Exhibit 10.1
PATENT LICENSE AGREEMENT
THIS PATENT LICENSE AGREEMENT (Patent License Agreement" or "Agreement"),
dated ,as of February 1, 1995, between Headway Technologies, Inc., a California
corporation (hereinafter called "HEADWAY"), and Seagate Technology, Inc., a
Delaware corporation (hereinafter called "SEAGATE").
Each of the parties has the right (as GRANTOR herein) to grant licenses to
the other party (as GRANTEE herein) under certain patents and desires to acquire
a non-exclusive license under such patents of the other party.
Each of the parties expects to continue research and development which will
produce further patents and each party may require a non-exclusive license under
such patents of the other party.
In consideration of the promises and mutual covenants herein contained,
HEADWAY and SEAGATE agree as follows:
NOW, THEREFORE, in consideration of the mutual agreements, covenants and
promises set forth herein and for other good and valuable consideration, receipt
of which is thereby acknowledged, HEADWAY and SEAGATE agree as follows:
1. Definitions
For purposes of this Patent License Agreement, the following
terms and all other terms defined in this Patent License Agreement shall have
the meanings so defined unless the context clearly indicates otherwise, a term
defined in the singular shall include the plural and vice versa when the context
so indicates.
1.1. "Magnetic Head" shall mean any instrumentality or aggregate of
instrumentalities primarily designed to magnetically read. write and
erase information from magnetic recording discs.
1.2. "Suspension Assembly" shall mean any instrumentality or aggregate of
instrumentalities primarily designed to attach a Magnetic Head to a
support or positioning device, which instrumentality may comprise a
load beam section, means at one end of such section to attach it to a
Magnetic Head (which may include electrical connections to the head
and lead wires), and means at the other end to attach it to a support
or positioning device.
1.3. "Manufacturing Apparatus" shall mean any instrumentality or aggregate
of instrumentalities primarily designed for use in the fabrication of
Magnetic Heads or Suspension Assemblies.
1.4. "Licensed Patents" shall mean all patents, including utility models,
design patents and registrations for type fonts (but not including any
other design patents or registrations), issued or issuing on patent
applications entitled to an effective filing date prior to the fifth
anniversary of the date first above written, under which patents or
the applications therefor GRANTOR or ;any of its Subsidiaries now has,
or hereafter obtains, the right to grant licenses to GRANTEE of or
within the scope granted herein without such grant or the exercise of
rights thereunder resulting in the payment of royalties or other
consideration by GRANTOR or its Subsidiaries to third parties (except
lot payments between GRANTOR and Subsidiaries of GRANTOR. and payments
to third parties for inventions made by said third parties while
employed by GRANTOR or any of its Subsidiaries), as well as any
continuations, continuations-in-part and divisions based on such
patents. The term "Licensed Patents" shall also include said patent
applications and any patent reissuing on any of the aforesaid patents.
In the case of HEADWAY, the term "Licensed Patents" shall not include
the "Excluded HEADWAY Patents/Patent Applications" which shall mean
the HEADWAY patents and patent applications listed in Schedule 1.5. In
the case of Seagate the term "Licensed Patents" shall not include the
"Excluded Seagate Patent/Patent Applications" which shall mean the
Seagate patent and patent applications listed in Schedule 1.4.
1.5. "Licensed Product" shall mean a Magnetic Head or a Suspension
Assembly, including, without limitation, any component or subassembly.
1.6. "Subsidiary" shall mean a corporation, company or other entity:
1.6.1. 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, now or hereafter,
owned or controlled, directly or indirectly, by a party hereto,
but such corporation, company or other entity shall be deemed to
be a Subsidiary only so long as such ownership or control exists;
or
1.6.2. 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, now or hereafter, owned
or controlled, directly or indirectly, by a party hereto, but
such corporation, company or other entity shall be deemed to be a
Subsidiary only so long as such ownership or control exists.
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1.7. "Licensed Combination" shall mean and be limited solely to a
combination resulting from incorporation of a Licensed Product with
other components into a larger assembly wherein the larger assembly is
covered by a claim in a Licensed Patent and the sale of the Licensed
Product for use in that larger assembly would constitute contributory
infringement of such claim as defined in 35 U.S.C. (S) 271(c) without
regard to the clause reading "knowing the same to be especially made
or especially adapted for use in an infringement of such patent," and,
further, wherein such larger assembly, or any such other component, is
not separately covered by any Other Claim in any patent of a licensing
party.
1.8. "Other Claim" shall mean any claim in other than a Licensed Patent of
a party, or any claim which covers a larger assembly or any component
of a larger assembly into which a Licensed Product is or may be
incorporated or for which the sale of such Licensed Product for
incorporation into such larger assembly would not constitute
contributory infringement as defined in 35 U.S.C. (S) 271(c) without
regard to the clause reading "knowing the same to be especially made
or especially adapted for use in an infringement of such patent."
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2. Licenses And Immunities
2.1. Subject to the provisions of Section 2.7, HEADWAY on behalf of itself
and its Subsidiaries grants to SEAGATE a worldwide, fully paid-up,
non- exclusive, non-transferable, irrevocable, royalty-free license in
all countries of the world under HEADWAY's Licensed Patents:
2.1.1. to import, make, have made, use, lease, sell, offer to
sell and otherwise transfer Licensed Products and Licensed
Combinations and to practice any method or process involved in
the manufacture or use thereof; and
2.1.2. to import, make. have made, use, offer to sell and have
used Manufacturing Apparatus and to practice and have practiced
any method or process involved in the manufacture or use thereof.
2.2. In the event that neither HEADWAY nor any of its Subsidiaries has the
right to grant a license under any particular HEADWAY Licensed Patent
of the scope set forth above in this Section 2, then the license
granted herein under said HEADWAY Licensed Patent shall be of the
broadest scope which HEADWAY or any of its Subsidiaries has the right
to grant within the scope set forth above.
2.3. Subject to the provisions of Section 2.7, SEAGATE on behalf of itself
and its Subsidiaries grants to HEADWAY a worldwide, fully paid-up,
non- exclusive, non-transferable, irrevocable, royalty-free license in
all countries of the world under SEAGATE's Licensed Patents:
2.3.1. to import, make, have made, use, lease, sell, offer to
sell and otherwise transfer Licensed Products and Licensed
Combinations and to practice any method or process involved in
the manufacture of use thereof; and
2.3.2. to import, make, have made, use, offer to and have used
Manufacturing Apparatus and to practice and have practiced any
method or process involved in the manufacture or use thereof.
2.4. In the event that neither SEAGATE nor any of its Subsidiaries has the
right to grant a license under any particular SEAGATE Licensed Patent
of the scope set forth above in this Section 2, then the license
granted herein under said SEAGATE Licensed Patent shall be of the
broadest scope which SEAGATE or any of its Subsidiaries has the right
to grant within the scope set forth above.
2.5. SEAGATE on behalf of itself and its Subsidiaries, hereby grants to the
users of Licensed Products manufactured, leased, sold or otherwise
transferred by HEADWAY or its sublicensed Subsidiaries within the
scope of the licenses granted to HEADWAY under this Agreement, an
immunity from suit under SEAGATE Licensed Patents for the use, sale,
offer to sell, import or transfer of such Licensed Products or
Licensed Combinations, and with respect to such claims of Licensed
Patents for which the sale of such Licensed Product or Licensed
Combination would constitute contributory infringement as defined in
35 U.S.C. (S) 27l(c) without regard to the clause reading "knowing the
same to be especially made or especially adapted for use in an
infringement of such patent;" provided, however, that such immunity
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shall not extend to the combination of Licensed Products or Licensed
Combinations with other apparatus which is not supplied by HEADWAY or
its sublicensed Subsidiary.
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2.6. HEADWAY hereby grants to the users of Licensed Products manufactured,
leased, sold or otherwise transferred by SEAGATE or its sublicensed
Subsidiaries within the scope of the licenses granted to SEAGATE under
this Agreement, an immunity from suit under HEADWAY Licensed Patents
for the use, sale or transfer of such Licensed Products or Licensed
Combinations, and with respect to such claims of Licensed Patents for
which the sale of such Licensed Product or Licensed Combination would
constitute contributory infringement as defined in 35 U.S.C. (S)
271(c) without regard to the clause reading "knowing the same to be
especially made or especially adapted for use in an infringement of
such patent;" provided, however, that such immunity shall not extend
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to the combination of Licensed Products or Licensed Combinations with
other apparatus which is not supplied by SEAGATE or its sublicensed
Subsidiary.
2.7. Each party hereto, on behalf of itself and its Subsidiaries, covenants
not to xxx for direct infringement customers of the other party who
purchase Licensed Products or Licensed Combinations from such other
party solely because of such customer's incorporation of Licensed
Products or Licensed Combinations into combinations under
circumstances wherein the sale of such Licensed Product or Licensed
Combination for use in such combination would constitute contributory
infringement of a Licensed Patent as defined in 35 U.S.C. (S) 271(c)
without regard to the clause reading "knowing the same to be
especially made or especially adapted for use in an infringement of
such patent." Except as above provided in this Section 2.7, no license
or immunity is granted by either party hereto with respect to the
combination of Licensed Products with any other components, devices or
assemblies that may be covered by Other Claims.
3. Extension Of License To Subsidiaries
3.1. The licenses granted herein shall include the right of the parties
hereto to sublicense their respective Subsidiaries and the right of
such sublicensed Subsidiaries to sublicense other Subsidiaries. Each
sublicensed Subsidiary shall be bound by the terms and conditions of
this Agreement as if it were named herein in the place of the party
with whom the sublicense originated. If a Subsidiary ceases to be a
Subsidiary and holds any patents or patent applications under which a
party hereto is licensed, such licenses will continue for the life of
such patents or patent applications. Any sublicense granted to a
Subsidiary shall terminate on the date such Subsidiary ceases to be a
Subsidiary.
3.2. In the event a sublicensed Subsidiary of one party hereto is an
Operating Subsidiary (as hereinafter defined) at the time it ceases to
be a Subsidiary, and, with the written approval of said one party,
requests in writing, within one hundred and eighty (180) days after
ceasing to be a Subsidiary, a license agreement with the other party
hereto upon terms and conditions substantially identical with the
terms and conditions of this Agreement (except as hereinafter
provided) the other party hereto agrees that it will enter into such
license agreement forthwith. An Operating Subsidiary shall be any
Subsidiary of one party hereto which at the time it ceases to be a
Subsidiary has all of the following:
3.2.1. a line of marketable products;
3.2.2. patents or other intellectual property relating to the
line of marketable products;
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3.2.3. tangible assets at least equivalent in value to the
lesser of twenty-five million U.S. dollars ($25,000,000) or
twenty percent (20%) of the total assets of the party of which it
was formerly a Subsidiary; and
3.2.4. at the time of entry into such license agreement, it is
not a corporation, company or other entity who has either of the
following owned or controlled by a third party:
3.2.4.1 more than fifty percent (50%) of its outstanding
shares or securities (representing the right to vote for the
election of directors or other managing authority); or
3.2.4.2 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 its ownership interest representing the
right to make the decisions for such corporation, company or
other entity.
3.3. Any such agreement with an Operating Subsidiary shall differ from this
Agreement in the following respects:
3.3.1. this Section shall be omitted;
3.3.2. the name of the Operating Subsidiary shall be substituted
for the name of the party hereto of which it was formerly a
Subsidiary; and
3.3.3. in the event that such Operating Subsidiary is or
becomes organized under the laws of a country different from that
of the party hereto of which it was formerly a Subsidiary, the
parties shall negotiate in good faith an appropriate adaptation
of such license agreement to accord with customary local law and
practice.
4. Release
4.1 Each party, on behalf of itself and its Subsidiaries that are
Subsidiaries on the date hereof, hereby irrevocably releases the other
party, its Subsidiaries that are Subsidiaries on the date hereof, and
their respective customers, mediate and immediate from any and all
claims of infringement of any of the Licensed Patents, which claims
have been made or which might be made at any time, with respect to any
apparatus which includes any product manufactured, used, leased, sold
or otherwise transferred by or for the other party or its Subsidiaries
before the date hereof, and with respect to any method practiced in
the manufacture or use of such apparatus, to the extent that such
apparatus or method would have been licensed or the subject of any
immunity hereunder had it been manufactured, used, leased, sold or
otherwise transferred or practiced after the date hereof.
5. Other License Rights
5.1. It is recognized that the parties hereto or their respective
Subsidiaries may now have or hereafter obtain, the right to grant
licenses under one or more patents of any country, including utility
models, design patents and registrations for type fonts (but not
including any other design patents or registrations), issuing on
patent applications entitled to an effective filing date prior to the
fifth anniversary of the Closing Date, but that such grant or the
exercise of
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rights thereunder will result in payment of royalties or other
consideration by GRANTOR or its Subsidiaries to third parties. Each
party (as GRANTOR herein) agrees that, upon written request, it will
grant to the other party to the extent and subject to the terms and
conditions under which it then has the right to do so, a license of
the broadest scope which GRANTOR has the right to grant at any time,
but of no greater scope than the scope of the licenses granted herein
with respect to, any such patent or patent application. Such license
shall be granted under a separate agreement, upon payment of the same
royalty or other consideration as that which GRANTOR or any of its
Subsidiaries is obligated to pay to a third party because of the grant
of such license or the exercise of rights thereunder.
5.2. Upon written request by a party, the other party will inform the
requesting party of those patents or patent applications coming within
the scope of Section 5.1 at the time of such request.
6. Term Of Agreement
6.1. The term of this Agreement shall be from the date hereof until the
expiration of the last to expire of the Licensed Patents.
6.2. In the event that more than fifty percent (50%) of the outstanding
shares or securities (representing the right to vote for the election
of directors or other managing authority) of one party hereto
hereafter become owned or controlled, directly or indirectly, by a
third party prior to fifth anniversary of the Closing Date, said one
party shall promptly give notice of such acquisition to the other
party. If said one party does not have outstanding shares or
securities, such acquisition shall be deemed to occur if more than
fifty percent (50%) of its ownership interest representing the right
to make decisions for said party is acquired by said third party. All
rights granted hereunder to said one party together with any
sublicenses theretofore granted by said one party shall terminate on a
termination date one hundred and eighty (180) days after the date of
such acquisition.
In the event of such acquisition.
6.2.1. all licenses and immunities granted herein to said
other party under any patents issuing on patent applications
having an effective filing date subsequent to said
termination date and under said patent applications shall
terminate; and
6.2.2. said one party shall be entitled, upon request made
within one hundred and eighty (180) days after the date of
such acquisition to a nontransferable, non-exclusive,
royalty-free license under said other party's Licensed
Patents (including the right to sublicense its Subsidiaries)
to make, use, lease, offer to sell and otherwise transfer
only products identical with those manufactured and marketed
by said one party within the licenses granted in this
Agreement prior to such acquisition.
7. Warranty
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7.1. Each party represents and warrants that it has the full right and
power to grant the license and immunities set forth in Section 2 and
that there are no outstanding agreements, assignments or encumbrances
inconsistent with the provisions of said Section or with any other
provision of this Agreement. Each party (as a GRANTOR) further
represents and warrants that prior to the execution of this Agreement
it has set forth on the Schedules hereto informed the other party of
any patent originating from inventions made by employees of GRANTOR or
its Subsidiaries, which patent is now owned by GRANTOR or its
Subsidiaries and which patent, owing to prior arrangements with third
parties, does not, or will not, qualify as a Licensed Patent, under
which licenses are granted of the full scope set forth in Section 2.
Neither party makes any other representations or warranties, express
or implied, nor does either party assume any liability in respect of
any infringement of patents or other rights of third parties owing to
the other party's operation under the license-herein granted.
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8. Communications
8.1. Any payment, notice or other communication required or permitted to be
made or given to either party hereto pursuant to this Agreement shall
be sent to such party by certified mail, postage prepaid, addressed to
it at its address set forth below, or to such other address as it
shall designate by written notice given to the other party, and shall
be deemed to have been made or given on the date of mailing. The
addresses are as follows:
8.1.1. For HEADWAY,
Xxxxx Xxxxx
VP Engineering
Headway Technologies, Inc.
000 X. Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
8.1.2. For SEAGATE,
Patent Counsel
Seagate Technology, Inc.
000 Xxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000
9. Assignments
9.1. Neither party shall grant an exclusive license with respect to, or
assign, any of its patents, or the applications therefor, which
qualify as Licensed Patents, or any of its patents or the applications
therefor or rights which are subject to the other party's rights
pursuant to Section 5, unless such assignment is made subject to the
terms and conditions of this Agreement. Subject to the provisions of
Section 3, neither party shall assign any of its rights or privileges
hereunder without the prior written consent of the other party. Any
attempted assignment in derogation of the foregoing shall be void.
10. Know-How And Trade Secrets
10.1. No license or other right is granted herein to either party,
directly or by implication, estoppel or otherwise, with respect to any
trade secrets or know-how, and no such license or other right shall
arise from the consummation of this Agreement or from any acts,
statements or dealings leading to such consummation. Except as
specifically provided herein, neither party is required hereunder to
furnish or disclose to the other any technical or other information.
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11. Applicable Law
11.1. This Agreement shall be construed, and the legal relations between
the parties hereto shall be determined, in accordance with the law of
the United States and the State of California.
12. Miscellaneous
12.1. Nothing contained in this Agreement shall be construed as a
warranty or representation by either party as to the validity or scope
of any of its Licensed Patents and either party is free to contest in
any proceeding said validity or scope.
12.2. Nothing contained in this Agreement shall be construed as
conferring any right to use in advertising, publicity, or other
promotional activities any name, trade name, trademark, or other
designation of either party hereto (including any contraction,
abbreviation or simulation of any of the foregoing); and each party
hereto agrees not to use or refer to this Agreement or any provision
thereof in any promotional activity associated with apparatus licensed
hereunder, without the express written approval of the other party.
12.3. Nothing contained in this Agreement shall be construed as
conferring on either party any license or other right to copy the
exterior design of the products of the other party.
12.4. Nothing contained in this Agreement shall be construed as
conferring any rights by implication, estoppel or otherwise, to or
under copyrights or mask work or similar rights under any form of
statutory protection now existing or hereafter enacted, in any country
or countries, wherein the copying is a requisite of infringement under
such form of protection.
12.5. Nothing contained in this Agreement shall be construed as limiting
the rights which the parties have outside the scope of the licenses
granted hereunder, or restricting the right of either party or any of
its Subsidiaries to make, have made, use, lease, sell or otherwise
dispose of any particular product or products not herein licensed.
12.6. Each party shall, upon request from the other party sufficiently
identifying any patent or patent application, inform the other party
as to the extent to which said patent or patent application is subject
to the licenses and rights granted hereunder. If such licenses or
rights under said patent or patent application are restricted in
scope, copies of all pertinent provisions of any contract or other
arrangement creating such restrictions shall, upon request, be
furnished to the party making such request, unless such disclosure is
prevented by such contract, and in that event a statement of the
nature of such restriction will be provided.
12.7. Neither of the parties hereto, nor any of their respective
Subsidiaries shall be required hereunder to file any patent
application, or to secure any patent or patent rights, or to maintain
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any patent in force, or to provide copies of patent applications to
the other party or its Subsidiaries, or to disclose any inventions
described or claimed in such patent applications.
12.8. Neither party shall have any obligation hereunder to institute any
action or suit against third parties for infringement of any of its
Licensed Patents or to defend any action or suit brought by a third
party which challenges or concerns the validity of any of its Licensed
Patents. In addition, neither party shall have any right to institute
any action or suit against third parties for infringement of any of
the other party's Licensed Patents. If, however, either party becomes
aware of any infringement or threatened infringement of any Licensed
Patent of the other party, such party shall promptly notify the other
party."
12.9. It is recognized that one party hereto may have granted to a third
party licensing rights with respect to a patent or a patent
application which would otherwise qualify as a Licensed Patent under
this Agreement, such rights being subject to payment to the granting
party of royalties or other consideration in respect of licenses
extended by such third party to another. In any such event, the one
party shall promptly repay or cause to be repaid to the other party
hereto any royalties or other monetary consideration which the
granting party receives or is entitled to receive from such third
party as a result of such third party's extension to the other party
of a license under the affected patent or patent application of or
within the scope of the license granted under Section 2 of this
Agreement.
12.10. Licensed Products leased, sold or otherwise transferred by a party
hereto or its sublicensed Subsidiary shall be considered to be
licensed under any Licensed Patent which at any time covers such
Licensed Products, notwithstanding that the Licensed Product has been
re-leased, re-sold or re-transferred by any entity in the same or
another country.
12.11. Each party shall pay all taxes (including, without limitation,
sales and value added taxes, but excluding income tax) imposed by the
national government, including any political subdivision thereof, or
any country in which said party is doing business, as the result of
said party's furnishing consideration hereunder. In the event such a
tax becomes payable as a result of a party's furnishing consideration
in respect of a sublicense granted to any of its Subsidiaries pursuant
to Section 3.1, said sublicensing party shall be responsible for
determining the amount of and paying, or causing said sublicensed
Subsidiary to pay, said tax.
12.12. This Agreement will not be binding upon the parties until it has
been signed hereinbelow by or on behalf of each party, in which event
it shall be effective as of the date first above written. No amendment
or modification hereof shall be valid or binding upon the parties
unless made in writing and signed as aforesaid. This Agreement
embodies the entire understanding of the parties with respect to the
subject matter hereof and merges all prior discussions between them,
and neither of the parties shall be bound by any conditions,
definitions, warranties, understandings or representations with
respect to the subject matter hereof other than as expressly provided
herein.
12.13. If any provision or provisions of this Agreement are found by
competent authority to be invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of
any such provision or provisions in every other respect and the
remainder of this Agreement shall continue in effect so long as the
Agreement still expresses the intent of
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the parties. If the intent of the parties cannot be preserved, this
Agreement shall be either renegotiated or terminated.
12.14. The headings of the several sections are inserted for convenience
of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
12.15 It is agreed by the parties that in any action between parties
brought for the enforcement or interpretation of this Agreement, the
prevailing party will be entitled to collect reasonable expert witness
and attorneys' fees, and court costs from the other party, in addition
to any other relief to which it may be entitled."
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly signed as of the date first above written.
Headway Technologies, Inc.
Witness: By: /s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
President and CEO
/s/ Xxxxxx X. Xxxxx
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SEAGATE TECHNOLOGY, INC.
Witness: By: /s/ Xxxx X. Xxxxxxx
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Xxxx Xxxxxxx
President, CEO and COO
/s/ Xxxxxxx Xxxxxx
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