Standard Contract Language - Intellectual Property In a previous post some time ago, I alluded to the fact that most if not all contracts between technology buyers and sellers contain language that indemnifies each in the event that either side's intellectual property is proven to infringe on that of another.
The following excerpt is taken directly from EXRO's purchasing terms and conditions. They are industry standard:
10. Intellectual Property Rights.
10.1 Buyer’s Intellectual Property. Buyer does not transfer to Seller any patent, trade secret, trademark, service mark, copyright, mask work, or other intellectual property right (“Intellectual Property Right”) of Buyer in information, documents, or property that Buyer makes available to Seller under the Contract, other than the right to use Buyer’s Intellectual Property Rights to produce and supply Products and Services to Buyer.
10.2 Seller’s Intellectual Property. Except as stated in this Section 10.2, Seller does not transfer to Buyer any Intellectual Property Right of Seller related to the Products or Services or incorporated in Buyer’s Property, other than the right to incorporate Products purchased from Seller in vehicles and component parts and to sell those vehicles and component parts to the public. If the Contract is terminated by Seller or Buyer pursuant to Section 12.1 (other than by Seller for Buyer’s Default), Seller grants to Buyer a non-exclusive right and license to use Seller’s Intellectual Property Rights during the Contract term that would have applied had it not been earlier terminated under Section 12.1, and subject to Section 14, to obtain from alternate sources products and services similar to the Products and Services for use in vehicles or component parts covered by the terminated Contract. There will be no fee for this license if (1) Buyer terminates the Contract for Seller’s Default, or (2) Seller terminates the Contract other than for Buyer’s Default or pursuant to Section 16. Otherwise, the parties will negotiate a reasonable fee for use of Seller’s Intellectual Property Rights.
10.3 Infringement. (a) Subject to Section 10.3(b), Seller will indemnify and defend Buyer and its customers against claims, liabilities, losses, damages, costs, and expenses, including reasonable legal fees, arising out of the actual or alleged infringement by the Products of a third-party Intellectual Property Right (1) in the United States, the European Union, or Japan, and (2) in another jurisdiction if Seller is aware of the actual or alleged infringement in that other jurisdiction at the time the Purchase Order is issued and fails to disclose it to Buyer within 10 days after accepting the Purchase Order. If a claim under this Section 10.3 results, or is likely to result, in an injunction or other order that would prevent Seller from supplying or Buyer from using Products for their intended purpose, Seller will at its option and expense either (i) secure a license of the Intellectual Property Right that permits Seller to continue supplying the Products to Buyer, or (ii) modify the Products so that they become noninfringing, so long as the modification does not materially alter the operation or performance of the Products, or (iii) replace the Products with non-infringing but practically equivalent Products.