THE HOT SPRINGS AGREEMENT
1. Mar'kcing and consumf:r research, manufacturing
improvements
and rroduct c1cvelopment techniques ard
methodology should be
exchanged freely. Although the bigger facilities
in the operating
Companies might be expected to make bigger inputs
the size of these
facilities is in proportion to Company sales,
weighted for market
sophistic.-ition, ind all Companies will therefore
benefit appropriately.
2. Product Developments , if successful, will be
reflected in products.
Succcssful products are the desired outcome and
compensation will
accru2 to the producer in licensing such products
to users.
3. Prcd,.!ct and process developments which are
patentable should
be protected by the inventors and such inventions
become licensable
to inside and outside the Group.
4. '1 Ill '.- C S113LIld bc a gcnvral agrecinerit
botwecri all Tobacco Companies
in Uie Division to give first options , lead times
and "most favoured nation"
treatment to other Companies in the Division with
respect to product
and process pntcnts. It would also be agreed that
;xclusive liccnces
will not bc granted to competitors.
5. Machinery developments which are patentable may
be licensed
exclusively to appropriate producerz but &,e
interests
of t~-e Division would ~e protected in order to
give all member Companies
preferential or 'no less favourablel terms.
6. For all natnnts the invrnting Company would
protect in such countries
as it Sees fit bUt in all cases Divisional If Q.
should be consulted
and suitable arrangements made to assign or
protect in such other
coun-.-:es as may Le required.
7- In or--:,:r to eliminate unnecessary
duplication and to makc R.& D-
as effective as possible the Companies will agree
to keep each oLher
iaror-med on programmes, to exchange methodclogy
and to pool
ros
--s subj,~ct to patont protection mentioned above.
a. 7.-,uz- all. R. & D. clone by operating
Companies is properly regarded
as and paid for by the Company concerned. The
product
from such R- & D. is the property of that Company
and available
for exploitation bv that Company an~,--here
subject to the items above.
BATCo document for Province of BritiSh Columbia 20
April 1999


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The Hot Spr;nis Acreement (contd.)
9. Rescarc' dir-c:zcd from the centre which is
identified as research
in suppor-, of c-.cnernl Group stratcgy is
influenccd by the financially
contr:bu-ig Companics and the research product. is
available to
operZILir.:: Companies for royalty free use within
their area. Such
research will be financcd by a levy based an net
turnover of operating
Companies.
10. This arrangomcnt is fair and self adjustirg
for inflation, volume
and so=~istic:'ion and represents a considerable
advantage to the
operating Co7nnanies none of which may use all or
even most of
the research Product but all of which will have
access to that
product a: a -f--action of the cost to generate
it.
11. Finally, i: sliculd be ncted that a
substantial part of the work
dircctcd by the Centre will continue to be paid
for directly e.g.
whcre i: is c-:~rnmissioncd by operating Companies
for their o,,rn use or
whc-e i-. is pz;d for by Millbank.
SJG:DC
27 th June.
M.:
CD
BATCo document for Province of BritiSh Columbia 20
April 1999