License Agreement - Stanford University and Protein Design Labs Inc.
AGREEMENT
Effective as of July 1, 1990, THE BOARD OF TRUSTEES OF THE LELAND
STANFORD JUNIOR UNIVERSITY, a body having corporate powers under the laws of
the State of California ("STANFORD"), and PROTEIN DESIGN LABS, INC., a
Delaware company, having a principal place of business at 2375 Garcia Avenue,
Mountain View, California 94043 ("PDL"), agree as follows.
1. BACKGROUND
1.1 STANFORD has the exclusive assignment to an invention entitled,
"Method and Dosage Form Using an Antagonist to Gamma Interferon to Control
MHC-Associated Autoimmune Disease" ("Invention[s]"), as described in Stanford
Docket S87-029 and to any Licensed Patent(s), as hereinafter defined, which
may issue to such Invention(s).
1.2 STANFORD desires to have the Invention(s) perfected and marketed
at the earliest possible time in order that products resulting therefrom may
be available for public use and benefit.
1.3 PDL desires to acquire an exclusive, worldwide license under said
Invention(s) and Licensed Patent(s), for the purpose of undertaking
development, to manufacture, use, and sell Licensed Product(s).
1.4 The Invention(s) was made in the course of research supported by
the National Institutes of Health ("NIH").
2. DEFINITIONS
2.1 "Licensed Patent(s)" means any Letters Patent issued upon
STANFORD's U.S. Patent Application, Serial Number 087,015, filed August 18,
1987, including the information contained in such application, with respect to
the Invention(s), any foreign patents corresponding thereto, and/or any
divisions, continuations, continuations-in-part, or reissue thereof. The
table of currently pending patent applications is shown as Exhibit I.
2.2 "Licensed Product(s)" means any product or part thereof, the
manufacture, use, or sale of which is covered by a valid claim of an issued,
unexpired Licensed Patent(s) directed to the Invention(s). A claim of an
issued, unexpired Licensed Patent(s) shall be presumed to be valid unless and
until it has been disclaimed in writing by STANFORD or held to be invalid or
not infringed by a final judgment of a court of competent jurisdiction from
which no appeal can be or is taken.
2.3 "Net Sales" means the gross selling price of the Licensed
Product(s) in the form in which it is sold or used, less the following items
but only insofar as they actually pertain to the disposition of such Licensed
Product(s) by PDL or sublicensee(s) and are included in such gross selling
price, and (except Item [d]) are separately billed:
(a) Import, export, excise, value-added, and sales taxes, plus
custom duties;
(b) Costs of insurance, packing, and transportation from the
place of manufacture to the customer's premises or point of installation;
(c) Costs of installation at the place of use; and
(d) Credit for returns, allowances, or trades.
In the case of PDL's sublicensee(s), "Net Sales" may be defined as said
sublicensee(s) normally calculate and define "Net Sales" so long as it is
substantially similar to the above definition.
2.4 "Exclusive" means STANFORD shall not grant further licenses,
subject to Article 4. STANFORD has not granted any licenses except for the
license to the U.S. Government herein attached (Exhibit 2).
2.5 "Combination Product(s)" means Licensed Product(s) sold in a
combination package or kit containing other active products, such as
antibodies, antigens, and enzymes. Net Sales, for purposes of determining
royalty payments on the combination package, shall be calculated using one of
the following methods on a country-by-country basis:
(a) By multiplying the net selling price of that combination
package by the fraction A/A+B; where A is the gross selling price, during the
royalty paying period in question, of the Licensed Product(s) sold separately,
and B is the gross selling price, during the royalty period in question, of
the other active products sold separately; or
(b) If no such separate sales are made of the Licensed
Product(s) or any of the active products in such combination package during
the royalty paying period in question, Net Sales will be negotiated in good
faith.
2.6 "PDL" means PDL and Affiliates. An Affiliate means any
corporation or other business entity controlled by, controlling, or under
common control with PDL. For this purpose, "control" means direct or indirect
beneficial ownership of at least fifty percent (50%) of the voting stock, or
at least fifty percent (50%) interest in the income of such corporation or
other business.
2.7 "First Commercial Sale" means first sale of a non-orphan drug (as
currently defined under U.S. law) Licensed Product(s) following FDA approval
of such Licensed Product(s).
3. GRANT
3.1 STANFORD hereby grants and PDL hereby accepts a worldwide license,
which includes the right to sublicense, to make, have made, use, and sell
Licensed Product(s).
3.2 Said license shall be Exclusive for a term commencing as of July
1, 1990, and ending [ ] years from the date of First Commercial Sale of a
Licensed Product(s) by PDL or its sublicensee(s); PDL agrees to promptly
inform STANFORD in writing of the date of First Commercial Sale.
3.3 Upon request by PDL, STANFORD agrees to extend the period of
exclusivity if, in STANFORD's judgment, such extension is justifiable, taking
into consideration PDL's development costs and return on its investment.
3.4 After the Exclusive period, the license shall be nonexclusive
until expiration of the last to expire of Licensed Patent(s).
3.5 STANFORD retains the right to practice the Invention(s) for its
internal research purposes but will not commercialize the Invention(s).
4. GOVERNMENT RIGHTS
This Agreement is subject to all of the terms and conditions of Public
Law 96-517 as amended to date, and PDL agrees to take all action reasonably
necessary on its part as Licensee to enable STANFORD to satisfy its obligation
thereunder with NIH, relating to any Invention(s). PDL is not obligated to
disclose confidential information under this Article 4.
5. ROYALTIES
5.1 PDL agrees to pay to STANFORD a creditable, non-refundable license
issue royalty fee of [ ] upon signing the Agreement.
5.2 PDL also shall pay a [ ] annual advance on earned royalties
according to the following schedule:
(a) [ ] on July 1, 1991, if no Licensed Patent(s) has issued;
(b) [ ] on July 1, 1992, if no Licensed Patent(s) has issued;
and
(c) [ ] on each July 1 after a Licensed Patent(s) has issued
with a claim covering at least one (1) major autoimmune disease for as long as
this license shall be Exclusive. During the nonexclusive period, if any, PDL
will not be required to pay minimum annual advances.
All advance royalty payments are nonrefundable but they are creditable
against earned royalties to the extent provided in Paragraph 5.4.
5.3 In addition, PDL shall pay STANFORD earned royalties
(a) [ ] on Net Sales by PDL and its sublicensee(s) of Licensed
Product(s) during the period that the license to PDL is Exclusive; and
(b) [ ] of Net Sales during the period the license to PDL is
nonexclusive.
If PDL is required to obtain additional licenses not covered by this
Agreement in order to develop, manufacture, sell, or market Licensed
Product(s), PDL may reduce its earned royalty payments to STANFORD by an
amount equal to the sum of royalties under additional license(s) provided that
the royalty paid to STANFORD will not be less than [ ] of the rates
specified above.
5.4 Creditable payments under this Agreement shall be credited to PDL
against up to [ ] of each earned royalty payment which PDL would be
required to pay pursuant to Paragraph 5.3 until the entire credit is
exhausted.
5.5 The royalty on sales in currencies other than U.S. Dollars shall
be calculated using the appropriate foreign exchange rate for such currency
quoted by the Bank of America (San Francisco) foreign exchange desk, on the
close of business on the last banking day of each calendar quarter. Royalty
and payments to STANFORD shall be in U.S. Dollars an shall be net of all non-
U.S. taxes. In the case of PDL's sublicensee(s), the currency conversion
exchange rate may be computed as sublicensee(s) normally computes such
transactions.
6. REPORTS, PAYMENTS AND ACCOUNTING
6.1 Quarterly Royalty Payment and Report. PDL shall make written
reports and royalty payments to STANFORD within ninety (90) days after the end
of each calendar quarter following the First Commercial Sale. This report
shall state the number, description, and aggregate Net Sales of Licensed
Product(s) during such completed calendar quarter, and resulting calculation
pursuant to Paragraph 5.3 of earned royalty payment due STANFORD for such
completed calendar quarter. Concurrent with the making of each such report,
PDL shall include payment due STANFORD of royalties for the calendar quarter
covered by such report. In the case of sublicensee(s), PDL shall report
sublicensee sales within thirty (30) days of receipt by PDL of sublicensee
reports and pay STANFORD in the next applicable quarter.
6.2 Accounting. PDL agrees to keep records for a period of two (2)
years showing the manufacturing, sales, use, and other disposition of products
sold or otherwise disposed of under the license herein granted in sufficient
detail to enable the royalties payable hereunder by PDL to be determined, and
further agrees to permit its books and records to be examined by an
independent Certified Public Accountant satisfactory to PDL nominated by
STANFORD from time to time, but not more than once a calendar year, to the
extent necessary to verify reports provided for in Paragraph 6.1. Such
examination is to be made at the expense of STANFORD, and all information
shall be treated confidentially by STANFORD.
6.3 Progress Report. On or before September 1, starting with
September 1, 1991, of each year until PDL markets a Licensed Product(s), PDL
shall make a written report to STANFORD covering the preceding year regarding
the progress of PDL toward commercial use of Licensed Product(s). STANFORD
will use all reasonable efforts to keep any progress report, if clearly marked
"Confidential" confidential. Such report shall include, as a minimum,
information sufficient to enable STANFORD to satisfy reporting requirements of
the U.S. Government and for STANFORD to ascertain progress by PDL toward
meeting the diligence requirements of Paragraph 12.1. If PDL does not submit
the required reports, or if PDL has not demonstrated diligence as required by
Paragraph 12.1, STANFORD may terminate upon failure of PDL to cure the defect
within thirty (30) days after receipt of written notice from STANFORD.
6.4 PDL will reimburse STANFORD for any reasonable costs incurred by
STANFORD after July 1, 1990, in connection with the filing, prosecution of
patent applications, and maintenance of Licensed Patent(s), and these expenses
shall be paid within thirty (30) days of receipt of invoice of such costs.
With respect to foreign prosecution, STANFORD and PDL will agree on the
countries in which to pursue patent protection. STANFORD will employ
mutually agreeable patent counsel and keep PDL informed of patent prosecution.
7. NEGATION OF WARRANTIES
7.1 STANFORD warrants that STANFORD has an exclusive assignment to
Licensed Patent(s) and that STANFORD has the right to grant licenses under
Public Law 96-517 as amended.
7.2 Except for Paragraph 7.1, nothing in this Agreement is or shall be
construed as:
(a) A warranty or representation by STANFORD as to the validity
or scope of any Licensed Patent(s);
(b) A warranty or representation that anything made, used, sold,
or otherwise disposed of under any license granted in this Agreement is or
will be free from infringement of patents, copyrights, trademarks, or other
rights of third parties.
(c) An obligation to bring or prosecute actions or suits against
third parties for infringement, except to the extent and in the circumstances
described in Article 11, or
(d) Granting by implication, estoppel, or otherwise any licenses
under patents of STANFORD or other persons other than Licensed Patent(s),
regardless of whether such patents are dominant or subordinate to any Licensed
Patent(s). STANFORD is aware of the following issued patents and pending
applications which may or may not be infringed by PDL in practicing the claims
of the Invention(s).
(i) U.S. Patent No. 4,237,224 issued December 2, 1980,
U.S. Patent No. 4,468,464 issued August 28, 1984, and U.S. Patent No.
4,740,470 issued April 26, 1988 (Cohen-Boyer patents). PDL agrees that
nothing in this Agreement grants PDL any express or implied license or
right under or to the above Cohen-Boyer patents;
(ii) U.K. Patent Application No. 8607679 filed 27.03.86
(Winter patent);
(iii) U.S. Patent No. 4,816,397 issued March 28, 1989
(Celltech patent);
(iv) U.S. Patent No. 4,816,567 issued March 28, 1989
(Genentech patent); and
(v) U.S. Patent Application 644,473 filed August 27, 1984,
and all continuations, divisionals or continuations-in-part, and foreign
counterparts (STANFORD/ Columbia University chimeric inventions).
7.3 Except as expressly set forth in this Agreement STANFORD MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF LICENSED PRODUCT(S) WILL
NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS.
8. INDEMNITY
8.1 PDL agrees to indemnify, hold harmless, and defend STANFORD and
its trustees, officers, employees, students, and agents against any and all
claims for death, illness, personal injury, property damage, and improper
business practices arising out of the manufacture, use, sale, or other
disposition of Invention(s), Licensed Patent(s), or Licensed Product(s) by PDL
or sublicensee(s).
8.2 PDL agrees not to proceed with [ ] until the appropriate
insurance limits have been mutually agreed upon in writing by STANFORD and
PDL, provided that premiums for such insurance are reasonable and obtainable.
Such insurance shall cover the activities of PDL contemplated by this
Agreement, including public liability and product liability.
8.3 In order to meet the obligations of this Article 8, PDL agrees to
notify STANFORD thirty (30) days prior to the onset of Phase III clinical
trials and to inform STANFORD as to the expected number of patients
participating in such clinical trials.
8.4 Insurance shall be procured and maintained with a reputable and
financially secure insurance carrier. Such insurance shall include Stanford
University, Stanford University Hospital, their trustees, directors, officers,
employees, and agents, as additional insureds with respect to this Agreement,
and shall provide that it shall not be canceled or materially altered except
upon at least thirty (30) days written notice to STANFORD.
9. MARKING
When reasonable, prior to the issuance of patents on the Invention(s),
PDL agrees to mark Licensed Product(s) (or its containers or labels) made,
sold, or otherwise disposed of by it under the license granted in this
Agreement with the words "Patent Pending," and following the issuance of one
or more patents, with the numbers of the Licensed Patent, if applicable.
10. PROMOTIONAL ADVERTISING
PDL agrees not to identify STANFORD in any promotional advertising or
other materials to be disseminated to the public or any portion thereof or to
use the name of any STANFORD faculty member, employee, or student or any
trademark, service mark, trade name, or symbol of STANFORD or the Stanford
University Hospital, or that is associated with either of them, without
STANFORD's prior written consent.
11. INFRINGEMENT BY OTHERS: PROTECTION OF PATENTS
11.1 Both parties shall promptly inform the other party of any
suspected infringement of any Licensed Patent(s) by a third party. During the
Exclusive period of this Agreement, STANFORD and PDL each shall have the right
to institute an action for infringement of the Licensed Patent(s) against such
third party in accordance with the following:
(a) If STANFORD and PDL agree to institute suit jointly, the
suit shall be brought in both their names, the out-of-pocket costs thereof
shall be borne equally, and any recovery or settlement shall be shared
equally. PDL and STANFORD shall agree to the manner in which they shall
exercise control over such action. STANFORD may, if it so desires, also be
represented by separate counsel of its own selection, the fees for which
counsel shall be paid by STANFORD;
(b) In the absence of an agreement to institute a suit jointly,
PDL may institute suit, and, at its option, join STANFORD as a plaintiff. PDL
shall bear the entire cost of such litigation and shall be entitled to retain
the entire amount of any recovery or settlement;
(c) In the absence of an agreement to institute a suit jointly
and if PDL has not notified STANFORD that it has decided to join in or
institute a suit, as provided in (a) or (b) above, STANFORD may institute a
suit and, at its option, join PDL as a plaintiff. STANFORD shall bear the
entire cost of such litigation and shall be entitled to retain the entire
amount of any recovery or settlement; and
(d) If STANFORD decides to institute suit, then it shall notify
PDL in writing. PDL's failure to notify STANFORD in writing, within thirty
(30) days after the date of the notice, that it will join in enforcing the
patent pursuant to the provisions hereof, shall be and be deemed conclusively
to be PDL's assignment to STANFORD of all rights, causes of action, and
damages resulting from any such alleged infringement and STANFORD shall be
entitled to retain the entire amount of any recovery of settlement.
Furthermore, at its option, STANFORD may join PDL as plaintiff.
11.2 Should either STANFORD or PDL commence a suit under the provisions
of Paragraph 11.1 and thereafter elect to abandon the same, it shall give
timely notice to the other party who may, if it so desires, continue
prosecution of such suit, provided, however, that the sharing of expenses and
any recovery in such suit shall be prorated as of the date the party elects to
abandon the suit.
12. COMMERCIAL APPLICATION, SUBLICENSES
12.1 As an inducement to STANFORD to enter into this Agreement, PDL
agrees to use commercially reasonable efforts and diligence to proceed with
the development, manufacture, and sale of Licensed Product(s) and to develop
markets for the Licensed Product(s), subject to any delays or hindrances
beyond the control of PDL or due to force majeure. PDL intends to develop
Licensed Product(s) according to the following schedule. Failure to meet the
schedule will not be a breach of this Agreement as long as PDL can demonstrate
to STANFORD's reasonable satisfaction PDL's diligence in developing Licensed
Product(s):
June 1991: Either produce and characterize, or complete the
licensing of, a high-affinity, neutralizing anti-
gamma interferon (anti-IFN) antibody.
December 1991: Clone and sequence the light and heavy chain genes
of the anti-IFN antibody.
June 1992: Produce and characterize a mouse-human chimeric
anti-IFN antibody. Complete the protein design of
the (fully) humanized anti-IFN antibody.
December 1992: Produce and characterize a high-affinity, humanized
anti-IFN antibody.
June 1993: Produce the humanized anti-IFN antibody in
sufficient quality and quantity for animal
toxicology studies.
December 1993: Complete all toxicology studies required for IND
submission. Create master cell bank and complete
all cell tests (e.g., virology) needed for IND
submission.
June 1994: File IND for Phase I trials acceptable to FDA and
designed to show some indication of efficacy as well
as safety.
December 1994: Complete Phase I trials.
12.2 If PDL is unable (except for reasons or circumstances beyond PDL's
control) or unwilling to serve or develop a potential market for which there
is a willing and capable sublicensee(s), PDL will, at STANFORD's request,
negotiate in good faith a sublicense hereunder.
12.3 Any sublicense granted by PDL under this Agreement shall be
subject and subordinate to terms and conditions of this Agreement, except:
(a) Sublicense terms and conditions shall reflect that any
sublicensee(s) shall not further sublicense; and
(b) The earned royalty rates and other fees payable to PDL by
PDL's sublicensee(s) may be at higher rates and fees than of this Agreement.
Any such sublicense shall also expressly include the provisions of
Articles 6, 7 and 8 for the benefit of STANFORD.
13. TERMINATION
13.1 PDL may terminate this Agreement by giving STANFORD notice in
writing at least thirty (30) days in advance of the effective date of
termination selected by PDL.
13.2 STANFORD may terminate this Agreement if PDL:
(a) is in default in payment of royalty or providing of reports;
(b) is in breach of any provision hereof materially affecting
this Agreement; or
(c) provides any materially false report;
and PDL fails to remedy any such default, breach, or false report within
thirty (30) days after written notice thereof by STANFORD.
13.3 Surviving any termination are:
(a) PDL's obligation to pay royalties accrued or accruable;
(b) Any cause of action or claim of PDL or STANFORD, accrued or
to accrue, because of any breach or default by the other party; and
(c) The application provisions of Articles 6, 7, and 3.
14. ASSIGNMENT
This Agreement may not be assigned except as part of a sale or transfer
of substantially the entire business relating to operations pursuant to this
Agreement.
15. ARBITRATION
15.1 Any controversy arising under or related to this Agreement, or any
disputed claim by either party against the other under this Agreement
excluding any dispute relating to patent validity or infringement arising
under this Agreement, shall be settled in arbitration in accordance with the
Licensing Agreement Arbitration Rules of the American Arbitration Association.
Upon request of either party, arbitration will be by:
(a) A third party arbitrator mutually agreed upon in writing by
PDL and STANFORD within thirty (30) days of such arbitration request; or
(b) A member of the American Bar Association selected in
accordance with American Arbitration Association rules.
If the issues in dispute involve scientific or technical matters, any
arbitrator chosen hereunder shall have educational training and/or experience
sufficient to demonstrate a reasonable level of knowledge in the field of
biotechnology.
Judgment upon the award rendered by the Arbitrator may be entered in any
court having jurisdiction thereof.
15.2 The parties shall be entitled to discovery at their own expense in
like manner as if the arbitration were a civil suit in a general district
court.
15.3 Any arbitration shall be held at Stanford, California, unless the
parties hereto mutually agree in writing to another place.
16. NOTICES
All notices under this Agreement shall be deemed to have been fully
given when done in writing and deposited in the United States mail, registered
or certified, and addressed as follows:
To STANFORD: Office of Technology Licensing
Stanford University
857 Serra Street, 2nd Floor
Stanford, CA 94305-6225
Attention: Director, Technology Licensing
To PDL: Protein Design Labs, Inc.
2375 Garcia Avenue
Mountain View, CA 94043
Attention: President
Either party may change its address upon written notice to the
other party.
17. APPLICABLE LAW
This Agreement shall be construed, interpreted, and applied in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate originals by their duly authorized officers or representatives.
THE BOARD OF TRUSTEES
OF THE LELAND STANFORD
JUNIOR UNIVERSITY
By: /s/ Katharine Ku
Title: Acting Director, Technology
Licensing
Date: June 7, 1990
PROTEIN DESIGN LABS, INC.
By: /s/ Laurence Jay Korn
Title: President
Date: June 7, 1990
CONFIDENTIAL TREATMENT REQUESTED
Exhibit 1
TABLE OF PATENT APPLICATIONS AND PATENTS
Patent Patent Patent
Application Application Patent Patent Issue Expiration
Country Number Filing Date Number Date Date
U.S. [ ] [ ]
[ ] [ ]
Australia [ ] [ ]
Japan [ ] [ ]
Europe [ ] [ ]
Canada [ ] [ ]
Exhibit 2
LICENSE TO THE UNITED STATES GOVERNMENT
WHEREAS, C. Jacob, H. McDevitt, P. van der Meide, and J. Holoshitz, of
Stanford University, have invented "Method and Dosage Form Using An Antagonist
To Gamma Interferon To Control MHC-Associated Autoimmune Disease" and filed a
patent application thereon in United States bearing Serial No. 087.015 filing
date August 18, 1988;
WHEREAS, the invention was made in the course of research supported by
the Department of Health and Human Services; and
WHEREAS, the United States Government is entitled to certain rights in
and to said invention and application by reason of the terms of such support;
and
WHEREAS, the Stanford University, hereinafter called the "Licensor" has
acquired by assignment from the inventor the entire right, title, and interest
of the inventor to such invention;
NOW, THEREFORE
1. The Licensor, in consideration of the premises and other good and
valuable considerations, hereby grants and conveys to the United States
Government a royalty-free, nonexclusive and irrevocable license for
governmental purposes and on behalf of any foreign government pursuant to any
existing or future treaty or agreement with the United States under the
aforesaid patent application, and any and all divisions or continuations, and
in any and all patents or reissues which may be granted thereon during the
full term or terms thereof. As used herein, "governmental purpose" means the
right of the Government of the United States, including any agency thereof, to
practice and have practiced (made or have made, used or have used, sold or
have sold) in connection with programs funded in whole or in part by the
Federal Government throughout the world by or on behalf of the Government of
the United States.
2. The Licensor convenants and warrants that he has the right to
grant the foregoing license, and that any assignment which he may make of the
invention or the said patent applications or patents thereon, shall expressly
be made subject to this license.
3. The Licensor agrees that the Government shall not be estopped at
any time to contest the enforceability, validity, scope of, or title to, any
patent or patent application herein licensed.
The Board of Trustees of the
Leland Stanford Junior University
(Institution)
/s/ Katharine Ku
(Signature)
Katharine Ku
(Print or type name)
November 8, 1988 Associate Director, Technology Licensing
(Date) (Official Title)
I, Brenda Whitmarsh certify that I am the Asst. Secretary of the Institution
named as Licensor herein; that Katherine Ku, who signed this License on behalf
of the Institution is Assoc. Director, Tech. Licensing of said Institution;
and that said License was duly signed for and in behalf of said Institution by
authority of its governing body, and is within the scope of its corporate
powers.
SEAL /s/ Brenda Whitemarsh November 11, 1988
(Signature) (Date)