Exhibit 10.3
PATENT OWNERSHIP AGREEMENT AND
COVENANT NOT TO SUE
This Agreement is entered into and
made effective as of the 29th day of September, 2006, by and
between First Data Corporation, a Delaware corporation, having a
principal place of business at 6200 S. Quebec Street, Greenwood
Village, CO 80111 (hereinafter “First Data”) and The
Western Union Company, a Delaware corporation having a principal
place of business at 12500 E. Belford Ave., Englewood, CO 80112
(hereinafter “Western Union”).
1.0 BACKGROUND
The parties have entered into the
Separation Agreement, under which they have agreed to their
separation into two separately traded public companies (the
“Separation”). The parties desire to provide for
ownership and other rights to patents that have previously been
owned by the parent company prior to the Separation. Accordingly,
the parties agree as follows:
2.0 DEFINITIONS
The following capitalized terms,
whether in singular of plural form, shall have the meanings set
forth below for all purposes of this Agreement:
“ Affiliate ”
shall mean, when used with reference to a specific Person, any
Person that, directly or indirectly, or through one or more
intermediaries, owns or controls, is owned or controlled by, or is
under common ownership or common control with, such specific
Person. As used herein, “control” means the power to
direct the management or affairs of a Person and
“ownership” means the beneficial ownership of more than
50% of the voting equity securities of the Person.
“ Business Unit ”
shall mean assets, liabilities and employees of a party that while
not necessarily organized as a separate corporation or other legal
entity is regarded by the party as a distinct unit for purposes of
profit and loss management, or which is designated for the specific
purpose of disposition as an operating entity by a
party.
“ Contribution” shall
have the same meaning as in the Separation
Agreement.
“ Control ” shall
mean the power to direct the management of an entity, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms “Controlled by”
and “under common Control” have meanings correlative to
the foregoing.
“ First Data Patents
” shall mean (a) those U. S. patents (and any non-U.S.
patents corresponding thereto) identified in Exhibit A attached
hereto, (b) any U.S. or non-U.S. patents corresponding to and
issuing from those patent applications and invention disclosures
identified in Exhibit A, and (c) divisions, continuations,
continuations-in-part, re-examinations, reissues, extensions or
renewals of any such U.S. or non-U.S. patents.
“ First Data Controlled
Patents ” shall mean (a) those U. S. patents (and
any non-U.S. patents corresponding thereto) identified in Exhibit B
attached hereto, (b) any U.S. or non-U.S. patents
corresponding to and issuing from those patent applications and
invention
disclosures identified in Exhibit B, and
(c) divisions, continuations, continuations-in-part (but only
to the extent claims are supported by the specifications of those
patents), re-examinations, reissues, extensions or renewals of any
such U.S. or non-U.S. patents.
“ Separation Agreement
” shall mean the Separation and Distribution Agreement dated
September 29, 2006 between the parties.
“ Subsidiary ”
shall mean (a) a corporation or other legal entity Controlled
by a party or (b) a Business Unit. Any such corporation, other
legal entity or Business Unit shall be deemed a Subsidiary of a
party only so long as it is Controlled by that party.
“ Western Union Patents
” shall mean (a) those U. S. patents (and any non-U.S.
patents corresponding thereto) identified in Exhibit C attached
hereto, (b) any U.S. or non-U.S. patents corresponding to and
issuing from those patent applications and invention disclosures
identified in Exhibit C, and (c) divisions, continuations,
continuations-in-part, re-examinations, reissues, extensions or
renewals of any such U.S. or non-U.S. patents.
“ Western Union Controlled
Patents ” shall mean (a) those U. S. patents (and
any non-U.S. patents corresponding thereto) identified in Exhibit D
attached hereto, (b) any U.S. or non-U.S. patents
corresponding to and issuing from those patent applications and
invention disclosures identified in Exhibit D, and
(c) divisions, continuations, continuations-in-part (but only
to the extent claims are supported by the specifications of those
patents), re-examinations, reissues, extensions or renewals of any
such U.S. or non-U.S. patents.
3.0 OWNERSHIP OF WESTERN UNION
PATENTS AND FIRST DATA PATENTS
3.1 At the time of The Contribution,
Western Union shall become the sole and exclusive owner of all
right, title and interest in the Western Union Patents, including
the right to sue for past infringement.
3.2 At the time of The Contribution,
First Data shall continue as the sole and exclusive owner of all
right, title and interest in the First Data Patents, including the
right to sue for past infringement.
3.3 The parties agree to file
appropriate assignment documents with the U. S. Patent and
Trademark Office (and at appropriate non-U. S. patent offices for
corresponding non-U. S. patents) and reasonably cooperate with each
other in order to effect and record the ownership of the Western
Union Patents and the First Data Patents as provided under this
Section 3.0. The cost of such assignment documents and their
filing shall be born by Western Union for the Western Union
Patents, and shall be born by First Data for the First Data
Patents.
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4.0 OWNERSHIP OF WESTERN UNION
CONTROLLED PATENTS AND FIRST DATA CONTROLLED PATENTS
4.1 At the time of The Contribution,
Western Union and First Data shall each have, as joint owners, an
undivided interest in and to all right, title and interest in both
the Western Union Controlled Patents and the First Data Controlled
Patents.
4.2 The parties agree to file
appropriate assignment documents with the U. S. Patent and
Trademark Office (and at appropriate non-U. S. patent offices for
corresponding non-U.S. patents) and reasonably cooperate with each
other in order to effect and record the joint ownership of the
Western Union Controlled Patents and the First Data Controlled
Patents as provided under this Section 4.0. The cost of such
assignment documents and their filing shall be born by Western
Union for the Western Union Controlled Patents, and shall be born
by First Data for the First Data Controlled Patents. It is
understood that the parties may delay the recording of assignment
documents in jurisdictions outside of the U.S. for cost,
administrative convenience or other reasons, but any such delay in
recording shall not operate as a waiver or otherwise affect the
ownership of patents as provided herein. In the event of such delay
and if a prompt recording should thereafter become necessary for
carrying out any purpose of this Agreement, the parties agree to
proceed with such recording in a reasonably expeditious
manner.
4.3 Western Union and First Data
shall each have, as joint owners, full right to practice the
inventions claimed in the Western Union Controlled Patents and the
First Data Controlled Patents. The scope of such rights shall be
comparable to the scope of rights granted under Section 5.0
below (and subject to Sections 6.0 and 7.0 below).
4.4 Western Union shall have the
right (in its sole discretion) to transfer its joint ownership
interest in the Western Union Controlled Patents, but not the First
Data Controlled Patents (subject to Paragraph 9.3). First Data
shall have the right (in its sole discretion) to transfer its joint
ownership interest in the First Data Controlled Patents, but not
the Western Union Controlled Patents (subject to Paragraph
8.3).
4.5 Western Union hereby agrees to
provide all commercially reasonable cooperation to First Data
regarding notification of significant events in the process of
prosecuting the Western Union Controlled Patents. First Data hereby
agrees to provide all commercially reasonable cooperation to
Western Union regarding notification of significant events in the
process of prosecuting the First Data Controlled Patents. Such
commercially reasonable cooperation includes but is not limited to,
making inventors who are employed by a party available for review
of amendments and signature of documents and providing copies of
documents.
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5.0 IMMUNITY AS TO WESTERN UNION
PATENTS AND FIRST DATA PATENTS
5.1 Western Union (on behalf of
itself and its Subsidiaries) hereby grants to First Data and its
Subsidiaries:
(a) an immunity from patent
infringement claims, actions and suits based on any act which, if
not licensed hereunder, would infringe, contributorily infringe or
induce the infringement of any Western Union Patent, and
(b) pursuant to such immunity, a
worldwide, royalty-free, non-exclusive license under the Western
Union Patents to (i) make, have made (including authorizing
others to provide to First Data for its own use), use (on behalf of
First Data or for the benefit of its customers), have used, sell,
offer to sell, lease, import and otherwise transfer any machine,
system, process or product, or any component thereof,
(ii) provide and have provided any service, (iii) provide
and have provided any software to third parties, and
(iv) practice and have practiced any process or
method.
5.2 First Data (on behalf of itself
and its Subsidiaries) hereby grants to Western Union and its
Subsidiaries:
(a) an immunity from patent
infringement claims, actions and suits based on any act which, if
not licensed hereunder, would infringe, contributorily infringe or
induce the infringement of any First Data Patent, and
(b) pursuant to such immunity, a
worldwide, royalty-free, non-exclusive license under the First Data
Patents to (i) make, have made (including authorizing others
to provide to Western Union for its own use), use (on behalf of
First Data or for the benefit of its customers), have used, sell,
offer to sell, lease, import and otherwise transfer any machine,
system, process or product, or any component thereof,
(ii) provide and have provided any service, (iii) provide
and have provided any software to third parties, and
(iv) practice and have practiced any process or
method.
5.3 Except as specifically provided
otherwise in this Agreement, the immunity and licenses granted
under this Section 5.0 are personal, non-transferable and
non-assignable (other than to a successor resulting from an
internal corporate reorganization and not related to acquisition of
the assigning party by a third party), and do not include the right
to sublicense any other party unless such sublicense is granted to
a third party for the exclusive purpose of having products,
processes, services, etc. provided to a Party.
5.4 The immunity and licenses
granted under this Section 5.0 extend to and from Subsidiaries
of the parties. Each Subsidiary shall be bound by the terms and
conditions of this Agreement as if it were a named party hereto. If
at any time a Subsidiary of a party ceases to be a Subsidiary, then
(a) any immunity and licenses to such Subsidiary under the
patents of the
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other party shall continue, but only to the
business operations of the Subsidiary (and its products and
services) existing at the time it ceased to be a Subsidiary, and
(b) any immunity and licenses on behalf of such Subsidiary to
the other party shall continue, notwithstanding its ceasing to be a
Subsidiary.
5.5 Nothing in this Section 5.0
shall be deemed an obligation on the part of either party to
provide trade secrets, know-how or any technical information to the
other, nor shall be construed as granting by implication, estoppel
or otherwise any rights or licenses other than those expressly
stated. Subject to either Party’s rights in patents, either
Party shall be free to use any ideas, concepts, or know-how that
may be or was learned, exchanged, or developed while Western Union
was a subsidiary of First Data without compensation to the other
Party insofar as such ideas, concepts and know-how are retained in
the unaided memory of the employees of either Western Union or
First Data.
5.6 Nothing in this Section 5.0
shall be deemed a grant of immunity from any claim, action, or suit
other than as specifically provided herein.
6.0 LICENSING OF WESTERN UNION
CONTROLLED PATENTS
6.1 Western Union shall have the
exclusive right (as between itself and First Data) to grant
licenses under the Western Union Controlled Patents. The grant of
any such license, and the terms thereof, shall be within the sole
discretion of Western Union, but subject to the rights granted to
First Data under Sections 4.0 and 8.0. First Data shall have no
right to an accounting by Western Union or to otherwise share in
any royalties received by Western Union under any such
license.
6.2 Upon written request of First
Data, such request identifying a specific Western Union Controlled
Patent and a third party, Western Union shall notify First Data in
writing whether such third party has been granted a license under
that Western Union Controlled Patent.
7.0 LICENSING OF FIRST DATA
CONTROLLED PATENTS
7.1 First Data shall have the
exclusive right (as between itself and Western Union) to grant
licenses under the First Data Controlled Patents. The grant of any
such license, and the terms thereof, shall be within the sole
discretion of First Data, but subject to the rights granted to
Western Union under Sections 4.0 and 9.0. Western Union shall have
no right to an accounting by First Data or to otherwise share in
any royalties received by First Data under any such
license.
7.2 Upon written request of Western
Union, such request identifying a specific First Data Controlled
Patent and a third party, First Data shall notify Western Union in
writing whether such third party has been granted a license under
that First Data Controlled Patent.
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8.0 ASSERTION OF WESTERN UNION
CONTROLLED PATENTS
8.1 Western Union, and not First
Data, shall have the sole and exclusive right (in its sole
discretion) to assert and bring legal action against others for
infringement (including past infringement) of the Western Union
Controlled Patents, except under the limited circumstances provided
in Paragraph 8.2 below. First Data agrees to be bound by any
decision in such action as to the affected Western Union Controlled
Patents. If, notwithstanding the foregoing, First Data is required
by law or by the court to be a party to such action, First Data
shall waive venue and permit itself to be joined as a party;
however, in this instance, First Data shall not incur any expenses
as a joined party. Settlement decisions shall be made, with respect
to the Western Union Controlled Patents, by Western Union, unless
First Data has been joined voluntarily as a party. If First Data
joined voluntarily as a party, settlement decisions shall be made
jointly with the cost of settlement and any benefits being shared
between the Parties pursuant to Section 8.2.
8.2 As the only exception to the
sole and exclusive right of Western Union to assert the Western
Union Controlled Patents, should legal action be brought against
First Data in any jurisdiction claiming infringement by First Data
of a patent of a third party issued in the U. S. or any other
country, then First Data may assert any one or more of the Western
Union Controlled Patents against such third party for infringement
(including past infringement) thereof, by bringing legal action for
monetary and equitable relief against such third party with Western
Union’s written consent, which shall not be unreasonably
withheld. In determining whether Western Union is acting
reasonably, it may take into account all appropriate factors
including i) value of the suit; ii) value of the Western Union
Controlled Patent; iii) the presence of a good faith belief of
infringement of the patent by the third party’s methods,
systems or processes, iv) likelihood of success on the merits; v)
the potential harm to Western Union if the Western Union Controlled
Patent were to be invalidated or its claims limited; and vi) the
effort and/or expense that First Data would have to incur in order
to modify its product or service to avoid infringement. First Data
may not grant a license under the Western Union Controlled Patents
in settlement of such action, without the prior written approval
and authorization of (and agreed compensation to) Western Union.
Under the limited circumstances provided under this Paragraph 8.2,
First Data shall provide written notice of its intent to assert
such patents. Such notice shall include (a) the name of the
third party, (b) the circumstances (including relevant dates)
leading to such assertion, and (c) a summary of all
information known to First Data relating to the infringement by the
third party, and shall be delivered to Western Union at least
thirty (30) days prior to First Data’s proposed
commencement of an infringement action. Any such assertion shall
have a good faith and reasonable basis for claiming infringement by
the third party. Western Union shall have the right (to be
exercised within ten (10) days after receiving the assertion
notice) to have both parties jointly retain counsel (skilled in
patent law and selected by mutual agreement) to assist in
determining whether to grant or withhold its
