profit Participation due under this Agreement, or
the calculation of Profit (“Disputes”), as follows:
(a) The party raising the Dispute shall promptly provide the other party with
a written notice describing the nature of the Dispute in reasonable detail
(a “Dispute Notice”). During the thirty (30) day
period after a party153s receipt of a Dispute Notice, the parties will commence
discussions to attempt to resolve the Dispute.
(b) If the parties cannot timely resolve the Dispute through negotiation,
before resorting to arbitration the parties will try in good faith to settle the
Dispute by mediation before a mutually agreed mediator in Seattle, Washington.
The mediation will be conducted in English and administered by the American
Arbitration Association (“AAA”) under its Commercial
Mediation Procedures. If the parties are unable to agree upon a mutually
acceptable mediator, the AAA will appoint a qualified mediator. The mediation
proceeding shall take place on the earliest practicable date following the
submission of a request for mediation by either party, which request shall be
submitted within sixty (60) days after a party153s receipt of a Dispute Notice.
(c) If the Dispute is not resolved through mediation within thirty (30) days
after the mediation hearing, the parties will submit the Dispute to final and
binding arbitration
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
administered by the AAA under its Commercial Arbitration Rules. The
arbitrator may enter a default decision against any party who fails to
participate in the arbitration proceedings.
(i) The arbitration will be conducted before a mutually agreed panel of three
(3) neutral arbitrators in Seattle, Washington. If the parties are unable to
agree upon a mutually acceptable panel of three (3) arbitrators, the panel will
be selected by the AAA.
(ii) The arbitration hearing will be conducted in English, and under no
circumstances will the arbitration hearing extend for more than one (1) business
day. The award shall be rendered within one hundred twenty (120) days of the
demand and the arbitrators shall agree to comply with this schedule before
accepting appointment. The parties have included these time limits to expedite
the proceeding, but they are not jurisdictional, and the arbitrator may for good
cause permit reasonable extensions which shall not affect the validity of the
award.
(iii) All documents and information relevant to the Dispute in the possession
of any party shall be made available to the other party not later than sixty
(60) days after the demand for arbitration is served, and the arbitrator may
permit such depositions or other discovery deemed necessary for a fair hearing.
(iv) The parties agree that the arbitration method to be employed by the
parties will be “baseball arbitration,” in which case each party will submit to
the arbitrators and exchange with each other in advance of the hearing their
last, best offers and the arbitrators will be limited to awarding only one or
the other of the two figures submitted.
(v) The arbitrators153 award may be entered and enforced in any court with
competent jurisdiction and will be nonappealable. Such decision may be used in a
court of law only for the purpose of seeking enforcement of the arbitrator153s
decision permitted under this Agreement.
(vi) The award shall be in writing, shall be signed by a majority of the
arbitrators, and shall include a statement setting forth the reasons for the
disposition of any claim.
(vii) The costs of the arbitration proceeding, including reasonable
attorneys153 fees and costs, will be determined by the arbitrators, who may
apportion costs equally, or in accordance with any finding of fault or lack of
good faith of either party.
(viii) To the fullest extent permitted by law, no arbitration under this
Agreement shall be joined to any other arbitration, and no class arbitration
proceedings shall be permitted.
(ix) Except as may be required by law, neither a party nor any arbitrator may
disclose the existence, content, or results of any arbitration hereunder without
the prior written consent of both parties.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
|
11.10 |
Notices and Payment Delivery |
All notices required or permitted to be given hereunder will be in writing,
will make reference to this Agreement and will be delivered by hand, or
dispatched by prepaid air courier to the addresses set forth on the cover page
of this Agreement. Such notices will be deemed given when received by addressee
or, if delivery is not accomplished by reason of some fault of the addressee,
when tendered for delivery. Either party may give written notice of a change of
address to the other. After notice of such change has been received, any notice
or request will thereafter be given to such party at such changed address.
|
11.11 |
Severability |
If any provision of this Agreement is found to be invalid or unenforceable,
then the remainder of this Agreement will have full force and effect, and the
invalid provision will be modified, or partially enforced, to the maximum extent
permitted to effectuate the original objective.
|
11.12 |
Waiver |
Failure by either party to enforce any term of this Agreement will not be
deemed a waiver of future enforcement of that or any other term in this
Agreement or any other agreement that may be in place between the parties.
|
11.13 |
Miscellaneous |
This Agreement, including its exhibits and schedules, together with the other
Transaction Agreements, constitute the entire agreement between the parties with
respect to the subject matter hereof and merge and supersede all prior and
contemporaneous agreements, understandings, negotiations, and discussions.
Neither of the parties will be bound by any conditions, definitions, warranties,
understandings, or representations with respect to the subject matter hereof
other than as expressly provided in this Agreement or in the other Transaction
Agreements. The section headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement. This Agreement is not intended to confer any right or benefit on
any third party (including, but not limited to, any employee or beneficiary of
any party), and no action may be commenced or prosecuted against a party by any
third party claiming as a third-party beneficiary of this Agreement or any of
the transactions contemplated by this Agreement. No oral explanation or oral
information by either party hereto will alter the meaning or interpretation of
this Agreement. No amendments or modifications will be effective unless in
writing and signed by authorized representatives of both parties; provided,
however, that, after the Closing, Licensee may update Schedule
A to include any patents or patent applications within the
definition of Patents, based on its review of the Deliverables as defined in
subsection 3.1, by providing updated Schedule A to
Licensor. The terms and conditions of this Agreement and the other Transaction
Agreements will prevail notwithstanding any different, conflicting or additional
terms and conditions that may appear on any letter, email or other communication
or other writing not expressly incorporated into this Agreement.
|
11.14 |
Counterparts; Electronic Signature |
This Agreement may be executed in counterparts, each of which will be deemed
an original, and all of which together constitute one and the same instrument.
Each party will execute
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
and promptly deliver to the other parties a copy of this Agreement bearing
the original signature. Prior to such delivery, in order to expedite the process
of entering into this Agreement, the parties acknowledge that a Transmitted Copy
of this Agreement will be deemed an original document. “Transmitted Copy” means
a copy bearing a signature of a party that is reproduced or transmitted via
email of a .pdf file, photocopy, facsimile, or other process of complete and
accurate reproduction and transmission.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE A
LIVE ASSETS
*****[omitted]
SCHEDULE B
MEMORANDUM OF EXCLUSIVE LICENSE/RIGHTS
Digimarc Corporation, an Oregon corporation, having offices at 9405 SW Gemini
Drive, Beaverton, OR 97008, (“Licensor“), has granted
to IV Digital Multimedia Inventions LLC, a Delaware limited liability company,
having an office at 2711 Centerville Road, Suite 400, Wilmington, DE 19808
(“Licensee“), the exclusive, worldwide, transferable,
sublicensable license of all its rights of any kind conferred by the patents,
patent applications, and provisional patent applications listed in the
attached Appendix, including, without limitation, the
rights of any kind to, or conferred by, the Patents (defined below) to (a) use
or otherwise practice any art, methods, processes, and procedures covered by the
Patents, (b) make, have made, use, offer to sell, sell, import, and otherwise
distribute or dispose of any inventions, discoveries, products, services,
technologies or services covered by the Patents, (c) otherwise exploit any
rights granted in the Patents and/or any invention or discovery described in the
Patents, and (d) exclude other Persons from exercising any of such rights.
The “Patents” include all right, title, and interest that exist today and may
exist in the future in and to any and all of the provisional patent
applications, patent applications and patents listed in the
attached Appendix and any and all applications,
patents, certificates, models, protections, grants, and/or issuances resulting
from the rights granted in subsection (a) below.
Licensor has also assigned, transferred and conveyed to Licensee all right,
title, and interest in and to:
(a) rights to apply in any or all countries of the world for patents,
certificates of invention, utility models, industrial design protections, design
patent protections, or other governmental grants or issuances of any type
related to any of the Patents and the inventions and discoveries therein
including the right to claim priority to any of the Patents (including, without
limitation, continuation, division and continuation-in-part priority), with the
resulting applications, patents, certificates, models, protections, grants,
and/or issuances also being included under the definition of Patents;
(b) all causes of action and enforcement rights of any kind (whether such
claims, causes of action or enforcement rights are known or unknown; currently
pending, filed, to be filed, or otherwise) under the Patents and/or under or on
account of any of the Patents for past, current and future infringement of the
Patents, including without limitation, all rights to (i) pursue and collect
damages, profits and awards of whatever nature recoverable, (ii) injunctive
relief, (iii) other remedies, and (iv) compromise and/or settle all such claims,
causes of action and enforcement rights, for such infringement by granting an
infringing party a sublicense or otherwise; and
(c) rights to collect royalties or other payments under or on account of any
of the Patents or any of the foregoing.
SCHEDULE B
The preparation, filing, prosecution, maintenance and defense of the Patents
will be under Licensee153s exclusive control and discretion, in all pertinent
governmental patent offices anywhere in the world.
Licensor hereby irrevocably grants Licensee the exclusive power to grant one
or more powers of attorney with respect to the Patents and the exclusive
discretion to transfer that right to Licensee153s agent(s) or representative(s)
that Licensee may designate one or more time, now or in the future. Licensor
understands that execution of this document confers on any attorney(s) or
agent(s) to whom Licensee may grant a power of attorney the exclusive right to
correspond with any patent office with repect to the Patents, and that this
document does not create an attorney – client relationship with such
practitioners to whom Licensee grants powers of attorney pursuant to this
paragraph.
IN WITNESS WHEREOF this Memorandum of Exclusive License/Rights is executed at
Beaverton, Oregon on October 5, 2010.
|
LICENSOR: |
||
|
DIGIMARC CORPORATION |
||
|
By: |
||
|
Robert Chamness |
||
|
Chief Legal Officer and Secretary |
||
|
STATE OF OREGON |
) |
|
|
) ss. |
||
|
COUNTY OF WASHINGTON |
) |
ATTESTATION OF SIGNATURE PURSUANT TO 28 U.S.C. § 1746
The undersigned witnessed the signature of Robert Chamness to the above
Assignment of Patent Rights on behalf of Digimarc Corporation and makes the
following statements:
1. I am over the age of 18 and competent to testify as to the facts in this
Attestation block if called upon to do so.
2. Robert Chamness is personally known to me (or proved to me on the basis of
satisfactory evidence) and appeared before me on October 5, 2010 to
SCHEDULE B
execute the above Assignment of Patent Rights on behalf of Digimarc
Corporation.
3. Robert Chamness subscribed to the above Assignment of Patent Rights on
behalf of Digimarc Corporation.
I declare under penalty of perjury under the laws of the United States of
America that the statements made in the three(3) numbered paragraphs immediately
above are true and correct.
EXECUTED on October 5, 2010
_________________________________________
Print Name:_______________________________
SCHEDULE B
APPENDIX
******** [omitted]
SCHEDULE C
TRANSFER OF RIGHTS IN ABANDONED ASSETS
Digimarc Corporation, an Oregon corporation, having offices at 9405 SW Gemini
Drive, Beaverton, OR 97008, (“Licensor“), has granted
to IV Digital Multimedia Inventions LLC, a Delaware limited liability company,
having an office at 2711 Centerville Road, Suite 400, Wilmington, DE 19808
(“Licensee“), the exclusive, worldwide, transferable,
sublicensable license of all its rights of any kind conferred by the patents,
patent applications, and provisional patent applications listed in the
attached Appendix.
Licensor assigns to Licensee the rights, if any, to revive prosecution of
claims under such assets and to sue or otherwise enforce any claims under such
assets for past, present or future infringement.
Licensor hereby authorizes the respective patent office or governmental
agency in each jurisdiction to make available to Licensee all records regarding
the Abandoned Assets.
DATED this 5th day of October, 2010.
|
LICENSOR: |
||
|
DIGIMARC CORPORATION |
||
|
By: |
||
|
Robert Chamness |
||
|
Chief Legal Officer and Secretary |
||
SCHEDULE C
APPENDIX
******** [omitted]
SCHEDULE D
LIST OF DELIVERABLES
Licensor will cause the following to be delivered to Licensee, or Licensee153s
representative, within 14 days of closing for files necessary to respond to
final deadlines of actions due for Live Assets within three months after
closing, and for remaining items pertaining to Live Assets within 45 days of
closing, and for remaining items pertaining to Abandoned Assets, within 45 days
of a request by Licensee, but no earlier than 90 days after closing:
(a) U.S. Patents. For each item of the Patents that is an issued
United States patent, and for each Abandoned Asset to which any Live Asset
claims priority to such issued U.S. patent (whether a patent or similar
protection has been issued or granted), a copy of
|
(i) |
Assignment Agreement(s), |
|
(ii) |
conception and reduction to practice materials, and |
|
(iii) |
the publicly available file history for Abandoned Assets (to be obtained in |
|
(iv) |
the Docket, |
|
(v) |
each relevant license and security agreement; |
(b) U.S. Patent Applications. For each item of the Patents that is a
U.S. patent application, a copy of
|
(i) |
the patent application, as filed, |
|
(ii) |
if unpublished, a copy of the filing receipt and the non-publication request, |
|
(iii) |
the Assignment Agreement(s), |
|
(iv) |
the Docket, |
|
(v) |
all available conception and reduction to practice materials, |
|
(vi) |
evidence of foreign filing license (or denial thereof), |
|
(vii) |
each relevant license and security agreement, and |
|
(viii) |
the Prosecution History Files; |
(c) Common Interest Agreement. Licensor will deliver any Initial
Deliverables to be delivered by Licensor under paragraph (b) above to Licensee153s
legal counsel, together with two (2) executed originals of the Common Interest
Agreement.
(d) Non-U.S. For each Live Asset for which a non-United States patent
or similar protection has been issued or granted, a copy of
|
(i) |
the certificate for patent prosecution issued by the applicable government, |
|
(ii) |
each pending foreign application |
|
(iii) |
the Docket, |
|
(iv) |
the Assignment Agreement(s), |
|
(v) |
applicant name change, if necessary, and |
|
(vi) |
each relevant license and security agreement. |
(e) Thorough Search/Declaration. If originals of the Initial
Deliverables are not available and the required copies are not delivered to
Licensee prior to Closing, Licensor will cause (i) such copies of the Initial
Deliverables to be sent to Licensee or Licensee153s representative promptly if and
after such originals are located and (ii) an appropriate executive officer of
Licensor to deliver to Licensee a declaration, executed by such officer under
penalty of perjury, detailing Licensor153s efforts to locate such unavailable
original documents and details regarding how delivered copies were obtained.
Capitalized terms used in this Schedule D are defined in the Patent License
Agreement to which this Schedule D is attached.
SCHEDULE D
SCHEDULE 2.1
PAYMENT SCHEDULE FOR LICENSE ISSUE FEE
|
Date |
Payment |
|||
|
Closing |
$ |
2,600,000 |
||
|
November 15, 2010 |
$ |
2,675,000 |
||
|
February 15, 2011 |
$ |
2,750,000 |
||
|
May 16, 2011 |
$ |
2,825,000 |
||
|
August 15, 2011 |
$ |
2,875,000 |
||
|
November 15, 2011 |
$ |
2,950,000 |
||
|
February 15, 2012 |
$ |
3,025,000 |
||
|
May 15, 2012 |
$ |
3,100,000 |
||
|
August 15, 2012 |
$ |
3,175,000 |
||
|
November 15, 2012 |
$ |
3,250,000 |
||
|
February 15, 2013 |
$ |
3,350,000 |
||
|
May 15, 2013 |
$ |
3,425,000 |
||
SCHEDULE 2.1
SCHEDULE 2.3
PORTFOLIO MONETIZATION ALLOCATION METHODOLOGY
Licensee and/or its Affiliates will rank each of the patents and patent
applications included in the Portfolio Monetization as of the date of the
applicable Portfolio Monetization in one of the following four categories:
Category R1: patents and patent applications actually asserted against the
licensee and discussed in detail during the discussions leading to the Revenue
(i.e., named, analyzed and discussed in the assertion materials and
negotiations);
Category R2: patents and patent applications specifically mentioned but not
discussed in detail in the discussions leading to the Revenue (i.e., listed as
one of the patents that the licensee might infringe or need to license);
Category R3: patents and patent applications in the same patent class code as
one or more R1 or R2 patents and patent applications (i.e., not asserted or
specifically mentioned, but, as evidenced by its class code, may have been
infringed or needed to be licensed by the licensee); and
Category R4: all other patents and patent applications included in the
Portfolio Monetization.
Portfolio Profit will be allocated among the patents and patent applications
included in the Portfolio Monetization according to the following formula
(except, and to the extent, a Portfolio Monetization specifically assigns
allocations otherwise):
P = R * (VA/PN)
Where:
P = Portfolio Profit allocated to each patent and/or patent application
included in a Portfolio Monetization in one of the four categories
R = Portfolio Profit
VA = Value Allocation for that patent category (see below)
PN = Aggregate number of patents or patent applications from that
category included in the Portfolio Monetization
The Value Allocations for the four categories are:
R1 = 55%
R2 = 27.5%
R3 = 13.75%
R4 = 3.75%
SCHEDULE 2.3
EXHIBIT A
COMMON INTEREST AGREEMENT
THIS COMMON INTEREST AGREEMENT (“Agreement”) is entered into
between the undersigned legal counsel, for themselves and on behalf of the
parties they represent (as indicated below).
|
1. |
Background. |
1.1 Invention Law Group, P.C. and IV Digital Multimedia Inventions, LLC, a
Delaware limited liability company (collectively the “IV
Entities“), and Digimarc Corporation
(“Digimarc”) (the IV Entities and Digimarc are sometimes
hereafter referred to herein as a “party” or the
“parties”), have entered into a Patent License Agreement and
other transaction agreements with respect to certain patents (including their
patent applications filed or to be filed throughout the world). This transaction
will at least generate patent prosecution, patent portfolio monetization and
patent licensing work (the “Patent Matters”).
1.2 The parties have a common interest concerning the Patent Matters and have
agreed to treat their communications and those of their respective legal Counsel
(“Counsel“) concerning the Patent Matters as protected by the
common interest privilege. Furtherance of the Patent Matters requires the
exchange of proprietary documents and information, the joint development of
legal strategies and the exchange of attorney work product developed by the
parties and their respective Counsel.
|
2. |
Common Interest. |
2.1 The parties have a common, joint and mutual legal interest in cooperating
with each other, to the extent permitted by law, to share information that one
party asserts is protected by the attorney-client privilege and/or by the work
product doctrine with respect to the Patent Matters. The parties shall cause any
Counsel who may participate in this Agreement to be bound by its terms.
2.2 In order to further their common interest, the parties and their Counsel
may exchange their own privileged and work product information, orally and in
writing, including, without limitation, factual analyses, mental impressions,
legal memoranda, source materials, draft legal documents, prosecution history
files, analysis of the validity or infringement of patent claims and other
information (hereinafter “Common Interest Materials”). The sole
purpose for the exchange of the Common Interest Materials is to support the
parties153 common interest with respect to the Patent Matters. Any Common Interest
Materials exchanged shall continue to be protected under all applicable
privileges and no such exchange shall constitute a waiver of any applicable
privilege or protection.
|
3. |
Relationship; Additions; Termination. |
3.1 This Agreement does not create any agency or similar relationship among
the parties. Neither party nor their respective Counsel has the authority to
waive any applicable privilege or doctrine on behalf of any other party.
3.2 Nothing in this Agreement affects the separate and independent
representation of each party by its respective Counsel or creates an attorney
client relationship between the Counsel for a party and the other party to this
Agreement.
3.3 This Agreement shall continue until the earlier of:
(a) the end of the term, or termination by either party, of the Patent
License Agreement; or
(b) until such time as either party exercises its ability to withdraw from
and terminate the Agreement by thirty (30) days written notice if, in either
parties153 reasonable judgment, the interests of the parties are no longer
sufficiently aligned to have a common interest concerning the Patent Matters.
3.4 Notwithstanding termination, this Agreement shall continue to protect all
Common Interest Materials disclosed prior to termination. Sections 3 and 4 shall
survive termination of this Agreement.
|
4. |
General Terms. |
4.1 This Agreement is governed by the laws of the State of Washington,
without regard to its choice of law principles to the contrary. In the event any
provision of this Agreement is held by any court of competent jurisdiction to be
illegal, void or unenforceable, the remaining terms shall remain in effect.
Failure of either party to enforce any provision of this Agreement shall not be
deemed a waiver of future enforcement of that or any other provision.
4.2 The parties agree that a breach of this Agreement may result in
irreparable injury, that money damages would not be a sufficient remedy and that
the disclosing party shall be entitled to seek equitable relief, including
injunctive relief, as a non-exclusive remedy for any such breach.
4.3 Notices given under this Agreement shall be given in writing and
delivered by messenger or overnight delivery service to a party and their
respective Counsel at their last known address, and shall be deemed to have been
given on the day received.
4.4 This Agreement is effective and binding upon each party as of the date it
is signed by or on behalf of a party and may be amended only by a writing signed
by or on behalf of each party. This Agreement may be executed in counterparts.
Any signature reproduced or transmitted via email of a .pdf file, photocopy,
facsimile or other process of complete and accurate reproduction and
transmission shall be considered an original for purposes of this Agreement.
EXHIBIT A
This Agreement is being executed by each of the undersigned Counsel with the
fully informed authority and consent of the respective party it represents.
|
Counsel for Digimarc Corporation |
||
|
By: |
||
|
Robert Chamness |
||
|
Chief Legal Officer and Secretary |
||
|
October 5, 2010 |
||
|
Counsel for Invention Law Group, P.C. |
||
|
By: |
||
|
John Bove |
||
|
Date: |
||
|
Counsel for IV Digital Multimedia Inventions, LLC |
||
|
By: |
||
|
Thomas J. Hall |
||
|
Date: |
||
[Signature Page to Common Interest Agreement]
EXHIBIT A
EXHIBIT C
JOINT PRESS RELEASE
********* [omitted]
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