the Zealous

A consortium of international human rights organizations, bar associations, and advocacy groups has released its annual report coinciding with the International Day of the Endangered Lawyer, January 24. This year's focus is on Afghanistan. From the introduction of this year's report:

Professional and technical services vendors that develop custom software or technology to the specifications of their customers often face demands to indemnify and defend their customers from infringement claims of intellectual property rights. “If I’m sued because of your deliverable,” the customer's argument goes, “then you should step up and take responsibility for your failure to respect third party IP rights.”

This stance, though common, fails to appreciate the unique danger posed by “strict liability” IP rights for such vendors. These are IP rights that can be infringed regardless of whether the accused infringer knew of the existence of the protected subject matter, and regardless of any intention or knowledge. Utility patents, design patents, trademarks, trade dress, and, in the EU, design registrations, represent strict liability IP rights.

Consider the following not uncommon scenario: in the payments section of the contract you are negotiating, overdue interest is charged at five percent.  A higher rate is better for your client, and the client wants ten percent, so you redline accordingly. Client ultimately concedes and is willing to accept five. However, the draft from opposing counsel contains the following text:

Overdue interest is chargeable at the rate of five percent (10%).