Cax, This starts on Page 76 of the S-1. Cooters
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Under the agreement, we will receive a credit equal to the royalty we would
otherwise owe to QUALCOMM each year in exchange for our granting QUALCOMM
acquisition and licensing rights with respect to our new patents, patent
applications and invention disclosures each year during the same eight-year
period. The agreement will require us to meet with QUALCOMM at least once each
calendar quarter during the eight-year period and provide QUALCOMM the right to
select a portion
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of our new patents, patent applications and invention disclosures to be assigned
to QUALCOMM. However, we have the right to reject selections pursuant to a
prescribed procedure, provided that QUALCOMM is entitled to make an alternate
selection. This rejection right will generally be implemented so that QUALCOMM
will receive its first choice and at least every other choice in the order of
its preference each quarter. Any issued patent or published patent application
designated by QUALCOMM will be assigned subject to any pre-existing license
agreement we have entered into with respect to that patent or published patent
application. We, however, may not license unpublished patent applications or
invention disclosures to third parties, in order to ensure that any unpublished
patent applications or invention disclosures selected by QUALCOMM will not be
licensed by us to third parties at the time of their assignment to QUALCOMM. In
addition, we will be required to grant to QUALCOMM a royalty-free, worldwide,
nonexclusive license to use any of our patents, patent applications or invention
disclosures that we do not assign to QUALCOMM pursuant to this selection
procedure, including all of the patents and patent applications we create or
obtain during the eight-year period, subject to QUALCOMM's agreement not to
compete with us for a period of three years following the distribution. QUALCOMM
may sublicense our patents, patent applications and invention disclosures
essential to any wireless telecommunications standard to third parties for use
in wireless applications so long as the third parties agree not to assert their
patent rights against us with respect to our manufacture, use or sale of
products for use in compliance with any wireless telecommunications standard.
With respect to any proposed QUALCOMM sublicensee that does not agree that it
will not assert its patents against us, we will be required to license such
essential patents to that sublicensee on a fair and reasonable basis, free from
unfair discrimination.
In the event of a change of control of QUALCOMM, we may terminate QUALCOMM's
right to designate our patents, patent applications and invention disclosures
for assignment to QUALCOMM, QUALCOMM's right to grant further sublicenses to our
patents, patent applications and invention disclosures and QUALCOMM's right to
license the patents, patent applications and invention disclosures that we do
not assign to QUALCOMM. If we elect to terminate QUALCOMM's acquisition or
sublicense rights, we would no longer receive a royalty credit from QUALCOMM and
we would be required to begin paying QUALCOMM a royalty in exchange for its
agreement not to assert its patent rights against us. If we elect to terminate
QUALCOMM's right to license further patents from us, our right to license
further patents from QUALCOMM will also terminate.
In the event of a change of control of our company, QUALCOMM's right to
designate some of our patents, patent applications and invention disclosures for
assignment to it and its right to license from us and to sublicense to third
parties our patents, patent applications and invention disclosures essential to
any wireless telecommunications standard will automatically terminate unless the
company acquiring us agrees to be bound by the assignment and license provisions
described above with respect to its intellectual property as well as ours. If
the acquiring company does not agree to be bound by either the assignment
provision or the license and sublicense of essential patents provision, we would
no longer receive a royalty credit from QUALCOMM, and we would be required to
begin paying QUALCOMM a royalty in exchange for its agreement not to assert its
patent rights against us. If the acquiring party elects to be bound by the
patent assignment provision, however, QUALCOMM would still have the right to
(1) terminate the royalty credits and cause the acquiring company to commence
paying royalties or (2) require us to re-assign to it, subject to existing
licensing arrangements, the intellectual property QUALCOMM assigned to us prior
to the completion of this offering, along with a portion of the patents, patent
applications and invention disclosures developed by us prior to the change in
control. We would not, in the second instance, have the right to refuse to
assign to QUALCOMM any of these patents, patent applications and invention
disclosures designated by QUALCOMM. QUALCOMM's distribution of our common stock
to its stockholders will not constitute a change of control of our company for
purposes of the master intellectual property and license agreement.
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The master intellectual property assignment and license agreement will also
allocate rights relating to copyrights, trademarks, service marks and trade
names. QUALCOMM will assign to us its rights in listed copyrights, trademarks
and applications that pertain primarily to the business transferred to us. The
copyrights assigned to us will include all designs for integrated circuits and
related software and firmware. QUALCOMM, however, will retain a royalty-free,
nonexclusive license to use some of these designs, software and firmware in its
ongoing business, subject to QUALCOMM's agreement not to compete with us for a
period of three years following the distribution. QUALCOMM also will license to
us the nonexclusive, royalty-free right to use the QUALCOMM name on integrated
circuit products, modules and associated software for a period of four years
after the distribution, subject to terms and conditions customary for trademark
licenses. |
