Patent License Between Co. & Kodak - 3-29-98

EXHIBIT 10.34


CALCOMP/KODAK

PATENT LICENSE AND JOINT DEVELOPMENT AGREEMENT


PATENT LICENSE AND JOINT DEVELOPMENT AGREEMENT


THIS PATENT LICENSE AND JOINT DEVELOPMENT AGREEMENT ("Agreement") is made and entered into as of this 29th day of March, 1998 (the "Effective Date"), by and between Calcomp Technology, Inc. ("CALCOMP"), a Delaware corporation having a principal place of business at 2411 West La Palma Avenue, Anaheim, California 92801, and Eastman Kodak Company ("KODAK"), a New Jersey corporation having a principal place of business at 343 State Street, Rochester, New York 14650.


R E C I T A L S : - ---------------


A. CALCOMP has developed new technology related to drop-on-demand piezo inkjet printheads and associated drop-on-demand piezo inkjet print engines (herein referred to as "Printheads" and "Print Engines", respectively, as defined below).


B. KODAK has developed new technology related to certain inks, paper and other media (herein referred to as "Inks", and "Media", respectively, as defined below) for use in inkjet printing systems, and which, therefore, is believed should also be useful in the new CALCOMP technology.


C. KODAK desires a license to make, use and sell Printheads and associated Print Engines and inkjet printers (herein referred to as "Printers" as defined below) which use the new CALCOMP technology and the new KODAK technology.


D. CALCOMP and KODAK desire to jointly develop additional Printheads and associated Print Engines for various applications and certain related Inks, and to cross-license one another to the foregoing technology developed in such joint development effort.


E. CALCOMP and KODAK desire to purchase for resale and to distribute certain of each other's Inks for use in certain applications, and CALCOMP also desires to purchase for resale certain of KODAK's Media for use in certain applications.


NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, CALCOMP and KODAK hereby agree as follows:


1. DEFINITIONS. As used in this Agreement, the following terms, whether used
----------- in the singular or the plural shall have the following meaning:


1.1 Affiliate shall mean any company, partnership, joint venture, or
---------
other entity which directly or indirectly controls, is controlled by or is
under common control with a party. Control shall mean the possession of
fifty percent (50%) or more of the voting stock or the power to direct or
cause the direction of the management and policies


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of the controlled entity, whether through the ownership of voting
securities, by contract or otherwise, but only for so long as such control
exists. Provided, however, that any such Affiliate of KODAK shall agree in
writing with KODAK, and any such Affiliate of CALCOMP shall agree in
writing with CALCOMP, to abide by the terms of this Agreement.


1.2 Inks means solvent-based pigmented inks, water-based pigmented
----
inks, or dye-based inks for use in Printers.


1.3 Print Engine means a system comprising one or more Printheads, a
------------
Printhead and carriage support system, an Ink reservoir and system for
supplying such Ink from the reservoir to the Printhead, a Printhead
maintenance and capping station, drive electronics for the Print Engine,
and which also may or may not include as mutually agreed in writing by the
Project General Managers of the parties identified in Article X ("Joint
Development Direction") with respect to a specific Print Engine, a Media
drive system and a mechanical horizontal beam structure.


1.4 Printhead means a drop-on-demand piezo inkjet printhead in which
---------
individual ink drops are selectively expelled by activating corresponding
individually associated ink channels, each channel having two or more walls
formed from piezo materials, through corresponding individually associated
nozzles, and assemblies thereof.


1.5 CALCOMP Background Technology means technical information,
-----------------------------
inventions, concepts, product designs, component designs, trade secrets,
know-how, techniques, designs, processes, communications protocols,
software algorithms (whether patentable or not), patents, patent
applications, including any patents issuing thereon and any and all
divisions, continuations and continuations-in-part thereof, and any and all
reissues and reexaminations of any such patents, copyrights, copyright
registrations and applications, and all other intellectual property rights
(excluding, however, trade names or trademarks) conceived, originated,
discovered, developed or otherwise made by CALCOMP, solely or jointly with
others, or by others under CALCOMP's direction, and which are related to
Printheads, Print Engines or Printers, or to dye-based or solvent-based
pigmented Inks, and which were so made (i) prior to March 29, 1998, or (ii)
independently of and during the term of the Joint Development Project.


1.6 Exclusive Field: See Exhibit J(1) for this Section 1.6.
---------------


1.7 Improvement means inventions, concepts, products, components,
-----------
trade secrets, know-how techniques, designs, processes communications
protocols, software, whether patentable or not, patents, patent
applications, including any patents issuing thereon and any and all
divisions, continuations and continuations-in-part thereof, and any and all
reissues and reexaminations of any such patents, copyrights, copyright
registrations and applications, and all other intellectual property rights
(excluding, however, trade names or trademarks) which (i) are conceived,
discovered, developed or


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otherwise made by or on behalf of either CALCOMP or KODAK or jointly by the
parties, (ii) are so made in the conduct of the Joint Development Project,
and (iii) are related to Printheads, Print Engines, Printers, or Ink or
Media.


1.8 Joint Development Project means the development project between
-------------------------
KODAK and CALCOMP for the development of certain Printheads and associated
Print Engines, if required, and which may also include mutually agreed upon
Printers, Inks or Media as further described in the Operating Work Plan to
be prepared for the Joint Development Project as described in Section
X.3(d) of this Agreement.


1.9 Media means paper and other media on which the Ink used in a
-----
Printer is printed.


1.10 KODAK Background Technology means technical information,
---------------------------
inventions, concepts, product designs, component designs, trade secrets,
know-how, techniques, designs, processes, communications protocols,
software algorithms (whether patentable or not), patents, patent
applications, including any patents issuing thereon and any and all
divisions, continuations and continuations-in-part thereof, and any and all
reissues and reexaminations of any such patents, copyrights, copyright
registrations and applications, and all other intellectual property rights
(excluding, however, trade names and trademarks) conceived, originated,
discovered or developed by KODAK, solely or jointly with others, or by
others under KODAK's direction, and which are related to water-based
pigmented Inks or Media, and were so made (i) prior to March 29, 1998 or
(ii) independently of and during the term of the Joint Development Project.


1.11 Nonexclusive Field is as defined in Section 3.2 of this
------------------
Agreement.


1.12 Master OEM Agreement No. 1 means that certain OEM Agreement
--------------------------
between KODAK and CALCOMP, dated March 29, 1998, covering OEM sales of
Printheads, Print Engines, Printers, Inks, and Media, if any, by CALCOMP to
KODAK.


1.13 Master OEM/Supply Agreement No. 2 means that certain Agreement
---------------------------------
between KODAK and CALCOMP, dated March 29, 1998, covering CALCOMP-branded
sales of Inks and Media by KODAK to CALCOMP and supply of KODAK-branded
Inks and KODAK-branded Media by KODAK to CALCOMP.


1.14 Printer means a system with printing capability that
-------
incorporates a Printhead and/or a Print Engine.


1.15 Net Sales means the amount of monies received by a party or its
---------
Affiliates in the sale or any other transfer of the product in question to
independent unrelated third parties in bona fide arm's length commercial
transactions, excluding commission payments to third parties, discounts,
freight allowances, returns, refunds, bad debts, installation costs,
training costs, technical assistance costs and taxes applicable thereto;


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provided, however, that if a party transfers the product in question to (i)
an Affiliate for its own internal commercial use in the Exclusive Field or
Nonexclusive Field, or (ii) to any unrelated third party (other than an
Affiliate) for non-monetary consideration for purposes other than trade or
beta testing, the amount of money to be used in determining the applicable
Net Sales on such product shall be equal to the amount that such party
would have received in a sale of the same volume of such product to an
unrelated third party in a bona fide arm's length commercial transaction.


1.16 ULC Printhead: See Exhibit J(2) for this Section 1.16.
-------------------------------------------------------


1.17 Topaz Assets means those assets acquired by CALCOMP through its
------------
acquisition of Topaz Technologies, Inc., and any substitution, additions,
replacements, improvements, betterments and developments thereto, as more
fully described on Exhibit G attached hereto.
--------------------------


2. JOINT DEVELOPMENT
-----------------


2.1 Scope of Joint Development. CALCOMP agrees to use its best
--------------------------
efforts to achieve the goals and complete the Joint Development Project.
KODAK agrees to work jointly with CALCOMP as set forth in this Agreement to
support it in achieving the goals and completing the Joint Development
Project. The parties acknowledge and agree that CALCOMP has the primary
responsibility for achieving the goals and completing the Joint Development
Project and in particular Milestones #1 and #2 as described on Exhibit B to
this Agreement.


2.2 Term. The Joint Development Project will begin March 29, 1998
----
and shall continue until completion of development of the ULC Printhead,
unless earlier terminated or extended by written agreement of the parties
or as otherwise provided under Article 14 of this Agreement ("Term and
Termination").


2.3 Costs of Joint Development Project: See Exhibit J(3) for this
----------------------------------
Section 2.3.


X. JOINT DEVELOPMENT DIRECTION
---------------------------


X.1 Joint Development Managers. Upon signing of this Agreement, the following
--------------------------
two Project General Managers for each party shall be appointed to direct
the overall conduct of the Joint Development Project activities:


For KODAK: A. Gable


For CALCOMP: A. Bibl


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Each party shall also appoint a Technical Director to manage day-to-day
technical activities of the Joint Development Project but such appointees
shall not have authority to decide on issues or proposals which reasonably
would be expected to have a material effect on the overall conduct of the
Joint Development Project in the absence of, or in lieu of, the written
approval of the Project General Managers. The Technical Director for KODAK
shall be A. Lubinsky, and the Technical Director for CALCOMP shall be D.
Gardner. Any change in the designated Program General Managers or
Technical Directors shall require advance written notice to the other
party. The Project General Managers and Technical Directors shall have no
authority to modify or amend the terms of this Agreement.


X.2 Joint Development Decisions. All decisions with regard to any material
---------------------------
proposal, issue, or course of action under the Joint Development Project
shall be by mutual written agreement of the Project General Managers,
unless otherwise specified Agreement.


X.3 Joint Development Responsibilities. The Project General Managers shall be
---------------------------------- responsible for the following:


a) Overall direction of the Joint Development Project;


b) Staffing and facility requirements of the Joint Development Project;


c) Scheduling and conducting at least quarterly reviews of the Joint Development Project, the Operating Work Plan for the Joint Development Project, and preparation of suitable progress reports of the project results, including an annual overall written review of the Joint Development Project for the parties; and


d) Preparing, updating, modifying if necessary, and reviewing the Operating Work Plan for the Joint Development Project in accordance with the milestones and project work set forth in Exhibit A. The first such Operating Work Plan shall be prepared by the parties within sixty (60) days from the Effective Date of this Agreement.


X.4 Joint Development Personnel. Each party agrees to make its employees and
---------------------------
nonemployee consultants reasonably available at their respective places of
employment to consult with the other party on issues arising from work
performed on the Printheads and Print Engines of the Joint Development
Project, including without limitation technical performance, manufacturing
materials and manufacturing process, manufacturing costs, and related
issues.


X.5 Joint Development Facilities. During the Joint Development Project, a
----------------------------
small number of representatives of each party may, upon reasonable notice
and at times reasonably acceptable to the other party, (i) visit the
facilities where the Joint Development Project is being conducted, (ii)
consult informally, during such visits and by telephone, with personnel of
the other party performing work on the Joint Development Project, and (iii)


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work in the facilities and with the representatives of the other party who
are performing work on the Joint Development Project. Each party at the
request of the other party shall cause appropriate individuals working on
the Joint Development Project to be reasonably available for meetings at
the location of the facilities where such individuals are employed at times
reasonably convenient to the party responding to such request.


X.6 Joint Development Records. Each party shall keep complete, accurate and
-------------------------
authentic notes, data and records of the work performed on the Printheads
and Print Engines under the Joint Development Project in accordance with
its established company practices and shall be obligated to provide all
such documentation to the other party upon written request at reasonable
intervals. Each party shall further have the right to inspect and make
copies of such notes, data and records so maintained by persons carrying
out the Joint Development Project at reasonable times; provided, however,
that such inspection and copying shall not confer upon the inspecting or
copying party any ownership rights with respect to such notes, data or
records except as expressly provided in this Agreement.


Y. Ownership of Improvements
-------------------------


Y.1 By CALCOMP. CALCOMP shall own all right, title and interest in and to any
----------
Improvements developed by CALCOMP or KODAK, solely or jointly, which relate
to Printheads, Print Engines, Printers, dye based Inks, and/or solvent-
based pigmented Inks, including all intellectual property rights (excluding
trade names and trademarks), and CALCOMP shall have the right to apply for
copyrights, patents (including utility and design patents), or other
protection for such intellectual property rights anywhere in the world
under its own name and at its own expense. If KODAK makes any Improvement
related to Printheads, Print Engines, Printers, dye-based Inks and/or
solvent-based pigmented Inks, KODAK shall, and hereby does, transfer to
CALCOMP all right, title and interest in and to such Improvement. KODAK
agrees that it shall promptly notify CALCOMP of any Improvement and shall
take all actions and execute all documents as CALCOMP may reasonably
request, to effectuate the acknowledgment of CALCOMP's ownership of the
Improvement and the vesting in CALCOMP of complete and exclusive ownership
of any such Improvement. KODAK shall secure, maintain and defend for
CALCOMP's benefit, all rights in such Improvements, including the right to
submit any patent or copyright or application or registration.
Notwithstanding the foregoing, KODAK shall have the right to develop
independently from CALCOMP and without use of any of the CALCOMP Background
Technology, its own inkjet printheads and associated print engines and
printers as well as dye-based Inks, solvent-based pigmented Inks and other
Media or water-based pigmented Inks and will own all rights therein,
including all intellectual property rights. In connection with KODAK's
right to develop independently from CALCOMP its own dye-based Inks and
solvent-based pigmented Inks and maintain KODAK's ownership of all rights
therein, the parties acknowledge that KODAK may use CALCOMP Background
Technology with respect to Printheads, Print


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Engines and Printers and prototypes thereof developed in the Joint
Development Project; provided, however, that such KODAK independent
development activity shall not use CALCOMP Background Technology directed
to dye-based Inks or solvent-based pigmented Inks.


Y.2 By KODAK. KODAK shall own all right, title and interest in and to any
--------
Improvements developed by KODAK or CALCOMP, solely or jointly, which relate
to water-based pigmented Inks or Media, including all intellectual property
rights (excluding trade names or trademarks), and KODAK shall have the
right to apply for copyrights, patents (including utility and design
patents), or other protection for such intellectual property rights
anywhere in the world under its own name and at its own expense. If
CALCOMP makes any Improvement related to water-based pigmented Inks or
Media, CALCOMP shall, and hereby does, transfer to KODAK all right, title
and interest in and to such Improvement. CALCOMP agrees that it shall
promptly notify KODAK of any Improvement and shall take all actions and
execute all documents as KODAK may reasonably request, to effectuate the
acknowledgment of KODAK's ownership of the Improvement and the vesting in
KODAK of complete and exclusive ownership of any such Improvement. CALCOMP
shall secure, maintain and defend for KODAK's benefit, all rights in such
Improvements, including the right to submit any patent or copyright or
trademark application or registration. Notwithstanding the foregoing,
CALCOMP shall have the right to develop independently from KODAK and
without use of any of the KODAK Background Technology, its own water-based
pigmented Inks and Media and will own all rights therein, including all
intellectual property rights. In connection with CALCOMP's right to
develop independently from KODAK its own dye-based, solvent-based pigmented
Inks, and water-based pigmented Inks and maintain CALCOMP's ownership of
all rights therein, the parties acknowledge that CALCOMP may conduct such
independent development with respect to dye-based, solvent-based pigmented
Inks, or water-based pigmented Inks using Printheads, Print Engines and
Printers and prototypes thereof developed in the Joint Development Project;
provided, however, that such CALCOMP independent development activity shall
not use KODAK Background Technology directed to dye-based, solvent-based
pigmented Inks, or water-based pigmented Inks.


3. LICENSES
--------


3.1 Exclusive License to KODAK. CALCOMP hereby grants to KODAK and its
-------------------------- Affiliates, subject to KODAK's and its Affiliates' compliance with its material obligations under this Agreement, a perpetual, exclusive, worldwide license under the CALCOMP Background Technology and under all Improvements owned by CALCOMP, subject to the provisions of paragraph 3.7 below, to make and have made the Printheads, Print Engines, and Printers and to use and sell the Printheads and Print Engines, and Printers within the Exclusive Field. Such license shall be fully paid-up with respect to Improvements owned by CALCOMP and shall be royalty-bearing as set forth in Section 4.2 with respect to CALCOMP Background Technology.


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3.2 Nonexclusive License to KODAK. CALCOMP hereby further grants to KODAK
----------------------------- and its Affiliates, subject to KODAK's and its Affiliates' compliance with its material obligations under this Agreement, a perpetual, non-exclusive, worldwide license under the CALCOMP Technology and under all Improvements owned by CALCOMP, subject to the provisions of paragraph 3.7 below, to make and have made the Printheads, Print Engines, and Printers and to use and sell the Printheads, Print Engines, and Printers within the Nonexclusive Field. Such license shall be fully paid-up with respect to Improvements owned by CALCOMP and shall be royalty-bearing as set forth in Section 4.2 with respect to CALCOMP Background Technology. The Nonexclusive Field includes the worldwide markets for products and services outside of the Exclusive Field and the ULC Printhead with the exception of the following applications:


3.2.1 Industrial Packaging Printing Applications which mean specially
configured monochrome or color piezo inkjet printing systems using a flat-
bed printer having a print area of at least 3 feet by 3 feet for printing
onto corrugated paper packaging, paper board packaging and other similar
packaging substrates;


3.2.2 Label/Ticket Printing Applications which mean specially
configured monochrome or color piezo inkjet printing systems for printing
labels or tickets onto substrates having a print width of less than 6
inches;


3.2.3 Postal Printing Applications which mean specially configured
monochrome or color piezo inkjet printing systems primarily intended for
printing on postal envelopes or franking printing for postage stamp
applications;


3.2.4 Design and Pattern Printing Applications which mean monochrome
or color, high volume, production piezo inkjet printing systems which print
recurring designs and patterns directly on textile fabrics, fabric-like
substrates and similar home furnishing materials such as wall and floor
coverings. Design and Pattern Printing Applications shall not include
short-run piezo inkjet printing systems for proofing designs or patterns or
piezo inkjet printing systems for signage or displays or piezo inkjet
printing systems which print via sublimation onto cloth or other
substrates; and


3.2.5 CAD/CAM Applications which mean monochrome and/or color piezo
ink jet printing devices, primarily for engineering, architectural,
manufacturing, design and construction markets, which create two
dimensional line drawings and three dimensional color renderings to provide
hard copy working documents.


The applications specifically excluded from the Nonexclusive Field in the
foregoing Sections 3.2.1 through 3.2.5 shall not be construed to limit or
in any way restrict the rights granted to KODAK under this Agreement with
respect to the Exclusive Field or the ULC Printhead.


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3.3 Certain Third Party Rights. KODAK acknowledges that CALCOMP has
-------------------------- granted certain exclusive rights, for a period of up to six (6) months to a third party solely with respect to 25 picoliter contone Printheads.
------ Accordingly, KODAK agrees that until the foregoing exclusive rights granted to the third party terminate, its non-exclusive license rights under this Agreement solely with respect to such 25 picoliter contone Printheads shall be expressly subject to the ...