IP insurance
The cost of enforcing IP rights can be very high. However, you may consider that protecting some types of IP is critical, regardless of cost.
One way of obtaining some protection from these costs is to obtain an insurance policy to cover the costs of legal proceedings, sometimes known as an IP insurance policy.
Policies vary from insurer to insurer. An IP insurer should be able to advise on what IP rights can be covered. In fact, insurance covering the full IP rights of the property owner is preferable to more selective patent-only protection, as it gives greater legal scope for any future defence or enforcement action.
Typical features
Specific IP
IP insurance only covers specifically identified IP. If you specify a particular patent for the purposes of the policy, the policy will only cover infringements relating to that patent, but no other IP rights. This restriction enables the insurer to charge an appropriate premium.
Cover for expenses
IP insurance should cover expenses that you incur as a result of prosecuting an infringer (pursuit expenses), or those incurred defending proceedings, or both, depending on the needs of the policyholder.
Insurers control the payment of legal expenses and the decision to incur legal expenses. An insurer will need to be satisfied that the case has a good chance of success before funding legal action, particularly where pursuit expenses are involved.
Your insurers will also reserve the right to withdraw funding if, for example, you do not accept reasonable settlement offers.
Insurers will not fund unlimited legal expenses. The extent of the policy's cover will be reflected in the premium you pay. The longer the period of cover, the higher the amount of cover, the higher the premium payable.
Extent of cover
IP insurance operates on an 'occurrence' basis. This means that the infringement must have occurred during the period the policy is held, the insurer must be notified during that period, and any legal proceedings must be started during the same period.
The policy will not cover legal proceedings arising from the infringement of IP rights that occur before the date the policy starts.
Last Updated: 13/12/2012
