2. How Commercial Firms Protect Intellectual Property In Transactions Daniel J. Mazella Celera Genomics Group, An Applera Corporation Business

3. Table of Contents 1  1. Patent Rights, Know How, Confidential Information  2. Grant Clauses  3. Frequently Occurring Issues  4. Valuation of IP

4. 2  1. Sample Definitions and Clauses  “Patent Rights” shall mean patents of Company X, including inventor’s certificates and applications throughout the world as well as substitutions, extensions, reissues, renewals, divisions, continuations, continuations in part (only to the extent related to this Agreement), which Company X now owns or controls or hereafter owns or controls.  “Know How” shall mean unpatented information not in the public domain, including, without limitation, trade secrets, Confidential Information, inventions (whether patentable or not), discoveries, technology, data, formulae, algorithms, specifications or knowledge relating to the practice of any Company X Patent Rights.

5. 3  “Confidential Information” shall mean  (i) all ideas and information of any kind, including, without limitation, technology, know-how, technical data, products, software, works of authorship, assets, operations, contractual relationships, business plans or any other aspect of either party’s business, in written other tangible or electronic form provided by one party (“disclosing party”) to the other (“receiving party”) as “confidential,” “proprietary” or with a legend of similar import;  (ii) software in any form (including, without limitation, related documentation), whether or not labeled in accordance with the preceding;  (iii) [non-patented] Intellectual Property obtained from the Disclosing Party;  (iv) information orally disclosed and identified as confidential at the time of such disclosure which is summarized in writing within thirty (30) days of such disclosure.  [Definition of information that does not constitute Confidential Information normally follows]  “Intellectual Property Rights” shall mean Patent Rights, Know-How, and Confidential Information, as well as rights in copyright, trademark or tradenames.

6. 4  2. Grant Clauses  Patent Rights/Know-How. X grants to Y the non-exclusive, non-transferable, worldwide, royalty free, fully paid up right and license (without right to sublicense) to make, have made, use, sell, offer to sell, import, export, and improve the [subject] Intellectual Property in the Field for the Term solely for the purposes explicitly stated in this Agreement and for no other use whatsoever.  Copyright. X grants to Y a non-exclusive, worldwide personal license to reproduce, [modify, i.e., to create derivative works?], distribute, display and transmit the Intellectual Property via the Internet, subject to the restrictions herein. [Note: Compare this grant to a grant in a standard software license]  Patent Rights/Know-How/Copyright. X grants to Y the exclusive, worldwide, sublicensable right to Use the Intellectual Property in the Field for the Term solely for the purposes explicitly stated in the Agreement. The right to “Use” the Intellectual Property includes the right to make, have made, have used, copy, reproduce, perform, display, sell or otherwise distribute the Intellectual Property.

7. 5  3. Frequently Occurring Issues  a. Issues relating to jointly developed IP  Available for internal use outside of collaboration?  Background IP protected? (no transfer by virtue of undertaking collaboration)  File patent or hold as trade secret?  Can co-developer share joint IP with co-developer’s other collaborators?  Rights to improvements/ability to further develop the joint IP?  Rights/responsibilities for commercializing joint IP (which party commercializes and in what way?)  Freedom to Operate (Use of co-developer’s patent rights without fear of infringement litigation)  Contribution of resources ($, people, equity)

8. 6  b. Issues relating to In-licensed IP  Do you have all of the rights you need?  Further development -- allowed?  Freedom to Operate (Has Licensor given a representation regarding Third Party IP infringement?)  Can you share the IP with your collaborators?

9. 7  4. Valuation of IP  Upfront payment versus royalty  Problem: determining market value of something not yet invented