NON-EXCLUSIVE PATENT AND PROPRIETARY INFORMATION
THIS AGREEMENT (hereinafter, "this Agreement"), effective as of
__________________, is made and entered into by and between ______________, a
corporation organized and existing under the laws of the ______________, having its
corporate headquarters at _______________________, hereinafter referred to as
"Licensee", and the University of Maine System Board of Trustees, of 16 Central Street,
Bangor, Maine 04401 (hereinafter, "the University of Maine "), a nonprofit educational
institution organized and existing under the laws of the State of Maine, having its place
of business at 16 Central Street, Bangor, Maine 04401.
WHEREAS the University of Maine is the owner by assignment of certain patent
rights and proprietary information pertaining to _____________________ and
developed by _________________ of the University of Maine faculty, and has the right
to grant licenses to the same; and
WHEREAS the University of Maine desires to have the patent rights and
proprietary information utilized in the public interest; and
WHEREAS Licensee is engaged in the business of __________________
_________________________, and is capable and committed to diligently developing
and commercializing products and/or services which exploit said patent rights and
proprietary information; and
WHEREAS Licensee desires a non-exclusive license to practice the patents and
proprietary rights of the University of Maine upon the terms and conditions hereinafter
NOW, THEREFORE, in consideration of the premises and covenants contained
herein and with the intention of being bound hereby, the parties agree as follows:
As used herein, the following terms shall have the meanings set forth below:
(a) "Affiliate" shall mean a legal entity which (i) is controlled by a party, (ii) is
commonly controlled with a party, or (iii) controls a party to this Agreement, wherein
"control" shall require more than 50% equity interest.
(b) “Field” shall mean uses of the Licensed Patents and Proprietary
Information in __________________.
(c) "Licensed Patents" means the following U.S. patents and patent
applications, patents to be issued pursuant to such applications, and all divisions,
continuations, reissues, substitutes, and extensions, including but not limited to all
foreign patents and patent applications directed to subject matter specifically described
in the U.S. cases below:
U.S. Patent Applic. No. Filing Date
U.S. Patent No. Issue Date
(d) "Licensed Products" means products or services that in the absence of
this Agreement would infringe at least one claim of Licensed Patents, and products or
services that are made or provided by Licensee using proprietary material, processes or
methods described in Licensed Patents, and provided thereby to Licensee by the
University of Maine.
(e) "Licensed Territory" means _____________________.
(f) “Net Sales” means the amount billed, invoiced, or received (whichever
occurs first) for sales, leases, or other transfers of Licensed Products, less:
(i) customary trade, quantity or cash discounts and non-affiliated brokers' or
agents' commissions actually allowed and taken;
(ii) amounts repaid or credited by reason of rejection or return;
(iii) to the extent separately stated on purchase orders, invoices, or other
documents of sale, taxes levied on and/or other governmental charges made as to
production, sale, transportation, delivery or use and paid by or on behalf of Licensee;
(iv) reasonable charges for delivery or transportation provided by third
parties, if separately stated.
Net Sales also includes the fair market value of any non-cash consideration
received by Licensee for the sale, lease, or transfer of Licensed Products.
2. Grant of Patent License.
(a) The University of Maine hereby grants to Licensee, to the extent of the Licensed
Territory and Field, a non-exclusive license to make, use, and sell Licensed Products
under the Licensed Patents and proprietary information described in Licensed Patents.
(b) Licensee shall not have the right to sublicense the Licensed Patents or
(c) The term of the grant in Licensed Patents shall be until the end of the term for
which patent rights in Licensed Patents are pending or in effect and in control of the
University of Maine, unless this Agreement is terminated sooner as provided herein.
(d) The University of Maine reserves the right to practice Licensed Patents for its
own purposes including the licensing of the same to third parties within identical Fields
and Licensed Territories.
(e) The license granted hereunder shall not be construed to confer any rights upon
Licensee by implication, estoppel, or otherwise to any rights not specifically set forth in
In consideration of the rights, privileges, and licenses granted by the University of Maine
hereunder, Licensee shall pay royalties and other monetary consideration as follows:
(a) Initial license fee, nonrefundable and non-creditable against royalties of
________ Dollars ($________) due immediately upon execution of this Agreement;
(b) Royalties in an amount equal to __________% of Net Sales. On sales between
Licensee and its Affiliates for resale, the royalty shall be paid on Net Sales of the
Affiliate. Such royalty payments shall be non-refundable, irrespective of whether or not
one or more patent applications under Licensed Patents are abandoned before issuing
as a patent.
(c) A minimum annual royalty amount of at least __________ Dollars ($________)
to the extent such minimum royalty is greater than the aggregate annual royalty
computed in accordance with Section 3(b), as calculated per calendar year, initially from
the first anniversary of the effective date of this Agreement for the previous 12 month
4. Reports and Payments.
a) Licensee agrees to deliver to the University of Maine true, accurate, and detailed
written reports to the University of Maine quarterly within forty-five (45) days each March
31, June 30, September 30, and December 31 of each year. Such reports shall include
at least the following information in a form acceptable to the University of Maine:
(i) Number of Licensed Products sold by Licensee and its Affiliates;
(ii) Total billings for all such Licensed Products;
(iii) Accounting for all Licensed Products used or sold, particularly specifying which
patent applications and patents of the Licensed Patents are applicable and showing the
deductions used to determine the Net Sales thereof;
(iv) The amount of royalty due thereon, or if no royalties are due for any reporting
period, a statement that no royalties are due.
All reports shall be certified as correct by an officer of Licensee and shall include a
detailed listing of all deductions from royalties. The first such report shall include all
such Licensed Products manufactured, used, or sold prior to effective date of this
(b) Concurrent and in accordance with each such quarterly report, Licensee shall
pay to the University of Maine royalties at the rate specified in Section 3 of this
Agreement. Reports and accompanying royalties for the quarter represented by the
report shall be paid to the University of Maine in U.S. dollars and directed to the address
set forth in Section 8 of this Agreement. Royalty payments not received with their
respective reports from Licensee by the due dates specified in Subsection (a) above
shall be deemed to be overdue. All overdue payments pursuant to this Agreement shall
bear interest calculated from the due date until payment is received at the higher of; (a)
the rate of eight percent (8%) per annum; or (b) “prime” plus two percent (2%). Interest
shall be compounded annually, and the “prime” rate used to calculate interest shall be
the rate published in the “Wall Street Journal” on the first business day of each year for
which such payments are due.
(c) If this Agreement is for any reason terminated before all quarterly payments
herein provided have been made, Licensee shall immediately submit a terminal report
and pay UNIVERSITY OF MAINE any remaining unpaid balance even though the due
date as above provided has not been reached.
(d) Licensee shall keep full, true, and accurate books of account, in accordance with
generally accepted accounting principles, containing all information that may be
necessary for the purpose of showing the amounts payable the University of Maine
hereunder. Such books and the supporting data related thereto shall be kept at
Licensee’s principal place of business and shall be open at all reasonable times for
three (3) years following the end of the calendar year to which they pertain to the
inspection of the University of Maine and/or its agents for the purpose of verifying
Licensee’s royalty reports or compliance with any other aspects of this Agreement. The
fees and expenses of the University of Maine’s representatives shall be borne by the
university, however, if an error of more than five percent (5%) of the total payments due
or owning for any year is discovered, then Licensee shall bear the fees and expenses of
the University of Maine’s representatives.
5. Patent Prosecution and Infringement Actions
(a) University of Maine has or may prepare, apply for, seek prompt issuance of, and
shall use reasonable efforts to maintain during the term of this Agreement patent rights
in Licensed Patents. In the event the University of Maine desires to cease pursuing or
paying maintenance fees for any of the Licensed Patents in any country, University of
Maine shall provide Licensee with written notice thereof, which notice shall specify the
Licensed Patents at issue and be provided at least thirty (30) days before lack of action
on a matter would cause patent rights in Licensed Patents to be abandoned. If given
such notice, Licensee shall have the right, but not the obligation, to pay for and take
over pursuit or maintenance of the Licensed Patents at issue on behalf of the University.
(b) Licensee shall inform University of Maine promptly in writing of any alleged
infringement of the Licensed Patents by a third party and of any available evidence
(c) In any infringement suit University of Maine may institute to enforce Licensed
Patents, Licensee shall, at the request of University of Maine, cooperate in all respects
and, to the extent possible, have its employees testify when requested to make
available relevant records, papers, information, samples, specimens, and the like..
(d) Licensee shall be responsible for _________ percent (_____%) of all fees and
costs, including attorney’s fees, relating to the pursuit and maintenance of Licensed
Patents, whether incurred prior to or after the effective date of this Agreement. Fees
and costs incurred by an billed to University of Maine prior to the effective date of this
Agreement will be payable by Licensee to University of Maine in said proportion within
five (5) business days after the execution of this Agreement by Licensee. In addition,
Licensee shall be liable to University of Maine for any fees and costs relating to the
pursuit and maintenance of Licensed Patents incurred by University of Maine after the
effective date of this Agreement in said proportion. Fees and costs incurred after the
effective date of this Agreement shall be paid by Licensee to University of Maine within
thirty (30) days after Licensee’s receipt of invoice from University of Maine. Payments
pursuant to this Section are not creditable against royalties.
6. Commercial Milestones
(a) Licensee shall use diligent efforts to effect introduction of Licensed Products into
the commercial market as soon as practicable, consistent with sound and reasonable
business practice and judgment.
(b) Prior to signing this Agreement, Licensee has provided to University of Maine a
written development and commercialization plan under which Licensee intends to bring
the Licensed Products into commercial use. Such plan includes that by the date of
______________ Licensee will have _______________________________
(c) No later than sixty (60) days after June 30 of each calendar year Licensee shall
provide University of Maine with a written annual progress report describing progress on
applicable research and development, regulatory approvals, manufacturing, marketing,
and sales, during the most recent twelve (12) month period ending June 30 and plans
for the forthcoming year. If progress differs from that anticipated in either Sections 6(a)
or 6(b), Licensee shall explain the reasons for the difference and propose alternate
plans for approval by the University of Maine. Licensee shall also provide any
reasonable additional data required by University of Maine to evaluate Licensee’s
(a) The University of Maine shall have the right to terminate this Agreement, upon
written notice, if:
(i) Licensee defaults in the performance of any of the obligations herein contained
and such default has not been cured within thirty (30) days after receiving written notice
thereof from University of Maine; or
(ii) Licensee ceases to carry out its business, becomes bankrupt or insolvent,
applies for or consents to the appointment of a trustee, receiver, or liquidator of its
assets or seeks relief under any law for the aid of debtors; or
(iii) Licensee directly or indirectly challenges or causes to be challenged the validity
or enforceability of Licensed Patents, the value of proprietary information provided to
Licensee by University of Maine, or University of Maine’s ownership of Licensed Patents
or proprietary information incorporated therein anywhere in the world; or
(iv) If, at any time after three years form the effective date of this Agreement
University of Maine determines that Licensee has not made adequate commercial
progress in accordance with Section 6.
(b) Licensee may terminate this Agreement upon six (6) months prior written notice
to the University of Maine and payment of all amounts due University of Maine through
the effective date of termination.
(c) Upon termination of this Agreement, Licensee shall not be released from any
obligation that matured prior to the effective date of such termination. Licensee may,
however, sell all Licensed Products manufactured prior to the date of such termination,
provided that Licensee shall pay to University of Maine the royalties thereon as required
by Section 3 hereof and submit reports and payments as required by Section 4.
(d) The provisions of Section 8 shall survive termination of this Agreement.
8. Indemnification, Insurance, and Liability.
(a) Licensee shall at all times during the term of this Agreement and thereafter
indemnify, defend, and hold University of Maine, its trustees, officers, employees, and
affiliates harmless against all claims and expenses, including legal expenses and
reasonable attorney’s fees, arising out of the death of or injury to any person or persons
or out of any damage to property or the environment, and against any other claim,
proceeding, demand, expense, and liability of any kind whatsoever resulting from the
production, manufacture, sale, use, lease, consumption, or advertisement of Licensed
Products or arising from any obligation of Licensee hereunder.
(b) Upon execution of this Agreement, Licensee shall obtain and carry full force and
effect liability insurance which shall protect Licensee and University of Maine in regard
to events covered by Section 8(a), as provided below:
i) Commercial General Liability, $1,000,000 Combined Single
including but not limited to, Limits for Bodily Injury and
Products, Contractual, Fire, Property Damage
Legal and Personal Injury
ii) Products Liability $5,000,000
The University of Maine System shall be named as an additional insured with respect to
each insurance policy in this Section above.
(c) Upon request, Licensee shall provide University of Maine with Certificates of
insurance evidencing the coverage required above. Licensee shall provide University of
Maine with written notice at least fifteen (15) days prior to cancellation, non-renewal or
material change in such insurance; If Licensee does not obtain replacement insurance
providing comparable coverage with such fifteen (15) day period, University of Maine
shall have the right to terminate this Agreement effective at the end of such fifteen (15)
day period without notice or any additional waiting periods.
(d) UNIVERSITY OF MAINE MAKES NO REPRESENTAITONS AND EXTENDS NO
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT
NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, AND VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR
PENDING. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A
REPRESENTATION OR WARRANTY GIVEN BY UNIVERSITY OF MAINE THAT THE
PRACTICE BY LICENSEE OF THE LICENSE GRANTED HEREUNDER SHALL NOT
INFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY. UNIVERSITY OF MAINE
ADDITIONALLY DISCLAIMS ALL OBLIGATIONS AND LIABILITIES ON THE PART OF
UNIVERSITY OF MAINE FOR DAMAGES, INCLUDING, BUT NOT LIMITED TO
DIRECT, INDIRECT, SPECIAL AND CONSEQUENTIAL DAMAGES, ATTORNEYS’
AND EXPERTS’ FEES, AND COURT COSTS ARISING OUT OF OR IN CONNECTION
WITH THE MANUFACTURE, USE OR SALE OF THE PRODUCTS OR SERVICES
LICENSED UNDER THIS AGREEMENT. LICENSEE ASSUMES ALL
RESPONSIBILITY AND LIABILITY FOR LOSS OR DAMAGE CAUSED BY LICENSED
PRODUCTS WHICH ARE MANUFACTURED, USED, OR SOLD BY LICENSEE.
Any notice or other communication required, or which may be given, pursuant to this
Agreement, shall be in writing. Any such notice, communication, or payment due
pursuant to this Agreement shall be deemed delivered (i) on the day of delivery in
person; (ii) ten (10) days after deposit in first class registered mail, with return receipt
requested; (iii) on the actual delivery date if deposited with an overnight courier; or (iv)
on the date sent by facsimile, if confirmed with a copy sent contemporaneously by first
class, certified, registered or express mail; in each case properly posted and fully
prepaid to the appropriate address set forth below:
Notice to _______________________ Notice to THE UNIVERSITY OF MAINE:
____________________________ The University of Maine
____________________________ Research and Economic Development
____________________________ 5717 Corbett Hall, Room 430
Orono, ME 04469-5717
Attn:___________________________ Attn: Mr. James S. Ward
Fax: ___________________________ Fax: (207) 581-1479
10. Dispute Resolution.
(a) In case of a dispute or difference between the parties arising out of, or in
connection with, this Agreement, the parties shall first endeavor to settle the dispute or
(b) All disputes or differences arising in connection with this Agreement which
cannot be settled as provided in the preceding paragraph shall be the subject of a
settlement meeting between principals of the parties.
(c) All disputes or differences arising in connection with this Agreement which
cannot be settled as provided in the preceding paragraphs shall be subject to non-
binding mediation in Portland, Maine, United States of America. The mediation will be
conducted under the World Intellectual Property Organization (WIPO) Mediation Rules
(effective from October 1, 1994).
11. Development and Promotion of Technology.
(a) Licensee has no obligation to share with the University of Maine or others details
on the performance of any technology pertaining to the Licensed Products or the
proprietary information contained therein, e.g., data and process information.
(b) The University of Maine has no right, without Licensee’s prior written approval, to
release any press release or other publicity or advertising which mentions Licensee by
name or otherwise identifies Licensee, except as required by Maine State law.
(c) Licensee shall not use the name, trademarks, or insignias of the University of
Maine or its Affiliates, or the name of any inventors on Licensed Patents in any
advertising, promotional, or sales literature without prior written approval of the
University of Maine.
(d) This agreement does not grant to the University of Maine any rights to Licensee
developed advances, whether or not patentable.
(e) The University of Maine shall not be liable for any costs incurred by Licensee
during the development of technology relating to the commercialization of Licensed
12. General Provisions.
(a) Neither party may assign or transfer any rights or obligations under this
Agreement to any third party without the prior written consent of the other party, except
to its successor in interest. This Agreement shall inure to the benefit of and be binding
upon the parties and successors in interest.
(b) If at any time either of the parties hereto should waive its right resulting from a
breach of any provision of this Agreement, such waiver is not to be construed as a
continuing waiver of other breaches of the same or other provisions of the Agreement.
None of the terms of this Agreement will be held to have been waived or altered unless
such waiver or alteration is in writing and signed by both parties to this Agreement.
(c) This Agreement shall be governed and construed in accordance with the laws of
the State of Maine (without reference to the choice of law provisions thereof).
(d) The parties acknowledge that this Agreement constitutes the entire
understanding and agreement between the parties with respect to the subject matter
hereof and supersedes all representations, understandings, or agreements, oral or
written, which are not included herein. This Agreement cannot be modified in any
respect except by an instrument in writing, which specifically refers to this Agreement,
expressly states that such instrument modifies the obligations of the parties, and is
executed by duly authorized representatives of the parties.
(e) Licensee acknowledges that the University of Maine is subject to the Maine
Freedom of Access Act, 1 M.R.S.A. § 401 et seq. Notwithstanding any other provision
of this Section or this Agreement, the University of Maine may disclose any information,
including, but not limited to, confidential information disclosed to the University of Maine
by Licensee, as required by law. The University of Maine shall notify Licensee of any
request to disclose confidential information to allow Licensee to contest such disclosure
and/or obtain a protective order or other similar protections.
(h) If a court of competent jurisdiction determines that one or more provisions of this
Agreement are invalid, such decision shall not affect the remainder of the Agreement,
and the remaining provisions shall remain in force in accordance with their terms.
(i) The parties shall not discriminate and shall comply with applicable laws
prohibiting discrimination on the grounds of race, color, religion, sex, sexual orientation,
national origin or citizenship status, age, disability or veteran status. The parties will
provide reasonable accommodations to qualified individuals with disabilities upon
(j) With regard to its own employees, each party will be responsible for compliance
with all applicable laws, rules, and regulations involving, but not limited to, employment,
labor, hours of work, payment of wages, working conditions, occupational safety and
health, workers’ compensation, payment of taxes, such as unemployment, social
security and other payroll taxes, and other applicable contributions from such persons
as required by law.
(k) Licensee understands and acknowledges that the transfer of certain commodities
and technical data is subject to United States laws and regulations controlling the export
of such commodities and technical data, including all Export Administration Regulations
of the United States department of Commerce and all International Traffic in Arms
Regulations of the United States department of State. These laws and regulations
among other things, prohibits or requires a license for the export of certain types of
technical data or materials to certain specified countries. Licensee hereby agrees and
gives written assurance that it will comply with all United States laws and regulations
controlling the export of commodities and technical data, that it will be solely responsible
for any violation of the same by Licensee or its Affiliates, and that it will defend and hold
University of Maine harmless in the event of any legal action of any nature occasioned
by such violation.
(l) Neither party to this Agreement shall be liable for non-performance of any
obligation under this Agreement is such non-performance is caused by a Force
Majeure. “Force Majeure” mans an unforeseeable cause beyond the control of and
without the negligence of the party claiming Force Majeure, including, but not limited to,
fire, flood, other severe weather, acts of God, labor strikes, interruption of utility
services, war, acts of terrorism, and other unforeseeable accidents.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on their behalf by their duly authorized representatives as of the dates
The University of Maine