Public Health Service Patent License Agreement-Nonexclusive - The National Institute of Health, the Centers for Disease Control and Prevention, the Food and Drug Administration and Seattle Genetics Inc.
PUBLIC HEALTH SERVICE
PATENT LICENSE AGREEMENT—NONEXCLUSIVE
For PHS internal use only:
Patent License Number: L-156-98/0
Serial Number(s) of Licensed Patent(s) and/or Patent Application(s):
USPA SN 06/911,227 (USPN 4,892,827)
USPA SN 08/463,163 (USPN 5,696,237)
Licensee: Seattle Genetics, Inc.
Cooperative Research and Development Agreement (CRADA) Number: N/A
Additional Remarks: U.S. only license.
Public Benefit(s): Licensee (1) to continue development of a cancer therapeutic discontinued in 1997; and (2) to set up indigent access program for U.S. citizens following regulatory approval of the cancer therapeutic in the United States.
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) and/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:
PHS and Licensee agree as follows:
[*] Confidential treatment requested
and/or 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.
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.
3. GRANT OF RIGHTS
5. STATUTORY AND PHS REOUIREMENTS AND RESERVED GOVERNMENT RIGHTS
6. ROYALTIES AND REIMBURSEMENT
cases, royalties shall be calculated on the basis of Net Sales of Licensed Products by Licensee or any such sublicensee, whichever is larger, as provided in Paragraph 6.03 hereof.
7. PATENT FILING, PROSECUTION, AND MAINTENANCE
8. RECORD KEEPING
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
officer of Licensee and shall include a detailed listing of all deductions made under Paragraph 2.10 to determine Net Sales made under Article 6 to determine royalties due.
10.01 Licensee shall use its reasonable best efforts to bring the Licensed Products and Licensed Processes to Practical Application. "Reasonable best efforts" for the purposes of this provision shall include adherence to the Commercial Development Plan at Appendix F and performance of the Benchmarks at Appendix E.
10.02 Upon the First Commercial Sale, until the expiration of this Agreement, Licensee shall use its reasonable best efforts to make Licensed Products and Licensed Processes reasonably accessible to the United States public.
11. INFRINGEMENT AND PATENT ENFORCEMENT
11.01 PHS and Licensee agree to notify each other promptly of each infringement or possible infringement of the Licensed Patent Rights, as well as any facts which may affect the validity, scope, or enforceability of the Licensed Patent Rights of which either Party becomes aware. Should PHS elect not to initiate an infringement suit against any unlicensed third party infringement of the Licensed Patent Rights, PHS agrees to consider in good faith a grant to Licensee of the right to initiate such suit (at Licensee's sole expense).
11.02 In the event that a declaratory judgment action alleging invalidity of any of the Licensed Patent Rights shall be brought against PHS, PHS agrees to notify Licensee that an action alleging invalidity has been brought. PHS does not represent that it will commence legal action to defend against a declaratory action alleging invalidity. Licensee shall take no action to compel the Government either to initiate or to join in any such declaratory judgment action. Should the Government be made a party to any such suit by motion or any other action of Licensee, Licensee shall reimburse the
Government for any costs, expenses, or fees which the Government incurs as a result of such motion or other action. Upon Licensee's payment of all costs incurred by the Government as a result of Licensee's joinder motion or other action, these actions by Licensee will not be considered a default in the performance of any material obligation under this Agreement.
12. NEGATION OF WARRANTIES AND INDEMNIFICATION
12.01 PHS offers no warranties other than those specified in Article 1.
12.02 PHS does not warrant the validity of the Licensed Patent Rights and makes no representations whatsoever with regard to the scope of the Licensed Patent Rights, or that the Licensed Patent Rights may be exploited without infringing other patents or other intellectual property rights of third parties.
12.03 PHS MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER DEFINED BY THE CLAIMS OF THE LICENSED PATENT RIGHTS OR TANGIBLE MATERIALS RELATED THERETO.
12.04 PHS does not represent that it will commence legal actions against third parties infringing the Licensed Patent Rights.
12.05 Licensee shall indemnify and hold PHS, its employees, students, fellows, agents, and consultants harmless from and against all liability, demands, damages, expenses, and losses, including but not limited to death, personal injury, illness, or property damage in connection with or arising out of: a) the use by or on behalf of Licensee, its directors, employees, or third parties of any Licensed Patent Rights; or b) the design, manufacture, distribution, or use of any Licensed Products, Licensed Processes or materials by Licensee, or other products or processes developed in connection with or arising out of the Licensed Patent Rights. Licensee agrees to maintain a liability insurance program consistent with sound business practice.
13. TERM, TERMINATION, AND MODIFICATION OF RIGHTS
13.01 This Agreement is effective when signed by all parties and shall extend to the expiration of the last to expire of the Licensed Patent Rights unless sooner terminated as provided in this Article 13.
13.02 In the event that Licensee is in default in the performance of any material obligations under this Agreement, including but not limited to the obligations listed in Article 13.05, and if the default has not been remedied within ninety (90) days after the date of notice in writing of such default, PHS may terminate this Agreement by written notice and pursue outstanding amounts owed through procedures provided by the Federal Debt Collection Act.
13.03 In the event that Licensee becomes insolvent, files a petition in bankruptcy, has such a petition filed against it, determines to file a petition in bankruptcy, or receives notice of a third party's intention to file an involuntary petition in bankruptcy, Licensee shall immediately notify PHS in writing. Furthermore, PHS shall have the right to terminate this Agreement immediately upon Licensee's receipt of written notice pursuant to this Paragraph 13.03.
13.04 Licensee shall have a unilateral right to terminate this Agreement in any country or territory by giving PHS sixty (60) days written notice to that effect.
13.05 PHS shall specifically have the right to terminate or modify, at its option, this Agreement, if PHS determines that the Licensee: 1) is not executing the Commercial Development Plan submitted with its request for a license and the Licensee cannot otherwise demonstrate to PHS's satisfaction that
the Licensee has taken, or can be expected to take within a reasonable time, effective steps to achieve Practical Application of the Licensed Products or Licensed Processes; 2) has not achieved the Benchmarks as may be modified under Paragraph 9.02; 3) has willfully made a false statement of, or willfully omitted, a material fact in the license application or in any report required by the license Agreement; 4) has committed a material breach of a covenant or agreement contained in the license; 5) is not keeping Licensed Products or Licensed Processes reasonably available to the public after commercial use commences; 6) cannot reasonably satisfy unmet health and safety needs; or 7) cannot reasonably justify a failure to comply with the domestic production requirement of Paragraph 5.02 unless waived. In making this determination, PHS will take into account the normal course of such commercial development programs conducted with sound and reasonable business practices and judgment and the annual reports submitted by Licensee under Paragraph 9.02. Prior to invoking this right, PHS shall give written notice to Licensee providing Licensee specific notice of, and a ninety (90) day opportunity to respond to, PHS's concerns as to the previous items 1) to 7). If Licensee fails to alleviate PHS's concerns as to the previous items 1) to 7) or fails to initiate corrective action to PHS's satisfaction, PHS may terminate this Agreement.
13.06 PHS reserves the right according to 35 U.S.C. 209(0(4) to terminate or modify this Agreement if it is determined that such action is necessary to meet requirements for public use specified by federal regulations issued after the date of the license and such requirements are not reasonably satisfied by Licensee.
13.07 Within thirty (30) days of receipt of written notice of PHS's unilateral decision to modify or terminate this Agreement, Licensee may, consistent with the provisions of 37 CFR 404.11, appeal the decision by written submission to the designated PHS official. The decision of the designated PHS official shall be the final agency decision. Licensee may thereafter exercise any and all administrative or judicial remedies that may be available.
13.08 Within ninety (90) days of expiration or termination of this Agreement under this Article 13, a final report shall be submitted by Licensee. Any royalty payments, including those incurred but not yet paid (such as the full minimum annual royalty), and those related to patent expense, due to PHS shall become immediately due and payable upon termination or expiration. Unless otherwise specifically provided for under this Agreement, upon termination or expiration of this Agreement, Licensee shall return all Licensed Products or other materials included within the Licensed Patent Rights to PHS or provide PHS with certification of the destruction thereof.
14. GENERAL PROVISIONS
14.01 Neither Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of the Government to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right by the Government or excuse a similar subsequent failure to perform any such term or condition by Licensee.
14.02 This Agreement constitutes the entire agreement between the Parties relating to the subject matter of the Licensed Patent Rights, and all prior negotiations, representations, agreements, and understandings are merged into, extinguished by, and completely expressed by this Agreement.
14.03 The provisions of this Agreement are severable, and in the event that any provision of this Agreement shall be determined to be invalid or unenforceable under any controlling body of law, such determination shall not in any way affect the validity or enforceability of the remaining provisions of this Agreement.
14.04 If either Party desires a modification to this Agreement, the Parties shall, upon reasonable notice of the proposed modification by the Party desiring the change, confer in good faith to determine
the desirability of such modification. No modification will be effective until a written amendment is signed by the signatories to this Agreement or their designees.
14.05 The construction, validity, performance, and effect of this Agreement shall be governed by Federal law as applied by the Federal courts in the District of Columbia.
14.06 All notices required or permitted by this Agreement shall be given by prepaid, first class, registered or certified mail or by an express/overnight delivery service provided by a commercial carrier, properly addressed to the other Party at the address designated on the following Signature Page, or to such other address as may be designated in writing by such other Party. Notices shall be considered timely if such notices are received on or before the established deadline date or sent on or before the deadline date as verifiable by U.S. Postal Service postmark or dated receipt from a commercial carrier. Parties should request a legibly dated U.S. Postal Service postmark or obtain a dated receipt from a commercial carrier or the U.S. Postal Service. Private metered postmarks shall not be acceptable as proof of timely mailing.
14.07 This Agreement shall not be assigned by Licensee except: a) with the prior written consent of PHS, such consent not to be withheld unreasonably; or b) as part of a sale or transfer of substantially the entire business of Licensee relating to operations which concern this Agreement. Licensee shall notify PHS within ten (10) days of any assignment of this Agreement by Licensee, and Licensee shall pay PHS, as an additional royalty, [*] percent ([*]%) of the fair market value of any consideration received for any assignment of this Agreement within thirty (30) days of such assignment.
14.08 Licensee agrees in its use of any PHS-supplied materials to comply with all applicable statutes, regulations, and guidelines, including PHS and DHHS regulations and guidelines. Licensee agrees not to use the materials for research involving human subjects or clinical trials in the United States without complying with 21 CFR Part 50 and 45 CFR Part 46. Licensee agrees not to use the materials for research involving human subjects or clinical trials outside of the United States without notifying PHS, in writing, of such research or trials and complying with the applicable regulations of the appropriate national control authorities. Written notification to PHS of research involving human subjects or clinical trials outside of the United States shall be given no later than sixty (60) days prior to commencement of such research or trials.
14.09 Licensee acknowledges that it is subject to and agrees to abide by the United States laws and regulations (including the Export Administration Act of 1979 and Arms Export Control Act) controlling the export of technical data, computer software, laboratory prototypes, biological material, and other commodities. The transfer of such items may require a license from the cognizant Agency of the U.S. Government or written assurances by Licensee that it shall not export such items to certain foreign countries without prior approval of such agency. PHS neither represents that a license is or is not required or that, if required, it shall be issued.
14.10 Licensee agrees to mark the Licensed Products or their packaging sold in the United States with all applicable U.S. patent numbers and similarly to indicate "Patent Pending" status. All Licensed Products manufactured in, shipped to, or sold in other countries shall be marked in such a manner as to preserve PHS patent rights in such countries.
14.11 By entering into this Agreement, PHS does not directly or indirectly endorse any product or service provided, or to be provided, by Licensee whether directly or indirectly related to this Agreement. Licensee shall not state or imply that this Agreement is an endorsement by the Government, PHS, any other Government organizational unit, or any Government employee. Additionally, Licensee shall not use the names of NIH, CDC, PHS, or DHHS or the Government or their employees in any advertising, promotional, or sales literature without the prior written consent of PHS, except that Licensee may publicly identify the existence of this Agreement and is not prohibited from using publicly available factual information regarding the Licensed Patent Rights, Licensed
Products and Licensed Processes specifically including, but not limited to, the names of the inventors as appears on the Licensed Patent Rights and their associated NIH institutes, without such consent.
14.12 The Parties agree to attempt to settle amicably any controversy or claim arising under this Agreement or a breach of this Agreement, except for appeals of modifications or termination decisions provided for in Article 13. Licensee agrees first to appeal any such unsettled claims or controversies to the designated PHS official, or designee, whose decision shall be considered the final agency decision. Thereafter, Licensee may exercise any administrative or judicial remedies that may be available.
14.13 Nothing relating to the grant of a license, nor the grant itself, shall be construed to confer upon any person any immunity from or defenses under the antitrust laws or from a charge of patent misuse, and the acquisition and use of rights pursuant to 37 CFR Part 404 shall not be immunized from the operation of state or Federal law by reason of the source of the grant.
14.14 Paragraphs 8.01, 9.06-9.08, 12.01-12.05, 13.07, 13.08, and 14.12 of this Agreement shall survive termination of this Agreement.
SIGNATURES BEGIN ON NEXT PAGE
PHS PATENT LICENSE AGREEMENT—NONEXCLUSIVE
/s/ JACK SPIEGEL
Jack Spiegel, Ph.D.
|Director, Division of Technology Development and Transfer|
|Office of Technology Transfer|
|National Institutes of Health|
Mailing Address for Notices:
Office of Technology Transfer
|National Institutes of Health|
|6011 Executive Boulevard, Suite 325|
|Rockville, Maryland 20852-3804|
For Licensee (Upon, information and belief, the undersigned expressly certifies or affirms that the contents of any statements of Licensee made or referred to in this document are truthful and accurate.:
/s/ H. PERRY FELL
H. Perry F, Ph.D., MBA
|President Seattle Genetics, Inc.|
Mailing Address for Notices:
Perry Fell, Ph.D., MBA
|President Seattle Genetics, Inc.|
|2215 26th Avenue, S.E.|
|Bothell, Washington 98021|
|fax (425) 489-4798|
Any false or misleading statements made, presented, or submitted to the Government, including any relevant omissions, under this Agreement and during the course of negotiation of this Agreement are subject to all applicable civil and criminal statutes including Federal statutes 31 U.S.C. 3801-3812 (civil liability) and 18 U.S.C. 1001 (criminal liability including fine(s) and/or imprisonment).
Licensee agrees to pay to PHS a noncreditable, nonrefundable license issue royalty in the amount of [*] Dollars ($[*]).
Licensee agrees to pay to PHS a nonrefundable minimum annual royalty in the amount of [*] Dollars ($[*]) beginning January 1, 1999.
Licensee agrees to pay PHS earned royalties on Net Sales by or on behalf of Licensee as follows:
[*] Percent ([*]%) of Net Sales of Licensed Products by Licensee or its sublicensees; and Licensee shall be entitled to a [*] Percent ([*]%) credit against the earned royalty rate on Net Sales for each [*]Percent ([*]%) of royalty Licensee must pay in excess of [*] Percent ([*]%) to unaffiliated third party licensors for the manufacture and sale of Licensed Products. However, in no instance shall the earned royalty rate for PHS be reduced below [*] Percent ([*]%).
Licensee agrees to pay PHS benchmark royalties as follows:
[*] Dollars ($[*]) upon initiation of the first Phase III Clinical Trial for Licensed Products; and
[*] Dollars ($[*]) upon marketing approval in the United States for Licensed Products.
Licensee agrees to pay PHS additional royalties for unreimbursed patent prosecution expenses as set forth in Paragraphs 6.08 and 6.09.
APPENDIX E—Benchmarks and Performance
Licensee agrees to the following Benchmarks for its performance under this Agreement and, within sixty (60) days of achieving a Benchmark, shall notify PHS that the Benchmark has been achieved.
[*]—Initiation of first [*] using Licensed Products.
[*]—Initiation of first [*] using Licensed Products.
[*]—Initiation of first [*] using Licensed Products.
[*]—[*] of Licensed Products with a regulatory agency.
[*]—[*] of Licensed Products filed with a regulatory agency.