EXHIBIT 10.16
THE CONFIDENTIAL PORTIONS OF THIS EXHIBIT, WHICH HAVE
BEEN REMOVED AND REPLACED WITH AN ASTERISK, HAVE BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 PROMULGATED UNDER THE SECURITIES
ACT OF 1933 AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF
1934.
LICENSE AGREEMENT
THIS
LICENSE AGREEMENT (the "Agreement") is made and entered into as
of
November 6, 2003, (the "Effective Date") between Wilson Greatbatch
Technologies,
Inc. (as defined below, "WGT"), a Delaware corporation, and
Medtronic, Inc. (as
defined below, "Medtronic"), a Minnesota corporation.
WITNESSETH:
WHEREAS, WGT has developed expertise and intellectual property in
the field
of tantalum defibrillation capacitors used in implantable medical
devices; and
WHEREAS, WGT desires to grant, and Medtronic desires to obtain,
certain
license rights with respect to the Intellectual Property (as such
term is
defined below) in accordance with the terms of this Agreement.
AGREEMENTS:
NOW
THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein, and for other valuable
consideration,
the receipt and adequacy of which is hereby acknowledged, the
parties mutually
agree as follows:
ARTICLE 1
DEFINITIONS
1.1
Specific Definitions. As used in this Agreement, the following
definitions and terms shall have the designated meanings:
"Affiliate" of a specified person (natural or juridical) means 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. "Control"
shall mean ownership of more than 50% of the shares of stock
entitled to vote
for the election of directors in the ease of a corporation, and
more than 50% of
the voting power in the case of a business entity other than a
corporation.
"Confidential Information" means know-how, trade secrets, and
unpublished
information disclosed (whether before or during the term of this
Agreement) by
one of the parties (the "disclosing party") to the other party (the
"receiving
party"), and which is marked as proprietary or confidential as
provided below,
excluding information that:
(a)
was already in the possession of the receiving party prior to
its
receipt from the disclosing party (provided that the receiving
party is able to
provide the disclosing party with reasonable documentary proof
thereof);
<PAGE>
(b)
is or becomes part of the public domain by reason of acts not
attributable to the receiving party;
(c)
is or becomes available to the receiving party from a source other
than
the disclosing party which source, to the best of the receiving
party's
knowledge, has rightfully obtained such information and has no
obligation of
nondisclosure or confidentiality to the disclosing party with
respect thereto;
(d)
is made available by the disclosing party to a third party
unaffiliated
with the disclosing party on an unrestricted basis;
(e)
is independently developed by the receiving party completely
without
reference to any Confidential Information of the disclosing party,
as evidenced
by the receiving party's written records; or
(f)
has been or must be publicly disclosed by reason of legal,
accounting
or regulatory requirements beyond the reasonable control, and
despite the
reasonable efforts, of the receiving party.
All Confidential Information disclosed by one party to the other
under this
Agreement shall be in writing and bear a legend "Proprietary,"
"Confidential" or
words of similar import or, if disclosed in any manner other than
writing, shall
be followed by confirmation that such information is confidential
by the
disclosing party within thirty (30) days. All Licensed Know-How
transmitted to
Medtronic hereunder shall be considered Confidential Information of
WGT for
purposes of Article 5 and the other provisions of this Agreement
whether or not
marked "Proprietary" or "Confidential."
"Contract Year" means a period of one year beginning on May 1 of a
calendar year
and ending on April 30 of the next calendar year.
"Evans" means Evans Capacitor Company, a Delaware Company, and its
Affiliates.
"Evans Patents" means the patents licensed from Evans to WGT under
the license
agreement dated August 8, 1996, as amended and restated on or about
the date
hereof.
"Expiration" or "Expired" means, with respect to a particular
Patent, the
Patent's expiration, abandonment, cancellation, disclaimer, award
to another
party other than WGT in an interference proceeding, or declaration
of invalidity
or unenforceability by a court or other authority of competent
jurisdiction
(including final rejection in a re-examination or re-issue
proceeding).
"Unexpired" shall mean a Patent that has not Expired. If in any
country there
should be two or more such decisions conflicting with respect to
the validity of
the same claim, the decision of the higher or highest tribunal
shall thereafter
control; however, should the tribunals be of equal rank, then the
decision or
decisions invalidating the claim shall prevail when the conflicting
decisions
are equal in number and the majority of decisions shall prevail
when the
conflicting decisions are unequal in number.
<PAGE>
"Field of Use" means medical applications.
"First Contract Period" means the five-year period commencing on
May I, 2004 and
ending on April 30, 2009; provided however, if the date that
Medtronic shall
have executed and delivered this Agreement to WGT is after May 1,
2004, then (a)
the First Contract Period shall commence on the first day of the
month in which
such execution and delivery occurs (" Commencement Date") and
continue for five
years thereafter; (b) the Second Contract Period shall commence on
the fifth
anniversary of the Commencement Date and continue for five years
thereafter; (c)
the term "Contract Year" shall be changed so as to mean a period
beginning each
calendar year on the Commencement Date (and each year thereafter on
the
anniversary thereof) and ending 12 months later; and (d) the Third
Contract
Period, if any, shall commence on the tenth anniversary of the
Commencement
Date.
"Initial Fee" means *.
"Intellectual Property" means U.S. and foreign Patent Rights,
copyrights and
copyright registrations and applications, mask works and
registrations thereof,
Know-How, Inventions, in each case, relating to Tantalum Capacitors
or Tantalum
Defibrillation Capacitors.
"Intellectual Property Rights" means all rights in Intellectual
Property.
"Interest Rate" means interest compounded quarterly at a per annum
rate of
interest equal to the prime commercial lending rate quoted by Wells
Fargo Bank
Minnesota, N.A. in effect from time to time plus *.
"Invention" means any invention, discovery, know-how, trade secret,
data,
information, technology, process or concept, whether or not
patented or
patentable, and whether or not memorialized in writing.
"Know-How" means all know-how, trade secrets, expertise,
inventions, discoveries
and technical information now or hereafter owned by or licensed
(with the right
to sublicense) which are necessary or useful for designing,
developing,
processing, manufacturing, using or selling Licensed Products
within the Field
of Use, including but not limited to information embodied in
drawings, designs,
copyrights, copyright registrations and applications, patent
applications,
material specifications, processing instructions, formulas,
equipment
specifications, product specifications, confidential data, computer
software,
electronic files, research notebooks, invention disclosures,
research and
development reports and the like related thereto.
"Licensed Know-How" means the Know-How of WGT and/or its Affiliates
as of the
date of this Agreement that is identified on Exhibit B attached to
and made a
part of this Agreement, and any Know-How subsequently transmitted
by WGT
pursuant to Section 2.4.
"Licensed Products" means Tantalum Capacitors and Tantalum
Defibrillation
Capacitors.
"Medtronic" means Medtronic, Inc. and its Affiliates.
<PAGE>
"Medtronic Competitor" means a third party whose primary business
is the
manufacture or sale of one or more medical devices that are used to
monitor,
diagnose, manage, deliver therapy to, or treat diseases and medical
conditions
occurring within and around the cardiovascular system.
"Patent Rights" means (a) all patents or patent applications
(including any
patents issued thereon) whether owned or licensed from a third
party (with the
right to sublicense) (b) all continuation, divisional, re-issue,
re-examination
and substitution applications that may be filed based on the
foregoing
referenced patents or patent applications, together with any
patents that may
issue based thereon; and (c) all foreign applications that may be
filed based on
the foregoing referenced U.S. patents and patent applications,
together with all
patents which may issue based thereon.
"Royalty Limitation Date" means the first date as of which both of
the following
conditions have been satisfied: (a) Medtronic shall have paid
cumulative
royalties to WGT under Section 3.3, 3.4 and/or 3.5 of * and (b)
either (i) all
Evans Patents have been determined to be invalid or unenforceable
or (ii) the
Second Contract Period shall have ended.
"Second Contract Period" means the five-year period commencing on
May 1, 2009
and ending on April 30, 2014.
"Sublicense" means the Sublicense Agreement between the parties of
even date
herewith under which WGT has granted to Medtronic certain
sublicense rights
under the license agreement between WGT and Evan Capacitor Company
dated August
8, 1996, as amended and restated.
"Tantalum Capacitor" means the electrolytic capacitor based on a
porous tantalum
anode and a liquid electrolyte and whose manufacture, sale or use
is covered by
one or more claims of a WGT Capacitor Patent or an Evans
Patent.
"Tantalum Defibrillation Capacitor" means a bank of one or more
Tantalum
Capacitors of appropriate size (or such other number of Tantalum
Capacitors as
the parties may mutually agree in writing), connected electrically
to give the
required energy and voltage that is capable of operating in an
implantable
defibrillator to deliver a therapeutic electric charge and whose
manufacture or
sale is covered by one or more claims of a WGT Capacitor Patent or
an Evans
Patent.
"Target Amount" means * of Medtronic's requirements for Tantalum
Capacitors
during the First Contract Period or, in reference to the Second
Contract Period,
means * of Medtronic's requirements for Tantalum Capacitors during
any single
calendar year during the Second Contract Period.
"Third Contract Period" means the period, if any, commencing on May
1, 2014 and
continuing until the earlier of the Royalty Limitation Date or the
termination
of this Agreement.
"Third Party Patents" means the patent or patents described in the
letter from
WGT to Medtronic of even date herewith.
"WGT" means Wilson Greatbatch Technologies, Inc. and its
Affiliates.
<PAGE>
"WGT Capacitor Patents" means all Patent Rights of WGT as of the
date of this
Agreement that are necessary or useful for designing, developing,
processing,
manufacturing, using or selling Tantalum Capacitors or Tantalum
Defibrillation
Capacitors, other than the Evans Patents, and any Patent Rights
that WGT may
obtain after the date hereof with respect to any of the Third Party
Patents and
including any Intellectual Property Rights resulting from, related
to, or
arising out of claims or causes of action held by WGT, in each
case, relating to
Tantalum Capacitors or Tantalum Defibrillation Capacitors. A list
of the WGT
Capacitor Patents is included as Exhibit A.
1.2
Other Terms. Other terms may be defined elsewhere in the text of
this
Agreement and shall have the meaning indicated
throughout this Agreement.
1.3
Definitional Provisions.
The
words "hereof," "herein," and "hereunder" and words of similar
import,
when used in this Agreement, shall refer to this Agreement as a
whole and not to
any particular provisions of this Agreement.
The
terms defined in the singular shall have a comparable meaning when
used
in the plural, and vice versa.
References to an "Exhibit" or to a "Schedule" are, unless
otherwise
specified, to one of the Exhibits or Schedules attached to or
referenced in this
Agreement, and references to an "Article" or a "Section" are,
unless otherwise
specified, to one of the Articles or Sections of this
Agreement.
The
term "person" includes any individual, partnership, joint
venture,
corporation, trust, unincorporated organization or government or
any department
or agency thereof.
The
term "dollars" or "$" shall refer to the currency of the United
States
of America.
ARTICLE 2
LICENSE TO MEDTRONIC
2.1
Grant of License. Subject to the terms and conditions of this
Agreement, WGT hereby grants to Medtronic, and Medtronic hereby
accepts, an
exclusive, perpetual, worldwide, royalty-bearing license to use to
make, have
made, sell and import in the Field of Use Licensed Products covered
by, or
manufactured by a process covered by, one or more claims of any
Unexpired WGT
Capacitor Patent which has not been held invalid or unenforceable
by a final
decision which has not been appealed and to use Licensed Know-How
for such
purposes; provided that Medtronic shall not have the right under
this license to
sell Licensed Products to any person separate from or independent
of a medical
device.
2.2
Sublicensing. Medtronic may not sublicense any of its rights or
obligations under Section 2.1 except that Medtronic may grant
sublicenses solely
for the purpose of obtaining contract manufacturing of Licensed
Products covered
by, or manufactured by a process covered by, one or more claims of
any Unexpired
WGT Capacitor Patent which has not been held invalid or
<PAGE>
unenforceable by a final decision which has not been appealed,
provided that (i)
Medtronic shall cause such sublicensee to comply with all of
Medtronic's
obligations hereunder, and (ii) any such sublicense granted by
Medtronic shall
terminate automatically upon termination of this Agreement.
2.3
Exclusivity. The exclusivity referred to in the grant of license
in
Section 2.1 above is subject to the following: (i) WGT shall have
the right to
exploit the WGT Capacitor Patents and Licensed Know How (including
but not
limited to making and selling Tantalum Capacitors); and (ii) WGT
shall have the
right to grant back-up licenses to WGT customers to make Tantalum
Capacitors
which licenses are to be effective only if, and for as long as, WGT
is unable
for force majeure or other reasons to supply any such customer with
its
requirements of Tantalum Capacitors.
2.4
Licensed Know-How. WGT shall deliver copies of the Licensed
Know-How to
Medtronic as soon as practicable after receipt of written request
for such
copies from Medtronic. WGT shall, upon Medtronic's request from
time to time
until *, use its reasonable commercial efforts to answer promptly
and in writing
any written questions with respect to the Licensed Know-How of WGT,
which exists
as of the date of this Agreement and which is relevant to the
manufacture of
Licensed Products as is reasonably necessary or useful to enable
Medtronic to
manufacture or have manufactured Licensed Products. Under no
circumstances,
however, shall WGT be required to provide any training to Medtronic
personnel
with respect to the manufacture of Licensed Products. Any Know-How
provided by
WGT to Medtronic pursuant hereto shall become and be deemed to be
Licensed
Know-How.
ARTICLE 3
ROYALTIES AND REPORTS
3.1
Royalties. As consideration for the licenses and other rights
granted
hereunder and under the Sublicense Agreement, Medtronic shall pay
to WGT the
initial license fee provided for in Section 3.2 and the royalties
set forth in
Sections 3.3, 3.4 and, if applicable, Section 3.5 below during the
First
Contract Period, the Second Contract Period and the Third Contract
Period (if
any). After the Royalty Limitation Date, Medtronic shall owe no
further
royalties to WGT under this License Agreement or the Sublicense,
and the
licenses contained herein and in the Sublicense shall be deemed to
be fully
paid.
3.2
Initial Fee. Medtronic shall pay to WGT an initial license fee in
the
amount of * no later than ninety (90) days following the date on
which Medtronic
first sells or commercially releases a medical device incorporating
a Licensed
Product covered by, or manufactured by a process covered by, one or
more claims
of any Unexpired patent included within a WGT Capacitor Patent or
an Evans
Patent which has not been held invalid or unenforceable by a final
decision
which has not been appealed ("First Sale") Medtronic shall not be
deemed to have
sold or commercially released a medical device incorporating a
Licensed Product
covered by, or manufactured by a process covered by, a WGT
Capacitor Patent or
an Evans Patent if such medical device is in development, testing,
or which has
yet to receive FDA approval for commercial sale. Medtronic shall
not be
obligated to pay an Initial Fee if it first sells or commercially
releases such
medical devices incorporating Licensed Products after WGT has
failed to supply
Licensed Products under the terms of any supply agreement between
WGT and
Medtronic for supply of such Licensed Products.
<PAGE>
3.3 Royalties during
First Contract Period.
(a)
Within ninety (90) days following the end of each calendar year
during
the First Contract Period, and within ninety (90) days following
the end of the
First Contract Period, WGT will deliver to Medtronic a report
listing the number
of Licensed Products purchased by Medtronic from WGT during such
calendar year
or the First Contract Period, as the case may be.
(b)
If Medtronic has purchased a total number of Licensed Products from
WGT
during the First Contract Period equal to or greater than the
Target Amount,
Medtronic shall have no obligation to pay WGT any royalty for any
Licensed
Products manufactured by or for Medtronic.
(c)
If Medtronic has not purchased a total number of Licensed Products
from
WGT equal to or greater than the Target Amount by the completion of
the First
Contract Period, Medtronic shall pay WGT within thirty (30) days
following the
receipt of an invoice from WGT, a royalty equal to * per Tantalum
Defibrillation
Capacitor manufactured by or for Medtronic and which are sold by
Medtronic
during the First Contract Period.
3.4
Royalties during Second Contract Period.
(a)
Within ninety (90) days following the end of each Contract Year
during
the Second Contract Period, WGT will deliver to Medtronic a report
listing the
number of Licensed Products purchased by Medtronic from WGT during
the year.
(b)
If Medtronic has purchased a number of Licensed Products from WGT
equal
or greater than the Target Amount for such Contract Year, Medtronic
shall have
no obligation to pay WGT any royalty for any Licensed Products
manufactured by
or for Medtronic during such year.
(c)
If Medtronic has not purchased a number of Licensed Products from
WGT
equal to or greater than the Target Amount for such Contract Year,
Medtronic
will pay WGT within thirty (30) days following the receipt of an
invoice from
WGT a royalty equal to * per Tantalum Defibrillation Capacitor
manufactured by
or for Medtronic and which are sold by Medtronic during such
year.
3.5
Royalties during Third Contract Period.
(a)
After the Second Contract Period, Medtronic shall pay royalties
only if
it shall not have paid WGT cumulative royalties during the First
Contract Period
and Second Contract Period of *.
(b)
Within sixty (60) days following the end of each Contract Year
during
the Third Contract Period, Medtronic will pay WGT a royalty equal
to * per
Tantalum Defibrillation Capacitor until Medtronic has paid
cumulative royalties
equaling * under Section 3.3, Section 3.4 and this Section 3.5,
after which time
no further royalty shall be owing by Medtronic and the license
shall be deemed
to be fully paid.
3.6
Definition of "Sold". For purposes of Section 3.3, Section 3.4,
and
Section 3.5, the term "sold" shall exclude any Tantalum Capacitors
that are held
in inventory, used as sales samples,
<PAGE>
used for purposes of regulatory submissions, provided in exchange
for a damaged
or defective Tantalum Capacitor as part of a warranty program, or
used for
testing or quality control purposes.
3.7
Payment Reductions.
a.
The royalties payable under Sections 3.3, 3.4 and 3.5 shall be
subject
to set off as described in Section 7.4 relating to indemnification
of Medtronic
for breach of representations and warranties of WGT, and in Section
4.1 relating
to breach by WGT of its license agreements with third parties.
b.
If Medtronic is required to pay to any party other than WGT any
royalty
to allow Medtronic to make, have made, use or sell Licensed
Products, WGT shall
reduce the royalty payments specified herein, or pay such sums to
Medtronic,
together with interest at the Interest Rate accrued from the time
Medtronic
makes such royalty payment to a party other than WGT (provided that
WGT's
cumulative liability to pay sums to Medtronic under this section
shall be
limited to the sum of all royalties paid to WGT under this License
Agreement
plus Medtronic's out of pocket costs), such that the overall
royalties paid to
any and all parties (including WGT) on Licensed Products for use in
Medtronic
products will in no event exceed the royalties set forth in
Sections 3.2, 3.3,
3.4 and 3.5 above.
c.
In addition, if Medtronic pays any sums to Evans that Medtronic
reasonably deems necessary to preserve Medtronic's rights under the
Sublicense
(including but not limited to curing any defaults by WGT under its
license with
Evans or paying any additional royalties required to maintain WGT's
exclusivity
rights under its license with Evans), WGT shall reduce the royalty
payments
specified herein, or pay sums to Medtronic together with interest
at the
Interest Rate accrued from the time Medtronic makes such payment to
Evans
(provided that WGT's cumulative liability to pay sums to Medtronic
under this
section shall be limited to the sum of all royalties paid to WGT
under this
License Agreement plus Medtronic's out of pocket costs) such that
the overall
royalties paid to any and all parties (including WGT) on Licensed
Products for
use in Medtronic products, plus any additional sums paid to Evans
on WGT's
behalf, will in no event exceed the royalties set forth in Sections
3.2, 3.3,
3.4 and 3.5 above.
d.
If Medtronic's right to a set off under paragraphs (b) and (c) of
this
Section 3.7 arises in connection with a claim subject to
indemnification under
Article 7, the provisions of Article 7, including without
limitation the
requirements for notice to WGT, shall govern the parties' rights
and obligations
with respect to such claims. If Medtronic's right to a set off does
not arise in
connection with a claim that is subject to indemnification under
Article 7, and
if Medtronic intends to seek reimbursement with respect to such
obligation under
Section 3.7(b) or (c), Medtronic shall promptly notify WGT of its
obligation and
shall consult with WGT before agreeing to pay any royalty to a
third party to
allow Medtronic to make, have made, use or sell Licensed
Products.
Notwithstanding the foregoing, Medtronic shall have no obligation
to consult
with WGT before making any payment to Evans that Medtronic
reasonably deems
necessary to preserve Medtronic's rights under the Sublicense.
3.8
Records/Audits. WGT agrees to keep accurate written records
sufficient
in detail to enable Medtronic to determine and verify the number of
Licensed
Products purchased by
<PAGE>
Medtronic and its Affiliates during the First Contract Period and
during each
year of the Second Contract Period. Medtronic agrees to keep
accurate written
records sufficient in detail to enable WGT to determine and verify
the number of
Tantalum Capacitors used by Medtronic and its Affiliates (i.e.
their
requirements) during the First Contract Period and during each year
of the
Second Contract Period. WGT and Medtronic each shall maintain such
records for
each relevant period for not less than three years after the end of
such period.
Upon reasonable notice and during regular business hours, both
parties shall
from time to time (but no more frequently than once annually) make
available the
records referred to in Section 3.7 for audit at the requesting
party's expense
by representatives from a nationally recognized independent
certified public
accounting firm selected by the requesting party and reasonably
acceptable to
the audited party to verify the accuracy of the records provided to
the
requesting party. Such representatives shall execute a suitable
confidentiality
agreement reasonably acceptable to the audited party prior to
conducting such
audit. Such representatives may disclose to the requesting party
only their
conclusions regarding the accuracy and completeness of royalty
payments and of
records related thereto, and shall not disclose the audited party's
confidential
business information to the requesting party without the prior
written consent
of the audited party. No claim may be asserted by either party
against the other
for errors discovered in the audit unless made within ninety (90)
days following
completion of such examination or audit made pursuant to this
Section 3.8.
ARTICLE 4
ADDITIONAL OBLIGATIONS
4.1
Maintain Licenses in Force. In addition to its obligations set
forth in
the Evans Sublicense, WGT shall comply with all of the provisions
of, and shall
maintain in full force and effect, all license agreements with
third parties
pursuant to which WGT is licensee of intellectual property included
in the
Intellectual Property. WGT shall promptly notify Medtronic if any
such third
party alleges any breach by WGT of any such license agreement.
Medtronic shall
be entitled, but not obligated, to cure any alleged breach by WGT
of such
license agreement and set-off the cost of such cure against amounts
otherwise
owed to WGT hereunder.
ARTICLE 5
INTELLECTUAL PROPERTY
5.1
Protect Know-How. WGT and Medtronic each agrees to maintain the
confidentiality of all non-public information regarding the WGT
Capacitor
Patents and Licensed Know-How licensed under this Agreement,
including but not
limited to the status of any patent applications included in the
WGT Capacitor
Patents. Each party agrees not to disclose or use (except as
permitted or
required for performance by the party receiving such Confidential
Information of
its rights or duties hereunder) any Confidential Information of the
other party
obtained during the term of this Agreement until the expiration of
* after the
termination or expiration of this Agreement. Each party further
agrees to take
appropriate measures to prevent any such prohibited disclosure by
its present
and future employees, officers, agents, subsidiaries, or
consultants during the
term of this Agreement and for a period of * thereafter.
5.2
Protection of Intellectual Property. WGT agrees to protect the
WGT
Capacitor Patents licensed hereunder to Medtronic by obtaining and
maintaining
appropriate patent rights as
<PAGE>
recommended by reputable patent counsel, except for any patent
applications
abandoned based on advice of such counsel, provided, however, that
Medtronic
shall have the right to review and consult with WGT with respect to
any filings
or other correspondence relating to the WGT Capacitor Patents
licensed hereunder
to Medtronic with the appropriate patenting authority, including
with respect to
any proposed abandonments. If Medtronic reasonably determines, in
its sole
discretion, that any Invention conceived, reduced to practice or
otherwise made,
developed or acquired by one or more employees or agents of WGT and
having
application to Tantalum Capacitors as of the date of this Agreement
is not being
adequately protected by patents, Medtronic may so inform WGT. If
Medtronic
decides that WGT's response has been inadequate, Medtronic may take
whatever
action it reasonably deems necessary at its expense to protect such
Invention.
All patents and copyright registrations related thereto shall be
applied for in
the names of the actual inventors or authors and shall be assigned
to WGT,
subject to Medtronic's rights and license therein; each party shall
execute and
deliver such forms of assignment, power of attorney and other
documents which
are necessary to give effect to the provisions hereof.
5.3
Ownership of Intellectual Property. Subject to the rights and
licenses
granted to Medtronic by this Agreement, (a) any Intellectual
Property conceived,
reduced to practice or otherwise made, developed or acquired by one
or more
employees or agents of WGT shall be the property of WGT, (b) any
Intellectual
Property conceived, reduced to practice or otherwise made,
developed or acquired
by one or more employees or agents of Medtronic shall be the
property of
Medtronic, and (c) WGT shall and hereby does assign in full to
Medtronic all
rights arising in any Joint Invention (defined below), to permit
Medtronic to
hold sole ownership rights in and to any Joint Invention. Medtronic
hereby
grants WGT a nonexclusive, worldwide fully-paid license to any
Joint Invention
to make, use, or sell Tantalum Capacitors for any use, provided,
however, that
WGT shall not make, use, or sell Tantalum Capacitors incorporating
any Joint
Invention to a Medtronic Competitor for a period of * following
such time as the
Joint Invention was first jointly conceived, reduced to practice or
otherwise
made, developed or acquired by one or more employees or agents of
WGT and one or
more employees or agents of Medtronic. For purposes of this
Section,
Intellectual Property shall be deemed to have been developed
jointly by
employees or consultants of Medtronic and WGT, and thus be a "Joint
Invention",
if in connection with any patent application therefor (whether or
not any such
application is to be made or trade secret protection is to be
relied upon), at
least one employee or consultant of each of Medtronic and WGT would
be required
to be named as an inventor in such application in order for a
patent to be
valid.
5.4
Prosecution of Infringement of Intellectual Property Other Than
By
Third Party Patents.
(a)
Medtronic and WGT shall each promptly notify the other if it knows
or
has reason to believe that rights to any Intellectual Property
licensed
hereunder are being infringed or misappropriated by a third party
within the
Field of Use or that such infringement or misappropriation is
threatened. In the
event such alleged infringement relates to a Third Party Patent,
the parties
shall treat such alleged infringement as set forth in Section 5.5.
In all other
instances, WGT shall, after learning of and investigating such
alleged
infringement or misappropriation, send notice to Medtronic (i)
offering
Medtronic the choice of participating in such prosecution or (ii)
declining to
prosecute such alleged infringement or misappropriation.
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(b)
In the event WGT offers Medtronic the choice to participate in
the
prosecution pursuant to (a) (i) above, Medtronic shall have thirty
(30) days in
which to notify WGT in writing of Medtronic's election to
participate in the
prosecution of such alleged infringement or misappropriation. If
Medtronic
elects to participate, Medtronic shall be obligated to pay its own
costs and
expenses incurred by it in connection with such prosecution and
shall be
entitled to receive fifty percent (50%) of the net proceeds
realized from WGT's
and