Intellectual Property Insurance
Intellectual Property Insurance, in its most basic form, allows you to insure your
patent or other Intellectual Property Rights to cover the cost of suing for infringement.
However, it is too late to seek insurance when you have a a court order on your
desk - you must get insurance before you become aware of any potential infringement.
The best way to view insurance for your intellectual property is to compare it with
the insurance you take out for other property such as plant and equipment insurance.
The Need for Intellectual Property Insurance
There are many reasons to get Intellectual Property Insurance - and these reasons
may include things that you have not already considered:
- Mitigate Risk
- Facilitate Licensing
- Encourage Investment
- Deter Potential Infringers
Mitigate Risk
Risk mitgation is typically the primary driver for seeking insurance. In relation
to IP the likelihood of the event might be low but the potential costs can be astronomical.
Your rights can be attacked or infringed in any part of the world. Intellectual
Property Insurance a practical and financial alternative to self-funding legal enforcement
of your IP rights.
Facilitate Licensing
Licensees of your intellectual propery want an assurance that the IP is going to
make them money and not just cost them money. Having appropriate Intellectual Property
Insurance in place will give your licensees confidence that the IP will be enforced
and that this cost associated with this risk is already built into the licensing
fees.
Encourage Investment
When trying to seek funding for your business - it is one thing to have intellectual
property - it is another to be in a position to enforce it. Investors might be happy
to accept the risk in providing capital to grow your company - but they may be more
hisitant to provide more capital to engage in an intellectual property dispute.
Intellectual Property Insurance will provide investors that their investment in
your intellectual property is more secure.
Deter Potential Infringers
Potential infringers of your intellectual property rights will always be more hesitant
if they know your litigation will be funded. Knowledge that you have Intellectual
Property Insurance will deter your competition from infringing your IP rights.
Type of Cover
The types of cover vary between insurers. The basic aspects that can be covered
include:
- Expenses to defend infringment of third party rights
- Damages to third party as a result of infringment
- Expenses to persue infringment of your rights
Policies can also be customised your your specific requirements for covering events
such as:
- Adverse or misleading media reports impacting your brand
- Invalidity or revocation of IP rights in whole or in part
- Governmental action preventing exploitation of rights
- Unsuccessful defence of an infringement action
Basis for Indemnity
Your decision on the type of policy will impact the basis for calcuating the basis
for your indemnity. Possible basis include:
- Reimbursement of research and development costs
- Loss of profit calculated on future projected earnings
- Loss of profit calculated on historic earnings