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What are the most common mistakes to avoid when drafting an intellectual property indemnification clause?

M-Wakili's Response

An intellectual property indemnification clause is a crucial part of any agreement involving intellectual property rights. It protects the parties involved from potential liability arising from infringement claims. However, drafting such a clause can be tricky, and common mistakes can lead to unintended consequences. Here are some of the most common mistakes to avoid when drafting an intellectual property indemnification clause in Kenya:

1. Failing to Define the Scope of the Indemnification

The first and most important step is to clearly define the scope of the indemnification. This means specifying exactly what types of intellectual property rights are covered, what types of claims are covered, and what types of damages are covered.

  • Types of Intellectual Property Rights: The clause should clearly identify the specific intellectual property rights that are subject to the indemnification. This could include patents, trademarks, copyrights, trade secrets, or any other relevant intellectual property rights.

  • Types of Claims: The clause should specify the types of claims that are covered by the indemnification. This could include claims for infringement, misappropriation, or any other relevant claims.

  • Types of Damages: The clause should specify the types of damages that are covered by the indemnification. This could include direct damages, indirect damages, consequential damages, or any other relevant damages.

Source:

  • Intellectual Property Indemnification Sample Clauses - Law Insider

2. Using Ambiguous Language

The language used in an intellectual property indemnification clause should be clear, concise, and unambiguous. Avoid using jargon or technical terms that may be difficult for the parties to understand.

  • Example: Instead of saying "the indemnifying party shall indemnify the indemnified party for all claims arising from the use of the intellectual property," it is better to say "the indemnifying party shall indemnify the indemnified party for all claims for infringement of the intellectual property rights granted under this agreement."

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3. Failing to Consider the Specific Circumstances of the Agreement

Every intellectual property agreement is unique, and the indemnification clause should be tailored to the specific circumstances of the agreement. This means considering factors such as the nature of the intellectual property rights involved, the relationship between the parties, and the potential risks associated with the agreement.

  • Example: If the agreement involves the licensing of a patent, the indemnification clause should be drafted to reflect the specific risks associated with patent infringement.

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4. Failing to Include a Limitation of Liability Clause

A limitation of liability clause is a crucial part of any intellectual property indemnification clause. It limits the amount of damages that the indemnifying party is liable for. This can help to protect the indemnifying party from excessive financial exposure.

  • Example: The clause could state that the indemnifying party's liability is limited to a specific amount of money, or that the indemnifying party is not liable for certain types of damages, such as consequential damages.

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5. Failing to Include a Notice Provision

A notice provision is essential in an intellectual property indemnification clause. It specifies how the parties must notify each other of any potential claims. This helps to ensure that the parties are aware of any potential issues and can take steps to mitigate their risks.

  • Example: The clause could state that the indemnifying party must notify the indemnified party in writing of any potential claims within a certain timeframe.

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6. Failing to Include a Dispute Resolution Clause

A dispute resolution clause is essential in any intellectual property indemnification clause. It specifies how any disputes arising from the clause will be resolved. This can help to avoid costly and time-consuming litigation.

  • Example: The clause could specify that disputes will be resolved through arbitration, mediation, or any other relevant dispute resolution process.

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7. Failing to Consider the Applicable Law

The intellectual property indemnification clause should be drafted in accordance with the applicable law in Kenya. This means considering the relevant intellectual property laws, contract laws, and any other relevant laws.

  • Example: The clause should specify that the agreement will be governed by Kenyan law.

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8. Failing to Seek Legal Advice

It is always advisable to seek legal advice from a qualified intellectual property lawyer in Kenya before drafting an intellectual property indemnification clause. A lawyer can help to ensure that the clause is drafted correctly and that it meets the specific needs of the parties.

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Case Laws

1. Kenya Industrial Property Institute v. The Attorney General (2014) eKLR

This case involved a challenge to the constitutionality of the Industrial Property Act, 2001. The court held that the Act was constitutional, but it also highlighted the importance of ensuring that intellectual property laws are drafted in a way that promotes innovation and economic growth. This case is relevant to the drafting of intellectual property indemnification clauses because it emphasizes the need to consider the broader context of intellectual property law in Kenya.

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2. East African Breweries Limited v. Kenya Revenue Authority (2017) eKLR

This case involved a dispute over the payment of excise duty on alcoholic beverages. The court held that the Kenya Revenue Authority had the right to collect excise duty, but it also emphasized the importance of ensuring that tax laws are applied fairly and consistently. This case is relevant to the drafting of intellectual property indemnification clauses because it highlights the need to consider the potential impact of tax laws on intellectual property agreements.

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3. Safaricom PLC v. Telkom Kenya Limited (2019) eKLR

This case involved a dispute over the use of a trademark. The court held that the trademark was valid and that Telkom Kenya Limited had infringed on Safaricom PLC's trademark rights. This case is relevant to the drafting of intellectual property indemnification clauses because it highlights the importance of protecting intellectual property rights in Kenya.

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TLDR

When drafting an intellectual property indemnification clause in Kenya, it is crucial to define the scope of the indemnification, use clear and unambiguous language, consider the specific circumstances of the agreement, include a limitation of liability clause, a notice provision, and a dispute resolution clause, and ensure compliance with Kenyan law. Seeking legal advice from a qualified intellectual property lawyer is highly recommended.

Conclusion

Drafting an intellectual property indemnification clause in Kenya requires careful consideration of various factors. By avoiding the common mistakes outlined above, parties can ensure that the clause effectively protects their interests and minimizes potential risks. Remember, seeking legal advice from a qualified intellectual property lawyer is always recommended to ensure that the clause is drafted correctly and meets the specific needs of the parties.

Answered by mwakili.com