the Zealous

13 Dec 22

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.

06 Dec 22

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%).

19 Nov 22

The obligation to return or destroy confidential information upon request (or at contract termination) is ubiquitous in confidentiality agreements. But in this era of distributed network computing and cloud storage, when nothing can ever be completely deleted everywhere, compliance with such a clause is illusory.