Indemnity provision for Window server security
An indemnity provision protects your Window server from infringement claims and liability, before accepting an indemnity provision from a vendor, there are several key features you should consider.
Triggers & terminators of indemnity obligation for Window server
Common triggers of a software vendor's obligations are the filing of a formal complaint against the end user or the receipt of a “cease and desist” demand from the patent owner.
Other types of provisions terminate indemnity based on how the user uses the software. Some indemnity provisions terminate if the end user makes any modifications to the software, while others terminate if the user fails to comply with particular use restrictions in the license (e.g., use only for specific purposes or conditions).
The extent of the vendor’s liability is another important factor to consider. Sometimes provisions do not cover court fees or the cost of a settlement, should the user prefer to settle instead of litigate. Often, indemnity clauses are capped at a set amount or as a percentage of the purchase price.
Some indemnity provisions may only obligate the vendor to provide replacement code without assuming any of the financial liability for losses suffered by the user or to compensate the patent owner for “damages” caused by the “infringing” use. And, caps on indemnification are often imposed in general contract provisions, rather than in indemnity clauses.
Consider as well who controls any litigation. An indemnity provision may state that the vendor has no obligations or liabilities unless it is “given the sole right to control and direct the investigation, preparation, defence, and settlement of such a claim.” A user may find this lack of control unappealing and unacceptable, particularly if the user would prefer to settle quickly while the vendor is determined to litigate.
What should you know about your Window server vendor?
Even the most favourably worded indemnity provision will not immunise you when a vendor has no intention of paying for any infringement caused by use of its software, or is financially unable to meet its obligations to satisfy a judgment for which you are jointly and severally liable.
You could spend years litigating a breach of contract claim before a vendor is held accountable, only to find that the vendor does not have the resources to satisfy its duty to indemnify.
So it is important to understand your vendor’s financial capacity, track record, and position on respecting intellectual property ownership. Ask for the vendor’s litigation history, including the number of indemnity demands, why they were made, who made them, and how they were resolved.
Also ask what the vendor does to ensure that its products do not infringe anyone else’s intellectual property, and whether the product contains, or is derived from, any open source code which could ultimately expose the end users to infringement liability.
Finally, discern whether the vendor is capable of readily providing you with a replacement product in the event its product is found to infringe.
To find out more information on indemnification for Window server call today on 0800 458 4545 or request more information online.
