Journal Article

Warranties and indemnities in contracts: protecting and exploiting IP

Belinda Doshi and Sarah Thomson

in Journal of Intellectual Property Law & Practice

Volume 2, issue 6, pages 377-381
Published in print June 2007 | ISSN: 1747-1532
Published online December 2006 | e-ISSN: 1747-1540 | DOI: http://dx.doi.org/10.1093/jiplp/jpl211
Warranties and indemnities in contracts: protecting and exploiting IP

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Legal context

Warranties and indemnities are present in most contracts but are particularly relevant in contracts involving intellectual property(IP), where the contract subject matter is intangible and less open to verification. Warranties and indemnities are often the most heavily negotiated parts of such contracts.

Key points

This note discusses warranties and indemnities often found in contracts dealing with IP rights and deals with some of the key practical areas that should be considered when drafting and negotiating such provisions.

Practical significance

Warranties and indemnities offer important protection to licensees and assignees of IP rights. However, it is important to understand their limitations. Firstly, warranties and indemnities are only ever as good as the entity that gives them. Secondly, indemnities only provide financial protection in respect of civil liability. As certain types of IP rights infringement are criminal offences under English law, indemnities should not replace the need for appropriate due diligence.

Keywords: A competent intellectual property (IP) lawyer will be a master not only of the provisions governing IP rights but also of the rules of contract law that govern the licence or the assignment of those rights.; Businesses enter into contracts for the sale or use of IP rights in the expectation that those contracts will be a source of profit. Consequences of the use of another's right, even under licence, can include financial loss and liability towards third parties whose interests were not apparent at the time the contract is made.; Counselling a combination of prudent vigilance and responsible licence drafting, the authors of this article explain both the benefits of warranties and indemnities and the extent to which they guard against unforeseen liability.

Journal Article.  2754 words. 

Subjects: Intellectual Property Law

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