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intellectual property insurance 2017-03-22T14:20:43+00:00

Intellectual Property Insurance

Can you afford legally to pursue or defend your registered Intellectual Property Rights?

Insurance can provide cover for the legal costs (up to your predetermined and/or the underwritten Limit of Indemnity) of your pre-selected specialist IP solicitors to act for you through litigation, negotiation or mediation to ensure your IP Rights are protected at law.

FREQUENT QUESTIONS REGARDING INTELLECTUAL PROPERTY RIGHTS

Q – What is meant by (i) “intellectual” and by (ii) “property” ?

A – (i) Creations/inventions are the result of the ideas and thoughts of an individual – thus a product of their intellect.

(ii) Any creation/invention is rightly viewed as property and as such should legally belong to the individual who conceived it.

Q – So why should Intellectual Property Rights (IPRs) need further to be protected?

A – Having documentation and certificates establishing your legal ownership will not necessarily prevent the infringement or theft of your rights without being able to obtain redress.

Q – How then can I protect my legal rights?

A – To protect your rights may therefore require litigation. Even though the rights may legally be yours there remains the need to defend or pursue them by proving this in the High Court – and this often can be very expensive.

Q – Is there an affordable way to obtain legal protection?

A – (i) YES. Annual, renewable intellectual property legal expenses insurance: this does not need to be prohibitively costly

(ii) That policy in itself can provide a positive DETERRENT which could obviate litigation – and funding up-front Excess.

WHY INSURE?

Fear of “idea theft” can inhibit an inventor from developing the full potential of his idea and from marketing it. Yet while insufficient marketing can relegate a good idea to failure, promoting an unprotected idea invites a risk of plagiarism.

Further, having documented proof of intellectual property ownership – patents and licenses, etc does not necessarily mean the protection of your rights is assured. It could be that say, “prior art” till then unknown, may counteract an alleged infringement. Moreover, your idea or design can still be hijacked and copied. Without legal expenses insurance protection, the litigation costs are always likely to be high. Alas! The costs could even prove unaffordable!

For a large or small company or an individual, legal costs are likely to be of the same order. Having affordable protection insurance available provides the finances for litigation to support the pursuit or defence of claims. Such protection thus places you on an equal financial footing with your opponent.

Note: Even if you can generally afford the level of litigation costs to pursue or defend a claim, the cover from a legal expenses insurance policy should normally save you paying most, if not all of your solicitors’ costs within the Limit of Indemnity chosen, and without your solicitors losing any of their fee-earning capacity.

This demonstrates the value of an annual IPR insurance policy. It is essential; it is an affordable alternative to self-funding.

FACILITIES AVAILABLE FOR PROTECTING YOUR IP RIGHTS

Any policy issued will depend upon a wide range and variety of considerations, circumstances and levels of cover required adequately to protect given IP Rights. Experience is available to obtain sound advice in sourcing the soundest solution.

“BEFORE-THE-EVENT” insurance offers annually renewable 12-month policies from the time a patent is applied for or a risk e.g. a licence, is created. This ensures continuous cover. Such a “Before-the-Event” policy will include:
Legal Expenses cover to allow defence or pursuit of your IP Rights up to your chosen and approved Limit of Indemnity (LOI).
A DETERRENT which may pre-empt the need for litigation and obviate finding the money for any Excess needed for each claim.

BEFORE-THE-EVENT policies are tailored to the customer’s choices of cover with the premiums primarily being determined by:
The amount of legal expenses cover required (LOI)
The geographical limits (from five areas now with one including China)
The amount of Excess to be paid, determined either voluntarily or by the underwriter.
Number of risks and types – e.g. patents, licenses, designs, trademarks, copyright and confidentiality.

Note: Each type of risk disclosed MUST be individually covered in the policy. Infringement say, of an abrogation of a license may not necessarily impinge upon the patent(s) involved. The underwriter could thus refuse the claim if the licence was not covered

IPR rights can be attacked or infringed in any part of the world. International IPRs can grant you right of ownership in those countries where granted or registered. There may need to seek wider geographical cover for legal redress.

Features (continued)

The importance of the role of Appointed Representative within a Policy

An Appointed Representative is selected for the life of each policy by the policyholder and having completed a Protocol form, should gain the underwriter’s approval. He/she has to be a solicitor with proven experience in IP Litigation and success in negotiation, who will act for the insured. This method increases the potential for successful claims – in pursuit or defence. Should the insured not have a solicitor experienced in this particular field, suitable recommendations are available.

Note: Without the weapon of that aforementioned DETERRENT inherent in a Before-the-Event policy, even a specialist IP litigation solicitor would have little with which to negotiate. Yet if the Appointed Representative can convince the opponents that his client really can afford litigation , the latter may re-consider whether the High Court is the best road to go down when offers of negotiation are being made.

The “After-the-Event” policy

Although there is no substitute for prevention occasionally a dispute/claim arises but where an IPRs protection insurance policy has NOT been taken out. By definition, Cover for an extant risk would have to be refused by a Before -the-Event underwriter

You cannot count upon obtaining an After-the-Event policy in these cases. The alleged infringement having occurred would be in effect, a claim – so a significantly higher premium would reflect this. Yet the underwriter may decline to accept the risk altogether because of an inadequate (less than 65%) likelihood of success. This high likelihood of success has to be professionally assessed by a solicitor or barrister and re-affirmed by the same person once the pleadings become available

Note: THE MESSAGE IS CLEAR : – it would be seriously risky and costly solely to rely only upon After-the-Event policies. It is much more secure – and cheaper, continuously to protect one’s IPRs using an annual, renewable Before-the-Event policy.

ADDITIONAL PRECAUTIONS

Apart from implementing insurance protection there are additional steps recommended further to protect your IPRs.

Non-disclosure:

Before involving anyone in any still secure details of your ideas or designs, they MUST first sign a letter of Non-disclosure – Consultants, toolmakers, manufacturers, friends – Yes! Even Underwriters.

However tantalising an important firm may be to work with as a potential client or a licensee – and sometimes they are the very ones who shrug off such a request – much can be lost without redress if such a letter is refused. Be strong and move on!

Pre-emptive warnings:

Make a point of displaying your Protection Insurance details in places of maximum impact: Letter-headings; packaging; strapping. It is an inoffensive yet often effective way of protecting what is yours by drawing attention to the insurance

Simple security measures:

Some hidden yet well-protected mark, known only to yourself, can sometimes provide simple, welcome yet unexpected evidence of infringement.

Wholesale Stockists:

Consider adding to a Licence the onus of infringement not only on the Stockist firm but also the owner/ MD personally.