The benefits of IP Insurance
With IP worth 75% of a business’ value why do less than 13% of businesses have IP insurance? It’s fascinating to read the insurance industry’s perspective on this phenomenon: Protecting Intellectual Property in the new world order. I find insurance (& third party funding) essential in many disputes. In most cases, this is "After the Event" or ATE insurance. Matthew Hogg and Edward Cartwright's article makes a great point that many people forget: you may assume that you have contractual protection if someone in your supply chain infringes third party intellectual property but, even if this contract holds up to scrutiny, the other business may not be able to pay the legal costs and with joint and several liability you may be left with the bill. It's important to remember that if you’re involved in infringing activities by making infringing products, you could be one of the defendants on the hook (or even the only defendant). Infringing activities can be as broad as "keeping" patent protected products so it is easy to infringe without being directly involved. As the authors note: “Unfortunately, the forces of globalisation, digitalisation and recession only increase the likelihood of IP litigation”. They also note that a lot of IP rights, particularly trade marks and patents have changed hands in the last year as insolvent businesses sold off assets. Those purchasers are now looking for infringers... Many businesses who think they have IP covered under their general business insurance may be disappointed when they read the small print and discover that IP is excluded. Any policy should cover IP claims from all relevant angles to the business including: (i) contractual liability regarding IP, (ii) defending IP disputes from third parties and (iii) suing businesses who infringe your IP (i.e. IP enforcement). Finally - an acronym buster: ATE - after the event insurance. This means any insurance you need to get AFTER you discover your rights are infringed or you are accused of IP infringement. BTE - before the event insurance. This means insurance you buy speculatively BEFORE you have a known IP dispute. It is usually a lot cheaper and it’s available for defendants (unlike most ATE insurance). Rosie's Twitter thread on this issue is available here.