3. Project Intellectual Property.
(a) "Project Intellectual Property" means the legal rights relating to inventions (including Subject Inventions as defined in 37 CFR
401), patent applications, patents, copyrights, trademarks, mask works, trade secrets and any other legally protectable information,
including computer software, first made or generated during the performance of this STTR Agreement.
(b) Except as otherwise provided herein, ownership of Project Intellectual Property shall vest in the party whose personnel conceived
the subject matter or first actually reduced the subject matter to practice, and such party may perfect legal protection therein in its
own name and at its own expense. Jointly made or generated Project Intellectual Property shall be jointly owned by the PARTIES
unless otherwise agreed in writing. The SBC shall have the first option to perfect the rights in jointly made or generated Project
Intellectual Property unless otherwise agreed in writing.
(1) The ownership, including rights to any revenues and profits, resulting from any product, process, or other innovation or
invention based on the cooperative shall be allocated between the SBC and the RI as follows:
SBC Percent: RI Percent:
(2) Expenses and other liabilities associated with the development and marketing of any product, process, or other
innovation or invention shall be allocated as follows:
SBC Percent:
RI Percent:
(c) The PARTIES agree to disclose to each other, in writing, each and every Subject Invention, which may be patentable or otherwise
protectable under the United States patent laws in Title 35, United States Code. The PARTIES acknowledge that they will disclose
Subject Inventions to each other and the awarding agency within
months after their respective inventor(s) first disclose the
invention in writing to the person(s) responsible for patent matters of the disclosing Party. All written disclosures of such inventions
shall contain sufficient detail of the invention, identification of any statutory bars, and shall be marked confidential, in accordance
with 35 U.S.C.
205.
(d) Each party hereto may use Project Intellectual Property of the other nonexclusively and without compensation in connection with
research or development activities for this STTR project, including inclusion in STTR project reports to the AGENCY and proposals
to the AGENCY for continued funding of this STTR project through additional phases.
(e) In addition to the Government's rights under the Patent Rights clause of 37 CFR
401.14, the PARTIES agree that the
Government shall have an irrevocable, royalty free, nonexclusive license for any governmental purpose in any Project Intellectual
Property.
(f) SBC will have an option to commercialize the Project Intellectual Property of RI, subject to any rights of the Government therein,
as follows--
(1) Where Project Intellectual Property of RI is a potentially patentable invention, SBC will have an exclusive option for
a license to such invention, for an initial option period of months after such invention has been reported to SBC. SBC
may, at its election and subject to the patent expense reimbursement provisions of this section, extend such option for an
additional
months by giving written notice of such election to RI prior to the expiration of the initial option period.
During the period of such option following notice by SBC of election to extend, RI will pursue and maintain any patent
protection for the invention requested in writing by SBC and, except with the written consent of SBC or upon the failure of
SBC to reimburse patenting expenses as required under this section, will not voluntarily discontinue the pursuit and
maintenance of any United States patent protection for the invention initiated by RI or of any patent protection requested
by SBC. For any invention for which SBC gives notice of its election to extend the option, SBC will, within days after
invoice, reimburse RI for the expenses incurred by RI prior to expiration or termination of the option period in pursuing
and maintaining (i) any United States patent protection initiated by RI and (ii) any patent protection requested by SBC.
SBC may terminate such option at will by giving written notice to RI, in which case further accrual of reimbursable
patenting expenses hereunder, other than prior commitments not practically revocable, will cease upon RI's receipt of such
notice. At any time prior to the expiration or termination of an option, SBC may exercise such option by giving written
notice to RI, whereupon the parties will promptly and in good faith enter into negotiations for a license under RI's patent
rights in the invention for SBC to make, use and/or sell products and/or services that embody, or the development,
manufacture and/or use of which involves employment of, the invention. The terms of such license will include: (i)
payment of reasonable royalties to RI on sales of products or services which embody, or the development, manufacture or
use of which involves employment of, the invention; (ii) reimbursement by SBC of expenses incurred by RI in seeking and
maintaining patent protection for the invention in countries covered by the license (which reimbursement, as well as any
such patent expenses incurred directly by SBC with RI's authorization, insofar as deriving from RI's interest in such
invention, may be offset in full against up to
of accrued royalties in excess of any minimum royalties due RI); and, in
the case of an exclusive license, (iii) reasonable commercialization milestones and/or minimum royalties.