The Licensing Corner

• Jurisdiction: United States,Federal,California
• Citation: Vol. 43 No. 3
• Publication year: 2018
• Author: Sean Hogle
• topic: Contracts,Intellectual Property,Technology

The Licensing Corner

Sean Hogle

Rooney Nimmo PC

RESPONSIBILITY FOR STRICT LIABILITY IP INFRINGEMENTS: DEVELOPERS VS. LICENSORS

A typical corporate purchaser of technology solutions or development services has procurement policies in place mandating that sellers of such solutions or services indemnify and defend the buyer from third party claims of intellectual property rights infringement. "If I'm sued because of your [insert: product or deliverable]" the argument goes, "then you should step up and take responsibility to your customer for your failure to respect third party IP rights." This stance, although ubiquitous, may sometimes fail to appreciate the differences between developers and licensors—particularly with respect to infringements of so-called "strict liability" IP rights, in which liability attaches regardless of intent or knowledge. Whether the purchase is of a product or a deliverable matters a great deal.

To define these terms: a "developer" for present purposes is a provider of custom development services, with deliverables consisting of technology, software, user interfaces, web/application design, or the like. A "licensor," in contrast, is a licensor or seller of fixed proprietary products, technology, or solutions. With the former, the buyer defines the product that it wants and the developer caters to the buyer's specific needs. With the latter, the licensor delivers a more standardized offering to the buyer.

"Strict liability" IP rights, as that term is used here, are intellectual property rights, the liability for infringement of which attaches regardless of whether the accused infringer knew of the existence of the protected subject matter, and regardless of any intention. Utility patents, design patents, trademarks, trade dress, and, in the EU, design registrations, are strict liability IP rights under this...