home *** CD-ROM | disk | FTP | other *** search
- Newsgroups: misc.jobs.contract
- Path: sparky!uunet!spool.mu.edu!agate!boulder!csn!teal!bhayden
- From: bhayden@teal.csn.org (Bruce Hayden)
- Subject: Re: What to do about indemnification clause?
- Message-ID: <bhayden.722499606@teal>
- Sender: news@csn.org (news)
- Nntp-Posting-Host: teal.csn.org
- Organization: Colorado SuperNet, Inc.
- References: <721623613snx@crynwr.com> <ARTK.92Nov22164603@cc-color1.Congruent.COM>
- Date: Mon, 23 Nov 1992 06:20:06 GMT
- Lines: 45
-
- artk@Congruent.COM (Arthur Kreitman) writes:
-
- >In article <721623613snx@crynwr.com> nelson@crynwr.com (Russell Nelson) writes:
-
- >> I don't like the following indemnification clause in a contract I'm
- >> looking at:
- >>
- >> Seller agrees to defend, indemnify and hold Buyer harmless
- >> from and against any and all liabilities, claims, penalties,
- >> forfeitures, suits, and the associated costs and expenses ...
- >> caused, in whole or in part, by ... any negligent or willful
- >> acts, errors or omissions by Seller ...
- >>
- >> This means (IANAL) that if I use a technique in my software that
- >> later turns out to be patented, *I* get stuck paying the patent
- >> license. This sucks. I'm thinking that I should bill them for a
- >> patent search plus some kind of insurance against patent violations.
- >> Any ideas on this?
-
- > This is a standard clause. It's in all our software licenses. As far
- >as I'm concerned, it fair. You're selling software that you've developed.
- >If it infringes on a patent, your're the infringer and should pay.
-
- That is a utopian position. In today's environment, you probably do not
- know if you are infringing a software patent (or if you allegedly are,
- whether it is valid and enforceable). Most of the patents that have
- issued in the area, have issued in the last couple of years. You may
- actually be infringing a patent by using a technique learned in school.
-
- The question is who should bear the risk of such a patent surfacing.
- The answer unfortuanately is the party with the least market power.
- This may be wrong, or it may be right, but it is how the world works.
- The party in the stronger position dictates the terms.
-
- Unfortunately, there isn't a lot that you can do about it. If your
- program is the least bit complex, it possibly infringes a number of
- patents. A patent opinion by a reputable patent attorney in such a
- case would be prohibitavely expensive. I have estimated $250k for
- a medium sized program. Prof. Ray Nimmer of the U. of Houston indicated
- that his firm estimates $300k for such an opinion.
-
- Bruce E. Hayden
- (303) 758-8400
- bhayden@csn.org
-
-