IP warranty & indemnity clauses are legal tools often used
by buyers to manage and distribute supply chain risks, in
particular IP litigation and associated financial hazards in
connection with the seller's products once linked to the supply
chain. Per our observation, these clauses are treated in
Taiwan's courts in a buyer-friendly manner, especially when the
two parties are both business entities.
A question often raised during the buyer-seller negotiation on
indemnity clause is whether the seller's indemnity obligation
should be premised on "actual infringement" of the
products the seller supplies, or an "asserted
infringement" is good enough to trigger the buyer's
indemnity claim. In most cases where this question is spotted, the
parties either solve it with a clearer contract language or end up
without a deal. As such, this question is not often tried at
Taiwan's courts. Still, an exception comes up recently: a
three-judge panel of the IP Court rendered a
