Patent License Agreement - Microsoft Corp. and Immersion Corp.
PATENT LICENSE AGREEMENT
This Patent License Agreement (the "Agreement") is between Microsoft Corporation
("Microsoft"), a Washington corporation, having a place of business at One
Microsoft Way, Redmond, Washington 98052, and Immersion Corporation
("Immersion"), a California corporation, having a place of business at 2158
Paragon Drive, San Jose, California 95131, each a "party" and collectively the
"parties". The effective date of this Agreement is the date last signed below
(the "Effective Date").
WHEREAS, Immersion is a technology development business with expertise
and patent rights in the field of force feedback (FF) technologies; and
WHEREAS, Microsoft is also an innovator in and has expertise and patent
rights in the field of FF technologies, and has contributed to the
creation of a substantial market for FF gaming devices; and
WHEREAS, to resolve present patent issues, the parties wish to enter
into a license agreement as set forth herein;
NOW, THEREFORE, in consideration of the payments and promises made hereunder,
the sufficiency of which the parties acknowledge, the parties agree as follows:
1. DEFINITIONS
1.05 DIRECTINPUT refers to the dinput.dll, dinput.vxd, pid.dll,
dinput.h and dinputd.h files contained in either Version 6 or in
Version 7 of DirectX, as they exist as of the Effective Date,
and future versions of such files to the extent (but only to the
extent) they do not contain additional or modified FF-related
functionality. For purposes of this Agreement, the version of
DirectInput contained in DX7 which exists as of the Effective
Date is build 4.07.00.0201.
1.06 END-USER means a consumer who purchases and uses DirectInput, or
software or hardware into which DirectInput is integrated or
with which DirectInput is bundled, solely for his or her own
enjoyment or personal use. END-USERS do not include developers
who use DirectInput to create commercial products such as
hardware devices, software products or webpages.
1.1 FF is an abbreviation for Force Feedback. FORCE FEEDBACK means
the simulation of feel or tactile sensations.
1.2 IMMERSION FF PATENT PORTFOLIO means (i) all FF-related claims in
any utility patents and utility patent applications owned or
acquired by, or licensed to, Immersion or its Subsidiaries
(which, in the case of patents licensed to Immersion or its
Subsidiaries, are permitted to be sublicensed)
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and that are filed as of the Effective Date of this Agreement or
during the term of this Agreement, and (ii) all subsequent
FF-related claims in any utility patents (i.e. divisional,
continuation, continuation-in-part, reissue, reexaminations and
foreign patents/applications) that claim priority based on such
patents or patent applications described in (i) above. A listing
of the currently-issued patents comprising the Immersion FF
Patent Portfolio as of the Effective Date is attached as Exhibit
A ("Immersion FF Patent Portfolio").
1.3 IMMERSION FF PATENT PORTFOLIO LICENSEE means any person that has
been or subsequently is licensed by Immersion or its
Subsidiaries to practice at least some of the inventions claimed
in the Immersion FF Patent Portfolio.
1.4 IMMERSION LICENSEE PRODUCT(s) means FF hardware devices of any
kind shipped in commercial quantities by or on behalf of
Immersion Patent Portfolio Licensees on or before December 31,
1999 (the "Immersion Licensee Current Version"), as well as all
substantially similar future versions of such devices. A device
is "substantially similar" within the meaning of the foregoing
sentence if it has substantially the same appearance,
performance, feature set and architecture as the Immersion
Licensee Current Version, notwithstanding (i) firmware and
driver changes made to ensure compatibility with future versions
of Microsoft operating system software; (ii) changes related to
adding USB support; and (iii) cost reductions to the electronics
or existing mechanical design.
1.5 IMMERSION PRODUCT(s) means FF hardware devices of any kind
shipped in commercial quantities by Immersion or its
Subsidiaries on or before December 31, 1999 (the "Immersion FF
Current Version"), and any future replacement FF hardware
devices marketed and sold by Immersion or its Subsidiaries which
are substantially similar to the Immersion FF Current Version. A
device is "substantially similar" within the meaning of the
foregoing sentence if it has substantially the same appearance,
performance, feature set and architecture as the Immersion FF
Current Version, notwithstanding (i) firmware and driver changes
made to ensure compatibility with future versions of Microsoft
operating system software; (ii) changes related to adding USB
support; (iii) cost reductions to the electronics or existing
mechanical design.
1.6 MICROSOFT FF PATENT PORTFOLIO means (i) all FF-related claims in
any utility patents and utility patent applications owned or
acquired by, or licensed to, Microsoft or its Subsidiaries
(which, in the case of patents licensed to Microsoft or its
Subsidiaries, are permitted to be sublicensed) and that are
filed as of the Effective Date of this Agreement, and (ii) all
subsequent FF-related patent claims in any utility patents (i.e.
divisional, continuation, continuation-in-part, reissue,
reexaminations and foreign patents/applications) that claim
priority based on such patents or patent
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applications described in (i) above. A listing of the
currently-issued patents comprising the Microsoft FF Patent
Portfolio as of the Effective Date is attached as Exhibit B
("Microsoft FF Patent Portfolio")
1.7 MICROSOFT PRODUCTS refers collectively to the Sidewinder Force
Feedback Joystick, Sidewinder Force Feedback Wheel and R-4 Force
Feedback Wheel products.
1.8 R-4 FORCE FEEDBACK WHEEL means the FF user interface device
manufactured by or for Saitek Ltd. which bears the "R-4 Force
Feedback Wheel" product name as the primary trademark, as such
product exists as of March 1, 1999 (the "R-4 Current Version")
and any future versions of such product which are substantially
similar to the R-4 Current Version, are introduced into the
commercial marketplace in commercial quantities by October 31,
1999, and are branded with "R-4 Force Feedback Wheel" as the
primary trademark.
1.9 SAITEK LICENSE means the Force Feedback technology license
agreement between Saitek Ltd. and Microsoft as such license
agreement exists as of the Effective Date or as it is amended as
set forth in this Agreement.
1.10 SIDEWINDER FORCE FEEDBACK JOYSTICK means (a) the FF joystick
product sold as of May 1, 1999 by Microsoft under the
"Sidewinder Force Feedback Joystick" product name; (b) a
replacement FF joystick product (however named or labeled) with
Substantially Similar Functional Characteristics which is
shipped by Microsoft or its Subsidiaries in commercial volumes
on or before October 31, 2000 (devices qualifying under (a) or
(b) shall hereinafter be referred to as the "Sidewinder Joystick
Current Version"); and (c) any future replacement FF joystick
products marketed and sold by Microsoft or its Subsidiaries
which are substantially similar to the Sidewinder Joystick
Current Version. A product is "substantially similar" within the
meaning of (c) above if it has substantially the same
appearance, performance, feature set and architecture as the
Sidewinder Joystick Current Version, notwithstanding (i)
firmware and driver changes made to ensure compatibility with
future versions of Microsoft operating system software; (ii)
changes related to adding USB support; (iii) cost reductions to
the electronics or existing mechanical design.
1.11 SIDEWINDER FORCE FEEDBACK WHEEL means (a) the FF steering wheel
product sold as of May 1, 1999 by Microsoft under the
"Sidewinder Force Feedback Steering Wheel" product name; (b) a
replacement FF steering wheel product (however named or labeled)
with Substantially Similar Functional Characteristics which is
shipped by Microsoft or its Subsidiaries in commercial volumes
on or before October 31, 2000 (devices qualifying under (a) or
(b) shall hereinafter be referred to as the "Sidewinder Wheel
Current Version"); and (c) any future replacement FF steering
wheel
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products marketed and sold by Microsoft or its Subsidiaries
which are substantially similar to the Sidewinder Wheel Current
Version. A product is "substantially similar" within the meaning
of (c) above if it has substantially the same appearance,
performance, feature set and architecture as the Sidewinder
Wheel Current Version, notwithstanding (i) firmware and driver
changes made to ensure compatibility with future versions of
Microsoft operating system software; (ii) changes related to
adding USB support; (iii) cost reductions to the electronics or
existing mechanical design.
1.12 SIDEWINDER PRODUCTS means the collective term for the Sidewinder
Force Feedback Joystick and Sidewinder Force Feedback Wheel
products.
1.13 SUBSIDIARY means a corporation, company or other entity:
a) more than fifty percent (50%) of whose outstanding
shares or securities (representing the right to vote for
the election of directors or other managing authority)
are, as of the Effective Date, owned or controlled,
directly or indirectly, by a party, but such
corporation, company, or other entity shall be deemed to
be a Subsidiary only so long as such ownership or
control exists; or
b) which does not have outstanding shares or securities, as
may be the case in a partnership, joint venture or
unincorporated association, but more than fifty percent
(50%) of whose ownership interest representing the right
to make the decisions for such corporation, company or
other entity is, as of the Effective Date, owned or
controlled, directly or indirectly, by a party, but such
corporation, company or other entity shall be deemed to
be a Subsidiary only so long as such ownership or
control exists.
1.14 SUBSTANTIALLY SIMILAR FUNCTIONAL CHARACTERISTICS means that a
current version of a given product and its replacement version
(e.g., a currently shipping FF joystick product and its
replacement FF joystick product) bear the following relationship
to each other: the replacement product has substantially the
same functionality and feature set as the current version,
notwithstanding that, for example, one or more of the ancillary
buttons, knobs or sliders in the current version may be changed
to a different mechanical form in the replacement product, and
notwithstanding the addition of a mechanism whereby one or more
additional peripherals could be added or attached to the
replacement version by the end-user as a plug-in (whether or not
the device is shipped with such additional peripherals actually
plugged-in), provided that any such additional peripherals would
not include FF capabilities, and notwithstanding that the drive
mechanism has been changed in the replacement version.
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2. IMMERSION LICENSE TO MICROSOFT
2.1 SIDEWINDER PRODUCT PATENT LICENSE: In consideration for the
one-time payment made in Section 5.1 ("Microsoft One-Time
Payment to Immersion") and the license and covenant-not-to-sue
set forth in Section 3.2 ("License and Covenant-Not-To-Sue Under
Microsoft FF Patent Portfolio"), Immersion and its Subsidiaries
grant Microsoft and its Subsidiaries a worldwide, nonexclusive
license under the Immersion FF Patent Portfolio (which license
shall become irrevocable, perpetual, non-terminable and fully
paid-up upon Immersion's receipt of Microsoft's one-time payment
required under Section 5.1) to make, have made, use, have used,
import and have imported, sell, have sold, and offer for sale
Sidewinder Products, subject to the limitation that, except for
reasonable product transition overlap (including possible
manufacturing overlap as well as marketing efforts to clear the
distribution channels of one product while its replacement
product is being introduced), the foregoing license shall extend
to only one Sidewinder Force Feedback Joystick product and one
Sidewinder Force Feedback Wheel product being manufactured or
marketed by or for Microsoft or its Subsidiaries at any one
time. Such license shall apply to Sidewinder Products without
regard to whether such Sidewinder Products are marketed in a
bundle with other separate products.
2.2 MICROSOFT SUBLICENSING RIGHTS: Immersion and its Subsidiaries
grant to Microsoft and its Subsidiaries a worldwide,
nonexclusive license under the Immersion FF Patent Portfolio
(which license shall become irrevocable, perpetual,
non-terminable and fully paid-up upon Immersion's receipt of
Microsoft's one-time payment required under Section 5.1) (i) to
sublicense third parties to manufacture Sidewinder Products on
behalf of Microsoft or its Subsidiaries for sale by Microsoft or
its Subsidiaries under the licenses granted herein, and (ii) to
sublicense Saitek to make, have made, use, have used, import and
have imported, sell and have sold and offer for sale R-4 Force
Feedback Wheels, solely to the extent the Saitek License, by its
terms, permits such activities as of the Effective Date. No
further sublicensing rights are granted to Microsoft or its
Subsidiaries by this Section 2.2 ("Microsoft Sublicensing
Rights") except as expressly granted herein and to the extent
the Saitek License grants to Saitek more extensive rights than
those granted by Immersion to Microsoft or its Subsidiaries for
sublicense to Saitek hereunder, no license by Immersion is
implied. Microsoft hereby agrees that any amendments or
modifications it agrees to make to the Saitek License after the
Effective Date shall not in any way affect the scope of products
licensed pursuant to that Agreement.
2.3 MICROSOFT REFERENTIAL USE OF IMMERSION BRANDING: During the term
of this Agreement, Microsoft agrees to make referential use of
the I-FORCE trademarks by including in each Microsoft Product
(excluding the R-4 Force Feedback Wheel) the following
reference: "Microsoft is a licensee of
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Immersion Corporation, the exclusive licensor, under the [INSERT
I-FORCE LOGO] logo, of I-FORCE force-feedback patents and
technology." Specifically, Microsoft agrees to incorporate the
foregoing reference along with a reference (and, to the extent
technically feasible, a hyper-text link) to Immersion's
then-current corporate web site (www.force-feedback.com) in the
About Box for the associated driver software control panel or
comparable location. Microsoft also agrees to place or have
placed on the underside (exterior) of the Sidewinder Products
the following notice: "Microsoft is a licensee of Immersion
Corporation, the exclusive licensor of I-FORCE force-feedback
patents and technology." Microsoft agrees to exercise its
commercially reasonable best efforts to implement the foregoing
references into Microsoft Products (excluding the R-4 Force
Feedback Wheel) manufactured by or for Microsoft as promptly as
possible, and commits to doing so by no later than ninety (90)
days from the Effective Date. Notwithstanding the referential
use described in this Section 2.3 ("Microsoft Referential Use of
Immersion Branding"), no trademark license is granted to
Microsoft hereunder to use the Immersion trademarks or to
sublicense such Immersion trademarks to third parties. Immersion
hereby agrees to defend, indemnify and hold Microsoft, its
Subsidiaries, distributors and licensees harmless from and
against any and all claims that Microsoft's including such
reference violates a third party's trademarks or other
proprietary rights. In the event Microsoft receives such a third
party claim ("Indemnification Claim"), Microsoft agrees to
promptly notify Immersion in writing of the Indemnification
Claim and to cooperate with Immersion at Immersion's expense in
defending the Indemnification Claim. Immersion's obligations
under the foregoing indemnity provision, shall, however, be
subject to a total dollar limit of 50% of all payments by
Microsoft to Immersion hereunder (the "Indemnification Cap");
provided that in the event Immersion does not within sixty (60)
days of receiving notice from Microsoft of an Indemnification
Claim (or within three (3) days of such notice if the
third-party claim is accompanied by a motion for preliminary
injunction or temporary restraining order that would if granted
prevent Microsoft from shipping product which contains such
reference) agree in writing to fully and completely indemnify
and hold Microsoft harmless with respect to the Indemnification
Claim without regard to the Indemnification Cap, then Microsoft
in its sole discretion may elect to discontinue all future
referential use of the I-FORCE trademarks as set forth in this
Section 2.3 in conjunction with the product sku associated with
the region in which the claim is raised. At such time as the
third-party claim is settled or otherwise resolved in a manner
which permits Microsoft to referentially use the I-FORCE
trademarks, Immersion may request, in writing, that Microsoft
resume referential use of the I-Force trademark as set forth in
this Section 2.3 and Microsoft agrees to do so, provided that
Immersion pays Microsoft's reasonable costs and allows Microsoft
a commercially reasonable amount of time to make the change.
Subject to Microsoft's
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right to protect its own trademarks, tradenames and
servicemarks, Immersion may request, in writing, that Microsoft
substitute alternative tradenames, trademarks or servicemarks
which may be substituted for those referred to above or that
Microsoft substitute a different Immersion corporate web site
(i.e., different from www.force-feedback.com) and Microsoft
agrees to do so, provided that Immersion pays Microsoft's
reasonable costs and allows Microsoft a commercially reasonable
amount of time to make the substitution. Immersion agrees that
Microsoft's obligations to include a hyper-text link under
Sections 2.3 and 6.2 shall not apply to any link to a site which
on a consistent basis (as opposed to the normal featuring of new
products, product reviews, etc.) features a product sold by a
Microsoft competitor more prominently than a product sold by
Microsoft.
2.4 SAITEK BRANDING REQUIREMENT: Microsoft agrees to use its
commercially reasonable best efforts to require Saitek to use
the I-FORCE trademarks and to incorporate them on the bottom of
the R-4 Force Feedback Wheel. In addition, Microsoft agrees to
use its commercially reasonable best efforts to require Saitek
to include the I-FORCE logo in the About Box or comparable
location on the driver software control panel associated with
the R-4 Force Feedback Wheel, or if there is no About Box, in
the associated product manual. Microsoft agrees to use
commercially reasonable best efforts to require Saitek to
implement the foregoing trademark requirements by September 15,
1999. Microsoft agrees to use commercially reasonable best
efforts to impose on Saitek the obligation to include the
I-FORCE logo on the product packaging for R-4 Force Feedback
Wheels and in connection with advertising or promotional
materials associated with the R-4 Force Feedback Wheels.
Microsoft agrees to use commercially reasonable best efforts to
require Saitek to permit Immersion to cite Saitek as an
Immersion FF Patent Portfolio Licensee and to list Saitek in all
materials that list other Immersion FF Patent Portfolio
Licensees.
2.5 LIMITED SOFTWARE LICENSE: Immersion hereby grants Microsoft and
its Subsidiaries a worldwide, non-exclusive license under the
Immersion FF Patent Portfolio (which license shall become
irrevocable, perpetual, non-terminable and fully paid-up upon
Immersion's receipt of Microsoft's one-time payment required
under Section 5.1):
(a) to manufacture, sell, offer for sale, import and use
DirectInput; and
(b) to manufacture, sell, offer for sale, import and use
Microsoft's FF-capable gaming software products listed
in Exhibit C (all of which Microsoft represents have
been distributed by Microsoft to third parties in
commercial quantities on or before May 1, 1999), and to
manufacture, sell, import and use successor versions of
such gaming software products.
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Microsoft and its Subsidiaries and End-Users shall not be liable
to Immersion or its Subsidiaries as a contributory infringer
under 35 U.S.C. Section 271(c) (or the foreign law equivalent
thereof), or for inducing infringement under 35 U.S.C. Section
271(b) (or the foreign law equivalent thereof), based solely on
their manufacture, importation, offer for sale, use or sale of
DirectInput in combination with third-party software and/or
hardware products, nor shall they be liable for direct
infringement under 35 U.S.C. Section 271(a) (or the foreign
equivalent thereof) based solely on their combination of
DirectInput with unlicensed Microsoft or third-party hardware or
software if no force feedback element of the claim or claims
asserted against them is contributed by the Microsoft or
third-party hardware or software which they combine with
DirectInput. Except as specifically provided above, this Section
2.5 shall not be construed to immunize Microsoft or its
Subsidiaries from liability under 35 U.S.C. Section 271(a)-(c),
or under any other provision of Title 35 of the United States
Code, either expressly, by implication, by estoppel, or
otherwise. However, injunctive relief in patent infringement
actions brought by Immersion or its Subsidiaries based on
Microsoft's or Microsoft's Subsidiaries' unlicensed hardware or
software products, or the combination thereof with each other or
with DirectInput, shall, unless product integration and/or
bundling make it impractical, be directed to such unlicensed
products, and not to DirectInput itself.
3. LICENSE AND COVENANT-NOT-TO-SUE UNDER MICROSOFT FF PATENT PORTFOLIO.
3.1 In consideration for the licenses granted herein by Immersion
and its Subsidiaries, the favorable one-time royalty payment for
the licenses granted them herein with respect to the Immersion
FF Patent Portfolio, and the force feedback evangelism services
provided for in Section 6.6, Microsoft and its Subsidiaries
hereby grant Immersion and its Subsidiaries a royalty-free,
worldwide, non-exclusive license (which license shall be
irrevocable and non-terminable during the term set forth in
Section 3.3 upon Immersion's receipt of Microsoft's one-time
payment required under Section 5.1), under the Microsoft FF
Patent Portfolio, to make, have made, use, have used, import and
have imported, sell, have sold and offer for sale Immersion
Product(s), subject to the limitation that, except for
reasonable product transition overlap (including possible
manufacturing overlap as well as marketing efforts to clear the
distribution channels of one product while its replacement
product is being introduced), the foregoing license shall extend
to only one version of a given FF hardware device being
manufactured or marketed by or for Immersion or its Subsidiaries
at any one time (i.e., Immersion will not have a given Immersion
FF Current Version and its replacement version being
manufactured or marketed at the same time, but may have two or
more different Immersion FF hardware devices on the market at a
given time).
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3.2 In further consideration for the licenses granted herein by
Immersion and its Subsidiaries, the favorable one-time royalty
payment for the licenses granted them herein with respect to the
Immersion FF Patent Portfolio, and the force feedback evangelism
services provided for in Section 6.6, Microsoft and its
Subsidiaries hereby grant all present and future Immersion FF
Patent Portfolio Licensees a covenant-not-to-sue such Immersion
FF Patent Portfolio Licensees under the Microsoft FF Patent
Portfolio with respect to Immersion Licensee Product(s), subject
to the limitation that, except for reasonable product transition
overlap (including possible manufacturing overlap as well as
marketing efforts to clear the distribution channels of one
product while its replacement product is being introduced), the
foregoing covenant shall extend to only one version of a given
FF hardware device being manufactured or marketed by or for
Immersion FF Patent Portfolio Licensees at any one time (i.e., a
given Immersion FF Patent Portfolio Licensee will not have a
given Immersion FF Patent Portfolio Licensee Current Version and
its replacement version being manufactured or marketed at the
same time, but may have two or more different Immersion FF
Patent Portfolio Licensee hardware devices on the market at a
given time). Microsoft warrants that no third party has or will
be granted the right, as an exclusive licensee or patent
assignee of Microsoft or otherwise, to assert any claim as to
which Microsoft has granted the covenant-not-to-sue described
above. No third party against whom Microsoft has a pending
infringement claim subsequent to the Effective Date with respect
to the Microsoft FF Patent Portfolio will be granted the
above-described covenant-not-to-sue in the event such third
party becomes an Immersion FF Patent Portfolio Licensee after
Microsoft has made a claim against such third party.
3.3 The term of the license provided to Immersion under Section 3.1,
and of the covenant-not-to-sue provided to Immersion's licensees
under Section 3.2, shall commence on the Effective Date and end:
3.3.1 With respect to FF joysticks and steering wheels, the
later of (a) April 30, 2002; or (b) the final date on
which Microsoft or any Subsidiary or sublicensee of
Microsoft exercises any right pursuant to Sections 2.1
or 2.2 above;
3.3.2 With respect to all other FF hardware products, on
December 31, 2000.
3.4 The covenant-not-to-sue granted in Section 3.2 above shall be
terminable upon written notice by Microsoft, with respect to any
particular Immersion licensee, in the event such licensee (a)
files suit against Microsoft or its Subsidiaries alleging
infringement of any FF-related patent or other intellectual
property right; (b) files suit against a Microsoft distributor,
reseller or end user alleging infringement of any FF-related
patent or other intellectual property right with respect to a
Microsoft FF product; or (c)
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engages in a course of conduct which, under applicable Federal
Circuit Court of Appeals case law, gives rise to a reasonable
apprehension by Microsoft of such suit.
3.5 As set forth in Sections 3.1 and 3.2 above, Microsoft's license
to Immersion and its Subsidiaries and its covenant not to sue
Immersion's Patent Portfolio Licensees are granted by Microsoft
on a royalty or fee free basis. If Microsoft or its Subsidiaries
have entered or do enter into a license agreement with a third
party with respect to that third party's FF related claims in
patents and patent applications and such license rights are
sublicensable by Microsoft or its Subsidiaries such that they
become part of the Microsoft FF Patent Portfolio (hereinafter,
"Third Party Patents"), then: (i) if the Third Party Patents are
sublicensable by Microsoft or its Subsidiaries on a royalty free
or one-time lump sum fee basis, then Immersion, its Subsidiaries
and the Immersion Patent Portfolio Licensees shall immediately
receive rights to such Third Party Patents pursuant to Sections
3.1 and 3.2 as the case may be and Immersion, its Subsidiaries
and the Immersion Patent Portfolio Licensees shall not owe
Microsoft or its Subsidiaries any compensation for receiving
such rights; (ii) if the Third Party Patents are sublicensable
by Microsoft or its Subsidiaries solely on a royalty bearing
basis, then Microsoft shall notify Immersion of the Third Party
Patent license and Immersion may elect on behalf of itself, its
Subsidiaries and the Immersion Patent Portfolio Licensees to
take a royalty bearing sublicense (or covenant not to sue as the
case may be) to such Third Party Patents subject to the terms of
Sections 3.1 and 3.2 hereof (provided the parties acknowledge
that such a license for Third Party Patents may not necessarily
be irrevocable and non-terminable nor may they run for the term
set forth in Section 3.3), in which event, Immersion, its
Subsidiaries and the Immersion Patent Portfolio Licensees shall
be entitled to receive, as to such Third Party Patents, the
lowest royalties and best terms and conditions as compared to
those paid by Microsoft, its Subsidiaries or any of their
sublicensees.
4. NO MICROSOFT TRADEMARK LICENSE. No trademark license is granted to
Immersion hereunder to use the Microsoft trademarks or to sublicense
such Microsoft trademarks to third parties.
5. MICROSOFT ONE-TIME PAYMENT TO IMMERSION
5.1 ONE-TIME PAYMENT: Within forty (40) days after the Effective
Date and Microsoft's receipt of an invoice from Immersion,
Microsoft shall make a one-time payment of Two Million Three
Hundred Fifty Thousand Dollars ($2,350,000) to Immersion for the
licenses granted to Microsoft and its Subsidiaries by Immersion
and its Subsidiaries with respect to the Microsoft Products
under the terms of Section 2.1 ("Sidewinder Product Patent
License") and Section 2.2 ("Microsoft Sublicensing Rights"). If
Immersion or its Subsidiaries have entered or do enter into a
license
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agreement with a third party with respect to that third party's
FF related claims in patents and patent applications and such
license rights are sublicensable by Immersion or its
Subsidiaries such that they become part of the Immersion Patent
Portfolio (hereinafter, "Third Party Patents"), then: (i) if the
Third Party Patents are sublicensable by Immersion or its
Subsidiaries on a royalty free or one-time lump sum fee basis,
then Microsoft and its Subsidiaries shall immediately receive
rights to such Third Party Patents pursuant to Sections 2.1 and
2.2 and shall not owe Immersion or its Subsidiaries any
compensation over that referenced in the first sentence of this
Section 5.1 for receiving such rights; (ii) if the Third Party
Patents are sublicensable by Immersion or its Subsidiaries
solely on a royalty bearing basis, then Immersion shall notify
Microsoft of the Third Party Patent license and Microsoft may
elect on behalf of itself and its Subsidiaries to take a royalty
bearing sublicense to such Third Party Patents subject to the
terms of Sections 2.1, 2.2 and 2.5 hereof (provided the parties
acknowledge that such a license for Third Party Patents may not
necessarily be irrevocable, non-terminable and/or perpetual), in
which event, Microsoft and its Subsidiaries shall be entitled to
receive, as to such Third Party Patents, the lowest royalties
and best terms and conditions as compared to those paid by
Immersion, its Subsidiaries or any of their sublicensees.
5.2 MOST FAVORED ROYALTIES AND TERMS ON FUTURE PRODUCT LICENSES: As
further consideration for entering into this Agreement,
Immersion agrees as follows:
5.2.1 In any future non-exclusive patent license agreement
entered into between the Parties after the Effective
Date for FF hardware devices other than the Microsoft
Products ("New Agreement"), Microsoft shall, subject to
the limitations imposed in Sections 5.2.2 and 5.2.5
below, be entitled to the most favorable running royalty
rate and/or lump-sum payment term granted by Immersion
(either before or after the date of the New Agreement)
for a non-exclusive license covering, at least,
comparable products (e.g., a joystick is comparable to a
joystick, a wheel is comparable to a wheel, a
laparoscopic surgical simulator is comparable to a
laparoscopic surgical simulator) in a similar
field-of-use. The consumer, arcade and industrial
markets are examples of fields of use. Such other
license agreement shall hereinafter be referred to as
the "Other Immersion Agreement."
5.2.2 In order to qualify for royalty terms contained in an
Other Immersion Agreement and at its option, Microsoft
shall (a) agree to each of the basic license provisions
as set forth in Sections 2.3, 6.1, 6.2, 7.1, 7.2, and
8.1 of this Agreement; and (b) with respect to all other
material terms of such Other Immersion Agreement, either
(i) match all material terms of such Other Immersion
Agreement, or (ii) with respect to any material terms of
such Other Immersion Agreement
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<PAGE> 12
it cannot or will not match (except for sales volume over time
requirements, which must be matched), negotiate a reasonable
economic equivalent to such non-matched terms, or if such an
agreement cannot be reached by the Parties, expeditiously submit
such issue to binding arbitration before a single arbitrator
acceptable to both Immersion and Microsoft.
5.2.3 Microsoft shall have the right from time to time, at its
own expense, to have reasonable audits of Immersion's
license agreements performed by an independent auditor,
who shall be under an obligation to preserve the
confidentiality of those agreements. In the event such
an audit reveals Immersion patent license grants
covering comparable products in a similar field of use
as the grants included in the proposed New Agreement or
New Agreements, and which have a lower running royalty
rate or lump-sum payment term than the proposed New
Agreement or New Agreements, the terms of such license
agreements (but not the identity of Immersion's
licensee) shall be disclosed to Microsoft pursuant to
the terms of a mutually-acceptable confidentiality
agreement.
5.2.4 In no event shall the most favorable running royalty
rate used in Section 5.2.1 above exceed [****] of net
receipts, so long as the FF hardware device covered by
the New Agreement is a computer peripheral intended for
consumer markets. In determining the net receipts to
which this Section shall apply, Microsoft shall be
entitled to the most favorable definition contained in
an Other Immersion Agreement whose royalty rate is
[****] or less. Where Microsoft bundles unlicensed (and
non-infringing with respect to the Immersion FF Patent
Portfolio) hardware or software products with the
licensed FF product, the maximum royalty ("Max Royalty")
on the licensed product shall be [****]
5.2.5 Notwithstanding the above, this Section 5.2 shall not
apply to any license agreement entered into as part of a
settlement of pending litigation between Immersion or
its Subsidiaries, on the one hand, and Microsoft or its
Subsidiaries, on the other; except that this exception
shall not apply if Immersion fails to notify Microsoft
of Microsoft's or its Subsidiaries' alleged
infringement, and engage in license discussions, prior
to filing suit. Microsoft agrees that after receiving
such notice, it will not file any action or proceeding
contesting the validity, enforceability or
non-infringement of the patent or patents with respect
to which Immersion has given it notice until after the
parties have failed, despite their good faith efforts,
to reach agreement on a license agreement and in no
event earlier than forty-five (45) days following
Microsoft's receipt of Immersion's notice. Similarly,
Immersion agrees that it will not file any action or
proceeding alleging infringement of the patent or
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
-12-
MICROSOFT AND IMMERSION CONFIDENTIAL
<PAGE> 13
patents until after the parties have failed, despite
their good faith efforts, to reach agreement on a
license agreement and in no event earlier than
thirty-five (35) days following Microsoft's receipt of
Immersion's notice. In addition, statements regarding
intellectual property claims made by Immersion or its
Subsidiaries in connection with threatened or actual
litigation with a third-party with whom Immersion has
entered into an Other Immersion Agreement shall not be
admissible in any arbitration conducted pursuant to
Section 5.2.2 above.
6. OTHER TERMS AND CONDITIONS
6.1 PRESS RELEASE: The parties shall jointly prepare a press release
announcing this Agreement, consisting of mutually agreed-upon
text, press date, and city or cities of origin. Neither party
shall issue any other press release, sales or marketing,
promotional material, advertisements, or similar materials
discussing such party's relationship to the other party, except
as may be expressly authorized or required in this Agreement or
with the other party's prior written agreement to the content
and distribution of any such material or information. Immersion
shall be free to cite Microsoft as an Immersion FF Patent
Portfolio Licensee and to list Microsoft in all materials that
list other Immersion FF Patent Portfolio Licensees.
6.2 PATENT MARKING: As soon as possible after the Effective Date,
and in no event later than ninety (90) days thereafter,
Microsoft shall mark all newly-manufactured Sidewinder Products
with (a) a label notifying purchasers that the product may be
governed by one or more patents enumerated in the "About Box" or
comparable location of the software component of the Product;
(b) a statement in the "About Box" or comparable location that
--------------------------------------------------------------------------------
This product may be subject to one or more of the
following patents owned by Immersion Corporation:
______________________
--------------------------------------------------------------------------------
(where the blank has been filled in with the numbers of the
patents set forth in Exhibit A, as such list is amended by
Immersion from time to time); and (c) a reference to Immersion's
then-current corporate web site (www.force-feedback.com) in the
About Box for the associated driver software control panel or
comparable location (which reference shall, to the extent
technically feasible, be a hyperlink). Changes made by Microsoft
to the list of patents based on an amendment of such list by
Immersion shall be made within a commercially reasonable amount
of time, and Immersion agrees to compensate Microsoft for its
reasonable costs necessary to make such changes.
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<PAGE> 14
6.3 NO ADMISSION: Microsoft's and its Subsidiaries' license of the
Immersion FF Patent Portfolio and/or payment of the one-time
payment under Section 5.1 ("Microsoft One-Time Payment to
Immersion") and/or Immersion's and its Subsidiaries' license of
the Microsoft FF Patent Portfolio from Microsoft shall not be
deemed to be evidence or an admission that a product infringes
any patent of the other party, or that any patent of a party is
valid or enforceable.
6.4 TAXES:
(a) The amounts to be paid (or deemed paid) by either party
to the other do not include any foreign, U.S. federal,
state, local, municipal or other governmental taxes,
duties, levies, fees, excises or tariffs, arising as a
result of or in connection with the transactions
contemplated under this Agreement including, without
limitation, (i) any state or local sales or use taxes or
any value added tax or business transfer tax now or
hereafter imposed on the provision of any services to
the other party under this Agreement, (ii) taxes imposed
or based on or with respect to or measured by any net or
gross income or receipts of either party, (iii) any
franchise taxes, taxes on doing business, gross receipts
taxes or capital stock taxes (including any minimum
taxes and taxes measured by any item of tax preference),
(iv) any taxes imposed or assessed after the date upon
which this Agreement is terminated, (v) taxes based upon
or imposed with reference to either parties' real and/or
personal property ownership and (vi) any taxes similar
to or in the nature of those taxes described in (i),
(ii), (iii), (iv) or (v) above, now or hereafter imposed
on either party (or any third parties with which either
party is permitted to enter into agreements relating to
its undertakings hereunder) (all such amounts, together
with any penalties, interest or any additions thereto,
collectively "Taxes"). Neither party is liable for any
of the other party's Taxes incurred in connection with
or related to the sale of goods and services under this
Agreement, and all such Taxes shall be the financial
responsibility of the party obligated to pay such taxes
as determined by the applicable law, provided that both
parties shall pay to the other the appropriate Collected
Taxes in accordance with subsection (b) below. Each
party agrees to indemnify, defend and hold the other
party harmless from any Taxes (other than Collected
Taxes) or claims, causes of action, costs (including,
without limitation, reasonable attorneys' fees) and any
other liabilities of any nature whatsoever related to
such Taxes to the extent such Taxes relate to amounts
paid under this Agreement.
(b) Any sales or use taxes described in (a)(i) above that
(i) are owed by either party solely as a result of
entering into this Agreement and the payment of the fees
hereunder, (ii) are required to be collected
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<PAGE> 15
from that party under applicable law, and (iii) are
based solely upon the amounts payable (or deemed
payable) under this Agreement (such taxes the "Collected
Taxes"), shall be stated separately as applicable on
payee's invoices and shall be remitted by the other
party to the payee, upon request payee shall remit to
the other party official tax receipts indicating that
such Collected Taxes have been collected and paid by the
payee. Either party may provide the other party an
exemption certificate acceptable to the relevant taxing
authority (including without limitation a resale
certificate) in which case payee shall not collect the
taxes covered by such certificate. Each party agrees to
take such commercially reasonable steps as are requested
by the other party to minimize such Collected Taxes in
accordance with all relevant laws and to cooperate with
and assist the other party, in challenging the validity
of any Collected Taxes or taxes otherwise paid by the
payor party. Each party agrees to equally share the cost
of any successful other party-initiated ruling and/or
appeal or other determination that concludes that a
Collected Tax is not owing in whole or in part under
this Agreement. Each party shall indemnify and hold the
other party harmless from any Collected Taxes,
penalties, interest, or additions to tax arising from
amounts paid by one party to the other under this
Agreement, that are asserted or assessed against one
party to the extent such amounts relate to amounts that
are paid to or collected by one party from the other
under this Section. If any taxing authority refunds any
tax to a party which the other party originally paid, or
a party otherwise becomes aware that any tax was
incorrectly and/or erroneously collected from the other
party, then that party shall promptly remit to the other
party an amount equal to such refund, or incorrect
collection as the case may be plus any interest thereon.
(c) If taxes are required to be withheld on any amounts
otherwise to be paid by one party to the other, the
paying party will deduct such taxes from the amount
otherwise owed and pay them to the appropriate taxing
authority. At a party's written request and expense, the
parties will use reasonable efforts to cooperate with
and assist each other in obtaining tax certificates or
other appropriate documentation evidencing such payment,
provided, however, that the responsibility for such
documentation shall remain with the payee party.
(d) This Section 6.4 shall govern the treatment of all taxes
arising as a result of or in connection with this
Agreement notwithstanding any other Section of this
Agreement.
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<PAGE> 16
6.5 ESCALATION: In the event of any dispute arising under this
Agreement, authorized representatives of each of the parties
shall meet or communicate by phone or otherwise no later than
ten (10) working days after receipt of notice by either party of
a request for dispute resolution and shall enter into good faith
negotiations aimed at resolving the dispute. If the
representatives are unable to resolve the dispute in a mutually
satisfactory manner within the next five (5) working days after
the initial meeting or phone communication described above, the
dispute shall be referred to the top management level for
FF-related matters in each party, and each party shall designate
a top management executive with authority to resolve the dispute
to meet in good faith in an attempt to resolve the dispute
within thirty (30) days after receipt of the initial notice.
This Section 6.5 ("Escalation") shall not limit either party's
ability, after referring the dispute to the top management
levels of the parties and expiration of the thirty (30) day
period following receipt of the initial notice, to seek an
injunction or other equitable relief for breach of obligations
related to intellectual property or as may otherwise be
necessary to protect any other rights of either party.
6.6 FORCE FEEDBACK EVANGELISM SERVICES: Immersion agrees that for a
period of twelve (12) months following the Effective Date, it
shall provide at least fifty (50) hours per month of force
feedback evangelism services. "Force feedback evangelism
services," as used in this Section 6.6, means marketing services
directed to convincing and/or assisting developers to create
force feedback-capable software products.
7. TERM & TERMINATION
7.1 TERM: The term of this Agreement shall be for a period of time
up through the expiration of the last of the patents in the
Microsoft FF Patent Portfolio and Immersion FF Patent Portfolio.
7.2 TERMINATION FOR CAUSE: If either party materially breaches any
obligation contained in this Agreement, the other party may
terminate this Agreement upon sixty (60) days' written notice;
provided, however, that cure of such material breach within such
sixty (60) day notice period shall bar termination on account of
such material breach.
7.3 EFFECT OF TERMINATION: In the event of termination of this
Agreement for any reason, except non-payment of the one-time
payment described in Section 5.1 ("One-Time Payment"), the
provisions of Section 2 ("Immersion License to Microsoft"),
Section 3 ("License and Covenant-Not-To-Sue Under Microsoft FF
Patent Portfolio"), Section 6.2 ("Patent Marking"), Section 6.3
("No Admission"), Section 7 ("Term & Termination"), Section 8
("Confidentiality") and Section 9 ("Miscellaneous") shall remain
in force and shall survive any termination.
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<PAGE> 17
8. CONFIDENTIALITY.
8.1 CONFIDENTIALITY: All terms and conditions of this Agreement
shall be deemed Confidential Information as defined herein. The
parties expressly undertake to retain in confidence all
information and know-how transmitted to one party ("Receiving
Party") by the other party ("Disclosing Party") that the
Disclosing Party has designated as proprietary and/or
confidential or that, by the nature of the circumstances
surrounding the disclosure, ought in good faith to be treated as
proprietary and/or confidential ("Confidential Information").
Confidential Information includes all information relating to
payments and terms under this Agreement. The parties will make
no use of Confidential Information except under the terms and
during the existence of this Agreement. Confidential Information
shall not include any information that: (i) is or subsequently
becomes publicly available without the Receiving Party's breach
of any obligation owed the Disclosing Party; (ii) became known
to Receiving Party from a source other than Disclosing Party
other than by the breach of an obligation of confidentiality
owed to Disclosing Party; (iii) is independently developed by
Receiving Party. Nothing herein shall prevent a Receiving
Party's disclosure of Confidential Information as required by
applicable statutory or regulatory requirement (including,
without limitation, disclosure to comply with reporting
obligations associated with a legitimate corporate transaction),
or of such terms as directly affect a party's licensee to said
licensee in the event such licensee receives a notice of
infringement from the other party hereto, or pursuant to a
subpoena or document request. If a Receiving Party is subject to
a subpoena or document request calling for the production of a
Disclosing Party's Confidential Information, the Receiving Party
shall notify the Disclosing Party as soon as practicable to
permit the Disclosing Party to endeavor to minimize disclosure
by obtaining a protective order or otherwise. Receiving Party's
obligation under this Section 8 with respect to any particular
information shall extend to the earlier of such time as such
information is publicly available through no fault of Receiving
Party or ten (10) years following termination of this Agreement.
9. MISCELLANEOUS
9.1 SUFFICIENT RIGHTS: Each party represents and warrants that it
has all legal right and power to grant the other party the
license rights granted in this Agreement, and that its execution
and performance of this Agreement will not violate any law or
agreement.
9.2 NOTICE: Any written notice under this Agreement shall be sent by
certified mail, return receipt requested, or its equivalent,
addressed as follows:
FOR NOTICES TO MICROSOFT: FOR NOTICES TO IMMERSION:
VICE PRESIDENT, HARDWARE LOUIS ROSENBERG, PRESIDENT
MICROSOFT CORPORATION IMMERSION CORPORATION
ONE MICROSOFT WAY 2158 PARAGON DRIVE
-17- MICROSOFT AND IMMERSION CONFIDENTIAL
<PAGE> 18
REDMOND, WASHINGTON 98052 SAN JOSE, CALIFORNIA, 95131
WITH A COPY TO: WITH A COPY TO:
MICROSOFT GENERAL COUNSEL STACY A. SNOWMAN, ESQ.
LAW & CORPORATE AFFAIRS GRAY CARY WARE & FREIDENRICH
MICROSOFT CORPORATION 139 TOWNSEND STREET, SUITE 400
ONE MICROSOFT WAY SAN FRANCISCO, CA 94107
REDMOND, WASHINGTON 98052
9.3 SEVERABILITY: If any part of this Agreement is found to be in
violation of any law, or is found to be unenforceable, contrary
to public policy, or otherwise legally defective, the Agreement
shall be construed and interpreted without reference to that
part.
9.4 ASSIGNMENT: This Agreement is not assignable or transferable
except in the case of a merger, acquisition or assignment or
transfer of all or substantially all of the assets of the
Microsoft Hardware Group of Microsoft or of Immersion and only
if the successor (in the case of a merger or acquisition) or
assignee or transferee (in the case of an asset sale) has agreed
in writing to be bound hereby to the same extent as was the
predecessor entity. Any other attempt to assign or transfer this
Agreement without the prior written consent of the other party
shall be void.
9.5 NO OBLIGATION TO ENFORCE: Neither party shall have any
obligation to enforce its patent rights against third parties.
9.6 NO INDEMNITY: Except as provided in Sections 2.3 and 9.12
hereof, neither party shall be liable to indemnify, defend, or
hold harmless the other party against charges of patent
infringement, trade secret infringement, trademark infringement,
trade dress infringement, or the like, arising out of the
subject matter of this Agreement.
9.7 DISCLAIMER: BOTH PARTIES DISCLAIM ALL WARRANTIES, EXPRESS OR
IMPLIED, EXCEPT AS PARTICULARLY DETAILED HEREIN. THE PARTIES DO
NOT WARRANT THAT THE MANUFACTURE, USE, SALE, IMPORT OR LICENSE
OF THEIR PATENTED INVENTIONS ARE FREE FROM INFRINGEMENT OF THIRD
PARTY PATENT OR OTHER RIGHTS.
9.8 RELEASE - IMMERSION TO MICROSOFT: Immersion and its Subsidiaries
hereby fully and forever release and discharge Microsoft and its
Subsidiaries, and their manufacturers, importers and
distributors, licensees and users from any and all damages,
liability, suits, claims and causes of action of any kind,
whether known or unknown, suspected or unsuspected, arising out
of patent infringement or alleged patent infringement of the
Immersion FF Patent Portfolio by:
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<PAGE> 19
(a) the manufacture, sale, offer for sale, importation and
use of the Sidewinder Products prior to the Effective
Date;
(b) the manufacture, sale, offer for sale, importation and
use of the R-4 Force Feedback Wheels manufactured and
sold by or for Microsoft's sublicensee, Saitek, prior to
the Effective Date; and
(c) any activities occurring prior to the Effective Date
that would have been licensed under Section 2.5 had they
occurred after the Effective Date.
9.9 MODIFICATION OF DIRECTINPUT: In consideration for the releases
granted by Immersion above, Microsoft on behalf of itself and
its Subsidiaries hereby agrees that they will not modify
DirectInput so as to disadvantage Immersion Products or
Immersion Licensee Products being commercially distributed by or
for Immersion or Immersion Licensees as of the Effective Date as
compared to competitive Sidewinder Products being commercially
distributed by or for Microsoft or its Subsidiaries as of the
Effective Date, and further agrees that DirectInput will support
Immersion Products and Immersion Licensee Products being
commercially distributed by Immersion or Immersion Product
Licensees as of the Effective Date for a period of at least
three years from the Effective Date. For purposes of satisfying
these modification and support obligations, Microsoft will be
deemed to be in compliance if (a) it refrains from modifying
DirectInput so as to disadvantage the Wingman Force and Wingman
Formula Force products currently being shipped by Logitech as
compared to competitive Sidewinder Products being commercially
shipped by or for Microsoft or its Subsidiaries as of the
Effective Date; and (b) for the above-referenced three year
period, DirectInput supports at least the Wingman Force and
Wingman Formula Force products currently being shipped by
Logitech.
9.10 RELEASE - MICROSOFT TO IMMERSION: Microsoft and its Subsidiaries
hereby fully and forever release and discharge Immersion and its
Subsidiaries, and their manufacturers, importers and
distributors, licensees and users from any and all damages,
liability, suits, claims, and causes of action of any kind,
whether known or unknown, suspected or unsuspected, arising out
of patent infringement or alleged patent infringement of the
Microsoft FF Patent Portfolio by any and all FF devices
manufactured, used, sold or imported by Immersion or its
Subsidiaries prior to the Effective Date, which products are
listed in Exhibit D hereto.
9.11 NEW INFORMATION: In connection with the waiver and
relinquishment of the matters set forth in Sections 9.8 and 9.9
(hereinafter the "Released Matters"), each of the parties
acknowledges that it is aware that it or its attorneys or
accountants may hereafter discover claims or facts in addition
to or different from those which it now knows or believes to
exist with respect to the Released Matters or the other party
hereto, but that it is its
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<PAGE> 20
intention hereby fully, finally and forever to settle and
release all of the Released Matters, which now exist, may exist
or heretofore have existed between Immersion and Microsoft. In
furtherance of this intention, the releases herein given shall
be and remain in effect as full and complete mutual releases as
to the Released Matters notwithstanding the discovery or
existence of any such additional or different claim or fact.
9.12 ASSIGNMENT OF RELEASED MATTERS: Immersion and Microsoft each
warrant and represent to the other that as of the Effective Date
it is the sole and lawful owner of all right, title and interest
in and to all of the respective Released Matters and that it has
not heretofore voluntarily, by operation of law or otherwise,
assigned or transferred or purported to assign or transfer to
any person whomsoever any Released Matter or any part or portion
thereof of any claim, demand or right against the other.
Immersion and Microsoft shall indemnify and hold harmless the
other from and against any claim, demand, damage, debt,
liability, account, reckoning, obligation, cost, expense, lien,
action or cause of action (including payment of attorneys' fees
and costs actually incurred whether or not litigation be
commenced) based on or in connection with or arising out of any
such assignment or transfer or purported or claimed assignment
or transfer.
9.13 BENEFICIARIES: Except with respect to the license rights,
covenant-not-to-sue and releases granted by this Agreement to
Saitek and/or to Immersion Product Licensees, this Agreement is
not for the benefit of any person who is not a party signatory
hereto or specifically named a beneficiary in this paragraph or
elsewhere in this Agreement. The provisions of this Agreement
and the releases contained herein shall extend to and inure to
the benefit of and be binding upon, in addition to Immersion and
Microsoft and their Subsidiaries, just as if they had executed
this Agreement: the respective legal successors and assigns of
each of Immersion and Microsoft solely as permitted under the
terms of Section 9.4 ("Assignment").
9.13 REPRESENTATION: Each party acknowledges to the other party that
it has been represented by independent legal counsel of its own
choice throughout all of the negotiations which preceded the
execution of this Agreement and that it has executed this
Agreement with the consent and on the advice of such independent
legal counsel. Each party further acknowledges that it and its
counsel have had adequate opportunity to make whatever
investigation or inquiry they may deem necessary or desirable in
connection with the subject matter of this Agreement prior to
the execution hereof and the delivery and acceptance of the
consideration specified herein.
9.14 INDEPENDENT CONTRACTOR: Each party shall at all times act as an
independent entity, and shall be solely responsible for any and
all social
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<PAGE> 21
security, unemployment, Workers' Compensation and other
withholding taxes for any and all of its employees. Nothing in
this Agreement shall be construed as creating a partnership,
joint venture or agency relationship between the parties.
Neither party has authority to make, assume or create any
representation, warranty, agreement, guarantee, claim or
settlement on behalf of the other party with respect to the
subject matter of this Agreement or otherwise. Each party shall
defend, indemnify and hold the other party, its officers,
directors, and employees harmless from all claims, costs,
expenses, fines, fees and damages resulting from any claim
arising out of or related to a breach of the provisions of this
paragraph by such party.
9.15 NO WAIVER: Failure by either party to enforce any provision of
this Agreement will not be deemed a waiver of future enforcement
of that or any other provision.
9.16 GOVERNING LAW: The interpretation, construction, and performance
of this Agreement shall be governed by the laws of the State of
Washington.
9.17 AMBIGUITY: This Agreement has been drafted by both Microsoft and
Immersion, and no ambiguity shall be resolved against either of
them by virtue of its role in drafting this Agreement.
9.18 PERSONAL INJURY AND PROPERTY DAMAGE CLAIMS: Each party or its
Subsidiaries who manufactures or sells any product
("Manufacturer") shall indemnify, protect, defend and hold the
other party ("Licensor") harmless from any claims, damages,
liabilities, judgments, settlements, losses, costs and expenses
(including court costs and reasonable attorneys' and experts'
fees) (collectively, "Costs") suffered or incurred by the
Licensor in respect of any third party claim to the extent such
third party claim or threatened claim arises from a personal or
alleged personal injury or damage or alleged damage to property
arising out of the third party's use of an FF product
manufactured or sold by the Manufacturer, notwithstanding any
license or covenant-not-to-sue granted the Manufacturer by the
Licensor hereunder.
9.19 NEGATION OF WARRANTIES AND OTHER OBLIGATIONS: Nothing in this
Agreement shall be construed:
(i) as a warranty or representation by a party as to the
validity or scope of any patents;
(ii) as granting by implication, estoppel or otherwise any
licenses or rights under patents or other intellectual
property rights of a party other than expressly granted
herein;
(iii) to require a party to file any patent application
relating to Force Feedback;
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<PAGE> 22
(iv) as a warranty that a party will be successful in
securing the grant of any patent relating to Force
Feedback or any reissue or extensions thereof; or
(v) to require a party to pay any maintenance fees or take
any other steps to maintain such party's patent rights
relating to Force Feedback.
9.20 ENTIRE AGREEMENT: This Agreement embodies the entire
understanding of the parties regarding the subject matter of
this document and supersedes all prior or contemporaneous
understandings and agreements, whether written or oral, and can
be modified only by a writing signed by both parties, or their
successors.
9.21 SUGGESTIONS AND FEEDBACK: Either party may from time to time
provide suggestions, comments or other feedback to the other
party with respect to Confidential Information provided
originally by the other party (hereinafter "Feedback"). Both
parties agree that all Feedback is and shall be entirely
voluntary and shall not, absent separate agreement, create any
confidentiality obligation for the receiving party. However, the
receiving party shall not disclose the source of any feedback
without the providing party's consent. Feedback shall be clearly
designated as such and, except as otherwise provided herein,
each party shall be free to disclose and use such Feedback as it
sees fit, entirely without obligation of any kind to the other
party. The foregoing shall not, however, affect either party's
obligations hereunder with respect to Confidential Information
of the other party.
9.22 COUNTERPARTS: This Agreement may be executed in counterparts,
which when taken together shall constitute a single, binding
agreement between the parties.
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THEREFORE, the authorized representatives of the parties have executed this
Agreement in duplicate originals.
MICROSOFT CORPORATION IMMERSION CORPORATION
Signed: /s/ D. Stuart Ashman Signed: /s/ Louis Rosenberg
--------------------------- ---------------------------
Name: D. Stuart Ashman Name: Louis Rosenberg
--------------------------- ---------------------------
Title: GM Hardware Title: President
--------------------------- ---------------------------
Date: 7/19/99 Date: 7/19/99
--------------------------- ---------------------------
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<PAGE> 24
Exhibit A
Immersion FF Patent Portfolio
U.S. Patent Number Issue Date Title
------------------ ---------- -----
4,823,634 4/89 Multifunction Tactile
Manipulative Control
5,185,561 2/9/93 Torque Motor as a Tactile
Feedback Device in a Computer
System
5,220,260 6/15/93 Actuator Having
Electronically Controllable
Tactile Responsiveness
5,389,865 2/14/95 Method and System for
Providing a Tactile Virtual
Manipulator Defining an
Interface Device Therefor
5,414,337 5/9/95 Actuator Having
Electronically Controllable
Tactile Responsiveness
5,459,382 10/17/95 Method and System for
Providing a Tactile Virtual
Reality
5,513,100 4/30/96 Velocity Controller with
Force Feedback
5,559,412 9/24/96 Actuator Having
Electronically Controllable
Tactile Responsiveness
5,576,727 11/19/96 Electromechanical
Human-Computer Interface With
Force Feedback
5,589,854 12/31/96 Touching Feedback Device
5,629,594 5/13/97 Force Feedback System
5,691,898 11/25/97 Safe and Low Cost Computer
Peripherals With Force
Feedback for Consumer
Applications
5,701,140 12/23/97 Method and Apparatus for
Providing a Cursor Control
Interface With Force Feedback
5,721,566 2/24/98 Method and Apparatus for
Providing Damping Force
Feedback
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<PAGE> 25
3/21/98 Method and Apparatus for
5,731,804 Providing High Noise
Mechanical I/O for Computer
Systems
5,734,373 3/31/98 Method and Apparatus for
Controlling Force Feedback
Interface Systems Utilizing a
Host Computer
5,739,811 4/14/98 Method and Apparatus for
Controlling Human Interface
Systems Providing Force
Feedback
5,769,640 6/23/98 Method and System for
Simulating Medical Procedures
including Virtual Reality and
Control Method and System for
Use Therein
5,754,023 5/19/98 Gyro-Stabilized Platforms for
Force-Feedback
B1 5,459,382 6/9/98 Method and System for
Providing a Tactile Virtual
Manipulator Defining an
Interface Device Therefor
5,767,839 6/16/98 Method and Apparatus for
Providing Passive
Human-Computer Interface
Systems
5,790,108 8/4/98 Controller
5,805,140 9/8/98 High Bandwidth Force Feedbck
Interface Using Voice Coils
and Flexures
5,821,920 10/13/98 Control Input Device for
Interfacing an Elongated
Flexible Object With a
Computer System
5,825,308 10/20/98 Force Feedback Interface
Having Isotonic and Isometric
Functionality
5,828,197 10/27/98 Mechanical Interface Having
Multiple Grounded Actuators
5,831,408 11/3/98 Force Feedback System
5,844,392 12/1/98 Haptic Browsing
5,872,438 2/16/99 Whole-Body Kinesthetic Display
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3/9/99 Three-Dimensional Cursor
5,880,714 Control Interface With Force
Feedback
5,889,670 3/30/99 Method and Apparatus for
Tactilely Responsive User
Interface
5,889,672 3/30/99 Tactilely Responsive User
Interface Device and Method
Therefor
5,907,487 5/25/99 Force Feedback Device With
Safety Feature
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Exhibit B
Microsoft FF Patent Portfolio
US Patent No. 5,643,087, issued 07/01/97 and entitled "Input Device Including
Digital Force Feedback Apparatus."
US Patent No. 5,709,219, issued 01/20/98 and entitled "Method and Apparatus to
Create a Complex Tactile Sensation."
US Patent No. 5,742,278, issued 04/21/98 and entitled "Force Feedback Joystick
with Digital Signal Processor Controlled by Host Processor."
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Exhibit C
Microsoft FF-Capable Gaming Products
Combat Flight Simulator
Flight Simulator 98 (and prior versions thereof)
Cart Precision Racing
Midtown Madness
Motor Cross Madness
Monster Truck Madness 2 (and predecessor)
Mech Warrior 3 (and predecessors)
Starlancer
Urban Assault
Baseball Version 3D
Fighter Ace (online version only)
Allegiance (online version only)
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Exhibit D
Released Immersion Products
Impulse Engine 1000 (CIE-1000)
Impulse Engine 2000 (CIE-2000)
Impulse Engine 3000 (CIE-3000)
Impulse Engine 2000 w/passive actuators (CIE-2000B)
Impulse Stick-Impulse Engine based (CIS-SYS)
Impulse Stick I-Force based (CIS-SYS-IF)
Laparoscopic Impulse Engine (CIE-LAPARO)
Virtual Laparoscopic Interface
Catheter Insertion Simulator
Bronchoscope Simulator
Hysteroscope Simulator
Ureteroscope Simulator
Endoscope Simulator
Sinus Surgery Simulator
Needle Insertion Simulator- single axis, active
Needle Insertion Simulator- three axis, passive
Needle Insertion Simulator- three axis, active, virtual pivot point
Knob Controller Knob Controller with hat switch and push button
Video Editing Knob Controller
I-Force 1.5 Arcade System (IPCB-6030)
I-Force 2.0 Arcade System (Axis)(COEM-6050)
I-Force 2.0 Arcade System (930) (IPCB-6031)
Impulse Engine - 2 axis (COEM-6012-IE)
Impulse Engine - 3 axis (IPCB-6035)
Impulse Engine Two Axis ISA (CIE-6010)
Impulse Engine ISA 2.1 (CIE-6015)
Impulse Engine 3GM (CIE-3GM)
Impulse Engine PCI (CIE-6017)
Axis I Release System (TPG-001)
Axis II Release System (TPG-010)
Axis II Release System (TPF-001)
Picker PinPoint (CPP-ASSY)
Yoke with I-Force 1.5 (DisneyQuest)
Xulu Impulse Stick PER-Force Controller (Cybernet)
Stylin' 3D (Cybernet)
SpacePen (Cybernet)
FingerForcer (Cybernet)
Locomotion Simulator (Cybernet)
CyberImpact Stick (Cybernet)
CyberImpact Wheel (Cybernet)
CyberImpact Yoke (Cybernet)
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