Exhibit
10.11
THE SYMBOL '***' IS USED THROUGHOUT THIS
EXHIBIT TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED
AS CONFIDENTIAL
CONFIDENTIAL
PUBLIC HEALTH
SERVICE
PATENT LICENSE
AGREEMENT-EXCLUSIVE
COVER PAGE
For PHS internal use
only:
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|
|
Patent License Number:
L-103-96/0
|
|
|
Serial Numbers of Licensed
Patents:
|
U.S. Patent Application Serial No.
[***], filed [***];
|
|
|
U.S. Patent Application Serial No.
[***], filed [***], now issued as U.S. Patent No. [***] on [***];
and
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|
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U.S. Patent Application Serial. No.
[***], filed [***]
|
Licensee: Angiotech
Pharmaceuticals, Inc.
CRADA Number (if
applicable)
This Patent License
Agreement, hereinafter referred to as the " Agreement ,"
consists of this Cover Page, an attached Agreement, a
Signature Page, Appendix A (List of Patent(s) or Patent
Application(s)), Appendix B (Fields of Use and Territory), Appendix
C (Royalties), Appendix D (Modifications), Appendix E (Benchmarks),
and Appendix F (Commercial Development Plan). The Parties to this
Agreement are:
1)
The National Institutes
of Health ("NIH"), the Centers for Disease Control and
Prevention ("CDC"), or the Food and Drug Administration ("
FDA "), hereinafter singly or collectively referred to as
"PHS," 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."
Model PHS Patent Liccnse
Agreement—Exclusive—Angiotech
Pharmaceuticals,
Form 121895 Page 1 of 27
(L403-96(0) (MAL) CONFIDENTIAL 19971117
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.. §
§ 200-212, the Federal Technology
Transfer Act of 1986, 15 U.S.C. § 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 develop processes, methods, or marketable
products for public use and benefit.
1.06
Licensee
possesses certain intellectual properties including U.S. Patent
Application Serial No. [***], U.S. Patent Application Serial No.
[***], PCT cognate application no. [***], and [***] divisional
patent applications claiming priority of USSN [***] in the same
field as that disclosed in the PHS patent application.
Further, Licensee also possesses intellectual property embodied. in
U.S. Patent Application Serial No. [***], filed [***] entitled
[***].
1.07
Licensee
and PHS previously entered into a nonexclusive license
agreement to license rights under U.S. Patent Application Serial
No. [***], filed [***], namely PHS License Agreement L-331-96/0
which license was fully executed on November 26, 1997.
2
DEFINITIONS
2.01
"Benchmarks" mean the
performance milestones that are set forth in Appendix E.
2.02
"Commercial Development
Plan" means the written commercialization plan attached as
Appendix F.
Model PHS Patent License
Agreement—Exclusive—Angiotech Pharmaceuticals,
Inc
Form 121895
Page 2 of 27 (L-103-96/0)
(FINAL) CONFIDENTIAL 19971117
2.03
" 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 .
2.04
" Government
" means the Government of the United States of America.
2.05
" Licensed
Fields of Use " means the fields of use identified in
Appendix B.
2.06
" 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 disclosed 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 disclosed in a) above: 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 disclosed in a) above.
2.07
" 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.
2.08
" 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 judgment of a court of competent
jurisdiction.
2.09
" Licensed
Territory " means the geographical area identified in Appendix
B.
2.10
" 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. Net Sales shall not include transfers at or below
cost by or on behalf of Licensee of Licensed Products
or the practice of Licensed Processes in connection with
compassionate use, emergency use, bonafide research, treatment
Investigational New Drug Applications (IND's), or the like
authorized by the U.S. Food and Drug Administration ("FDA") or
corresponding foreign agencies. 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.
Model PHS Patent License
Agreement—Exclusive—Angiotech Pharmaceuticals,
Inc.
Form 121895
Page 3 of 27 (L-103-96/0) (FINAL)
CONFIDENTIAL 19971117
2.11
"
Practical Application " means to manufacture in the case of
a composition or product, to practice in the case of a process or
method, or to operate in the case of a machine or system; and in
each case, under such conditions as to establish that the invention
is being utilized and that its benefits are to the extent permitted
by law or Government regulations available to the public on
reasonable terms.
2.12
"
Research License " means a nontransferable,
nonexclusive license to make and to use the Licensed
Products or Licensed Processes as defined by the
Licensed Patent Rights for purposes of research and not for
purposes of commercial manufacture or distribution or in lieu of
purchase.
2.13
" Combined
Product " means a product that contains a Licensed
Product along with at least one other active component or
active ingredient, including any proprietary device, not covered by
the Licensed Patent Rights.
2.14
" Effective Date"
means the date when the last party to sign has executed this
Agreement.
3.
GRANT OF
RIGHTS
3.01
PHS
hereby grants and
Licensee accepts, subject to the terms and conditions of this
Agreement:
an exclusive
license as set forth in Appendix B for:
[***]
a nonexclusive
license as set forth in Appendix B for:
[***]
Model PHS Patent License
Agreement—Exclusive--Angiotech Pbarmaceuticals,
Inc.
Form 121895 Page 4
of 27 (L-103-96/0) (FINAL) CONFIDENTIAL
19971117
under the Lisensed
Patent Rights in the Licensed Territory to make and have
made, to use and have used, and to sell and have sold any
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 . Each sublicense entered
into by Licensee which includes rights within a nonexclusive
field of use (as set forth in Appendix B of this Agreement) under
this Agreement shall also include; (i) the joint and concurrent
licensing of a portion of Licensee's intellectual property rights
as described under Article 1.06 above, and/or (ii) rights within an
exclusive field of use (as set forth in Appendix B of this
Agreement) under this Agreement.
4.02
Licensee agrees
that any sublicenses granted by it shall provide that the
obligations to PHS of Paragraphs 5.01-5.04, 8.01, 10.01,
10.02, 12.05 and 13.07-13.09 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 sublieenses
granted by Licensee shall provide for the termination of the
sublicense, or at the option of the sublicensee, the conversion of
the sublicense to a license directly between such sublicensee(s)
and PHS , to the extent it relates to the Licensed Patent
Rights 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 fatly executed
sublicense agreement postmarked within thirty (30) days of the
execution of such agreement. To the extent permitted by law,
governmental regulation, and PHS policy, PHS agrees to
maintain each such sublicense agreement and all information
relating thereto in confidence. Licensee will take
reasonable efforts to mark such information as
confidential.
5.
GRANT OF
RIGHTSSTATUTORY REQUIREMENTS AND RESERVED GOVERNMENT
RIGHTS
5.01
PHS
reserves on behalf of the Governmen t 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. Prior
to the First Commercial Sale , Licensee agrees to
provide PHS reasonable quantities of Licensed Products or materials
made through the Licensed Processes for PHS research
use.
Model PHS Patent License
Agreement—Exclusive--Angiotech Pharmaceuticals,
Inc.
Form 121895 Page 5 of 27
(L-103.96/0) (FINAL) CONFIDENTIAL 19971117
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 this
Agreement. Licensee agrees not to unreasonably deny requests for a
Research License from such future collaborators with PHS
when acquiring such 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
In addition to the
reserved license of Paragraph 5.01 above, PHS reserves the
right to grant such nonexclusive Research Licenses directly
or to require Licensee to grant nonexclusive Research
Licenses on reasonable terms. 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.
6.
ROYALTIES AND
REIMBURSEMENT
6.01
Licensee
agrees to pay to PHS a noncreditable, nonrefundable license issue
royalty as set forth in Appendix C.
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.
However, the first minimum annual royalty shall be due and payable
on January 1, 2000) covering the period from January 1, 2000 to
December 31, 2000 inclusive.
6.03
Licensee
agrees to pay PHS
earned royalties as set forth in Appendix C.
6.04
Licensee
agrees to pay PUS
benchmark royalties as set forth in Appendix C.
6.05
Licensee
agrees to pay PHS
sublicensing royalties as set forth in Appendix C.
6.06
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 or irrevocably
lapses, or c) the claim has been held to be invalid or
unenforceable by an unappealed or unappealable decision of a court
of competent jurisdiction or administrative agency.
6.07
No multiple royalties
shall be payable because any Licensed Products or
Licensed Processes are covered by more than one of the
Licensed Patent Rights.
Model PHS Patent License
Agreement—Exclusive—Angiotech Pharmaceuticals ,
Inc.
Form 121895 Page 6 of 27
(L-103-96/0) (FINAL) CONFIDENTIAL 19971117
6.08
On sales of Licensed
Products by Licensee to sublicensees or affiliated parties or
on sales made in other than an arm's-Iength 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.
Notwithstanding the foregoing, sales between and among Licensee and
its sublicensees which are intended for resale shall not be
included in Net Sales. In such cases, royalties shall be calculated
on the basis of Net Sales of Licensed Product(s) by
Licensee or any such sublicensee, whichever is larger, as provided
in Section 6.03 hereof.
6.09
With regard to expenses
associated with the preparation, filing, prosecution, and
maintenance of all patent applications and patents included within
the Licensed Patent Rights incurred by PHS prior to the
effective date of this Agreement, Licensee shall pay to PHS
, as an additional royalty, within sixty (60) days of PHS 's
submission of a statement and request for payment to Licensee, an
amount equivalent to such patent expenses previously incurred by
PHS for any patent expenses which PHS has not yet received
reimbursement as of the Effective Date of this
agreement.
6.10
With regard to expenses
associated with the preparation, filing, prosecution, and
maintenance of all patent applications and patents included within
the Licensed Patent Rights incurred by PHS on or after the
effective date of this Agreement, PHS , at its sole
option, may require Licensee :
(a)
to pay PHS on an
annual basis, within sixty (60) days of PHS 's submission of
a statement and request for payment, a royalty amount equivalent to
all such patent expenses incurred during the previous calendar
year(s); or
(b)
to pay all such patent
expenses directly to the law firm employed by PHS to handle such
functions. However, in such event, PHS and not Licensee shall be
the client of such law firm. Any patent costs incurred after the
Effective Date of this Agreement will be shared on a pro
rata basis by all commercialization licensees to the Licensed
Patent Rights at the time when said costs are incurred.
Under exceptional
circumstances, Licensee may be given the right to assume
responsibility for the preparation, filing, prosecution, or
maintenance of any patent application or patent included with the
Licensed Patent Rights . In that event, Licensee shall
directly pay the attorneys or agents engaged to prepare, file,
prosecute, or maintain such patent applications or patents and
shall provide to PHS copies of each invoice associated with such
services as well as documentation that such invoices have been
paid.
6.11
Licensee may elect to
surrender its rights in any country of the Licensed Territory under
any Licensed Patent Rights upon sixty (60) days written notice to
PHS and owe no payment obligation under Article 6.10 for
patent-related expenses incurred in that country after the
effective date of such written notice.
6.12
If the Licensee or its
sublicensee sells a Combined Product, the Net Sales price for
purposes of earned royalty determination under this Article 6 shall
be calculated by multiplying the market price of the Combined
Product by the fraction of al(a+b), where a is the total
market price of the Licensed Product if sold separately and
b is the total market price of any other active product or
component in the Combined Product if sold separately. If the
Licensed Product or any other active component or product in the
Combined Product are not sold separately, the Net Sales price upon
which a royalty is paid shall be: (a) the market price at which the
Licensed Product reasonably could be sold as a separate item, which
may be used as a in the above fraction in this paragraph to
calculate earned royalty if the Licensed Product
Model PHS Patent License
Agreement—Exclusive—Angiotech Pharmaceuticals,
Inc.
Form 121895 Page 7 of 27
(L-103-9610) (FINAL) CONFIDENTIAL 19971117
is the only active
component of the Combined Product not sold as a separate item; or
(b) Net Sales price of the Combined Product multiplied by a factor
of 1/x where x is the number of active components or
ingredients contained in the Combined Product up to a maximum of
[***]
7.
PATENT FILING,
PROSECUTION, AND MAINTENANCE
7.01
Except as otherwise
provided in this Article 7, 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. At
Licensee's request and expense, PHS shall
cooperate with Licensee in preparing, filing, prosecuting, and
maintaining such patent applications and patents included in the
Licensed Patent Rights as may be reasonably requested by
Licensee from time to time. Notwithstanding the foregoing,
PHS will retain Principal Power of Attorney and primary
control over the preparation, filing, prosecution, and maintenance
of said patent applications and patents. PHS shall provide
Licensee with reasonable opportunity to comment on any document
PHS intends to file or causes to be filed with the relevant
intellectual property or patent office.
7.02
Upon PBS's written
request, Licensee shall assume the responsibility for the
preparation, filing, prosecution, and maintenance of any and all
patent applications or patents included in the Licensed Patent
Rights and shall on an ongoing basis promptly furnish copies of all
patent-related documents to PAS. In such event, Licensee shall,
subject to the prior approval of PAS, select registered patent
attorneys or patent agents to provide such services on behalf of
Licensee and PHS. PHS shall provide appropriate powers of
attorney and other documents necessary to undertake such actions to
the patent attorneys or patent agents providing such services.
Licensee and its attorneys or agents shall consult with PHS in all
aspects of the preparation, filing, prosecution and maintenance of
patent applications and patents included within the Licensed Patent
Rights and shall provide PHS sufficient opportunity to
comment on any document that Licensee intends to file or to cause
to be filed with the relevant intellectual property or patent
office.
7.03
At any time, PHS
may provide Licensee with written notice that PHS wishes to
assume control of the preparation, filing, prosecution, and
maintenance of any and all patent applications or patents included
in the Licensed Patent Rights. If PHS elects to assume such
responsibilities, Licensee agrees to cooperate fully with PHS, its
attorneys and agents in the preparation, filing, prosecution, and
maintenance of any and all patent applications or patents included
in the Licensed Patent Rights and to provide PHS with
complete copies of any and all documents or other materials that
PAS deems necessary to undertake such responsibilities. Licensee
shall be responsible for all reasonable costs associated with
transferring patent prosecution responsibilities to an attorney or
agent of PHS 's choice.
7.04
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.
Model PHS Patent License
Agreement--Exclusive—Angiotech Pharmaceuticals,
Inc.
Form 121895 Page 8 of 27
(L-103-9610) (FINAL) CONFIDENTIAL 19971117
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 9.08 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.
8.02
Licensee agrees, as part
of its independent audit, to have its auditors conduct a review of
sales and royalties at least every two years if annual sales of the
Licensed Product or Licensed Processes are equal to or greater than
the equivalent of two (2) million U.S. dollars. The review shall
address, at a minimum, the amount of gross sales by or on behalf of
Licensee during the audit period, the amount of funds owed to the
Government under this Agreement, and whether the amount owed has
been paid to the Government and is reflected in the records of the
Licensee. A report by the auditor shall be submitted promptly to
PHS on completion. Licensee shall pay for the entire cost of the
review.
9.
REPORTS ON PROGRESS,
BENCHMARKS, SALES AND PAYMENTS
9.01
Prior to signing this
Agreement, Licensee has provided to PHS the Commercial Development
Plan at Appendix F, under which Licensee intends to bring the
subject matter of the Licensed Patent Rights to the point of
Practical Application. This Commercial Development Plan is hereby
incorporated by reference into this Agreement. Based on this plan,
performance Benchmarks are determined as specified in Appendix
E.
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. PHS also encourages these reports to include information on
any of Licensee's public service activities that relate to the
Licensed Patent Rights, If reported progress differs from that
projected in the Commercial Development Plan and Benchmarks,
Licensee shall explain the reasons for such differences. In any
such annual report, Licensee may propose amendments to the
Commercial Development Plan, acceptance of which by PHS may not be
denied unreasonably. Licensee agrees to provide any additional
in
