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Hold Harmless and Indemnify
Posted by Anonymous . updated on 2/26/2009
Hey All,
I am looking at a proposed exclusive patent license agreement. The licensee want the licensor to indemnify and hold harmless the licensee in the event of a claim or suit of infringement.
Both parties can agree that there would be no infringement without the product, but the licensee states that the licensor should be responsible for licensee's losses. I do not agree.
What is usually the case ?
Answers (4)
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Daniel ...
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This type of indemnity provision is often placed into product license agreements. However, it is usually to protect and indemnify licensee from any claim of infringement by another patent owner (against licensee's products).
It is no revelation to anyone that litigation is expensive, and patent infringement is particularly costly. So, it is very important to negotiate the indemnity provision carefully, particularly concerning (a) cost of the defense; (b) obligation to defend; (c) control over the litigation and settlement process, should litigation arise; (d) notice of infringement by others (to allow licensor to take actions), etc.
If you need to discuss this with an IP attorney and review/negotiation this license, I am an available to discuss this (and my hourly rate is very reasonable),
Daniel Basov
Solton Rosen & Balakhovsky LLP
110 Wall Street, 11th floor
New York, NY 10005
daniel.basov@srblaw.net
212-344-1744
NOTICE: This posting and answer are not intended to provide complete legal advice or form an attorney-client relationship.
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mike
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Good Morning,
Anybody with some thoughts on this topic?
It appears that indemnification can be very costly, and is an unknown or not predictable future cost. Looking at the possible royalty compared to the cost of possible hold harmless and indemnification It is not such a good idea.
The interested and potential licensee says that he would not leave me hanging and that he will back me up if something should arise. Wow, that make me want to sign the agreement. ....warm and fuzzy.
It is possible that he knows that I will not sign, and just wants a way to negotiate the royalty down.
Does this guy seem slimmy or should I think he is just doing business move ??
Thanks, mike
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JSonnab...
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This is purely a negotiated term. Either party can assume the risk of infringement, and both parties can undertake a right-to-use analysis.
- Jeff
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mike
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Jeff,
Thanks for your comments.
I have researched many license agreements and have never seen an indemnification by licensor line item.
Also, I just can't get past the idea that it is the product, not the patent, that infringes.
mike
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