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EXHIBIT 10.7
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, as amended (the
"Exchange Act").
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
**Confidential treatment requested pursuant to Rule 24b-2 of the
Exchange Act.
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.
**Confidential treatment requested pursuant to Rule 24b-2 of the
Exchange Act.
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").
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
**Confidential treatment requested pursuant to Rule 24b-2 of the
Exchange Act.
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).
(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.
(d)
This
Section 2.02 shall not apply to the ** Patents.
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
**Confidential treatment requested pursuant to Rule 24b-2 of the
Exchange Act.
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.
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)
BSC
grants (and will cause its Affiliates to grant) to St. Jude
and its Affiliates the right and option for a period of thirty
(30) months from the Effective Date to obtain a
non-
**Confidential treatment requested pursuant to Rule 24b-2 of the
Exchange Act.
exclusive,
worldwide, non-transferable, royalty-bearing license under the
** Patents. Should St. Jude opt to acquire such license, St.
Jude shall pay to BSC on no less than a quarterly basis a
royalty of ** percent (**%) of the net revenue received for
the sale of each
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