IPR Indemnity

15.1.  The Service Provider shall be responsible for, and shall release and indemnify the Authority, its employees, agents and contractors on demand from all IPR Liability and against all IPR Claims except to the extent that any IPR Liability or IPR Claim is caused by:-

15.1.1.  any use by or on behalf of the Authority of the Software, or the use of the Authority Software by or on behalf of the Service Provider, in either case in combination with any item not supplied pursuant to this Agreement; or

15.1.2.  the use by the Authority of the Software in a manner not reasonably to be inferred from the [Output Specification] or the provisions of this Agreement.

15.2.  Either party shall promptly notify the other when it becomes aware of any IPR Claim being brought or any IPR Liability arising.

15.3.  Any IPR Claim brought shall be managed by the Service Provider at its own expense.  The Service Provider shall take such action as is necessary to minimise the impact of any IPR Claim on the Authority and the delivery of the Services pending the outcome of the IPR Claim.

15.4.  The Authority shall, at the request of the Service Provider, assist the Service Provider in the management of any IPR Claim and where the Authority does so assist the Service Provider shall reimburse the Authority for any reasonable costs and reasonable expenses incurred in doing so.

15.5.  The Authority shall not make any admissions which could be prejudicial to the defence or settlement of the IPR Claim (or could increase the IPR Liability) without first obtaining the written permission of the Service Provider, such permission not to be unreasonably withheld or delayed.

15.6.  If an IPR Claim is made, or the Service Provider anticipates that an IPR Claim might be made, the Service Provider may, at its own expense and sole option, either:

15.6.1.  procure for the Authority the right to continue using the relevant item which is subject to the IPR Claim; or

15.6.2.  replace or modify the relevant item with non-infringing substitutes provided that:

a)  the performance and functionality of the replaced or modified item is at least equivalent to the performance and functionality of the original item;

b)  the replaced or modified item does not have an adverse effect on any other Services;

c)  there is no additional cost to the Authority; and

d)  the terms of this Agreement shall apply to the replaced or modified Services.

15.7.  If the Service Provider elects to modify or replace an item pursuant to clause 15.6.2 or to procure a licence in accordance with clause 15.6.1, but this has not avoided or resolved the IPR Claim, then, without prejudice to the indemnity set out in clause 15.1, the Service Provider shall be liable for all reasonable and unavoidable costs of the substitute items and/or services including the additional costs in implementing and maintaining the substitute items.