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AMENDED AND RESTATED PATENT LICENSING AGREEMENT

Patent License Agreement

AMENDED AND RESTATED  PATENT LICENSING AGREEMENT | Document Parties: NEOMAGIC CORP | The Consortium for Technology Licensing, Ltd |  Scott Sullinger | Paul Richman You are currently viewing:
This Patent License Agreement involves

NEOMAGIC CORP | The Consortium for Technology Licensing, Ltd | Scott Sullinger | Paul Richman

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Title: AMENDED AND RESTATED PATENT LICENSING AGREEMENT
Governing Law: Delaware     Date: 6/10/2005
Industry: Semiconductors     Sector: Technology

AMENDED AND RESTATED  PATENT LICENSING AGREEMENT, Parties: neomagic corp , the consortium for technology licensing  ltd ,  scott sullinger , paul richman
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Exhibit 10.20

 

AMENDED AND RESTATED

PATENT LICENSING AGREEMENT

 

This AMENDED AND RESTATED PATENT LICENSING AGREEMENT (hereinafter referred to as the “Agreement”) is made and entered into March 28, 2005 (the “Effective Date”) by and between NeoMagic Corporation, a corporation duly organized and existing under the laws of the State of Delaware and having its principal office at 3250 Jay Street, Santa Clara, California, 95054 (hereinafter referred to as “NEOMAGIC”) and The Consortium for Technology Licensing, Ltd., a corporation duly organized under the laws of the State of New York and having its principal office at Six Swan Place, Nissequogue, New York 11780-1335 (hereinafter referred to as “CONSORTIUM”). This Agreement amends and restates in its entirety the April 1, 2002 Patent Licensing Agreement and all amendments thereto between NEOMAGIC and CONSORTIUM.

 

WITNESSETH

 

WHEREAS, NEOMAGIC is the owner of certain Patent Rights (as later defined herein) relating to the patents and patent applications listed in Appendix A hereto and has the right to grant licenses in respect of said Patent Rights;

 

WHEREAS, NEOMAGIC desires to appoint CONSORTIUM as its exclusive licensing agent, subject to certain conditions as later specified herein, to derive licensing revenue from third parties that wish to exercise the Patent Rights in connection with the manufacture, use or sale of products that are not made by or for NEOMAGIC and do not incorporate NEOMAGIC products;

 

WHEREAS, CONSORTIUM has represented to NEOMAGIC, to induce NEOMAGIC to enter into this Agreement, that CONSORTIUM possesses expertise in the licensing of intellectual property similar to the Patent Rights and that it shall commit itself to a thorough, vigorous and diligent program, the objective of which will be to assist NEOMAGIC in deriving licensing revenue from some or all of the Patent Rights; and

 

WHEREAS, CONSORTIUM desires to obtain the right to derive licensing revenue on NEOMAGIC’s behalf from the Patent Rights upon the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

 

1. DEFINITIONS .

 

For the purposes of this Agreement, the following words and phrases shall have the following meanings:

 

1.1 “Confidential Information” as used in this Agreement shall mean any trade secrets or other secret or confidential information of NEOMAGIC, and any ideas and expressions contained in any deliverables provided by NEOMAGIC to CONSORTIUM. Confidential Information does not include any portions of any such deliverables which are made publicly available by NEOMAGIC or which are generally known outside NEOMAGIC. Confidential


Information also includes any other confidential information belonging to or relating to the business of NEOMAGIC or its affiliated companies including, without limitation, information relating to NEOMAGIC’s customers, intellectual property, employees, programs, costs, products, apparatus, equipment, financing, plans or technology which NEOMAGIC does not make generally available to the public.

 

1.2 “Licensed Product” shall mean any product or part thereof which:

 

(a) the manufacture, use or sale of which is covered in whole or in part by any claim in the NEOMAGIC Patents in the country in which any such product or part thereof is made, used or sold; or

 

(b) is manufactured by using a process or is employed to practice a process which is covered in whole or in part by any claim in the NEOMAGIC Patents in the country in which any Licensed Process is used or in which such product or part thereof is used or sold.

 

Notwithstanding the foregoing, “Licensed Product” does not include any NeoMagic Product.

 

1.3 “Licensed Process” shall mean any process which is covered in whole or in part by any claim contained in the NEOMAGIC Patents.

 

1.4 “Licensee” means a licensee of the Patent Rights that has executed a Licensee Agreement either directly with NEOMAGIC or with any of its Subsidiaries in accordance with this Agreement.

 

1.5 “Licensee Agreement” means the written agreement each Licensee shall execute either directly with NEOMAGIC or with any of its Subsidiaries in order to obtain the right to manufacture, use or sell products incorporating or embodying all or part of the Patent Rights; provided that if any Licensee Agreement is renegotiated by NEOMAGIC or by any of its Subsidiaries, it shall continue to be deemed a Licensee Agreement. Notwithstanding the foregoing, “Licensee Agreement” does not include any agreement relating to the design, development, manufacture, distribution or sale of a NeoMagic Product.

 

1.6 “NEOMAGIC Patents” shall mean all the patents and/or patent applications, in all countries of the world, currently owned by NEOMAGIC and/or its Subsidiaries, as listed in Appendix A, and all patents and/or patent applications, in all countries of the world, which shall in the future issue to, or be applied for, by NEOMAGIC and/or its Subsidiaries, which shall be incorporated into Appendix A from time to time, by amendment.

 

1.7 “NeoMagic Product” means any hardware or software product manufactured by or for NEOMAGIC or any third party product that incorporates a hardware or software product manufactured by or for NEOMAGIC.

 

1.8 “Net Revenues” shall mean the total amount actually paid, during the term of this Patent Licensing Agreement and for five (5) years thereafter, by any third party, by way of

 


[***]

Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.

 

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license fees, royalties or any other types of payments, to NEOMAGIC and/or its Subsidiaries for the right to use the Patent Rights pursuant to a Licensee Agreement, less the following amounts related to such third party payments incurred pursuant to this Agreement: (i) outside engineering time and expenses incurred by NEOMAGIC and/or its Subsidiaries; (ii) outside legal expenses incurred by NEOMAGIC and/or its Subsidiaries; (iii) out-of-pocket disbursements incurred by NEOMAGIC and/or its Subsidiaries; and (iv) all amounts paid to CONSORTIUM as reimbursement of expenses under Section 4.4 hereof. Notwithstanding the above, the outside legal expenses referred to in this Section 1.8 shall not include NEOMAGIC’s and/or its Subsidiaries’ normal patent-related costs such as, but not limited to, prosecution and patent maintenance. NEOMAGIC shall provide CONSORTIUM with adequate documentary evidence of the items described in (i) – (iii) directly above. Any expenses deducted from Net Revenues under this Section 1.8(i) – (iv) shall be deducted pro-rata from all payments to be received under a Licensee Agreement, and not from just the first payment(s) under such Licensee Agreement.

 

1.9 “Patent Rights” means the rights to make, have made, use, lease, sell and import products incorporating and/or using the NEOMAGIC Patents.

 

1.10 [***]

 

1.11 “Records” shall mean any documents, tapes, records or other materials in printed or machine-readable form containing any Confidential Information.

 

1.12 “Subsidiary” shall mean any corporation, company or other entity of which a party hereto, now or hereafter, owns or controls, directly or indirectly, more than fifty percent (50%) of the Voting Rights. As used herein, the term “Voting Rights” means (i) the outstanding shares or stock entitled to vote for the election of directors of a corporation, company or other entity in question or (ii), in case such entity does not have outstanding shares or securities, the ownership interest representing the right to manage such entity. Any corporation, company or other entity which would at any time be a Subsidiary of NEOMAGIC or CONSORTIUM, as the case may be, by reason of the foregoing, shall be considered as a Subsidiary for the purposes of this Agreement only so long as the ownership or control, directly or indirectly, by NEOMAGIC or CONSORTIUM, as the case may be, meets the conditions hereinabove set forth. “Subsidiaries” of NEOMAGIC or CONSORTIUM shall mean, respectively, all corporations, companies or other entities that qualify as a Subsidiary under the foregoing.

 

2. APPOINTMENT .

 

2.1 Subject to the terms and conditions of this Agreement, NEOMAGIC hereby appoints CONSORTIUM as its exclusive agent to negotiate Licensee Agreements with Licensees on behalf of NEOMAGIC.

 

2.2 (a) Except for the rights expressly granted to CONSORTIUM hereunder, NEOMAGIC reserves all rights in and to the NEOMAGIC Patents, including without limitation the right:

 

(i) to use the Patent Rights in all past, current and future NEOMAGIC designs and components;

 


[***]

Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.

 

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(ii) to license the Patent Rights to any third party for purposes of the third party designing, developing, manufacturing, distributing or selling any NeoMagic product; and

 

(iii) to license or sell any of the NEOMAGIC Patents.

 

(b) Notwithstanding any other provision of this Agreement, NEOMAGIC shall not be required to make any payments to CONSORTIUM, by way of Royalty Payments or otherwise as a result of:

 

(i) exercising any rights under 2.2(a)(i) or 2.2(a)(ii) above; or

 

(ii) any payments or other consideration received by NEOMAGIC or its stockholders as the result of (1) any general sale of the assets of NEOMAGIC or any of its divisions, (2) the reorganization of NEOMAGIC, or (3) the merger, acquisition or spin-off of NEOMAGIC or any of its divisions into or by a third party or separate entity; or

 

(iii) any payments or other consideration received by NEOMAGIC as the result of any business arrangement or agreement whose primary objective does not relate to the intellectual property area (although intellectual property may be a component thereof) and which was negotiated directly between NEOMAGIC and a third party, without any involvement on the part of CONSORTIUM; or

 

(iv) any payments or other consideration received by NEOMAGIC as the result of any business arrangement or agreement between NEOMAGIC and a third party which was effected after NEOMAGIC specifically requested that CONSORTIUM represent NEOMAGIC in pursuing such business arrangement or agreement with such third party and CONSORTIUM elected, for any reason whatsoever, not to represent NEOMAGIC in pursuing such business arrangement or agreement, resulting in NEOMAGIC’s either having to negotiate with such third party directly or having to enlist the assistance of an outside consultant or agent (other than CONSORTIUM) to negotiate with such third party.

 

(c) Notwithstanding any other provision of this Agreement, any third party, or other entity, that acquires all, or substantially all, of the assets of NEOMAGIC shall not be required to make any payments to CONSORTIUM, by way of Royalty Payments or otherwise, under the following circumstances: (i) the primary business of such third party, or other entity, is the licensing of intellectual property, (ii) the third party, or other entity, grants a license under the Patent Rights to another company or organization not previously licensed under the Patent Rights and (iii) CONSORTIUM has not contacted or met with such company or organization on behalf of NEOMAGIC for at least one (1) year prior to such third party’s acquiring all, or substantially all, of the assets of NEOMAGIC.

 


[***]

Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.

 

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2.3 Notwithstanding any other provision in this Agreement, CONSORTIUM shall not enter into any Licensee Agreement with any Licensee.

 

2.4 CONSORTIUM agrees to forward to NEOMAGIC an original copy of any and all Licensee Agreements promptly upon execution by the parties. NEOMAGIC agrees to forward to CONSORTIUM an original copy of all Licensee Agreements promptly upon execution by the parties. CONSORTIUM agrees that all agreements with Licensees will be made solely between the Licensee and NeoMagic.

 

2.5 CONSORTIUM shall not license the NEOMAGIC Patents in conjunction with any other party’s patents or patent rights without the prior written consent of NEOMAGIC.

 

2.6 The rights granted hereunder shall not be construed to confer any rights upon CONSORTIUM, by implication, estoppel, or otherwise, as to any technology or intellectual property other than any rights expressly set forth herein.

 

2.7 NEOMAGIC recognizes that, in order to secure licensing agreements, the inventors of the NEOMAGIC Patents will need to be available for meetings with potential Licensees and for a reasonable amount of consultation with CONSORTIUM, from time to time, as required, without fee.

 

2.8 CONSORTIUM will endeavor to negotiate all Licensee Agreements in the English language.

 

2.9 The parties agree to meet regularly, at mutually-convenient times and places, after the execution of this Agreement to discuss and determine strategies concerning the licensing of Patent Rights to Licensees.

 

3. CONSORTIUM OBLIGATIONS .

 

3.1 CONSORTIUM shall use its best efforts to derive Net Revenues from Licensees, through licensing and/or selling, all or part, of the Patent Rights to Licensees through a thorough, vigorous and diligent program for exploitation of the Patent Rights. Without limiting the foregoing, CONSORTIUM shall:

 

(a) use reasonable efforts to promote licenses of the Patent Rights to third parties; and

 

(b) conduct its business in a manner that reflects positively on NEOMAGIC and the Patent Rights.

 

3.2 CONSORTIUM acknowledges that the Confidential Information constitutes valuable, confidential proprietary information of NEOMAGIC and agrees that both during the term hereof and thereafter CONSORTIUM shall not, except in the provision of its services hereunder and for the exclusive advantage of NEOMAGIC, use or disclose to any third party any Confidential

 


[***]

Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.

 

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Information acquired by it. CONSORTIUM also agrees not to use or permit others to use the Confidential Information, or to make copies of any of the Records, except as may be authorized by NEOMAGIC. CONSORTIUM acknowledges that all Records, including all copies thereof, containing any Confidential Information belong exclusively to NEOMAGIC and the same shall be delivered up to NEOMAGIC forthwith following the termination or expiration of this Agreement, or at any time at the request of NEOMAGIC. CONSORTIUM agrees to comply with all security measures and to follow all instructions provided by NEOMAGIC in order to safeguard and protect the Confidential Information. CONSORTIUM will advise NEOMAGIC of any unauthorized disclosure or use of any of the Confidential Information of which it becomes aware.

 

3.3 CONSORTIUM shall be required to receive NEOMAGIC’s consent prior to approaching any party for purposes of discussions or negotiations, or for purposes of pursuing an infringement claim concerning the NEOMAGIC Patents, which consent NEOMAGIC may withhold in its sole discretion. NEOMAGIC agrees that for a period of eighteen (18) months following the grant of such consent, that NEOMAGIC, or any designee or representative of NEOMAGIC, shall not approach that party for the purposes of pursuing an infringement claim concerning, or negotiating a license to use, the NEOMAGIC Patents. In the event where a consent is not given, NEOMAGIC reserves the right to approach that party for the purposes of pursuing an infringement claim concerning, or negotiating a license to use, the NEOMAGIC Patents.

 

3.4 CONSORTIUM agrees that, if it is prevented from pursuing a claim of infringement against a party, or concluding a Licensee Agreement with a party for reasons of conflict of interest, that, notwithstanding any other provision in this Agreement, NEOMAGIC shall immediately be permitted to approach that party for purposes of pursuing an infringement claim or concluding a Licensee Agreement.

 

4. ROYALTIES AND EXPENSES .

 

4.1 (a) The first [***] of Net Revenues derived from Licensee Agreements and/or sales transactions of one or more NEOMAGIC Patents will accrue entirely to NEOMAGIC. Thereafter, for all Net Revenues in excess of the first [***], except as provided in section 2.2(b) above, NEOMAGIC shall pay to CONSORTIUM royalty payments (the “Royalty Payments”) calculated as follows:

 

(i) [***] of Net Revenues derived from Licensee Agreements;

 

(ii) [***] of all Net Revenues associated with sales transactions of one or more NEOMAGIC Patents, and

 

(iii) an additional one-time bonus of [***] if CONSORTIUM exceeds performance targets established by agreement with NEOMAGIC.

 

(b) If NEOMAGIC is compensated by a Licensee in other than financial terms under (i) or (ii) above, then the parties will negotiate in good faith to determine a comparable amount of compensation to CONSORTIUM in lieu of the Royalty Payments.

 


[***]

Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.

 

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(c) If NEOMAGIC licenses or sells all or part of the Patent Rights to a third party and CONSORTIUM is not involved, and has not been involved, at any time, in the introduction of, or the negotiation or transaction with, the third party, then the “Royalty Payments” that NEOMAGIC shall pay to CONSORTIUM, as specified above in Section 4.1(a), (i) and (ii), shall be reduced [***] to [***] in Section 4.1(a)(i) and from [***] to [***] in Section 4.1(a)(ii), and NEOMAGIC shall pay such reduced payments to CONSORTIUM.

 

4.2 The Royalty Payments due hereunder to CONSORTIUM shall be paid in full without deduction of taxes or other fees which may be imposed by any government and shall be paid by NEOMAGIC to CONSORTIUM within a thirty (30) day period following the end of each calendar quarter in which NEOMAGIC receives payment of the Net Revenues.

 

4.3 Royalty Payments shall be paid to CONSORTIUM in United States dollars. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by using the mid point of the exchange rate specified by The Wall Street Journal on the last business day of the calendar quarterly reporting period to which such Royalty Payments relate.

 

4.4 CONSORTIUM shall be responsible for paying all of its out-of-pocket expenses incurred in connection with its efforts to facilitate the obtaining of Net Revenues, as per the terms of this Agreement, including, but not limited to, out-of-pocket expenses, travel expenses, telephone bills, mailing charges, copying charges and fees incurred for technical patent analysis. However, CONSORTIUM shall not be responsible, in any way, for reimbursing NEOMAGIC for any costs, fees or expenses whatsoever that NEOMAGIC incurs unless NEOMAGIC has obtained specific written authorization to incur any such costs, fees or expenses from CONSORTIUM prior to NEOMAGIC inc


 
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