A Technology Transfer Agreement facilitates the sharing or commercialization of proprietary technology between parties. This playbook provides guidance on ownership rights, confidentiality, and obligations to support the transfer process.
Why This Matters: Weak or missing indemnities expose the licensee to significant legal costs and damages if underlying IP is invalid or infringing.
Negotiation strategy
If you're the Licensor:
Ensure that the indemnity clauses cover all potential legal costs and damages. Push for unlimited liability where possible and seek to include specific language that addresses third-party claims.
If you're the Licensee:
Limit the scope of indemnities to direct damages and consider implementing a cap on liability. Ensure that warranties are clear but do not overpromise on aspects that cannot be guaranteed.
Essential elements
1
Non-Infringement Warranty
Guarantee IP does not infringe.
2
Validity Warranty
Assure IP is valid and enforceable.
3
Indemnity Clause
Protects against third-party claims.
Action framework
ACCEPT
Propose edits if the indemnity does not cover legal costs or if the warranty language is vague.
EDIT
Reject if indemnities are absent or if warranties are too limited.
ADD
Add clauses if there are no existing warranties or indemnities.
PRO TIP
Always verify the enforceability of indemnities in the relevant jurisdictions.
Example clauses
FAVORABLE
Robust Indemnity Clause
"The Licensor shall indemnify and hold harmless the Licensee from any claims, damages, or legal costs arising from alleged infringement of third-party rights related to the licensed IP."
NEUTRAL
Standard Warranty Clause
"The Licensor warrants that the licensed IP is free from known defects."
UNFAVORABLE
Limited Indemnity Clause
"The Licensor indemnifies the Licensee only for direct damages, excluding legal costs."
Fallbacks
High-Risk Projects
In high-risk projects, ensure indemnities are comprehensive and cover all potential liabilities, including consequential damages.
Cross-Border Licensing
Consider jurisdiction-specific indemnities to address varying legal standards and enforceability across borders.
Start-Up Licensors
For start-up licensors, negotiate warranties that reflect the developmental stage of the IP, possibly accepting more limited indemnities.
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