Contractor to own the intellectual property

05 License to intellectual property rights in background information

1. The Contractor hereby grants to Canada a non-exclusive, perpetual, irrevocable, world-wide, fully-paid and royalty-free license to exercise such of the Intellectual Property Rights in any Background Information incorporated into the Work or necessary for the performance of the Work as may be required in order for Canada to exercise its license in the Intellectual Property Rights in the Foreground Information. The Contractor agrees to make any such Background Information (including, in the case of Software, source code) promptly available to Canada for any such purpose.
2. The Contractor acknowledges that Canada may wish to award contracts for any of the purposes contemplated in subsection 1 and that such contract awards may follow a competitive process. The Contractor agrees that Canada's license in relation to the Intellectual Property Rights in Background Information includes the right to disclose the Background Information to bidders for such contracts, and to sub-license or otherwise authorize the use of that information by any contractor engaged by Canada solely for the purpose of carrying out such a contract. Canada shall require bidders and the contractor not to use or disclose any Background Information except as may be necessary to bid for or to carry out that contract.
3. Where the Intellectual Property Rights in any Background Information are owned by a Subcontractor at any tier, the Contractor shall either obtain a license from that Subcontractor that permits compliance with subsections 1 and 2 or arrange for the Subcontractor to convey directly to Canada the same rights by execution of the form provided for that purpose by the Minister, in which case the Contractor shall deliver that form to the Minister, duly completed and executed by the Subcontractor, no later than the time of disclosure to Canada of that Background Information.
4. Notwithstanding subsection 1, the license set out therein shall not apply to any Software that is subject to detailed license conditions that are set out elsewhere in the Contract.

Replace subsection 10(1) in the "Waiver of Moral Rights" Section of the "Contractor to Own Intellectual Property Rights in Foreground Information" terms and conditions by the following:

1. The Contractor shall provide to Canada, at the completion of the Work or at such other time as the Minister may require, a written permanent waiver of moral rights (as this term is defined in the Copyright Act, R.S.C., c. C-42), in a form acceptable to the Minister, from every author that contributed to any Foreground Information which is subject to copyright protection and which is deliverable to Canada under the terms of the Contract.

Protection of intellectual property

The Contractor shall take reasonable measures to protect the Intellectual Property Rights in the Foreground Information, and in any case shall take at least the same measures as it takes in relation to other equivalent intellectual property owned by it.

Foreground information - Confidentiality

The Contractor, during the performance of the Contract and for a period of _____ months thereafter, shall keep confidential and shall not publish or otherwise disclose to any person any Foreground Information, except as may be necessary to carry out the Work under the Contract in which case the Contractor shall impose the same obligation of confidentiality on any person to whom the information is disclosed. The foregoing obligation does not apply to any Foreground Information where the same information is publicly available from a source other than Canada.

License to Canada's information

If commercial exploitation or further development of the Foreground Information, the Intellectual Property Rights in which vest in the Contractor pursuant to section 03, reasonably requires the use of certain Canada-owned information other than that supplied to the Contractor for purposes of the Contract, Canada may provide the Contractor with a license for that purpose, on terms and conditions to be negotiated between the Contractor and the Minister and which terms and conditions may include the payment of compensation. The Contractor must set out its request for such a license in writing, with an explanation as to why the license is required. The Minister shall respond in writing to the request within a reasonable period of time. If the Contractor's request is refused, the Minister's reply shall provide an explanation for the refusal.

Commercialization in Canada

1. In consideration of the Contractor receiving title to the Intellectual Property Rights in the Foreground Information, the Contractor agrees that manufacture of any product incorporating or derived from the Foreground Information will be done substantially in Canada and that the provision of any service incorporating or derived from the Foreground Information will be substantially from a base in Canada, and that such a product or such a service will be marketed and sold within _____ months after final payment under the Contract is made to the Contractor.
2. The Contractor shall have satisfied the obligation in subsection 1 in relation to any part of the Foreground Information if a product manufactured substantially in Canada or a service provided substantially from a base in Canada that incorporates or is derived from that part of the Foreground Information is being offered for general sale by the Contractor or its transferee, assignee or licensee, and at least one arm's-length sale has been made (other than a sale from a transferee, assignee or licensee to the Contractor, or vice-versa). The Minister may accept other evidence as demonstrating satisfaction of the obligation. When the obligation has been satisfied in relation to any part of the Foreground Information, the obligation shall cease to apply to that part of the Foreground Information.
3. If, ____ months before the end of the period specified in subsection 1, the obligation to market and sell a product or service as set out in that subsection has not yet been satisfied in relation to any part of the Foreground Information, the Contractor shall immediately submit to the Minister a report setting out:
   1. a description of the efforts that have been and will be made by the Contractor or its transferee, assignee or licensee to satisfy the obligation; and
   2. the reasons why the obligation has not been satisfied.
4. At the expiration of the period specified in subsection 1, if the Minister is satisfied that the Foreground Information is capable of commercial exploitation in Canada but that
   1. the Contractor (or its transferee, assignee or licensee) is incapable of achieving that; or
   2. the Contractor has not made every reasonable effort to fulfil the obligation; then the Minister may invoke either of the remedies set out in subsection 6. If the Minister is satisfied that the potential value to Canada of commercial exploitation of the Foreground Information substantially in Canada so justifies, the Minister may extend the time for the Contractor to fulfil the obligation by such period as the Minister may decide. In any other circumstance, the obligation shall cease to apply to that part of the Foreground Information.
5. The Contractor agrees that any of the following, affecting any part of the Foreground Information, would constitute a breach of the Contractor's obligation entitling the Minister
   
   to exercise, in relation to that part of the Foreground Information, the option to collect the
   
   liquidated damages provided for in the Contract for such a breach (if any), or, without prejudice
   
   to any other remedy that may be available at law or under the Contract, to exercise a remedy set out in subsection 6:
   1. the Contractor or any affiliate, subcontractor or agent of the Contractor manufactures outside Canada a product incorporating or derived from the Foreground Information without that product also being manufactured substantially in Canada, or provides from a base outside Canada a service incorporating or derived from the Foreground Information without that service also being provided substantially from a base in Canada;
   2. through the act or omission, whether direct or indirect, and whether deliberate or negligent, of the Contractor or its employee or subcontractor (including the sale or assignment of the Foreground Information or license or other authorization of the use of the Foreground Information), any person, corporation or other entity is enabled to manufacture outside Canada a product incorporating or derived from the Foreground Information without that product also being manufactured substantially in Canada, or to provide from a base outside Canada a service incorporating or derived from the Foreground Information without that service also being provided substantially from a base in Canada;
   3. the Contractor or its transferee or assignee, or a controlling interest in the Contractor or its transferee or assignee, is acquired by a person not resident in Canada or by a corporation or other entity controlled outside of Canada, and that person, corporation or other entity does not enter into an agreement with the Minister governing the use of the Foreground Information, promptly and before a breach described in paragraph (a) or (b) has occurred; or
   4. to the extent permitted by the laws of Canada or a Canadian province, the Contractor or its transferee or assignee becomes bankrupt or insolvent, makes an assignment for the benefit of creditors, or takes the benefit of any statute relating to bankrupt or insolvent debtors, or the Contractor, its transferee or assignee suffers the appointment against it of a receiver under a debt instrument or by a court, or an order is made or a resolution passed for the winding up of the Contractor, its transferee or assignee.
6. Where this subsection applies by virtue of subsection 4 or 5, the Minister may, by notice, either
   1. require the Contractor to assign or transfer to Canada at no cost the Intellectual Property Rights in the Foreground Information, or
   2. require the Contractor to provide to one or more persons, corporations or other entities specified by the Minister at no cost a non-exclusive, perpetual, unconditional, irrevocable, world-wide, and royalty-free license permitting the commercial exploitation of the Intellectual Property Rights in the Foreground Information, including the right to further develop the Foreground Information and to own the Intellectual Property Rights in any such further development.

   The Contractor agrees that it will promptly execute such conveyances or other documents relating to title or licensing as the Minister may require, and that it will afford the Minister or a licensee, as the case may be, at that party's expense all reasonable assistance in the preparation of applications and in the prosecution of any application for registration of any Intellectual Property Rights in any jurisdiction arising out of the Foreground Information, including without limitation the assistance of the inventor in the case of Inventions.

7. In the event that a breach described in paragraph (a), (b) or (c) of subsection 5 occurs, in addition to all other remedies available to Canada at law or under the terms of the Contract, the Contractor shall upon demand account for and pay to Canada any net revenues earned by the Contractor as a result of the breach.

Liquidated damages

1. The Contractor agrees that Canada would suffer actual damages as a result of a breach, described in paragraph 5(a), (b) or (c) of the clause Commercialization in Canada, of the obligation set out in subsection 1 of that clause, and that such damages are likely to be extremely difficult to quantify. In the event that such a breach occurs, the Contractor agrees to pay to Canada liquidated damages in the amount of $_____. Canada and the Contractor agree that the foregoing amount is their best pre-estimate of the amount of damages that Canada would suffer, and that it is not intended to be, nor is it to be construed as, a penalty.
2. Canada shall have the right to hold back, drawback, deduct or set off, from and against any monies owing at any time by Canada to the Contractor, any liquidated damages owing and unpaid under subsection 1.
3. Nothing in this clause is to be interpreted as limiting the rights and remedies which Canada or the Minister may otherwise be entitled to under the Contract or at law.

Effective October 1, 2000