Covenant to Customers
Published: July 05, 2007 | Updated: July 05, 2007
Microsoft, on behalf of itself and its Subsidiaries, hereby covenants not to sue a Customer of Xandros for infringement under Microsoft’s Covered Patents on account of such Customer’s use of specific copies of Covered Products as distributed by Xandros during the Term. For the avoidance of doubt, bug fixes and minor updates to a specific copy is considered the same copy and remains covered by the above covenant provided such bug fixes and minor updates do not add substantial new functionality; an upgrade (or a new version) of a specific copy is treated as two different copies.
The above covenant is personal to any given Customer and is non-transferable. By necessity, the covenant is conditioned upon the Customer providing Microsoft, upon its request, with sufficient information to verify which copies of Client Offerings and Server Offerings are Covered Products subject to the covenant. Microsoft reserves the right to update (including discontinue) the above covenant pursuant to the terms of the Patent Cooperation Agreement between Xandros and Microsoft that was publicly announced on June 4, 2007; however, any covenant provided to specific copies of Covered Products before such update shall survive under its initial terms and conditions.
The foregoing covenants shall survive for such specific copies of Covered Products distributed during the Term until six years after the last of any applicable Covered Patents expire.
Definitions of capitalized terms used above may be found in the Definitions section below.
“Client Offerings” means any products of Xandros that include the Linux operating system and are used only on a client laptop or client desktop computer. Examples of Client Offerings include Xandros Desktop product offerings running on a client laptop or desktop computer.
“Covered Products” means specific copies of (1) Client Offerings for which a Customer has paid Xandros for a Patent SKU and MLGP has received the applicable Fee, and (2) Server Offerings for which Xandros has paid MLGP the applicable Fee; provided such specific copies of Client Offerings and Server Offerings do not comprise or include Foundry Products, Clone Products or Other Excluded Products. Covered Products do not include Free Downloads, BRIC Server Offerings or BRIC Client Offerings.
“Covered Patents” means Patents that cover the Covered Products which Microsoft or any of its Subsidiaries now or hereafter (i) owns or controls, or (ii) has the ability or right to grant a release, covenant not to sue or other freedom from suit. Covered Patents do not include Extendible Third Party Patents.
“Customers” means an enterprise or individual that utilizes a specific copy of a Covered Product for its intended purpose as authorized by Xandros. Enterprises or individuals are not Customers when they (1) resell, license, supply, distribute or otherwise make available to third parties such specific copy or additional copies of the Covered Product; or (2) resell, license, supply, or distribute the output of SDKs or developer kits they utilize as a Customer. For avoidance of doubt, an enterprise or individual cannot qualify both as a Customer and Distributor for use of the same copy of a Covered Product.
“Server Offerings” means any products of Xandros that include the Linux operating system and are used on a server or any non-client computer (but not including Mainframes). Examples of Server Offerings include Xandros Server product offerings.
“Subsidiary” means any entity (a) more than fifty percent (50%) of whose outstanding shares or securities representing the right to vote for the election of directors or other managing authority are, now or hereafter, owned or controlled, directly or indirectly, by a party, but such entity shall be considered a Subsidiary only when such ownership or control exists; or (b) which does not have outstanding shares or securities, as may be the case in a partnership, joint venture or unincorporated association, but more than fifty percent (50%) of whose ownership interest representing the right to make the decisions for such entity is, now or hereafter, owned or controlled, directly or indirectly, by a party, but such entity shall be considered a Subsidiary only when such ownership or control exists.
“Term” means the period beginning on the Effective Date and, unless extended pursuant to Section 7.1, ending on the earlier of (i) five (5) years from the Effective Date, or (ii) the date of termination of this Agreement.
“Patent SKU” means patent coverage from Microsoft purchased for a copy of a Client Offering under the terms set forth in the Covenant to Customers.
“Foundry Product” means a product which is either (a) designed by a third party (or designed for a third party other than by Xandros) without substantial input from Xandros and made, reproduced, sold, licensed, or otherwise transferred by Xandros, on essentially an exclusive basis, (i) to that third party, or (ii) to that third party’s customers, or (iii) as directed by that third party; or (b) made, reproduced, sold, licensed or otherwise transferred through or by Xandros for the primary purpose of attempting to make such product subject to the covenants under the Covered Patents of Microsoft so that a third party’s customers can receive the benefit of such covenants.
“Clone Product” means a product (or major component thereof) of Xandros that has the same or substantially the same features and functionality as a then-existing product (or major component thereof) of Microsoft (“Prior Product”) and that (a) has the same or substantially the same user interface, or (b) implements all or substantially all of the Application Programming Interfaces of the Prior Product. Those portions of a product that are otherwise licensed to Xandros from Microsoft shall not be considered in determining whether the product is a Clone Product. Except for Wine, OpenXchange, StarOffice, OpenOffice, CrossOver Office and Mono, the Parties agree that versions of products sold, licensed, supplied, distributed or otherwise made available by Xandros for Revenue before the Effective Date (“Existing Products”) will not be deemed to be Clone Products.
“Other Excluded Products” means (a) office productivity applications (word processing, spreadsheets, presentation software, etc.) of Xandros that are hosted by or running on a computer acting as a server for a connected client device, (b) any software embedded or otherwise running in any devices (printers, cameras, game consoles, set-top boxes, phones, handheld devices, TVs, etc.) other than personal computers, workstation computers, or server computers (not including Mainframes), (c) any protocol functionality to the extent such functionality is licensed to Xandros [REDACTED], and (d) new features and functions in the following categories of products: (i) video game consoles (e.g., Xbox video game consoles), console games, video game applications designed to run on a computer, and on-line video gaming services (e.g., Xbox live); (ii) business applications designed, marketed and used to meet the data processing requirements of particular business functions, such as accounting, payroll, human resources, project management, personnel performance management, sales management, financial forecasting, financial reporting, customer relationship management, and supply chain management; (iii) email servers (including mail transfer agents); and (iv) unified communications.
“Free Downloads” means specific copies of Client Offerings and Server Offerings that are downloaded for free from a publicly available website of Xandros. Free Downloads do not include any copies of Client Offerings or Server Offerings for which Xandros receives any revenue or other consideration.
“BRIC Server Offerings” means Server Offerings Distributed in Brazil, Russia , India or China by Xandros or its Subsidiaries.
“BRIC Client Offerings” means Client Offerings Distributed in Brazil, Russia, India or China by Xandros or its Subsidiaries.
“Patents” means any and all utility patents, utility models, utility patent registrations, and equivalent rights (including, without limitation, originals, divisionals, provisionals, results of reexamination, continuations, continuations-in-part, extensions or reissues), and utility patent applications for the foregoing, in all countries of the world, and any other procedure or formality with respect to the aforesaid that can result in an enforceable utility patent right anywhere worldwide. Patents do not include design patents, design registrations, or trade dress rights.
“Extendible Third Party Patents” means any Patent entitled, in whole or in part, to an effective filing date on or before March 27, 2012, which is not owned or controlled by Microsoft or any of its Subsidiaries but under which Microsoft or any of its Subsidiaries now has or hereafter obtains the ability or right to grant a covenant not to sue or other freedom from suit to customers of Xandros, where the grant of the covenant or other freedom from suit to the customers of Xandros is contingent on the payment of consideration to a third party which (a) is not a Subsidiary of Microsoft or (b) at the time an invention claimed by the Patent was conceived, was not a Subsidiary of Microsoft or an employee or contractor of Microsoft or a Subsidiary of Microsoft.
“Distributors” means resellers and distributors to the extent they are authorized by Xandros (directly or indirectly) to resell, license, supply, distribute or otherwise make available Covered Products of Xandros.
“Mainframes” means high performance computers, such as the IBM’s zSeries and System z high performance computers, any equivalent offerings and any offerings marketed as “mainframes.”
“Effective Date” means March 27, 2007.
“Applications Programming Interfaces” means a set of one or more routines or interfaces provided by a software program (including an operating system, middleware or other software application) that are used to invoke or direct functions or services of such software program for use by other software programs.
“Revenue” means any consideration to Xandros that is reasonably attributable to the sale, license or other distribution of Client Offerings. The parties agree that the definition of Revenue is based on the current revenue model of Xandros for Client Offerings, and that if such revenue model materially changes during the Term, Xandros will promptly give written notice to Microsoft and the parties will negotiate a new Revenue definition in good faith. The current definition of Revenue shall remain the same during such good faith negotiations.