Additional Protection From Suppliers In Patent Infringement Actions

Overview

Large retailers have been sued for patent infringement in recent years in relation to distributing a supplier's products that allegedly infringe a third party's intellectual property. Though suppliers can sometimes be properly named as defendants in such actions, more often patentees have named only retailers. More generally, any Canadian business selling products made in whole or in part outside of Canada could itself be subject to a claim for patent infringement.

In these situations it is important for such businesses to have strong indemnities in place to ensure that they will be properly compensated for losses arising as a result of their defence of the lawsuit. However, even the strongest indemnity provides only a contractual basis to sue the supplier of a product that is the subject of a patent infringement case against the retailer selling the product, in the event that the supplier of the infringing product refuses to compensate covered losses. In