{"id":42657,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/patent-license-agreement-international-business-machines-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"patent-license-agreement-international-business-machines-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/patent-license-agreement-international-business-machines-corp.html","title":{"rendered":"Patent License Agreement &#8211; International Business Machines Corp. and Uniphase Corp."},"content":{"rendered":"<pre> PATENT LICENSE AGREEMENT (\"Agreement\") with an Effective\nDate of March 10, 1997 between INTERNATIONAL BUSINESS MACHINES CORPORATION,\na New York corporation (\"IBM\"), and UNIPHASE CORPORATION, a Delaware\ncorporation (\"LICENSEE\").\n\n     Contemporaneously with the execution of this Agreement, the parties\nhave entered into a Technology License Agreement which includes, in part, a\nlicense under certain technology owned by IBM to manufacture and sell\nRoyalty-Bearing Products (as defined in such Technology License Agreement).\nThe exercise of such technology license by LICENSEE may require a license\nunder the IBM patents listed in Exhibit 1 (the \"Licensed Patents\").\nLICENSEE desires to acquire a nonexclusive license under the Licensed\nPatents for such Royalty-Bearing Products.\n\nIn consideration of the premises and mutual covenants herein contained, IBM\nand LICENSEE agree as follows:\n\nSection 1.  Definitions\n1.1  \"Patented Portion\" shall mean that portion of a Product which:\n(a)embodies or uses all the elements or steps recited in any one Claim of\n     one Licensed Patent; or\n(b)is manufactured by use of all the steps recited in any one Claim of one\n     Licensed Patent.\n\n1.2  \"Products\" shall mean semiconductor laser chips other than Royalty-\nFree Products (as defined in the Technology License Agreement).\n\n1.3  \"Selling Price\" shall mean the actual selling price to unaffiliated\ncustomers, and the greater of actual selling price or fair market value in\nsales to affiliated customers; provided that in either case the Selling\nPrice shall be reduced for discounts, taxes, transportation fees and other\nunreimbursed charges paid by LICENSEE or its Subsidiaries in connection\nwith the sale of Products.\n\n1.4  \"Subsidiary\" shall mean a corporation, company or other entity:\n(a)more than fifty percent (50%) of whose outstanding shares or securities\n     (representing the  right to vote for the election of directors or\n     other managing authority) are, now or hereafter, owned or controlled,\n     directly or indirectly, by a party hereto, or\n(b)which does not have outstanding shares or securities, as may be the case\n     in a partnership, joint venture or unincorporated association, but\n     more than fifty percent (50%) of whose ownership interest representing\n     the right to make the decisions for such corporation, company or other\n     entity is now or hereafter, owned or controlled, directly or\n     indirectly, by a party hereto, but such corporation, company or other\n     entity shall be deemed to be a Subsidiary only so long as such\n     ownership or control exists.\n\n1.5  \"Claim\" shall mean an allowed claim under a Licensed Patent that has\nnot expired or been adjudicated invalid.\n\nSection 2.     License\n2.1  IBM grants to LICENSEE and its Subsidiaries a nonexclusive license\nunder the Licensed Patents to make, use, import, offer to sell, sell and\notherwise transfer Products.  The license as to any Subsidiary shall\nterminate on the date such Subsidiary ceases to be a Subsidiary.\nAdditionally, subject to Section 2.4, IBM grants to LICENSEE and its\nSubsidiaries a nonexclusive license under the Licensed Patents the right to\nhave LICENSEE's Products made by another manufacturer for the use and\/or\nlease, sale or other transfer only by LICENSEE and its Subsidiaries.  Such\nlicense shall further include the right to incorporate Products as\ncomponents, subassemblies or subsystems in other products manufactured\nand\/or sold by LICENSEE and its Subsidiaries.\n\n2.2  No license is granted pursuant to Section 2.1 with respect to any\nparticular Product, unless:\n(a)a Licensed Patent defines a Patented Portion of said Product;\n(b)said Licensed Patent is identified in a report as covering said Product,\n     if required by Section 4.5; and\n(c)either the royalty attributable to said Product is paid as required by\n     Section 4.2, or a late payment of said royalty is made and accepted by\n     IBM pursuant to Section 4.4.\n\n2.3  No license, immunity or other right is granted under this Agreement,\neither directly or by implication, estoppel, or otherwise:\n(a)other than under the Licensed Patents;\n(b)with respect to any item other than a Product notwithstanding that such\n     other item may incorporate one or more Products; or\n(c)to parties acquiring any item from LICENSEE or its Subsidiaries for the\n     combination of such acquired item with any other item, including other\n     items provided by LICENSEE or its Subsidiaries, or for the use of any\n     such combination even if such acquired item has no substantial use\n     other than as part of such combination.\n\n2.4  The license to have Products made granted in Section 2.1 to LICENSEE:\n(a)  shall only apply when the specifications for LICENSEE's Products were\n     created by LICENSEE (either solely or jointly with one or more third\n     parties);\n(b)  shall only be under Claims of Licensed Patents, the infringement of\n     which would be necessitated by compliance with such specifications;\n(c)  shall not be under Claims for a method or process unless such method\n     or process is based upon technology created by LICENSEE (either solely\n     or jointly with one or more third parties) or otherwise licensed by\n     IBM to LICENSEE; and\n(d)  shall not apply to any Products in the form manufactured or marketed\n     by said other manufacturer prior to LICENSEE furnishing said\n     specifications.\n\n     Unless LICENSEE informs IBM to the contrary, LICENSEE shall be deemed\nto have authorized said other manufacturer to make LICENSEE's Products\nunder the license granted to LICENSEE in Section 2.1 when the condition\nspecified in Section 2.4(a) is fulfilled.  In response to a written request\nidentifying a Product and a manufacturer, LICENSEE shall in a timely manner\ninform IBM of the quantity of such Product, if any, manufactured by such\nmanufacturer pursuant to the license granted in Section 2.1.\n\n2.5  LICENSEE shall have the right to exercise any license rights granted\nhereunder through any Subsidiary, and any reference in this Section 2 to\nLICENSEE shall be deemed to refer to any Subsidiary through which LICENSEE\nshall so exercise such license rights.\n\nSection 3.   Payment\n3.1  LICENSEE, on behalf of itself and its Subsidiaries, shall pay a\nroyalty for each Product which contains a Patented Portion at a rate\ncomputed at the following percentages of Selling Price of such Product:\n\n      Number of Licensed Patents     Percentage of\n      Covering the Product           Selling Price\n\n                1                         1%\n                2                         2%\n                3                         3%\n                4                         4%\n                5 or more                 5%\n\nFor the purposes of this Section 3.1, a Licensed Patent and its\ncorresponding patents in other countries, listed in Exhibit 1, shall be\ndeemed to be one Licensed Patent.\n\nRoyalties shall only be payable on one occasion for each Product\nmanufactured and sold by LICENSEE or its Subsidiaries.  To the extent a\nProduct consisting of a semiconductor laser chip, which is subject to\nLICENSEE's royalty obligations pursuant to this Section 3.1, is\nincorporated as a component, subassembly or subsystem in another product,\nthe Selling Price shall be determined based on the published list price (or\nif no such published list price exists, the fair market value) of such\nsemiconductor laser chip exclusive of any other portion of the product that\ndoes not contain Patented Portions.\n\n3.2  Subject to Section 3.4, no royalties shall be paid by LICENSEE with\nrespect to Products which LICENSEE purchases from a third party licensed\nunder all of the Licensed Patents to sell such Products, and for which\nProducts a royalty or other consideration was paid to IBM.\n\n3.3  If LICENSEE purchases from a third party portions of a Product and\ncombines such portions with each other and\/or with other portions such that\nthe combination is itself a Product which includes a Patented Portion not\nfully included in any individual purchased portion, then royalty shall be\ndue for the combination in accordance with this Section 3, whether or not\nsaid third party is authorized by IBM to sell said purchased portions.\n\n3.4  Any semiconductor laser chip that would otherwise be subject to\nLICENSEE's royalty obligations pursuant to this Section 3 shall not be\nsubject to such royalty obligations if such chip is sold by LICENSEE (or\nany Subsidiary of LICENSEE authorized to exercise LICENSEE's license rights\nhereunder pursuant to Section 2.5 hereof) to a customer that is licensed by\nIBM at the time of such sale as to the Patented Portion that would\notherwise give rise to such royalty obligation; provided such customer\nnotifies LICENSEE, in writing at or prior to the time of such sale, that it\nis exercising its own \"have made\" rights as to such Patented Portion, and\nLICENSEE notifies IBM, of its intention to excercise such exclusion from\nits royalty obligation in the royalty report for such reporting period.\n\nSection 4.     Accruals, Records, Reports and Other Information\n4.1  Royalties shall accrue when a Product, with respect to which royalty\npayments are required by this Agreement, is first sold or otherwise\ntransferred (including, sold or otherwise transferred to IBM or any of its\nSubsidiaries), or first used in each country of use, by or for LICENSEE or\nany of its Subsidiaries.\n\n4.2  LICENSEE's accounting period shall be semiannual and end on the last\nday of each June and December during the term of this Agreement.  Within\nsixty (60) days after the end of each such period, LICENSEE shall furnish\nto IBM a written report containing the information specified in Section 4.5\nand shall pay to IBM all unpaid royalties accrued hereunder through the end\nof each such period.\n\n4.3  LICENSEE shall pay all royalties and other payments due hereunder in\nUS dollars.  All royalties for an accounting period computed in other\ncurrencies shall be converted into US dollars at the exchange rate for bank\ntransfers from such currency to US dollars as quoted by the head office of\nCitibank N.A., New York, USA, at the close of banking on the last day of\nsuch accounting period (or the first business day thereafter if such last\nday is a non-business day).\n\n4.4  IBM may accept a late payment provided such payment includes all\noverdue royalties or other payment plus interest. The interest on any\noverdue royalty or other payment shall be calculated commencing on the date\nsuch royalty or other payment became due, using an annual rate which is the\ngreater of ten percent (10%) or one percentage point higher than the prime\ninterest rate as quoted by the head office of Citibank N.A., New York, USA\nat the close of banking on such date, or on the first business day\nthereafter if such date falls on a non-business day.  If such interest rate\nexceeds the maximum legal rate in the jurisdiction where a claim therefor\nis being asserted, the interest rate shall be reduced to such maximum legal\nrate.\n\n4.5  LICENSEE's written report shall be certified by an officer of LICENSEE\nand shall contain the following information:\n(a)a description of each type of Product, the quantity sold or otherwise\n     transferred during the accounting period, and the sum of the Selling\n     Prices for such quantity;\n(b)identification of each Licensed Patent covering each such Product.\n     However, if LICENSEE pays royalties for the use of five (5) or more\n     Licensed Patents, LICENSEE shall have no obligation to identify the\n     Licensed Patents for that Product;\n(c)the amount of royalties due for each type of Product; and\n(d)the aggregate amount of all royalties due.\nIn the event that any of Sections 4.5(a) through 4.5(d) does not apply to\nan accounting period, LICENSEE shall so indicate.  In the event no\nroyalties are due, LICENSEE's report shall so state.\n\n4.6  For the purpose of determining obligations under IBM patents, LICENSEE\nshall, within thirty (30) days of a written request by IBM:\n(a)provide to or make available for inspection by IBM or its designee any\n     Product or a copy of any materials relevant to any Product identified\n     by IBM;\n(b)sell, license or otherwise transfer and deliver to IBM any Product at\n     any time offered for sale or transferred by LICENSEE; and\n(c)provide to IBM or its designee access to those manufacturing processes\n     used by LICENSEE in the manufacture of Products.\n\n4.7  LICENSEE shall keep records in accordance with generally accepted\naccounting principles and in sufficient detail to permit the determination\nof royalties due to IBM. Such records shall include, but not be limited to,\ndetailed records supporting the information provided under Section 4.5.\nSuch records shall be kept for six (6) years following the submission of\nthe related report.\n\nUpon written notice for an audit, LICENSEE shall permit auditors designated\nby IBM, together with such legal and technical support as IBM deems\nnecessary, to examine, during ordinary business hours, records, materials,\nand manufacturing processes of LICENSEE for the purpose of verifying\ncompliance with this Agreement.\n\nEach party shall pay the costs that it incurs in the course of the audit.\nHowever, in the event that the audit establishes underpayment greater than\nfive percent (5%) of the royalties due, LICENSEE shall reimburse IBM for\nthe cost of the audit; provided, however, such reimbursement shall not\nexceed the amount of the underpayment.\n\n4.8  IBM agrees that any statements or audit results furnished or otherwise\nmade available to or obtained by IBM pursuant to this Section 4.0 shall be\nsubject to equivalent confidentiality restrictions set forth in Section 3\nof the Technology License Agreement and shall not be disclosed by IBM for a\nperiod of three (3) years from the date of disclosure.\n\nSection 5.   Term; Termination\n5.1  The license granted herein shall remain in effect for a period of five\n(5) years from the Effective Date, unless earlier terminated under the\nprovisions of this Agreement.\n\n5.2  LICENSEE may terminate the license granted herein, in whole or as to\nany specified Licensed Patent by giving notice in writing to IBM; provided,\nhowever, that termination of the license as to any specified Licensed\nPatent shall include termination of the license as to all corresponding\nLicensed Patents in other countries. Any such termination shall be\nirrevocable.\n\n5.3  IBM shall have the right to terminate this Agreement, or the license\ngranted hereunder, if LICENSEE is more than fifty-thousand dollars\n($50,000) in arrears in its payment obligations or if LICENSEE fails, at\nany time to:\n(a)maintain records which substantially meets the requirements of Section\n     4.7;\n(b)make a report which substantially meets the requirements of Section 4.5;\n     or\n(c)permit an audit pursuant to Section 4.7; and\n\nif LICENSEE does not cure such breach within sixty (60) days after mailing\nof written notice from IBM to LICENSEE specifying the nature of such\nbreach; unless such breach is the subject of a good faith dispute between\nIBM and LICENSEE. IBM's termination of this Agreement or of the license\nshall be effective upon written notice.\n\n5.4  No termination of this Agreement or the license granted hereunder\nshall relieve LICENSEE of any obligation or liability accrued hereunder\nprior to such termination.\n\nSection 6.     Option Granted\n6.1  LICENSEE grants to IBM, the right to obtain a license to make, use,\nimport, offer to sell, sell and otherwise transfer any information handling\nsystem product.  Said license shall be on terms, including royalty rates,\nno less favorable than those granted to LICENSEE herein or in any amendment\nhereto.  Said right shall bewith respect to any patent under which LICENSEE\nor any of its Subsidiaries has the right to grant licenses to unaffiliated\nthird parties at any time on or before the Effective Date and shall be\nlimited to a number equivalent to the number of Licensed Patents licensed\nhereunder.\n\nSection 7.     Means of Payment and Communication\n7.1  Payment shall be made by electronic funds transfer.  Payments shall be\ndeemed to be made on the date credited to the following account:\n\n     IBM, Director of Licensing\n     The Bank of New York\n     48 Wall Street\n     New York, New York 10286\n     United States of America\n     Credit Account No.890-0209-674\n     ABA No. 0210-0001-8\n\n7.2  Notices and other communications shall be sent by facsimile or by\nregistered or certified mail to the following address and shall be\neffective upon mailing:\n\n     For IBM:                    For LICENSEE:\n     Director of Licensing       Director, Intellectual Property\n     IBM Corporation             Uniphase Corporation\n     500 Columbus Avenue         163 Baypointe Parkway\n     Thornwood, New York 10594   San Jose, CA  95134\n     Facsimile: (914) 742-6737   (408) 954-0540\n\n\n\n\nSection 8.     Miscellaneous\n8.1  LICENSEE shall not assign this Agreement, assign or sublicense any\nrights under it, nor delegate any of its obligations. Any attempt to do so\nshall be void.\n\n8.2  Both parties agree not to use or refer to this Agreement or any of its\nprovisions in any promotional activity.\n\n8.3  IBM shall not have any obligation hereunder to institute any action or\nsuit against third parties for infringement of any Licensed Patents or to\ndefend any action or suit brought by a third party which challenges or\nconcerns the validity of Licensed Patents.  LICENSEE shall not have any\nright to institute any action or suit against third parties for\ninfringement of any Licensed Patents.\n\n8.4  IBM represents and warrants that it has the full right and power to\ngrant the license set forth in Section 2.  IBM MAKES NO REPRESENTATIONS OR\nWARRANTIES, EXPRESS OR IMPLIED, NOR SHALL IBM HAVE ANY LIABILITY, IN\nRESPECT OF ANY INFRINGEMENT OF PATENTS OR OTHER RIGHTS OF THIRD PARTIES DUE\nTO LICENSEE'S OPERATION UNDER THE LICENSE HEREIN GRANTED.\n\n8.5  This Agreement shall not be binding upon the parties until it has been\nsigned hereinbelow by or on behalf of each party.  No amendment or\nmodification hereof shall be valid or binding upon the parties unless made\nin writing and signed as aforesaid.\n\n8.6  If any section of this Agreement is found by competent authority to be\ninvalid, illegal or unenforceable in any respect for any reason, the\nvalidity, legality and enforceability of any such section in every other\nrespect and the remainder of this Agreement shall continue in effect so\nlong as the Agreement still expresses the intent of the parties.  However,\nif the intent of the parties cannot be preserved, this Agreement shall be\neither renegotiated or terminated.\n\n8.7  This Agreement shall be construed, and the legal relations between the\nparties hereto shall be determined, in accordance with the law of the State\nof New York, USA, as such law applies to contracts signed and fully\nperformed in such State.\n\n8.8  The headings of sections are inserted for convenience of reference\nonly and are not intended to be part of or to affect the meaning or\ninterpretation of this Agreement.\n\nThis Agreement, including its Exhibit, and the Technology License Agreement\nof even date herewith, embody the entire understanding of the parties with\nrespect to the Licensed Patents, and replaces any prior oral or written\ncommunications between them.\n\n\nAgreed to:                         Agreed to:\nUNIPHASE CORPORATION               INTERNATIONAL BUSINESSMACHINES\nCORPORATION\n\nBy: \\s\\ Danny E. Pettit            By: \\s\\ Suzanne C. Lewis\nName: Danny E. Pettit              Name: Suzanne C. Lewis\nTitle: Vice President, Finance     Title: Business Development\n       and CFO                           Consultant\n\n                                 Exhibit 1\n\n\"Licensed Patents\" shall mean the following patents, patents issuing from\nthe following applications, and all patents which are reissues, divisions,\ncontinuations, or extensions of any of the following patents:\n\n  Patent\/Application          Issue or File\n     Number                        Date\n                                (DD\/MM\/YY)\n\n 4,246,548                       20\/01\/81\n 4,805,179                       14\/02\/89\n 4,901,329                       13\/02\/90\n 4,917,453                       17\/04\/90\n 4,971,927                       20\/11\/90\n 5,029,555                       09\/07\/91\n 5,032,219                       16\/07\/91\n 5,032,879                       16\/07\/91\n 5,0377,76                       06\/08\/91\n 5,059,552                       22\/10\/91\n 5,060,233                       22\/10\/91\n 5,100,220                       31\/03\/92\n 5,103,493                       07\/04\/92\n 5,111,468                       05\/05\/92\n 5,153,890                       06\/10\/92\n 5,172,365                       15\/12\/92\n 5,177,031                       05\/01\/93\n 5,185,289                       09\/02\/93\n 5,247,597                       21\/09\/93\n 5,259,049                       02\/11\/93\n 5,280,535                       18\/01\/94\n 5,284,792                       08\/02\/94\n 5,287,001                       15\/02\/94\n 5,307,357                       26\/04\/94\n 5,309,465                       03\/05\/94\n 5,311,539                       10\/05\/94\n 5,319,725                       07\/06\/94\n 5,327,415                       05\/07\/94\n 5,331,655                       19\/07\/94\n 5,344,746                       06\/09\/94\n 5,373,166                       13\/12\/94\n 5,376,582                       27\/12\/94\n 5,376,587                       27\/12\/94\n 5,414,293                       09\/05\/95\n 5,463,705                       31\/10\/95\n 5,498,973                       12\/03\/96\n 5,516,727                       14\/05\/96\n 5,594,749                       14\/01\/97\n Appl.721072                     26\/09\/96\n PCT\/IB97\/00055                  27\/01\/97\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7886,7935],"corporate_contracts_industries":[9516,9508],"corporate_contracts_types":[9613,9616],"class_list":["post-42657","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-international-business-machines-corp","corporate_contracts_companies-jds-uniphase-corp","corporate_contracts_industries-telecommunications__equipment","corporate_contracts_industries-technology__hardware","corporate_contracts_types-operations","corporate_contracts_types-operations__ip"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42657","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42657"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42657"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42657"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}