Exhibit 10.4
PATENT AND SOFTWARE LICENSE
AGREEMENT
This PATENT AND SOFTWARE LICENSE
AGREEMENT (the “Agreement”), effective this 30th
day of April, 2004 (the “Effective Date”), is between
Pharmacopeia Drug Discovery, Inc., a corporation organized and
existing under the laws of the State of Delaware and having a
principal place of business at 3000 Eastpark Boulevard, Cranbury
New Jersey 08512 (“PDD”), and Pharmacopeia, Inc., a
corporation organized and existing under the laws of the State of
Delaware and having a place of business at 9685 Scranton Road, San
Diego, California 92121-3752 (“Pharmacopeia”), for
itself and on behalf of Accelrys Inc. and each of
Pharmacopeia’s subsidiaries other than PDD (Pharmacopeia and
such subsidiaries other than PDD being referred to herein
collectively as the “Pharmacopeia Group”).
WHEREAS, the Pharmacopeia Group is the owner of certain
software product(s), together with the related documentation and
components thereto, as well as all rights, title and interest in
and to the inventions disclosed in certain patents and patent
applications;
WHEREAS , PDD is the owner of all rights, title and
interest in and to the inventions disclosed in certain patents and
patent applications;
WHEREAS, PDD has incurred significant expenses in
connection with the filing, prosecution and maintenance of such
patents and patent applications;
WHEREAS, PDD desires to obtain, and the Pharmacopeia
Group desires to grant, a license to PDD to the software and a
license to practice the inventions claimed by the Licensed Patents;
and
WHEREAS , the Pharmacopeia Group desires to obtain, and
PDD desires to grant, a license to practice the inventions claimed
by the PDD patents;
NOW THEREFORE,
the parties agree as
follows:
1.
Definitions
. For all purposes of this
Agreement, the following terms have the meanings set forth
below:
1.1.
“Affiliate” of a party
means any legal entity directly or indirectly controlling,
controlled by or under common control with that party. For purposes
of this Agreement, “control” means the direct or
indirect ownership of more than fifty percent (50%) of the
outstanding voting securities of the legal entity, or the right to
receive more than fifty percent (50%) of the profits or earnings of
the legal entity, or the right to direct the policy decisions of
the legal entity.
1.2.
“Documentation” means
the then current on-line help, guides, and manuals published by the
Pharmacopeia Group and made generally available by the Pharmacopeia
Group for the Software. Documentation shall include any
updated Documentation that the Pharmacopeia Group provides with
Updates.
1.3.
“Licensed Patents” means
the patents and patent applications listed on Exhibit A attached
hereto, and any and all patents issuing from the patent
applications listed on such Exhibit A, or issuing from any
divisions or continuations of such applications, as well as all
re-issues, re-examinations, renewals or extensions of such
patents.
1.4.
“PDD Patents” means the
patents and patent applications listed on Exhibit C attached
hereto, and any and all patents issuing from the patent
applications listed on such
Exhibit C, or issuing from any divisions or
continuations of such applications, as well as all re-issues,
re-examinations, renewals or extensions of such patents.
1.5.
“PDD Patent Product”
means a software product, developed or commercialized by the
Pharmacopeia Group, which meets the following description: (i) in
the absence of the license granted under Section 3.4.a of this
Agreement, the making, using, copying, sale, rental, lease or offer
for sale, rental or lease of such software product would infringe
any claim of a PDD Patent, or (ii) any software product designed or
developed for use with software described in (i)
1.6.
“PDD’s Internal
Business” means the design and manufacture of compounds for
sale to and use by third parties, for its own use, and for use in
performing drug discovery and development services for third
parties; the selection and evaluation of appropriate target
molecules; the development of assays for screening against target
molecules; the screening of compounds against target molecules for
its own internal research or for third parties and interpreting and
advising on the results of such screening; and the performing of
medicinal/pharmaceutical chemistry services for its own internal
research or for third parties.
1.7.
“Software” means the
software product(s), together with the Documentation and components
(including new releases, enhancements, and modifications provided
under warranty or maintenance, if applicable) listed on attached
Exhibit B.
1.8.
“Software License Term”
means the period commencing on the Effective Date and ending on
April 30, 2007.
1.9.
“Source Code” means the
program instructions for the software programs known as TopKat,
LibProp and ADME Profiler, as those programs are constructed as of
the Effective Date.
1.10.
“Update(s)” means new
releases, corrections, enhancements, improvements and modifications
of the Software and/or Documentation that are (a) subsequent
releases of the Software that (i) add new features, functionality,
and/or improved performance, (ii) operate on new or other
databases, operating systems, or client or server platforms, or
(iii) add new foreign language capabilities; (b) bug or error
fixes, patches, workarounds, and maintenance releases; (c) new
point releases, including those denoted by a change to the right of
the first decimal point (e.g., version 3.0 to 3.1) and (d) new
major version releases, regardless of the version name or number,
but including those denoted by (i) a change to the left of the
first decimal point (e.g., version 5.0 to 6.0) and/or (ii) the
addition of a date designation or a change in an existing date
designation (e.g., version 1999 to 2000); provided, however that
Updates shall not include new or separate products which are
offered only for an additional fee to its customers generally,
including those customers purchasing maintenance
services.
1.11.
“User(s)” means the
named or specified (by password or other user identification)
individuals authorized by PDD to use the Software, regardless of
whether the individual is actively using the Software at any given
time. PDD may replace Users and authorize new Users as
necessary to reflect personnel changes provided that the number of
Users at any given time does not exceed the maximum number of Users
at any given time. Users may include the employees of PDD or
third parties; provided that such third party is limited to use of
the Software (i) only as configured and deployed by PDD, and (ii)
solely in connection with PDD’s business operations as
conducted by or through such third party, including but not limited
to the
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installation, administration or implementation
of the Software for PDD. PDD agrees that it is responsible
for ensuring that any usage by its employees and any such third
parties is in accordance with the terms and conditions of this
Agreement. It is expressly understood and agreed that Users
shall not include the employees or consultants of, or third parties
working with, any individual or entity that acquires a controlling
interest in PDD or PDD’s Internal Business, whether by
merger, consolidation, reorganization or similar transaction or by
sale, transfer or disposition of all or substantially all
PDD’s assets, properties or business.
2.
Software License to
PDD .
2.1.
License Grant
. Subject to the terms and
conditions of this Agreement, the Pharmacopeia Group hereby grants,
and PDD accepts for the Software License Term, a worldwide,
paid-up, royalty-free, irrevocable (subject to Section 2.2),
nontransferable (with no right to sublicense) and non-exclusive
license to use the Software for the sole purpose of processing the
work of PDD’s Internal Business.
a.
PDD may only use the Software at the
specific location(s) at which the Software currently is utilized or
to which the Software is subsequently delivered.
b.
For host-locked licenses, PDD may
use the Software only on the central processing unit (the
“Licensed CPU”) originally designated for installation
or as agreed to by the relevant member of Pharmacopeia Group, and
only at the specific location at which the Software is currently
utilized or to which the Software is subsequently delivered.
For floating licenses, the Software may be accessed by any computer
that is commercially supported by PDD and within PDD’s
authorized network at the specific location at which the Software
is currently utilized or to which the Software is subsequently
delivered.
c.
The Software may be used
simultaneously by no more than the maximum number of Users set
forth on Exhibit B, and may not be electronically or otherwise
transferred to a different physical location.
i.
If, during the License Term, PDD
desires to use the Software for additional simultaneous Users, at
another site, or on a different Licensed CPU (for host-locked
licenses), PDD shall secure the prior approval of the relevant
member of the Pharmacopeia Group, which will not be unreasonably
withheld but which will be conditioned upon payment by PDD of the
Pharmacopeia Group’s then-current license fees for such
additional Users, additional site or different Licensed
CPU.
ii.
If, after the expiration or
termination of the License Term, PDD desires to use the Software
for additional simultaneous users, at another site, or on a
different Licensed CPU (for host-locked licenses), PDD shall secure
the prior approval of the relevant member of the Pharmacopeia
Group, which may be granted subject to additional
charges.
2.2.
License Term
. The license granted in Section 2.1
shall be in effect for the Software License Term, unless earlier
terminated by one of the parties as set forth in Section 8.2 or
8.4, or extended by mutual written agreement of the
parties.
2.3.
Software Ownership
. The Software, documentation, and
supporting materials and all worldwide intellectual property rights
therein are the sole and exclusive property of the
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Pharmacopeia Group and its licensors or
suppliers. Except to the limited extent required for PDD to
use the Software pursuant to the license granted in Section 2.1,
nothing in this Agreement will be deemed to grant, by implication,
estoppel or otherwise, a license in any existing or future patents
of the Pharmacopeia Group. No title or ownership rights to
the Software are transferred to PDD by this Agreement, but shall
remain with the Pharmacopeia Group and/or its licensors or
suppliers. All rights not expressly granted by the
Pharmacopeia Group with respect to the Software under this
Agreement are reserved by the Pharmacopeia Group.
2.4.
Software Maintenance
.
a.
During the Software License Term,
the Pharmacopeia Group will provide maintenance services that
include both Update Service and Hotline Support as described in
this Section 2.4.a.i and 2.4.a.ii at no additional cost or expense
to PDD.
i.
Update Service includes the
provision to PDD of all Updates that are made by the Pharmacopeia
Group during the Software License Term within thirty (30) days of
the date such Updates are available to the Pharmacopeia
Group’s other customers.
ii.
Hotline Support includes
commercially reasonable telephone and electronic mail assistance
and consultation to assist PDD in resolving problems with the use
of the Software, including the verification, diagnosis, and
correction of material errors and defects in the Software.
Maintenance service does not include new products sold separately
by the Pharmacopeia Group, which products must be separately
licensed by PDD.
For clarity, installation,
implementation, integration or similar services do not fall within
the maintenance services to be provided by the Pharmacopeia Group
under this Agreement. Should PDD require such services, these
may be available subject to payment of the Pharmacopeia
Group’s then-standard fees for such services and execution of
the Pharmacopeia Group’s then-standard terms and conditions
for such services.
b.
After the Software License Term,
upon payment of the applicable maintenance fee by PDD, maintenance
services will be provided under the Pharmacopeia Group’s
standard commercial terms for customers using the Software for
twelve-month periods unless terminated by either party upon thirty
(30) days written notice prior to the renewal date. Annual
maintenance fees are payable in advance on the anniversary date of
the order.
2.5.
Non-Disclosure; Alterations;
Copies .
a.
PDD acknowledges and agrees that the
Software, its structure, organization, source code and related
documentation are valuable and proprietary trade secrets of the
Pharmacopeia Group. PDD shall (i) maintain the
confidentiality of the Software, using, at a minimum, the same
safeguards afforded its own confidential, proprietary trade
secrets, but in no event less than reasonable care; (ii) not
disclose, provide, transfer, rent, sublicense, or otherwise make
available any portion of the Software to any third party, without
first obtaining the written approval of the relevant member of the
Pharmacopeia’s Group. PDD’s non-disclosure
obligation shall not apply
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to information now or hereafter in
the public domain through no fault of PDD, information in the
possession of PDD prior to disclosure by the Pharmacopeia Group,
information properly obtained without restriction from a third
party who is not bound by an obligation of confidentiality to the
Pharmacopeia Group, or information independently developed by PDD
without reference to the Software.
b.
PDD acknowledges any actual or
threatened breach of the obligations of confidentiality set forth
in Section 2.5.a will constitute immediate, irreparable harm to the
Pharmacopeia Group for which monetary damages would be an
inadequate remedy, and that the Pharmacopeia Group may, in addition
to any other remedy under this Agreement, seek injunctive or other
appropriate equitable relief as remedy for such breach.
c.
PDD shall not alter, modify, adapt,
translate, reverse engineer, decompile, disassemble, or create
derivative works from the Software, nor take any other steps
intended to produce a source language statement of the Software or
any part thereof without the express prior written consent of the
relevant member of the Pharmacopeia Group.
d.
PDD is authorized to copy the
Software solely for backup, archival, and disaster recovery
purposes and only to the minimum extent necessary to accomplish
such purposes. PDD shall not remove any copyright or
proprietary rights notices from the Software and shall reproduce
all such notices on any copies that it makes.
2.6.
Publication
Acknowledgement . If the
Software is used by PDD to obtain results that are published in a
scientific journal or other publication, PDD will acknowledge its
use of the Software with an appropriate citation, which shall
include the Pharmacopeia Group’s then current full corporate
name and the name of the Software product used.
2.7.
Applicable Laws
. PDD agrees to comply with all
applicable laws and regulations in its performance under this
Agreement. PDD acknowledges that the Software may be subject
to U.S. Export controls, and agrees not to export the Software or
any part or direct product thereof in violation of U.S. Bureau of
Industry Security regulations. In furtherance of these
obligations, PDD hereby represents, warrants and covenants that it
will not use, or authorize or permit any other person, firm,
corporation or other entity to use, the Software or make the
Software available for use in connection with the design,
development, production, stockpiling or use of any chemical or
biological weapons. PDD agrees to defend, indemnify, and hold
harmless the Pharmacopeia Group from and against any violation of
such laws or regulations by PDD or any of its respective agents,
officers, directors or employees. This indemnity provision
shall survive any termination of this Agreement.
3.
Patent Licenses
.
3.1.
License Grant to PDD
.
a.
The Pharmacopeia Group grants to
PDD, and PDD accepts, a worldwide, paid-up, royalty-free,
irrevocable, nontransferable and non-exclusive license to the
Licensed Patents solely for use in PDD’s Internal
Business.
b.
The rights and licenses granted are
personal and may not be sub-licensed, assigned or otherwise
transferred except only as expressly set forth in this
Agreement.
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c.
Notwithstanding Section 3.1.b, PDD
may grant a sublicense to the Licensed Patents to those of its
customers who practice the Licensed Patents in a field that is not
competitive with the software products and services provided by the
Pharmacopeia Group.
d.
PDD and the Pharmacopeia Group each
acknowledges and agrees that no right or license in or to any
patent or proprietary right of the Pharmacopeia Group, other than
to the Licensed Patents as expressly set forth herein, is granted
by this Agreement, either expressly or by implication.
3.2.
Maintenance of Intellectual
Property Rights .
a.
As of the Effective Date and until
the termination or expiration of the license granted in Section
3.1.a, the Pharmacopeia Group shall be responsible, at the
Pharmacopeia Group’s sole discretion and expense, for
preparing, filing, prosecuting and maintaining in such countries
where the Pharmacopeia Group deems appropriate, those patents and
patent applications incorporated in the Licensed Patents and
conducting any interference, re-examination, reissue and opposition
proceedings relating to such Licensed Patent. PDD agrees to
cooperate in any manner reasonably requested in connection with all
such actions by the Pharmacopeia Group; provided that PDD is
reimbursed by the Pharmacopeia Group for any expenses resulting
from such cooperation.
b.
As of the Effective Date and until
the termination or expiration of the license granted in Section
3.1.a, the Pharmacopeia Group shall keep PDD fully informed as to
the status of patent matters described in Section 3.2.a including,
without limitation, by providing copies of any substantive
documents that the Pharmacopeia Group receives from any patent
offices concerning the Licensed Patents promptly after receipt by
the Pharmacopeia Group and by providing PDD with the opportunity to
fully review and comment on any substantive documents which will be
filed in any patent office as far in advance of a filing date as
reasonable. The documents shall include, without limitation,
and where applicable, office actions, notice of all fees due,
notices of interference, reissue, re-examination, or opposition
proceedings or requests for patent term extensions.
c.
As of the Effective Date and until
the termination or expiration of the license granted in Section
3.1.a, in the event the Pharmacopeia Group decides to cease
prosecuting or maintaining any patents and patent applications
incorporated in the Licensed Patents, or decides not to conduct any
interference, re-examination, reissue or opposition proceedings
with respect thereto, the Pharmacopeia Group will inform PDD of
such decision at a time sufficient to allow PDD to respond to any
outstanding office action or other obligation, and PDD will have
the right but not the obligation to maintain such patents and
patent applications, and to conduct any interference,
re-examination, reissue or opposition proceedings with respect
thereto, at PDD’s sole expense. The Pharmacopeia Group
agrees to assign such patent applications to PDD, and to cooperate
in any manner reasonably requested in connection with any such
actions by PDD, at the expense of PDD.
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3.3.
Patent Enforcement
.
a.
As of the Effective Date and until
the termination or expiration of the license granted in Section
3.1.a, in the event the Pharmacopeia Group learns that any third
party, including without limitation a customer of the Pharmacopeia
Group, is or might be infringing, or preparing to infringe, any
Licensed Patent, then the Pharmacopeia Group will promptly notify
PDD of such information. Upon such notice, PDD and the
Pharmacopeia Group will consult one another in a timely manner
concerning any appropriate response to such infringement or
noncompliance. Each party agrees to cooperate in all
reasonable respects with the other in any action either may take
against infringement of any Licensed Patent.
b.
The Pharmacopeia Group may, but is
not obligated to, enforce the Licensed Patents, at the Pharmacopeia
Group’s own expense, against any such third party infringing
the same. PDD may join any such lawsuit at its own
expense. In the event the Pharmacopeia Group elects not to
enforce the Licensed Patents against such third party infringer,
PDD may assume the responsibility for enforcing the Licensed
Patents, at PDD’s sole expense. However, absent the
Pharmacopeia Group’s permission, PDD may not enforce the
Licensed Patents against any third party.
c.
The Pharmacopeia Group will not
enter into any settlement or compromise with such an infringing
third party that requires PDD to sublicense or relinquish any of
the rights granted to PDD hereunder without PDD’s prior
written consent. In the event PDD assumes the responsibility
for enforcing the Licensed Patents against such third party, PDD
will not enter into any settlement or compromise with an infringing
third party without the consent of the Pharmacopeia
Group.
d.
In any action to enforce any
Licensed Patents, either party, at the reasonable request and sole
expense of the other party, will cooperate to the fullest extent
reasonably possible with the other party, including being joined as
a party to the action, if necessary. This provision does not
require, and may not be construed to require, either party to
undertake any activities, including legal discovery, at the request
of any third party except as may be required by lawful process of a
court of competent jurisdiction.
e.
Any consideration received or
recovered by either party from any litigation or settlement of any
claim or suit pursuant to Section 3.3.b will first be applied to
reimburse the Pharmacopeia Group and PDD, as applicable, for such
party’s respective litigation expenditures related to
enforcing the Licensed Patents licensed to PDD under
