NATIONAL INSTITUTES OF HEALTH CENTERS FOR DISEASE CONTROL PATENT LICENSE AGREEMENT

 

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                                                                   Exhibit 10.15

 

                          NATIONAL INSTITUTES OF HEALTH

                           CENTERS FOR DISEASE CONTROL

 

                      PATENT LICENSE AGREEMENT -- EXCLUSIVE

 

                                   COVER PAGE

 

 

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For Office of Technology Transfer/NIH internal use only:

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Patent License Number: L-135-94

 

Serial Numbers of Licensed Patents: USPA SN 07/861,249

                                         SN 08/065,618

 

Licensee: MediChem Research, Inc.

 

CRADA Number (if applicable):

 

Additional Remarks:

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This Patent License Agreement, hereinafter referred to as the "Agreement,"

consists of this Cover Page, an attached Agreement, a Signature Page, Appendix A

(Patent or Patent Application), Appendix B (Fields of Use and Territory),

Appendix C (Royalties), Appendix D (Modifications), and Appendix E (Benchmarks).

This Cover Page serves to identify the Parties to this Agreement:

 

       1)      The National Institutes of Health ("NIB") or the Centers for

              Disease Control ("CDC"), hereinafter singly or collectively

              referred to as "PES," agencies of the United States Public Health

              Service within the Department of Health and Human Services

              ("DHHS"); and

 

       2)      The person, corporation, or institution identified above and/or on

              the Signature Page, having offices at the address indicated on the

              Signature Page, hereinafter referred to as "Licensee."

 

 

NIH Office of Technology Transfer

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                     PHS PATENT LICENSE AGREEMENT-EXCLUSIVE

 

       PHS and Licensee agree as follows:

 

1.      BACKGROUND

 

       1.01    In the course of conducting biomedical and behavioral research,

              PHS investigators made inventions that may have commercial

              applicability.

 

       1.02    By assignment of rights from PHS employees and other inventors,

              DHHS, on behalf of the United States Government, owns intellectual

              property rights claimed in any United States and foreign patent

              applications or patents corresponding to the assigned inventions.

              DHHS also owns any tangible embodiments of these inventions

              actually reduced to practice by PHS.

 

       1.03    The Assistant Secretary for Health of DHHS has delegated to PHS

              the authority to enter into this Agreement for the licensing of

              rights to these inventions under 35 U.S.C. Sections 200-212, the

              Federal Technology Transfer Act of 1986, 15 U.S.C. Section 3710a,

              and/or the regulations governing the licensing of Government-owned

              inventions, 37 CFR Part 404.

 

       1.04    PHS desires to transfer these inventions to the private sector

              through commercialization licenses to facilitate the commercial

              development of products and processes for public use and benefit.

 

       1.05    Licensee desires to acquire commercialization rights to certain of

              these inventions in order to develop processes, methods, or

              marketable products for public use and benefit.

 

2.      DEFINITIONS

 

       2.01    "Licensed Patent Rights" shall mean:

 

               a)      U.S. patent applications and patents listed in Appendix A,

                     all divisions and continuations of these applications, all

                     patents issuing from such applications, divisions, and

                     continuations, and any reissues, reexaminations, and

                     extensions of all such patents;

 

              b)      to the extent that the following contain one or more claims

                     directed to the invention or inventions claimed in a)

                     above: i) continuations-in-part of a) above; ii) all

                     divisions and continuations of these continuations-in-part;

                     iii) all patents issuing from such continuations-in-part,

                      divisions, and continuations; and iv) any reissues,

                     reexaminations, and extensions of all such patents;

              c)      to the extent that the following contain one or more claims

                     directed to the invention or inventions claimed in a)

                     above:

 

 

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                     all counterpart foreign applications and patents to a) and

                     b) above, including those listed in Appendix A.

 

                     Licensed Patent Rights shall not include b) or c) above to

                     the extent that they contain one or more claims directed to

                     new matter which is not the subject matter of a claim in a)

                     above.

 

       2.02    "Licensed Product(s)" means tangible materials which, in the

              course of manufacture, use, or sale would, in the absence of this

              Agreement, infringe one or more claims of the Licensed Patent

              Rights that have not been held invalid or unenforceable by an

              unappealed or unappealable judgement of a court of competent

               jurisdiction.

 

       2.03    "Licensed Process(es)" means processes which, in the course of

              being practiced would, in the absence of this Agreement, infringe

              one or more claims of the Licensed Patent Rights that have not

               been held invalid or unenforceable by an unappealed or

              unappealable judgment of a court of competent jurisdiction.

 

       2.04    "Licensed Territory" means the geographical area identified in

              Appendix B.

 

       2.05    "Net Sales" means the total gross receipts for sales of Licensed

              Products or practice of Licensed Processes by or on behalf of

              Licensee or its sublicensees, and from leasing, renting, or

              otherwise making Licensed Products available to others without

              sale or other dispositions, whether invoiced or not, less returns

              and allowances actually granted, packing costs, insurance costs,

              freight out, taxes or excise duties imposed on the transaction (if

              separately invoiced), and wholesaler and cash discounts in amounts

              customary in the trade. No deductions shall be made for

              commissions paid to individuals, whether they be with independent

               sales agencies or regularly employed by Licensee, or sublicensees,

              and on its payroll, or for the cost of collections.

 

       2.06    "First Commercial Sale" means the initial transfer by or on behalf

              of Licensee or its sublicensees of Licensed Products or the

              initial practice of a Licensed Process by or on behalf of Licensee

              or its sublicensees in exchange for cash or some equivalent to

              which value can be assigned for the purpose of determining Net

              Sales.

 

       2.07    "Government" means the government of the United States of America.

 

       2.08    "Licensed Fields of Use" means the fields of use identified in

              Appendix B.

 

3.      GRANT OF RIGHTS

 

       3.01    PHS hereby grants and Licensee accepts, subject to the terms and

              conditions of this Agreement, an exclusive license to Licensee

              under the Licensed Patent Rights in the Licensed Territory to make

              and have made, to use and have used, and to sell and have sold any

 

 

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              Licensed Products in the Licensed Fields of Use and to practice

              and have practiced any Licensed Processes in the Licensed Fields

              of Use.

 

       3.02    This Agreement confers no license or rights by implication,

              estoppel, or otherwise under any patent applications or patents of

              PHS other than Licensed Patent Rights regardless of whether such

              patents are dominant or subordinate to Licensed Patent Rights.

 

4.      SUBLICENSING

 

       4.01    Upon written approval by PHS, which approval will not be

              unreasonably withheld, Licensee may enter into sublicensing

              agreements under the Licensed Patent Rights.

 

       4.02    Licensee agrees that any sublicensee granted by it shall provide

               that the obligations to PHS of Paragraphs 5.01-5.05, 8.01, 10.01,

              10.02, 12.05, and 13.08-13.11 of this Agreement shall be binding

              upon the sublicensee as if it were a party to this Agreement.

              Licensee further agrees to attach copies of these Paragraphs to

              all sublicense agreements.

 

       4.03    Any sublicensee granted by Licensee shall provide for the

              termination of the sublicense, or the conversion to a license

              directly between such sublicensees and PHS, at the option of the

              sublicensee, upon termination of this Agreement under Article 13.

              Such conversion is subject to PHS approval and contingent upon

              acceptance by the sublicensee of the remaining provisions of this

              Agreement.

 

       4.04    Licensee agrees to forward to PHS a copy of each fully executed

              sublicense agreement postmarked within sixty (60) days of the

              execution of such agreement.

 

5.      STATUTORY AND PHS REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS

 

       5.01    PHS reserves on behalf of the Government an irrevocable,

              nonexclusive, nontransferable, royalty-free license for the

              practice of all inventions licensed under the Licensed Patent

              Rights throughout the world by or on behalf of the Government and

              on behalf of any foreign government or international organization

              pursuant to any existing or future treaty or agreement to which

              the Government is a signatory.

 

       5.02    Licensee agrees that products used or sold in the United States

              embodying Licensed Products or produced through use of Licensed

              Processes shall be manufactured substantially in the United

              States, unless a written waiver is obtained in advance from PHS.

 

       5.03    Licensee acknowledges that PHS may enter into future Cooperative

              Research and Development Agreements (CRADAs) under the Federal

              Technology Transfer Act of 1986 that relate to the subject matter

              of

 

 

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              this Agreement. Licensee agrees not to unreasonably deny requests

              for sublicense or cross-license rights from such future

              collaborators with PHS when acquiring such derivative rights is

               necessary in order to make a CRADA project feasible. Licensee may

              request an opportunity to join as a party to the proposed CRADA.

 

       5.04    DHHS has responsibility for funding basic biomedical research, for

              funding medical treatment through programs such as Medicare and

              Medicaid, for providing direct medical care and, more generally,

              for protecting the health and safety of the public. Because of

              these responsibilities, and the public investment in the research

              that culminated in the Licensed Patent Rights, PHS may require

              Licensee to submit documentation in confidence showing a

              reasonable relationship between the pricing of a Licensed Product,

              the public investment in that product, and the health and safety

              needs of the public. This paragraph shall not restrict the right

              of Licensee to price a Licensed Product or Licensed Process so as

               to obtain a reasonable profit for its sale or use. This Paragraph

              5.04 does not permit PHS to set or dictate prices for Licensed

              Products or Licensed Processes.

 

       5.05    In addition to the reserved license of Paragraph 5.01 above, PHS

              reserves the right to grant nonexclusive licenses to make and to

              use the inventions defined by the Licensed Patent Rights for

              purposes of research involving the inventions themselves, and not

              for purposes of commercial manufacture or in lieu of purchase if

              the inventions are available as commercial products for research

              purposes. The purpose of this research license is to encourage

              basic research, whether conducted at an academic or corporate

              facility. In order to safeguard the Licensed Patent Rights,

              however, PHS shall consult with Licensee before granting to

              commercial entities a research license or providing to them

              research samples of the materials claimed in the Licensed Patent

              Rights.

 

6.      ROYALTIES AND REIMBURSEMENT

 

       6.01    Licensee agrees to pay to PHS a noncreditable, nonrefundable

              license issue royalty as set forth in Appendix C within thirty

              (30) days from the date that this Agreement becomes effective.

 

 

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       6.02    Licensee agrees to pay to PHS a nonrefundable minimum annual

              royalty as set forth in Appendix C. The minimum annual royalty is

              due and payable on January 1 of each calendar year and may be

              credited against any earned royalties due for sales made in that

              year. The minimum annual royalty due for the first calendar year

              of this Agreement may be prorated according to the fraction of the

               calendar year remaining between the Effective Date of this

              Agreement and the next subsequent January 1.

 

       6.03    Licensee agrees to pay PHS earned royalties as set forth in

              Appendix C.

 

       6.04    Licensee agrees to pay PHS benchmark royalties as set forth in

              Appendix C.

 

       6.05    A claim of a patent or patent application licensed under this

              Agreement shall cease to fall within the Licensed Patent Rights

              for the purpose of computing the minimum annual royalty and earned

              royalty payments in any given country on the earliest of the dates

              that a) the claim has been abandoned but not continued, b) the

              patent expires, c) the patent is no longer maintained by the

              Government, or d) all claims of the Licensed Patent Rights have

              been held to be invalid or unenforceable by an unappealed or

              unappealable decision of a court of competent jurisdiction or

              administrative agency.

 

       6.06    No multiple royalties shall be payable because any Licensed

              Products or Licenced Processes are covered by more than one of the

              Licensed Patent Rights.

 

       6.07    On sales of Licensed Products by Licensee to sublicensees or

              affiliated parties or on sales made in other than an arm's-length

              transaction, the value of the Net Sales attributed under this

              Article 6 to such a transaction shall be that which would have

              been received in an arm's-length transaction, based on sales of

              like quantity and quality products on or about the time of such

              transaction.

 

       6.08    As an additional royalty, Licensee agrees to pay PHS, within sixty

              (60) days of PHS's submission of a statement and request for

              payment, an amount equivalent to all reasonable expenses

              previously incurred by PHS in the preparation, filing,

               prosecution, and maintenance of Licensed Patent Rights. Licensee

              further agrees to pay PHS annually, within sixty (60) days of

              PHS's submission of a statement and request for payment, a royalty

              amount equivalent to all such future patent expenses incurred

              during the previous calendar year, as of the date the statement

              and request for payment is sent by PHS to Licensee. Fifty percent

              (50%) of the cumulative amount of such payments may be credited

              against royalties due under Paragraph 6.03; however, the net

              royalty payment in any calendar year may not be lower than the

              minimum annual royalty specified in Appendix B. Licensee may elect

              to surrender its rights in any country of the Licensed Territory

              under any Licensed Patent Rights

 

 

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              upon sixty (60) days' written notice to PHS and owe no payment

              obligation under this paragraph for subsequent patent-related

              expenses incurred in that country.

 

7.      DOMESTIC AND FOREIGN PATENT FILING, PROSECUTION, AND MAINTENANCE

 

       7.01    PHS agrees to take responsibility for, but to consult with the

              Licensee in, the preparation, filing, prosecution, and maintenance

              of any and all patent applications or patents included in the

              Licensed Patent Rights and shall furnish copies of relevant

              patent-related documents to Licensee.

 

       7.02    Each party shall promptly inform the other as to all matters that

              come to its attention that may affect the preparation, filing,

              prosecution, or maintenance of the Licensed Patent Rights and

              permit each other to provide comments and suggestions with respect

              to the preparation, filing, and prosecution of Licensed Patent

              Rights, which comments and suggestions shall be considered by the

              other party.

 

8.      RECORD KEEPING

 

       8.01    Licensee agrees to keep accurate and correct records of Licensed

               Products made, used, or sold and Licensed Processes practiced

              under this Agreement appropriate to determine the amount of

              royalties due PHS. Such records shall be retained for at least

              five (5) years following a given reporting period. They shall be

              available during normal business hours for inspection at the

              expense of PHS by an accountant or other designated auditor

              selected by PHS for the sole purpose of verifying reports and

              payments hereunder. The accountant or auditor shall only disclose

              to PHS information relating to the accuracy of reports and

              payments made under this Agreement. If an inspection shows an

              underreporting or underpayment in excess of five percent (5%) for

              any twelve (12) month period, then Licensee shall reimburse PHS

              for the cost of the inspection at the time Licensee pays the

              unreported royalties, including any late charges as required by

              Paragraph 7.06 of this Agreement. All payments required under this

              Paragraph shall be due within thirty (30) days of the date PHS

              provides Licensee notice of the payment due.

 

9.      REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS

 

       9.01    Prior to signing this Agreement, Licensee has provided to PHS a

              written commercialization plan ("Commercial Development Plan")

              under which Licenses intends to bring the subject matter of the

              Licensed Patent Rights into commercial use. The Commercial

              Development Plan is hereby incorporated by reference into this

              Agreement. Based on this plan, performance benchmarks are

              determined as specified in Appendix E ("Benchmarks").

 

 

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       9.02    Licensee shall provide written annual reports on its product

              development progress or efforts to commercialize under the

              Commercial Development Plan for each of the Licensed Fields of Use

              within sixty (60) days after December 31 of each calendar year.

              These progress reports shall include, but not be limited to:

              progress on research and development, status of applications for

              regulatory approvals, manufacturing, sublicensing, marketing, and

              sales during the preceding calendar year, as well as plans for the

              present calendar year. If reported progress differs from that

              projected in the Commercial Development Plan and Benchmarks,

              Licensee shall explain the reasons for such differences. Licensee

              may propose amendments in any such annual report to the Commercial

              Development Plan, acceptance of which by PHS may not unreasonably

              be denied. Licensee agrees to provide any additional data

              reasonably required by PHS to evaluate Licensee's performance.

              Licensee may amend the Benchmarks at any time upon written consent

              by PHS. PHS shall not unreasonably withhold approval of any

              request of Licensee to extend the time periods of this schedule if

              such request is supported by a reasonable showing by Licensee of

              diligence in its performance under the Commercial Development Plan

               and toward bringing the Licensed Products to the point of

              practical application as defined in 37 CFR 404.3(d). Licensee

              shall amend the Commercial Development Plan and Benchmarks at the

              request of PHS to address any Licensed Fields of Use not

              specifically addressed in the plan originally submitted.

 

       9.03    Licensee shall report to PHS the date of the First Commercial Sale

              in each country in the Licensed Territory within thirty (30) days

              of such occurrence.

 

       9.04    Licensee shall submit to PHS within sixty (60) days after each

              calendar half-year ending June 30 and December 31 a royalty report

              setting forth for the preceding half-year period the amount of the

              Licensed Products sold or Licensed Processes practiced by or on

              behalf of Licensee in each country within the Licensed Territory,

              the Net Sales, and the amount of royalty accordingly due. With

              each such royalty report, Licensee shall submit payment of the

              earned royalties due. If no earned royalties are due to PHS for

              any reporting period, the written report shall so state. The

               royalty report shall be certified as correct by an authorized

              officer of Licensee and shall include a detailed listing of all

              deductions made under Paragraph 2.05 to determine Net Sales made

              under Article 6 to determine royalties due.

 

       9.05    Licensee agrees to forward semi-annually to PHS a copy of such

              reports received by Licensee from its sublicensees during the

              preceding half-year period as shall be pertinent to a royalty

               accounting to PHS by Licensee for activities under the sublicense.

 

       9.06    Royalties due under Article 6 shall be paid in D.S. dollars. For

              conversion of foreign currency to U.S. dollars, the conversion

              rate shall be the rate quoted in The Wall Street Journal on the

              day that the payment is due. All checks and bank drafts shall be

              drawn on

 

 

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              United States banks and shall be payable to NIH/Patent Licensing

              at the address shown on the Signature Page below. Any loss of

              exchange, value, taxes, or other expenses incurred in the transfer

              or conversion to U.S. dollars shall be paid entirely by Licensee.

              All royalty payments due under this Agreement shall be mailed to

              the following address: NIH, P.O. Box 360120, Pittsburgh,

              Pennsylvania 15251-6120. The royalty report required by paragraph

              9.04 of this Agreement shall accompany each such payment and a

              copy of such report shall also be mailed to PHS at its address for

               notices indicated on the Signature Page of this Agreement.

 

       9.07    Late charges will be applied to any overdue payments as required

              by the U.S. Department of Treasury in the Treasury Fiscal

              Requirements Manual, Section 8025.40. The payment of such late

              charges shall not prevent PHS from exercising any other rights it

              may have as a consequence of the lateness of any payment.

 

       9.08    All plans and reports required by this Article 9 and marked

              "confidential" by Licensee shall be treated by PHS as commercial

              and financial information obtained from a person and as privileged

              and confidential and, to the extent permitted by law, shall not be

               subject to disclosure under the Freedom of Information Act, 5

              U.S.C. Section 552.

 

10.     PERFORMANCE

 

       10.01   Licensee shall use its reasonable best efforts to introduce the

              Licensed Products into the commercial market or apply the

              Licensed Processes to commercial use as soon as practicable.

              "Reasonable best efforts" for the purpose of this provision shall

              include, but not be limited to, adherence to the Commercial

               Development Plan and performance of the Benchmarks. The efforts of

              a sublicensee shall be considered the efforts of Licensee.

 

       10.02   Upon the First Commercial Sale, until the expiration of this

              Agreement, Licensee shall use its reasonable best efforts to keep

              Licensed Products and Licensed Processes reasonably accessible to

              the public.

 

11.     INFRINGEMENT AND PATENT ENFORCEMENT

 

       11.01   PHS and Licensee agree to notify each other promptly of each

              infringement or possible infringement,