You carry insurance for your house, car and business. What about your intellectual property?
In the business world, it’s not uncommon to hear the story about the big guy who is simply too big and the little guy who isn’t prepared or financially able to fight back. And this is the case when large companies infringe upon the intellectual property rights of smaller competitors.
According to a cost study conducted by the American Intellectual Property Law Association, the average litigation costs for a patent infringement suit ranges between $767,000 and $2,645,000.
Intellectual property insurance has been around for about 20 years, but its existence is relatively unknown. With the increasing pace of innovation and litigation, intellectual property insurance is now available to IP owners and businesses of all sizes. IP insurance helps fund litigation risks by ensuring that there are funds available to pay the associated legal expenses.
IP insurance is available for both the enforcement and defense of IP rights. Intellectual Property defense coverage is pretty much what it sounds like – it will pay the costs to defend you and also can provide coverage for damages if someone tries to claim the rights to the same IP (or business model, process, or application). IP enforcement coverage basically funds legal expenses to enforce your patent, copyright, or trademark. In addition to obtaining IP insurance directly, IP owners can also require in the Licensing Agreement that the Licensee (i.e. indemnifying party) have an intellectual property insurance policy.
If you are a start up or small business, IP insurance may be one of your best competitive strategies. If your company is targeted by a larger company looking to back you into a corner, you may not have the resources to fight back, and your IP rights could be in jeopardy. Intellectual property insurance might be a good option to give you the legal muscle to keep your IP rights intact.