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5/50 re: a-b-c re: Does BAE own...

about 10 years ago

in response to jrubinst's message

c'mon it's Article 4.

continuing with the roof analogy...

you pay me 5% when you use my shingles.

it'll probably be something you add on to the selling price, rather than reducing your profit.

when I use your hammer, I pay you 5% (again, probably *not* out of my net profit).

if you convince ("sub-license") your brother ("another military contractor") to also use my shingles in his roofing business, and you charge him an extra $1 to do it, I get fifty cents of that.

same thing goes if I get my cousin to use your hammer, even though he might want to use the hammer he already has (his own fab).

if he uses screws, glue, or a spot-welder (somebody else's fab than yours), then sorry, the 50% sharing doesn't apply.

but of course, the 5% still does.

this doesn't bother me, since the per-job size of your roofing work (eg. missles) are incredibly large compared to mine (about a million bucks apiece, and they aren't re-usable).

in summary: 5% top-line royalty each way for direct sales; and we each share half together if there's any inbreeding.

make sense?

cheers,

ARTICLE IV. RUNNING ROYALTIES AND OTHER CONSIDERATION.

4.1. Running Royalty Rates to ODIS. In consideration of the rights granted to BAE SYSTEMS hereinabove in Section 3.1, BAE SYSTEMS, its Affiliates and its sublicensees, if any, shall pay to ODIS running royalties on the Net Selling Price of Licensed Products or Licensed Processes sold, transferred, or Otherwise Disposed of by BAE SYSTEMS, its affiliates, agents or sublicensees in any country of the world that Licensed Products or Licensed Processes embody, employ or are manufactured by use of any invention that forms part of ODIS Background Technology or ODIS Development Technology during the period commencing on the date of first sale, transfer or Other Disposition and ending 15 years thereafter at the royalty rate of 5.0% commencing on the Effective Date of this Agreement. No royalties shall be required to be paid hereunder with respect to sales or transfers by BAE Systems or its Affiliates to ODIS or its Affiliates, or for any subsequent resales by ODIS or its Affiliates of Licensed Products or Licensed Processes sold or transferred to any of them by BAE Systems or its Affiliates. It is understood and agreed by the parties that after such 15-year period from the effective date has expired, all further sales or other transfers of Licensed Products and Licensed Processes will be on a royalty-free basis.

4.2 Running Royalty Rates to BAE SYSTEMS. In consideration of the rights granted to ODIS hereinabove in Section 3.2, ODIS, its Affiliates or its sublicensees, if any, shall pay to BAE SYSTEMS running royalties on the Net Selling Price of

Licensed Products or Licensed Processes sold, transferred or Otherwise Disposed of by ODIS, its affiliates, agents or sublicensees in any country of the world that Licensed Products or Licensed Processes embody, employ or are manufactured by use of any invention that forms part of BAE SYSTEMS Background Technology or BAE Systems Development Technology during the period commencing on the date of first sale, transfer or Other Disposition and ending 15 years thereafter at the royalty rate of 5.0% commencing on the Effective Date of this Agreement. No royalties shall be required to be paid hereunder with respect to sales or transfers by ODIS or its Affiliates to BAE Systems or its Affiliates, or for any subsequent resales by BAE Systems or its Affiliates of Licensed Products or Licensed Processes sold or transferred to them by ODIS or its Affiliates. It is understood and agreed by the parties that after such 15 year period from the effective date has expired, all further sales or other transfers of the licensed products will be on a royalty-free basis for both parties.

4.3 Sublicense Fees. BAE Systems shall pay ODIS an aggregate of fifty percent (50%) of all payments received (“Sublicense Income”) by BAE Systems or any Affiliate receives from any Sublicensee in consideration of the Sublicense of rights granted BAE Systems and its Affiliates pursuant to Section 3.1, including without limitation license fees, milestone payments, license maintenance fees and other payments, but excluding running royalties on sales or other transfers. ODIS shall pay BAE Systems an aggregate of fifty percent (50%) of Sublicense Income received by ODIS or any Affiliate in consideration of the sublicense of rights granted to ODIS and its Affiliates pursuant to Section 3.2. All payments to be made by one party to

the other in respect of Sublicense Income received by either party shall be made within thirty (30) days of receipt of such Sublicense Income.

4.4 No Multiple Royalties. If the manufacture, use, lease or sale of any Licensed Product or the performance of any Licensed Process is covered by more than one of the Patent Rights, multiple royalties shall not be due.