B-139585, SEP. 21, 1959
Highlights
INC.: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 31. WE HAVE CONSIDERED WITH INTEREST THE ADDITIONAL VIEWS SUBMITTED IN YOUR LETTER SUGGESTING THAT THERE MUST BE CERTAIN CRITERIA FOR INCORPORATING THE WAIVER STIPULATION IN BIDS. THAT THE ADMINISTRATIVE DECISION TO SO STIPULATE IS SUBJECT TO REVIEW. THERE ARE SEVERAL FACTORS FOR CONSIDERATION IN DETERMINING THE ADVISABILITY OF REQUIRING INDEMNIFICATION FOR POSSIBLE PATENT INFRINGEMENTS. ARE COVERED BY STATUTE. AS WE HAVE HERETOFORE STATED. IS ONE FOR DETERMINATION BY THE ADMINISTRATIVE AGENCIES. SUCH DETERMINATIONS ARE MADE PURSUANT TO ADMINISTRATIVELY PRESCRIBED CRITERIA. ARE SUBJECT TO REVIEW BY OUR OFFICE ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF EACH CASE PRESENTED.
B-139585, SEP. 21, 1959
TO VAN VALKENBURGH, NOOGER AND NEVILLE, INC.:
REFERENCE IS MADE TO YOUR LETTER OF AUGUST 31, 1959, SUGGESTING THAT WE "CONTINUE TO WEIGH" QUESTIONS CONSIDERED IN OUR LETTER TO YOU OF JULY 2, 1959, RELATIVE TO THE INCLUSION IN AN INVITATION ISSUED BY THE DEPARTMENT OF THE NAVY OF A "WAIVER OF INDEMNITY" CLAUSE WHEREBY THE USE OF A PARTICULAR PATENTED INVENTION WOULD BE AUTHORIZED AND THE USUAL PATENT INFRINGEMENT INDEMNIFICATION WOULD BE WAIVED.
WE HAVE CONSIDERED WITH INTEREST THE ADDITIONAL VIEWS SUBMITTED IN YOUR LETTER SUGGESTING THAT THERE MUST BE CERTAIN CRITERIA FOR INCORPORATING THE WAIVER STIPULATION IN BIDS; THAT THE ADMINISTRATIVE DECISION TO SO STIPULATE IS SUBJECT TO REVIEW; AND THAT COSTS OF LITIGATION MIGHT BE AVOIDED BY REQUIRING PATENT INFRINGEMENT INDEMNIFICATION.
WHERE PATENTED INVENTIONS MAY BE INVOLVED, OF COURSE, THERE ARE SEVERAL FACTORS FOR CONSIDERATION IN DETERMINING THE ADVISABILITY OF REQUIRING INDEMNIFICATION FOR POSSIBLE PATENT INFRINGEMENTS, BUT NEITHER THE USE OF INDEMNIFICATION CLAUSES, NOR THE FACTORS FOR THEIR WAIVER, ARE COVERED BY STATUTE. THIS MATTER, AS WE HAVE HERETOFORE STATED, IS ONE FOR DETERMINATION BY THE ADMINISTRATIVE AGENCIES. SUCH DETERMINATIONS ARE MADE PURSUANT TO ADMINISTRATIVELY PRESCRIBED CRITERIA, AND ARE SUBJECT TO REVIEW BY OUR OFFICE ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF EACH CASE PRESENTED.
AS YOU HAVE INDICATED IN YOUR LETTER, THE COST OF POSSIBLE OR PROBABLE LITIGATION IS AN IMPORTANT FACTOR. THIS FACTOR MUST BE CONSIDERED NOT ONLY BY THE GOVERNMENT PROCURING AGENCY, HOWEVER, BUT ALSO BY THE SUPPLIER. HENCE, THE IMPACT OF SUCH COST PROBABILITY MAY BE REFLECTED IN THE BID PRICE, PARTICULARLY WHERE A PATENT INDEMNIFICATION CLAUSE IS INCLUDED IN THE INVITATION.
UPON FURTHER REVIEW AND CAREFUL CONSIDERATION OF ALL THE INFORMATION AND EVIDENCE OF RECORD WE DO NOT BELIEVE THAT YOU HAVE PRESENTED ANYTHING WHICH WOULD JUSTIFY QUESTIONING THE ADMINISTRATIVE ACTION IN THIS CASE.