Opinion ID: 207814
Heading Depth: 2
Heading Rank: 1

Heading: The Relevant Terms of the Agreement

Text: In Article 2 of the Agreement, each party granted two licenses (to products and to processes, respectively) to the other party and its subsidiaries. [1] This case involves the scope of Imation's licenses, each of which states in relevant part that Philips agrees to grant and does hereby grant to [Imation] and its SUBSIDIARIES a personal, nonexclusive, indivisible, nontransferable, irrevocable, worldwide, royalty-free license under PHILIPS LICENSED PATENTS. Each license grant thus relies on several defined terms relevant to this appeal. Article 1 of the Agreement sets forth these definitions. In particular, Article 1, Section 12 of the Agreement articulates a three-part definition of the scope of Licensed Patents, which includes patents that: (1) are owned or controlled by the granting party or any of its SUBSIDIARIES such that such party or its SUBSIDIARIES now has or hereafter obtains the right to grant the licenses within the scope of this Agreement; (2) relate to optical or magneto-optical information storage and retrieval technology; and (3) have a filing date, or claim priority from a date, or are or were entitled to claim priority from a date, on or before the expiration date of this Agreement as set forth in Article 4, herein. Immediately following Section 12, Section 13 defines Subsidiary as any ... form of business organization as to which the party now or hereafter has more than a fifty percent (50%) ownership interest. Article 3 provides that the term of the licenses granted under Article 2 shall commence on the effective date of this Agreement and shall continue as to each Licensed Patent for its life. According to Imation, at least one of the patents licensed under Article 2 will not expire until 2020. Article 4 of the Agreement, which contains the expiration date referenced in Section 12(3), states that [t]he term of this Agreement shall expire on March 1, 2000, except that any patent license which has been granted under ARTICLE 2 shall continue thereafter for the term provided in ARTICLE 3. Since the expiration of the Agreement on March 1, 2000 (the expiration date), Imation has formed or acquired at least two additional subsidiaries. In 2003, Imation formed a joint venture with Moser Baer under the name Global Data Media FZ-LLC (GDM). Imation owns 51% of the GDM joint venture and Moser Baer owns 49%. In addition to GDM, Imation acquired Memorex International, Inc. (Memorex) in 2006, and now possesses at least a 50% ownership interest in Memorex. Both GDM and Memorex are third-party defendants to the underlying case, but neither is a party to this appeal.