Q&As

Can an employer rely on a general IPR indemnity not to infringe third party IPR against the contractor, when they directed the contractor to breach the patent?

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Produced in partnership with Shobana Iyer of Swan Chambers
Published on LexisPSL on 11/08/2017

The following IP Q&A Produced in partnership with Shobana Iyer of Swan Chambers provides comprehensive and up to date legal information covering:

  • Can an employer rely on a general IPR indemnity not to infringe third party IPR against the contractor, when they directed the contractor to breach the patent?
  • Construction of the indemnity clause
  • Variation
  • Illegality defence of under the principle ex turpi causa

For the purposes of this Q&A, we have focused on the scenario where the principal (not necessarily as an employer) has an IPR indemnity clause in its favour, from an independent contractor not to infringe third party IPR. With regard to an employer relationship you may have to consider the limits of vicarious liability of the employer too; see Practice Notes: Liability of employers for the acts of their employees and others and Liability for independent contractors.

We have limited this Q&A to cover a general overview of the likely defences which the contractor may evoke from the question posed. It should be noted that judgments of the court are not like statutes, and precedents are always, to some degree at least, fact-sensitive. While a case may fall within a principle as enunciated in a judgment, a consideration of the facts of the particular case may show that the principle was being too broadly or narrowly stated.

Assuming the principal has a trigger to claim damages under the indemnity from the contractor (being the indemnifying party) for the losses it has incurred. If the principal had ‘directed the contractor to breach the patent’ this may have repercussions for the principal in enforcing the indemnity clause. The contractor may, depending on the facts of the case, be able to rely on some of the following defences

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