When a supplier refuses an indemnity: what it costs to be wrong
Answer. A refused indemnity does not stop the underlying patent claim. It only removes your safety net. You carry the defence costs, any customs exposure, and the commercial disruption yourself until the claim is resolved on its own track, and separately from that, the supply agreement decides whether any of it comes back to you. Being wrong about which track applies is what makes this expensive.
Basis
Two different questions run at the same time, and they are governed differently. The patent claim itself — whether the disputed component infringes — is a matter for the patent system. If the patent in question is a unitary patent, the framework introduced by Regulation (EU) No 1257/2012 and Council Regulation (EU) No 1260/2012 places jurisdiction with the Unified Patent Court, under the Agreement on a Unified Patent Court. If, instead, the dispute arrives as goods stopped at an EU border on suspicion of infringing an IP right, the customs authority acts under Regulation (EU) No 608/2013.
The indemnity is a different question entirely. It is a contractual promise inside the supply agreement, and its scope, its exclusions, and its notice requirements are set by that agreement and by the national contract law chosen in it. No EU regulation decides whether a supplier owes you an indemnity. That question is answered by the clause you signed.
Practical consequence
While the supplier disputes the indemnity, the patent claim keeps moving. Costs accrue on your side: legal fees, potential damages exposure, and — if goods are held at the border — storage and delayed delivery. If you later win the indemnity dispute, you may recover those costs from the supplier, but recovery is a second lawsuit, not a refund. Being wrong about whether the indemnity applies at all can mean paying twice: once to defend the patent claim, and again to litigate the indemnity.
Timing also works against you. A customs authority acting under Regulation (EU) No 608/2013 does not wait for your indemnity dispute to settle before its own procedural clock runs. Missing a customs response window can mean the goods are treated as infringing by default, regardless of what the supply agreement eventually decides.
What to do
- Send written notice invoking the indemnity clause today, naming the specific claim and attaching the notice you received.
- Preserve every document tied to the claim: the infringement notice, the customs notice if any, and the correspondence with the supplier.
- Identify whether the patent is a unitary patent. That determines whether the claim can proceed before the Unified Patent Court under the Agreement on a Unified Patent Court.
- If goods are held at the border, respond to the customs authority within the window it sets under Regulation (EU) No 608/2013 — do not wait for the supplier to answer first.
- Contact your partner as soon as the supplier's refusal is in writing, so the defence and the indemnity dispute can run in parallel rather than in sequence. How to reach a partner explained
- Instruct separate counsel for the indemnity dispute if the refusal is final. Mixing the two disputes under one brief usually slows both.
Who decides
| Track | Governed by | Who decides |
|---|---|---|
| Patent infringement claim (unitary patent) | Agreement on a Unified Patent Court, Regulation (EU) No 1257/2012 | Unified Patent Court |
| Goods held at an EU border | Regulation (EU) No 608/2013 | Customs authority, subject to judicial review |
| Indemnity refusal itself | Supply agreement and its governing law | Forum named in the agreement |
Three different decision-makers can be active on one file at once. That is normal here, and it is the reason the two disputes should not be run by a single, undivided brief.
Forks
If the dispute also raises who owns the design files behind the disputed product, that is a separate question with its own answer: When the client wants the design files, not just the finished output. Do not let it merge into the indemnity file; the ownership question can be resolved on its own timeline.
If the disputed component embeds a third party's work under a licence that the licensor pulls mid-dispute, that changes the defence entirely, and it is covered here: When the referenced work is removed and its limits. Check the licence chain before assuming the supplier is the only party who can be at fault.
If the supplier's refusal is partial — accepting defence costs but disputing damages, for instance — treat that as two indemnity questions, not one, because the agreement may answer them differently.
Limit
This page does not value your claim, does not tell you whether your specific indemnity clause is enforceable as drafted, and does not replace a reading of the actual supply agreement. It also does not cover indemnity disputes governed entirely outside the EU customs and unitary patent framework; those depend on the national law chosen in the contract, which is outside what this page states.
Verified
Checked against: Regulation (EU) No 608/2013; Regulation (EU) No 1257/2012; Council Regulation (EU) No 1260/2012; Agreement on a Unified Patent Court. Indemnity clauses themselves are governed by national contract law, which is not covered by these sources and is not stated here as a citation.
If the real question behind this dispute is whether to renew the supply agreement at all rather than fight this one claim, that assessment sits in a different layer: Counterparty report before renewing a contract and the deadline.
Related publications
The product is redesigned mid-dispute patent what it costs covers the adjacent scenario where the disputed product changes shape while the claim is still open.
FAQ
What is the first step when a supplier refuses an indemnity?
Put the refusal in writing yourself, referencing the original notice, and preserve every document tied to the claim before deciding how to respond. Do not let the refusal go unanswered while the underlying patent claim continues to move.
Which deadline is already running?
If goods are held at an EU border, the customs authority's own response window under Regulation (EU) No 608/2013 is running regardless of the indemnity dispute. If the claim instead proceeds before the Unified Patent Court under the Agreement on a Unified Patent Court, its procedural timetable runs independently of when the supplier answers you.
Who decides, and on what evidence?
The patent claim is decided by the Unified Patent Court if the patent is a unitary patent, or by the customs authority if goods are held at the border, each on the evidence of infringement. The indemnity itself is decided separately, by the forum named in the supply agreement, on the evidence of what that clause actually promised.