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EXHIBIT 10.22
Joint Development Agreement
Between
Dow Corning Corporation & Tessera, Inc.
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This Joint Development Agreement ("Agreement") is made and entered into
by and between Tessera, Inc., a corporation organized under the laws of
Delaware, having a principal place of business at 3099 Orchard Drive, San Jose
CA 95134 (hereinafter "Tessera") and Dow Corning Corporation, a corporation
organized under the laws of Michigan having a principal place of business at
2200 West Salzburg Road, Midland, MI 48686 and its wholly owned subsidiaries (as
set forth in Appendix D) and its Affiliates (hereinafter "DCC"), on May 12, 1997
("Effective Date") with reference to the following facts:
WHEREAS, Tessera is in the business of developing and selling certain
components useful in the fabrication of packages for microelectronic devices and
has developed and is continuing to develop a network of Tessera Licensees for
the production of such packages. In the development of such microelectronic
packages, Tessera has also formulated certain materials for the improvement of
such packages; and
WHEREAS, DCC is in the business of developing and selling silicone
materials and associated technology. DCC desires to manufacture materials for
sale and transfer to Tessera and Tessera Licensees;
NOW THEREFORE, the parties hereto agree as follows:
1.0 DEFINITIONS
1.1 "Technology" means know-how relating to design, formulation and use of
silicone materials for the manufacture of microelectronic components,
non-exclusively including Confidential Information, material
specifications, chemical structure, current best method of manufacture
and assembly, component specifications, design methods, process data,
yields, reliability data, and other engineering data and test results.
1.2 "Improvement" means modifications, derivatives, improvements, improved
formulation or enhanced specifications relating to the Specification
Materials and arising out of Technology that may be made by either party
hereto under the provisions and during the term of this Agreement or
extension hereof. Notwithstanding, Licensee Improvements shall be
excluded from the definition of Improvements.
1.3 "Licensee Improvement" means a modification to a Specification Material
as requested by a Tessera Licensee that: (1) modifies such Specification
Material in other than an aesthetic manner; and (2) was not earlier
requested, in writing, by Tessera.
1.4 "Joint Invention" means a patentable invention invented by two (2) or
more inventors prior to the expiration or termination of this Agreement,
at the time of such invention at least one of such inventors being an
employee of Tessera and at least one such inventors being an employee of
DCC. For the purposes of this paragraph, the term "employee" shall mean
those people who have an obligation to assign rights in patentable
inventions to a respective party to this Agreement, including contract
employees.
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TESSERA/DOW CORNING CONFIDENTIAL
1.5 "Confidential Information" includes all information disclosed prior to
the expiration or termination of this Agreement by one party to another
hereunder including, without limitation, ideas, inventions (whether
patentable or not), designs, product concepts, improvements,
manufacturing tolerances, quality standards, business strategies,
forecasts, customer lists, product development plans and marketing plans
provided, however, that such information is designated and marked as
being confidential in nature by the disclosing party at the time of
disclosure to the receiving party and provided further that such
information, if disclosed orally, is reduced to writing, marked as being
confidential, and delivered to the receiving party within thirty (30)
days after such disclosure. Notwithstanding, Confidential Information
shall not include any information which: (1) was lawfully in possession
prior to receipt from disclosing party; (2) is or becomes a matter of
public knowledge through no fault of the receiving party; (3) is lawfully
obtained by the receiving party from a third party under no obligation of
confidentiality; (4) is independently invented by the receiving party
without reference to the disclosed Confidential Information; or (5) the
receiving party receives prior written consent for disclosure of
Confidential Information to a third party.
1.6 "Trade Secret" means Technology or information that is disclosed to the
other party prior to the expiration or termination of this Agreement and
that: (i) derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable by
proper means by persons who can obtain economic value from its disclosure
or use; (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy; and (iii) is disclosed to the
other party and designated, in written form, as a trade secret. The
parties acknowledge that they have been working together since September
1996 on Specification Materials and that certain Specification Materials
that have been developed to date may have used the Trade Secret
information of at least one of the parties. Tessera and DCC agree that
Trade Secrets transferred prior to the Effective Date shall fall within
the terms of this Agreement provided the respective parties identify such
information to the other party within ninety (90) days of the Effective
Date of this Agreement.
1.7 "Sample" means a sufficient quantity (as mutually agreed upon by the
parties hereto) of a Specification Material from DCC to test and evaluate
the material performance.
1.8 "Commercialization Date" means either the date of the first sale to
Tessera or a Tessera Licensee or one (1) year from the date of the first
shipment of a Sample to Tessera or a Licensee, which ever is earlier.
1.8A "TCC(R) Package" means a microelectronic device reading on or equivalent
to one or more claims in a patent or patent application listed in
Appendix F, as amended from time to time by written mutual agreement
signed by both parties hereto.
1.9 "Specification Material" means a silicone material developed pursuant to
this Agreement, for use by Tessera in a Tessera microelectronic package,
which is manufactured by DCC to Tessera specifications or Tessera and DCC
joint specifications and (i) sampled to Tessera within the term of this
Agreement and qualified by Tessera for use in a Tessera TCC(R) Package
within four (4) months of such sampling; or (ii) sampled to Tessera
within the term of this Agreement and substantially similar to a material
qualified by Tessera for use in a Tessera TCC(R) Package.
1.9A "General Specification Materials" means a silicone material which is (i)
a Specification other than a Low Solvent Swell Material; or (ii) a
product listed in Appendix E and substantially
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TESSERA/DOW CORNING CONFIDENTIAL
similar products to such products listed in Appendix E which have been
sampled to Tessera between September 1996 and the Effective Date of this
Agreement.
1.10 "Low Solvent Swell Material" means a Specification Material which either
(1) reads on or is equivalent to one or more of the claims in the patents
resulting from the patent applications listed in Appendix C; or (2) is
based upon Tessera's Trade Secret information related to Tessera's filler
or filler treatment Technology.
1.11 "Tessera Licensee" means those parties Tessera has licensed to its
patents for the manufacture of certain microelectronic packages and
components therefor, namely TCC packages and TCMT materials, as listed in
Appendix A and amended from time to time by Tessera in a written
notification to DCC. Tessera agrees not to delete a Tessera Licensee from
the list in Attachment A unless either: (1) the party in question has
been found, by a court of competent jurisdiction, to be in violation of a
license agreement between Tessera and such party; or (2) such party has
not disputed a termination of their license by Tessera within thirty (30)
days of such termination.
1.12 "Semiconductor Grade Material" means silicone material used in the
packaging of microelectronic devices.
1.13 "Affiliate" means any company (1) of which more than fifty percent (50%)
of the voting stock is owned or controlled by Dow Corning Corporation
(the entity executing this agreement); and (2) agrees to be bound by the
terms of this Agreement in a written memorandum signed by such company
and by Tessera. A company shall be considered an Affiliate only so long
as such majority ownership or control exists.
1.14 "Tessera Trademarks" includes, for the purposes of this Agreement, the
following Tessera marks as further set forth in Appendix B: TESSERA,
COMPLIANT CHIP, TCC, TCMT, (mu)BGA, Micro BGA and the TESSERA BLOCK
LOGO as shown below:
[LOGO]
2.0 SCOPE OF AGREEMENT
2.1 Low Solvent Swell Material Development. Tessera and DCC shall use
reasonable efforts to use their respective Technology to develop Low
Solvent Swell Materials for use by Tessera in Tessera TCC(R) Packages.
Tessera shall use reasonable efforts to provide DCC with sufficient
Tessera Technology to enable DCC to manufacture Samples of Low Solvent
Swell Materials. Tessera shall notify DCC if Tessera uses reasonable
efforts to provide a DCC competitor with sufficient Tessera Technology to
enable such DCC competitor to manufacture Low Solvent Swell Materials.
DCC shall use reasonable efforts to furnish Tessera with such Samples for
test and evaluation within Tessera TCC(R) Packages. DCC shall also use
reasonable efforts to provide Tessera with sufficient DCC Technology to
aid in the test and evaluation of the material performance, as set forth
in Paragraph 2.8. Further, DCC shall use reasonable efforts to modify any
Low Solvent Swell Material or to supplement any material characteristic
data when reasonably requested by Tessera.
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TESSERA/DOW CORNING CONFIDENTIAL
It is understood and agreed that DCC may modify DCC commercial products
for use by Tessera in a Tessera TCC(R) Package. If such modified products
fall within the scope of Low Solvent Swell Materials, such modified
products will be relabeled and such relabeled products will be subject to
the restrictions of Paragraph 2.51. The original DCC commercial products
and any modifications thereto (other than modifications made pursuant to
the immediately preceding paragraph) are excluded from the definition of
Low Solvent Swell Materials.
It is understood and agreed that DCC may utilize current or future DCC
technology or know-how to develop ingredients for silicone materials for
use by Tessera. If such silicone materials fall within the scope of Low
Solvent Swell Materials, such silicone materials will be subject to the
restrictions of Paragraph 2.51. Such ingredients and silicone materials
developed using DCC technology or know-how, other than silicone materials
developed by DCC for use by Tessera in a Tessera TCC(R) Package, are
excluded from the definition of Low Solvent Swell Materials.
2.2 General Specification Material Development. Tessera and DCC shall use
reasonable efforts to use their respective Technology to develop General
Specification Materials for use by Tessera in microelectronic packaging.
Tessera shall use reasonable efforts to provide DCC with sufficient
Tessera Technology to enable DCC to manufacture Samples of such General
Specification Materials. DCC shall use reasonable efforts to furnish
Tessera with such Samples for test and evaluation within Tessera's
microelectronic packages. DCC shall use reasonable efforts to provide
Tessera with sufficient DCC Technology to aid in the test and evaluation
of the material performance, as set forth in Paragraph 2.8. Further, DCC
shall use reasonable efforts to modify any General Specification Material
or to supplement any material characteristic data when reasonably
requested by Tessera.
It is understood and agreed that DCC may modify DCC commercial products
for use by Tessera in a Tessera TCC(R) Package. If such modified products
fall within the scope of General Specification Materials, such modified
products will be relabeled and such relabeled products will be subject to
the restrictions of Paragraph 2.52. The original DCC commercial products
and any modifications thereto (other than modifications made pursuant
to the immediately preceding paragraph) are excluded from the definition
of General Specification Materials.
It is understood and agreed that DCC may utilize current or future DCC
technology or know-how to develop ingredients for silicone materials for
use by Tessera. If such silicone materials fall within the scope of
General Specification Materials, such silicone materials will be subject
to the restrictions of Paragraph 2.52. Such ingredients and silicone
materials developed using DCC technology or know-how, other than silicone
materials developed by DCC for use by Tessera in a Tessera TCC(R)
Package, are excluded from the definition of General Specification
Materials.
2.3 Samples to Tessera Licensees. DCC shall not provide Specification
Materials or related information to Tessera Licensees unless a written,
mutual agreement has been signed by both Tessera and DCC allowing DCC to
sample or sell a particular Specification Material to a Tessera Licensee,
provided that prior to any disclosure of Confidential Information DCC and
the particular Tessera Licensee shall execute a non-disclosure agreement
having no less protective terms for Confidential Information than the
terms set forth in this Agreement.
2.4 Tessera Licensee Modifications. In the event that DCC makes a
modification to a Specification Material as a result of a request from
a Tessera Licensee and such modification falls under the
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definition of a Licensee Improvement, DCC shall use reasonable efforts to
obtain permission to send such improved Specification Material to Tessera
for evaluation.
2.5 Lead-time
2.51 Low Solvent Swell Material.
(A) Except as provided in Paragraph 2.11 or Paragraph 2.51(B),
for a period of [*] ([*]) [*] from the Effective Date of
this Agreement, DCC will not ship a Low Solvent Swell
Material to any party other than Tessera or a Tessera
Licensee.
(B) For a period of [*] ([*]) [*] from the first sale
(within the borders of any country that is a member of the
European Economic Area) of each type of Low Solvent Swell
Material (i.e. (i) encapsulants; (ii) compliant interposer
pad material; and (iii) die attach/adhesives), DCC will not
ship any such particular type of Low Solvent Swell Material
to any other party, other than Tessera or a Tessera
Licensee, who is doing microelectronic packaging or related
business within the borders of any country that is a member
of the European Economic Area. After each such: [*] ([*])
[*] period from such first sale of a particular type of Low
Solvent Swell Material, DCC may ship such particular Low
Solvent Swell Materials to any party doing business within
the borders of any country that is a member of the European
Economic Area.
2.52 General Specification Material. Except with Tessera's permission,
DCC will not supply General Specification Material to any other
party other than Tessera or a Tessera Licensee for a period of
[*] ([*]) [*] from the Commercialization Date of each Sample.
2.6 Exclusive Promotion. For a period of [*] ([*]) [*] from the Effective
Date of this Agreement, Tessera will exclusively promote the
Specification Materials in publications, licensee training and device
qualifications so long as competitive materials are not substantially
better for the particular packaging application, e.g. encapsulants,
compliant interposer pads, die attach/adhesives, etc.
2.7 Confidential. Except as otherwise limited by paragraphs 1.5 and 5.1, all
physical Samples of Specification Materials shall be treated as
Confidential Information by Tessera and DCC until both Tessera and DCC
agree to make such Samples non-confidential.
2.8 Test and Evaluation of Specification Materials. Tessera shall have full
discretion as to the nature and extent of the testing, evaluation and
performance of Specification Materials. However, DCC shall be apprised of
and shall have an opportunity to comment on the tests being performed to
establish the performance of the materials within Tessera microelectronic
packages.
2.9 DCC Rights Outside of Semiconductor Grade Material Applications: Outside
the area of microelectronic packaging applications, DCC may manufacture,
use and sell Specification Materials without Tessera's permission so long
as DCC does not knowingly subvert the general intent of this Agreement by
such manufacture, use or sale. The terms in Paragraph 2.7 do not apply to
the sampling of Specification Materials outside the area of
microelectronic packaging applications, as set forth in this Paragraph
2.9.
2.10 Pricing. DCC shall use reasonable efforts to fulfill purchase orders for
Specification Materials from Tessera, the pricing to Tessera for such
Specification Materials shall be no greater than the
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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lowest price in effect at the time of delivery of such Specification
Material of any Tessera Licensee for the same Specification Material
container size. Tessera's purchases shall be subject to DCC's normal
availability and allocation procedures. This Pricing paragraph shall
remain effective and binding on DCC for: (1) General Specification
Materials: [*] ([*]) [*] from the Effective Date; (2) Low Solvent Swell
Materials: [*] ([*]) [*] from the Effective Date.
2.11 Marketing in Japan. Once a written mutual agreement has been signed by
both parties pursuant to Paragraph 2.3, DCC may utilize Dow Corning Toray
Silicone Company Ltd. (hereinafter "DCTS") to sample or sell such
Specification Materials to Tessera Licensees within Japan so long as DCC
does not knowingly subvert the general intent of this Agreement by such
utilization of DCTS.
3.0 INTELLECTUAL PROPERTY
3.1 Trademarks.
3.11 License to Tessera Trademarks. Subject to the terms and conditions
set forth within this Agreement and DCC's agreement to the
provisions hereof including all attachments hereto, Tessera hereby
grants DCC a non-exclusive, non-transferable, non-sublicensable,
non-royalty bearing license to use the Tessera Trademarks on
printed materials for the marketing and promotion of Specification
Materials to Tessera Licensees. This license of the Tessera
Trademarks shall continue for the life of any Specification
Material with which the Tessera Trademarks are used to market or
promote such Specification Material at the termination of this
Agreement. Tessera further warrants that DCC shall be the only
silicone supplier authorized by Tessera to use such Tessera
Trademarks for a period of two (2) years from the first
Commercialization Date of each of the following types of
Specification Materials: (1) encapsulants; (2) compliant
interposer pad material; and (3) die attach/adhesives. DCC agrees
that it will do nothing inconsistent with Tessera's ownership of
the Tessera Trademarks and that all use of the Tessera Trademarks
by DCC shall inure to the benefit of and be on behalf of Tessera.
DCC further agrees that nothing in this Agreement shall give DCC
any right, title or interest in the Tessera Trademarks other than
the right to use the Tessera Trademarks in accordance with this
Agreement for the marketing and promotion of Specification
Materials to Tessera Licensees.
3.12 Consent. DCC agrees that prior to using any Tessera Trademark in
the marketing or promotion of a Specification Material, DCC shall
seek Tessera's consent for each use of a Tessera Trademark.
Tessera shall have thirty (30) days within which to object to each
such proposed use of a Tessera Trademark. Any modification to a
marketing or promotional item subsequent to Tessera's consent
shall require a new consent from Tessera unless it follows a form
of trademark use which may be set forth and/or modified by Tessera
from time to time.
3.13 Form of Use. All of the Tessera Trademarks, save for "TCMT" and
"Micro BGA", are federally registered by the U.S. Trademark
Office. As such, DCC shall use the "(R)" symbol adjacent the
Tessera Trademarks in all titles and headings and other prominent
uses of the Tessera Trademarks and shall also use its best efforts
to use the "(R)" symbol on at least the first and most obvious use
of each Tessera Trademark within any printed material.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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"TCMT" and "Micro BGA" are common law trademarks of Tessera. As
such, DCC shall use the "TM" symbol adjacent these marks in all
titles and headings and other prominent uses of the TCMT or Micro
BGA marks and shall also use its best efforts to use the "symbol
on at least the first and most obvious use of each such mark
within the text of any printed material.
Each such marketing or promotional item shall further contain the
following text: "_____ (List of the Tessera Trademarks used in the
marketing item) are registered trademarks of Tessera, Inc." or a
suitable variant thereof to account for a singular use of a
Tessera Trademark. Further, DCC shall use its best efforts to use
the Tessera Trademarks as modifiers in conjunction with generic
nouns, e.g. the (mu)BGA(R) package.
3.2 Patents.
3.21 Tessera Technology. Tessera hereby grants DCC a non-exclusive,
non-transferable, non-sublicenseable, perpetual, royalty-free
right to make, use and sell products embodying Tessera's Low
Solvent Swell Material and associated Technology directed to such
Low Solvent Swell Materials solely for the purpose of
manufacturing Semiconductor Grade Materials for sale to Tessera
and Tessera's Licensees for the packaging of microelectronic
devices, as limited by the terms and provisions set forth in this
Agreement.
Further, Tessera hereby grants DCC a non-exclusive,
non-transferable, non-sublicenseable, perpetual, royalty-free
right to make, use and sell products embodying Tessera's Low
Solvent Swell Material Technology and patents directed to such Low
Solvent Swell Material Technology generally outside of the area of
Semiconductor Grade Materials, as limited by the terms and
provisions set forth in this Agreement.
3.22 Apportionment of Patent Rights in Joint Inventions. DCC shall
assign all Device Patents to Tessera: A Device Patent shall be
deemed to be any U.S. patent, U.S. patent application, foreign
patent or foreign patent application on a Joint Invention with
claims drawn solely to Device Claims. A Device Claim shall be
deemed to be any claim drawn to a microelectronic packaging
device, a microelectronic component, a method of producing such
devices or a method of producing such components. DCC shall assign
all Use Patents in the area of microelectronic packaging to
Tessera: A Use Patent in the area of microelectronic packaging
shall be deemed to be any U.S. patent, U.S. patent application,
foreign patent or foreign patent application on a Joint Invention
with claims drawn solely to Use Claims. A Use Claim shall be
deemed to be any claim drawn to a use of a Semiconductor Grade
Material within: a microelectronic packaging device, a
microelectronic component, a method of producing such devices or a
method of producing such components. Tessera shall assign all
Composition of Matter Patents to DCC. A Composition of Matter
Patent shall be deemed to be any U.S. patent, U.S. patent
application, foreign patent or foreign patent application on a
Joint Invention with claims drawn solely to Composition of Matter
Claims. A Composition of Matter Claim shall be deemed to be any
claim drawn to a silicone product, intermediate or formulation: a
method of preparing a silicone product, intermediate or
formulation: or a method of delivering a silicone product,
intermediate or formulation.
When a Semiconductor Grade Material of a Use Claim of any Use
Patent reads on any claim of any Composition of Matter Patent,
then such Use Patent shall be deemed a
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"Corresponding Use Patent" to such Composition of Matter Patent.
Notwithstanding the immediately preceding paragraph regarding the
apportionment of rights in joint patents, if (i) a Composition of Matter
Patent is not obtainable in a particular country, despite reasonable
efforts by DCC to obtain such patent in such country, and (ii) a
Corresponding Use Patent is obtainable in such country, then: (a) DCC
shall not be under an obligation to assign its rights in such
Corresponding Use Patent in such country to Tessera; and (b) neither
party shall license any third party to practice the invention of such
Corresponding Use Patent without the other party's consent. However,
neither party shall unreasonably withhold such consent. A refusal by
either party to grant such consent is deemed reasonable if the
prospective licensee refuses to pay a reasonable royalty to such party
for the right to practice the invention of such Corresponding Use Patent.
The ownership rights of all other patents and patent applications on
Joint Inventions, including those patents and patent applications having
both Device Claims and Composition of Matter Claims, shall be determined
according to law of the United States.
Tessera shall have a fully paid, non-royalty bearing, non-transferable,
perpetual, non-sublicenseable right to use any silicone product,
intermediate, formulation and any method of delivery of any silicone
product, intermediate or formulation of any Joint Invention for the
production or packaging of any microelectronic device.
Nothing in this Agreement shall be construed as to curtail DCC's rights,
to make, use, sell, license, and sub-license the technology of any
Composition of Matter Patent in any and all areas outside of the area of
microelectronic packaging.
Tessera and DCC shall reasonably consult with one another with respect to
drafting, timing for applying for, and prosecuting patent applications
and enforcing the resulting patents on Joint Inventions. The parties
hereto shall execute such documents and render such assistance as may be
appropriate to enable a party or both parties hereto to apply for,
obtain, maintain and enforce patents on Joint Inventions.
DCC shall be solely responsible for fees associated with the filing,
prosecution, maintenance and enforcement of all Composition of Matter
Patents. Tessera shall be solely responsible for the fees associated with
the filing, prosecution, maintenance and enforcement of all Device
Patents. Tessera and DCC shall share equally in the costs associated with
the filing, prosecution, maintenance and enforcement of all jointly owned
patents on Joint Inventions. Either party may terminate responsibility
for future financial obligations relating to jointly owned patents and
jointly owned patent applications on Joint Inventions by relinquishing
ownership rights in such Joint Inventions to the other party. If either
party so relinquishes such ownership rights, the relinquishing party
shall have a fully paid, non-royalty bearing, non-transferable,
perpetual, non-sublicenseable right to make, use and sell the invention
of the relinquished patent.
Such apportioned Joint Invention rights shall not include any right of
license by implication with respect to any portion of the other party's
Technology or unrelated patents.
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4.0 TECHNICAL EXCHANGE MEETINGS AND REPORTS
4.1 DCC agrees to provide written reports and technical updates on DCC's
Improvements on at least a quarter-year basis to Tessera during the term
of this Agreement at mutually agreed scheduled technical exchange
meetings.
4.2 Tessera agrees to provide written reports and technical updates on
Tessera's Improvements on at least a quarter-year basis to DCC during the
term of this Agreement at mutually agreed scheduled technical exchange
meetings.
5.0 MANAGEMENT OF CONFIDENTIAL INFORMATION
5.1 Confidentiality Period. The respective duties to hold the Confidential
Information in confidence shall expire five (5) years from the date of
disclosure and shall not be used except in accordance with this
Agreement.
5.2 Standard of Care. Tessera and DCC shall hold in confidence and protect
the other party's disclosed Confidential Information using a degree of
care at least equal to that exercised with their own valuable
Confidential Information (but never less than a reasonable degree of
care) and shall not disclose such Confidential Information to any third
party provided that the receiving party may disclose Confidential
Information or information derived therefrom to those of its employees or
contract employees who: (1) have a need to know such information to
achieve the purposes of this Agreement; (2) have been notified that such
information is confidential; and (3) have executed a written agreement
requiring employees and contract employees to safeguard confidential
information generally. Both Tessera and DCC agree that there is a duty to
promptly advise the disclosing party of any unauthorized disclosure or
use of Confidential Information. In the event either party considers
certain information, data or samples provided by the other party to be
excluded from the above obligation of confidence and intends to make
disclosure of such information to a third party, the receiving party
shall give the disclosing party at least thirty (30) days prior written
notice of the information to be disclosed and the basis upon which the
information is believed to be excluded from the obligation of confidence.
5.3 Documentation Manager. Both DCC and Tessera shall designate a
Documentation Manager to perform the task of logging and tracking the
confidential documents transferred between the companies. If possible,
each written transfer of confidential information will be copied by the
parties to their respective Document Managers. Tessera's Documentation
Manager is Christopher M. Pickett, Director of Intellectual Property and
may be contacted at the Tessera fax and street address. DCC's
Documentation Manager is Marlene Gladstone, Technical Service Specialist
and may be contacted at Dow Corning Corporation, 910 Auburn Court,
Fremont, CA 94538, facsimile number (510) 490-0650.
5.4 Employee Agreements. Both parties hereto represent that all of their
employees, including contract employees, shall be under an obligation to
assign ideas and inventions (by agreement or by operation of law) to
their respective employer prior to having access to Confidential
Information received hereunder.
5.5 Wrongful Disclosure of Confidential Information. If the owner of the
Confidential Information believes that the other party to the Agreement
has made a wrongful disclosure of Confidential Information, the owner
shall send a written notification (by facsimile or one day courier to the
other party detailing the wrongful disclosure. The other party will have
thirty (30) days from the
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transmission or mailing date of such notification to either provide an
explanation why no wrongful disclosure has occurred or to mitigate the
effects of the wrongful disclosure. It is understood and agreed by the
parties that a wrongful disclosure of Confidential Information is
considered a terminable breach of this Agreement at the option of the
owner of the Confidential Information which was wrongfully disclosed.
6.0 MANAGEMENT OF TRADE SECRETS
6.1 Confidentiality Period of Trade Secrets. The respective duties to hold
the Trade Secrets in confidence shall expire Thirty (30) years from the
date of disclosure and shall not be used except in accordance with this
Agreement.
6.2 Standard of Care. Tessera and DCC shall hold in confidence and protect
the other party's disclosed Trade Secrets using a degree of care at least
equal to that exercised with their own valuable Trade Secrets (but never
less than a reasonable degree of care) and shall not disclose such Trade
Secrets to any third party provided that the receiving party may disclose
Trade Secrets or information derived therefrom to those of its employees
who: (1) have a need to know such information to achieve the purposes of
this Agreement; (2) have been notified that such information is
confidential; and (3) have executed a written agreement requiring
employees to safeguard confidential information generally. Both Tessera
and DCC agree that there is a duty to promptly advise the disclosing
party of any unauthorized disclosure or use of Trade Secrets. In the
event either party considers certain information, data or samples
provided by the other party to be excluded from the above obligation of
confidence and intends to make disclosure of such information to a third
party, the receiving party shall give the disclosing party at least
thirty (30) days prior written notice of the information to be disclosed
and the basis upon which the information is believed to be excluded from
the obligation of confidence.
6.3 Documentation Manager. As stated in Paragraph 5.3, both DCC and Tessera
shall designate a Documentation Manager to perform the task of logging
and tracking the Trade Secret information and documents transferred
between the companies. As of the Effective Date, each written transfer of
Trade Secret information will be transferred first between the parties
respective Documentation Managers. The receiving Documentation Manager
will then control the dissemination of the disclosing party's Trade
Secrets.
6.4 Wrongful Disclosure of Trade Secrets. If the owner of the Trade Secret
believes that the other party to the Agreement has made a wrongful
disclosure of Trade Secret, the owner shall send a written notification
(by facsimile or one day courier) to the other party detailing the
wrongful disclosure. The other party will have thirty (30) days from the
transmission or mailing date of such notification to either provide an
explanation why no wrongful disclosure has occurred or to mitigate the
effects of the wrongful disclosure. It is understood and agreed by the
parties that a wrongful disclosure of Trade Secret is considered a
terminable breach of this Agreement at the option of the owner of the
Trade Secret which was wrongfully disclosed.
7.0 TERM & TERMINATION
7.1 Term. This Agreement shall bind the parties beginning on the Effective
Date and, unless earlier terminated as provided for elsewhere in this
Agreement, shall remain in full force until it automatically expires on
the fourth (4th) anniversary of the Effective Date, provided that Tessera
and DCC may extend the Agreement by mutual written consent, dated and
signed by both parties hereto.
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TESSERA/DOW CORNING CONFIDENTIAL
7.2 Written Termination. After the first anniversary of the Effective Date,
either party to this Agreement may terminate the Agreement at will by
giving the other party sixty (60) days written notice. Upon such
termination, the cooperative development efforts will cease; however,
Tessera and DCC will continue to be bound by the terms of this Agreement,
as set forth in Paragraph 7.5.
7.3 Termination for Breach. Either party may terminate this Agreement by
giving the other party sixty (60) days prior written notice upon the
breach of any material provision of this Agreement by such other party.
Such termination shall become effective if the breach is not cured within
sixty (60) days after written notice thereof to the party responsible for
such breach.
7.4 Return of Confidential Information and Components. Upon termination of
this Agreement, both parties will use reasonable efforts to return or
destroy all tangible Confidential Information, materials and components
and partial components made under this Agreement, unless same have been
paid for by Tessera. Confidential Information contained on data storage
media shall be deleted therefrom. However, one copy of the Confidential
Information may be retained in a restricted file for archival purposes,
which file shall be kept in the custody of a single named employee, whose
identity will be specified by notice to the other party hereto.
7.5 Survival Clause. Unless otherwise provided elsewhere in this Agreement,
the following provisions shall survive the termination or expiration of
this Agreement:
7.51 Paragraphs 2.3, 2.4, 2.5 et seq., 2.6, 2.7, 2.9, and 2.10.
7.52 Paragraph 3.0 et seq. unless such termination is a result of
Paragraph 7.3, in which case the rights and licenses granted in
Paragraphs 3.1 et seq. and 3.21 shall be terminated.
7.53 Paragraph 5.0 et seq., Management of Confidential Information.
7.54 Paragraph 6.0 et seq., Management of Trade Secrets.
7.55 Paragraph 8.0, No Warranties.
7.56 Paragraph 9.0, Limitation on Damages.
7.57 Paragraph 10.0 et seq., Miscellaneous.
8.0 NO WARRANTIES
Tessera and DCC acknowledge and agree that the rights and licenses,
Technology and Specification Materials granted or otherwise provided
hereunder are provided to the other party "AS IS", with no warranty of
any kind. TESSERA and DCC MAKE NO WARRANTY, EXPRESS, IMPLIED, STATUTORY
OR OTHERWISE, CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE,
QUALITY, USEFULNESS OR NONINFRINGEMENT. Tessera and DCC make no
warranty that the Technology or Specification Materials will be
sufficient or yield any particular result.
9.0 LIMITATION ON DAMAGES:
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TESSERA/DOW CORNING CONFIDENTIAL
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY OTHER
PERSON OR ENTITY (UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR
OTHER THEORY) FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL OR LIQUIDATED
DAMAGES ARISING OUT OF OR RELATED TO THE SUBJECT MATTER OF THIS
AGREEMENT, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES OR LOSSES.
10.0 MISCELLANEOUS: The following additional terms shall apply to this
Agreement:
10.1 Governing Law & Dispute Resolution. The parties further agree this
Agreement shall be governed by and construed under the laws of the State
of California, irrespective of choice of law provisions. Both parties
shall use their best efforts to resolve by mutual agreement any disputes,
controversies, claims or difference which may arise from, under, out of
or in connection with this Agreement. Disputes arising directly under the
terms of this Agreement or the grounds for termination thereof shall be
resolved as follows: (1) First, within forty-five (45) days of the first
notification of such a dispute, the management of both parties shall meet
to attempt to resolve such disputes; (2) If the disputes cannot be
resolved by the management within the forty-five (45) days set forth
above, either party may then make a written demand for binding
arbitration of the dispute. Subject to the terms of this arbitration
provision, the rules of the arbitration shall be agreed upon by the
Parties prior to the arbitration and based upon the nature of the
disagreement. To the extent that the Parties cannot agree on the rules of
the arbitration, then the Commercial Arbitration Rules of the American
Arbitration Association ("AAA") in effect on the Effective Date of this
Agreement, and except as the applicable rules are modified by this
Agreement, shall apply. The proceedings shall be held in San Jose,
California, U.S.A. under the auspices of the AAA. As a minimum set of
rules in the arbitration the Parties agree as follows:
(1) The arbitration shall be held by single arbitrator mutually
acceptable to both Parties. If the Parties cannot agree on a
single arbitrator within thirty (30) days from the date written
demand is made, each Party shall identify one independent
individual who shall meet to appoint a single arbitrator. If an
arbitrator still cannot be agreed upon within an additional thirty
(30) days, one shall be appointed by the AAA. The arbitrator shall
be at least generally knowledgeable regarding the use of materials
in the packaging of microelectronics;
(2) Neither Party shall sue the other where the basis of the suit is
within the scope of this section except for enforcement of the
arbitrator's decision in the event that the other Party is not
performing in accordance with the arbitrator's decision;
(3) Any arbitration proceeding hereunder shall be conducted on a
confidential basis;
(4) The arbitrator shall apply the substantive laws of the State of
California in interpreting and resolving disputes;
(5) The Parties shall agree upon what, if any, discovery shall be
permitted. If the Parties cannot agree on the form of discovery
within thirty (30) days after the appointment of the arbitrator,
then the arbitrator shall set forth the limits of discovery. In no
event, however, shall any such discovery take more than three
months from the date the limits of discovery have been defined;
(6) The duty of the parties to arbitrate any dispute within the scope
of this Arbitration provision shall survive the expiration or
termination of this Agreement. The Parties specifically agree that
any action must be brought, if at all, within two (2) years from
the accrual of the cause of action;
(7) The discretion of the arbitrator to fashion remedies hereunder
shall be no broader than the legal and equitable remedies
available to a court. This Arbitration provision shall
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TESSERA/DOW CORNING CONFIDENTIAL
govern if any conflict arises between this Arbitration provision
and any other remedy terms in this Agreement;
(8) Disputes as to the validity or scope of any patent shall not be
subject to arbitration unless the party owning such patent
consents to the arbitration. If such a dispute cannot be settled
by agreement of the parties and the party owning the patent does
not consent to arbitration, then such dispute shall be settled by
a court of competent jurisdiction in the nation which issued the
patent in question; and
(9) The decision of the arbitrator shall be final and binding upon the
parties hereto and the expense of the arbitration (including
attorneys' fees) shall be paid as the arbitrator determines.
10.2 No Waiver. No failure or delay on either party in the exercise of any
right or privilege hereunder shall operate as waiver thereof, nor shall
any single or partial exercise of such right or privilege preclude other
or further exercise thereof or any other right or privilege.
10.3 Export Regulations. Both parties shall comply with the laws and
regulations of the government of the United States, and of any other
country as applicable relating to the export of commodities and technical
data, any direct product of such data, or any product received from the
other party, to any proscribed country listed in such laws and
regulations unless properly authorized by the appropriate government, and
not knowingly export, or allow the export or re-export of any Technology
or Confidential Information, or any system, component, item, material or
package made under or using the foregoing, in violation of any
restrictions, laws or regulations, or without all required licenses and
authorizations, to Afghanistan, the People's Republic of China or any
Group Q, S, W, Y or Z country specified in the then current Supplement
No. 1 to Section 770 of the US Export Administration Regulations (or any
successor supplement or regulations).
10.4 Modifications. All additions, modifications or waivers to this Agreement
must be made in a writing signed by both parties and specifically
referring to this Agreement.
10.5 Notices. All notices, required documentation, and correspondence in
connection herewith shall be in the English language, shall be provided
in writing and shall be given by facsimile transmission or by registered
or certified letter to Tessera and DCC at the addresses and facsimile
numbers set forth below:
Tessera: Tessera, Inc.
3099 Orchard Dr.
San Jose, California 95134
Facsimile No.: 408-894-0768
Attn.: Chief Executive Officer
DCC: Dow Corning Corporation
2200 West Salzburg Road
Auburn, MI 48611
Facsimile: (517) 496-6354
Attn.: General Patent Counsel
Either Party may change its address and/or facsimile number by giving the
other party notice of such new address and/or facsimile number. All
notices if given or made by registered or certified letter shall be
deemed to have been received on the earlier of the date actually received
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<PAGE> 14
TESSERA/DOW CORNING CONFIDENTIAL
and the date three days after the same was posted and if given or made by
facsimile transmission shall be deemed to have been received at the time
of dispatch, unless such date of deemed receipt is not a business day, in
which case the date of deemed receipt shall be the next succeeding
business day.
10.6 Invalidity. If any provision of this Agreement is declared invalid or
unenforceable by a court having competent jurisdiction, it is mutually
agreed that this Agreement shall endure except for the part declared
invalid or unenforceable by order of such court. The parties shall
consult and use their best efforts to agree upon a valid and enforceable
provision which shall be a reasonable substitute for such invalid or
unenforceable provision in light of the intent of this Agreement.
10.7 Assignment. Neither party may assign this Agreement or any of its rights
or obligations hereunder without the prior written consent of the other
party, except when a party hereto either re-incorporates its business or
sells substantially all of its assets to a single third party entity (not
including a sale of assets pursuant to a bankruptcy proceeding).
10.8 Section Headings. The headings and captions used herein shall not be used
to interpret or construe this Agreement.
10.9 Agreement Confidentiality. Tessera and Licensee agree that the terms of
this Agreement are confidential (but not the existence of the Agreement)
and shall not be disclosed to third parties without the prior consent of
the other party.
10.10 Entire Agreement. This Agreement embodies the entire understanding
between the parties relating to the subject matter hereof, whether
written or oral, and supersedes all prior representations, warranties or
agreements between the parties not contained in this Agreement. Any
amendment or modification of any provision of this Agreement must be in
writing, dated and signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
Tessera, Inc
By: /s/ JOHN W. SMITH By: /s/ LEON D. CROSSMAN
---------------------------- ---------------------------------
Print Name: John W. Smith Print Name: Dr. Leon D. Crossman
Title: President & CEO Title: Vice President & Executive
Director, Science & Technology
Date: 5/10/97 Date: 5/12/97
-------------------------- -------------------------------
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<PAGE> 15
[TESSERA LETTERHEAD]
August 11, 1997
VIA FACSIMILE
Ms. Paula Lagatutta
Patent Attorney
Dow Corning Corporation
RE: Extension to Paragraph 1.6 of the Joint Development Agreement
Dear Paula:
As discussed on the telephone on August 8, 1997, Tessera is requesting a
retroactive extension to the obligation to identify Tessera's Trade Secret
information transferred prior to the Effective Date of the Joint Development
Agreement between Dow Corning Corporation and Tessera, Inc. ("Agreement"). The
exact wording of the pertinent portion of the Agreement reads:
1.6 "Trade Secret" means Technology or information that is disclosed to
the other party prior to the expiration or termination of this Agreement
and that: (i) derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable by proper
means by persons who can obtain economic value from its disclosure or use;
(ii) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy; and (iii) is disclosed to the other party and
designated, in written form, as a trade secret. The parties acknowledge
that they have been working together since September 1996 on Specification
Materials and that certain Specification Materials that have been developed
to date may have used the Trade Secret information of at least one of the
parties. Tessera and DCC agree that Trade Secrets transferred prior to the
Effective Date shall fall within the terms of this Agreement provided the
respective parties identify such information to the other party within
ninety (90) days of the Effective Date of this Agreement.
Tessera is requesting an extension to August 22, 1997 to further allow us to
collect the trade secret information provided to Dow Corning prior to the
Effective Date. If Dow Corning agrees to this extension, please have an
authorized representative sign and date this letter below.
Best regards,
/s/ CHRIS PICKETT
------------------------
Chris Pickett
Director of Intellectual Property
Tessera, Inc.
Dow Corning Corporation
Signature: /s/ LEON D. CROSSMAN
------------------------------
Print Name: LEON D. CROSSMAN
------------------------------
Date: August 13, 1997
-----------------------------------
<PAGE> 16
[DOW CORNING LETTERHEAD]
LEGAL/PATENT DEPARTMENT
June 5, 1997
Chris Pickett
Tessera, Inc.
3099 Orchard Drive
San Jose, CA 95134
Dear Mr. Pickett:
Dow Corning Toray Silicone Company, Ltd. (hereinafter "DCTS"), pursuant to
paragraph 1.13 of the joint development agreement between Dow Corning
Corporation and Tessera, Inc., having an effective date of May 12, 1997,
amended effective June 3, 1997, and a copy of which is enclosed (hereinafter
"Agreement"), hereby agrees to be bound by the terms of this Agreement.
Please have an authorized officer of Tessera execute all three copies of
this letter and return two copies to:
Paula Lagattuta, Esq.
Dow Corning Corporation
Patent Department - Mail CO1232
Midland, Michigan 48686-0994
If there are any questions regarding this agreement, please contact Paula
Lagattuta at (517) 496-5712.
ACCEPTED: Very truly yours,
TESSERA, INC. DOW CORNING CORPORATION
By: /s/ JOHN W. SMITH By: /s/ LEON D. CROSSMAN
------------------------------- ---------------------------
LEON D. CROSSMAN
Typed Name: JOHN W. SMITH V.P. & Executive Director
------------------------------ Science & Technology
Title: President
-----------------------------------
Date: 10-29-97 Date: June 16, 1997
------------------------------------ -----------------------
DOW CORNING TORAY SILICONE COMPANY, LTD
By: /s/ MASAYOSHI SHIMOI
--------------------------------------
Typed Name: Masayoshi Shimoi
------------------------------
Managing Director, General Manager
Title: Mkt'g & Sales Div.
-----------------------------------
Date: September 11, 1997 ACCNO. 20328
------------------------------------
