Background Info
I do corporate sales for a small financial services company specializing in market data. Unfortunately we find ourselves, in the short to medium term, without legal counsel and I have been forced to wrestle with a very large Data License Agreement and a very demanding client-side attorney. I have managed to take care of most of the miner issues, but there are several more serious issues still outstanding pertaining to intellectual property infringement, indemnification, liability and damages that I would like some assistance with if possible.
FIRST SECTION
INTELLECTUAL PROPERTY INFRINGEMENT and INDEMNITY: Supplier warrants that the sale, delivery, transmission, provision of access to and/or use of the Services shall not violate or infringe any trademark, patent, copyright, trade secret or other proprietary right ("Intellectual Property Right") of any third party. At its sole expense, Supplier shall defend, indemnify and save <CLIENT>, its Affiliates, their Representatives, successors and assigns harmless from any and all threats, claims, suits and proceedings and all related losses, damages, judgments, costs or expenses (including attorneys' fees) alleging that the sale, delivery, transmission and provision of access of Data and Services to, and possession or use of the Data or Services by, <CLIENT>, its Affiliates, their Representatives and successors and assigns, infringes an Intellectual Property Right of any third party.
The first part of this paragraph is our language, the client has countered by inserting the emboldened and underlined language. My feeling is that, simply put, we have said that our data is proprietary (which it is) and the client has inserted language that puts us on the hook should that turn out not be the case. Should I be accepting this language?
SECOND SECTION
<CLIENT> shall indemnify Supplier for any damages that may be suffered as a result of Data being accessed by a competitor of Supplier ("Competitor"), due to any fraud, or willful default or gross negligence on the part of <CLIENT>. In all other instances <CLIENT> shall indemnify Supplier for any direct damages that may be suffered as a result of theirsuch breach of this Agreement up to a maximum cap of 250,000 USD (two hundred and fifty thousand United States Dollars). <CLIENT'S> obligations in this section shall survive termination and natural expiry of their subscription.
The major issue here is that they are refusing to cover indirect/consequential damages and have added language stating that they will only pay for direct damages. So if, for example, they shared our data with someone who then decided they were going to start their own business using our data resulting in loss of business, the client wouldn't compensate us for that loss, even though they were at fault for sharing the data. What counter options do I have here?
THIRD SECTION
GENERAL INDEMNIFICATION: Each Party shall indemnify, defend and hold the other Party, its Affiliates, their Representatives and successors, assigns, harmless from any third party claims, suits and proceedings and all related losses, damages, judgments, costs and expenses (including reasonable attorney's fees, arising out of the willful misconduct or negligent acts or omissions of the indemnifying Party, its agents or employees.
LIMITATION OF LIABILITY: Neither party shall be liable to the other for any special, indirect or consequential damages, including, but not limited to, lost profits, even if the party allegedly liable had knowledge of the possibility of such damages, arising under this Agreement; provided, however, the foregoing provision shall not in any way apply to or limit <CLIENT'S> obligations under this Agreement entitled "General Indemnification" or <CLIENT'S> liability for its gross negligence or willful misconduct and Supplier's obligations or liability arising under the Sections of this Agreement entitled "Intellectual Property Infringement Indemnification", "Confidentiality" and "General Indemnification," or the Supplier's liability for its gross negligence or willful misconduct.
If I've read this correctly this just seems plain unreasonable. They're proposing the removal of their liability (the emboldened and underlined language) whilst retaining ours.
I am hopeful of being able to provide the client with acceptable counter proposals with language. It is a tricky situation as they are a major client of ours and they know it, in a sense they have us bent over a barrel.
Thanks in advance.
I do corporate sales for a small financial services company specializing in market data. Unfortunately we find ourselves, in the short to medium term, without legal counsel and I have been forced to wrestle with a very large Data License Agreement and a very demanding client-side attorney. I have managed to take care of most of the miner issues, but there are several more serious issues still outstanding pertaining to intellectual property infringement, indemnification, liability and damages that I would like some assistance with if possible.
FIRST SECTION
INTELLECTUAL PROPERTY INFRINGEMENT and INDEMNITY: Supplier warrants that the sale, delivery, transmission, provision of access to and/or use of the Services shall not violate or infringe any trademark, patent, copyright, trade secret or other proprietary right ("Intellectual Property Right") of any third party. At its sole expense, Supplier shall defend, indemnify and save <CLIENT>, its Affiliates, their Representatives, successors and assigns harmless from any and all threats, claims, suits and proceedings and all related losses, damages, judgments, costs or expenses (including attorneys' fees) alleging that the sale, delivery, transmission and provision of access of Data and Services to, and possession or use of the Data or Services by, <CLIENT>, its Affiliates, their Representatives and successors and assigns, infringes an Intellectual Property Right of any third party.
The first part of this paragraph is our language, the client has countered by inserting the emboldened and underlined language. My feeling is that, simply put, we have said that our data is proprietary (which it is) and the client has inserted language that puts us on the hook should that turn out not be the case. Should I be accepting this language?
SECOND SECTION
<CLIENT> shall indemnify Supplier for any damages that may be suffered as a result of Data being accessed by a competitor of Supplier ("Competitor"), due to any fraud, or willful default or gross negligence on the part of <CLIENT>. In all other instances <CLIENT> shall indemnify Supplier for any direct damages that may be suffered as a result of theirsuch breach of this Agreement up to a maximum cap of 250,000 USD (two hundred and fifty thousand United States Dollars). <CLIENT'S> obligations in this section shall survive termination and natural expiry of their subscription.
The major issue here is that they are refusing to cover indirect/consequential damages and have added language stating that they will only pay for direct damages. So if, for example, they shared our data with someone who then decided they were going to start their own business using our data resulting in loss of business, the client wouldn't compensate us for that loss, even though they were at fault for sharing the data. What counter options do I have here?
THIRD SECTION
GENERAL INDEMNIFICATION: Each Party shall indemnify, defend and hold the other Party, its Affiliates, their Representatives and successors, assigns, harmless from any third party claims, suits and proceedings and all related losses, damages, judgments, costs and expenses (including reasonable attorney's fees, arising out of the willful misconduct or negligent acts or omissions of the indemnifying Party, its agents or employees.
LIMITATION OF LIABILITY: Neither party shall be liable to the other for any special, indirect or consequential damages, including, but not limited to, lost profits, even if the party allegedly liable had knowledge of the possibility of such damages, arising under this Agreement; provided, however, the foregoing provision shall not in any way apply to or limit <CLIENT'S> obligations under this Agreement entitled "General Indemnification" or <CLIENT'S> liability for its gross negligence or willful misconduct and Supplier's obligations or liability arising under the Sections of this Agreement entitled "Intellectual Property Infringement Indemnification", "Confidentiality" and "General Indemnification," or the Supplier's liability for its gross negligence or willful misconduct.
If I've read this correctly this just seems plain unreasonable. They're proposing the removal of their liability (the emboldened and underlined language) whilst retaining ours.
I am hopeful of being able to provide the client with acceptable counter proposals with language. It is a tricky situation as they are a major client of ours and they know it, in a sense they have us bent over a barrel.
Thanks in advance.
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