EXHIBIT 10.6
CRM LICENSE
AGREEMENT
This CRM License Agreement (the
“Agreement”), which is agreed to be effective as
hereinafter provided, is by and between St. Jude Medical, Inc., a
Minnesota corporation having its principal place of business at One
Lillehei Plaza, St. Paul, Minnesota, 55117 (“St.
Jude”), and Boston Scientific Corporation, a Delaware
corporation having its principal place of business at One Boston
Scientific Place, Natick Massachusetts, 01760-1537
(“BSC”).
RECITALS
A. BSC
and/or certain of its Affiliates, on the one hand, and St. Jude
and/or certain of its Affiliates, on the other hand, are adverse
parties in the following currently pending litigation matters,
which are being terminated pursuant to a Settlement Agreement by
and between BSC and certain of its Affiliates, on the one hand, and
St. Jude and certain of its Affiliates, on the other hand, dated
July 29, 2006 (the “Settlement Agreement”):
1) Pacesetter, Inc. v. Cardiac
Pacemakers, Inc., et al. , Case No. 02-1337 DWF/SRN (D. Minn.)
(the “Minnesota Pacesetter Case”);
2) Cardiac Pacemakers, Inc., et
al., v. St. Jude Medical, Inc., et al. , Civil Action No.
04-1016 JMR/FLN (D. Minn.) (the “Minnesota CPI Case”);
and
5) Pacesetter, Inc. et al. v.
Intermedics, Inc. et al. , Case No. CV 06-3166 GHK(FFMx)
(C.D. Cal.) (the “California case”).
B. St.
Jude and BSC and/or certain of their respective Affiliates are
engaged in, inter alia , the design, development,
manufacture, and sale of CRM Products.
C. St.
Jude and BSC and/or certain of their respective Affiliates own or
hold certain Licensed Patents and rights under Sublicensable
Patents relating to CRM Products.
D. Pursuant
to the Settlement Agreement, St. Jude and BSC have agreed to
terminate the Minnesota Pacesetter Case, the Minnesota CPI Case,
and the California case and have agreed to enter into a cross
licensing of certain rights under the Licensed Patents and
Sublicensable Patents.
Now therefore, in consideration of
the covenants and agreements set forth herein and for valuable
consideration receipt of which is hereby acknowledged, St. Jude and
BSC mutually agree as follows:
** The
appearance of a double asterisk denotes confidential information
that has been omitted from the exhibit and filed separately,
accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934.
ARTICLE I
Definitions of Certain
Terms
For the purposes of this Agreement,
the following capitalized terms shall have the meaning specified
below. In addition, whenever used in the Agreement,
“include,” “includes,” and
“including” shall be deemed to be followed by
“without limitation,” whether or not it is followed by
such words.
Section 1.01
. Affiliate .
“Affiliate” means any person or entity that controls or
is controlled by or is under common control with St. Jude or BSC on
the Effective Date or at any time thereafter. For purposes of this
Section 1.01, ownership, directly or indirectly, of more than fifty
percent (50%) of the capital stock or other comparable ownership
interest of the corporation or entity carrying the right to vote
for or appoint directors or their equivalent (if not a corporation)
shall constitute control thereof. “Affiliate” of a
third party means a person or entity that controls, is controlled
by, or under common control with, such third party. Without in any
way limiting the foregoing, “Affiliates” of St. Jude
include Pacesetter, Inc., St. Jude Medical AB, and St. Jude Medical
S.C., Inc. and “Affiliates” of BSC include Guidant
Corporation, Cardiac Pacemakers, Inc., Guidant Sales Corporation,
and Intermedics, Inc.
Section 1.02
. CRM Products . “CRM
Products” means devices for monitoring or electrically
stimulating or shocking the heart which are suitable for chronic
implantation, in whole or in part, by or with human patients. The
term “CRM Products” includes, without limitation:
cardiac pacemakers, antitachycardia pacemakers, cardiac
resynchronization therapy systems, cardioverters, and
defibrillators, including combinations thereof; loop recording
systems, implantable cardiac monitoring systems, implantable
hemodynamic monitoring systems, pulse generators and other waveform
generators for such devices; cardiac lead implant catheters and
associated tools; leads, electrodes, sensors, capacitors,
batteries, power sources, and all other components for such
devices; mechanisms for coupling such generators in a stimulating,
shocking, sensing, or monitoring relationship to the heart; and
data dispensing, processing, and gathering systems for such
devices, including programmers, pacing system analyzers,
defibrillation system analyzers, testers, encoders, decoders,
transtelephonic and other remote monitoring systems and services
for use with implantable devices, transmitters, receivers, and
computer software-controlled systems, and including the software.
The term “CRM Products” excludes, by way of example and
not limitation, nerve stimulators (unless used for cardiac
therapy), bone growth stimulators, drug release pumps, cardiac
pumps, artificial hearts, prosthetic heart valves, catheter
ablation devices, imaging systems, catheter location systems,
apparatus for revascularization or correction of other physical
defects in heart tissue, arrhythmia mapping devices (except as part
of an implantable cardiac therapy or monitoring device),
angioplasty devices and EKG monitors (other than cardiac
stimulation device programmers or other telemetry devices for use
with implantable pulse generators or cardiac monitors) which are
standalone, non-ambulatory and not intended for transtelephonic or
other remote monitoring.
Section 1.03
. Licensed Patents
.
(a) “Licensed
Patents” means any and all patents relating to CRM Products
(including the manufacture or use thereof), which are (i) owned
(whether by development, acquisition, or otherwise) by St. Jude or
its Affiliates as of the Effective Date or BSC or its Affiliates as
of the Effective Date and have a priority date on or before the
Effective Date or (ii) licensed to St. Jude or its Affiliates or
BSC or its Affiliates as of the Effective Date under licenses or
other agreements,
and which permit St. Jude or its
Affiliates or BSC or its Affiliates to grant licenses or
sublicenses, in each case without any right in a non-Affiliated
third party to receive royalties or any other continuing payments
to maintain the license or other agreement in effect, which are
within the scope of the following class: all patents issued in any
country from patent applications filed as of the Effective Date
including all patents maturing from continuation,
continuation-in-part, divisional, and reissue applications, or
reexaminations of such patents and patent applications, and further
including all patents which are counterparts of such patents or
patent applications which are described in this Section 1.03,
regardless of whether such patent matures from a convention or
non-convention patent application, and any other substitution,
renewal, extension, addition, utility model, or other patent,
non-U.S. or U.S., which claims priority based on such a patent
application.
(b) Notwithstanding
the foregoing, the term “Licensed Patents” specifically
excludes the ** Patents and the ** Patents.
(c) Notwithstanding
the foregoing, the term “Licensed Patents” specifically
excludes Sublicensable Patents.
(d) Notwithstanding
the foregoing, the term “Licensed Patents” specifically
excludes the patents listed on Exhibit A which are or will be
subject to licensing restrictions being negotiated with a third
party.
Section 1.04
. Sublicensable Patents
.
(a) “Sublicensable
Patents” shall mean patents and patent applications, both
U.S. and non-U.S., which relate to CRM Products and which are the
subject of licenses or assignments or other agreements with
non-Affiliated third parties in force as of the Effective Date and
which licenses or assignments or other agreements (a) convey rights
to St. Jude or its Affiliates or BSC or its Affiliates as licensee
or assignee or grantee, including the right to grant sublicenses or
licenses, and further (b) (i) require the payment of royalties or
any other continuing payments either for use of the patents or
patent applications or to maintain the license or assignment or
other agreement in effect or (ii) have other licensing restrictions
such as field of use restrictions.
(b) Without
limiting the foregoing, the term “Sublicensable
Patents” specifically includes, but is not limited to, all
present patents and patent applications listed on Exhibit B of this
Agreement. The parties believe that Exhibit B is a complete listing
of their respective U.S. patents and patent applications within the
foregoing definition of Sublicensable Patents which are in
existence as of the Effective Date, and any errors, overinclusions
or omissions from Exhibit B will be deemed to be inadvertent and
not a material breach. Present foreign patents and applications,
including foreign counterparts of U.S. patents and patent
applications listed on Exhibit B, have intentionally not been
included in Exhibit B but are deemed to be Sublicensable Patents if
they are covered by the foregoing definition in this Section
1.04.
(c) Notwithstanding
the foregoing, the term “Sublicensable Patents”
excludes the Mirowski-Owned Patents.
Section 1.05
. Mirowski-Owned Patents .
“Mirowski-Owned Patents” shall mean all patent rights
that are the subject of the Amended and Restated Exclusive License
Agreement dated January 28, 2004, by and between Guidant
Corporation and Mirowski Family Ventures, LLC (“MFV”),
a limited liability company organized under the laws of the State
of Maryland (the “MFV Exclusive License”).
** The
appearance of a double asterisk denotes confidential information
that has been omitted from the exhibit and filed separately,
accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934.
Section 1.06
. ** Patents . “**
Patents” shall mean those patents and patent applications,
and all patents and patent applications claiming priority
therefrom, ** as set forth in Exhibit C.
Section 1.07
. ** Patents . “**
Patents” shall mean those patents and patent applications,
and all patents and patent applications claiming priority
therefrom, ** as set forth in Exhibit D. The ** Patents shall
include the sublicensable patents and patent applications of **
listed in Exhibit D.
Section 1.08
. Effective Date .
“Effective Date” shall mean July 29, 2006.
ARTICLE II
Cross License; Covenant Not to
Sue
Section 2.01
. License . Subject to the
terms, conditions, and limitations set forth herein:
(a) St.
Jude grants (and will cause its Affiliates to grant) to BSC and its
Affiliates a non-exclusive, irrevocable, perpetual, fully paid-up
worldwide license or sublicense, as the case may be, without the
right to sublicense, under all Licensed Patents of St. Jude (and
its Affiliates) to make, have made, use, sell, have sold, offer to
sell, distribute, have distributed, and otherwise dispose of CRM
Products, including supplying or causing to be supplied components
thereof for use therein, and further including importing CRM
Products, including components thereof for use therein, into any
jurisdiction where Licensed Patents of St. Jude (or its Affiliates)
are effective.
(b) BSC
grants (and will cause its Affiliates to grant) to St. Jude and its
Affiliates, a non-exclusive, irrevocable, perpetual, fully paid-up,
worldwide license or sublicense, as the case may be, without the
right to sublicense, under all Licensed Patents of BSC (and its
Affiliates) to make, have made, use, sell, have sold, offer to
sell, distribute, have distributed, and otherwise dispose of CRM
Products, including supplying or causing to be supplied components
thereof for use therein, and further including importing CRM
Products, including components thereof for use therein, into any
jurisdiction where Licensed Patents of BSC (or its Affiliates) are
effective.
(c) If
any party has CRM Products made for it under the above license
grant, such CRM Products must bear its or one of its
Affiliates’ trade names or trademarks; however, such CRM
Products may bear third-party trade names or trademarks for
materials or components used in such CRM Products.
(d) The
licenses granted in this Section 2.01 shall be irrevocable except
for the specific right to terminate described in Section 9.02,
below.
Section 2.02
. Option to Obtain Sublicense on
Sublicensable Patents . It is the intent of each party to
afford the other party and its Affiliates the opportunity to obtain
sublicenses under the Sublicensable Patents.
Accordingly:
(a) St.
Jude grants (and will cause its Affiliates to grant) to BSC and its
Affiliates the right and option until sixty (60) days following the
termination of this Agreement to obtain sublicenses under one or
more of the Sublicensable Patents. Upon written request by BSC to
St. Jude, St. Jude will inform BSC of the provisions of the
agreement or license with a third party conveying rights in a
particular Sublicensable Patent to St. Jude or its Affiliates, and
shall make available to BSC and its Affiliates a non-exclusive,
non-transferable license affording them the most favorable terms
and conditions permissible to sublicensees under such agreement or
license with such third party (but in no event under terms more
favorable than those of St. Jude or its Affiliates).
** The
appearance of a double asterisk denotes confidential information
that has been omitted from the exhibit and filed separately,
accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934.
(b) BSC
grants (and will cause its Affiliates to grant) to St. Jude and its
Affiliates the right and option until sixty (60) days following the
termination of this Agreement to obtain sublicenses under one or
more of the Sublicensable Patents. Upon written request by St. Jude
to BSC, BSC will inform St. Jude of the provisions of the agreement
or license with a third party conveying rights in a particular
Sublicensable Patent to BSC or its Affiliates, and shall make
available to St. Jude and its Affiliates a non-exclusive,
non-transferable license affording them the most favorable terms
and conditions permissible to sublicensees under such agreement or
license with such third party (but in no event under terms more
favorable than those of BSC or its Affiliates).
(c) It
is the intention of the parties under this Section 2.02 that a
party acquiring a sublicense under Sublicensable Patents be
required to make only current payments based on current usage and
that no previously paid “front end” payments be
recovered by the sublicensor under such sublicensing arrangement.
Notwithstanding any contrary foregoing provisions, if the party
elects to obtain a sublicense thereunder and the license or
assignment granted to the sublicensor requires ongoing minimum
payments to maintain the license or assignment, payments by the
sublicensor for the right to grant a sublicense or option to
sublicense, or if the sublicensor is required to pay to the
original licensor or assignor amounts based on the
sublicensor’s or its sublicensee’s current usage, then
the sublicensor may require under the sublicensing arrangement that
its sublicensee pay the amounts required for the grant of the
sublicense or option to sublicense as well as a pro rata portion of
such minimum payments under the original license or such usage
payments due from the sublicensor, with each party’s
respective pro rata amount based upon the volume of their
respective sales of products covered by the original license
agreement. The obligation to pay a pro rata share of minimum
royalty does not apply to a minimum royalty required to maintain an
exclusive license under a Sublicensable Patent unless otherwise
agreed.
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(d)
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This Section 2.02 shall not apply to
the ** Patents.
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Section 2.03
. Royalty Payments to Third
Parties . Any royalty payments required to be made to the owner
of a patent sublicensed in the future in accordance with this
Agreement shall be made, if permissible under the applicable
license agreement and if acceptable to the sublicensor, directly by
the sublicensee to such owner in accordance with the terms of the
applicable license agreement. Unless otherwise required by the
applicable license agreement, questions regarding the
applicability, validity, or enforceability of any patent
sublicensed in accordance with this Agreement shall be resolved by
the owner of the sublicensed patent and the sublicensee. The
sublicensor of such patent shall have the right in its discretion
to participate in any such discussions or negotiations between the
owner of the sublicensed patent and the sublicensee. In any event,
the sublicensee shall keep the sublicensor fully informed of all
discussions and negotiations between such sublicensee and the owner
of the sublicensed patent. Any dispute arising between the
sublicensor and sublicensee of any such patent shall be resolved by
alternative dispute resolution as provided in Article 8 of this
Agreement.
Section 2.04
. Rights under Section 2.02
Subject to Continued Payment of Royalties . In the event that
either party fails in any material respect to pay to the other
party (or to the licensor of a Sublicensable Patent, as the case
may be) royalties required under this Agreement, and such failure
is not cured within sixty (60) days of written notice to the
defaulting party of such failure, then all license rights of the
defaulting party under Section 2.02 of this Agreement, with respect
only to the particular patent or patents in dispute, shall
terminate. Such a termination shall in no way affect or impair the
rights of the other party under such Section 2.02.
** The
appearance of a double asterisk denotes confidential information
that has been omitted from the exhibit and filed separately,
accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934.
Section 2.05
. Regarding OEM Activities .
The licenses granted or to be granted under this Article II shall
not be used in such a way as to manufacture CRM Products on an
original equipment manufacturer (“OEM”) basis for any
person or entity other than St. Jude and its Affiliates or BSC and
its Affiliates. The licenses granted or to be granted under this
Article II shall apply to and for the benefit of CRM Products
manufactured by a party to this Agreement for a third party who is
licensed under the appropriate patents of the other party to this
Agreement where, and to the extent that, the third party’s
license permits such third party to “have made” such
CRM Products for such third party. Nothing in this Agreement shall
preclude the use of the licenses granted or to be granted under
this Article II by a party or its Affiliate for the purpose of
having CRM Products manufactured by a third party on an OEM basis
for such party or its Affiliate; provided, however, that such CRM
Products must bear the trademark or trade name of such party or its
Affiliate. Notwithstanding the foregoing, such CRM Products may
bear third-party trade names or trademarks for materials or
components used in such CRM Products.
Section 2.06
. Option To Sublicense
Mirowski-Owned Patents . BSC grants (and will cause its
Affiliates to grant) to St. Jude and its Affiliates an irrevocable,
perpetual right and option to obtain a sublicense under the
Mirowski-Owned Patents. Upon written notice by St. Jude to BSC of
St. Jude’s election to exercise the option granted in this
Section 2.06, St. Jude and its Affiliates shall have a
non-exclusive, non-transferable (except as permitted by Section
9.02, below) worldwide license under the Mirowski-Owned Patents
effective as of the date such written notice is deemed to have been
given under Article 6 of this Agreement. Any sublicense granted as
a result of this Section 2.06 shall afford St. Jude the most
favorable terms and conditions permissible to sublicensees under
the MFV Exclusive License (but shall in no event require BSC or its
Affiliates to make any payments on behalf of St. Jude or its
Affiliates).
Section 2.07
.
** and ** Patents . It
is the intent of each party to afford the other party and its
Affiliates the rights provided below regarding the ** Patents and
the ** Patents. Accordingly:
(a)