MICROSOFT AZURE IP ADVANTAGE

BENEFIT TERMS AND CONDITIONS

Microsoft offers Microsoft Azure IP Advantage Benefits to Qualified Customers of Microsoft Azure products and services.  These benefits are offered subject to the following terms and conditions (“Terms”).   By exercising the Microsoft Azure IP Advantage Benefits, Qualified Customer agrees to be bound by these Terms.   

AGREEMENT

1.                  Definitions 

Affiliate” means with respect to a given Entity (i) any other Entity Controlling, Controlled by, or under common Control with, such given Entity (collectively “Controlled Affiliate”), and (ii) Country-Specific Affiliates.  An Entity shall be deemed an Affiliate only so long as such Control exists.

Asserting Entity” means, at any given period of time, any Entity (including its Affiliates) that earn (during the then-preceding twelve (12) month period) more than fifty percent (50%) of their collective revenue through monetizing their patents or patent applications by enforcement or licensing of third party commercial software, product or service offerings that do not compete with any bona-fide commercial software, product or service offerings of such Entity (including its Affiliates); provided, however, an Asserting Entity does not include (i) Microsoft or its Affiliates, or (ii) any Entity formed primarily for the purpose of acquiring and selling patents for defensive purposes such as offering rights similar to the “Patent Pick” rights set forth in these Terms.

Azure” means the current and future cloud services platform and technologies of Microsoft or its Affiliates, including (i) the cloud services platforms and technologies described at https://azure.microsoft.com/en-us/ and successor sites, and (ii) the cloud software solutions offered by Microsoft or its Affiliates that a customer may use to create and operate a cloud running in the customer’s on-premises environment, currently referred to as Azure Stack.

 Commercial Entity” means any Entity (other than Microsoft or its Affiliates) that has substantial software, product or service offerings against which a meaningful patent infringement lawsuit may be brought. 

Control” means direct or indirect (a) ownership of more than fifty percent (50%) of the outstanding shares representing the right to vote for members of the board of directors or other managing officers of an entity, or (b) for an entity that does not have outstanding shares, more than fifty percent (50%) of the ownership interest representing the right to make decisions for such entity. 

Country-Specific Affiliatesmeans any Entity (i) through which a party or its Controlled Affiliates are conducting their primary business in a specific geographic area with respect to any of their software, hardware, technology, products, services or other offerings, and (ii) for which either (a) such party or such Controlled Affiliate owns less than 50% of such Entity’s equity interest due to regulatory requirements prohibiting 50% or more ownership, or (b) in China only, a party or its Controlled Affiliates owns at least 45% of such Entity’s equity interest; provided that such Entity is only a Country-Specific Affiliate to the extent that it is conducting such primary business of a party or its Controlled Affiliates.

 Entity” means any individual, person, trust, corporation, partnership, joint venture, limited liability company, association, unincorporated organization, and any other legal or governmental entity.

Initiate” means to assert a patent infringement claim in a lawsuit; provided, however, Initiate does not include a first Entity asserting a patent infringement claim in a lawsuit against a second Entity (or its Affiliates) if such second Entity (or its Affiliates) filed a patent infringement lawsuit against such first Entity (or its Affiliates) less than six (6) months prior to such first Entity asserting such patent infringement claim.

Microsoft” means Microsoft Corporation.

MTL” means Microsoft Technology Licensing, LLC.

Parties” or “parties” means Qualified Customer and Microsoft.

Patent” means any patent or patent application in any country, except design patents and design registrations, that are owned by Microsoft, MTL or their Affiliates.

Patent List” means the list of patents owned by MTL set forth at http://aka.ms/AzureIPAdvantagePatentList.

 Patent Request Form” means the form specified by MTL that a Qualified Customer may use to request to purchase a Patent from the Patent List.  An exact copy of this form is available by request to ipadvant@microsoft.com. 

Patent Sales Agreement” means an agreement in the form specified by MTL that is executed between MTL and a Qualified Customer for the sale of a Patent.   An exact copy of this form is available by request to ipadvant@microsoft.com.

Plaintiff” has the meaning set forth in Section 4.1.

Qualified Customer” means a customer that has paid One Thousand US Dollars (US $1,000.00) or more each month in the then-preceding three (3) month period for the usage by such customer or its Affiliates of Azure software or services operated by Microsoft.  For the avoidance of doubt, in cases where a customer prepays for Azure or makes other Azure monetary commitments, it is the value of the Azure usage and not the pre-payment value that determines qualification.  Qualified Customers must be bona fide users of Azure and do not include any Entity (including its Affiliates) that markets and sells its own cloud services platform as an alternative to Azure, including, without limitation, Google, Amazon and IBM, and their Affiliates.

Transfer” means (i) a sale, transfer or assignment of a Patent owned by Microsoft, MTL or their Affiliates to an Asserting Entity; and (ii) an exclusive license grant to an Asserting Entity of one or more claims of a Patent; provided, however, any licenses, releases or other rights provided to a Qualified Customer and its Affiliates under these Terms shall be limited to the extent of such exclusive license grant. 

2.                  The Springing License

2.1              License Grant.  During the Term, if Microsoft, MTL or their Affiliates (“Microsoft Entity”) Transfer a Patent to an Asserting Entity (“Transferred Patent”), then effective immediately prior to such Transfer, such Microsoft Entity hereby grants a nonexclusive, nonsublicensable, royalty-free, fully paid-up, worldwide, nontransferable, perpetual, irrevocable license (and release for past activity) under the Transferred Patent to each then-eligible Qualified Customer and its then-current Affiliates to make, have made (exclusively for such Qualified Customer and such Affiliates), use, sell, offer for sale, import, distribute, lease, and otherwise dispose of software and services of such Qualified Customer and such Affiliates but only to the extent such software and such services are running on Azure.

2.2              Reservation of Rights.  The licenses and releases provided in these Terms are non-extendible, nonexclusive, nontransferable, and shall not provide any enforcement rights with respect to any Patents to a Qualified Customer, its Affiliates or any third parties.  No additional rights (including any implied patent licenses, covenants, releases, immunities or other rights) are granted by the licenses or releases contained in these Terms, through implication, exhaustion, estoppel or otherwise.  Notwithstanding anything to the contrary in these Terms, Microsoft, MTL and their Affiliates are not bound by, and do not grant any license, covenant, release, immunity or other right or incur any other obligations as a result of, any downstream licensing obligations of a Qualified Customer or its Affiliates, including with respect to any other license agreements with a third party.  Without limiting the generality of the foregoing, the licenses and releases contained in these Terms do not include, and are conditioned upon Qualified Customer, its Affiliates, and all other Entities not receiving, any license, right, release or covenant under these Terms (a) to any portions of the software or services not covered by any Transferred Patent (e.g. related or enabling technologies); (b) to encumber, license or sublicense any Transferred Patent; or (c) under any patents or other intellectual property rights other than the Transferred Patents even if such patents or other intellectual property are necessary for practicing any Transferred Patent.

3.                  The Patent List

3.1              The Patent List.  MTL has published the Patent List on a publicly available website, organized by technology areas.  MTL has used reasonable efforts to make patents available on the Patent List that have the potential to be helpful to a general pool of Azure customers for the defensive purposes set forth in these Terms, but MTL does not guarantee that any patents in the Patent List will be useful to a Qualified Customer.  MTL will maintain the list and may add and remove patents to and from the Patent List at its discretion.

3.2              MTL Ownership Rights.  A Qualified Customer has no right, title or interest in any patents in the Patent List unless and until MTL and Qualified Customer have executed a Patent Sales Agreement, and Qualified Customer hereby waives any such rights, title and interest to the extent any are deemed to exist.  MTL is the sole owner of the patents in the Patent List, and in its sole discretion, may fully exert its ownership rights at all times, including prosecuting, licensing, encumbering, selling, transferring and enforcing the patents, through litigation or otherwise, including during and after the Term.  If MTL sells any of the patents in the Patent List, or files a patent lawsuit including any patents in the Patent List, such patents shall be deemed to be automatically removed from the Patent List.  If a patent is removed from the Patent List for any reason, a Qualified Customer shall no longer be able to purchase such patent under these Terms.

4.                  Patent Pick Process

4.1              Submission of Patent Request Form.  During the Term, if a Qualified Customer or its Affiliates are sued by a Commercial Entity (such Entity including its current Affiliates, “Plaintiff”) for utility patent infringement with respect to software or services deployed by a Qualified Customer or its Affiliates on Azure (“Plaintiff Lawsuit”), then a Qualified Customer may, within six (6) months of the filing of such Plaintiff Lawsuit, submit a request to MTL to purchase a single Patent from the then-current Patent List by fully completing and sending to MTL a Patent Request Form; provided, however, only one Patent may be purchased per Plaintiff Lawsuit, and only one Patent may be purchased during any given one year period.  If all of the Conditions have been met, MTL will sell the requested Patent to a Qualified Customer by executing the Patent Sales Agreement.  Any Patent Request Forms submitted by a Qualified Customer shall be deemed incorporated into these Terms and are subject to all of these Terms.

4.2              Conditions.  The following conditions (“Conditions”) must be met prior to MTL executing any Patent Sales Agreement:

(a)                 Qualified Customer was a Qualified Customer on the date of the filing of the Plaintiff Lawsuit and on the date of submitting the Patent Request Form, and Qualified Customer has not (and its Affiliates have not) maintained a lawsuit Initiated by Qualified Customer (or its Affiliates) against Microsoft, its Affiliates or their customers for patent infringement with regard to Azure or software or services running on Azure within two years prior to the date of the Patent Request Form. 

(b)               The patent infringement claim in the Plaintiff Lawsuit is not subject to an indemnification obligation by Microsoft, a supplier of Qualified Customer or any other Entity.

(c)                Qualified Customer reasonably believes that Plaintiff is infringing the Patent identified in the Patent Request Form and intends in good faith to assert such patents against Plaintiff in the Plaintiff Lawsuit with respect to the specific software, products or services of Plaintiff identified in the Patent Request Form (“Identified Products”).

(d)               Plaintiff does not have a license or similar rights to the Patent with respect to the Identified Products and Microsoft or any of its Affiliates are not obligated to provide such license or similar rights to Plaintiff upon the sale or assignment of such patents.

(e)                Qualified Customer submits the Patent Request Form to MTL within six (6) months of the filing of the Plaintiff Lawsuit, and the Patent Request Form is fully and accurately completed, including attaching a properly and fully executed Patent Sales Agreement.

(f)                MTL reasonably believes that all of the above conditions in this Section 4.2 have been met, the Qualified Customer is a bona fide user of Azure, and all of the conditions and representations in the Patent Request Form, are true.

4.3              MTL Response to Submission.  Within thirty (30) days of receipt of the Patent Request Form, MTL will reject or accept the submission.  If MTL rejects the submission, MTL will state the reason(s) for the rejection in its response.  If MTL accepts the submission, MTL will execute the Patent Sales Agreement attached to the Patent Request Form and the parties will perform under the terms and conditions of such Patent Sales Agreement.

4.4              No Assistance.  Qualified Customer understands and acknowledges that Microsoft and MTL will provide no guidance, diligence or other assistance to Qualified Customer regarding which patents, if any, Qualified Customer will identify in any submission.

5.                  Term and Termination

5.1              Term.  The period of applicability of these Terms (“Term”) shall commence on the date these Terms are posted by Microsoft (“Effective Date”) and terminate on the earlier of (i) the date of termination of these Terms, or (ii) for any given Qualified Customer, the date on which such Qualified Customer is no longer a Qualified Customer.

5.2              Termination.  These Terms and the benefits hereunder may be terminated by Microsoft at any time by providing six (6) months’ notice of termination.  Only Sections 5 and 6 shall survive the expiration or termination of these Terms.

5.3              Updates.  Qualified Customer understands that these Terms are benefits provided to Qualified Customer as part of Microsoft Azure IP Advantage Benefits and will, by necessity, need to be updated and improved over time.  As such, Microsoft reserves the right to update these Terms by providing Qualified Customer with ninety (90) days’ notice of any such updates. 

6.                  Miscellaneous

6.1              Applicable Law and Jurisdiction. The validity, construction, and performance of these Terms shall be governed by and construed first in accordance with the federal laws of the United States to the extent federal subject matter jurisdiction exists, and second in accordance with the laws of the State of New York, exclusive of its choice of law rules.  With respect to all civil actions or other legal or equitable proceedings directly arising between the parties or any of their Affiliates under these Terms, the parties consent to exclusive jurisdiction and venue in the United States District Court for the Southern District of New York (the “Forum”) unless no federal jurisdiction exists, in which case the parties consent to exclusive jurisdiction and venue in the state courts located in the borough of Manhattan, New York (the “Alternate Forum”).  The parties irrevocably consent to personal jurisdiction and waive the defense of forum non conveniens in the Forum, or Alternate Forum, if applicable, with respect to themselves and their Affiliates.  Process may be served on any party in the manner authorized by applicable law or court rule.

6.2              Transfer Taxes.  Qualified Customer is responsible for and shall timely pay any sales, use, value added, goods and services, or other transfer taxes, documentary charges, recording fees, or similar taxes, charges, or fees arising from or in connection with any sale, assignment, and transfer of any patents to the Qualified Customer. 

6.3              LIMITATION ON DAMAGES. UNLESS OTHERWISE REQUIRED BY APPLICABLE LAW, NO MICROSOFT ENTITY SHALL BE LIABLE TO QUALIFIED CUSTOMER FOR LOSS OF PROFITS, OR ANY SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES, HOWEVER CAUSED, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

6.4              LIMITATION OF LIABILITY.  WITHOUT WAIVING ANY OTHER RIGHTS OF ANY MICROSOFT ENTITY, INCLUDING ANY RIGHT TO SEEK SPECIFIC PERFORMANCE OR SEEK OTHER EQUITABLE RELIEF, THE MICROSOFT ENTITIES’ TOTAL CUMULATIVE LIABILITY UNDER THESE TERMS SHALL NOT EXCEED FIFTY THOUSAND US DOLLARS (US $50,000.00). THE PARTIES ACKNOWLEDGE THAT THESE LIMITATIONS ON POTENTIAL LIABILITIES WERE AN ESSENTIAL ELEMENT IN SETTING CONSIDERATION UNDER THESE TERMS. 

6.5              DISCLAIMER OF REPRESENTATIONS AND WARRANTIES.  UNLESS OTHERWISE REQUIRED BY APPLICABLE LAW, NO PARTY MAKES ANY REPRESENTATION OR WARRANTY EXCEPT FOR THEIR RESPECTIVE REPRESENTATIONS AND WARRANTIES SET FORTH IN ANY PATENT REQUEST FORM OR ANY EXECUTED PATENT SALES AGREEMENT, AND THE MICROSOFT ENITIES DISCLAIM ALL IMPLIED WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  NO MICROSOFT ENTITY GIVES QUALIFIED CUSTOMER ANY WARRANTY OR ASSURANCE (A) REGARDING THE PATENTABILITY OF ANY CLAIMED INVENTION IN, OR THE VALIDITY, OF ANY PATENT OR (B) THAT MANUFACTURE, USE, SALE, OFFERING FOR SALE, IMPORTATION, EXPORTATION OR OTHER DISTRIBUTION OF ANY SOFTWARE, PRODUCT OR SERVICE DISCLOSED AND CLAIMED IN ANY PATENT WILL NOT CONSTITUTE AN INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF OTHER PERSONS.  EXCEPT AS SPECIFICALLY PROVIDED IN THE PATENT SALES AGREEMENT, THE PATENTS ARE LICENSED AND SOLD “AS IS” WITHOUT ANY REPRESENTATION OR WARRANTY.

6.6              Compliance with Laws. Notwithstanding anything contained in these Terms to the contrary, the obligations of the parties shall be subject to all laws, present and future, of any government having jurisdiction over the parties and this transaction, and to orders, regulations, directions or requests of any such government.

6.7              Entire Agreement.  These Terms constitute the entire agreement between the parties with respect to the subject matter hereof, and merges and supersedes all prior and contemporaneous oral agreements, understandings, negotiations and discussions. Neither of the parties shall be bound by any conditions, definitions, warranties, understandings, or representations with respect to the subject matter hereof other than as expressly provided herein. The section headings contained in these Terms are for reference purposes only and shall not affect in any way the meaning or interpretation of these Terms. Except as provided in Section 5.3, no amendments or modifications shall be effective unless in writing signed by authorized representatives of both parties. These Terms will prevail notwithstanding any different, conflicting or additional terms and conditions which may appear on any purchase order, acknowledgment or other writing not expressly incorporated into these Terms. 

6.8              Notices.  Qualified Customers may request a Patent Request Form and Patent Sales Agreement by sending a request in writing to ipadvant@microsoft.com.  Completed Patent Request Forms and Patent Sales Agreement shall be delivered by hand, or dispatched by prepaid air courier or by registered or certified airmail, postage prepaid, addressed as follows:

Microsoft Corporation

One Microsoft Way

Redmond, WA  98052

Attn:  Director of IP Licensing

Email: IPAdvant@microsoft.com

Such notices to Microsoft or MTL shall be deemed received when actually received by addressee or, if delivery is not accomplished by reason of some fault of the addressee, when tendered for delivery.  Microsoft or MTL may give notice of a change of address and, after notice of such change has been received, any notice or request shall thereafter be given to Microsoft or MTL at such changed address.  Notices to Qualified Customer may be provided online by updating these Terms.

6.9              Relationship of Parties. The parties hereto are independent contractors. No party has any express or implied right or authority to assume or create any obligations on behalf of the other or to bind the other to any contract, agreement or undertaking with any third party. Nothing in these Terms shall be construed to create a partnership, joint venture, employment or agency relationship between Microsoft, MTL and a Qualified Customer. 

6.10          Severability.  The terms and conditions stated herein are declared to be severable. If any section, paragraph, provision, or clause in these Terms shall be found or be held to be invalid or unenforceable in any jurisdiction in which these Terms is being performed, the remainder of these Terms shall be valid and enforceable and the parties shall use good faith to negotiate a substitute, valid and enforceable provision which most nearly effects the parties’ intent in entering into these Terms.

6.11          Waiver.  Failure by any party to enforce any term of these Terms shall not be deemed a waiver of future enforcement of that or any other term in these Terms.

6.12          Construction.  As used in these Terms, (a) the words “include” and “including” and variations thereof, will not be deemed to be terms of limitation, but rather will be deemed to be followed by the words “without limitation,” and (b) unless the context otherwise requires, the word “or” shall be deemed to be an inclusive “or” and shall have the meaning equivalent to “and/or.”

6.13          Assignment. These Terms shall inure to the benefit of, and shall be binding upon, any successors, assigns and other legal representatives of Microsoft and Qualified Customer.