Copyright is an intangible property right that gives the creator of an original work the exclusive right to profit from the work for a set number of years before the work passes into the public domain. The creator has a copyright in his original work the moment he puts it into a fixed medium, such as writing it down, putting it on canvas or recording it. These rights are present even if the creator does not go through the formal process of registering the copyright.
The U.S. Copyright Act gives the holder of a copyright the right to assign all or part of his interest in a creative work to another party. The transfer happens pursuant to an assignment contract that exchanges the rights for valuable consideration, typically for money. In practice, a creator makes an original work, like a superhero, for example. If he wants to sell that creation to a company that publishes comic books, he would execute a copyright assignment that transfers his interest in the character for the remainder of the copyright term. The company owns the character and can do anything it wants with it, while the creator is entitled to be paid for his work according to the terms of the contract.
An indemnity clause is one of a number of clauses that are included in the typical copyright assignment agreement. The clause requires the creator to guarantee that the work he is selling is original and that he owns the rights, and to promise to defend the assignee against any copyright infringement claims or other claims against the work. The notion of "defending" often includes providing information, answering questions and paying for any legal defense or judgment in the case.
An indemnity clause can be broad or limiting. It is in the creator's best interest to try to include some limiting language that guarantees the originality of the work "“to the best of his knowledge and belief,” so he is not held liable for accidentally infringing on an existing copyright. The assignee, on the other hand, will likely want the clause to be be broad enough to include all claims arising from the work. A common use of an indemnity clause is in copyright assignments in the publishing industry. Authors are usually required to indemnify publishers against infringement claims against their work and other claims arising from their writing, such as defamation. If a third party makes a claim of plagiarism against an author who has assigned a book to a publisher, the author is often responsible for helping to defend the case and reimbursing the publisher for any damages.