There are projects for which you should consider including a contract provision relating to indemnity for intellectual property claims. For example, assume that an Owner wants to incorporate some specific technology or methodology into its new production facility. If a third party feels that the technology or method violates its intellectual property right, that party will likely bring a claim against not only the owner but also the entire design and construction team.
Similarly, if the design team includes a new design or technology, the project owner may be concerned about possible intellectual property claims.
Here is a sample intellectual property indemnity clause:
Contractor agrees to defend, indemnify and hold Owner harmless from and against any and all claims arising from or in any manner related to an infringement of patents or the improper use of other intellectual property rights in connection with Contractor’s performance of the Work and the ownership or use of any portion of the Facility unless such infringement or improper use is at the direction of Owner and not otherwise contemplated in this Agreement. Should any such claim materially impair Contractor’s performance of the Work or continued operations of the Facility by Owner then Contractor shall, at its own expense, use reasonable efforts to timely procure the right to continue its performance of the Work so as not to materially impair the schedule for completion of the Work or timely procure for Owner the right to continue operation of the Facility.
Owner shall defend, indemnify and hold Contractor and its Affiliates harmless from and against any and all claims arising from or in any manner related to an infringement of patents or the improper use of other proprietary rights which may occur in connection with Contractor’s performance of the Work in a manner specifically directed by Owner.