Liquidmetal Technologies Inc (LQMT)

[PatentGuy1]

Thanks for taking the time to read the contract and for your interpretation. I agree with your interpretation of section 2.3 - i.e., "with ink and paper a magical exclusion can be granted within an exclusive territory" - but I think that there is more to it than that.

Referring back to the definitions:

1.9. “Eontec Licensed Products” shall mean any product the manufacture, use, offer for sale, sale or importation of which by Eontec would, but for this Agreement, infringe a valid claim of an LMT Licensed Patent in a jurisdiction where such valid claim exists or that incorporates or uses any element of the LMT Licensed Technical Information in its design or manufacture.

I believe that 1.9 means that an Eontec product that does not infringe an LMT patent (e.g., a product made from DM105) would not be an "Eontec licensed Product."

1.24. “LMT Licensed Products” shall mean any product the manufacture, use, offer for sale, sale or importation of which by LMT would, but for this Agreement, infringe a valid claim of an Eontec Licensed Patent in a jurisdiction where such valid claim exists or that incorporates or uses any element of the Eontec Licensed Technical Information in its design or manufacture.

I believe that 1.24 means that LMT product that does not infringe an Eontec patent (e.g., a product made from LM105) would not be an "LMT licensed Product."

Looking at section 2.3:

2.3. Territories. Eontec shall take such action and measures as shall be necessary to ensure that Eontec Licensed Products are not sold or resold in or into the LMT Exclusive Territory by Eontec or any other party in the chain of distribution (whether as a part of a finished product assembled or produced by a third party or otherwise) without first obtaining the prior written consent of LMT. LMT shall take such action and measures as shall be necessary to ensure that LMT Licensed Products are not sold or resold in or into the Eontec Exclusive Territory by LMT or any other party in the chain of distribution (whether as a part of a finished product assembled or produced by a third party or otherwise) without first obtaining the prior written consent of Eontec.

I interpret the first sentence of 2.3 to mean that Eontec is prohibited from selling "Eontec Licensed Products" (i.e., products made from LM105) into LMT Exclusive Territory without LMT's prior written approval. IMO, this prohibition only applies to "Eontec Licensed Products" (i.e., products made from LM105), and does not apply to non-Eontec Licensed Products (i.e., products made from DM105). Consequently, IMO, this agreement does not prevent Eontec from selling DM105 in LMT Exclusive Territory.

The second sentence provides the limitations on where LMT can sell LMT Licensed Products (i.e., products made using LM105).