Indemnification Policy Expanded

An expanded indemnification policy gives more legal protection to end users of nearly any Microsoft product that is found to infringe on a third-party’s intellectual property (IP). The changes could reduce the likelihood of infringement suits against Microsoft customers and ensure that the company has an early opportunity to intervene in cases that have long-term implications for its products. In addition, by publicizing the changes and keeping indemnification in the spotlight, Microsoft casts doubt on the legal status of open-source competitors, particularly Linux.

Understanding the Risk

Indemnify is defined by Webster’s Dictionary as “to compensate for damage or loss sustained, expense occurred, etc.” However, when Microsoft and other IT vendors talk about indemnification, they are using it in a very narrow sense: committing to covering expenses associated with lawsuits accusing the vendor’s product of violating a third-party’s IP (patents, copyrights, trademarks, or trade secrets).