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Intellectual Property Insurance

Intellectual Property is central to protecting the ideas, creativity and brands. But many businesses fail to take action to protect such valuable assets, on the basis that they might not be able to afford to enforce such rights.

Reduce risk

But there is a solution – IP Insurance. Like any insurance, you pay a premium to hedge against the possibility that you might – one day – need to cover a large expense, such as legal costs in a court action. Like any insurance it pays to shop around. Since IP Insurance is dealing with larger sums than (for example) your house insurance, the benefits of shopping around (or the disadvantages of not doing so) are magnified.

Some IP Insurance providers offer protection specific to the UK Intellectual Property Enterprise Court (previously the Patents County Court), for example. It’s a cheaper, simpler policy and looks attractive. After all you could always choose to pursue an infringer in the Intellectual Property Enterprise Court – couldn’t you?

The Challenges

Well, may be not. What if the infringer – and all infringements – occur in Scotland? The Intellectual Property Enterprise Court only has jurisdiction for England and Wales. What if you’ve got more than UK rights? For example, a European patent application? Or a US application? This type of policy probably won’t be enough to covers such situations either. So know your market. And know the extent of your patent coverage. No business needs “worldwide” protection, for the simple reason that no business has patents in every single country of the world. And if one or more of your patent applications is pending, you can’t enforce in many countries until grant. So perhaps consider extending the geographical extent of the policy as and when your rights proceed to grant.

Understand your policy

Some insurance policies focus only on patents and in particular on infringement of your patents. Others offer a broader IP perspective and are prepared to insure against litigation for infringement of registered designs and trade marks. Some will also offer protection in the event that you need to defend yourself against a claim for infringement of someone else’s IP rights. Make sure you understand the extent of the policy – perhaps check out its scope with your patent attorney or IP lawyer. In short, don’t guess, get some advice.

Be aware that most insurance policies will cap the amount of money being paid out for a legitimate claim – and that patent infringement actions can be expensive. Make sure that you select a cap that will be enough for your needs.

Choose the right option

Another point to consider is whether to select a policy that would help with the costs of arbitration or mediation of an IP dispute. These alternatives to litigation are growing in popularity and are much more cost effective.

You’ll need to invest some time looking through the different options to find one that most closely matches your needs. Compare more than the price and read the small print. Because IP Insurance policies can be very, very different in their scope.

But be reassured. The mere fact that you have IP Insurance can be enough to make many potential infringers back down.