Common use of Infringement Action by Third Parties Clause in Contracts

Infringement Action by Third Parties. (a) In the event of the institution of any claim or suit by a Third Party against BND for patent infringement involving the manufacture, use, lease or sale of any Licensed Product in the Territory, BND shall promptly notify BDSI in writing of such claim or suit. BND shall have the right to defend such claim or suit at its own expense, and BDSI hereby agrees to assist and cooperate with BND, at BDSI's own expense, to the extent necessary in the defense of such claim or suit. During the pendency of such claim or suit, BND shall continue to make all payments due under this Agreement, but shall have a credit against Running Royalties otherwise payable hereunder for the full amount of all costs and expenses incurred by BND in defending against such claim or suit; provided, however, that in applying the credit against any Running Royalty payment, the amount of such payment shall not be reduced by more than 50% and any remaining credit shall be applied against subsequent Running Royalty payments .