PATENT LICENSE CONTRACT
Contract No:
Conclusion Date:
Conclusion Place:
INDEX
Article 1 Defininitions
Article 2 ScoPe of the Contract
Article 3 Price of the Contract
Article 4 Conditions of Payment
Articfe 5 Technical Service and Training
Article 6 Technical Documentation
Article 7 Verification and Acceptance
Article 8 Technical Improvement
Article 9 Guarantees and Claims
Article 10 confidentiality
Article 11Infringements
Article 12 Taxes andDuties
Article 13 ForceMajeure
Article 14 Arbitration
Article 15 App1icable LaW
Article 16 Duration
APPENDIXES
appendis 1 Name， Content of Patent Documents and Application of the Patents
appendix 2 Models， Specifications and Technical lndices of the Contract Product
appendix 3 The Starting Date and Counting Methods of Royalty
appendix 4 The Content and Method of Licensor’s auditing
appendix 5 Training of Party A’s Personnel
appendix 6 Technical Service or Specialist Send by Party B
appendix 7 Verification and Acceptance of the Contract Product This Contract made____on_____________ day of____________，By and between __________，organized and existingunder the laws of the People’s Republic of China. with rehistered office at (hereinafterreferred to as Party A) of the first part and __________，organized and existing underthe laws of ____________，with its principal office at________________.
WITNESSTH Whereas the patent right which said in the Contract os owned by Party B.
Whereas Party B has the right and agreed to grant Paryt A the rights to Use，manufac-ture and sell the Contract Products of the PPatented Technology;Whereas Party a hoPe to use the Patented Technology of Party B to manufacture and selltheContract Products;
Both Parties authorized representatives， through friendly negotiation， have agreeto en-ter into this Contract under the ertms as stipulated below;
Artide 1 Definitions
For the purpose of this Contract， the following terms have the following meanings;
1.1.‘Patented Technology’means those letters patent， and applications thereforpresently owned or hereafter acquired by Party B and/or which Party Bhas or may have therigt to control or grant license thereof during the term hereof in any or all countriesof the world and which are applicable to or may be used in the manufacture of Cotract Products.
1.2. ‘Contract Products’mians the products described in Appendis2 annexed hereto，to-gether with all improvements and modifications thereof or developments with respectthere-to.
1.3. ‘Patty A’means____________. or his legal representative， agent and inhetitorto theproperty of the Company.
1.4. ‘Party B’ means___________，or his legal representative，agent and inheritor，to the property of the Company.
1.5. ‘The Contraet Factory’ means the place which Party Party A manufactures theContract Products. That is_______________.
1.6.‘Spare P`menas replacement parts for Contract products or for any part there-of.
1.7. ‘Components’means those components and parts of Contruct Produets which Par-tyB has agreed or may from time to time agree in writing to permit Party A to manufactureor sell.
1.8. ‘Technical Documents’meane engineering， manufacturing and originatinginforna-tion relatiog to the manufacture and servicing of Contract Products， includingdrawings， blueprints，design sheets， material specifications， photographs， photostats and general da-ta， and designs and pecifications relatingto manufacturing Contract Producdts， tools and fix-tures， but includes，however， onlysuch information as is available to Party B and applicable to the operations of Party Aunder this Contract which detaile as per Appendis 1 to the Con-tract.
1.9 ‘Net Selling Price’ menans remaining amount of invoice value of theContractProd-ucts， after deduction of packahing， installation and freight charges，trade and discount，commission，insurance and taxes and duties. if any， directlyapplicable to the Prdduct.
1.l0 ‘The Date of Coming into Effect of the Contract’means the date of raificationofthe Contract by the managing constructure of the parties or by the competentauthorities ofboth parties， whichever comes later.
Article2 Scope of the Contract
2.1. Party A agrees to acquire from Party B and Party B agrees to transfer to Party Athe patented Technology for Contract Products. Such Patented Technology shall be in exactaccordance with the technologyof Party B’s latest products.
2.2 Party B grants Party A the non-exclusive right to design and manufactureContractProducts in China and to markdt the said Products in China and abroad.
2.3 Party B shall be responsible to provide Party A with documents relevant to thesaidPaptents and with special fittings of the samplemachine their concrete details andschedule ofdelivary being set out in Appendix 2 to the Contract.
2.4 The Contract does not cover the Patented technology for the parts from othercoun-tres.But Party B shall provide Party A with the specimens and the tecincal specifications andthe name of the manufacturers of the parts.
2.5 party B shall be responsible for the training of Party A’s technicl personnelin Party B’s relevant facilities and also do its best to enable Party A’s technicalpersonnel to masterthe Patented Technplogy of the aforesaid Contract Product (details asper Appendix 5 to the Contract).
2.6 Party B is obliged to send at its own expense technical personnel to Party A’sfacto-ry for technical service (details as per Appendix 6 to the Contract).
2.7 If it is required by Party A. Pafrty B shall be under an obligation to provideParty Aat the most favourable price wity parts， accessories， raw materials， fittings，etc. for COn-trade mark the two Parties.
2.8 Party B grants Party A the rignt to use Party B’s trade mark， and use thecombinedtrade，mark of both parties or mark the wouding ’production according toLicensor’s Licence’on the Contract Produets.
Article 3 Price of the Contract
3.1 price of the Contract shall be calculated on Royalty in accordance with thecontent and scope sipulated in Artice 2 to the Contract and shall be paid in___________.
3.2 Royalty under the Contract shall be paid from__________ months after the the dateofcoming into effect of the Contract in terms of Calendar Year. The date of settlingaccountsshallbe 31，December of each year.
3.3 Royalty at the rate of__________ % (___________percent ) shall be Calcuated interms ofnet Selling Price after the Contract Products are sold in this year，the ContractProducts which not sold shall not be included.
3.4 The report of the selling quantity， net selling amount of the contract ProductsandRoyalty which should be paid in last year shall be submitted to Party B in writtenform by Party A within 10 (ten) days after the date of settling accounts to Royalty. Thespecific methods which calculatenet selling amountand Royalty are detailed in Appendix 3to the Contract.
3.5 The Contract Products sold by Party A pursuant to the patent license hereingranted shall be deemed to have been sold when paid for.
3.6 If the Contract Products are returned or allowances made thereon after the royaltythereon has been paid Party A shall be entitled to take ppropriate erdit for suchoverPay-mentagainst royalties thereafter accruing.
3.7 If Party B demand to audit the accounts of Party A，it shall notice Party A withinl0(ten) days after receiving the written notice of Party A in accordance with Article 3.4 of the Contract.The speeific content and procedure of auditing accounts aredetailed in Appendix 4 tothe Contract.
Article 4 Couditions of Payment
4.1 Royalty stipulated in Section 3 to the Contract shall be effected by Party A toarty Bthrough the Bank____________(here it is the business Bank of Party A， and the Bank_________(here it is the busines Bank of Party B)， payrnent shall be settled in________.
4.2 Party B shall immediately issue the related documents ofter receiving the writtennotieesubmitted by Party A in accordance with Artiele 3.4 of the Contract， the Royaltyshall be paid by Party A to Party B within 30(thirty) days after Party A has received thefol-lowing documents whichare provided by Party B and found them in confoumity with thestipulations of thContract.
A. Four copies of the statement on calculation of the royalty;
B. Four copies of the commercial invoice;
C. Two copies of the sight draft.
4.3 Party A shall have the right to deduct from any of the above mentioned payment theppenalties and/or compensations which party B shall pay in accordance with thestipulations ofthe Contract.
ArticIe 5 Technical service and Training
5.1 Technicgl Service
5.1. l During the validity period of the Contract， Party B shall send a specialist toPartyA`s factory to explain the drawings and technical documents and to provide teehnicalservise indesigning.manufacturing， adjustment，inspection and maintenance of theContracted Pro-duet so to eheble Party A to use， as fast as possible， home materialsand raw components without affeeting the properties of the Products so manufactured.
5.1.2 Party B shall twice send it’s specialists to Party A’s factory to provldetechnicalservice for a total of 30 working days man.
5.l.3 The first technical service sha1l start in the sixth month after the Contraytcomesinto effect. Party B shall send a specialist to Party A’s factory to providetechnical service for 12 working days/man.
5.1.4 The second technical service shall start during the verification of theCortractedProduets.Parth B shall send a specialist to Party A’s factory to providetechnical servicefor18 working days/man.
5.1.5 Party B shall， for its specialists， bear their travelling expensee. ParthAshall be responsible for Boarding and lodging and affording the means of conveyance fromthe lodgingplace to the factoty.
5.2 Technical Training
5.2 1 Party B shall train Party A’s technical personnel so as to enable them tomasterParty B’s design， performance test and technology in machining， erection andinspection of the Contracted Products， so that Party A can use the technical documentsand know-how supplied by Party B toproducethe same products in the Contract Factory. Party B shall do its best to arrange for Party A’s Personnel to visit the majorusersand the manufacturing Process of the components from other countries of the ContractedProducts.
5.2.2 Party A shall send twice its technical personnel to Party B’s factory fortraining， andthe total number of the participants shall not exceed 320 days/man (excluding the inter-preter).
5.2.3 The first training shall be from the third to the fourth month after theContract comes into effect. There shall be 4 technical persons and an interpreterto besent to party B for training for 16o working days/man (5 days week). The training shallcover the design of the Contracted Products and manufacturing technology.
5.2.4 The second training shall be from the eighth to the nineth month. Party A shallsent 4 technical persons and an interpreter to Party B’s factory for training for 160working days/man (5 days per week). The training shall cover the designing， themanufacturing technology，erection and adjustment of the Contracted Products.
5.2.5 Party A shall bear the travelling expenses of its trainees; Party B shallprovide Party A’s trainees free of charge with boarding， lodging and means ofconveyance for travel- ling between the lodging place and the factory.
Article 6 Technical Documents
6.1 Party B shall， according to the delivery schedule and details stpulated inAppendix 2to the Contract， deliver the documents at________________.
6.2 The date stamped by the air transportation ageney at____________，shll be takenas the actual date of delivery paryt A shall send to Party B a photostat copy of theairconsignment note shwing the stampde date of arrival.
6.3 Within twenty-four hours after the despatch of each lot of the technical documente，Party B shal1 notify Party A by cable or telex of the contract number， number and dateof the air consignment note， items of the documents， number of pieces， airmail toParty A two copies of each of the air consignment note and detaikled list of thetechnical documents.
6.4 If the technical documents are foumd lost， damaged or mutilated during airtrans-portation， Party B shall supply Party A free of charge with a second lot ofdocuments within thechortest possible time but not later than thirty days after it hasreceived from Party A the writtennotice. Within sixty days after party a has receivedthe documents from Party B，if Party A does not declare the shortage and request tocover the same， it is considered asa-cepted.
6.5 The technical documents shall be in English and based on metric system ofmeasure-ments.
Article 7 Verification and Acceptance
7.1 The Verification Test on the first samplemachine of the Contracted Product shallbe carried out by the joint group consisting of Party A’s and Party B’s representativesaccordingto the schedule and contents stipulated in Appendix 7 to the Contract. lf theperformance of the Contracted Product is in conformity with the technical specificationsstipulated in Ap-pendix 1， such testshall be considersd as qualified and therepresentatives of both parties shll sign the Inspection and Testing Certificate for theproper performance of the Contracted Product in quadruplicate， 2copies for each party.
7.2 If the Verification Test demonstrates that the performance of the ContractedProd-uct isnot in conformity with prescribed technical specifications， both partiesshall， throughamicable negotiations，make a joint study of and analyse the cause andtake measures to e-liminate the defects and carry out asecond test. when the second testdemonstuates tha the performance is qualified， both parties shall sign a testingcertificate for the proper perfot- mance
7.3 If Party B is responsible for the failure of the first test， Party B shall sendat ist own expense technical ersonnel for the second test.
7.4 If the second test fails again and the failure is attributed to Party B， Party Bshallindemnify Party A for any losses sustained and shall take effective measures toeliminate thedefects and carry out a third test.
7.5 If the third test again fails， and if Party B is responsible for the failure，Party A has the right to terminate the Contract at its discretion and lodge claims asstipulated ih Article9.If the responsibility for the failure lies with Party a， the twoParties shall negotiate as tohow to further implement the Contract.
Article 8 Technical Improvements
8.1 If the technical documents provided by Party B are not applicable to Party A’sactualproduction condidions (such as design standards， raw materials， purchased Partsfor the ma-chine， production facilitie)， Party B is obliged to assist Party A inmodifying the technicaldocuments and confirm the same. upon the condition that theproperties of the Contracted Products are not affected， raw materials， fittings andequipmint of chinese origin may be used.
8.2 During the currency of the Contract. if eithet of the two parties effets improve-ments on or developments of the Products within the xcope stipulated in the Contract，thd said party shall submit， free of charge， to the other party the technologicalinformation con-cernign such improvements or developments.
8.3 The ownership of such improvements on or developments of the ontracted Productshall belong to the party who has effected such improvements or develpments. The otheparyt shall not apply for patent ortransfer the same to any third arty.
Article 9 Guarantees and Claims
9.1 Party B guarantees that the technical documents to be supplied by Party B are thelatest technical information which has been put into practical use by Party B. Party Balso undertakesto supply to Party A in time the technical information relevant to anydevelop-ment of or improvement on the Contracted Product.
9.2 Party B guarantees that the technical documents to be supplied by Party B arecom-plete，correct，legible and are to be despatched in time.
9.3 If the documents supPied by Party B are not in conformity with the stipulationin Article 6， Party B shall， within the shortext possible time but not later than 3Odays after re-ceiPt of Party A’s written notice， despatch free of charge to Party Athe missing or the cor- rcet and legible technical socuments.
9.4 If Party B fails to despatch the said documents within the stipulated period asper Appendix 2 Party B shall pay penalty to Party A in the following proportions:
(a)...percent of the total Contract price for delay from 1 to 4 weeks.
(b)...percent of the total contract price for delay form 5 to 8 weeks.
(c)...percent of the total contract price for delay exceeding weeks;
9.5 The payment of penalties by Party B to Party A as stipulated in Article 9 shllnot releve party B of its obligation to deliver the said documents.
9.6 Whenever the delay in delivering the said documents exceeds 6 months， Party Ashall be entitled to terminate the Contract at its discretion and Party B shall beobliged to re- fund Party A all its payments together with the corresponding ingerestat the rate of... per-cent per annum.
9.7 If the verification tests fail with the responsibility lying with Party B andif，as theresult，Party A cannot start normal production with the Contract having to beterminated， Party B shall erfund all the payments previously made by Party A to Party Btogether with the interest at the rate of... percent per annum.
9.8 If only some aspects of the properties of the Product are not up to the standardsasstipulated in the Contract and the responsibility lies with Party B， Party B shallcompensate Party A with ... percent of the total Contract price according to Concredtcircumstances. Ifthe responsibility lies with Party A， Party a shall pay the totalContract price in accordancewith the stipulations.
Article 10 Confidentiality
10. 1 All drawings， designs， specifications and all other technical informationmade available under this Contract by Party B shall be kept strictly confidential byParty A who.shall not sell， transfer or divulge it in any manner to anyone exceptthose of its own employ-ees who will be using it in the manufacture of the Products，without prior written consent ofParty B. Party A may. however，supply such technicalinformation to its subcontractor to the extent necessary for such subcontractor tomanufacture parts of Contract Products，pro-vidingthat Party A shall have suchsubcontractor agree， in writing， to hold suchnical information strictly in confidence.
10.2 ln case any part (s) or all of the above-mentioned technical information havebeen madepublic by Party B or any third party. Party A shall be thus released form theresponsi-bilityfor keeping secret the part(s) or all of the technology already published.
10.3 after the termination of the Contract， Party A shall have the rigbt to usetheatents supplide by B， i. e. Paryt A shall still have the right to design，manufacture，use，and export Contract Products.
Article 11 Infringement
11.1 Party B guarantees that it is the legitimate owner of the Patent to thestipulations of the Contract， and that it is lawfully in a position to transfer thePatent to Party A. of accusation of infringing the rights of a third party occurs，Party B shall be responsible for the matter and fully the legal andeconomicresponsibilities trising therefrom
11.2 A complete list of Party B’s patents and patent applications relevant toContrarct Product are specified in Appendixl to the Contract. Within one month after theContract has comeinto force Party B shall despatch to Party A two photostat copies ofthe letters patentsand patent application(s).
Article l2 Taxes and Duties
12.1 AIl taxes， customs duties and other excises arising in connection with theperfor-mance of the Contract outside the territory of Party A’s country shall be borneby PartyB.
12.2 In the execution of the Contract， any income made by Party B within theterritory of China shall be subject to taxation according to the tax laws of the People`sRepublic of China.
Article l3 Force Majeure
13.1 If either of the contracting parties is prevented from executing the Contractby Forcer Majeure events such as war， serious flood， fire， typhoon and earthquake，or other events agreed upon between both parties， the term for the execution of theContract may be extenede by a period equal to that affected by the event(s).
13.2 The involred party shall notify the other party by telex or cable within theshortest possible time of the occurrence of the Force Majeure event and within l4 daysthereaftersend by registered airmail to the other party a certificate issued by therelevant competent authori- ties for confirmation by theother Party.
13.3 should the Force Majeure event last more than one hundred and twenty(120)con-secutive days，both， parties shall settle the question of further exccution of theContract through friendly negotiations as soonas possible.
Article l4 Arbitration
14.1 All disputes arisint from the execution of or in connection with the Cotractshallbesettled through fricndly consultations between both parties. In case no settlementcan be reached through consultations， then the disputes shall be submitted toarbitration.
14.2 The arbitration shall take place in Stockholm， Sweden， and be conducted bythearbitration tribunal of theStockholm Chamber of Commerce in accordance with thestatutes of the said tribunal.
14.3 The arbitration award shall be final and binding upon both parties.
l4.4 The arbitiation fee shall be borne by the losing party.
l4.5 If the arbitration involves only a part of the Contract， then in the course ofarbitra-tion， the execution of the contract shall be continued except the part which isunder arbit ra-tion.
Article 15 Applicable law
This Contract shall be governed by the laws if the People’s Republic of China as totheinterpretation and performance of the Contract.
Articl l6 Duration
16.1 The Contrant os signed on April 4， 2004， by authorized represenatives of botbparties. after the Contract has been signed， the two parties shall apply to their resPectivethe managing onstructure of the parties or government authorities for apPrval. The dateof ap-proval last obtained shall be taken as the date of effectiveness of the Contract. Both partfies shallexert their best efforts to obtain the approval within sixty (60)says and inform the oth-er party by telex and thereafter confirm the same by letter. Ifthe COntract can not come into affect within six (6) months after the date of signing，both parties are entitlid to consider themselves absolved from the Contract.
16.2 Tbe Contract shall be valid for ten (10) years beginning from the date of itsbe-comingeffective， and shall become null and void automatically upon the expiry of thevalidity period of the Contract.
16.3 THe termination of this contract shall not affect in any way the outstandingclaims and the liabilities existing between the two parties upon the expiry of the validity of the Contractandthe debtor shall be kept liable until he fully pays up his debts to the creditor. The Contract is made out in Chinese and in English. In case of doubt as totheinterpretation of any provisions gerof， the Chinese version shall be controlling.
Party A :_________________ by__________________
Party B:___________________
by_______________ |
