I've developed a low volume high priced product, which I currently sell in the EU market. A UK based company would like to sell my product in countries including the US. I don't want to start wading through US patents to see if my product infringes one.
In the distributions agreement would it be reasonable to ask for a clause such as:
"The Distributor indemnifies and holdsWould this be highly unusual as the clause normally work the other way? Do you know of any agreements that have this type of clause protecting the developer in this way?
STARTUP harmless against any claim of
infringement of patent rights arising from sale of STARTUPS's
My company will not have any physical presence in the US and neither will the distributor.
EDIT I suppose asking the US customer to indemnify the STARTUP against US patent infringement would be unreasonable/unlawful?
I know this all sounds paranoid, but US software patents seem to be granted for the most obvious ideas, so I think it is quite possible we infringe one.
It is unusual to ask the distributor to indemnify you, the developer, for IPR infringement. After all, you are the one who knows how you developed your product (i.e. did you copy it? did you hire someone to develop it and under what conditions?). In almost all distribution agreements I have drafted and negotiated against, it is the startup/developer of the product who indemnifies the distributor for IPR infringement.
Your question also mentions that neither you nor your distributor will have a physical presence in the US. If you or the distributor are selling your product in the US, you can still get sued in the US. Whether or not the plaintiff can bring a lawsuit against you or the distributor in a US court does not depend solely on physical presence. However, practically speaking it is very difficult and expensive to drag you into court in the US is you aren't in the US because if the plaintiff wins the lawsuit, he has to enforce the judgement abroad and that is expensive and time consuming.
Definitely unusual, but that does not make such a provision impossible. However, proposing such a provision might make you look as if you do not know what you are doing or you are unreasonable.
A more mainstream approach might be for you to disclaim all warranties for IP infringement outside the EU, and for each party to waive any right of indemnification it may have against the other party for any claim based on such infringement.
Disclaimer: This information does not constitute legal advice and does not establish an attorney-client relationship.
It sounds fairly unusual, and may not make sense at all. But I can see a few cases where it may.
Two points to consider (tell us more):