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EXHIBIT 10.5
PATENT LICENSE AGREEMENT
This
PATENT LICENSE AGREEMENT (this Agreement)
is made as of
, 200___
between MIDDLEBROOK PHARMACEUTICALS, INC., a Delaware corporation (MiddleBrook) and KEF
PHARMACEUTICALS, INC., a Delaware corporation (Kef). MiddleBrook and Kef are each
referred to individually as a Party, and collectively as the Parties.
Background Statement
MiddleBrook and Kef are Parties to an Asset Purchase Agreement, dated as of November ___,
2007 (the Purchase Agreement), and are entering into this Agreement pursuant to Section
3.4(e)(ii) of the Purchase Agreement for the purpose of granting to Kef an exclusive license under
the Licensed Patents (as defined in the Purchase Agreement) set forth on Schedule A (the
Licensed Patents).
Statement of Agreement
1. Definitions.
1.1 Terms Defined in Purchase Agreement. Terms defined in the Purchase Agreement and
not otherwise defined by this Agreement shall have the meaning given to such terms in the Purchase
Agreement.
1.2 Adverse Drug Experience means the definition in the current 21 C.F.R.
Section 314.80, as in effect from time to time.
1.3 Agreement has the meaning set forth in the introductory paragraph.
1.4 Kef has the meaning set forth in the introductory paragraph.
1.5 Keflex Products has the meaning given it in the Sublicense.
1.6 License has the meaning set forth in Section 2.
1.7
Licensed Patents has the meaning set forth in the Background Statement.
1.8 Licensed Products means all products that may now or hereafter be sold under the
Sublicense.
1.9 MiddleBrook has the meaning set forth in the introductory paragraph.
1.10 MiddleBrooks Knowledge has the meaning given the Sellers Knowledge in the
Purchase Agreement.
1.11 Party means either MiddleBrook or Kef and Parties shall mean both
MiddleBrook and Kef.
1.12
Purchase Agreement has the meaning set forth in the Background Statement.
1.13 Regulatory Obligations has the meaning set forth in Section 5.1.
1.14
Related Agreements has the meaning set forth in the Purchase Agreement.
1.15 Sublicense means the Patent Sublicense Agreement, dated as of the date hereof,
between MiddleBrook and Kef pursuant to which Kef shall grant a sublicense to MiddleBrook under the
Licensed Patents.
1.16 Territory means the United States of America and Puerto Rico.
2. Grant of License. MiddleBrook hereby grants to Kef, upon and subject to the terms
and conditions of this Agreement, a perpetual, irrevocable, royalty-free, exclusive (even as to
MiddleBrook) license under the Licensed Patents to develop, make, have made, import, offer for sale
and sell Keflex Products in the Territory (the License).
3. Ownership of Licensed Patents. Kef acknowledges that, as between Kef and
MiddleBrook, MiddleBrook is the sole and exclusive owner of the Licensed Patents, and Kef shall do
nothing inconsistent with such ownership. Kef shall not challenge MiddleBrooks ownership and
rights in or to any of the Licensed Patents or assist others in challenging MiddleBrooks ownership
thereof. Kef agrees that nothing in this Agreement shall give Kef any right, title or interest in
the Licensed Patents other than the License granted herein. Upon MiddleBrooks request, Kef shall
provide such information and assistance, and execute and deliver such documents, as MiddleBrook may
reasonably request for purposes of registering, maintaining or enforcing any of the Licensed
Patents.
4. Representations and Warranties. MiddleBrook represents and warrants to Kef that:
(i) the Licensed Patents constitute all Patents related to or used by MiddleBrook in connection
with the manufacture, sale or development of Keflex Products; (ii) each of the Licensed Patents, if
issued, is in full force and effect; (iii) all fees necessary to maintain the issued Licensed
Patents have been paid in full when due, and there are currently no maintenance fees due for any of
the issued Licensed Patents; (iv) there has been no action by the United States Patent and
Trademark Office to reexamine, terminate or cancel any Licensed Patent or to decline to issue any
Licensed Patent that has not been issued; (v) MiddleBrook has not granted any license under any of
the Licensed Patents to develop, make, have made, import, offer for sale or sell Keflex Products
other than the license to Kef under this Agreement and; (vi) to MiddleBrooks Knowledge, no Person
(A) has claimed that any Licensed Patent is invalid or unenforceable or (B) is currently infringing
any Licensed Patent.
5. Regulatory Obligations.
5.1 Performance by MiddleBrook. MiddleBrook shall take all reasonable and appropriate
actions, at MiddleBrooks sole cost and expense, to maintain the Licensed Patents and shall
oversee, monitor, coordinate and perform all regulatory actions, communications and filings with
and submissions, including filings and submissions of supplements and amendments thereto, to each
applicable Regulatory Authority or Governmental Authority with respect to each Patent (the
Regulatory Obligations). Notwithstanding the foregoing, nothing herein shall operate to
prevent Kef from taking such actions as Kef, in its sole discretion, deems appropriate
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to ensure that all Regulatory Obligations are properly and timely performed, subject to prior
notice to and consultation with MiddleBrook.
5.2 Regulatory Meetings and Correspondence. MiddleBrook shall be responsible for
interfacing, corresponding and meeting with the applicable Regulatory Authorities with respect to
each Patent. Kef shall execute such notices, powers of attorney, acknowledgments, consents and
other instruments as MiddleBrook may reasonably request to authorize MiddleBrook to act on Kefs
behalf for all actions before and communications with Regulatory Authorities and other Governmental
Authorities, including the United States Patent and Trademark Office, as shall be necessary and
appropriate to enable MiddleBrook to perform the Regulatory Obligations.
5.3 Exchange of Information. The Parties shall establish procedures to ensure that
the Parties exchange on a timely basis all necessary information to enable MiddleBrook to comply
with all Regulatory Obligations, including, without limitation, filing updates, pharmacovigilance
filings and investigator notifications. To the extent either Party receives any information
regarding Adverse Drug Experiences related to the use of any Keflex Products, such Party shall, (i)
within five (5) days of its receipt of such information, provide the other Party with such
information, (ii) promptly provide all follow-up information that may reasonably be requested and
(iii) otherwise act in accordance with such Adverse Event Reporting Procedures to be agreed upon in
writing by the Parties from time to time. Without limiting the foregoing requirement, MiddleBrook
shall provide Kef with copies of all communications between MiddleBrook and any Governmental
Authorities relating to any of the Licensed Patents, Approved Registrations, IND and Keflex
Products, in every case within five (5) Business Days of the sending or receipt of such
communication by MiddleBrook.
5.4 Costs and Expenses. MiddleBrook shall bear all costs and expenses of performing
the Regulatory Obligations.
6. Infringement of Licensed Patents.
6.1 Conduct of Actions. If either Party shall receive notice of any infringement or
threatened infringement of any of the Licensed Patents, such Party shall immediately notify the
other Party of such infringement or threatened infringement, providing all information relating
thereto possessed by the notifying Party. Except as provided below, MiddleBrook may initiate and
control any legal action relating to infringement of any of the Licensed Patents; provided,
however, that (i) MiddleBrook shall keep Kef fully apprised of all activity in such action, (ii)
Kef shall have the right to participate in such action at its own expense, (iii) MiddleBrook shall
not take any position in such action inconsistent with Kefs exclusive license under the Licensed
Patents and (iv) no settlement of any such action shall be made without the consent of Kef, which
shall not be unreasonably withheld or delayed. Upon notice of infringement, if MiddleBrook fails
within a reasonable time thereafter to initiate legal action relating to any such infringement of
any of the Licensed Patents, or if the Sublicense shall have terminated, Kef may initiate and
control any legal action relating to infringement of the Licensed Patents relating to the Keflex
Products. The Parties hereby agree that either Party may include the other as a party plaintiff in
any such action and that each Party shall cooperate, at the expense of the Party controlling the
relevant legal action, in the prosecution of such action as reasonably requested by the Party
controlling such action. Any monetary recovery in connection with such action shall
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first be applied to reimburse MiddleBrook and Kef for out-of-pocket expenses (including
attorneys fees) incurred in prosecuting such action. Any remaining monetary recovery in such
action shall be equitably divided between the Parties on the basis of their respective damages
resulting from the claimed infringement. The Party controlling any legal action pursuant to this
Section 6.1 shall bear all expenses of such action, other than the fees of any counsel the other
Party may engage if it chooses to participate separately in such action.
6.2 Action Initiated Against Kef. In the event that a declaratory judgment action
alleging invalidity or infringement of any of the Licensed Patents shall be brought against Kef,
MiddleBrook, at its option, shall have the right, within thirty (30) days after commencement of
such action, to intervene and take over the sole defense of the action at its own expense.
6.3 Cooperation. In any infringement action, either Party may institute to enforce
the Licensed Patents pursuant to this Agreement, the other Party shall, at the expense of the Party
initiating such action, reasonably cooperate and, to the extent possible, have its applicable
employees testify when requested and make available relevant records, papers, information, samples,
specimens and the like.
7. Indemnification; Insurance.
7.1 Indemnification by MiddleBrook. MiddleBrook shall defend, indemnify and hold
harmless Kef from and against all liabilities, losses, obligations, claims, judgments, awards,
relief, settlements, costs and expenses (including costs of any product recall and reasonable
attorneys fees, experts fees, investigation costs and other expenses of litigation) which Kef,
its shareholders, directors, officers, employees and representatives may suffer or incur arising
out of (i) the development, manufacture, marketing, advertising, sale or use by MiddleBrook or its
successors, directly or indirectly, of the Licensed Products (excluding any such activities
conducted by Kef or its successors, in connection with the Keflex Products, if the Sublicense
should terminate), (ii) the performance or failure of performance by MiddleBrook of the Regulatory
Obligat






