Notwithstanding A and C, a contractor may ultimately be liable to indemnify the government for any damages. FAR 52.227-5 addresses indemnification where the contractor is to be promptly notified of any infringement action by the government. The FAR instructs the government that the Patent Indemnity clause is not to be used when there is broad A and C or in contracts for supplies or services that are uniquely governmental – clearly not offered or sold to the public in the competitive market. Prime contractors and subcontractors should look at their flowdown provisions to ensure indemnity provisions are used appropriately and should reject them if they are not.
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