10. PATENT PROTECTION
10.1 LICENSEE shall be responsible for all future costs of filing, prosecution and maintenance of all United States patent applications contained in the LICENSED PATENTS after the EFFECTIVE DATE. Any and all such United States patent applications, and resulting issued patents, shall remain the property of YALE. If YALE enters into any license agreements with third parties to any of the LICENSED PATENTS, then the patent expenses in this Article 10 shall be shared equally amongst LICENSEE and such third party licensees according to the formula I/N, where N = the total number of licensees (including LICENSEE) to the applicable LICENSED PATENTS. Any third parties which have already entered into a license with YALE for the LICENSED PATENTS or any portion of them are listed in Appendix B. YALE shall update Appendix B within 60 days of a license of the LICENSED PATENTS.
10.2 After the EFFECTIVE DATE, LICENSEE shall be responsible for all future costs of filing, prosecution and maintenance of all foreign patent applications, and patents contained in the LICENSED PATENTS in the countries outside the United States in the LICENSED TERRITORY selected by YALE and agreed to by LICENSEE or requested by LICENSEE. All such applications or patents shall remain the property of YALE. If YALE enters into any license agreements with third parties to any of the LICENSED PATENTS, then the patent expenses in this Article 10 shall be shared equally amongst LICENSEE and such third party licensees according to the formula I/N, where N = the total number of licensees (including LICENSEE) to the applicable LICENSED PATENTS.
LICENSEE acknowledges that YALE shall not file any such applications in low or lower-middle income countries, as designated by the World Bank (www.worldbank.org).
If LICENSEE does not agree to pay the expenses of filing, prosecuting or maintaining a LICENSED PATENT in any country outside the United States, or fails to pay the expenses of filing, prosecuting or maintaining a LICENSED PATENT in the United States, then LICENSEE’s rights under this Agreement shall terminate automatically with respect to that LICENSED PATENT in that country.
10.3 The costs mentioned in Articles 10.1 and 10.2 shall include, but are not limited to, any taxes, annuities, working fees, maintenance fees, renewal and extension charges. Payment of such costs shall be made, at YALE’s option, either directly to patent counsel or by reimbursement to YALE. In either case, LICENSEE shall make payment directly to the appropriate party within thirty (30) days of receiving its invoice. All patent applications under the LICENSED PATENTS shall be prepared, prosecuted, filed and maintained by independent patent counsel chosen by YALE and reasonably acceptable to LICENSEE. Said independent patent counsel shall be ultimately responsible to YALE. YALE shall instruct patent counsel to keep both YALE and LICENSEE fully informed of the progress of all patent applications and patents, and to give both YALE and LICENSEE reasonable opportunity to comment on the type and scope of useful claims and the nature of supporting disclosures. YALE shall give due consideration in good faith to all LICENSEE requests or instructions. YALE will not finally abandon any patent application for which LICENSEE is bearing expenses without LICENSEE’s consent. YALE shall have no liability to LICENSEE for damages, whether direct, indirect or incidental, consequential or otherwise, allegedly arising from its good faith decisions, actions and omissions in connection with such prosecution.
10.4 If commercially feasible, LICENSEE shall mark, and shall require AFFILIATES and SUBLICENSEES to mark, all LICENSED PRODUCTS with the numbers of all patents included in LICENSED PATENTS that cover the LICENSED PRODUCTS to the extent required by applicable law. Without limiting the foregoing, all LICENSED PRODUCTS shall be marked in such a manner as to conform with the patent marking notices required by the law of any country where such LICENSED PRODUCTS are made, sold, used or shipped, including, but not limited to, the applicable patent laws of that country.
11. INFRINGEMENT AND LITIGATION
11.1 Each party shall promptly notify the other in writing in the event that it obtains knowledge of infringing activity by third parties, or is sued or threatened with an infringement suit, in any country in the LICENSED TERRITORY as a result of activities that concern the LICENSED PATENTS and shall supply the other party with documentation of the infringing activities that it possesses.
11.2 During the TERM of this Agreement:
(a) LICENSEE shall have the first right, but not the obligation, to defend the LICENSED PATENTS against infringement, validity or enforceability challenges or interference in the FIELD and in the LICENSED TERRITORY by third parties. This right and obligation includes bringing any legal action for infringement and defending any counter claim of invalidity or action of a third party for declaratory judgment for non-infringement, invalidity, unenforceability or non-interference. If, in the reasonable opinion of LICENSEE’s counsel, YALE is required to be a named party to any such suit for standing purposes, LICENSEE may join YALE as a party; provided , however , that (i) YALE shall not be the first named party in any such action, (ii) the pleadings and any public statements about the action shall state that the action is being pursued by LICENSEE and that LICENSEE has joined YALE as a party; and (iii) LICENSEE shall keep YALE reasonably apprised of all developments in any such action. LICENSEE may settle such suits solely in its own name and solely at its own expense and through counsel of its own selection; provided , however , that no settlement shall be entered without YALE’s prior written consent, such consent not to be unreasonably withheld or delayed. LICENSEE shall bear the expense of such legal actions. Except as described above or for providing reasonable assistance, at the request and expense of LICENSEE (which shall include being joined as a party as set forth above), YALE shall have no obligation regarding the legal actions described in Article 11.2 unless required to participate by law. However, YALE shall have the right to participate in any such action through its own counsel and at its own expense. Any recovery arising from an enforcement of the LICENSED PATENTS shall first be applied to LICENSEE’s out of pocket expenses and second shall be applied to YALE’s out of pocket expenses, including legal fees. YALE shall recover [***] of any excess recovery over those expenses arising from the enforcement of the LICENSED PATENTS. If intellectual property other than the LICENSED PATENTS is part of the enforcement action and the recovery, then YALE shall recover [***] of the recovery fairly allocated to the LICENSED PATENTS, as determined by an independent third party appraiser.
(b) In the event LICENSEE fails to initiate and pursue or participate in the actions described in Article(a) within [***] days of (a) notification of infringement from YALE or (b) the date LICENSEE otherwise first becomes aware of an infringement, whichever is earlier, and provided such infringement results in a material reduction in royalties that would otherwise be payable to YALE, or in the opinion of YALE’s patent counsel would result in a potential loss of material rights under the LICENSED PATENTS, YALE shall have the right to initiate such legal action at its own expense . In such case, LICENSEE shall provide reasonable assistance to YALE if requested to do so. YALE may settle such actions solely through its own counsel. Any recovery shall be retained by YALE. YALE may convert the grant of the LICENSE herein to a non-exclusive license in the country where such legal action is taken upon written notice to LICENSEE.
(c) Notwithstanding the foregoing, neither LICENSEE nor YALE shall take any action to enforce the LICENSED PATENTS, in low or lower-middle income countries, where such action is intended to prevent the sale of LICENSED PRODUCTS in any such countries. However, LICENSEE and/or YALE may take such action in any such country, provided that such action is intended to prevent the manufacturing, use or sale of LICENSED PRODUCTS for export to countries that are not low-income or lower-middle countries.