GIS » Topics » Article 3. OWNERSHIP AND USE

This excerpt taken from the GIS 10-K filed Jul 26, 2007.
Article 3. OWNERSHIP AND USE

 

3.1           SODIMA shall own any New Technology or Improvements which are conceived and reduced to practice solely by its employees and shall have the right to patent such New Technology or Improvements (including the decision as to in which countries patent coverage will be sought) at its sole discretion and expense. SODIMA shall grant to LICENSEE all the rights and privileges described in the Agreement (and any amendments thereto) with respect to any such New Technology and Improvements conceived or reduced to practice solely by SODIMA employees.

3.2            SODIMA shall have the right, from time to time upon reasonable written notice to LICENSEE to request LICENSEE to add products within the scope of the Products already developed by SODIMA or which SODIMA may develop during the course of the Agreement to the Products. LICENSEE shall have the right, however, to decline to produce such products if LICENSEE deems it economically inadvisable to do so. The Parties may, however, agree to conduct test marketing for any such product and, if such test marketing demonstrates sufficient market potential, including economic feasibility, LICENSEE cannot decline to product such product. Expenses for any such test marketing shall be shared equally between LICENSEE and SODIMA.

3.3             SODIMA shall provide technical assistance to LICENSEE in the manner contemplated in Article III of the Agreement with respect to all such Improvements and New Technology conceived or reduced to practice solely by SODIMA employees.

3.4            SODIMA and LICENSEE shall jointly own any New Technology or Improvements which are conceived and/or reduced to practice jointly by employees of SODIMA and LICENSEE. Unless modified pursuant to the provisions of Article 3.5, below, SODIMA and LICENSEE shall each have the right to use such jointly owned New Technology or Improvements as each sees fit, subject to any restrictions on use imposed under the Agreement and any amendments thereto (e.g., such New Technology and Improvements shall be licensed exclusively to LICENSEE in the Territory). LICENSEE shall have the right to patent such jointly owned New Technology and Improvements in the United States at its sole discretion and expense.

3.5            The Steering Committee shall determine whether to file patent applications in countries

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other than the United States on such jointly owned New Technology or Improvements (including the decision as to in which countries patent coverage will be sought). LICENSEE shall be in charge of the patent registration process for all patent applications filed pursuant to the provisions of this Article 3.5 and all out-of-pocket expenses incurred by LICENSEE on such applications shall be shared equally with SODIMA. Should the Steering Committee disagree on whether to file patent applications on such jointly owned New Technology or Improvements (either whether to file for patent coverage at all or whether to file in a particular country or countries) the Party desiring patent coverage shall have the option to proceed to obtain such coverage on its own. In such case, the filing Party will be solely responsible for all costs associated with obtaining such patent coverage. Likewise, if at any time in the process of obtaining patent coverage, one of the Parties decides that it no longer wishes to continue to pay for its share of the expenses associated with obtaining such patent coverage (either for all patents associated with such technology or for patents associated with such technology in a particular country or countries), the Party electing to discontinue payment shall notify the other Party of its decision, in writing. Such other Party shall then have the option to proceed to obtain patent coverage on its own and at its sole expense. In the event one Party alone is paying all expenses associated with obtaining patent coverage in any particular country or countries, such Party bearing all expenses shall have sole ownership of any patents which issue in such country or countries, and the other Party shall have no rights in such patent except as otherwise provided in the Agreement and any amendments thereto.

3.6            LICENSEE shall own any New Technology or Improvements which are conceived and reduced to practice solely by its employees and shall have the right to patent and/or use such New Technology or Improvements in the United States at its sole discretion and expense.

3.7            The Steering Committee shall determine whether to file patent applications in countries other than the United States on New Technology or Improvements which are solely owned by LICENSEE (including the decision as to in which countries patent coverage will be sought). LICENSEE shall be in charge of the patent registration process for all patent applications filed pursuant to the provisions of this Article 3.7 and all out-of-pocket expenses incurred by LICENSEE on such applications shall be shared equally with SODIMA. Should the Steering Committee disagree on whether to file patent applications on such New Technology or Improvements which are solely owned by LICENSEE (either whether to file for patent coverage at all or whether to file in a particular country or countries) the Party desiring patent coverage shall have the option to proceed to obtain such coverage on its own. In such case, the filing Party will be solely responsible for all costs associated with obtaining such patent coverage. Likewise, if at any time in the process of obtaining patent coverage, one of the Parties decides that it no longer wishes to continue to pay for its share of the expenses associated with obtaining such patent coverage (either for all patents associated with such technology or for patents associated with such technology in a particular country or countries), the Party electing to discontinue payment shall notify the other Party of its decision, in writing. Such other Party shall then have the option to proceed to obtain patent coverage on its own and at its sole expense. In the event LICENSEE alone is paying all expenses associated with obtaining patent coverage in any particular country or countries, SODIMA shall have no rights in such patent. In the event SODIMA alone is paying all expenses associated with obtaining patent coverage in any particular country or countries, SODIMA and LICENSEE shall jointly own any patents which issue in such country or countries and LICENSEE shall not receive any compensation for the use of the New Technology covered by such patent which it would otherwise have received pursuant to the provisions of Article 4.8, below.

3.8            SODIMA and its licensees shall have no right to use New Technology or Improvements owned solely by LICENSEE in the Territory. Outside the Territory, to the extent such New Technology or Improvements result from a Native Field Project, SODIMA and/or its licensees shall have the exclusive right to use such New Technology and/or Improvements for the manufacture and sale of Products in the FDP Field, subject to any payment obligations set forth in Article 4, below. If for same valid business reason, LICENSEE elects not to allow SODIMA and/or its licensees to use such Native Field Project New Technology, outside the Territory, LICENSEE shall forfeit its right to any extended royalty discount on New Products incorporating such New Technology as described in Article 4.3, below. Finally, to the extent such

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New Technology or Improvements result from a LICENSEE Core Competency Project, LICENSEE shall have the option to allow SODIMA and/or its licensees to use on an exclusive basis such New Technology and/or Improvements for the manufacture and sale of products in the FDP Field outside the Territory. Such option, shall be exercised at LICENSEE's sole discretion, with payment for SODIMA's and/or its licensees' use of such New Technology and/or Improvements to be determined as set forth in Article 4, below.

3.9            LICENSEE shall have no obligation to allow SODIMA and/or its licensees to use Third Party Technology. To the extent SODIMA desires access to Third Party Technology (either for its own use or use by its licensees), SODIMA shall have the right to request access to such Third Party Technology. Should LICENSEE agree to provide such access to Third Party Technology to SODIMA and/or its licensees, SODIMA and LICENSEE shall negotiate the specific terms and conditions upon which access will be provided. However, nothing set forth herein shall be construed as requiring that LICENSEE provide SODIMA and/or its licensees access to such Third Party Technology.

3.10          LICENSEE agrees that SODIMA and its licensees may use LICENSEE's promotional ideas and creative ideas in advertising, provided that LICENSEE has no valid business or legal reason for withholding the use of same. SODIMA and its licensees shall not have the right to use LICENSEE's specific advertising and promotional materials and copy unless LICENSEE gives its prior written consent for such use. Extra copies of LICENSEE's advertisements and promotional materials will be provided at cost to SODIMA and its licensees at their request, provided that such copies are available.

3.11          To the extent that SODIMA and/or its licensees use New Technology or Improvements owned solely by LICENSEE (regardless of whether such New Technology or Improvements result from a Native Field Project or a LICENSEE Core Competency Project), LICENSEE shall transfer such New Technology or Improvements to SODIMA and SODIMA shall then be responsible for transferring such New Technology or Improvements to its licensees. Further, unless LICENSEE agrees otherwise, the Parties agree that LICENSEE need not utilize any of its resources when transferring New Technology or Improvements to SODIMA.

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