License agreements often contain indemnities. An indemnity is a
contractual obligation to step in and reimburse some financial
obligation such as a liability, loss, or damage. In essence, the
party giving the indemnity will make the injured party
"whole" by recompensing losses and expenses.
The court in Coastal Contacts Inc. v. Elastic Path Software
Inc., 2013 BCSC 133 reviewed the meaning and scope of an
indemnity for intellectual property infringement, which is a common
clause in many intellectual property (IP) license agreements. This
is what's known as an IP indemnity clause. Coastal Contacts
was an online retailer of eyeglasses. Elastic Path sold software
for running e-commerce websites. The two companies entered into a
Software Licensing Agreement allowing Coastal to use the Elastic
Path software in Coastal's eyewear business.
