ProCorn Inbred Release and Licensing Agreement between Agriculture and Agri-Foods, Canada (AAFC) and commercial corn companies

 

DRAFT - FOR DISCUSSION PURPOSES ONLY

CORN INBRED RELEASE AND LICENSING AGREEMENT

 

BETWEEN: HER MAJESTY THE QUEEN in right of Canada acting through the Minister of Agriculture (hereinafter referred to as "Agriculture and Agri-Food Canada")

OF THE FIRST PART

AND: XXX (hereinafter referred to as "the Company")

OF THE SECOND PART

 

WHEREAS Agriculture and Agri-Food Canada has developed the Inbred Line(s) of corn described in Appendix "A" or in an amendment to this Agreement as per the Model in Appendix "A" (hereinafter referred to as the "Inbred Line(s)"; and

WHEREAS the Company wishes to have the use of the AAFC Inbred Line(s) for crossing purposes in order to develop new corn hybrids and corn inbreds;

WHEREAS the Company may request permission from Agriculture and Agri-Food Canada to use the Inbred Line(s) for the production of hybrid seed for commercialization (hereinafter referred to as "Hybrid Seed");

WHEREAS Agriculture and Agri-Food Canada may agree to grant such permission upon the terms conditions and limitations provided in this Agreement.

NOW THEREFORE the parties hereto covenant and agree as follows:

1. Proprietary Rights of AAFC Inbred Lines

2. Subject to Section 4 (License) it is understood that the AAFC Inbred Line(s) belong to Agriculture and Agri-Food Canada and that all intellectual property rights related to the AAFC Inbred Line(s) are vested and shall continue to be vested in Agriculture and Agri-Food Canada.

3. Use of AAFC Inbred Line(s) by the Company

4. Subject to Section 4 (License), Agriculture and Agri-Food Canada hereby grants the Company the right to use the AAFC Inbred Line(s) free of charge.

   1. for the production of small quantities of Hybrid Seed and for performance testing of the said Hybrid Seed;
   2. as part of its research program to develop new corn Inbred Lines;

   and for no other purpose whatsoever.

5. Affiliates
6. 1. The use of the AAFC Inbred Line(s) permitted under Section 2 may be carried out by any of the Company's affiliates, but only after the Company has obtained from the affiliates a written undertaking as per the Model contained in Appendix "B" hereto, and has provided Agriculture and Agri-Food Canada with an original copy thereof.
   2. In this Agreement, the term "affiliates" means any person or corporate entity that directly or indirectly controls, or is controlled by, or is under common control with the Company. The term "control" means the possession of 50% or more of the voting stock of the controlled party.
   3. The Company shall provide to Agriculture and Agri-Food Canada upon request the necessary information establishing that a particular entity is an affiliate of the Company.
   
    
7. License
8. 1. In the event that the Company or any of its affiliates wishes to commercialize any hybrid for the production of which the AAFC Inbred Line(s) is (are) to be used as parent(s), the Company or the affiliate will request permission (license) therefore from Agriculture and Agri-Food Canada by sending a written notice. If Agriculture and Agri-Food Canada agrees to grant such permission (license), a Sub-Agreement shall be executed between Agriculture and Agri-Food Canada and the Company as per the model in Appendix "C".
   2. Any Inbred Line derived from an AAFC Inbred Line through simple genetic conversion or otherwise and which does not qualify as a "new variety" within the meaning of the UPOV (International Union for the Protection of New Plants) Convention, will be owned by Agriculture and Agri-Food Canada and any use thereof by the Company will be subject to the same type of permission (license) as provided under paragraph (a).
   3. In the event that Agriculture and Agri-Food Canada grants a licence to the Company, it is understood that such license is a non-exclusive license granted to the Company to use, maintain and increase the Inbred Line to produce and sell in the countries or territories listed in Appendix "C" (hereinafter referred to as the licensed territory), Hybrid Seed using the Inbred Line as parent subject to the conditions and limitations hereinafter contained, including the special conditions or restrictions, if any, mentioned in Appendix "C" and applicable to any portion of the licensed territory. It is understood that Appendix "C" may be revised from time to time by written agreement of the parties hereto.
   
    
9. Qualified Personnel

10. The use of AAFC Inbred Line(s) permitted under Section 2 will be carried out under the direction of a qualified plant breeder.

11. Confidentiality and Security
12. 1. The Company shall not disclose any information related to this Agreement except as may be necessary to carry out this agreement and shall take reasonable measure to ensure that AAFC Inbred Line(s) remain within the Company's premises and under the control of the company, and are conveyed or transferred to any other place or person except in strict accordance with this Agreement.
    2. In the event that a license has been granted under Section 4, each Party agrees to keep strictly confidential all test reports, sales data, and other proprietary information, as well as information of a technical nature. Neither Party will communicate or reveal such information to anyone except its employees, agents and representatives, except without the prior written approval of the other, and only to such extent as may be necessary for the proper exploitation of the Inbred Line in accordance with the provisions of this Agreement. Each Party agrees not to use the other Party's proprietary information for any technical or commercial program not covered in this Agreement. The Company agrees to take reasonable measures to insure that the Inbred Line remains within the Company's premises or under its control, and is not conveyed or transferred to any other place or person except strictly for the purpose of this Agreement.
    3. Nothing in this section shall be interpreted so as to require Agriculture and Agri-Food Canada not to disclose information which it may be legally required to disclose under the Access to Information Act (Canada).
    
     
13. Access by Agriculture and Agri-Food Canada

14. Employees or representatives from Agriculture and Agri-Food Canada shall be allowed to visit and inspect the Company's premises or those of its affiliates at any reasonable time, in order to determine whether the requirements of this Agreement are being followed by the Company.

15. Reports, records and audit
16. 1. The Company shall provide Agriculture and Agri-Food Canada between August 31 and December 1 of each year, with a written report on the status and usage of the Inbred Line(s), or if a licence has been granted with an annual report on its activities carried out under this Agreement. The Company shall also provide any interim report which may be specifically requested by Agriculture and Agri-Food Canada.
    2. In the event that a license has been granted under Section 4, the Company agrees to keep accurate records of operations in connection with this Agreement showing the volume of the Inbred Line produced and sold, the volume of each variety of Hybrid Seed produced and sold, net prices and percentage of royalty applicable, as well as the volume of seed remaining in stock in each country in which hybrid seed has been produced and sold. The Company agrees at the request of Agriculture and Agri-Food Canada and at the Company's expense, to provide a statement prepared by the Company's regular independent public accountant verifying the royalties or reports submitted to Agriculture and Agri-Food Canada provided, however, that Agriculture and Agri-Food Canada may be permitted through an independent public accountant retained by Agriculture and Agri-Food Canada or through another party agreed upon by the Company and Agriculture and Agri-Food Canada to inspect such records in order to ascertain the accuracy of such royalties and reports.
    3. The Company specifically authorizes the Canadian Seed Grower's Association (and any similar organization or institution in other countries) to disclose to Agriculture and Agri-Food Canada any information it may have with respect to the production of seed including acreage planted as well as the formula of hybrids with Agriculture and Agri-Food Canada Inbred Lines.
    
     
17. Addresses

18. All communications and notices pertaining to this Agreement shall be sent as follows:

    To Agriculture and Agri-Food Canada:

    The Director
    Eastern Cereal and Oilseed Research Centre
    Research Branch
    Agriculture and Agri-Food Canada
    K.W. Neatby Building
    Ottawa, Ontario K1A 0C6
    Canada
    Tel: (613) 759-1952
    Fax: (613) 759-1970

    To the Company:

    XXX

19. Duration and Termination
20. 1. This Agreement shall remain in effect for a period of seven (7) years, unless earlier terminated as provided for in this Section 10.
    2. This Agreement may be terminated prior to expiry upon one (1) year's written notice by the Company to Agriculture and Agri-Food Canada indicating that it will no longer use the AAFC Line Inbred (s) , in which case, the related license shall be terminated as of date or until this Agreement is terminated by Agriculture and Agri-Food Canada as provided hereinafter.
    3. Agriculture and Agri-Food Canada may, by written notice to the Company, terminate this Agreement if the Company becomes bankrupt or insolvent or does not remedy any identified breach or default to carry out its obligations under this Agreement, including those obligations related to any related license granted hereunder or failure to supply the written report set forth in Section 8A. The Company shall have thirty (30) days to remedy such breach or default following receipt of notice from Agriculture and Agri-Food Canada bringing such breach or default to its attention, failing which this Agreement shall be immediately terminated. Agriculture and Agri-Food Canada may also, by written notice to the Company, terminate this Agreement if Agriculture and Agri-Food Canada's mandate is changed such that Agriculture and Agri-Food Canada no longer supports research in and/or the release of corn Inbred.
    4. Upon termination or expiry of this Agreement, all existing stock of the Inbred Line shall be disposed of promptly in accordance with Agriculture and Agri-Food Canada's directions and no sale or other disposition of the existing stock of Hybrid Seed shall take place unless a new Agreement is executed.
    
     
21. Royalties
22. 1. In the event that a license has been granted pursuant to Section 4, the Company agrees to pay Agriculture and Agri-Food Canada royalties in accordance with the Royalty Rates mentioned in Appendix "D" and applicable to Hybrid Seed sold in the relevant licensed territory.
    2. Royalties shall be paid to Agriculture and Agri-Food Canada before December 1 of each year, with respect to sales effected up to the previous August 31.
    3. Cheques for the payment of royalties shall be in Canadian funds and shall be made payable to the Receiver General for Canada. Where applicable, the exchange of rates shall be those issued by the Bank of Canada on the day payment is made. Each cheque shall be sent to:

    4. Director
       Eastern Cereal and Oilseed Research Centre
       Agriculture and Agri-Food Canada
       K.W. Neatby Building
       Ottawa, Ontario K1A 0C6
       Canada

    5. Each cheque shall be accompanied by a summary statement bearing the Financial Coding of the Agreement for each Inbred Line (Appendix "A") and showing the formula used by the Company to determine the amount of royalties due, the period covered, the total sales effected by country, the type of hybrid and the percentage of royalties applicable.
    
     
23. Protection (Plant Breeders' Rights)

24. In the event that a license has been granted pursuant to Section 4, the Parties agree that Agriculture and Agri-Food Canada has developed the Inbred Line which is the subject of this Agreement. It is also agreed that Agriculture and Agri-Food Canada has the exclusive authority to claim Plant Breeders' Rights in countries in which legislative protection is available for such rights.

    Unless otherwise agreed to by Agriculture and Agri-Food Canada, the Company shall not proceed with commercialization in a country where Plant Breeders' Rights protection for the parent Agriculture and Agri-Food Canada Inbred is available, without written permission from Agriculture and Agri-Food Canada and without obtaining and maintaining, at its own expense, such protection on behalf of Agriculture and Agri-Food Canada. In such situations, the Company may have the obligation to sub-license other companies. The financial arrangements will be negotiated with Agriculture and Agri-Food Canada at that time.

    The company may deduct from royalty payments all expenses incurred in defending against claims from third parties alleging any interest in the Inbred Line.

25. Warranties

26. Agriculture and Agri-Food Canada makes no warranties herein, express or implied, and more specifically, Agriculture and Agri-Food Canada makes NO WARRANTIES OF MERCHANT ABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IT IS AGREED THAT THE COMPANY ACCEPTS AGRICULTURE AND AGRI-FOOD CANADA'S EFFORTS AND THE INBRED LINE COVERED BY THIS AGREEMENT ON AN "AS IS" BASIS.

27. Other Legal Requirements

28. In the event that a license has been granted pursuant to Section 4, the Company shall obtain any other authorizations or permits which may be required under any federal, provincial or foreign legislation, in order for the Company to legally carry out all of its activities under the license.

29. General
30. 1. This Agreement may not be assigned in whole or in part or no sub-licenses shall be issued by the Company without the prior written consent of Agriculture and Agri-Food Canada;
    2. This Agreement shall be interpreted in accordance with the laws in force in the province mentioned as part of the Company's address. Where such address is outside Canada, the laws of the Province of Ontario, Canada, shall apply.
    3. All amendments to this Agreement shall be in writing;
    4. The Company warrants that no bribe, gift, or other inducement has been paid, given, promised or offered to any Government official or employee in relation to this Agreement.
    1. No member of the House of Commons of Canada shall be admitted to any share or part of this Agreement or to any benefit to arise therefrom;
    2. Notwithstanding the provisions of this Agreement, the Parties may from time to time by mutual agreement vary the terms of this Agreement by amendment in writing;
    3. It is a term of this Agreement that no former Canadian Government public office holder who is not in compliance with the post-employment provisions of the Conflict of Interest and Post-Employment provisions of the Conflict of Interest and Post- Employment Code for Public Office Holders shall derive a direct benefit from this Agreement.
31. Entire Agreement

32. This Agreement and Appendices A, B, C, and D constitute the entire agreement between the Parties and it sets forth all representations forming part of or in any way affecting or relating to this Agreement. The Parties acknowledge that there are no representations either oral or written, between AAFC and the Company other than those expressly set out in this Agreement.

IN WITNESS WHEREOF this Agreement has been executed by the duly authorized representatives of the parties.

Done in duplicate this _____ day of ______________, 20____.

FOR HER MAJESTY	FOR THE COMPANY
_____________________________________ Dr. Lianne Dwyer, Acting Director Eastern Cereal and Oilseed Research Centre Agriculture and Agri-Food Canada	____________________________________ Name ____________________________________ Title
_____________________________________ Witness	____________________________________ Witness
_____________________________________ Print name of witness	_____________________________________ Print name of witness

AFFIX SEAL BELOW

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APPENDIX "A"

To the Agreement between Agriculture and Agri-Food Canada and _____________________

entered into on the ____ day of _________________, 20_____.

Agriculture and Agri-Food Canada has developed the following Inbred Line(s) of corn:

XXX

The Company wishes to have the use of the AAFC Inbred Line(s) for crossing purposes in order to develop new corn hybrids and corn inbred.

 

Done in duplicate this ____ day of _________________, 20____, at___________________.(City)

____________________
(Country)

_______________________________
Name (in print)

_______________________________
Signature

_______________________________
Witness

AFFIX COMPANY SEAL BELOW

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APPENDIX "B"

To the Agreement between Agriculture and Agri-Food Canada and __________________________ entered into on the ______ day of ________________, 20_____, (hereinafter referred to as the "Master Agreement").

UNDERTAKING BY AFFILIATE

1. Name of Affiliate: ________________________________________________________
2. Address: ________________________________________________________________

3. ________________________________________________________________________

4. Relationship with Company:

5. ________________________________________________________________________

6. Name and address of Affiliate's plant breeder:

7. ________________________________________________________________________

   ________________________________________________________________________

8. Undertaking

9. On behalf of the above-named Affiliate, I agree to use the following AAFC Inbred(s):

   ________________________________________________________________________

   ________________________________________________________________________

for the very same purpose as stated in Section 2 of the Master Agreement, to obtain permission (license) from Agriculture and Agri-Food Canada before proceeding with commercialization of any corn hybrid derived fro the said AAFC Inbred(s) and to abide by all other terms and conditions of the Master Agreement.

Done in duplicate this _____ day of ______________, 20___ at _______________(City), ______________________(Country).

_________________________________ Name (in print)	___________________________ Print name of witness
_________________________________ Signature	___________________________ Witness

AFFIX COMPANY SEAL BELOW

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APPENDIX "C"

To the Agreement dated __________________________ between Agriculture and Agri-Food Canada and

________________________________________ entered into on the ____ day of _____________, 20___.

 

Sub-Agreement

1. The company is hereby given the right to use the Inbred Line(s) as a male or female parent to produce the named Hybrid Seed for sale in the following countries or territories, subject to the special conditions and/or restrictions mentioned below.

2. 	Inbred	Hybrid	Licensed Country	Male or Female	Royalty Rate	Financial Code (do not write in this column)
   1
   2
   3
   4
   5
   6

   
   
   
   
   

   LICENSED COUNTRY/TERRITORY	CONDITIONS/LIMITATIONS
   Canada and the U.S.A.	- NIL -

3. The list of countries or territories mentioned in the preceding paragraph may be changed through an amendment of this Appendix duly signed by both Parties. It is understood that, with respect to the addition of countries or territories, Agriculture and Agri-Food Canada may impose special restrictions or conditions including requirements limiting the production of foundation seed to suppliers designated by Agriculture and Agri-Food Canada.
4. This Appendix "C" supersedes any previous version of Appendix "C" agreed to by Agriculture and Agri-Food Canada and the Company.

Signed this _____ day of ________________, 20____.

ON BEHALF OF AGRICULTURE AND AGRI-FOOD CANADA	ON BEHALF OF THE COMPANY
_____________________________ Dr. Lianne Dwyer, Acting Director Eastern Cereal and Oilseed Research Centre Agriculture and Agri-Food Canada	______________________________ Signature
	______________________________ Name (in block letters)

 

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APPENDIX "D"

To the Corn Inbred Licensing Agreement dated ________________________ between Agriculture and Agri-Food Canada and _________________________________.

ROYALTY RATES: The royalty formula will be based on the percentage of Agriculture and Agri-Food Canada Inbred(s) in the hybrid. The basic rate for hybrid seed sold is 5%. The rate is based on a percentage of the net dealer price in the market for which the seed will be sold.

1. Hybrid Seed Sold for Production
2. 
   
   

   Pedigree	% of Net Dealer Price
   AC X AC*	5.00%
   AC X OT*	2.50%
   OT X AC	2.50%
   (OT X OT) AC	2.50%
   (AC X OT) AC	3.75%
   (AC X OT) OT	1.25%

   * AC = Agriculture and Agri-Food Canada Inbred Line(s)

   * OT = Other Inbred Lines(s)

3. Net Dealer Price

4. Net dealer price shall be defined for the purpose of this Agreement as the invoiced price for certified seed sales in the currency in which the hybrid was sold to dealers OR in the case of companies who sell directly to the end user (farmer customers) it shall be defined as the retail sales price less discounts and commissions.

5.  

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REPLY TO QUESTIONNAIRE WIPO/GRTKF/IC/Q.2

 

PRACTICAL GUIDANCE AND LESSONS LEARNED

Question 21: Please share any practical advice that you may have arising out of the drafting, negotiation and conclusion of the contract in question, in particular, any advice relating to the intellectual property aspects of the contract.

Response:
Prior Informed Consent: In essence, prior informed consent is given by the providers of the genetic resources, i.e. AAFC.

Legal Advice: Obtained at the time of drafting by AAFC. Most companies also obtain legal advice prior to signing.