As the risk of Intellectual Property (IP) litigation in the UK, Europe and the USA grows, founders and IP managers at IP rich businesses should consider insuring these valuable assets. Other business assets are insured as standard (offices, stock etc) but if a company’s IP is infringed or if a company is sued for infringing the rights of a third party the damage can be greater then any other business risk.
IP litigation is expensive but IP insurance mitigates this risk by transferring the costs to an insurer. The key benefits are:
- Protects Cashflow: Rarely do IP rich businesses make provisions for IP litigation on their balance sheet. By putting an IP insurance policy in place such eventualities can be accounted for. It also allows decisive enforcement or defence actions to be taken without draining vital cash reserves;
- Increases Value Of Rights: Licensees, lenders and investors know they won’t have to pay for expensive legal action to protect business value which increases the value of patents, trade marks and copyright. IP Insurance policies also cover indemnities in licenses and sale agreements which adds real value to those agreements;
- Provides a Deterrent: Many of our clients put evidence of their IP insurance policy on their website to deter competitors from copying their IP. If a potential infringer knows the IP they are intending to copy is insured (so that the owner has funding for any litigation) then they may think twice about their actions;
- Encourages Early Settlement: If a claim does arise we encourage our clients to let the other side know about the existence of their IP insurance policy early on. This confirms funding and can lead to the parties getting round the negotiating table earlier than would otherwise be the case. This is especially true if one party has larger revenue than the other and hopes to use this superior fire power to take advantage of their situation. In litigation, cash is king!
Whether a business owns patents, trade marks, copyrights or designs, IP insurance has many benefits and is now more affordable than ever. It makes sound business sense to learn more about how the policies operate and their cost. It will often be a fraction of the overall IP budget.
When it comes to IP, businesses ask the question, ‘what is the point in having IP if you cant afford to enforce it!’. IP insurance provides a sound response to this argument and allows businesses to trade with confidence.
To obtain a quote all you need to do is complete the very short form here and we will get back to you with terms within 48 hours. Alternatively, please give us a call on 0203 633 0766 and we’ll be delighted to talk through your options.