Goto Section: 68.502 | 68.506 | Table of Contents

FCC 68.504
Revised as of
Goto Year:1996 | 1998
Sec. 68.504  Universal patent license agreement.

                   UNIVERSAL PATENT LICENSE AGREEMENT

    Effective as of -------- WESTERN ELECTRIC COMPANY, INCORPORATED, a 
New York corporation (``WESTERN''), having an office at 222 Broadway, 
New York, New York 10038, and ---------------- (``the CORPORATION''), 
having an office at ---------------- agree as follows:

                         Article I--Definitions

    1.01  Terms in this agreement (other than technical terms, names of 
parties, companies and Article headings) which are in capital letters 
shall have the meanings specified in the General Definitions Appendix, 
and technical terms in this agreement which are in capital letters shall 
have the meanings specified in the Technical Definitions Appendix.

              Article II--Grants of Licenses and Immunities

    2.01  WESTERN grants to the CORPORATION under WESTERN'S PATENTS 
nonexclusive licenses for products of the following kinds:
 _______________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    2.02  All licenses herein granted shall commence on the effective 
date hereof and, except as provided in Article V and notwithstanding the 
expiration of the FIVE YEAR PERIOD, shall continue for the entire terms 
that the patents under which they are granted are in force or for that 
part of such terms for which WESTERN has the right to grant such 
licenses.

[[Page 381]]

    2.03  WESTERN grants under all patents issued in countries other 
than the United States and owned or controlled by AMERICAN TELEPHONE AND 
TELEGRAPH COMPANY, a New York corporation (``AT&T''), WESTERN or their 
SUBSIDARIES, royalty-free immunity relating to the sale, lease or use 
in, or the importation into, such other countries of LICENSED PRODUCTS, 
and maintenance parts therefor, manufactured under the licenses granted 
under WESTERN'S PATENTS: provided, however, that nothing in this section 
2.03 shall relieve the CORPORATION of its obligation to pay any royalty 
which may be predicated upon such manufacture of any such LICENSED 
PRODUCT or part, whether or not the first sale, lease or use thereof 
occurs outside of the United States.
    2.04  The licenses granted for LICENSED PRODUCTS are licenses to 
make, have made, use, lease and sell such LICENSED PRODUCTS. Such 
licenses include the rights to maintain LICENSED PRODUCTS, to practice 
methods and processes involved in the use of LICENSED PRODUCTS and to 
make and have made, to use and have used, and to maintain machines, 
tools, materials and other instrumentalities, and to use and have used 
methods and processes, insofar as such machines, tools, materials, other 
instrumentalities, methods and processes are involved in or incidental 
to the development, manufacture, installation, testing or repair of 
LICENSED PRODUCTS.
    2.05  The grant of each license to the CORPORATION includes the 
right to grant sublicenses within the scope of such license to its 
SUBSIDIARIES. Such right may be exercised at any time prior to 
termination or cancellation of the corresponding license under the 
provisions of Article V. Any such sublicenses granted to any present 
SUBSIDIARY may be made effective, retroactively, as of the effective 
date hereof, and any such sublicenses granted to any future SUBSIDIARY 
may be made effective, retroactively, as of the date such company became 
a SUBSIDIARY.
    2.06  It is recognized that WESTERN or any of its ASSOCIATED 
COMPANIES may have entered into or may hereafter enter into a contract 
with a national government to do development work financed by such 
government and may be required under such contract (either 
unconditionally or by reason of any action or inaction thereunder) to 
assign to such government its rights to grant, or may now or hereafter 
be restrained by such government from granting, licenses or immunities 
to others than its ASSOCIATED COMPANIES under patents for inventions 
arising out of such work or covered by such contract. The resulting 
inability of WESTERN to grant the licenses or immunities purported to be 
granted by it under patents for such inventions shall not be considered 
to be a breach of this agreement, if:

(i) Such contract is for the benefit of such government's military or 
national defense establishment or the Energy Research and Development 
Administration of the United States Government or the National 
Aeronautics and Space Administration of the United States Government, or
(ii) In cases other than (i), such contract is with the United States 
Government or any agency of and within such Government, and any such 
requirement or restraint is pursuant to a statute or officially 
promulgated regulation of such Government or agency applicable to such 
contract;

provided, however, that

(iii) WESTERN (or, if an ASSOCIATED COMPANY thereof has entered into 
such contract, such ASSOCIATED COMPANY) shall exert its best efforts to 
enable WESTERN to grant the licenses or immunities herein purported to 
be granted by it under such patents; and
(iv) Within ninety (90) days after the filing of any application for any 
such patent, WESTERN shall give written notice to the other party 
identifying such application by country, number and date of filing.

    For the purposes of this section 2.06, AT&T, WESTERN and their 
ASSOCIATED COMPANIES shall all be deemed to be ASSOCIATED COMPANIES of 
one another.

                          Article III--Royalty

    3.01  The CORPORATION shall pay to WESTERN royalty, at the 
applicable rate hereinafter specified, on each LICENSED PRODUCT, and 
maintenance part therefor, which is a ROYALTY-BEARING PRODUCT, and

(i) Which is sold, leased or put into use by the CORPORATION or any of 
its SUBSIDIARIES while any license acquired hereunder by the CORPORATION 
with respect to such ROYALTY-BEARING PRODUCT shall remain in force, or
(ii) Which is made by or for the CORPORATION or any of its SUBSIDIARIES 
while any such license shall remain in force and is thereafter sold, 
leased or put into use by the CORPORATION or any of its SUBSIDIARIES,

whether or not such SUBSIDIARIES are sublicensed pursuant to section 
2.05, such royalty rate to be applied, except as provided in section 
3.05, to the NET SELLING PRICE of such ROYALTY-BEARING PRODUCT if sold 
for a separate consideration payable wholly in money and in all other 
cases to the FAIR MARKET VALUE thereof. The royalty rates applicable to 
LICENSED PRODUCTS of the kinds specified in section 2.01, and 
maintenance parts therefor, are as follows:

[[Page 382]]

   (iii)________________________________________________________________
 _______________________________________________________________________
________________________________________________________________________
    3.02  If a LICENSED PRODUCT is a ROYALTY-BEARING PRODUCT solely on 
account of one or a limited number of WESTERN'S PATENTS, the CORPORATION 
may elect to reduce the amount of royalty otherwise payable hereunder on 
said LICENSED PRODUCT by a royalty reduction percentage, and as of an 
effective date, established by WESTERN. Upon written request from the 
CORPORATION identifying the LICENSED PRODUCT and each relevant patent, 
WESTERN will inform the CORPORATION of the royalty reduction percentage 
applicable in respect of said LICENSED PRODUCT and patent or patents and 
the effective date thereof.
    3.03  A LICENSED PRODUCT, or maintenance part therefor, which is 
made and sold by the CORPORATION or any of its SUBSIDIARIES and which is 
a ROYALTY-BEARING PRODUCT hereunder on account of one or more of 
WESTERN'S PATENTS, may be treated by the CORPORATION as not licensed and 
not subject to royalty hereunder if all of the following conditions are 
met:

(i) The purchaser is licensed under the same patent or patents, pursuant 
to another agreement, to have said LICENSED PRODUCT or part made;
(ii) The purchaser expressly advises the CORPORATION or its SUBSIDIARY, 
whichever effects the making and sale, in writing at or prior to (but in 
no event later than) the time of such sale that, in purchasing said 
LICENSED PRODUCT or part, it is exercising its own license or licenses 
under said patent or patents to have said LICENSED PRODUCT or part made; 
and
(iii) The CORPORATION retains such written advice and makes it available 
to WESTERN at the latter's request.

    3.04  Only one royalty shall be payable hereunder in respect of any 
ROYALTY-BEARING PRODUCT. Royalty shall accrue hereunder on any LICENSED 
PRODUCT, or maintenance part therefor, upon its first becoming a 
ROYALTY-BEARING PRODUCT, and the royalty thereon shall become payable in 
accordance with the provisions of this Article III upon the first sale, 
lease or putting into use thereof.
    3.05  If any sale of a ROYALTY-BEARING PRODUCT shall be made by the 
CORPORATION on a SUBSIDIARY thereof to:

(i) Any company of which the CORPORATION is a SUBSIDIARY at the time of 
such sale, or
(ii) The CORPORATION or a SUBSIDIARY thereof or any other SUBSIDIARY of 
a company of which the CORPORATION is a SUBSIDIARY at the time of such 
sale.

royalty payable hereunder shall be computed on the FAIR MARKET VALUE of 
such ROYALTY-BEARING PRODUCT,

                    Article IV--Reports and Payments

    4.01  The CORPORATION shall keep full, clear and accurate records 
with respect to ROYALTY-BEARING PRODUCTS. WESTERN shall have the right 
through its accredited auditing representatives to make an examination 
and audit, during normal business hours, not more frequently than 
annually, of all such records and such other records and accounts as may 
under recognized accounting practices contain information bearing upon 
the amount of royalty payable to it under this agreement. Prompt 
adjustment shall be made by the proper party to compensate for any 
errors or omissions disclosed by such examination or audit. Neither such 
right to examine and audit nor the right to receive such adjustment 
shall be affected by any statement to the contrary, appearing on checks 
or otherwise, unless such statement appears in a letter, signed by the 
party having such right and delivered to the other party, expressly 
waiving such right.\1\

    \1\ If licensee insists on a non-Western auditor, third line, 
insert, after ``representatives'', -or, at the election of the 
CORPORATION, through a firm of certified public accountants proposed by 
WESTERN and accepted by the CORPORATION-.
---------------------------------------------------------------------------

    4.02  (a) Within sixty (60) days after the end of each semiannual 
period ending on June 30th or December 31st, commencing with the 
semiannial period during which this agreement first becomes effective, 
the CORPORATION shall furnish to WESTERN a statement, in form acceptable 
to WESTERN, certified by a responsible official of the CORPORATION:

(i) Showing all ROYALTY-BEARING PRODUCTS, by kinds of LICENSED PRODUCTS, 
which were sold, leased or put into use during such semiannual period, 
the NET SELLING PRICES of such ROYALTY-BEARING PRODUCTS or (where 
royalty is based on FAIR MARKET VALUES) the FAIR MARKET VALUES thereof 
and the amount of royalty payable thereon (or if no such ROYALTY-BEARING 
PRODUCT has been so sold, leased or put into use, showing that fact);
(ii) Identifying, if royalty is reduced under provisions of section 
3.02, each LICENSED PRODUCT by its type and the patent or patents 
involved in such royalty reduction;

[[Page 383]]

(iii) Showing, by purchasers and kinds of LICENSED PRODUCTS, the 
monetary totals of the sales, to each purchaser exercising its own ``to 
have made'' license or licenses, of LICENSED PRODUCTS and maintenance 
parts in transactions of the character described in section 3.03; and
(iv) Identifying all transactions of the character described in section 
3.05.

    (b) Within such sixty (60) days the CORPORATION shall, irrespective 
of its own business and accounting methods, pay to WESTERN the royalties 
payable for such semiannual period.
    (c) Notwithstanding the provisions of section 6.03(a)(v), the 
CORPORATION shall furnish whatever additional information WESTERN may 
reasonably prescribe from time to time to enable WESTERN to ascertain 
which LICENSED PRODUCTS (and maintenance parts therefor) sold, leased or 
put into use by the CORPORATION or any of its SUBSIDIARIES are subject 
to the payment of royalty to WESTERN, and the amount of royalty payable 
thereon.
    4.03  Royalty payments provided for in this agreement shall, when 
overdue, bear interest at an annual rate of one percent (1%) over the 
prime rate or successive prime rates in effect in New York City during 
delinquency.
    4.04  Payment to WESTERN shall be made in United States dollars to 
WESTERN'S Treasury Organization at 222 Broadway, New York, New York 
10038, or at such changed address as WESTERN shall have specified by 
written notice. If any royalty for any semiannual period referred to in 
section 4.02 is computed in other currency, conversion to United States 
dollars shall be at the prevailing rate for bank cable transfers on New 
York City as quoted for the last day of such semiannual period by 
leading banks dealing in the New York City foreign exchange market.

           Article V--Termination, Cancellation and Surrender

    5.01  (a) If the CORPORATION shall fail to fulfill one or more of 
its obligations under ARTICLES III or IV, WESTERN may, upon election and 
in addition to any other remedies that it may have, at any time 
terminate all licenses and rights granted to the CORPORATION hereunder, 
by not less than six (6) months' written notice to the CORPORATION 
specifying any such breach, unless within the period of such notice all 
breaches specified therein shall have been remedied.
    (b) Termination by WESTERN of licenses and rights granted to the 
CORPORATION shall terminate the obligations of the CORPORATION under the 
provisions of Articles III and IV relating to such terminated licenses 
and rights, except such obligations as to ROYALTY-BEARING PRODUCTS made, 
sold, leased or put into use prior to such termination.
    5.02  By written notice to WESTERN, the CORPORATION may cancel the 
licenses for any specified products granted hereunder to it under 
WESTERN'S PATENTS. Such cancellation shall be effective as of the date 
of giving said notice but shall not relieve the CORPORATION of its 
obligation to pay accrued royalties with respect to such specified 
products.
    5.03  By written notice to WESTERN, specifying any of WESTERN'S 
PATENTS by number and date of issuance, the CORPORATION may surrender 
and terminate all licenses and rights granted to it under such specified 
patent or patents or under any specified invention or inventions 
thereof. Such surrender and termination shall be effective as of a date 
specified in said notice which shall not be more than six (6) months 
prior to the date of giving said notice. As of said effective date, such 
specified patent or patents or invention or inventions shall cease to be 
among, or among the inventions of, WESTERN'S PATENTS for the purposes of 
this agreement without affecting obligations in respect of royalties 
accrued prior to said effective date.
    5.04  (a) Every sublicense granted by the CORPORATION shall 
terminate with termination or cancellation of its corresponding license.
    (b) Any sublicenses granted shall terminate if and when the grantee 
thereof ceases to be a SUBSIDIARY of the CORPORATION. Each LICENSED 
PRODUCT and each maintenance part, made by or for a SUBSIDIARY of the 
CORPORATION, and on which royalty has accrued but which remains not 
sold, leased or put into use at the time such SUBSIDIARY ceases to be a 
SUBSIDIARY of the CORPORATION, shall be deemed to have been put into use 
by such SUBSIDIARY immediately prior to such time at the place said 
LICENSED PRODUCT or part is then located.
    5.05  Licenses, immunities and rights with respect to each LICENSED 
PRODUCT, and each maintenance part, made, sold, leased or put into use 
prior to any termination or cancellation under the provisions of this 
Article V shall survive such termination or cancellation.

                  Article VI--Miscellaneous Provisions

    6.01  (a) WESTERN shall, upon written request from the CORPORATION 
sufficiently identifying any patent by country, number and date of 
issuance, inform the CORPORATION as to the extent to which any such 
patent is subject to the licenses, immunities and rights granted to the 
CORPORATION.
    (b) If such licenses, immunities or rights under any such patent are 
restricted in scope, copies of all pertinent provisions of

[[Page 384]]

any contract (other than provisions of a contract with a government to 
the extent that disclosure thereof is prohibited under the government's 
laws or regulations) creating such restrictions shall, upon request, be 
furnished to the CORPORATION.
    6.02  Upon written request from the CORPORATION, WESTERN shall 
inform the CORPORATION which of WESTERN'S PATENTS cover inventions under 
which the United States Government holds a royalty-free license.
    6.03  (a) Nothing contained in this agreement shall be construed as:

(i) Requiring the filing of any patent application, the securing of any 
patent or the maintaining of any patent in force; or
(ii) A warranty or representation by WESTERN as to the validity or scope 
of any patent; or
(iii) A warranty or representation that any manufacture, sale, lease, 
use or importation will be free from infringement of patents other than 
those under which and to the extent to which licenses or immunities are 
in force hereunder; or
(iv) An agreement to bring or prosecute actions or suits against third 
parties for infringement; or
(v) An obligation to furnish any manufacturing or technical information 
or assistance; or
(vi) Conferring any right to use, in advertising, publicity or 
otherwise, any name, trade name or trademark, or any contraction, 
abbreviation or simulation thereof; or
(vii) Conferring by implication, estoppel or otherwise upon the 
CORPORATION any license or other right under any patent, except the 
licenses and rights expressly granted to the CORPORATION; or
(viii) An obligation upon WESTERN to make any determination as to the 
applicability of any patent to any product of the CORPORATION or any of 
its SUBSIDIARIES; or
(ix) A release for any infringement prior to the effective date hereof.

    (b) Neither WESTERN nor AT&T makes any representations, extends any 
warranties of any kind or assumes any responsibility whatever with 
respect to the manufacture, sale, lease, use or importation of any 
LICENSED PRODUCT, or part therefor, by the CORPORATION, any of its 
SUBSIDIARIES, or any direct or indirect supplier or vendee or other 
transferee of any such company, other than the licenses, immunities and 
rights expressly herein granted.
    6.04  Neither this agreement nor any licenses or rights hereunder, 
in whole or in part, shall been assignable or otherwise transferable.
    6.05  Any notice, request or information shall be deemed to be 
sufficiently given when sent by registered mail addressed to the 
addressee at its office above specified (and when addressed to WESTERN 
to the attention of its Patent Licensing Organization) and any royalty 
statement shall be deemed to be sufficiently furnished when sent by 
registered mail addressed to WESTERN'S Treasury Organization at 222 
Broadway, New York, New York 10038, or at such changed address as the 
addressee shall have specified by written notice.
    6.06  This agreement sets forth the entire agreement and 
understanding between the parties as to the subject matter hereof and 
merges all prior discussions between them, and neither of the parties 
shall be bound by any conditions, definitions, warranties, 
understandings or representations with respect to such subject matter 
other than as expressly provided herein, or in any prior existing 
written agreement between the parties, or as duly set forth on or 
subsequent to the effective date hereof in writing and signed by a 
proper and duly authorized representative of the party to be bound 
thereby.
    6.07  The construction and performance of this agreement shall be 
governed by the law of the State of New York.
    IN WITNESS WHEREOF, each of the parties has caused this agreement to 
be executed in duplicate originals by its duly authorized 
representatives on the respective dates entered below.
WESTERN ELECTRIC COMPANY, INCORPORATED
 By_____________________________________________________________________
                                        Director of Patent Licensing    
          ______________________________________________________________
                                                                Date    
[SEAL]
                                                             Attest:    
          ______________________________________________________________
                                                           Secretary    
By______________________________________________________________________
 Title__________________________________________________________________
           _____________________________________________________________
                                                                Date    
[SEAL]
Attest:    
          ______________________________________________________________
                                                           Secretary    

                      General Definitions Appendix

    FAIR MARKET VALUE means the NET SELLING PRICE which the CORPORATION 
or any of its SUBSIDIARIES, whichever effects the sale, lease or use of 
the product or maintenance part, would realize from an unaffiliated 
buyer in an arm's length sale of an identical product or maintenance 
part in the same quantity and at the same time and place as such sale, 
lease or use.
    FIVE YEAR PERIOD means the period commencing on the effective date 
of this agreement and having a duration of five years.
    LICENSED PRODUCT means:
(i) Any product as such, or

[[Page 385]]

(ii) Any product which is any specified combination, of the kinds listed 
in section 2.01 of this agreement. Although the term does not mean, and 
although licenses are not granted for any other combination, a LICENSED 
PRODUCT
(iii) Shall not lose its status as such on account of, and
(iv) Shall not cause an unlicensed combination to infringe WESTERN'S 
PATENTS solely on account of, such LICENSED PRODUCT being made, sold, 
leased or put into use as part of an unlicensed combination.

    NET SELLING PRICE means the gross selling price of the ROYALTY-
BEARING PRODUCT in the form in which it is sold, whether or not 
assembled (and without excluding therefrom any components or 
subassemblies thereof, whatever their origin and whether or not patent 
impacted), less the following items but only insofar as they pertain to 
the sale of such ROYALTY-BEARING PRODUCT by the CORPORATION or any of 
its SUBSIDIARIES and are included in such gross selling price:

(i) Usual trade discounts actually allowed (other than cash discounts, 
advertising allowances, or fees or commissions to any employees of the 
CORPORATION, a SUBSIDIARY of the CORPORATION, a company of which the 
CORPORATION is a SUBSIDIARY at the time of the sale, or any other 
SUBSIDIARY of a company of which the CORPORATION is a SUBSIDIARY at the 
time of such sale);
(ii) Packing costs;
(iii) Import, export, excise and sales taxes, and customs duties;
(iv) Costs of insurance and transportation from the place of manufacture 
to the customer's premises or point of installation;
(v) Costs of installation at the place of use; and
(vi) Costs of special engineering services not incident to the design or 
manufacture of the ROYALTY-BEARING PRODUCT.

    ROYALTY-BEARING PRODUCT means any LICENSED PRODUCT, and any 
maintenance part therefor,

(i) Which upon manufacture includes, or the manufacture of which 
employs, any invention of any of WESTERN'S PATENTS in force at the time 
and place of such manufacture, or
(ii) Which includes when sold, leased or put into use, or the use of 
which employs, any invention of any of WESTERN'S PATENTS in force at the 
time and place of such sale, lease or use,

other than

(iii) Inventions under which the United States Government holds a 
royalty-free license if such LICENSED PRODUCT or part is contracted for, 
directly or indirectly, by the United States Government, or by another 
national government with funds derived through the Military Assistance 
Program or otherwise through the United States Government, and
(iv) Inventions employed in the manufacture of, or included in, such 
LICENSED PRODUCT or any original part thereof, or such maintenance part 
therefor or any original part thereof, by a direct or indirect supplier 
of the CORPORATION or any of its SUBSIDIARIES, but only to the extent 
such supplier has exercised its own licenses granted by WESTERN under 
patents for such inventions to so employ or include said inventions.

    SUBSIDIARY means a company the majority of whose stock entitled to 
vote for election of directors is now or hereafter controlled by the 
parent company either directly or indirectly, but any such company shall 
be deemed to be a SUBSIDIARY only so long as such control exists.
    WESTERN'S PATENTS means all patents issued at any time in the United 
States for:

(i) Inventions made prior to the termination of the FIVE YEAR PERIOD and 
owned or controlled at any time during the FIVE YEAR PERIOD by AT&T, 
WESTERN or any of their SUBSIDIARIES,
(ii) Inventions made during the FIVE YEAR PERIOD, solely or jointly with 
anyone, and in the course of their employment by employees of any such 
company who are employed to do research, development or other inventive 
work, and
(iii) Any other inventions made prior to the termination of the FIVE 
YEAR PERIOD, with respect to which and to the extent to which any such 
company shall at any time during the FIVE YEAR PERIOD have the right to 
grant the licenses and rights which are herein granted by WESTERN:

provided, however, that said patents do not include those issued for 
inventions made by employees of any SUBSIDIARY of WESTERN or AT&T 
exclusively engaged in the performance of contracts with the Energy 
Research and Development Administration of the United States.

                     Technical Definitions Appendix

 _______________________________________________________________________
________________________________________________________________________
________________________________________________________________________

                   BILATERAL PATENT LICENSE AGREEMENT

    Effective as of -------- WESTERN ELECTRIC COMPANY, INCORPORATED, a 
New York corporation (``WESTERN''), having an office at 222 Broadway, 
New York, New York

[[Page 386]]

10038, and ---------------- (``the CORPORATION'') having an office at --
-------------- agree as follows:

                         Article I--Definitions

    1.01  Terms in this agreement (other than technical terms, names of 
parties, companies and Article headings) which are in capital letters 
shall have the meanings specified in the General Definitions Appendix, 
and technical terms in this agreement which are in capital letters shall 
have the meanings specified in the Technical Definitions Appendix.

              Article II--Grants of Licenses and Immunities

    2.01  WESTERN grants to the CORPORATION under WESTERN'S PATENTS 
nonexclusive licenses for products of the following kinds:
    2.02  The CORPORATION grants to WESTERN and to AMERICAN TELEPHONE 
AND TELEGRAPH COMPANY, a New York corporation (``AT&T''), severally, 
under the CORPORATION'S PATENTS nonexclusive royalty-free licenses for 
products of the following kinds:
 _______________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    2.03  All licenses herein granted shall commence on the effective 
date hereof and, except as provided in Article VI and notwithstanding 
the expiration of the FIVE YEAR PERIOD, shall continue for the entire 
terms that the patents under which they are granted are in force or for 
that part of such terms for which the grantor has the right to grant 
such licenses.
    2.04  (a) WESTERN grants under all patents issued in countries other 
than the United States and owned or controlled by AT&T, WESTERN or their 
SUBSIDIARIES, royalty-free immunity relating to the sale, lease or use 
in, or the importation into, such other countries of LICENSED PRODUCTS, 
and maintenance parts therefor, manufactured under the licenses granted 
under WESTERN'S PATENTS; provided, however, that nothing in this section 
2.04(a) shall relieve the CORPORATION of its obligation to pay any 
royalty which may be predicated upon such manufacture of any such 
LICENSED PRODUCT or part, whether or not the first sale, lease or use 
thereof occurs outside of the United States.
    (b) The CORPORATION grants under all patents issued in countries 
other than the United States and owned or controlled by it or its 
ASSOCIATED COMPANIES, royalty-free immunity relating to the sale, lease 
or use in, or the importation into, such other countries of LICENSED 
PRODUCTS, and maintenance parts therefor, manufactured under the 
licenses granted under the CORPORATION'S PATENTS.
    2.05  The licenses granted for LICENSED PRODUCTS are licenses to 
make, have made, use, lease and sell such LICENSED PRODUCTS. Such 
licenses include the rights to maintain LICENSED PRODUCTS, to practice 
methods and processes involved in the use of LICENSED PRODUCTS and to 
make and have made, to use and have used, and to maintain machines, 
tools, materials and other instrumentalities, and to use and have used 
methods and processes, insofar as much machines, tools, materials, other 
instrumentalities, methods and processes are involved in or incidental 
to the development, manufacture, installation, testing or repair of 
LICENSED PRODUCTS.
    2.06  The grant of each license to the CORPORATION includes the 
right to grant sublicenses within the scope of such license to its 
SUBSIDIARIES. The grant of each license to WESTERN or AT&T includes the 
right to grant sublicenses within the scope of such license to its 
ASSOCIATED COMPANIES. Such right of either party or AT&T may be 
exercised at any time prior to termination or cancellation of the 
corresponding license under the provisions of Article VI. Any such 
sublicenses granted to any present SUBSIDIARY or any present ASSOCIATED 
COMPANY may be made effective, retroactively, as of the effective date 
hereof, and any such sublicenses granted to any future SUBSIDIARY or any 
future ASSOCIATED COMPANY may be made effective, retroactively, as of 
the date such company became a SUBSIDIARY or an ASSOCIATED COMPANY.

                  Article III--Acquisition and Warranty

    3.01  WESTERN and the CORPORATION shall each acquire rights to 
inventions made during the FIVE YEAR PERIOD which relate to the subject 
matter of licenses granted and are made, in the course of their 
employment, either solely or jointly with anyone, by its or its 
ASSOCIATED COMPANIES employees (and in the case of WESTERN'S obligation, 
by employees of AT&T or its SUBSIDIARIES) who are employed to do 
research, development or other inventive work, such that each grantee 
shall by virtue of this agreement, receive in respect of patents issued 
for such inventions, licenses and rights of the scope and upon the terms 
herein provided to be granted to such grantee.
    3.02  WESTERN and, except as may be stated in a letter from the 
CORPORATION to WESTERN referring to this agreement and delivered before 
or concurrently with the execution hereof by WESTERN, the CORPORATION 
each warrants that there are no commitments or restrictions which will 
limit the licenses and rights granted by it under patents issued at any 
time for inventions owned at any time during the FIVE

[[Page 387]]

YEAR PERIOD by it or any of its ASSOCIATED COMPANIES (and in the case of 
WESTERN'S warranty, by AT&T or any of its SUBSIDIARIES).
    3.03  It is recognized that either party or any of its ASSOCIATED 
COMPANIES may have entered into or may hereafter enter into a contract 
with a national government to do development work financed by such 
government and may be required under such contract (either 
unconditionally or by reason of any action or inaction thereunder) to 
assign to such government its rights to grant, or may now or hereafter 
be restrained by such government from granting, licenses or immunities 
to others than its ASSOCIATED COMPANIES under patents for inventions 
arising out of such work or covered by such contract. The resulting 
inability of such party to grant the licenses or immunities purported to 
be granted by it under patents for such inventions shall not be 
considered to be a breach of this agreement, if:

(i) Such contract is for the benefit of such government's military or 
national defense establishment or the Energy Research and Development 
Administration of the United States Government or the National 
Aeronautics and Space Administration of the United States Government, or
(ii) In cases other than (i), such contract is with the United States 
Government or any agency of and within such Government, and any such 
requirement or restraint is pursuant to a statute or officially 
promulgated regulation of such Government or agency applicable to such 
contract;

provided, however, that:

(iii) Such party (or, if an ASSOCIATED COMPANY thereof has entered into 
such contract, such ASSOCIATED COMPANY) shall exert its best efforts to 
enable such party to grant the licenses or immunities herein purported 
to be granted by it under such patents; and
(iv) Within ninety (90) days after the filing of any application for any 
such patent, such party shall give written notice to the other party 
identifying such application by country, number and date of filing.

    For the purposes of this section 3.03, AT&T, WESTERN and their 
ASSOCIATED COMPANIES shall all be deemed to be ASSOCIATED COMPANIES of 
one another, and the CORPORATION and its ASSOCIATED COMPANIES shall be 
deemed to be ASSOCIATED COMPANIES of one another.

                           Article IV--Royalty

    4.01  The CORPORATION shall pay to WESTERN royalty, at the 
applicable rate hereinafter specified, on each LICENSED PRODUCT, and 
maintenance part therefor, which is a ROYALTY-BEARING PRODUCT, and

(i) Which is sold, leased or put into use by the CORPORATION or any of 
its SUBSIDIARIES while any license acquired hereunder by the CORPORATION 
with respect to such ROYALTY-BEARING PRODUCT shall remain in force, or
(ii) Which is made by or for the CORPORATION or any of its SUBSIDIARIES 
while any such license shall remain in force and is thereafter sold, 
leased or put into use by the CORPORATION or any of its SUBSIDIARIES,

whether or not such SUBSIDIARIES are sublicensed pursuant to section 
2.06, such royalty rate to be applied, except as provided in section 
4.05, to the NET SELLING PRICE of such ROYALTY-BEARING PRODUCT if sold 
for a separate consideration payable wholly in money and in all other 
cases to the FAIR MARKET VALUE thereof. The royalty rates applicable to 
LICENSED PRODUCTS of the kinds specified in section 2.01, and 
maintenance parts therefor, are as follows:

   (iii)________________________________________________________________
 _______________________________________________________________________
________________________________________________________________________

    4.02  If a LICENSED PRODUCT is a ROYALTY-BEARING PRODUCT solely on 
account of one or a limited number of WESTERN'S PATENTS, the CORPORATION 
may elect to reduce the amount of royalty otherwise payable hereunder on 
said LICENSED PRODUCT by a royalty reduction percentage, and as of an 
effective date, established by WESTERN. Upon written request from the 
CORPORATION identifying the LICENSED PRODUCT and each relevant patent, 
WESTERN will inform the CORPORATION of the royalty reduction percentage 
applicable in respect of said LICENSED PRODUCT and patent or patents and 
the effective date thereof.
    4.03  A LICENSED PRODUCT, or maintenance part therefor, which is 
made and sold by the CORPORATION or any of its SUBSIDIARIES and which is 
a ROYALTY-BEARING PRODUCT hereunder on account of one or more of 
WESTERN'S PATENTS, may be treated by the CORPORATION as not licensed and 
not subject to royalty hereunder if all of the following conditions are 
met:

(i) The purchaser is licensed under the same patent or patents, pursuant 
to another agreement, to have said LICENSED PRODUCT or part made;
(ii) The purchaser expressly advises the CORPORATION or its SUBSIDIARY, 
whichever effects the making and sale, in writing at or prior to (but in 
no event later than) the time of such sale that, in purchasing said 
LICENSED PRODUCT or part, it is exercising its own license or licenses 
under said patent or patents to have said LICENSED PRODUCT or part made; 
and

[[Page 388]]

(iii) The CORPORATION retains such written advice and makes it available 
to WESTERN at the latter's request.

    4.04  Only one royalty shall be payable hereunder in respect of any 
ROYALTY-BEARING PRODUCT. Royalty shall accrue hereunder on any LICENSED 
PRODUCT, or maintenance part therefor, upon its first becoming a 
ROYALTY-BEARING PRODUCT, and the royalty thereon shall become payable in 
accordance with the provisions of this Article IV upon the first sale, 
lease or putting into use thereof.
    4.05  If any sale of a ROYALTY-BEARING PRODUCT shall be made by the 
CORPORATION or a SUBSIDIARY thereof to:

(i) Any company of which the CORPORATION is a SUBSIDIARY at the time of 
such sale, or
(ii) The CORPORATION or a SUBSIDIARY thereof or any other SUBSIDIARY of 
a company of which the CORPORATION is a SUBSIDIARY at the time of such 
sale,

royalty payable hereunder shall be computed on the FAIR MARKET VALUE of 
such ROYALTY-BEARING PRODUCT.

                     Article V--Reports and Payments

    5.01  The CORPORATION shall keep full, clear and accurate records 
with respect to ROYALTY-BEARING PRODUCTs. WESTERN shall have the right 
through its accredited auditing representatives to make an examination 
and audit, during normal business hours, not more frequently than 
annually, of all such records and such other records and accounts as may 
under recognized accounting practices contain information bearing upon 
the amount of royalty payable to it under this agreement. Prompt 
adjustment shall be made by the proper party to compensate for any 
errors or omissions disclosed by such examination or audit. Neither such 
right to examine and audit nor the right to receive such adjustments 
shall be affected by any statement to the contrary, appearing on checks 
or otherwise, unless such statement appears in a letter, signed by the 
party having such right and delivered to the other party, expressly 
waiving such right.\1\
---------------------------------------------------------------------------

    \1\ If licensee insists on a non-Western auditor, third line, 
insert, after ``representatives'', -or, at the election of the 
CORPORATION, through a firm of certified public accountants proposed by 
WESTERN and accepted by the CORPORATION-.
---------------------------------------------------------------------------

    5.02  (a) Within sixty (60) days after the end of each semiannual 
period ending on June 30th or December 31st, commencing with the 
semiannual period during which this agreement first becomes effective, 
the CORPORATION shall furnish to WESTERN a statement, in form acceptable 
to WESTERN; certified by a responsible official of the CORPORATION:

(i) Showing all ROYALTY-BEARING PRODUCTS, by kinds of LICENSED PRODUCTS, 
which were sold, leased or put into use during such semiannual period, 
the NET SELLING PRICES of such ROYALTY-BEARING PRODUCTS or (where 
royalty is based on FAIR MARKET VALUES) the FAIR MARKET VALUES thereof 
and the amount of royalty payable thereon (or if no such ROYALTY-BEARING 
PRODUCT has been so sold, leased or put into use, showing that fact);
(ii) Identifying, if royalty is reduced under provisions of section 
4.02, each LICENSED PRODUCT by its type and the patent or patents 
involved in such royalty reduction;
(iii) Showing, by purchasers and kinds of LICENSED PRODUCTS, the 
monetary totals of the sales, to each purchaser exercising its own ``to 
have made'' license or licenses, of LICENSED PRODUCTS and maintenance 
parts in transactions of the character described in section 4.03; and
(iv) Identifying all transactions of the character described in section 
4.05.

    (b) Within such sixty (60) days the CORPORATION shall, irrespective 
of its own business and accounting methods, pay to WESTERN the royalties 
payable for such semiannual period.
    (c) Notwithstanding the provisions of section 7.04(a)(v), the 
CORPORATION shall furnish whatever additional information WESTERN may 
reasonably prescribe from time to time to enable WESTERN to ascertain 
which LICENSED PRODUCTS (and maintenance parts therefor) sold, leased or 
put into use by the CORPORATION or any of its SUBSIDIARIES are subject 
to the payment of royalty to WESTERN, and the amount of royalty payable 
thereon.
    5.03  Royalty payments provided for in this agreement shall, when 
overdue, bear interest at an annual rate of one percent (1%) over the 
prime rate or successive prime rates in effect in New York City during 
delinquency.
    5.04  Payment to WESTERN shall be made in United States dollars to 
WESTERN'S Treasury Organization at 222 Broadway, New York, New York 
10038, or at such changed address as WESTERN shall have specified by 
written notice. If any royalty for any semiannual period referred to in 
section 5.02 is computed in other currency, conversion to United States 
dollars shall be at the prevailing rate for bank cable transfers on New 
York City as quoted for the last day of such semiannual period by 
leading banks dealing in the New York City foreign exchange market.

[[Page 389]]

           Article VI--Termination, Cancellation and Surrender

    6.01  Any termination under the provisions of this Article VI by one 
party of licenses and rights of the other party shall not affect the 
licenses and rights of the terminating party and its sublicensees (or of 
AT&T and its sublicensees if WESTERN is the terminating party), nor the 
obligations of the CORPORATION under the provisions of Articles IV and V 
if it is the terminating party.
    6.02  If WESTERN shall fail to fulfill one or more of its 
obligations under this agreement, the CORPORATION may, upon election and 
in addition to any other remedies that it may have, at any time 
terminate all licenses and rights granted to WESTERN and AT&T hereunder, 
by not less than six (6) months' written notice to WESTERN specifying 
any such breach, unless within the period of such notice all breaches 
specified therein shall have been remedied.
    6.03  (a) If the CORPORATION shall fail to fulfill one or more of:

(i) Its obligations under Articles IV or V, or
(ii) Its obligations under this agreement whereby WESTERN or AT&T fails 
to receive licenses or rights which it is entitled hereunder to receive 
under patents issued in the United States,

WESTERN may, upon the election and in addition to any other remedies 
that it may have, at any time terminate all licenses and rights granted 
to the CORPORATION hereunder, by not less than six (6) months' written 
notice to the CORPORATION specifying any such breach, unless within the 
period of such notice all breaches specified therein shall have been 
remedied.
    (b) Termination by WESTERN of licenses and rights granted to the 
CORPORATION shall terminate the obligations of the CORPORATION under the 
provisions of Articles IV and V relating to such terminated licenses and 
rights, except such obligations as to ROYALTY-BEARING PRODUCTS made, 
sold, leased or put into use prior to such termination.
    6.04  (a) By written notice to WESTERN, the CORPORATION may cancel 
the licenses for any specified products granted hereunder to it under 
WESTERN'S PATENTS. Such cancellation shall be effective as of the date 
of giving said notice but shall not relieve the CORPORATION of its 
obligation to pay accrued royalties with respect to such specified 
products.
    (b) By written notice to the CORPORATION, WESTERN or AT&T may cancel 
the licenses for any specified products granted hereunder to it under 
the CORPORATION'S PATENTS, such cancellation to be effective as of the 
date of giving said notice.
    6.05  By written notice to WESTERN, specifying any of WESTERN'S 
PATENTS by number and date of issuance, the CORPORATION may surrender 
and terminate all licenses and rights granted to it under such specified 
patent or patents or under any specified invention or inventions 
thereof. Such surrender and termination shall be effective as of a date 
specified in said notice which shall not be more than six (6) months 
prior to the date of giving said notice. As of said effective date, such 
specified patent or patents or invention or inventions shall cease to be 
among, or among the inventions of, WESTERN'S PATENTS for the purposes of 
this agreement without affecting obligations in respect of royalties 
accrued prior to said effective date.
    6.06  (a) Every sublicense granted by a party or AT&T shall 
terminate with termination or cancellation of its corresponding license.
    (b) Any sublicenses granted shall terminate if and when the grantee 
thereof ceases to be an ASSOCIATED COMPANY of WESTERN or AT&T or a 
SUBSIDIARY of the CORPORATION. Each LICENSED PRODUCT and each 
maintenance part, made by or for a SUBSIDIARY of the CORPORATION, and on 
which royalty has accrued but which remains not sold, leased or put into 
use at the time such SUBSIDIARY ceases to be a SUBSIDIARY of the 
CORPORATION, shall be deemed to have been put into use by such 
SUBSIDIARY immediately prior to such time at the place said LICENSED 
PRODUCT or part is then located.
    (c) If an ASSOCIATED COMPANY'S relationship to a party or AT&T 
changes so that such ASSOCIATED COMPANY is no longer an ASSOCIATED 
COMPANY of such party or AT&T, licenses and rights acquired under the 
patents and patent rights of such ASSOCIATED COMPANY for inventions made 
prior to the date such relationship changed shall not be affected by 
such change.
    6.07  Licenses, immunities and rights with respect to each LICENSED 
PRODUCT, and each maintenance part, made, sold, leased or put into use 
prior to any termination or cancellation under the provisions of this 
Article VI shall survive such termination or cancellation.

                  Article VII--Miscellaneous Provisions

    7.01  With respect to patents or inventions owned jointly by the 
CORPORATION, or any of its ASSOCIATED COMPANIES, with any other person 
or persons who has or have granted, or who shall hereafter grant, to 
WESTERN or AT&T, licenses or other rights thereunder, the CORPORATION, 
to the extent that the licenses and rights so granted do not exceed the 
scope of the licenses and rights herein granted by the CORPORATION, 
consents to the grant of licenses and rights to WESTERN and AT&T under 
such patents and inventions by such other person or persons.

[[Page 390]]

    7.02  (a) Each party shall, upon written request from the other 
party sufficiently identifying any patent by country, number and date of 
issuance, inform the other party as to the extent to which any such 
patent is subject to the licenses, immunities and rights granted to such 
other party.
    (b) If such licenses, immunities or rights under any such patent are 
restricted in scope, copies of all pertinent provisions of any contract 
(other than provisions of a contract with a government to the extent 
that disclosure thereof is prohibited under that government's laws or 
regulations) creating such restrictions shall, upon request, be 
furnished to the party making such request.
    7.03  Upon written request from one party, the other party shall 
inform the requesting party which of said other party's patents cover 
inventions under which the United States Government holds a royalty-free 
license.
    7.04  (a) Nothing contained in this agreement shall be construed as:

(i) Requiring the filing of any patent application, the securing of any 
patent or the maintaining of any patent in force; or
(ii) A warranty or representation by any grantor as to the validity or 
scope of any patent; or
(iii) A warranty or representation that any manufacture, sale, lease, 
use or importation will be free from infringement of patents other than 
those under which and to the extent to which licenses or immunities are 
in force hereunder; or
(iv) An agreement to bring or prosecute actions or suits against third 
parties for infringement; or
(v) An obligation to furnish any manufacturing or technical information 
or assistance; or
(vi) Conferring any right to use, in advertising, publicity or 
otherwise, any name, trade name or trademark, or any contraction, 
abbreviation or simulation thereof; or
(vii) Conferring by implication, estoppel or otherwise upon any grantee 
any license or other right under any patent, except the licenses and 
rights expressly granted to such grantee; or
(viii) An obligation upon any grantor to make any determination as to 
the applicability of any patent to any product of any grantee or any of 
its ASSOCIATED COMPANIES; or
(ix) A release for any infringement prior to the effective date hereof.

    (b) Neither party nor AT&T makes any representations, extends any 
warranties of any kind or assumes any responsibility whatever with 
respect to the manufacture, sale, lease, use or importation of any 
LICENSED PRODUCT, or part therefor, by any grantee, any of its 
ASSOCIATED COMPANIES, or any direct or indirect supplier or vendee or 
other transferee of any such company, other than the licenses, 
immunities, rights and warranties expressly herein granted.
    7.05  Neither this agreement nor any licenses or rights hereunder, 
in whole or in part, shall be assignable or otherwise transferable.
    7.06  Any notice, request or information shall be deemed to be 
sufficently given when sent by registered mail addressed to the 
addressee at its office above specified (and when addressed to WESTERN, 
to the attention of its Patent Licensing Organization) and any royalty 
statement shall be deemed to be sufficiently furnished when sent by 
registered mail addressed to WESTERN'S Treasury Organization at 222 
Broadway, New York, New York 10038, or at such changed address as the 
addressee shall have specified by written notice.
    7.07  This agreement sets forth the entire agreement and 
understanding between the parties as to the subject matter hereof and 
merges all prior discussions between them and neither of the parties 
shall be bound by any conditions, definitions, warranties, 
understandings or representations with respect to such subject matter 
other than as expressly provided herein, or in any prior existing 
written agreement between the parties, or as duly set forth on or 
subsequent to the effective date hereof in writing and signed by a 
proper and duly authorized representative of the party to be bound 
thereby.
    7.08  The construction and performance of this agreement shall be 
governed by the law of the State of New York.
    IN WITNESS WHEREOF, each of the parties has caused this agreement to 
be executed in duplicate originals by its duly authorized 
representatives on the respective dates entered below.
WESTERN ELECTRIC COMPANY, INCORPORATED
 By_____________________________________________________________________
                                      Director of Patent Licensing      
          ______________________________________________________________
                                                                Date    
[SEAL]
                                                             Attest:    
          ______________________________________________________________
                                                           Secretary    
By______________________________________________________________________
 Title__________________________________________________________________
           _____________________________________________________________
                                                                Date    
[SEAL]
                                                             Attest:    
          ______________________________________________________________
                                                           Secretary    

                      General Definitions Appendix

    ASSOCIATED COMPANIES of AT&T are The Southern New England Telephone 
Company, a Connecticut corporation, and its

[[Page 391]]

SUBSIDIARIES, Cincinnati Bell Inc., an Ohio corporation, and its 
SUBSIDIARIES, and SUBSIDIARIES of AT&T other than WESTERN and its 
SUBSIDIARIES.
    ASSOCIATED COMPANIES of the CORPORATION are SUBSIDIARIES of the 
CORPORATION, companies presently having the CORPORATION as a SUBSIDIARY 
and other SUBSIDIARIES of such companies.
    ASSOCIATED COMPANIES of WESTERN are SUBSIDIARIES of WESTERN.
    The CORPORATION'S PATENTS means all patents issued at any time in 
the United States for:

(i) Inventions made prior to the termination of the FIVE YEAR PERIOD and 
owned or controlled at any time during the FIVE YEAR PERIOD by the 
CORPORATION or any of its ASSOCIATED COMPANIES,
(ii) Inventions made during the FIVE YEAR PERIOD, solely or jointly with 
anyone, and in the course of their employment by employees of any such 
company who are employed to do research, development or other inventive 
work, and
(iii) Any other inventions made prior to the termination of the FIVE 
YEAR PERIOD, with respect to which and to the extent to which any such 
company shall at any time during the FIVE YEAR PERIOD have the right to 
grant the licenses and rights which are herein granted by the 
CORPORATION.

    FAIR MARKET VALUE means the NET SELLING PRICE which the CORPORATION 
or any of its SUBSIDIARIES, whichever effects the sale, lease or use of 
the product or maintenance part, would realize from an unaffiliated 
buyer in an arm's length sale of an identical product or maintenance 
part in the same quantity and at the same time and place as such sale, 
lease or use.
    FIVE YEAR PERIOD means the period commencing on the effective date 
of this agreement and having a duration of five years.
    LICENSED PRODUCT means, as to any respective grantee,

(i) any product as such, or
(ii) any product which is any specified combination.

of the kinds listed in section 2.01 or 2.02 of this agreement. Although 
the term does not mean, and although licenses are not granted for, any 
other combination, a LICENSED PRODUCT

(iii) shall not lose its status as such on account of, and
(iv) shall not cause an unlicensed combination to infringe the grantor's 
patents (i.e., WESTERN'S PATENTS or the CORPORATION'S PATENTS, as the 
case may be) solely on account of, such LICENSED PRODUCT being made, 
sold, leased or put into use as part of an unlicensed combination.

    NET SELLING PRICE means the gross selling price of the ROYALTY-
BEARING PRODUCT in the form in which it is sold, whether or not 
assembled (and without excluding therefrom any components or 
subassemblies thereof, whatever their origin and whether or not patent 
impacted), less the following items but only insofar as they pertain to 
the sale of such ROYALTY-BEARING PRODUCT by the CORPORATION or any of 
its SUBSIDIARIES and are included in such gross selling price:

(i) Usual trade discounts actually allowed (other than cash discounts, 
advertising allowances, or fees or commissions to any employees of the 
CORPORATION, a SUBSIDIARY of the CORPORATION, a company of which the 
CORPORATION is a SUBSIDIARY at the time of the sale, or any other 
SUBSIDIARY of a company of which the CORPORATION is a SUBSIDIARY at the 
time of such sale);
(ii) Packing costs;
(iii) Import, export, excise and sales taxes, and customs duties;
(iv) Costs of insurance and transportation from the place of manufacture 
to the customer's premises or point of installation;
(v) Costs of installation at the place of use; and
(vi) Costs of special engineering services not incident to the design or 
manufacture of the ROYALTY-BEARING PRODUCT.

    ROYALTY-BEARING PRODUCT means any LICENSED PRODUCT of the kinds 
specified in section 2.01 of this agreement (other than any LICENSED 
PRODUCT for which all the licenses granted in this agreement are at a 
royalty rate of zero percent (0%)), and any maintenance part therefor,

(i) Which upon manufacture includes, or the manufacture of which 
employs, any invention of any of WESTERN'S PATENTS in force at the time 
and place of such manufacture, or
(ii) Which includes when sold, leased or put into use, or the use of 
which employs, any invention of any of WESTERN'S PATENTS in force at the 
time and place of such sale, lease or use,

other than:

(iii) Inventions under which the United States Government holds a 
royalty-free license if such LICENSED PRODUCT or part is contracted for, 
directly or indirectly, by the United States Government, or by another 
national government with funds derived through the Military Assistance 
Program or otherwise through the United States Government, and
(iv) Inventions employed in the manufacture of, or included in, such 
LICENSED

[[Page 392]]

PRODUCT or any original part thereof, or such maintenance part therefor 
or any original part thereof, by a direct or indirect supplier of the 
CORPORATION or any of its SUBSIDIARIES, but only to the extent such 
supplier has exercised its own licenses granted by WESTERN under patents 
for such inventions to so employ or include said inventions.

    SUBSIDIARY means a company the majority of whose stock entitled to 
vote for election of directors is now or hereafter controlled by the 
parent company either directly or indirectly, but any such company shall 
be deemed to be a SUBSIDIARY only so long as such control exists.
    WESTERN'S PATENTS means all patents issued at any time in the United 
States for:

(i) Inventions made prior to the termination of the FIVE YEAR PERIOD and 
owned or controlled at any time during the FIVE YEAR PERIOD by AT&T, 
WESTERN or any of their SUBSIDIARIES,
(ii) Inventions made during the FIVE YEAR PERIOD, solely or jointly with 
anyone, and in the course of their employment by employees of any such 
company who are employed to do research, development or other inventive 
work, and
(iii) Any other inventions made prior to the termination of the FIVE 
YEAR PERIOD, with respect to which and to the extent to which any such 
company shall at any time during the FIVE YEAR PERIOD have the right to 
grant the licenses and rights which are herein granted by WESTERN;

provided, however, that said patents do not include those issued for 
inventions made by employees of any SUBSIDIARY of WESTERN or AT&T 
exclusively engaged in the performance of contracts with the Energy 
Research and Development Administration of the United States.

[ 41 FR 28699 , July 12, 1976, as amended at  50 FR 47549 , Nov. 19, 1985]


Goto Section: 68.502 | 68.506

Goto Year: 1996 | 1998
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