Intellectual Property (IP) Rights Insurance

Intellectual property is the lifeblood of many businesses – being the knowledge and ideas that constitute the products and services, which generate revenue and brand value.

There are four principal forms of IP rights

Explanation

Example

Patents

The elements, means or methods that make something work Software, an engineering process, a packaging process, or a drug

Trademarks

Words or symbols used to distinguish goods & services Corporate logos or slogans

Design

The components that dictate how something looks – shape and visual appeal.  “Passing Off” is often the term used to define this process. Color in connection with a trademark or a specific product shape or configuration

Copyright

Protects written and recorded works Written music or literature

IP litigation is costly and can lead to injunctions, product recall, business interruption costs and damages.

Litigation is normally formed around two principles:

  1. The Infringement of IP rights.
  2. A challenge to the validity of both registered and unregistered IP.

IP Insurance

Historically, purchasing IP insurance for companies has often been a cumbersome, invasive and, when compared to buying other lines of insurance, expensive process. In recent years, the London insurance market has redeveloped their IP offering significantly, effectively providing an easier path for prospective applicants.

IP insurance enables businesses to protect their intangible assets by both enforcing their IP rights and protecting their balance sheet against third party infringement allegations. Furthermore, IP litigation is costly and can materially affect a company’s margin.

By purchasing IP insurance, an organizations can at least continue to operate by transferring its risk to the insurance market, whilst its business is being legally challenged – ultimately using the IP insurance as a business enabler.


Limits, Retentions and Premiums:

  • Limits of indemnity available up to $25,000,000
  • Excesses available from as low as $5,000*
  • Premiums start from as little as $3,000*

* based on lowest risk profile and a $1,000,000 limit of indemnity


The main IP coverage components are as follows:

  • Litigation Costs – to defend an Insured against an alleged breach of third-party IP rights
  • Damages – awarded by a court, arbitration or administrative tribunal
  • Directors’ and Officers’ – defence costs where directors and officers are personally joined in litigation for a breach of third party IP rights
  • Recall Expenses – arising from an injunction or breach of third-party IP rights including the costs of applying to revoke or otherwise invalidating the IP right in question
  • Abatement Costs* – to pursue a third-party for infringing proprietary IP rights including the costs of defending an application to revoke or otherwise invalidate the proprietary IP right(s)
  • Fee Shifting Costs – for court ordered damages arising out failed pursuit litigation
  • Loss Mitigation Costs – for the purposes of mitigating against a potential claim or IP litigation
  • Business Interruption Costs – including PR consultancy costs, future loss of profits and increased working costs associated with IP litigation or an injunction

*cannot be purchased as a stand-alone insuring agreement.