Written by attorneys · grounded in primary & secondary sources — see below
An assertion by a third party of rights in intellectual property that would interfere with the buyer's possession or use of goods sold. The phrase encompasses patent, copyright, and trademark claims arising from the goods themselves.
Ivan Ivanov purchased specialized software from Integrity Partners for use in his medical clinic. A patent holder sued Ivan for infringement based on the software. Ivan conducted an internal review for four months before notifying Integrity Partners of the suit. Because the delay exceeded a reasonable time after receiving notice of the litigation, Ivan is barred from any remedy over against Integrity Partners for liability established in the patent suit.
Ira Irving bought calculators from Ironclad Industries under a contract that did not disclaim warranties. A third party asserted patent rights against the calculators. Ira established that Ironclad, a merchant regularly dealing in such goods, had delivered the calculators subject to the third-party claim. Ironclad therefore breached its warranty against infringement or the like and faces liability for resulting damages.
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The duty arises when the buyer is sued as a result of a breach of the seller's warranty against infringement or the like. Notice must be given within a reasonable time after the buyer receives notice of the litigation.
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Yes. A full year of silence while the buyer conducts exclusive negotiations with the claimant exceeds the reasonable-time standard and prevents the seller from protecting its interests in the litigation.
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No. When the connection between the purchased goods and the infringement claim is apparent from the complaint, the buyer must notify the seller promptly rather than complete an extended internal review first.
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