Enforcing or defending your intellectual property (IP) rights against infringement can often be costly. One way of preparing for possible enforcement or defence costs is to take out an IP insurance policy, which will cover the costs of legal proceedings.
Trade Mark Protect is an insurance product tailored to assist small and medium sized enterprises with the costs of defending a trade mark both before and after it is registered.
IP insurance policies and coverage can differ significantly from insurer to insurer. It’s important to understand these differences before committing to a particular policy.
An IP insurance broker can advise you on your specific situation. However, there are a number of general rules that usually apply to these products.
What IP insurance covers
An IP insurance policy will provide protection for one or both of the following:
- Legal costs for enforcing claims against infringers. This includes damages such as loss of profits or reputation and settlements. The insurance applies to any IP right in Australia or worldwide.
- Legal cost for defending infringement claims made against you. This also includes claims made against your customers or licensees. An infringement claim often refers to a violation of a copyright or some other type of IP theft. The claim is often based on plagiarism, meaning someone steals the creative work of another person in an attempt to earn some sort of reward.
Conditions for IP insurance
Insurers control the payment of legal expenses and the decision to incur legal expenses. This means your insurer:
- needs to be satisfied that your case has a good chance of success before funding legal action, especially where enforcement claims are involved
- may have the right to withdraw funding if, for example, you don't accept reasonable negotiated settlement offers
- will not fund unlimited legal expenses (the level of cover is determined by the policy you purchase).
How it works
Every IP insurance policy is different. It’s important to understand policy terms and conditions in order to find the right one for you.
In order for you to be protected in enforcing your IP:
- your insurance policy must be current at the time of the claim
- the amount you are insured for needs to be adequate to meet your possible legal costs.
Contact a licensed insurance broker if you think an IP insurance policy might be beneficial to your IP. They can help you select the IP insurance policy that would best suit your specific needs.