Re: What does "hold harmless" mean?

[Ann Okerson <aokerson@pantheon.yale.edu>]

Philip Wallas of EBSCO Publishing sends the following message

---------- Forwarded message ----------
>From PWallas@epexchange.epnet.com Fri Jul 30 08:50:41 1999
From: Philip Wallas <PWallas@epexchange.epnet.com>
Subject: FW: What does "hold harmless" mean?
Date: Fri, 30 Jul 1999 08:44:13 -0400

Thanks to Alan Edleson for the clarification on this issue.  One related
item I find in my work licensing content for EBSCO Publishing's aggregated
full text databases is that some publishers want us to include a clause in
our user agreement, indemnifying the publisher against any claims by the
subscribing institution's users.  We have mutual indemnification clauses
in our license agreement with the publisher, but one particular publisher
wants the customer to indemnify them as well.

We have had numerous instances where state funded institutions have not
been able to accept our user agreement because their state laws do not
permit the institution to undertake a financial obligation (of unknown
scope) for another party and indemnification certainly has the potential
to have financial implications.  We end up having to customize products to
remove the content from the publisher who insists on the user agreement
clause. What is particularly frustrating is that this publisher requires
the same clause from all its distributors, yet we see institutions which
can not agree to the indemnification clause buying products from those
distributors. Academic Universe is one example.

Does anyone know if the existence of mutual indemnification between a
publisher and a licensee makes the idea of indemnification for the
publisher by the licensee's customer redundant?


-----Original Message-----
From: Alan Edelson [mailto:amedelson@topnet.net] 
Sent: Friday, July 30, 1999 8:02 AM
To: liblicense-l@lists.yale.edu
Subject: Re: What does "hold harmless" mean?

The practical import of the term "hold harmless" in a contract will
obviously be influenced by the context in which it is placed. But a common
example can be found in contracts entered into between publishers and
professional societies who own and operate a journal, and who wish to
engage the services of the publisher to perform the redactorial, proof
reading, typesetting, printing, marketing, and ad sales involved.  The
publisher pays the society a share of profits or a royalty on revenues.
Typically the society has total and absolute control over the editorial
content of the journal, and the appointment and supervision of the
journal's editor-in-chief.  It is therefore deemed reasonable for the
contract to provide that the society-owner of the journal will agree to
hold the publisher harmless from any law suits which may arise as a direct
result of the publication of the contents of the journal (provided, of
course, that the publisher accurately prints the material submitted to
it.)  This requires the society to indemnify the publisher for the costs
of defending itself in case of a suit, whether such a suit is successful
or not, and when successful, to pay any judgments ordered by the courts.
The intent of the "hold harmess" clause in this instance is not to enable
the publisher to evade its responsibilities, but rather to place them on
the shoulders of the party who by the terms of the contract and by the
party's actions controls the content of the journal.

Examples of situations that may result in suits include the publication of
articles containing copyrighted materials for which permission to reprint
was never asked or given, publication of statements deemed to be libelous,
obscene, infringing on the privacy of parties (such as the publication of
photographs of patients without the patient having given written
permission to do so), and increasingly, squabbles between investigators
whose names might have been improperly removed or added to the list of
parties authoring a paper.

One cannot say for sure how the term would apply in a given license, but
it probably is intended to protect the licensor from becoming the target
of suits, frivolous or otherwise, which were triggered by actions of the
licensee or by those given access to licensed materials by the licensee,
and which presumably involve some violation of the terms of the license.
Clearly, such licensing agreements, having been drafted by the licensor's
attorneys, will try to provide as broad a protection as possibe, and will
be based on the past experiences of the licensor or others in similar
positions, as recorded in case law. Much of this will sound far fetched to
the licensee, who may not have had access to the myriad of instances in
which such suits have arisen in the past. Finally, it should be mentioned
that the thorniest part of the negotiation of almost any business contract
is the section containing these protection clauses. In the end, each side
must decide what the probabilities of being caused harm realistically are,
and they then must make a business decision as to how much protection they
really need or should be able to avoid giving in order to conclude a
responsible deal.

Alan M. Edelson, Ph.D.
(Retired) President, J. B. Lippincott Company