By signing a patent license from a federal laboratory, a business can manufacture or use the invention in their products with the right to bar others without a license from doing the same. A business who signs a patent license often also receives additional supporting materials, e. Each patent license agreement is individually negotiated between representatives from the respective federal laboratories and the prospective licensee business.
Patent license agreements with government laboratories are authorized and encouraged by federal law. And accessing government inventions is made as easy as possible by TechLink. A license to government-owned patent rights will be subject to terms and conditions similar to those set forth in the sample agreements in the links below.
Some language may be modified to address unique aspects of each situation. Financial terms, in particular, will be based on the individual technology being licensed, the commercialization plan of the licensee, and the industry field the licensee operates in. Generally, financial terms used in patent license agreements with defense labs are favorable to small businesses. An exclusive patent license agreement affords a single licensee business the rights to manufacture and sell a government invention for any commercial application worldwide.
A partially-exclusive license allows multiple companies to obtain rights to manufacture and sell a government invention but only in certain, specified commercial applications or in certain, defined geographic locations. Non-exclusive licenses can allow any number of companies to obtain the same government technology and use it in many different products or commercial applications and make it for sale in many different geographic locations.
The Licensee desires to acquire commercialization rights to certain of these inventions in order to develop processes, methods, or marketable products for public use and benefit. Model Page 3 of 36 [Final] [Icosavax, Inc. Food and Drug Administration, and any successor agency thereto. Model Page 4 of 36 [Final] [Icosavax, Inc. Patent applications including provisional patent applications and PCT patent applications or patents listed in Appendix A, all divisions and continuations of these applications, all patents issuing from these applications, divisions, and continuations, and any reissues, reexaminations, and extensions of all these patents;.
Licensed Patent Rights shall not include 2. Model Page 5 of 36 [Final] [Icosavax, Inc. Notwithstanding the foregoing, transfers of Licensed Product or practice of the Licensed Process internally among Licensee , its Affiliate s , or their respective sublicensees shall be exempt from the calculation of Net Sales , unless the recipient is an end user of the Licensed Product or Licensed Process.
The supply of Licensed Product or practice of Licensed Process as samples for charitable, or non-commercial purposes, for use in non-clinical or clinical trials, or any test or other studies reasonably necessary to comply with any applicable laws shall not be included in the calculation of Net Sales. Model Page 6 of 36 [Final] [Icosavax, Inc. Model Page 7 of 36 [Final] [Icosavax, Inc. The NIAID grants and the Licensee accepts, subject to the terms and conditions of this Agreement , a nonexclusive license under the Licensed Patent Rights to make and have made, to use and have used, and to import and have imported the Licensed Materials listed in Appendix B in the Licensed Field of Use.
For the sake of clarity, Licensee has no right to sell and have sold, or to offer to sell, Licensed Materials.
This Agreement confers no license or rights by implication, estoppel, or otherwise under any patent applications or patents of the NIAID other than the Licensed Patent Rights regardless of whether these patents are dominant or subordinate to the Licensed Patent Rights.
Model Page 8 of 36 [Final] [Icosavax, Inc. For the avoidance of doubt, the Licensee does not have the right to solely sublicense the Licensed Patent Rights. The Licensee does not have the right to sublicense the Licensed Materials listed in Appendix B but shall have the right to transfer the Licensed Materials to its Affiliates , sublicensees and third-party contractors pursuant to Section 3.
The Licensee further agrees to attach copies of these Paragraphs to all sublicense agreements. Any sublicenses granted by the Licensee shall provide for the termination of the sublicense, or the conversion to a license directly between the sublicensees and the NIAID , at the option of the sublicensee, upon termination of this Agreement under Article To the extent permitted by law, the NIAID agrees to maintain each sublicense agreement in confidence.
To the extent required under 35 U. Model Page 9 of 36 [Final] [Icosavax, Inc. A patent or patent application licensed under this Agreement shall cease to fall within the Licensed Patent Rights for the purpose of computing earned royalty payments in any given country on the earliest of the dates that:.
No multiple royalties shall be payable because any Licensed Products or Licensed Processes are covered by more than one of the Licensed Patent Rights. On sales of Licensed Products by the Licensee or its Affiliates or sublicensees on sales made in other than an arms-length transaction, the value of the Net Sales attributed under this Article 6 to this transaction shall be that which would have been received in an arms-length transaction in the same country, based on sales of like quantity and quality products on or about the time of this transaction.
Model Page 10 of 36 [Final] [Icosavax, Inc. With regard to unreimbursed expenses associated with the preparation, filing, prosecution, and maintenance of all patent applications and patents included within the Licensed Patent Rights and paid by the NIAID on or after the effective date of this Agreement , the NIAID , at its sole option, may require the Licensee :.
In that event, the Licensee shall directly pay the attorneys or agents engaged to prepare, file, prosecute, or maintain these patent applications or patents and shall provide the NIAID with copies of each invoice associated with these services as well as documentation that these invoices have been paid.
The Licensee agrees that all information provided by the NIAID related to patent prosecution costs shall be treated as confidential commercial information and shall not be released to a third party except as required by law or a court of competent jurisdiction. Model Page 11 of 36 [Final] [Icosavax, Inc. The NIAID agrees to take responsibility for the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in the Licensed Patent Rights.
The Licensee agrees to keep accurate and correct records of Licensed Products made, used, sold, or imported and Licensed Processes practiced under this Agreement appropriate to determine the amount of royalties due the NIAID. NIAID may conduct such inspection no more than once per calendar year and may inspect records from a particular reporting period only once. If an inspection shows an overpayment for any twelve 12 month reporting period, Licensee shall be entitled to credit the amount of such overpayment against any future non-patent prosecution royalty amounts owed by Licensee under this Agreement.
Model Page 12 of 36 [Final] [Icosavax, Inc. This Commercial Development Plan is hereby incorporated by reference into this Agreement. Based on this plan, performance Benchmarks are determined as specified in Appendix D. If reported progress differs from that projected in the Commercial Development Plan and Benchmarks , the Licensee shall explain the reasons for such differences. The NIAID shall not unreasonably withhold condition, or delay approval of any request of the Licensee to extend the time periods of this schedule if the request is supported by a reasonable showing by the Licensee of diligence in its performance under the Commercial Development Plan and toward bringing the Licensed Products to the point of Practical Application.
Model Page 13 of 36 [Final] [Icosavax, Inc. With each royalty report, the Licensee shall submit payment of earned royalties due. If no earned royalties are due to the NIAID for any reporting period, the written report shall so state.
Royalties due under Article 6 shall be paid in U. For conversion of foreign currency to U. The royalty report required by Paragraph 9. The Licensee shall be solely responsible for determining if any tax on royalty income is owed outside the United States and shall pay this tax and be responsible for all filings with appropriate agencies of foreign governments. The payment of any additional royalties shall not prevent the NIAID from exercising any other rights it may have as a consequence of the lateness of any payment.
Model Page 14 of 36 [Final] [Icosavax, Inc. The Licensee shall use its reasonable commercial efforts to bring the Licensed Products and Licensed Processes to Practical Application. The efforts of a sublicensee shall be considered the efforts of the Licensee. Upon receipt and verification of the royalties due under Paragraph 6. Upon the First Commercial Sale , until the expiration or termination of this Agreement , the Licensee shall use its reasonable commercial efforts to make Licensed Products and Licensed Processes reasonably accessible to the United States public.
The Licensee agrees, after its First Commercial Sale, to make commercially reasonable quantities of Licensed Products or materials produced through the use of Licensed Processes available to patient assistance programs in the U.
The Licensee agrees, after its First Commercial Sale and as part of its marketing and product promotion in the U. Model Page 15 of 36 [Final] [Icosavax, Inc. The NIAID and the Licensee agree to notify each other promptly of each infringement or possible infringement of the Licensed Patent Rights , as well as, any facts which may reasonably be expected to affect the validity, scope, or enforceability of the Licensed Patent Rights of which either Party becomes aware.
The NIAID does not represent that it shall commence legal action to defend against a declaratory action alleging invalidity. The Licensee shall take no action to compel the Government either to initiate or to join in any declaratory judgment action.
Should the Government be made a party to any suit by motion or any other action of the Licensee , the Licensee shall reimburse the Government for any costs, expenses, or fees, which the Government incurs as a result of the motion or other action. The NIAID offers no warranties other than it warrants that those statements specified in Article 1 are true and correct. The NIAID does not warrant the validity of the Licensed Patent Rights and makes no representations whatsoever with regard to the scope of the Licensed Patent Rights , or that the Licensed Patent Rights may be exploited without infringing other patents or other intellectual property rights of third parties.
Model Page 16 of 36 [Final] [Icosavax, Inc. The Licensee shall indemnify and hold the NIAID , its employees, students, fellows, agents, and consultants harmless from and against all liability, demands, damages, expenses, and losses, including but not limited to death, personal injury, illness, or property damage resulting from third party claims or demands in connection with or arising out of:.
The Licensee agrees to maintain a liability insurance program consistent with sound business practice. This Agreement is effective when signed by all parties, unless the provisions of Paragraph In the event that the Licensee is in default in the performance of any material obligations under this Agreement , including but not limited to the obligations listed in Paragraph Model Page 17 of 36 [Final] [Icosavax, Inc.
The Licensee shall have a unilateral right to terminate this Agreement in any country or territory by giving the NIAID sixty 60 days written notice to that effect. Model Page 18 of 36 [Final] [Icosavax, Inc. Prior to invoking termination or modification of this Agreement under Paragraph The Licensee may thereafter exercise any and all administrative or judicial remedies that may be available. Within ninety 90 days of expiration or termination of this Agreement under this Article 13, a final report shall be submitted by the Licensee.
Any royalty payments, including those incurred but not yet paid such as the minimum annual royalty , and those related to patent expense, due to the NIAID shall become immediately due and payable upon termination or expiration.
If terminated under this Article 13, sublicensees may elect to convert their sublicenses to direct licenses with the NIAID pursuant to Paragraph 4. Model Page 19 of 36 [Final] [Icosavax, Inc. Many also ask for a minimum annual royalty. Standard royalty rates range from 2 to 20 percent of net revenues.
A performance obligation requires the licensee to meet specific milestones. If the licensee fails, the patent owner can end the license. This helps patent owners profit from licenses. Licensors still own their patents. That means they can be held liable for their inventions during the licensing period.
Ask the licensee to insure you during this period. This part of an agreement explains which rights the patent owner is licensing. You can also use it to explain which rights you aren't licensing. This clause lets you keep some rights to your patent. Filing a patent application is difficult. Licensing a patent can be even harder. Hire a professional patent lawyer to do due diligence to protect your rights.
This can also help you increase your profits. One analogy that can be helpful is to look at licensing approaches in two ways: "carrot" licensing and "stick" licensing.
In reality, both situations involve the threat of a court case. In the carrot approach, an inevitable court case is just implied. In the stick approach, it is directly stated. If you manage to get a large company to license your patent, you will get a lump sum payment that covers their past use of the product.
You will also receive money based on future use. Yes, but not in all cases. Talk with a patent attorney about your particular case. This works best if you already have your patent. If you don't have a patent, bring along a non-disclosure agreement to have people sign before you talk about it. Yes, sometimes the licensee can sublicense the rights. The grant clause explains whether this is possible. In some cases, patent rights are only part of the deal.
A hybrid license includes a patent license and other rights. This allows the licensee to make use of intellectual property rights as much as possible. This agreement covers any pre-existing intellectual property that a person or company has. It extends rights to using pre-existing intellectual property as you develop a new invention. In the U.
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