Common use of Infringement by Third Party Clause in Contracts

Infringement by Third Party. In the event SMSI or CMS has reason to believe that a Third Party may be infringing any of the Patent Rights, such party shall promptly notify the other party. SMSI, may in its discretion, elect to enforce the Patent Rights, through legal action or otherwise, and CMS agrees to cooperate with SMSI in such enforcement. If CMS has given written notification to SMSI of a Third Party infringement and has delivered satisfactory documentation to SMSI evidencing that the Third Party's infringing product is competitive with CMS's Licensed Product in the same country and total sales of such infringing product of the Third Party infringer are equal to or exceed one hundred thousand U.S. dollars (US$100,000) in an Agreement Year in the same country, then if SMSI fails to take commercially reasonable steps to enforce the Patent Rights within three (3) months of such notification, CMS's royalty rate applicable to sales in that country shall be decreased by one-half until such time as SMSI brings such action or otherwise resolves the issue of infringement.