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CO-EXCLUSIVE LICENSE AGREEMENT

License Agreement

CO-EXCLUSIVE LICENSE AGREEMENT | Document Parties: Edwards Lifesciences PVT, Inc., | 3F Therapeutics, Inc., You are currently viewing:
This License Agreement involves

Edwards Lifesciences PVT, Inc., | 3F Therapeutics, Inc.,

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Title: CO-EXCLUSIVE LICENSE AGREEMENT
Governing Law: California     Date: 6/6/2005
Industry: Biotechnology and Drugs     Law Firm: Gibson, Dunn Crutcher LLP; Reed Smith, LLP     Sector: Healthcare

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Exhibit 10.3

 

CO-EXCLUSIVE LICENSE AGREEMENT

 

This LICENSE AGREEMENT ( “Agreement” ), dated as of June 2, 2005 (the “Effective Date” ), is by and between Edwards Lifesciences PVT, Inc., a Delaware corporation ( “Edwards” ), on the one hand, and 3F Therapeutics, Inc., a Delaware corporation ( “3F” ), on the other hand.  Each of Edwards and 3F may be referred to herein individually as a “Party” or collectively as the “Parties.”

 

RECITALS

 

WHEREAS Edwards is the owner or has the right to sublicense certain patents and patent applications relating to catheter-delivered heart valves and venous valves;

 

WHEREAS 3F desires to obtain a co-exclusive license to such patents and patent applications in the Fields of Use defined below; and

 

WHEREAS Edwards is willing to grant such license to 3F under the following terms and conditions.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the covenants and agreements set forth herein, which constitutes good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.                Definitions.  The following definitions shall apply to the following terms:

 

1.1          “3F” shall have the meaning set forth in the preamble.

 

1.2          “Additional License” shall mean either a Compelled License or a Granted License.

 

1.3          “Affiliate” shall mean, with respect to any specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified.

 

1.4          “Agreement” shall have the meaning set forth in the preamble.

 

1.5          “Calendar Quarter” shall mean each three-month-period beginning January 1, April 1, July 1, and October 1 of each calendar year.

 

1.6   “Combination Price” shall be calculated by multiplying the gross invoice price charged and the value of any other consideration owed for such combined Licensed Product or Unauthorized Product and other product(s) that are not Licensed Products or Unauthorized Products by the fraction where A is the gross selling price of the Licensed Product or Unauthorized Product sold separately and B is the gross selling price of the other product(s) sold separately.  Notwithstanding any of the foregoing, in no event shall the fraction  used in the calculation of the Combination Price be less than one-half (1/2).

 

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1.7                                  “Compelled License” shall have the meaning set forth in Section 7.5.

 

1.8                                  “Edwards” shall have the meaning set forth in the preamble.

 

1.9                                  “Effective Date” shall have the meaning set forth in the preamble.

 

1.10                            “Field-Restricted Royalty” shall have the meaning set forth in Section 4.1.

 

1.11                            “Fields of Use” shall mean the Surgical Field of Use and the Venous Field of Use.

 

1.12                            “Granted License” shall have the meaning set forth in Section 7.5.

 

1.13                            “Heartport License” shall mean the license agreement, dated December 21, 2000, by and between Heartport, Inc., together with its predecessor Stanford Surgical Technologies, and Edwards’ predecessor-in-interest Percutaneous Valve Technologies, Inc., attached hereto as Exhibit D.

 

1.14                            “Licensed Patents” shall mean the Surgical Licensed Patents and the Venous Licensed Patents.

 

1.15                            “Licensed Products” shall mean the Surgical Licensed Products and the Venous Licensed Products.

 

1.16                            “Litigation” shall have the meaning set forth in Section 7.2.

 

1.17                            “Litigation Expenses” shall mean all attorneys’ fees and costs (including reasonable fees and costs attributable for work performed by in-house counsel), all expert fees and costs, all court and/or arbitration expenses, and any other fees and costs properly incurred, including any fees and costs incurred in bringing and prosecuting the Litigation and/or enforcing any order, judgment, ruling, or award granted as part of such Litigation.

 

1.18                            “Net Invoice Price” means (a) the gross invoice price charged and the value of any other consideration owed for a Licensed Product or Unauthorized Product, or (b) in those instances where the Licensed Product or Unauthorized Product is sold in combination with one or more other products that are not Licensed Products or Unauthorized Products, the Combination Price, less the following items, but only to the extent that they actually pertain to the disposition of such Licensed Product or Unauthorized Product and are identified separately on a bill or invoice:

 

i)                                          allowances actually granted to customers for rejections, returns, or prompt payment and volume discounts;

 

ii)                                       freight, transport packing, and insurance charges associated with transportation; and

 

iii)                                    rebates or discounts paid or credited pursuant to applicable law.

 

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Notwithstanding the foregoing, for purposes of this Section and this Agreement, in no event shall the Combination Price be used if such other product(s) are essential for the use or delivery of the Licensed Product or Unauthorized Product.  By way of example, the Net Invoice Price of a stented, tissue heart valve combined with a catheter delivery system shall be the gross invoice price charged and the value of any other consideration owed for both the stented, tissue heart valve and catheter delivery system, and not the Combination Price.

 

1.19                            “Net Sales” shall mean the Net Invoice Price charged by 3F or its Affiliates to a Third Party.

 

1.20                            “Outside-Field Royalty” shall have the meaning set forth in Section 4.2.

 

1.21                            “Party” shall have the meaning set forth in the preamble.

 

1.22                            “Parties” shall have the meaning set forth in the preamble.

 

1.23                            “Person” shall mean any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.

 

1.24                            “Royalty” or “Royalties” shall mean the Field-Restricted Royalty and/or Outside-Field Royalty, as appropriate.

 

1.25                            “Royalty Report” shall have the meaning set forth in Section 5.1.

 

1.26                            “Sublicensed Patents” shall mean (i) the patents and patent applications listed on Exhibit A attached hereto and (ii) any continuations, divisionals, reexaminations, reissues, extensions and foreign counterparts thereof, if and only to the extent that such rights are possessed by Edwards.

 

1.27                            “Surgical Field of Use” shall mean the surgical insertion through the chest cavity of a stented, tissue heart valve using a catheter delivery system of no greater than 50 centimeters in usable length (i.e., the length that can be inserted into the human body); provided, however, that such Surgical Field of Use does not include the delivery of a stented, tissue heart valve to the heart by way of any vessel other than solely through the thoracic aorta.

 

1.28                            “Surgical Licensed Patents” shall mean the patents and patent applications listed on Exhibit B attached hereto, and any continuations, divisionals, reexaminations, reissues, extensions and foreign counterparts thereof.

 

1.29                            “Surgical Licensed Product” shall mean a product in the Surgical Field of Use covered by any Valid Claim of the Surgical Licensed Patents or Sublicensed Patents.

 

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1.30                            “Third Party” shall mean any Person other than Edwards, 3F, or an Affiliate of either.

 

1.31                            “Unauthorized Product” shall mean a product sold by 3F that would be a Licensed Product under this Agreement if such product was used in the Surgical Field of Use or Venous Field of Use, as applicable, but which is actually used, with or without the direct involvement or prior knowledge of 3F, outside such applicable Field of Use.

 

1.32                            “Valid Claim” shall mean a claim of an issued and unexpired patent included in the Licensed Patents or Sublicensed Patents which has not been revoked or held unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been disclaimed, denied, or admitted to be invalid or otherwise unenforceable through reissue, reexamination, disclaimer, or otherwise.

 

1.33                            “Venous Field of Use” shall mean the treatment and repair outside of the heart of venous valves with venous insufficiency; provided, however, that such Venous Field of Use shall also include venous valves placed in the superior or inferior vena cava for treatment of the tricuspid valve.

 

1.34                            “Venous Licensed Patents” shall mean the patents and patent applications listed on Exhibit C attached hereto, and any continuations, divisionals, reexaminations, reissues, extensions and foreign counterparts thereof.

 

1.35                            “Venous Licensed Product” shall mean a product in the Venous Field of Use covered by any Valid Claim of the Venous Licensed Patents or Sublicensed Patents.

 

2.                License Grants.

 

2.1          Edwards hereby grants to 3F a worldwide, non-transferable (except as set forth in Section 13.2.1 below), royalty-bearing, co-exclusive license under the Surgical Licensed Patents, without the right to sublicense, to manufacture, have manufactured, use, import, offer for sale, and sell Surgical Licensed Products solely in the Surgical Field of Use.

 

2.2          Edwards hereby further grants to 3F a worldwide, non-transferable (except as set forth in Section 13.2.1 below), royalty-bearing, co-exclusive license under the Venous Licensed Patents, without the right to sublicense, to manufacture, have manufactured, use, import, offer for sale,  and sell Venous Licensed Products solely in the Venous Field of Use.

 

2.3          Edwards also hereby further grants to 3F a worldwide, non-transferable (except as set forth in Section 13.2.1 below), royalty-bearing co-exclusive sublicense under the Sublicensed Patents, without the right to further sublicense, to manufacture, have manufactured, use, import, offer for sale, and sell Licensed Products solely in the Fields of Use.

 

2.4          3F agrees and acknowledges that the limited scope of the Fields of Use set forth in this Agreement are a material and essential part of this Agreement.  As such, the licenses and sublicenses set forth in this Section 2 include a covenant by 3F to refrain from taking any actions that would permit, encourage, promote, market, fund, sponsor, or facilitate, directly or indirectly,

 

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any off label use or any other use of any Licensed Product outside the Surgical Field of Use or Venous Field of Use, as applicable, and to use its best efforts to prevent any such off label use or any other use outside such applicable Field of Use.  Any breach by 3F of this covenant shall be deemed a material breach of this Agreement.

 

2.5          The co-exclusive licenses and sublicense set forth in this Section 2 shall be co-exclusive with Edwards, its Affiliates, successors, and/or assigns. During the term of this Agreement, Edwards shall have no right to grant to any third party any license under the Surgical Licensed Patents in the Surgical Field of Use or Venous Licensed Patents in the Venous Field of Use or sublicense under the Sublicensed Patents in the Surgical Field of Use or the Venous Field of Use, except as provided in Section 7.5 hereof.

 

2.6          No implied patent or other intellectual property rights or licenses are granted by Edwards hereunder or in connection herewith other than those licenses and the sublicense expressly granted in this Agreement.

 

2.7          3F, as a sublicensee to the Sublicensed Patents, hereby agrees to comply with all terms and conditions applicable to a sublicensee under the Heartport License.

 

3.                Product Labeling.

 

3.1          Upon written notice from Edwards of a specific Licensed Patent that applies to a specific Licensed Product, each Licensed Product sold by 3F shall be marked in compliance with 35 U.S.C. § 287, or the relevant corresponding statute under the law of the country in which the Licensed Product is sold.

 

3.2          Each Licensed Product manufactured by or for 3F shall be labeled for use solely in the Surgical Field of Use or Venous Field of Use, as applicable.

 

4.                Royalties.

 

4.1          In consideration of the grant of rights under the Licensed Patents and Sublicensed Patents in this Agreement, and except as provided by Section 4.2 below, 3F shall pay Edwards a royalty (the “Field-Restricted Royalty” ) of four percent (4%) of the Net Sales of any Licensed Product sold by 3F.  The Field-Restricted Royalty accrues and shall be deemed payable at the time that each Licensed Product is sold.

 

4.2          In light of the essential nature of the limited scope of the Fields of Use, 3F shall pay Edwards a royalty (the “Outside-Field Royalty” ) of twenty-five percent (25%) of the Net Sales of all Unauthorized Products above the first fifty (50) Unauthorized Products sold by 3F in any year during the term hereof.  3F agrees and acknowledges that the Outside-Field Royalty represents a fair and reasonable Royalty for such Unauthorized Products and shall not be considered a penalty or fine.

 

5.                Pay


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