Exhibit 10.18
October 16, 2001
(1) Cambridge Display Technology Limited
(2) E. I. du Pont de Nemours and Company
(3) Uniax Corporation
Patent License for Displays and Display
Illumination
CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED FROM THIS DOCUMENT. SUCH OMISSIONS ARE NOTED BY " [**]" . AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION.
Table of Contents
1. Definitions and Interpretation 1
2. CDT License Grant 11
3. Financial Provisions 16
4. Intellectual Property and Proceedings 21
5. Commercial Marketing of LEP Devices 23
6. Accounts 23
7. Duration and Termination 24
8. Oppositions 25
9. Effects of Termination 25
10. Confidentiality 26
11. Force Majeure 28
12. Nature of Agreement 29
13. Governing Law and Jurisdiction 30
14. Notices 31
15. Further assurance 32
16. Waiver 32
17. Exclusion of warranties 32
18. Severance 33
19. Announcements 34
20. Non-Solicitation 34
Schedule 1
Schedule 2
Schedule 3
Schedule 4
Schedule 5
This Agreement is Between:
(1) Cambridge Display Technology Limited (company number 2672530) whose registered office is at Greenwich House, Madingley Rise, Madingley Road, Cambridge CB3 OHJ England (" CDT" ); and
(2) E. I. du Pont de Nemours and Company , a Delaware Corporation, having offices at 1007 Market Street, Wilmington, Delaware, 19898 USA (" Licensee" )
(3) Uniax Corporation , a California corporation having its principal place of business at 6780 Cortona Drive, Santa Barbara, CA 93103, USA (" Uniax" ).
Background: (A) CDT is the owner of inventions relating to electroluminescent polymer devices, in respect of which CDT has obtained and made applications for patent protection in various countries.
(B) The Licensee wishes to acquire a license under CDT' s patents and patent applications to manufacture, have made, use and sell electroluminescent polymer display devices and CDT is willing to grant such a license upon and subject to the provisions set out in this agreement.
It is agreed as follows:
1. Definitions and Interpretation
1.1 In this Agreement unless the context otherwise requires:
" Active Matrix Module" a Cell, together with filters, support structure, circuit boards, flexible connectors, together with the electronic drivers and other support circuitry to effect illumination of the display device, where at least the individual pixels are driven using individual switching elements.
" Affiliate of RIT Display" means a business entity in which RIT Display has at least a 50% equity interest.
" this Agreement" means this agreement (including any schedule or annexure to it and any document in agreed form).
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" CDT' s Group" means CDT and any other company which at the relevant time is its Holding Company or Subsidiary, or the Subsidiary of any such Holding Company; and " Member" of CDT' s Group has a corresponding meaning.
" Cell" means substrates consisting of glass or other rigid or flexible material incorporating where required by device architecture: electrodes wherein at least one electrode is transparent, transport layer(s), LEP Material, supporting layers and encapsulants but without electronic drivers.
" Component Materials" Means materials incorporated in LEP Device or Finished Product, including but not limited to those that make up substrate, electrodes, transport layer, LEP Material supporting layer, encapsulant.
" Confidential Information" Is defined in Clause 10.1 below.
" Covered Active Matrix Module" means Active Matrix Module covered by at least one of the claims directed to LEP Device architecture or LEP Device manufacture in at least one of the Patents still in force.
" Covered Cell" Means Cell covered by at least one of the claims directed to LEP Device architecture or LEP Device manufacture in at least one of the Patents still in force.
" Covered Finished Product" Means Finished Product covered by at least one of the claims directed to LEP Device architecture or LEP Device manufacture in at least one of the Patents still in force.
" Covered LEP Device" means LEP Device covered by at least one of the claims directed to LEP Device architecture or LEP Device manufacture in at least one of the Patents still in force.
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" Covered LEP Material" means LEP Material covered by at least one of the claims directed to LEP Material composition or LEP Material manufacture in at least one of the Patents still in force.
" Covered Passive Matrix Module" means Passive Matrix Module covered by at least one of the claims directed to LEP Device architecture or LEP Device manufacture in at least one of the Patents still in force.
" Demonstrators" means substrates consisting of glass or other inorganic material that cannot be bent with a radius of curvature of 30 cm or less without substantial irreversible plastic deformation or fracture, incorporating where required by device architecture: electrodes, transport layer(s), LEP Material, supporting layers and encapsulants together with the electronic drivers and other support circuitry to effect illumination of the entire display or individual pixels as well as all polarisers, the support frame, filters connection tabs and all other elements comprising a module, wherein current is passed through an array of electrodes without individually addressing each pixel.
" Display Employees" Means employees of Licensee or Uniax Corporation who are listed in Schedule 3, so long as such person is listed in Schedule 3, which list shall be updated from time to time pursuant to Clause 4.2 below.
" Effective Date" Means the date of the last signature to this Agreement.
" a Finished Product" Means any article (whether or not complete) produced by or for the Licensee or any Member of the Licensee' s Group which incorporates an LEP Device but which does not fall entirely within the definition of Cell, Active Matrix Module or Passive Matrix Module.
" Have-Made Partner" Means an entity that is not a Member of Licensee' s Group (or CDT' s Group,
3 depending upon the context) and is obligated to make Covered LEP Devices or incorporate Covered LEP Device in Covered Finished Product for Licensee (or CDT, depending upon the context) and/or Member(s) of Licensee' s Group (or CDT' s Group, depending upon the context).
" Holding Company and Subsidiary" have the meanings given to those expressions by section 736 of the Companies Act 1985;
" Intellectual Property" Means any patent, trade or service mark (whether registered or not), copyright, registered design, design light and topography right or any other form of protection, any right to apply or application for such protection, and any rights in any secret process, know-how, technical reports, designs, confidential information or otherwise or any associated or similar right or protection and any rights under Licenses and consents in relation to any of the foregoing subsisting at the relevant time in any jurisdiction, anywhere in the world.
" Investment Entity" Entity whose primary area of business is the management or acquisition of financial assets (e.g., mutual funds, pension funds, private equity, venture capitalist, leveraged buyout firm etc.) and does not include the financial investment arms of a Strategic Investor.
" LEP Device" Means an electronic display device in which light is generated by a LEP Material to produce a visible representation and comprising Cell, a Passive Matrix Module or an Active Matrix Module as the case may be.
" LEP Material" means an organic semiconductive conjugated polymer or copolymer having at least five(5) of one or more repeating units in the polymer backbone, wherein, upon application of an electric field, light emission occurs from any portion of the polymer backbone.
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" License" Means the license granted pursuant to Clause 2.
" Licensee' s Group"
means, in relation to the Licensee:
(a) the Licensee itself; and
(b) any other company which, at the relevant time, is a Subsidiary of the Licensee;
and " Member" of the Licensee' s Group has a corresponding meaning.
" Lump Sum Fee" means the non refundable lump sum of [**]
" Manufactured Cost" means material costs, direct personnel costs, maintenance costs, energy costs, depreciation, space costs (occupancy), indirect personnel costs, miscellaneous minor cost items needed for production, factory overheads and any relevant Third Party costs related to manufacture e.g. components, services (for the avoidance of doubt the term Manufactured Cost shall not include central administration costs, research and development costs, machine development and sales costs). These costs shall be calculated at the end of the first Year in which royalty is owing and thereafter, recalculated at the end of each Year, the calculation being based on data from the then-ending year and made in accordance with US GAAP.
" Minimum Royalty" [**]
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" More Favorable License" Means an agreement signed by CDT (or Member of CDT' s Group) with any Third Party after the Effective Date containing more favorable terms, in aggregate, including, but not limited to, license under the Patents to a Third Party at a upfront fee lower than the Lump Sum Fee, minimum royalty lower than the Minimum Royalty, a cap on royalty, a royalty rate that is lower than the Relevant Rate, or other terms in aggregate more favorable than the terms under this Agreement.
" Net Sales Value" is defined in Clause 3.2 below.
" Party" Means CDT or Licensee, depending on the context; " Parties" means CDT and Licensee, depending on the context.
" Passive Matrix Module" means a Cell together with the electronic drivers and other support circuitry to effect illumination of the entire display or individual pixels as well as all polarisers, the support frame, filters connection tabs and all other elements comprising the module, wherein individual pixels are driven by directly addressing electrodes, without additional individual microelectronic drivers.
" the Patents"
Means:
(1) the patents and patent applications listed in Schedule 1, to the extent that such patents and patent applications are directed to LEP Device architecture and/or LEP Device manufacture; and (2) all future patent applications owned by CDT, to the extent that such future patent applications are directed to LEP Device architecture and/or LEP Device manufacture, and which CDT solely owns or otherwise jointly owns with a Third Party and is free to sub-license without an express obligation to make any form of payment or other form of compensation to any Third Party; and
6 (3) and patents resulting from any extension of any such patents or patent applications described in (1) and (2) above, and patents resulting from any counterpart patent applications of such patent or patent application described in (1) and (2) above,(provided that, in the case of UK and Japanese patent applications only, a patent application will only be deemed to have been made for the purposes of this Agreement upon its second, or public, filing), to the extent that such extensions and counterpart patents are directed LEP Device architecture and/or LEP Device manufacture; and (4) those patents and patent applications that may be incorporated pursuant to Clauses 2.5, 2.6 and 2.8 below.
" Qualifying Sales" [**]
" a Quarter" means the three months commencing on the Effective Date and each successive period of three months thereafter during the continuance of this Agreement and any shorter period ending on its termination and " Quarterly" shall be construed accordingly.
" Relevant Rate"
Means in relation to Covered LEP Devices manufactured and sold by the Licensee or any other member of the Licensee' s Group in a given year, in the form of:
[**]
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" Relevant Technology"
Means:
(1) the patents (subject to Clause 2.2) and patent applications listed in Schedule 2, to the extent that such patents and patent applications are directed to LEP Device architecture and/or LEP Device manufacture,
including patents resulting from any extension of any such patents or patent applications, and patents resulting from counterpart patent applications of such patents and patent applications (provided that, in the case of UK, U.S. and Japanese patent applications only, a patent application will only be deemed to have been made for the purposes of this Agreement upon its second, or public, filing) to the extent that such extensions and counterpart patents are directed LEP Device architecture and/or LEP Device manufacture; and (2) any future patents or published patent applications owned by Licensee or Uniax that list as an inventor at least one Display Employees or an individual who is performing work under the direction or guidance of a Display Employee (during the time such individual is performing work under the direction or guidance of at least one Display Employees), and may be owned by
8 Licensee or Uniax on or before the earlier of:
(a) Fifth anniversary of the Effective Date and; or
(b) the date on which control (as defined for the purposes of Section 416, Income, and Corporation Taxes Act 1988) of CDT (or, in relation to that Member only, any other Member of its Group) is transferred to any person or persons other than the person or persons in control of CDT at the Effective Date, excluding date on which control of CDT is transferred as a result of an initial public offering or is transfer, to an Investment Entity;
and then only to the extent that such future patents and published patent applications are:
(i) directed to LEP Device architecture and/or LEP Device manufacture; and (ii) solely owned or otherwise jointly owned with a Third Party by DuPont or Uniax and which DuPont or Uniax is free to sub-license without an express obligation make any form of payment or other form of compensation to any Third Party; and (3) including patents resulting from extensions of any such future patents or published applications as described in (2) above, and patents resulting from any counterpart patent applications of such future patents or published applications as described in (2) above (provided that, in the case of UK, U.S. and Japanese patent applications only, a patent application will only be deemed to have been made for the purposes of this Agreement upon its second or public, filing), to the extent that such extensions and counterpart patents are directed to LEP Device architecture and/or LEP Device manufacture.
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" RITDisplays" Means RITdisplay Corporation, a corporation of the Republic of China, having a place of business at No. 10, Kuanfu N. Road, Hsin Chu Industrial Park, Taiwan, 30316 R.O.C., and any successors and assigns of the corporation.
" Royalty-Bearing Patent Rights" Means patent(s) or published patent application(s) of Third Parties to which CDT has sublicensing rights, to the extent such patents or published patent applications are directed to LEP Device architecture or LEP Device manufacture, but for the fact that the relevant Member of CDT' s Group would have to make some form of payment or other form of compensation to any relevant Third Party.
" Royalty-Free Patent Rights" Means patent(s) and/or published patent application(s) owned by (a) any current Member of CDT' s Group, or (b) any future Member of CDT' s Group, to the extent that such patent(s) and/or published patent application(s) can be sublicensed by CDT on or after the date such entity becomes such a Member or (c) a Third Party (to which CDT has royalty-free sublicensing rights), to the extent such patents or published patent applications are directed to LEP Device architecture or LEP Device manufacture.
" Strategic Investor" Means an entity that is in the business, or intends to enter into the business to design, or use, or make, or sell LEP Devices or Component Materials, or otherwise supplies or services the LEP Device manufacturer or is an end-user of LEP Devices, or controls (as defined for the purposes of Section 416, Income and Corporation Taxes Act 1988) or is under common control (as defined for the purposes of Section 416, Income and Corporation Taxes Act 1988) with such an entity.
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" Third Party" Means a Party that is not a Member of CDT' s Group or Licensee' s Group, depending upon the context.
" Year" means the period of twelve months from the Effective Date and each subsequent consecutive period of twelve months during the period of this Agreement.
1.2 Also in this Agreement, unless the context otherwise requires:
(a) words in the singular include the plural and vice versa and words in one gender include any other gender; (b) a reference to a statute or statutory provision includes any statute or statutory provision which modifies, consolidates, re-enacts or supersedes it; (c) a reference to Clauses and Schedules is to Clauses of and Schedules to this Agreement and references to sub-Clauses and paragraphs are references to sub-Clauses and paragraphs of the Clause or Schedule in which they appear;
(d) the table of contents and headings are for convenience only and shall not affect the interpretation of this Agreement. 2. CDT License Grant
2.1 CDT grants to the Licensee, and the Licensee accepts, a non-exclusive License under the Patents, [**] under such license, upon and subject to the provisions of this Agreement:
(a) to manufacture LEP Devices (but not to manufacture LEP Material or other Component Materials), to incorporate the LEP Devices into Finished Products and to use, offer to sell, sell and otherwise deal in the LEP Devices and Finished Products in any and all countries of the world;
11 (b) have LEP Devices (but not LEP Material, or other Component Materials) manufactured for the Licensee by two Have Made Partners of Licensee' s choice at any given time, subject to:
(i) the Licensee notifying CDT in writing of the identity of the Have Made Partner that Licensee would like to extend the benefits under this Clause 2.1(b); (ii) the prior written consent of CDT (which shall not be unreasonably withheld or delayed, it being acknowledged that the failure of a Have Made Partner to respect the intellectual property rights of others or the failure of a sovereign nation (in which such Have Made Partner is a resident) to respect and enforce intellectual property rights of others as evidenced by updated documents generated by a G-8 country member organization responsible for evaluation of intellectual property rights environment, are the only reasonable grounds to refuse consent) except that no consent shall be required if the Have Made Partner and the subcontracting arrangements concerned are located in Western Europe, the United States or Japan;
(iii) the Licensee obtaining the signature of any Have Made Partner on the letter attached to this Agreement as Schedule 4 whereby the Have Made Partner agrees to respect the intellectual property of CDT and to only manufacture LEP Devices for, or sell LEP Devices to, Licensee or Member of Licensee' s Group.
2.2 Despite Clause 2.1(b)(i)-(iii) above and unless replaced by another entity pursuant to Clause 2.4 below, Licensee nominates, and CDT consents, that one of the two Have Made Partners provided in Clause 2.1(b) is RITDisplays and Affiliates of RITDisplays.
2.3 Beyond the grant to two Have Made Partners provided in Clause 2.1(b) above, CDT will consider granting Licensee further " have made" rights with additional Have Made Partners, subject only to Licensee paying CDT an initial payment for each such right equal to the equivalent lump sum fee being charged by CDT for the requested display resolution at the time of the request from Licensee, provided that such lump sum fee is no greater than the Lump Sum Fee due upon signature of this Agreement.
2.4 In the event an existing Have Made Partner receiving the benefits of the grant pursuant to Clauses 2.1(b) and 2.2 above declares bankruptcy, exits the LEP Device manufacturing business, terminates its relationship with Licensee, or commits a material breach of its obligations to Licensee, Licensee is entitled to obtain a replacement Have Made Partner that will receive the benefits of the grant under Clause 2.1(b) above, pursuant to Clause 2.1(b)(i)-(iii) above, without paying CDT the lump sum fee required in Clause 2.3 above.
12 2.5 CDT hereby grants the Licensee an option to extend the License to include certain patented technology concerning ink-jet printing as relevant to LEP Devices being jointly developed by CDT and Seiko Epson Corporation (" SEC" ) as well as certain background patented technology concerning ink-jet printing as relevant to LEP Devices and owned by SEC to which CDT has sublicensing rights. If so extended, references in this Agreement to the " Patents" shall be construed accordingly. This option may be exercised at any time provided:
(a) the Licensee and its Group are: (i) not in actual or threatened or pending substantive litigation with SEC or otherwise being deemed hostile; or (ii) already in possession of a license from SEC in respect of the relevant SEC background technology;
(b) the Licensee simultaneously grants SEC and the Members of SEC' s Group (which meaning shall be the same as " CDT' s Group" ) a license to a portion of or all of the Relevant Technology as granted under Clause 4.1, for the same term and same scope of patent and/or know-how as the scope of the license CDT grants to Licensee; and
(c) the Licensee shall pay the following additional Relevant Rates: [**] Percentages are based on Net Sales Value. (d) CDT shall promptly provide Licensee list of patents available under this Clause 2.5 upon CDT' s receipt from SEC. 2.6 CDT hereby grants Licensee the option to extend the scope of the License by the addition of Royalty-Bearing Patent Rights, provided the Licensee makes such payment or compensation to CDT (or otherwise at its direction) on a full reimbursement basis (so that CDT passes through royalty payment obligations that CDT would otherwise have to pay under such Royalty-Bearing Patent Rights without additional surcharge by CDT). If so extended, references in this Agreement to the " Patents" shall be construed accordingly. CDT shall give, and shall procure that any CDT' s Group Member gives, full written particulars of any such patent or published patent application within the earlier of 30 days of the Effective Date and the date of any relevant publication.
2.7 This License cannot and will not be used for the production of lighting devices intended as a primary source of illumination. 2.8 CDT hereby extends the scope of the License by the addition of Royalty-Free Patent Rights, at no further payment than already required by the License. If so extended, references in this Agreement to the " Patents" shall be construed accordingly. CDT shall procure that any CDT' s Group Member gives, full written particulars of any such Royalty-Free Patent Rights within the earlier of 30
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