Page 4 – IPISC

That Dog Still Doesn’t Hunt

Sun, 23 Aug 2026 03:08:00 GMT

The Ninth Circuit Sends Bad Spaniels Home Again

Three years ago, we wrote about the Supreme Court’s 2023 decision in Jack Daniel’s Properties, Inc. v. VIP Products, LLC , the case pitting the world’s best-selling whiskey against a squeaky dog toy called “Bad Spaniels.” At the time, the Court had just narrowed the Rogers v. Grimaldi test for expressive works and sent the case back down to the lower courts to sort out whether the toy infringed or diluted Jack Daniel’s marks.

We said then that the fight over Rogers was far from over. What we probably didn’t expect was that, more than a decade after VIP first sued for a declaratory judgment in 2014, the parties would still be litigating this. But on August 4, 2026, the Ninth Circuit handed down decision which starts another chapter as it vacated the permanent injunction Jack Daniel’s and remanded to the District Court.

A Quick Recap of How We Got Here

In 2014, VIP introduces Bad Spaniels, a parody dog toy that swaps “Jack Daniel’s” for “Bad Spaniels,” “Old No. 7” for “Old No. 2,” and adds taglines like “43% POO BY VOL.” Jack Daniel’s demands VIP stop selling it, then VIP sues first.

In 2018, after a bench trial, the district court finds infringement, dilution, and enters a permanent injunction for Jack Daniel’s.

In 2020, the Ninth Circuit reverses, holding Bad Spaniels is an “expressive work” entitled to First Amendment protection under Rogers .

In 2023, the Supreme Court unanimously vacates that ruling, holding that Rogers doesn’t apply when a party uses another’s mark as a source identifier for its own goods, which is exactly what VIP had done by trademarking “Bad Spaniels” itself. The case was remanded to lower courts.

In 2025, on remand, the district court finds no likelihood of confusion, a win for VIP, but holds VIP liable for dilution by tarnishment and enters a new permanent injunction.

In 2026, VIP appeals again. On August 4, 2026, the Ninth Circuit vacated the most recent permanent injunction due to a failure to meet the burden of dilution by tarnishment and remanded to the District Court.

This litigation lasted twelve years with two trips through the Ninth Circuit and one trip to the Supreme Court. The parties still have no final judgment.

What the Ninth Circuit Actually Decided

This time , the fight was over dilution by tarnishment under the Federal Trademark Dilution Act, the theory that Bad Spaniels harmed Jack Daniel’s reputation by associating fine Tennessee whiskey with dog excrement. To win on that theory, a plaintiff must show three things: its trademark is famous, the accused product uses a mark that is similar to the famous trademark, and the accused product’s mark creates a mental association likely to damage the famous trademark’s reputation. The panel found Jack Daniel’s came up short, for two main reasons: (1) fame must be proven mark by mark and (2) generic consumer-psychology testimony does not meet evidentiary burden.

Fame must be proven mark by mark, not by the bottle. The district court had lumped “Jack Daniel’s” together with “Old No. 7” and treated the whole brand as famous. The Ninth Circuit said that’s not how it works, fame in a flagship mark doesn’t automatically extend to every other mark in the portfolio. Because Jack Daniel’s only proved that “Jack Daniel’s” and its registered trade dress, the bottle shape, were famous. “Old No. 7” dropped out of the dilution by tarnishment analysis entirely, which meant “Old No. 2” couldn’t be used against VIP either.

Generic consumer-psychology testimony does not meet evidentiary burden. Jack Daniel’s expert relied on a decades-old model of brand association to argue that pairing any food or beverage with images of defecation creates disgust. But he never studied whether this toy harmed these specific famous marks, and his analysis never accounted for the fact that Bad Spaniels is an obvious parody. The court agreed with the Second and Fourth Circuits that parody isn’t an automatic defense to dilution, but it is something courts can weigh. A successful parody sends two messages at once; it calls the original to mind while also signaling it isn’t the original. Consumers who get the joke are less likely to walk away thinking less of Jack Daniel’s.

VIP’s counsel struck a hopeful note after the ruling, telling reporters they hope this finally puts the twelve-year dispute to rest so that “consumers [are] able to enjoy both whiskey and having some fun with their beloved pets.”

The Real Lesson Isn’t About Dog Toys

This case illustrates a lesson for every business owner that relies on brand identity, A company with a famous brand has spent over a decade fighting a trademark dispute over squeaky dog toy. Yet, they still do not have a final judgment.

That’s not a knock-on Jack Daniel’s litigation strategy. It’s a reflection of how genuinely uncertain trademark dilution and parody disputes can be, even for sophisticated parties with deep pockets and strong trademarks. Along the way, this case has required: a full bench trial; two separate Ninth Circuit appeals; a Supreme Court decision; and second remand to the District Court.

Each of those steps carries its own legal fees, expert witness costs, and business disruption, regardless of who eventually “wins.” The underlying legal question here wasn’t fringe or exotic; it was a straightforward-sounding trademark dispute over a dog toy. If a case like that can take twelve years and still be unresolved, it’s a useful reminder of how hard it can be to predict litigation outcomes, timelines, or budgets from the outside.

Where Enforcement and Defense Insurance Fit In

This is exactly the kind of prolonged, expensive uncertainty that IP enforcement and defense insurance is built for. Whether you’re the brand owner trying to protect a famous mark from a competitor’s product or the smaller company on the other end of a cease-and-desist letter, litigation costs can escalate well beyond what either side originally budgeted.

Having a policy in place before a dispute arises means you’re not making decisions about whether to fight, settle, or fold based solely on what your legal budget can absorb that year. It means the merits of the case, not the cost of proving them, drives the strategy.

If you want to talk through how enforcement or defense coverage could apply to your brand or product portfolio, visit our website or reach out to our experienced team. We’ve been helping businesses navigate exactly this kind of uncertainty for over three decades.

The post That Dog Still Doesn’t Hunt appeared first on IPISC .

Trademark Lessons from John Oliver’s ‘Buc-Off’ Bit

Mon, 03 Aug 2026 17:46:00 GMT

If you tuned into Last Week Tonight on Sunday, you saw John Oliver launch a full-scale merchandise line for “Buc-Off,” a parody brand sporting a seven-foot squirrel named Mr. Nutterbutter. The launch included a circular logo, yellow background, and red hat designed to poke at Texas travel-center giant Buc-ee’s.

Oliver’s segment highlighted a reality that small-to-midsize business owners face every day: Buc-ee’s aggressively defends its trademark against smaller companies whose logos feature cartoon animals. Because full-scale federal trademark litigation can easily cost hundreds of thousands of dollars, most small businesses faced with a cease-and-desist letter are forced to settle, redesign their logo, or fold entirely, regardless of whether they have a strong defense like parody or non-infringement.

As Oliver put it, the chain usually prevails simply because smaller competitors lack the financial reserves to fight back, until someone with HBO’s legal budget steps into the ring.

That’s really the whole lesson buried in the joke, trademark disputes aren’t usually decided on the merits. They’re decided by who can afford to keep paying the litigation fees. Mr.

Nutterbutter is funny precisely because HBO can absorb a fight that would bankrupt

almost anyone else. Most businesses don’t have that kind of budget behind them, but they can level the playing field with intellectual property insurance.

The Two Sides of Intellectual Property Protection

Whether you are defending your brand from aggressive corporate claims or protecting your original marks from copycats, intellectual property disputes are expensive as full-scale trademark litigation can easily cost hundreds of thousands to over a million dollars. Trademark insurance is designed to cover legal fees and litigation costs, ensuring financial leverage

doesn’t dictate legal outcomes the way it nearly did for every small business Buc-ee’s has gone after.

When a third party alleges that your product or logo infringes on their trademark, defense costs accumulate rapidly before a court even decides the merits. Defense insurance pays for legal representation, court fees, expert witnesses, and litigation expenses if a third-party files a trademark infringement lawsuit against your scheduled product. As seen in the Buc-ee’s examples, smaller businesses often capitulate purely due to the projected cost of

defense. Trademark defense insurance gives small businesses the financial backing to stand their ground when they are in the right, instead of redesigning their logo since they can no longer afford the legal fees.

Building a brand takes years. Having a competitor copy your hard-earned goodwill can ruin a small business. But the same math that lets a giant like Buc-ee’s outspend its opponents also applies in reverse. Launching a lawsuit against an infringer requires significant capital, and a smaller company can find itself priced out of enforcing its own rights. Enforcement coverage pays the litigation fees incurred when you bring a lawsuit against a third party alleging they are infringing on your scheduled trademarks. A trademark is only as strong as your legal ability to enforce it. Enforcement coverage ensures that when a competitor is using your mark without authorization, you have the financial power to take them to court and protect your market share.

Don’t Wait for a “Buc-Off” Moment

John Oliver could take on a litigation giant because HBO’s legal budget made it a bit instead of a risk. Real businesses don’t get that luxury; for them, a trademark dispute poses

substantial financial risk whether they’re on the receiving end of a cease-and-desist or enforcing rights against a copycat. Whether you need to defend your flagship product against a heavy-handed competitor or enforce your rights against an imitator, specialized trademark insurance means you don’t need a seven-foot mascot and a television network behind you to survive the fight.

Is your brand protected? Contact IPISC today to learn how our Trademark Defense and Enforcement policies can safeguard your intellectual property or your brand identity.

The post Trademark Lessons from John Oliver’s ‘Buc-Off’ Bit appeared first on IPISC .

The Role of Intellectual Property in Renewable Energy Growth

Thu, 09 Jul 2026 15:18:00 GMT

Renewable energy technologies continue to play an increasingly important role in the global economy. Businesses, governments, and investors are dedicating significant resources toward developing solutions that can improve energy generation, storage, and efficiency. Advanced solar technologies, battery storage systems, hydrogen production, and carbon capture solutions continue to drive innovation throughout the renewable energy industry.

Intellectual property plays a significant role in many of these innovations. While renewable energy projects often involve substantial investments in equipment and infrastructure, the underlying technology itself may represent some of a company’s most valuable assets. Patents and other forms of intellectual property can help companies protect the innovations that differentiate them in a competitive and rapidly evolving marketplace.

Why Intellectual Property Matters in Renewable Energy

Many renewable energy companies are built around a single innovation or a portfolio of technologies designed to solve complex energy challenges.

Technologies such as more efficient solar panels, new battery chemistries, improved hydrogen production processes, and novel carbon capture solutions often require years of research, testing, and development before reaching the marketplace.

Patents can help companies protect those innovations while supporting long term business objectives such as commercialization, licensing, fundraising, and strategic growth.

Intellectual property may also help companies:

• Protect technologies developed through significant research and development efforts

• Differentiate products and services from competitors

• Create licensing opportunities and additional revenue streams

• Support investment and partnership discussions

• Establish business value beyond physical assets and infrastructure

From Innovation to Commercialization

Developing a new renewable energy technology is only one step in the process.

Many companies do not immediately manufacture products at scale. Instead, they may license their technology, enter joint ventures, collaborate with manufacturers, or partner with utilities and energy providers to bring innovations to market.

In these situations, intellectual property can play an important role by clearly defining ownership rights and creating a framework for commercialization.

A strong patent portfolio may help companies negotiate licensing agreements, attract strategic partners, and expand into new markets while maintaining control over proprietary technology.

Intellectual Property and Investment

Investors often evaluate intellectual property as part of their assessment of technology driven companies.

A well protected patent portfolio may provide evidence of innovation, demonstrate barriers to entry for competitors, and create opportunities for future revenue generation through licensing or commercialization.

This can be particularly important in renewable energy, where companies may spend hundreds of thousands or even millions of dollars developing and testing technologies before achieving widespread market adoption.

Intellectual property often extends beyond legal protection. Strong patent portfolios can contribute to company valuation, support investment discussions, and strengthen long term growth strategies.

Competition in a Growing Industry

As renewable energy markets continue to expand, competition is increasing as well.

Companies are continuously seeking ways to improve efficiency, lower costs, enhance performance, and develop new applications for emerging technologies. While competition can drive innovation, it can also increase the likelihood of intellectual property disputes.

Businesses may encounter situations where competitors introduce similar technologies, challenge existing patents, or face allegations of infringement related to their own products and processes.

Companies that rely heavily on innovation often view intellectual property protection as a way to preserve market position and maintain the value created through years of research and development.

Protecting the Value of Renewable Energy Innovation

Obtaining a patent is often only part of protecting an innovation.

Companies may also need to enforce their intellectual property rights against infringement or defend themselves when infringement allegations arise. Patent disputes can be complex, time consuming, and costly, particularly when valuable technologies or significant market opportunities are involved.

According to the American Intellectual Property Law Association, for even the most modest dispute, patent litigation costs can reach:

• $100,000 to $250,000 through the early stages of a case involving less than $1 million at risk

• $500,000 or more through discovery

• $750,000 to $1.1 million through trial

• Several million dollars in more complex disputes

These costs can present significant challenges for businesses of all sizes, including those operating in the renewable energy sector.

How Intellectual Property Insurance Can Add Value

Intellectual property disputes often involve more than legal strategy. Attorney fees, expert witnesses, discovery costs, court expenses, and potential settlements can quickly become significant financial considerations. Patent Enforcement Insurance and Patent Defense Insurance are designed to help companies manage these risks when enforcing their intellectual property rights or responding to patent infringement allegations.

By helping companies address the financial challenges associated with patent enforcement and patent defense matters, intellectual property insurance can allow organizations to focus on protecting and commercializing the innovations that drive their business.

Looking Ahead

The renewable energy industry continues to evolve as organizations invest in technologies designed to address changing energy needs around the world.

As innovation accelerates, intellectual property will likely remain an important tool for protecting technological advancements, supporting commercialization efforts, attracting investment, and creating long term business value.

Organizations developing the next generation of renewable energy technologies often recognize that protecting intellectual property is closely tied to protecting future growth and long term business value.

To learn more about IPISC’s intellectual property insurance solutions, contact us at https://ipisc.com/contact-us/ .

The post The Role of Intellectual Property in Renewable Energy Growth appeared first on IPISC .

When Your Brand Name Becomes a Liability: Lessons from Patagonia v. Entrepreneur Enterprises, Inc. dba Pattie Gonia Productions

Fri, 05 Jun 2026 15:32:00 GMT

A drag queen inspired by a South American mountain range. An outdoor apparel giant that pledges 1% of sales to environmental causes. A shared passion for climate activism and now a federal lawsuit that has become one of the most-watched trademark disputes of 2026. The case of Patagonia, Inc. v. Entrepreneur Enterprises, Inc. dba Pattie Gonia Productions (Case No. 2:26-cv-0586, C.D. Cal.) is more than a brand conflict playing out in the court of public opinion. It is a textbook illustration of why intellectual property risk, and IP insurance, matters to businesses of every size.

What Happened

Patagonia filed this trademark action on January 21, 2026, in the Central District of California against Entrepreneur Enterprises, Inc., which does business as Pattie Gonia Productions, and its owner, Wyn Wiley. The complaint asserts federal trademark infringement, dilution, and unfair competition under the Lanham Act and California law. Patagonia alleges that defendants’ use and attempted federal registration of the mark PATTIE GONIA for apparel, entertainment, and related services is confusingly similar to Patagonia’s well-known PATAGONIA trademarks, which are registered for apparel and related goods and services. Patagonia claims actual consumer confusion and contends that the PATTIE GONIA mark is likely to dilute its famous brand. Patagonia seeks injunctive relief barring further use and registration of the PATTIE GONIA mark, nominal damages, attorneys’ fees, and an order directing the USPTO to refuse the pending PATTIE GONIA application.

The Legal Landscape

Likelihood of Confusion

The central question in any infringement case is whether relevant consumers are likely to be confused about the source or affiliation of the accused goods and services. Courts apply a multi-factor test that weighs the similarity of the marks, the relatedness of the goods, the strength of the plaintiff’s mark, and evidence of actual confusion. Patagonia’s complaint includes screenshots of actual consumer social media comments mistaking Pattie Gonia content for official Patagonia content, evidence that carries substantial weight at trial. Its marks are famous, which eliminates certain validity challenges. Additionally, the goods and services in the trademark application overlap directly with Patagonia’s registered classes.

Defendants will likely argue the marks are distinct in commercial impression and that the Pattie Gonia persona has its own identity separate from the apparel brand. The February 2025 response email made a notable argument that both parties draw their names from the Patagonia region of South America, and that any similarity is geographic coincidence rather than copying. Whether a court finds that compelling alongside evidence of logo replication and a merchandise website remains to be seen.

Dilution

Patagonia also pleads dilution, a claim available only to owners of famous marks. Fame here is not in dispute. The PATAGONIA mark has been in continuous use for over fifty years, is sold globally, and has appeared on everything from technical climbing gear to food products under the PATAGONIA PROVISIONS sub-brand. A famous mark can be diluted by blurring, weakening the mark’s singular association with the owner, even without any likelihood of confusion. The PATTIE GONIA trademark application, filed across entertainment, apparel, and environmental advocacy, raises blurring concerns.

What This Means for Your Business

The Cost of Defense Is the Real Risk

Patagonia is seeking $1. Pattie Gonia estimates her IP defense could cost over $1 million . That asymmetry, a plaintiff seeking nominal monetary relief while a defendant faces seven-figure defense costs, is not unusual in trademark litigation. It is, in fact, one of the most common structural realities of IP disputes.

For any growing brand, content creator, or small business operating in a space adjacent to established marks, this case illustrates that the financial threat of IP litigation is not primarily the damages award. It is the cost of getting to the answer.

IP defense coverage pays the costs of defending against infringement claims brought against you. This is the coverage that would matter most to creators like Pattie Gonia Productions by covering approved costs related to legal fees, expert witnesses, potential settlement costs, and judgment costs.

For a small business or individual creator whose brand identity is the business, IP liability insurance can be the difference between mounting a real defense and being forced to capitulate for financial reasons alone.

By contrast, IP enforcement coverage pays the costs of asserting your own IP rights, the kind of coverage Patagonia would likely not need for this suit due to having access to substantial financial resources. However, a smaller brand owner might need enforcement insurance so they could afford to pursue a meritorious infringement claim.

Key Takeaways

The key takeaways from the Pattie Gonia and Patagonia litigation for individual creators or businesses include investment in IP defense and enforcement insurance. For individual creators and small businesses, IP defense and enforcement coverage can be essential for the business’s survival. IPISC has over 35 years of experience offering crucial IP insurance and litigation management through our claims department to individual creators and small businesses.

The post When Your Brand Name Becomes a Liability: Lessons from Patagonia v. Entrepreneur Enterprises, Inc. dba Pattie Gonia Productions appeared first on IPISC .

Enforcement Insurance For Intellectual Property Assets

Fri, 24 Apr 2026 11:29:00 GMT

As we discussed previously , intellectual property (IP) is everywhere; brands, content, and all manmade physical and virtual objects may have protection in IP. Businesses that create and innovate do not want competitors to free-ride on their efforts, and IP provides the legal tools to enforce the exclusive rights owned by those creators and innovators. Intellectual property Enforcement coverage can help strengthen those assets by providing the funds to litigate against infringers.

Who Has Intellectual Property?

Everybody has potential IP. The name of a business, its products, or services may be their core trademark resource. If someone else began using a name that was confusingly similar, customers could be misled and wrongly order from the competitor or blame the original user for a bad experience with that later competitor. Trademark law protects the original user of words, designs, or other devices from later uses that cause a likelihood of confusion. Any original text, artwork, video, software, or media can be protected by copyright from later unauthorized uses. Patents protect inventions, and they provide no protection until they are sought and issued from the patent office. If a company has a secret process, formula, or even a customer list that they keep confidential, trade secret law may provide protection against improper methods to misappropriate that information.

Insuring Enforcement of IP Assets

Intellectual property Enforcement coverage may be the only type of insurance available with a primary benefit to pay a plaintiff’s legal expenses in a lawsuit. Sometimes called “Pursuit” coverage, the holder of these policies has the ability to call on the insurer to help pay the costs of suing others who infringe on their IP rights.

Simply holding IP rights does not automatically prevent others from infringing. Each entrant into a market makes their own choice on products or services to offer, and there is generally no “IP police force” to prevent infringing short of blatant counterfeiting. Stopping infringers is a civil matter, requiring engagement of private attorneys. IP Enforcement policies pay the legal costs to bring and maintain lawsuits to stop infringement.

Insureds under an IP Enforcement policy may be asserting infringed patents, trademarks, or copyrights, or even misappropriated trade secrets. Policies may schedule insured IP to provide the insured and insurer an understanding on the scope of the rights subject to the policy.

Owners of IP strengthen their assets by backing them with insurance, which gives confidence that they won’t simply be outspent by a better funded adversary. The policy helps provide a level playing field against a larger competitor who releases knockoff products, mistakenly thinking that a smaller innovator couldn’t afford to maintain a suit against them. Without insurance, IP rights holders may become pressured to settle prematurely because they can’t afford the costs of the action. With Enforcement coverage, innovating companies can have their complaints addressed on their merits, even if the lawsuit gets dragged out in time and expense.

Simply holding Enforcement coverage can discourage potential infringers who might otherwise see an opportunity to infringe efficiently. Insureds can even give notice on their website that their IP rights are backed by insurance to warn off copycats, like a real property owner might give notice of their security systems to deter theft.

In modern business, intangible assets like IP are often the most valuable parts of the company. Demonstrating commitment to their protection through insurance can support use of IP assets as collateral for financing or other measures of valuation.

Common Elements of IP Enforcement Policies

Just as a house already on fire can’t be insured for fire damage, insurance against others’ infringement of IP rights may not cover pursuit of infringers who were in commercial use prior to the policy inception. This exclusion of pre-existing activity means that an IP Enforcement policy becomes more valuable the longer it is held. Where IP assets are scheduled, best practice is to list them as soon as possible. As soon as patent applications are filed, they may immediately be scheduled on the policy to establish pre-existing dates even if they don’t become enforceable until they are issued by the patent office.

Owners of IP assets may license them to others, but if the licensee breaches by not paying royalties while continuing activity they become infringers. Enforcement policies can be endorsed to cover pursuit of terminated licensees, or that risk can be eliminated from the coverage for parties who are commercializing their own IP without licensing it out to others.

Because Enforcement is such a unique type of coverage, it has some provisions that may be different from other types of policies. Consider that commercial insurance generally protects against negative events. If an infringement occurs, the IP owner can seek its remedy from litigation to receive damages or royalties as compensation. Sometimes the legal system produces unexpected outcomes, and a court might find against the owner that the IP was invalid or not infringed. In that case a negative event has happened, and the policy has paid its share of the cost of the proceeding, functioning as pure insurance.

However, if the suit is successful and the insured wins money, a positive event has happened. In that case, an Enforcement policy generally expects to share in the recovery, but that insurer’s share is limited to only the amount of the fees it paid. This may be written into the policy as a “recovery of costs” or “economic benefit” from the successful pursuit. Sometimes a case succeeds in removing an infringer from the marketplace, leaving more sales available to the insured, but monetary damages recovered are insufficient to cover the costs of the pursuit. Policies may provide relief from repayment of economic benefit for preset amounts where less money was recovered than the cost of the case. These provisions require the insured to use rational business judgment as to whether the cost of the pursuit is likely to be more than the potential recovery, and not unreasonably spend “other people’s money” pursuing uncollectable damages. Through these recovery of cost provisions, Enforcement policies blend insurance and bond functions when the pursuit is successful.

The unique benefit of funding plaintiff actions requires Enforcement policies to have guardrails against being leveraged to bring frivolous cases. Carriers generally require the insured to show that the proposed litigation has reasonable prospects of success. This may be shown by obtaining independent legal counsel’s opinion that more likely than not, a properly advised court should find infringement. The cost of that opinion may be counted toward the policy self-insured retention and can provide the roadmap for a successful case. If a court later disagreed with the cause of action, the diligence of obtaining the opinion would weigh against accusations that the case had been frivolous.

Enforcement coverage may be available as a stand-alone policy, available with separate limits from an IP Defense policy, or within the same policy as IP Defense. Inquire whether a combined policy creates sublimits for Enforcement, or for various steps in the process of a lawsuit. If sublimits apply, that policy may not have the robust coverage of a dedicated Enforcement agreement.

Benefits of Enforcement Coverage

To help support insured IP assets, an insurer may offer early intervention services at no charge to inform suspected infringers that the insured owns the IP asset, and that asset is backed by insurance. This opens a dialogue where the target may respond that they were unaware of the rights and seek a business resolution. This gives both insured and insurer benefit, as the potential conflict is avoided. The target may respond with reasons they do not violate the IP, providing a preview of potential defenses in subsequent litigation. Regardless of the response, the target is now on notice of the insured’s rights and their ability to sustain action supported by the policy. Experienced carriers note high levels of success in resolving potential disputes at the early intervention stage.

IP Enforcement insurance has been available since at least 1990, and has contributed to significant positive outcomes for insureds. Some insureds have had products knocked off by large competitors, but when they disclosed their Enforcement insurance received royalty contracts. A pet care company had its infomercial copied nearly shot-for-shot, for a product with nearly the same features and a confusingly similar name being sold by an “As Seen On TV” company. They brought an IP suit, and at mediation with the magistrate judge the innovators revealed the insurance to the copycat. The case settled at a significant multiple of the costs up to that point; the insurer recovered its costs and the insured kept all the remaining amounts, free to continue to invent new things.

Innovation does not just happen in cutting-edge, high-tech industries, but in many legacy segments as well. Recently, insured owners of patents for commercial grain processing equipment won an infringement lawsuit and collected over $11 million. Holding Enforcement coverage enabled them to stay in that fight through trial and vindicate the rights to their inventions.

Protect IP Assets With Insurance

When a company seeks “patent infringement insurance,” “trademark infringement insurance,” or “copyright infringement insurance,” they may be wanting Defense and/or Enforcement coverage. An experienced advisor can explore the true concerns to be included in a policy.

The purpose of intellectual property is to promote innovation and creation of new works. Businesses build value as they develop a portfolio of IP, but that value is diminished if they do not police their rights against infringers. IP Enforcement insurance supports those patents, trademarks, copyrights, or trade secrets so companies can realize the full benefits of their intellectual property assets.

This article was first published on IRMI.com and is reproduced with permission.
Copyright 2024, International Risk Management Institute, Inc.

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The Cost of Patent Enforcement and Why Some Companies Use IP Enforcement Insurance

Tue, 24 Mar 2026 19:53:00 GMT

Patent protection gives companies legal rights to their technology. But enforcing those rights can be expensive.

The cost of patent enforcement is often one of the biggest challenges companies face when protecting intellectual property.

A recent example illustrates why:

Sony Interactive Entertainment recently filed European patent application EP4686497 , which covers an adaptive AI driven super resolution system designed to improve graphics performance by dynamically adjusting neural network precision based on real time processing load.

Highly technical inventions often come with a practical challenge. Once valuable intellectual property is created, competitors may try to develop similar systems or design around the patented technology. When that happens, enforcement may become necessary.

Patent Enforcement Costs Can Be Significant

Once a patent dispute starts, the costs can build quickly. Cases often involve technical experts, large volumes of documents to review, specialized intellectual property attorneys, and extended court proceedings.

For many companies, the cost of patent litigation can quickly reach millions of dollars depending on the complexity of the case and the jurisdictions involved. Even strong patents require financial resources to enforce. Without the ability to pursue enforcement, the value of a patent may be difficult to fully realize.

International Enforcement Can Increase Patent Litigation Costs

Patent enforcement costs may increase further when disputes cross international borders.

For example, enforcing intellectual property rights in Europe can involve multiple legal systems and different approaches to infringement liability.

Legal analysis published in the Journal of Intellectual Property Law & Practice has noted that liability standards for intellectual property infringement can vary across European jurisdictions. These differences can complicate enforcement strategies when companies operate across multiple markets.

In practical terms, cross border patent disputes may involve multiple courts, separate legal teams, jurisdiction specific procedures, and/or additional legal analysis.

All of these factors can increase the overall cost of enforcing intellectual property rights.

Why Companies Consider IP Enforcement Insurance

Because patent enforcement costs can be substantial, some companies choose to use IP enforcement insurance .

IP enforcement insurance helps provide the financial backing needed to pursue infringers. Instead of funding litigation entirely from operating budgets, companies can rely on insurance coverage designed specifically for intellectual property disputes.

This type of coverage may help support:

Legal fees associated with patent enforcement
Expert witness costs
Litigation expenses required to pursue infringers

For businesses that rely heavily on proprietary technology, patent enforcement insurance can help ensure that intellectual property rights are enforceable in practice, not just on paper.

High Value Technology Makes Enforcement More Likely

Patents related to advanced technologies often carry higher enforcement risk.

Innovations involving artificial intelligence, graphics processing, software systems, and proprietary algorithms can directly impact product performance and market share.

When patents protect technologies that competitors want to replicate, disputes may become more likely.

That makes the financial side of enforcement planning especially important.

A Practical Question for Companies and Brokers

Companies invest significant resources in research, development, and patent protection.

But protecting intellectual property does not stop at registration.

If infringement occurred tomorrow, would the company have the financial resources available to enforce its patent rights?

For many organizations, the answer may involve considering IP enforcement insurance as part of their intellectual property strategy.

To learn more about patent enforcement insurance and intellectual property enforcement coverage, contact us at https://ipisc.com/contact-us/ .

The post The Cost of Patent Enforcement and Why Some Companies Use IP Enforcement Insurance appeared first on IPISC .

5 Questions to Ask During an IP Insurance Renewal

Fri, 27 Feb 2026 13:41:00 GMT

Renewal season for intellectual property insurance should not be reactive.

Too often, IP insurance policies only receive attention when the expiration date is right in front of you. By then, there is little time to evaluate coverage limits, policy structure, or operational changes.

Whether you are a broker reviewing coverage for your client or a business owner evaluating your own intellectual property insurance policy, asking the right questions before renewal season can make the process smoother and more effective.

Here are five questions to review before your IP insurance renewal.

1. Are any schedules current?

Businesses evolve quickly. New products, patents, trademarks, copyrights, software, or proprietary processes may be introduced or acquired throughout the year.

If newly developed products or intellectual property are not reflected in the policy schedules, coverage may not align with the company’s current risks.

Before renewal season, confirm:

• Are product additions, changes, updates, or software releases being considered?

• If client has new pending or issued patents, trademarks, or copyrights, are they listed for enforcement?

An updated schedule helps ensure intellectual property insurance coverage aligns with real world operations.

2. Does the policy include both IP Defense and IP Enforcement coverage?

Not all intellectual property insurance policies are structured the same way.

IP Defense Insurance responds when an infringement claim is made against your client.
IP Enforcement Insurance applies when your client takes action to protect its own intellectual property rights.

Many policies provide only one form of coverage.

Before renewal, confirm how coverage applies and whether both Defense and Enforcement options are available. Understanding the difference is essential when evaluating intellectual property risk exposure.

3. Have policy limits kept pace with business growth?

Growth in revenue, products, distribution, and geography typically brings greater intellectual property exposure.

Policy limits that were set three years ago may no longer reflect the scale of the business.

Ask whether current intellectual property insurance limits align with:

• Current revenue
• Market footprint
• Product complexity
• Contractual obligations

In the world of IP insurance, company growth moves but coverage often does not.

4. Have there been operational or structural changes?

Changes in operations can affect intellectual property risk.

Examples include:

• Entering new markets
• Launching new technology
• Expanding into e commerce
• Acquiring or merging with another company
• Licensing intellectual property

Renewal season is the right time to evaluate whether the policy structure reflects how the business currently operates.

5. How are IP claims handled?

Claims management matters just as much as policy language.

At IPISC, intellectual property claims are handled in-house by professionals who focus exclusively on IP risk. Litigation Management Services are included with every policy, providing guidance even before a claim is completed.

IPISC works alongside in-house claims managers who understand both the technology and the legal issues involved.

Early involvement can help evaluate threats, manage exposure, and coordinate strategy with the clients.

Preparing early makes renewal easier

By reviewing coverage structure, limits, intellectual property schedules, and claims handling procedures in advance, you and your client can enter renewal discussions with clarity and confidence.

To learn more about IP Defense Insurance, IP Enforcement Insurance, or the IPISC renewal process, visit ipisc.com .

The post 5 Questions to Ask During an IP Insurance Renewal appeared first on IPISC .

Why More Startups & SMEs Are Considering Intellectual Property Insurance

Tue, 06 Jan 2026 16:08:00 GMT

For many startups and other Small to Medium-sized Enterprises (SMEs), the most valuable part of the business is the idea behind it. The code, the special technology, the product design, the brand, or the formula is often the reason investors are interested, and the reason customers pay attention. But the same ideas that help a startup grow can also expose it to risk.

That’s why more SMEs and early-stage companies are taking a closer look at intellectual property (IP) insurance. It helps protect the work they are building, and it shows investors that the team is thinking ahead.

Small Companies Face More IP Pressure Than Ever

New companies are entering markets that are already moving fast and include many established players. When a startup releases a product or service, there is always a chance that someone else believes a patent, trademark, or copyright has been used without permission.

Common situations include:

Software features that resemble a patented method.
Brand names that overlap with an existing trademark.
Marketing assets that trigger a copyright dispute.
Early success triggers copycats.

These issues can become expensive very quickly. Even a simple dispute can slow down a young business at the wrong time.

Investors Pay Close Attention to IP Exposure

During fundraising, investors often look closely at how a startup manages risk. Intellectual property is a key part of that review. They want to know whether the company can defend itself if a claim appears and whether it can protect its own ideas as the business grows.

When a small company has IP insurance in place, it shows that legal costs have been considered and that there is a plan if a dispute arises. For brokers, this becomes a practical way to help clients strengthen their overall risk profile during due diligence conversations.

Defense and Enforcement Play Different Roles

As small enterprises scale, they may face issues from both sides.

Defense coverage supports a startup if it is accused of infringing on someone else’s intellectual property. These claims can come from competitors or non-practicing entities, and often arrive at inconvenient times such as during product launches or fundraising rounds.

Enforcement coverage supports a company when its own intellectual property is being used without permission. This could involve protecting a patent, brand, software, or confidential process that gives the business its value.

Having both options available helps insured companies respond appropriately no matter how an issue arises.

Guidance Matters When Issues Appear

Legal disputes can feel overwhelming for early-stage companies. That is why Litigation Management Services are built into IPISC’s approach. These services connect startups with IP professionals and experienced claims managers who help guide decisions from the start.

This guidance helps teams understand their options, manage legal spend, and stay focused on running the business rather than reacting under pressure.

Early Protection Can Prevent Delays Later

Startups move quickly. They change branding, launch new versions, and enter new markets. These shifts increase exposure over time, and early protection with an IP policy ensures they don’t hit unexpected barriers.

A short planning conversation between brokers and clients can help identify where an SME may be exposed and what type of policy fits their stage of growth. Contact us today to see how an IP policy can affect your startup or small to medium-sized business.

The post Why More Startups & SMEs Are Considering Intellectual Property Insurance appeared first on IPISC .

Why IP Insurance Goes Hand in Hand with a Cyber Policy

Mon, 17 Nov 2025 16:59:00 GMT

In today’s digital economy, your company’s most valuable assets often live online, which typically includes your data, brand, trade secrets, and intellectual property. While many businesses invest in a cyber insurance policy to protect against data breaches or ransomware, one major risk often goes overlooked, which is intellectual property infringement.

Cyber and IP risks are two sides of the same coin. Together, they form the foundation of a complete risk management strategy for modern businesses.

1. Cyber Insurance Protects Data, IP Insurance Protects Ideas

Cyber policies are designed to respond when your systems or data are compromised. They cover things like data restoration, breach notification costs, and reputational harm.

But what happens when your technology, algorithm, or brand identity itself is at risk?

That is where IP insurance steps in. It covers the legal costs to defend against or enforce intellectual property rights, which may involve patent, trademark, copyright, or trade secret disputes. In short, cyber policies protect the security of your information, while IP insurance protects the ownership of it.

2. IP Risks Can Be Triggered by Cyber Events

Cyber incidents can easily spark IP disputes. Consider these examples:

• A hacker steals proprietary code and a competitor uses it.
• An employee accidentally exposes trade secrets through a data leak.
• A software vendor claims your product infringes on their IP after a breach reveals your source code.

Cyber Policies Commonly Exclude Patent and other IP Infringement

Even with robust cyber coverage, most policies specifically exclude patent infringement. This means that if your product, technology, or software is accused of infringing on another party’s patent, you could face significant legal costs without protection. IP insurance directly addresses this gap by covering the expense of defending against or enforcing patent rights, helping ensure that your business is protected beyond data and network security.

3. Both Policies Strengthen Investor and Client Confidence

Investors and business partners are increasingly aware of risk. Having both cyber and IP coverage shows that your company takes a thoughtful approach to protecting its digital and creative assets. This dual protection builds trust and can be a key factor in due diligence or acquisition discussions.

4. A Unified Strategy for a Digital Future

As artificial intelligence, cloud systems, and connected devices continue to expand, the overlap between cyber and IP risk is growing. Data theft can become IP theft overnight. That is why forward-thinking companies are combining IP and cyber policies within a single risk strategy, ensuring their digital assets and creative work are fully protected.

Protect Your Digital and Intellectual Assets with IPISC

At IPISC, we work alongside your existing cyber coverage to provide custom IP insurance solutions that defend, enforce, and preserve your most valuable property and your ideas. Combine your cyber policy with an IP policy today!

The post Why IP Insurance Goes Hand in Hand with a Cyber Policy appeared first on IPISC .

Protect Your Software from Copyright Infringement and Other IP Risks

Tue, 28 Oct 2025 08:34:00 GMT

Software may be a company’s most valuable asset. In custom platforms and proprietary code, software drives operations, revenue, and innovation across industries. Unfortunately, with this value comes risks. Software disputes are often assertions of infringement of intellectual property (IP) in copyright, patent or trademark, and a loss can wipe out your commercial advantage.

If your business has built an internal tool, rolled out an app, or licensed software in from others or out to clients, it’s important to make sure those exposures are protected. Here are steps to protect yourself or your clients from the chances that using software leads to IP legal conflict.

An internal tool

Maybe your company built proprietary software to automate workflows, manage data, or speed up R&D. Even though it’s only used inside your business, it’s still subject to intellectual property, and can be at risk if a competitor claims you’re infringing on their rights or if someone tries to copy and repurpose it.

Rolling out an app

If you’ve launched a mobile or web app for customers, you’re putting your brand, features, and technology directly into the market. That makes you more visible to competitors and increases the chance of a challenge, whether it’s over design, branding, or functionality. Many common functionalities of apps are targets for claims of patent infringement, often by non-practicing entities who are immune to charges of infringement themselves.

Licensing software to clients

When your business licenses out software, you’re not just exposing your own work. You’re also accountable to your clients. If someone alleges infringement, it can disrupt contracts, relationships, and revenue. Having the right protection in place helps you defend your business and keep client trust.

Steps to Protect Your Software

1. Investigate Others’ Potential Rights

Understand where your code originates, and any open source or licensed copyright terms. Have experienced IP counsel search others’ patents and trademarks to avoid walking into a lawsuit.

2. Register Your Copyright

In the U.S., copyright protection exists as soon as your software is created but registering it with the U.S. Copyright Office strengthens your legal standing. Registration is often required before bringing an infringement lawsuit, and it can give you access to statutory damages and attorneys’ fees.

3. Use Strong Licensing Agreements

Clear, enforceable license agreements help define how your software can and cannot be used. Tailored licensing terms can limit unauthorized copying, modification, or resale.

4. Monitor and Enforce Your Rights

Proactive monitoring through software audits, license compliance checks, and online monitoring tools helps identify infringement early. Once detected, your business must be ready to take appropriate action to enforce your rights.

5. Strengthen Protection with IP Insurance

Even with careful planning, disputes can blow up if you have successful assets and products. This is where IP insurance plays a unique role:

Defense Insurance
Protects your business if you are accused of infringing on another party’s patent, trademark, or copyright. Even unfounded claims can be expensive to defend, and this coverage helps offset those costs.
Enforcement Insurance
Helps you take action when another party is infringing on your software’s copyright or other IP protection. Litigation can be extremely expensive, and this policy provides the resources to pursue your claim and protect your rights.

With both types of insurance, businesses gain the confidence to defend their work and enforce their ownership without being overwhelmed by the costs of litigation.

Final Thoughts

Software is a cornerstone of modern business and protecting it from the cost of fights over copyright, patent or trademark infringement is not just a legal necessity but a business priority. Registration, licensing, and monitoring are important first steps, but Defense and Enforcement Insurance provide financial support to truly protect your rights.

At IPISC, we specialize in insurance solutions designed to protect software-dependent businesses from the costs of intellectual property conflict. To learn more about how these policies can work for your business, visit ipisc.com .

The post Protect Your Software from Copyright Infringement and Other IP Risks appeared first on IPISC .

How to Talk to Your Client About Intellectual Property Risks

Mon, 04 Aug 2025 15:10:00 GMT

For many businesses, intellectual property (IP) is one of their most valuable assets. Shockingly, it’s also one of the least protected when it comes to insurance. As a broker, you’re in a unique position to start the conversation before your client learns the hard way through an unexpected lawsuit or infringement dispute.

Not sure how to begin? Use the tips below to guide the conversation or reach out to IPISC at https://ipisc.com/contact-us/ anytime for guidance, tools, or support.

Here’s how to make the conversation simple, relevant, and actionable:

1. Start with What’s Familiar

Most clients don’t think about their intellectual property the way they think about physical property. But the risks are just as real.

Try this:
“You insure your building, your equipment, even your employees. But if your patented product or company name were threatened tomorrow, would you have the resources to respond?”

2. Keep It Industry-Specific

Use examples relevant to your client’s industry. A tech startup may face risks from patent trolls. A food company might be vulnerable to trade secret theft. A retailer could be accused of infringing a competitor’s logo.

The more tailored the example, the easier it is for them to see the value.

“We’re seeing a rise in copyright disputes in manufacturing and tech companies like yours. These cases can be expensive and unpredictable—but they’re insurable.”

3. Explain That a Patent Alone Is Not Protection

Many clients assume owning a patent, trademark, or copyright is all they need. But registration doesn’t come with enforcement or defense built in.

“Owning IP is like owning a car. Having the title doesn’t mean you’re covered if something goes wrong. IP insurance fills that gap.”

4. Introduce Enforcement and Defense Coverage Simply

You don’t need to get technical. Just explain the basics:

Defense Insurance helps cover legal costs if they’re accused of infringing someone else’s IP.
Enforcement Insurance helps cover the costs of enforcing their IP rights if someone infringes on them.

“Whether your client is sued or needs to take action to stop infringement, there’s a policy that helps manage the cost and risk.”

5. Position Intellectual Property Insurance as a Business Tool

Reframe insurance as a strategic investment, not a cost. It can give clients peace of mind, protect R&D spend, and even help during Mergers and Acquisitions or fundraising.

“Investors and buyers often want to see that IP risks are accounted for. Having insurance in place signals preparation and strength.”

6. Lean on Us for Support

You don’t have to be the IP expert. IPISC is here to help you and your client every step of the way.

At IPISC, we’ve spent over 30 years focused solely on IP insurance. From pre-application support to policy servicing and litigation management, we’re your partner in this process.

Feel like you are ready to start the conversation?

Let us help you evaluate your client’s exposure and match them with the right policy.

Connect with us here: https://ipisc.com/contact-us/

The post How to Talk to Your Client About Intellectual Property Risks appeared first on IPISC .

What Is Trademark Insurance and Why Does It Matter?

Thu, 24 Jul 2025 08:00:00 GMT

Your brand is more than just a name or logo. It is the identity your customers recognize and trust. But in today’s crowded marketplace, trademark disputes are more common than many businesses realize. That’s where trademark insurance comes in.

What Is Trademark Insurance?

Trademark insurance is a type of intellectual property (IP) insurance that protects a business from legal and financial consequences related to its trademarks. At IPISC, we offer two main types of coverage: Trademark Defense Insurance and Trademark Enforcement Insurance .

Defense Insurance helps cover legal costs if your business is accused of infringing on someone else’s trademark.
Enforcement Insurance helps cover legal costs if you need to pursue someone else who is infringing on your trademark rights.

Both types of policies are designed to give your business the resources it needs to respond to disputes, whether you’re on the defensive or the offensive side of the matter.

Why Businesses Need Trademark Insurance

Even if your trademark is registered and you’ve done your due diligence, your business can still face legal threats. It could be a cease-and-desist letter from a competitor, or a larger company challenging your brand name. Legal fees and litigation fees add up quickly, especially if a case goes to court.

For small to mid-sized businesses, the financial pressure of defending a trademark can be overwhelming. Many companies are forced to rebrand or settle, even if they’ve done nothing wrong. Trademark insurance provides peace of mind by helping offset those costs.

Examples of Trademark Disputes

Trademark conflicts can happen across all industries. A startup’s name may be similar to a legacy brand. A logo might unintentionally resemble another company’s design. Even something as simple as using a particular phrase in marketing can spark a legal challenge.

Without insurance, the cost to defend your brand or stopping someone from using it without permission can run into six figure charges surprisingly quickly.

What Trademark Insurance Covers

Depending on the policy, coverage may include:

Attorney fees
Court costs
Expert witness fees
Settlement expenses
Damages you’re ordered to pay (in defense cases)

At IPISC, we also provide Litigation Management Services as part of our policies. That means our team of in-house IP specialists and experienced claims managers work alongside you to support your case.

Who Should Consider It?

Trademark insurance is a smart move for:

Startups building a brand identity
Established companies expanding into new markets
Businesses with unique product names or logos
Any organization concerned about the cost of IP litigation

Whether your company owns one trademark or a portfolio of brands, having coverage in place can make a major difference when it counts.

Final Thoughts

Protecting your trademarks isn’t just about registration. It is about preparation. Trademark insurance helps you be ready to defend what you’ve built or take action if someone else is using it without permission.

To learn more about how IPISC’s trademark insurance policies work, contact us at https://ipisc.com/contact-us/

The post What Is Trademark Insurance and Why Does It Matter? appeared first on IPISC .

Why Global Trends Make IP Insurance More Important Than Ever

Thu, 29 May 2025 15:11:00 GMT

The 2025 IP Index from the U.S. Chamber of Commerce shows just how rapidly the global economy is becoming more IP-driven. 33 countries improved their IP scores this year, highlighting the growing recognition of intellectual property as a driver of innovation, trade, and economic development.

Knowledge-based sectors now account for the largest portion of global economic output. Trade in IP assets has increased more than 17 times since 1990. Patents, trademarks, copyrights, and trade secrets are no longer abstract legal tools. They are central to growth strategies across nearly every industry.

Growth Along With New Pressures in IP

IP filings continue to climb. In 2023 alone, the world saw 16.3 million IP applications, including 3.5 million patents and over 11 million trademarks. In the United States, IP-intensive industries account for 41 percent of GDP and support more than 63 million jobs.

Meanwhile, in the United States, legal uncertainty around patents is raising concerns for businesses in technology and life sciences. Ongoing debates over patentability and the potential expansion of march-in rights are adding complexity to an already challenging environment.

Globally, enforcement remains uneven. Fewer than half of the countries in the IP Index scored above 50 percent for enforcement. This makes it more difficult for businesses to count on consistent protection across borders and expose valuable assets to risk when expanding internationally.

The takeaway is clear. Intellectual property is more valuable than ever, but it is also more exposed.

Get the Full 2025 IP Index Report Here: https://www.uschamber.com/intellectual-property/2025-ip-index

How IPISC Can Help

Intellectual property insurance is no longer a niche product. It is a strategic tool for protecting your assets, your business, and your future.

At IPISC, we offer insurance solutions designed to address the legal and financial risks associated with all types of intellectual property. Whether your client needs to defend against infringement claims or enforce their rights related to patents, trademarks, copyrights, or trade secrets, our policies provide the resources and support necessary to act confidently.

Every policy includes access to our Litigation Management Services. That means you and your client have experienced claims management with support from in-house IP attorneys at your side from the moment an issue arises. We also offer early intervention support and risk analysis services to help resolve disputes before they escalate.

As the global IP environment continues to evolve, staying prepared is not just wise. It is necessary. IPISC is here to help you meet that challenge with confidence.

The post Why Global Trends Make IP Insurance More Important Than Ever appeared first on IPISC .

Overcoming Obstacles to Intellectual Property Insurance

Fri, 02 May 2025 03:49:00 GMT

Insuring intellectual property (IP) can cover the defensive chance the insured is accused of infringing others’ rights ¹ and/or the enforcement risk that the insured might need to assert its IP rights against infringers. ² These risks extend across industry sectors. Some businesses offer relatively similar goods or services, and trademarks are the primary distinguishing factors for consumers. For industries dependent on content delivery, copyright licensing may be the largest revenue driver. Where innovation is most valued, patents can be the currency of cutting-edge success.

For every type of business, IP conflicts carry the potential to destroy their market position or unlock the key to success. Insurance can help manage that risk and allow the insured the best opportunity to thrive. However, the nature of IP sometimes creates challenges to placing and administering this type of coverage. Realistically addressing those challenges can help better protect insureds.

Who Is Covered and on What Terms?

Traditional insurance works best when the risk is widely spread with uncertainty about its targets. Occasionally, IP fights come from unexpected sources, such as non-practicing entities (NPEs) who assert patents with a seemingly distant relation to the targeted technology. These NPEs, sometimes referred to as patent trolls, can cause surprising disruptions to a practicing company with allegations based on subparts of the accused products. These entities may acquire patents near the end of their 20-year maximum term, pursuing users of what was thought to be generic elements incorporated into their offerings.

Likewise, operating companies from seemingly unrelated technologies sometimes try to monetize their assets by demanding licenses from noncompetitors who happen to fall within the scope of broadly claimed patents. Nearly identical trademarks can coexist in different channels of commerce without conflict until someone perceives a likelihood of confusion. These types of disputes can be easier to insure against because they are generally distributed among industries and suit the insurance model of spreading general risks for modest premiums. Prospective insureds may not perceive the threat, making them less likely to pursue or bind coverage. Insurers and brokers can educate prospects on the value of risk management for potentially expensive but unlikely IP conflicts.

Nonstandard Risks

Competitors often hold IP in order to claim exclusive rights in a market where others may want to sell. Companies may chase trends in industries but come up against patents, trademarks, or trade dress that seem necessary to the products. In these situations, diligent underwriters may assess higher retentions or party exclusions on foreseeable challengers. For example, a developer of a new smartphone operating system may not be able to obtain coverage against patents created or licensed by Apple or Android without a strong showing that the applicant fully designed around those claimed rights. The new system would also need to avoid using names similar to established trademarks or copying existing software code without a license. In those situations, insurance is not a substitute for proper IP practices.

Prior business relationships can trigger or exacerbate IP conflicts. Partners in a project may go their separate ways but dispute who owns the underlying IP rights to related developments. If hard feelings linger after a joint venture concludes, that bad blood can increase both the likelihood and severity of litigation expenses as private grievances are masked in IP claims. Family members whose business interests diverged can be among the most vexatious litigants in any kind of dispute.

Many music groups beyond their initial success have fought trademark battles over who owns the group’s name and to what extent former members can use that name when promoting their own shows. Cocreators of copyrighted works may each use the materials but can fight about the remuneration owed to the others for that use.

Under most employment relationships, employers own IP rights in their employees’ creations in the scope of their job. Even if they were the ones to innovate, a former employee’s later use of the innovation may trigger infringement claims by the former employer. Conversely, unless agreed elsewhere in a contract, writers, photographers, or videographers have ownership of the copyright in their works of authorship and can sue former employers for continued use beyond the initial purpose.

Applicants for IP coverage may be asked about recent corporate events such as executed or refused mergers, acquisitions, and licenses. Insurers may set special terms on parties who have a prior relationship and reason to complain about IP matters. Underwriters may be persuaded to cover more apparent risks if applicants distinguish their activities from prior art. However, even formal freedom to operate opinions from outside attorneys may not support an offer of coverage if the dispute remains too likely to occur and too expensive to litigate. Such opinions predict the ultimate outcome of a case and not the chances and costs of needing to persuade a court. However, this diligence can help underwriters get more comfortable with a risk if they provide clear pathways to defending assertions of infringement.

Brokers and internal risk managers may need to manage expectations that some risks may have different scopes of coverage available in the risk appetite of insurers. Creative solutions may be collaboratively insured by treating business risk differently from insurable risk, where nonstandard threats may be carved out or have different terms for coverage.

The Need for Open Communication

Applicants and underwriters for IP insurance benefit from the opportunity to explain any special circumstances and consider terms for nonstandard risks. Simply providing a company name and website address may not give a potential insurer the comfort of seeing only standard risks and offering clean terms. The applicant may have already managed a perceived risk or be lacking a required element of some core patent claims held by the market leader. When underwriters have questions, improved terms may be available after a phone call with a knowledgeable employee of the party seeking coverage. Without an open channel to communicate, coverage offerings may be limited by adverse assumptions made by the underwriter.

Applicants for IP insurance should resist the temptation to withhold potentially problematic information. Undisclosed details about known threats are likely to come up in any potential litigation, potentially endangering all coverage for the matter. Enforcement coverage for IP assets often excludes coverage against pre-existing infringers. In litigation, one of the first questions in discovery is likely “When did you begin offering this product or service?” If the answer to that predates the coverage, coverage may cease after the insured is already in the litigation. Similarly, defense coverage that excludes pre-existing threats may be endangered when a plaintiff pleads willful infringement after sending a cease-and-desist letter that was not subsequently disclosed in an application for IP defense coverage.

Educating Prospective Insureds

The biggest obstacle to the adoption of IP insurance coverage remains the lack of awareness of its availability and benefits, especially for companies with standard risk profiles. Insurers and managing general agents may offer resources to educate potential insureds, such as websites, marketing collateral, videos, and webinars. The broker community can further help spread the word by including IP in discussions of available coverages and by obtaining applications for underwriters to offer terms.

Pricing objections may be addressed by comparing the cost of these conflicts with the amount of premiums. As more insurers have entered the IP market, pricing for standard risks has generally been driven downward, and companies with standard risks should feel more comfortable binding this type of coverage. Insurers with more commoditized pricing may have less appetite to address nonstandard situations and decline to offer coverage to certain categories of applicants or risks. Other programs may take the time and effort to understand the nuances of challenging circumstances and collaborate on special terms to transfer an appropriate level of the risk. These are the situations that especially require open channels of communication between applicants and underwriters.

Recognize Potential IP Insurance Opportunities

IP matters to all types of businesses. The reputation of small and large companies is recognized by their branding and identifying features, which are protected by trademarks. Content creation and deployment are controlled by copyright law, including software code. Technological advances and usage implicate patent rights, which can be asserted against anyone who makes, uses, sells, offers for sale, or imports any product or process.

Managing the risks of IP conflict through insurance makes sense for entities of all sizes and industries. Proactive IP coverage can avoid later concerns that litigation could have been covered before it erupted but may not be insurable once a fight has been initiated. From the most complicated technologies of manufacturing, artificial intelligence, wireless communication, and life sciences to seemingly simple categories like sporting goods and business services, patents, trademarks, copyrights, and trade secrets can hold the key to commercial success. IP insurance can provide the resources necessary to obtain the best possible outcome from claims of infringement.

This article was first published on IRMI.com and is reproduced with permission.

Footnotes

¹ See Chuck Baxter, “ Defense Insurance for Intellectual Property Risks ,” January 17, 2025.

² See Chuck Baxter, “ Enforcement Insurance for Intellectual Property Assets ,” September 24, 2024.

The post Overcoming Obstacles to Intellectual Property Insurance appeared first on IPISC .

How much does it cost to get a patent?

Thu, 27 Mar 2025 14:48:00 GMT

Patents are the lifeblood of innovation. A patent protects the inventors’ rights, ensuring their creations cannot be replicated without explicit permission. They provide a competitive advantage in the marketplace, and in today’s economy, intellectual property is as vital as tangible assets. Protecting your creations with a patent is the first step to safeguarding those ideas.

This protection, however, comes with a price. How much does it cost to get a patent? The answer isn’t straightforward, as the expenses vary based on the type and complexity of the invention. Whether you are an independent or corporate innovator, understanding the costs involved is crucial for proper financial planning.

Overview of Patent Costs

Securing a patent is not merely about filing paperwork; it involves a series of steps, each accompanied by specific costs. Below is a breakdown of the primary expenses involved:

Filing Fees: These are the baseline costs paid to the United States Patent and Trademark Office (USPTO). Filing fees vary depending on the type of patent and the applicant’s classification (e.g., small or large entity).
Attorney Fees: Hiring a qualified patent attorney is critical to drafting a solid application. Attorneys charge based on the complexity of the invention, with rates ranging from $300-$600 per hour.
Maintenance Fees: Patents, particularly utility patents, require periodic payments to keep them active. These fees increase over time, ensuring only valuable patents are maintained.
Additional Costs: Costs such as technical drawings, search reports, and international filings can add significantly to the overall expenditure.

The total cost of obtaining and maintaining a patent can range from a few thousand dollars to over $20,000, making it essential to budget carefully.

Types of Patent Applications and Their Costs

The costs associated with patents depend largely on the type of application being filed. Below are the most common patent types and their respective expenses:

Provisional Patent Application

A provisional patent is a cost-effective way to establish an early filing date. While it does not mature into a patent, it offers temporary protection while the inventor prepares a utility application.

Filing fee: $60 to $300
Attorney fees: $300 to $600per hour
Total cost: $2,500 to $3,000 for mechanical or electrical inventions, up to $6,000 for software-related inventions.

Utility Patent Application

The most common type of patent, utility patents protect functional inventions. These applications are detailed and costly.

Filing fees: $0 to $320
Search fees: $32 to $700
Each independent claim in excess of three: $600
Examination fees: $128 to $800
Attorney fees: $12,000 median price but could be significantly more depending on the complexity.

Design and Plant Patents

Design patents protect the ornamental appearance of a product, while plant patents apply to new plant varieties. Both are less expensive than utility patents.

Typical range: $1,500 to $3,000

Factors That Influence Patent Costs

Patent costs can vary dramatically depending on several factors:

Complexity of the Invention: Simple mechanical inventions are typically less expensive to patent than complex software systems or medical devices, which require detailed descriptions and claims.
Attorney Involvement: Some inventors attempt to draft and file their applications without professional assistance, but this can lead to costly errors. Attorneys charge either hourly rates or flat fees.
Revisions and Rejections: If the USPTO requires amendments to your application or rejects it multiple times, additional fees will accrue.

Ongoing Patent Costs

Obtaining a patent is just the beginning. Maintaining its validity requires additional investment over time that you should be aware of.

Maintenance Fees: For utility patents, maintenance fees must be paid at specific intervals to keep the patent enforceable. These can range from $400 to $8,280depending on the entity size and the patent’s age.
International Filings: Protecting your patent abroad adds significant costs. International applications, governed by the Patent Cooperation Treaty (PCT), allow inventors to seek protection in multiple countries, often doubling or tripling overall expenses.
Insurance: While optional, it is highly encouraged that your business is protected in the case of infringement by obtaining patent insurance for enforcement of your rights and/or defense of your products or services. Obtaining patent insurance helps cover the cost of expensive litigation.

Insuring Your Patent Investment

Patents represent significant financial and intellectual investments.

Enforcement of patent rights often involves costly litigation. Patent insurance mitigates financial risks by covering legal fees associated with infringement claims. Specialized companies like IPISC (Intellectual Property Insurance Services Corporation) offer tailored insurance products to protect patent holders.

Types of Coverage:

Enforcement Insurance : Covers legal fees when enforcing rights against infringers.
Defense Insurance : Protects against claims that your products infringe on another entity’s patents or other intellectual property.

Benefits of Patent Insurance:

Below are just a few of the benefits you reap from obtaining patent insurance:

Reduces exposure to high litigation costs.
Levels the playing field for smaller inventors facing legal challenges from larger entities.
Safeguards the long-term value of intellectual property.

Conclusion

Patents are an invaluable tool for protecting innovation, but they require substantial financial and strategic investment. The cost of filing a patent can vary widely based on the invention’s complexity, attorney’s legal fees, and the type of patent sought. Cost of maintaining patents is further increased as the USPTO require the payment of maintenance fees at 3.5 years, 7.5 years, and 11.5 years after the grant date of the patent. If the patentee seeks additional patent protection in countries outside the US, then the patentee will file the patent application internationally as governed by PCT. The cost associated with maintenance fees and international filings can add to the financial burden of maintaining a patent portfolio.

However, with careful planning and the right resources—including patent insurance—you can safeguard your invention and its market value. It is important to seek the expert advice of a patent attorneys to navigate the patenting process. Once you have secured your patent, start a conversation with us at IPISC . IPISC can provide enforcement insurance to ensure you have the financial backing to enforce your patent rights or protection for your products against infringement of a third party’s intellectual property rights.

The post How much does it cost to get a patent? appeared first on IPISC .

Patent and Copyright Risks in the Construction Industry

Tue, 04 Mar 2025 13:59:00 GMT

The construction industry, while traditionally reliant on physical labor and materials, has increasingly integrated software and technology into its operations. This technological advancement, while offering numerous benefits, also introduces unique intellectual property risks in the form of patents and copyrights.

Patent Risks

Patents protect inventions, including software, hardware, and processes. In the construction industry, patent infringement can arise from various technologies and methods, as discussed below:

Software and Data Management

Many construction companies now use web-based bid analysis, award, and contract systems to streamline their operations. Project management software is another tool that helps teams coordinate schedules and resources efficiently. Real-time monitoring of subcontractors ensures that work is progressing as planned, while automated quality assurance systems help maintain high standards and compliance with regulations.

Construction Site Technologies

Advanced technologies are increasingly being deployed on construction sites. Support systems for building exteriors provide additional stability and safety, while fire-rated wall construction products enhance structural resilience. Vehicle control systems improve logistics and safety, and water treatment and storm drain technologies help manage environmental impact. Additionally, RFID tag and site management systems offer enhanced tracking and coordination of materials and equipment.

Design Patents

Various design elements in the construction industry are subject to patent protection. Fence panels and building structures are common examples. Other patented designs include wall blocks , textured building panels , framing members , and construction blocks , all of which contribute to unique architectural and structural innovations.

Copyright Risks

Copyright protects original works of authorship, including architectural works. This means that architectural plans , drawings , and even the building itself can be subject to copyright infringement.

Recent IP Litigation in Construction

Recent years have seen increased IP litigation in the construction industry, with cases involving computerized laboratory information management systems , mobile asset management systems , automated pricing systems , and aerial roof estimation systems . These disputes highlight the growing need for IP protection in construction technology.

Mitigating IP Risks

To mitigate IP risks, construction companies should take proactive steps. Conducting regular IP audits can help identify areas of potential infringement and vulnerability. Consulting with IP attorneys ensures a clear understanding of relevant IP laws and provides strategic protection measures. Licensing necessary technologies helps companies legally incorporate patented innovations into their work. Contracts with suppliers, contractors, and clients should be carefully reviewed to include appropriate IP provisions. Additionally, staying informed about the latest patents and copyrights in the industry can help prevent unintentional infringement.

Carrying IP insurance is another crucial step. IPISC offers coverage for when your IP is infringed upon or when you are accused of infringement. Our company can underwrite and customize the policy to the client’s specific needs, selling only the coverages the client requests or requires within their budget. Having 30+ years of experience allows IPISC to be nimble and creative where needed.

Click here to request an estimate for covering your charges made against you alleging infringement (defense) or for you to protect your intellectual property by enforcing your ip rights (enforcement).

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Defense Insurance For Intellectual Property Risks

Wed, 26 Feb 2025 15:55:00 GMT

Nearly every business has exposure to others’ intellectual property (IP) rights. Anyone who makes, uses, or offers for sale any product or service may be accused of infringing on someone else’s patents. The name you use for your company, product, or service could trigger allegations from owners of trademarks. Using pictures, text, video, audio, or computer software can implicate copyrights owned by others. Litigating these cases often become expensive, with defense of a moderate size patent case costing an average of $2.9 million before any settlement or damages.

Many forms of insurance are reluctant to cover IP disputes because the triggering events are often brought about by business decisions made to offer products or services, utilize trademarks, or publish materials. The usual inclination of insurance to exclude intentional acts makes carriers wary of covering the risk of business decisions without sharing in the potential business rewards of those decisions.

Existing business insurance policies may cover some IP disputes, and risk professionals should be ready to look for places to seek coverage before a conflict has arisen. However, general coverage forms often exclude or restrict whether IP conflicts are insured. Specific IP defense policies are much more likely to respond affirmatively when defending allegations of IP infringement, and can provide expert assistance for an insured unfamiliar with this particular type of litigation.

What Is The Threat?

An insured’s competitors may have incentive to assert IP claims to slow down or stop their rivals, sometimes with frivolous assertions. Entities of all sizes can use insurance coverage for IP claims to level the playing field against well-funded opponents and assure that they can afford to get their defenses a fair hearing in court. This helps eliminate the risk of losing not on the merits, but simply because you couldn’t afford to match the opponent’s legal spending.

Non-practicing entities (NPEs) may own patents, and derive income only from licensing those patents. Sometimes derided as patent trolls, NPEs are not subject to the risks of their targets suing back on the target’s patents, because the NPE isn’t selling infringing products. Patent defense coverage can help deter NPEs who are looking for quick settlements from companies unprepared to respond. Aggressive assertions of trademarks or copyrights can also create vexing asymmetrical dynamics. Insurers with experience handling similar claims can help guide insureds through these sometimes frustrating cases.

Without the freedom to operate, businesses are exposed to uncertainties of potential disruption of their sales offerings, and liabilities for infringement of others’ rights. Owners of rights in patents, trademarks, and/or copyrights can suppress competitors, or drain resources that businesses would otherwise use to grow.

Finding IP Coverage In Existing Policies

The best time to find coverage is before a threat, so the broker isn’t looking for fire insurance after the house already caught fire. However, even after a company has been accused of infringing upon others’ IP, risk professionals should review current policies to see if coverage might apply.

Commercial General Liability (CGL) policies usually offer some limited options under the personal and advertising injury provisions, but that language has evolved to restrict or remove application to many IP disputes. A typical CGL or Business Owner’s Policy is likely to have coverage for “advertising injury” which may include injury arising out of “Infringement of copyright, slogan, or title of any literary or artistic work, in your ‘advertisement.’” “Advertisement” is usually defined with examples like radio, TV, or online solicitation to induce the sale of the goods or services. However, that definition is likely to exclude the labeling or packaging of the goods. This means that simply because a product’s existing name is used in an advertising, the advertising injury provisions are not applicable.

Policies like a CGL are also likely to have separate exclusions that the policy does not apply to conflicts “arising out of any violation of any intellectual property rights such as copyright, patent, trademark, trade name, trade secret, service mark or other designation of origin or authenticity” other than “infringement, in your ‘advertisement,’ of (a) Copyright;

(b) Slogan, unless the slogan is also a trademark, trade name, service mark or other designation of origin or authenticity; or (c) Title of any literary or artistic work.” The effect of this exclusion of IP in CGL is that all patent cases, and copyright or trademark cases not exclusively triggered by advertising, are outside the coverage of these policies.

Many companies have Errors & Omissions and/or Directors & Officers forms of coverage, but these generally have broad exclusions for IP cases. Professional Liability policies may have limited coverage only if a professional has given advice or provided services that is the direct cause the infringement allegations, but further exclusions may still apply.

Media and Cyber policies have a variety of forms that usually exclude all patent disputes. They may have limited coverage for trademark or copyright infringement allegations, but only if those cases are directly caused by the insured’s activities in the media or online, respectively.

General insurance policies were usually not created with IP in mind, and have evolved with increasing limitations on non-core exposures. Finding coverage for an IP dispute in general insurance policies can feel like fitting a square peg in a round hole.

Common Elements of IP Defense Policies

Specialized IP defense insurance policies are designed to cover legal costs of responding to allegations of infringement and paying potential settlements or damages. They transfer the risk and reduce consequences of IP litigation. Brokers may need to look beyond their familiar sources to engage with these dedicated programs so that their insured becomes part of a program with expertise in IP protection.

Litigation over patents, trademarks, or copyrights often requires legal procedures that general liability policy forms may not anticipate. IP specific policies should explicitly include coverage for unique procedures in IP litigation, such as petitioning the patent office to reconsider the validity of asserted patents.

IP defense coverage may be tailored to each company’s risks, with options to cover patent, trademark, and/or copyright exposures. The insured activities may be specified by the policy to make clear the scope of the risk transfer, or may be more broadly defined for all potential activities of the company. Because IP defense policies transfer what may be business risks, carriers have incentive to use diligence to understand the applicant’s position, and limit their exposures in unreasonably risky circumstances.

Examples of Benefits of IP Defense Coverage

Sometimes simply holding IP defense coverage can deter continued assertions against an insured. A personal care company was sued by a competitor, threatening to bully them out of the business with threats of drawn-out and costly litigation on frivolous claims. When the defendant informed the IP owner that they had IP defense coverage, the dynamics shifted radically. The plaintiff realized it would pay its own legal bills while the defendant would benefit from insurance funding. The case quickly was dismissed. Attorneys for insureds enjoy these moments where “you could have heard a pin drop” as assertions are stymied by an unexpected reveal of IP defense insurance.

Octane Fitness created and sold elliptical exercise machines. A much larger competitor asserted patent infringement, but having insurance helped Octane reach a court decision on the merits which it could likely not have otherwise afforded. The case was eventually appealed all the way to the United States Supreme Court, who changed the law in a unanimous ruling that defendants could pursue their costs against plaintiffs for frivolous assertions. Intellectual property is an area mostly outside of political divides, but resources are necessary to fully defend even the most unfairly targeted.

Protecting Freedom To Operate With Insurance

Attorneys may write letters telling their clients that they should have freedom to operate using technologies or trademarks, but those opinions come with no way to pay for the defense of infringement assertions. Insurance can provide the backstop for the costs of protecting a company’s access to the marketplace.

Objections may include “we don’t have any patents, why do we need patent insurance?” Owners of patents can enforce them against anyone who makes, uses, or sells a technology, regardless of the defendant’s IP holdings. Often, those without their own formal IP are the most vulnerable, because they have not done the diligence to survey the relevant landscape.

Some supplier or licensing agreements may require indemnity against IP claims. By holding an IP defense policy with defined categories for additional insureds, those suppliers or licensors can satisfy that indemnity without taking on the full risk themselves. This can give the insured a market advantage, sharing their coverage against IP risks with customers or clients.

Obtaining an IP defense policy generally requires the applicant to disclose its revenues, any IP assets it owns and uses, and any initiated or expected IP disputes or threats. Detailed information about the technology or activities to be insured can help make the carrier’s underwriters more comfortable with the risk. Policies are usually structured for claims made and reported, covering threats and disputes that arise during the coverage even if the accused infringing activities began prior to the policy.

When discussing “IP insurance,” “patent infringement insurance,” “trademark infringement insurance,” or “copyright infringement insurance,” consider first if coverage is appropriate for defense and/or enforcement. Applications for the coverage can be made standing alone, or using supplemental applications to other existing general policies. Simply going through the application process can help insureds better understand their IP exposures and prepare them to protect their positions. By holding an IP defense policy an insured obtains peace of mind that they have the resources to respond effectively should their access to the marketplace be threatened by patent, trademark, or copyright allegations.

This article was first published on IRMI.com and is reproduced with permission.
Copyright 2024, International Risk Management Institute, Inc.

Footnotes

https://www.irmi.com/articles/expert-commentary/intellectual-property-matters
The Report of the Economic Survey , American Intellectual Property Law Association, 2023.
Business Owner’s Policy, Form SS 00 08 04 05
https://supreme.justia.com/cases/federal/us/572/545/
https://www.irmi.com/articles/expert-commentary/enforcement-insurance-for-intellectual-property-assets

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Protect Yourself from Trademark Trolls and Copyright Trolls

Tue, 26 Nov 2024 23:04:00 GMT

Intellectual property (IP) observers are likely familiar with the much-publicized Patent Assertion Entities (PAEs), a.k.a. Non-Practicing Entities (NPEs), a.k.a. “patent trolls.” PAEs are notorious for suing companies for the sole purpose of mining licensing fees, often regardless of the lawsuit’s merit. IP-related lawsuits generated by PAEs make up 62% of all IP infringement lawsuits led.

What exactly is a patent troll?

Generally, patent trolls are entities that have patents or patent portfolios, and use them primarily for the purpose of licensing to others. Typically they derive very little, if any, revenue from making, using or selling the patented product or service. They may seem less sympathetic because they acquire patents through a commercial transaction rather than through the customary course of research and development.

So, what is a trademark troll or copyright troll?

Trademarks are used to identify and distinguish goods from those of another; and they are intended for those entities using, or those with a bona fide intent to use, the mark in commerce. A company that acquires or creates trademarks for the sole purpose of enforcing them would not use or have a bona fide intent to use the mark(s) in commerce and would have difficulty legitimately enforcing their marks. Copyrights accrue to the author of a creative work, but can be aggregated by their employer or through later transactions. The pejorative “troll” label is sometimes applied to entities that are aggressively enforcing rights against others who might be using similar marks or works but in different settings.

How does a trademark troll or copyright troll turn into a bully?

Trademarks are generally limited to the goods and services for which they are registered, but the law recognizes some logical areas of expansion or potential dilution where marks can be enforced. Some entities may improperly attempt to enforce their trademarks against products in other goods and services categories well beyond the actual intended use that the trademark is registered to cover. Copyright bullies sometimes assert ownership of works even where others are seeking to make fair use.

How we can help?

We provide IP specific defense insurance policies to help policy holders defend against charges of trademark or copyright infringement, whether frivolous or not, and policies to help enforce trademarks or copyrights against those who are infringing. Contact us today, so we can get you in touch with one of our IP consultants to help or answer any questions!

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Why IP Insurance Is a Smart Investment Before Year’s End

Wed, 30 Oct 2024 15:08:00 GMT

With the year quickly coming to an end, many businesses are reassessing some of their assets, liabilities, and strategies in preparation for the next year. Something that is often overlooked but extremely important is insuring against risks involving intellectual property (IP). Whether it’s issues surrounding patents, trademarks, copyrights, or trade secrets, protecting your positions involving these valuable assets can be key for the long-term success of any business. Investing in IP insurance before year’s end can provide numerous benefits that not only protect your business now but set you up for a stronger start to the new year.

Financial Safety for Your Assets and Innovations

IP rights like patents, trademarks, and copyrights involve face legal challenges, including infringement lawsuits. Litigating these rights can be expensive and long-lasting, especially if your business is unprepared. With IP insurance, you ensure you have the financial flexibility to take on the litigation expenses for defending or enforcing your IP and Assets. This allows you to focus on what is important, which is to focus on growing your business instead of worrying about costly fees.

Maximize Tax Benefits

Purchasing IP insurance before the year’s end can help maximize your tax deductions for 2024. The premium for an IP insurance policy is tax deductible for businesses. As a result, investing in an IP insurance policy can reduce your tax bill while also enhancing your IP assets’ value to current or future investors. All while still safeguarding your valuable assets and IP.

Improve Investor Confidence

Investors are more likely to trust businesses that protect their assets, especially valuable intellectual property. IP insurance shows that your business is serious about safeguarding its intellectual property position and mitigating potential risks. This proactive approach can make your business more attractive to investors, partners, and stakeholders as you head into the new year.

Avoid Litigation Altogether

IPISC IP insurance policies, such as Enforcement Insurance, offer early intervention services to address potential disputes before they escalate into full-blown litigation. This is especially useful in industries where IP disputes are common. By investing in insurance now, you can start the year with a strong deterrence mechanism in place, reducing the risk of costly lawsuits down the road.

Conclusion

Protecting your intellectual property exposure is vital to your business’s future, and the end of the year presents a prime opportunity to make that investment. From financial security and tax benefits to investor confidence and legal protection, securing IP insurance now will provide both immediate and long-term advantages. Contact us today, so we can get you in touch with one of our IP consultants to help or answer any questions!

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Video Game Patents: A Double-Edged Sword

Tue, 22 Oct 2024 13:40:00 GMT

Video game development is an intricate process, involving groundbreaking ideas that reshape how players interact with digital worlds. Just like in other industries, game developers seek to protect their unique technologies and innovations through patents. While patenting is a standard business practice, its enforcement in the gaming industry has generated backlash from the gaming community. Players and developers alike have voiced concerns over whether patents stifle creativity and innovation, or if they are necessary safeguards for original ideas.

This blog post will explore some notable examples of video game patents and the community response to their enforcement.

Why Do Gamers Dislike Patents?

Game development is often driven by tight deadlines, shifting market demands, and narrow profit margins. A typical triple-A game or, a game produced by a major distributor, can take anywhere from two to five years to develop, while indie titles may take six months to two years. These long timelines can cause problems if a core gameplay mechanic is later alleged to be patented by others, leaving developers scrambling to make changes or face legal issues.

Moreover, video games are highly interconnected. Developers often draw inspiration from older titles, paying homage to previous games or building upon established mechanics. Patent enforcement in this environment becomes tricky—many games are built on the foundations of their predecessors, and a single patented idea could force developers to abandon their vision.

With the rise of digital distribution, many solo developers and small indie studios have flourished. However, without large corporate backing, they often struggle to navigate the complexities of intellectual property, leaving them vulnerable to patent disputes. To many gamers and indie developers, patents can feel like unnecessary barriers that prevent innovation in an industry that thrives on creativity.

Notable Video Game Patents

1. Apex Legends’ Ping System

Respawn Entertainment’s Apex Legends introduced a revolutionary in-game communication system known as the “ping system,” offering a non-verbal way for players to interact with each other. Instead of relying on voice chat, players could use pings to highlight enemy locations, suggest loot areas, or direct teammates’ movements. It was praised for its accessibility and ease of use.

In 2019, Electronic Arts (EA) patented this system (US Patent No. 11,097,189), raising concerns that it might prevent other developers from creating similar features. Given that team-based communication is essential in many games, the gaming community feared that EA’s patent would stifle innovation in this area. In response to the backlash, EA decided to license the patent for free to other developers.

2. Middle-Earth: Shadow of Mordor’s Nemesis System

Warner Bros. Interactive patented the Nemesis system from Middle-Earth: Shadow of Mordor, a dynamic mechanic where enemies remember past encounters with the player, shaping future interactions. This unique mechanic was highly praised for enhancing player immersion.

Warner Bros. patented the system in 2021 (US Patent No. 10,926,179), sparking outrage from both gamers and developers. Many believed that the patent would limit future innovation in emergent gameplay and storytelling. Critics argued that patenting such a core mechanic could prevent other studios from building upon it to create richer, more complex games.

3. SEGA’s Crazy Taxi Arrow Navigation System

The Crazy Taxi navigation system, patented by SEGA, uses a dynamic on-screen arrow that points players to their next destination, a core element of the arcade-style gameplay. SEGA patented this feature (US Patent No. 6,200,138) in 2001.

During its enforcement period, SEGA reportedly went after developers who used similar navigation tools, creating a chilling effect within the industry. Critics argued that the arrow, while useful, was too basic a mechanic to warrant patent protection. The patent has since expired, but the controversy surrounding it left a lasting impact on discussions of patent overreach in gaming.

4. Nintendo’s Pokémon Monster-Catching Mechanic

The monster-catching mechanic at the heart of Pokémon games was patented by Nintendo. Nintendo patented aspects of this mechanic (JP Patent No. 7,545,191 and US Patent Application No. 20230191255), which raised concerns within the monster-collecting genre. The broad scope of the patent made some worry that it could hinder other developers from creating similar games.

Recently, Nintendo has enforced its Japanese patent against Palworld by Pocketpair, igniting further outrage from fans who see the patent as overly restrictive in a genre that thrives on variation and competition.

5. Mass Effect’s Dialogue Wheel

Bioware, the developer behind Mass Effect, implemented an innovative dialogue wheel system that streamlined in-game conversations. This system streamlined player interactions while keeping the conversation flow intact. In 2023, EA patented the system (US Patent No. 11,648,472).

While praised for its innovation, the patent sparked debate about whether dialogue systems, a core element in many RPGs, should be protected. Critics argue that restricting the use of such systems could limit storytelling advancements in other games.

6. Eternal Darkness’ Sanity Meter

Eternal Darkness: Sanity’s Requiem , developed by Silicon Knights, introduced a groundbreaking sanity meter that altered gameplay based on the character’s mental state. The lower the sanity meter, the more distorted the gameplay became, with hallucinations and other psychological effects taking hold. Silicon Knights patented this system (US Patent No. 6,935,954), which some argued prevented other horror games from incorporating similar mechanics.

The sanity meter is often cited as one of the most innovative mechanics in the horror genre, but its limited use in other titles due to the patent has frustrated gamers who believe it could enhance many other games.

The Tension Between Patents and Innovation

The tension between protecting intellectual property and fostering creativity is a challenging issue for the gaming industry. Patents can be vital for safeguarding unique inventions, yet their application in video games often feels at odds with the industry’s collaborative nature. Many developers believe that core gameplay mechanics should remain open for others to build upon, fostering collective innovation across the industry.

Nevertheless, patents remain an important part of the business in gaming. Game developers continue to file new patents and enforce existing ones to protect their original ideas from competitors. This trend shows no signs of slowing down, as companies seek to safeguard their investments in a highly competitive market.

Conclusion

While the gaming community often views patent enforcement as restrictive, the reality is that intellectual property protection is here to stay. Balancing the need for IP protection with the desire to promote creativity will continue to be a delicate issue for developers. For companies looking to protect their game’s unique mechanics, having the right insurance coverage is crucial.

At IPISC, we’ve been helping businesses defend and enforce assets and intellectual property for over 30 years. Whether you’re concerned about protecting your rights or need protection from potential infringement claims, we’re here to help. Learn more about our solutions here .

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What is a Trade Secret?

Thu, 03 Oct 2024 08:00:00 GMT

Does your company have processes that would, if your competitors got ahold of them, cause negative economic consequences? If so, you might have a trade secret. In this post, we will define what a trade secret is.

Defining Trade Secrets

Trade secrets are a kind of IP that is slightly different from the previous three. A trade secret is considered any piece of information that has been kept private and possesses economic value. Coca-Cola ’ s recipe, KFC ’ s seasoning mix, Google ’ s algorithm, WD-40 ’ s ingredients—all of these are trade secrets. Other things like client lists, manufacturing processes, advertising strategies, and distributor lists could also be considered trade secrets.

Unlike trademarks, patents, or copyrights, trade secrets are not registered with any office or agency. This means that if another person or company independently comes up with the same recipe or manufacturing process that you have, it is perfectly legal. By keeping something as a trade secret, you give up your right to a perfect monopoly on it. Employees and competitors still may not steal this information from you, but independent invention and reverse engineering are allowed.

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What is a Patent?

Thu, 26 Sep 2024 08:00:00 GMT

Innovation is a crucial part of human development. For inventors who have developed a product or process, it is important to protect the hard work and investment that have gone into the innovation. In this post, we share what patents are and the protection they offer for those with innovative products and solutions.

Defining Patents

A patent allows the owner to exclude others from making, using, importing, offering for sale, or selling products that contain their patent. There are three kinds of patents: utility patents (which are given to inventions that are new/improved processes, machines, or useful goods), design patents (which are given to inventions with new, unique, ornamental designs), and plant patents (which are given for inventing or discovering a new and distinct plant species).

Patents offer protection for inventors who have spent time, money, and effort to bring their inventions to life. A patent gives its inventor the sole rights to sell, contract, create, etc. the contents of the patent for up to 20 years. This time allows the inventor to profit from their invention and make back their initial investment in it. After 20 years, the invention is no longer protected and becomes something that other inventors can use in future products.

By setting a duration on the length of a patent, inventors can incorporate newer, more complex aspects that they may not have made into their works. This limit also ensures that no one person or company can hold the rights to inventions indefinitely. If every single inventor had to be licensed to use, let ’ s say, screws, their ability to create would be hampered. The spirit of intellectual property laws is to reward creators for their work while also fostering invention!

Protecting Your Patents

Protecting your innovations against infringement is important and should be taken seriously. IPISC provides insurance for when infringement results in a lawsuit. Carrying an enforcement insurance policy is a great way to protect your intellectual property and yourself from costly litigation. Click here to learn more about our enforcement policy and how IPISC can partner with you in innovation.

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What is a Trademark?

Thu, 19 Sep 2024 08:00:00 GMT

Establishing a brand identity is important for every business. In doing so, there are assets and language defined that need protection that separates you from your competitors. That is where a trademark makes a difference. In this post, we are discussing what a trademark is and its benefits.

Defining a Trademark

A trademark is any word, symbol, or design that shows the source of a good. Some examples of famous trademarks are “Pepsi,” “Apple,” and “ Coppertone.” Trademarks are used to easily tell different brands, products, and services apart from one another. This protects companies from having their consumers or “ brand” stolen while also protecting against companies selling inferior products under a company ’ s name.

If trademarks were not protected, a company could sell a cola drink called “ Peppsi” with blue, red, and white designs on the label. If someone were to see “ Pepsi” and “ Peppsi” next to each other in the grocery store, they might not notice that the two are different products. This shopper could even think that both sodas were made by the same company. If the shopper buys “ Peppsi” and it is poorly made, they could end up blaming Pepsi in their confusion, and not buy from either company anymore. In this situation, Pepsi is severely hurt—not only was this customer tricked into buying a different company ’ s product, but their perception of Pepsi was damaged.

Trademarks do not have to be names, though; other famous trademarks are “ Finger Lickin ’ Good,” the shape of a Toblerone, Tiffany Blue, and the Nike logo. Owning a trademark does not mean that you own the exclusive rights to everything in your trademark—it just means that other companies cannot use it for similar products.

Protecting Your Trademarks

Your trademarks help identify your brand and reputation. Carrying enforcement and/or defense coverage on your trademarks is a wonderful tool for protecting your intellectual property. You can click here learn more about our insurance policies and how IPISC can help you protect your brands from trademark infringement.

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What is a Copyright?

Thu, 12 Sep 2024 16:38:00 GMT

Copyrights provide a foundation for a thriving creative economy. It is important that your creative works are protected because you deserve to be recognized for the hard work that you put into all of your creative ventures. In this post, we will discuss what copyrights are and how they protect your creative works.

Defining Copyrights

A copyright is any work of authorship that has been created in some way. Whether you are dealing with an oil painting, a written manuscript, an episode of a TV show, or the backing track of a song—all these creations could be copyrighted. So long as the work was created by a person, has a minimal level of creativity, and was created in a way that makes it somewhat “permanent,” it is copyright-able.

The moment someone creates a work, they become a copyright owner—even if they haven ’ t registered their work with the U.S. Copyright Office! Any copyright will last for the life of the author plus 75 years. By being a copyright owner, you can make/sell copies of your work, perform it live, make derivative works, and license others to do any of the previous acts.

Copyrights prevent others from copying your work—whether it be visual details from an art piece, exact verbiage from a novel, parts of music, or other aspects of your works. Copyrights are very specific and have a narrow scope of protection. Like trademarks, copyrights ensure that no one is misusing, misrepresenting, or profiting off your work/image without permission, but like patents, ownership of these rights expires at some point, allowing others to incorporate your creativity into future creations. When copyrights expire, a work is said to enter the public domain and may be freely used.

Protecting Your Copyrights

Your creative ventures deserve protection, and you deserve the credit for the hard work you invested. Unfortunately, there are times others want to benefit from your creative endeavors without your permission. This leads to a costly lawsuit that, without intellectual property litigation insurance, the burden falls to you to pay to protect your copyright. IPISC has years of experience insuring companies like yours so that your intellectual property is protected. If you have a copyright that is not insured, have a look at our enforcement insurance policy to help protect your copyright from those who would infringe on your intellectual property.

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What is Intellectual Property Insurance?

Thu, 05 Sep 2024 08:00:00 GMT

Patents, trademarks, and copyrights are all at risk of infringement. Intellectual property insurance helps companies cover the costs associated with litigation in enforcing or defending your intellectual property against such infringement.

What is Intellectual Property?

As a reminder, intellectual property is described as something created by human creativity. This could be a symbol, phrase, or design that represents the work that you provide. It could also be a product that you have invented, a process that you came up with, or a work such as art or a song. To learn more about the types of intellectual property see our other posts that describe each in detail.

Trademarks
Patents
Copyrights
Trade Secrets

Unfortunately, there are others who would infringe on your IP. To protect yourself and your IP from the cost of an infringement lawsuit, there is insurance available that provides coverage to help in these situations. IPISC offers policies for either situation and helps protect you and your intellectual property.

Enforcement Insurance

Enforcement insurance (formerly called the Abatement policy) is a unique plaintiff ’ s policy that reimburses your litigation expenses when you need to enforce your IP against alleged infringers, as well as reimburses your costs due to any invalidity counter-lawsuits filed against your IP. This type of policy is available to any company with:

issued patents,
patent application or provisional application
registered trademarks
trademark applications
common law trademarks
trade dress
registered or unregistered copyrights (must be registered before asserting)

When you have an enforcement policy, there are many benefits to carrying this type of policy. An enforcement policy is a great deterrent to your competitors infringing on your IP. It also reduces the pressure to settle too early, which happens when a company is paying for the litigation on its own. Carrying an enforcement policy provides relief to the worry of infringement and lets you move forward with innovation.

Defense Insurance

Defense insurance covers litigation expenses associated with your company defending itself against a claim of infringement on another ’ s intellectual property rights. Having a patent, trademark, or copyright does not protect you from an outside source suing you. In this case, you deserve to defend your IP, and it can become costly

Having a defense policy protects you from losing market share because you are experiencing a cash drain due to protecting your IP. This can help you move forward without the worry of a troll taking down your business.

Why is Intellectual Property Important?

Intellectual property infringement cases have been on the rise and are costly. These cases can cost millions of dollars. Without the coverage provided by intellectual property insurance the burden of these costs fall upon you. With the high cost of these cases, it has cost others to burn through the capital planned for further innovation. Carrying an insurance policy on your intellectual property protects you for further innovation with peace of mind.

Protecting Your IP is Important

You have worked hard to design your product or process, establish your brand identity, or bring your creative work to life; it would be a miss if you didn ’ t do everything possible to protect it. We have been in the industry of protecting IP for many years and be a part of helping many businesses protect their assets. Click here to talk to us about insuring your intellectual property.

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Intellectual Property Matters

Mon, 02 Sep 2024 19:30:00 GMT

Intellectual property (IP) is all around us. The brands, the content, and all human-made physical and virtual objects may have protection in IP. The name of your business, products, or services venture into the realm of trademarks. All images, text, video, audio, and software implicate copyright laws. Anything that is made, used, offered for sale, or imported can be the target of someone else’s assertion of infringement of their claimed patent rights. Even the information that a company acquires during its business can be protected as a trade secret , protecting it against improper means to acquire that information.

The owners of IP often offer products or services that are covered by the IP, and they want to keep the exclusive rights in the market. To do that, they must enforce those IP rights themselves in civil court; outside of pure counterfeiting, governments do not enforce IP rights for you. The recipient of an enforcement action must defend that lawsuit with its costs, distractions, and exposure to damages and injunctions. By understanding these kinds of disputes, professionals may seek solutions to manage their risks.

Trademarks

Trademarks designate the source of goods or services, and they exist to protect the reputation of the business and avoid public confusion. Everyday life is full of trademarks, like the swoosh on Nike shoes, the golden arches of McDonalds, and the name for just about every company and their products.

Multiple companies can use the same trademark if consumers are not likely to be confused. We have seen Delta faucets, Delta airlines, and Delta dental insurance from different entities, generally without confusion. Issues arise when the avenues of commerce make confusion likely, or if the mark is so famous, like Cadillac, that it wouldn’t be fair for others to use it even for different classes of goods.

What happens when trademark rights clash? In the United States, rights mostly go to the first user in the marketplace. A trademark holder may claim that another party is confusing the public with a similar name, only for the accused to respond, “We used it first, so you are the infringer!” Asserting IP rights sometimes carries the risk that the IP asset may be destroyed by its deployment, which makes diligence before accusations essential.

Copyrights

Copyrights accrue to any creators of content and protect the permission to copy or display the materials. Once an author fixes the materials in a tangible means of expression, they have rights under US copyright law but must register the work with the Copyright Office before they can sue for its infringement.

Just because content is available online, the copyright remains held by the creator unless they have contracted otherwise. Social media sites often have terms of service that require the original posting party to have rights, then allow resharing materials that are elsewhere on the site. Commercial uses of online materials generally require negotiating with the rights holder for permission through licenses.

Patents

Patents are granted for inventions that are new, useful, and not obvious. Those inventions may be mechanical, like the better mousetrap. Many current patents are for processes and methods, often implemented using software. These process patents can be more difficult to anticipate and cover workflows or computer programs where the user may not anticipate conflict.

Patents are negative rights, allowing their owner to seek a court order that the infringer must stop using the patented invention and seek damages. You don’t need to have your own patents to be sued for patent infringement; the most vulnerable companies are often those that did not do diligence analyzing their freedom to operate. Any party that makes, uses, offers for sale, or imports something that incorporates a patented invention can be held liable, even if they were unaware of the existence of the patent. Losing a case doesn’t only incur significant damages, it can require the accused to remove the product or service from the market.

Some patent disputes arise between competitors who both seek to serve the same market. They may dispute who had the idea first or how exactly the innovation is implemented. Each may have patents they assert against the other’s products, with a potential to cross-license to keep their own distribution channels. However, some patents can be held by a non-practicing entity (NPE) who is not vulnerable to a counterclaim of infringement and thus less easily persuaded to settle without economic terms. These NPEs, sometimes called “patent trolls,” exist solely to obtain licenses or settlements. Defense strategies can be very different for an NPE claim compared to a competitor’s suit.

Trade Secrets

Trade secret protections attach to information that has value for a business because that information is kept confidential. The secret herbs and spices used by KFC and the formula for Coca-Cola are among the most famous trade secrets, but any company can hold trade secrets in, for example, its confidential customer list. Few businesses would be willing to give their competitors their detailed customer information, and trade secret law protects against unsavory tactics to steal that information. Novel manufacturing methods may be kept secret rather than the manufacturer filing patents on those methods.

Enforcing trade secret rights can help insureds retain the benefits of its research and innovation. However, trade secret law does not protect against reverse engineering or using publicly available information to recreate similar results. Everyone is free to try to make their own recipe for fried chicken or soft drinks or to create a potential customer list of likely prospects. Trade secrets only come into play where the copying party uses improper means to obtain the information, such as computer hacking, physical entry without permission, or inducing an employee to violate their employment or nondisclosure agreements.

IP Conflicts

IP conflicts happen more often than you may think. For example, 3,129 patent lawsuits were filed in the United States during 2023. 1 During that time, 2,492 cases were concluded by settlement or resolution on the merits. In addition to those lawsuits reported, many more patent conflicts can arise through cease-and-desist demands or other correspondence, and possible resolutions are entered into without the need to resort to litigation.

Where cases are resolved prior to court decision, the terms are usually kept confidential. When courts assess damages, the average US damages award in patent cases before appeal was $44 million, an imposing sum for all but the most highly capitalized entities. 2

Each side in an IP conflict faces significant legal costs to stay in the fight. Beyond the usual lawsuit costs of filing, court reporters, travel, and other expenses, the rates charged by experienced IP litigators tend to be near the top end of the billing spectrum. Disputes will often engage on multiple fronts, with separate fights over whether the IP is valid, whether it was infringed, and what value should be placed on any damages.

IP may protect the core differentiator of a company, igniting disputes even when a case generates relatively modest damages. The parties have increased motivation to fight harder if more money is at stake. Where between $10 million and $25 million is in dispute, each side to a patent case spends on average $2.9 million each to litigate through trial. 3 Trademark cases with similar stakes cost each side on average $1.7 million, copyright cases on average $1.4 million, and trade secret cases on average $2.6 million. When the amounts in dispute go higher, so do the expected costs.

The burden of paying for IP litigation can cripple a small to midsize company. Even a division of a larger organization often has its own profit and loss reporting requirements and may be looking at expensive litigation as a detriment to its bottom line. A larger competitor may be willing to outspend their target to force an unfavorable settlement or litigation outcome.

Understanding a business’s IP risk profile is essential to crafting an appropriate risk management strategy. Insurance can help level the playing field in an IP dispute, allowing resolution on the merits. Solutions may be available through specialty IP programs for risks of enforcing the insured’s rights or for defending against others’ accusations of infringement.

This article was first published on IRMI.com and is reproduced with permission.
Copyright 2024, International Risk Management Institute, Inc.

Footnotes
1 Angela Morris, Docket Navigator and IAM Litigation Report Q4 2023, IAM, February 14, 2023.

2 Patent Litigation Report 2024, Lex Machina, 2024.

3 The Report of the Economic Survey, American Intellectual Property Law Association, 2023.

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What is Patent Insurance?

Thu, 15 Aug 2024 21:16:00 GMT

Patent Insurance: A Strategic Tool for Innovation

In today’s competitive business landscape, protecting intellectual property (IP) is important for companies relying on innovation to drive growth. Patents, a key form of IP, protect inventions by granting exclusive rights to their creators. However, merely holding a patent isn’t enough—defending against infringement claims or enforcing these rights can be costly and complex. This is where patent insurance comes into play, offering beneficial financial protection and support.

What is Patent Insurance?

Patent insurance is a specialized insurance that covers the high costs associated with patent litigation. Patent disputes, whether defending against infringement claims or enforcing a company’s rights, can quickly escalate into financial burdens. Patent insurance mitigates these risks, ensuring businesses can navigate legal challenges without jeopardizing their financial stability.

Types of Patent Insurance

Patent Defense Insurance :
- Purpose: Protects a business from the financial fallout of defending against patent infringement claims.
- Benefits: Covers legal fees, court costs, and in some cases, settlement costs or damages. This allows businesses to focus on their operations without the distraction and financial strain of a legal battle.
- Strategic Advantage: Provides companies with the resources to mount a strong defense, potentially leading to better litigation outcomes.

Patent Enforcement Insurance :

- Purpose: Provides the financial backing needed to enforce a company’s patent rights against infringers.
- Benefits: Covers the costs of litigation, including legal fees and court costs. It also helps in recovering damages if infringement is proven.
- Deterrent Effect: The existence of enforcement insurance can deter potential infringers, knowing the patent holder is equipped to pursue legal action.

Why Patent Insurance Matters

Patent insurance isn’t just about managing risk; it’s about empowering businesses to protect their innovations proactively. Defense insurance shields companies from unexpected legal challenges, while enforcement insurance enables them to protect their market position by taking action against infringers. Together, these policies provide a comprehensive safety net, allowing businesses to focus on innovation and growth with confidence.

For companies that invest heavily in research and development, patent insurance is a strategic necessity. It ensures that a company’s IP assets are protected from external threats and that the business is equipped to enforce its rights when necessary.

For tailored advice and comprehensive IP protection, IPISC is a leader in IP insurance services. Fill out our estimate form to start a conversation about protecting your intellectual property.

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Gifted Designs: Unboxing The Patent Battle Between Madovar Packaging and Gilded Box

Wed, 17 Jul 2024 02:10:00 GMT

In the competitive world of business, innovation stands as a cornerstone of success, driving companies to push their boundaries and create unique offerings. These innovations, often safeguarded by patents and other intellectual property rights, form a company’s competitive advantage. The recent legal clash between Madovar Packaging Inc. and IPMedia Holdings Inc., (operating as GildedBox), spotlights the importance of defending one’s patent rights in the marketplace.

Madovar Packaging Inc., a Canadian entity known for its pioneering work in luxury gift boxes, has secured multiple patents from the United States Patent and Trademark Office to protect its designs and manufacturing processes. Specifically, Madovar owns U.S. Patent No. 9,856,050 (“the ‘050 Patent”) and U.S. Patent No. 10,071,832 (“the ‘832 Patent”). Both of these patents relate to gift boxes enhanced with reinforcement rings. These rings not only provide the structural integrity but also enhance the aesthetic appeal of Madovar’s products, setting them apart in their market.

On the other hand, GildedBox specializes in customizable corporate gift products, featuring gift boxes that bear striking similarities in design and function to those protected by Madovar’s patents. Madovar’s legal complaint against GildedBox hinges on allegations of patent infringement concerning both the ‘050 and ‘832 Patents. According to Madovar’s claims, GildedBox’s gift box products replicate crucial elements of their patented designs without proper authorization, particularly by incorporating the reinforcement rings.

The conflict showcases how important the role of intellectual property protection is in fostering fairness and stimulating ongoing innovation in the marketplace. For enterprises like Madovar Packaging, safeguarding their products through patent rights is imperative. It preserves their competitive edge and strengthens their ability to advance in their field. The same applies to companies like GildedBox, who also rely on marketability and successful sales to grow. However, navigating the boundaries of innovation without IP infringement demands a fine balance between creativity and respect of assets.

Where innovation and intellectual property rights intersect, broader industry challenges and opportunities arise. In the realm of intellectual property management, tools like IP Insurance can play a pivotal role. It offers companies financial protection against the costs associated with defending against allegations of patent infringement or pursuing legal action against infringers. Such proactive measures not only mitigate risk but also empower businesses to confidently pursue their creative endeavors without compromising legality.

Safeguarding IP rights remains fundamental to ensuring fairness and fostering a climate of continued innovative success. The Madovar vs. IPMedia Holdings Inc., dba GildedBox case serves as a potent reminder of the stakes involved in a company’s competitive advantage and how important it is for businesses to protect their assets through robust patent strategies. If you are concerned about infringement of your company’s IP or protecting the sales of your products, contact us on our website here https://ipisc.com/contact-us/ to learn more about IP Insurance and how it aids in the effort to defend and enforce IP rights.

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Understanding the Cost of Copyright Infringement Lawsuits

Fri, 28 Jun 2024 13:32:00 GMT

When filing or defending a copyright infringement lawsuit, it’s very important to understand the various costs involved. These expenses can add up quickly and vary depending on the complexity of the case. Here’s a breakdown of the typical costs associated with a copyright infringement lawsuit, brought to you by IPISC, your trusted provider of intellectual property insurance.

What goes into the cost of a copyright infringement lawsuit?

Attorney Fees Initial Consultation

Many attorneys charge for an initial consultation, though some may offer it for free. This would help you understand your case’s strengths and weaknesses. Attorneys usually charge by the hour, with rates varying based on their experience and location. Some attorneys require an upfront retainer fee, which they bill against as they work on your case.

Court Fees Filing Fees

For Plaintiffs, the cost to file a lawsuit can vary depending on the court. These are the costs associated with serving the defendant with legal papers.

Expert Witness Fees

If your case requires expert testimony, such as from a forensic analyst or industry expert, expect to pay significant fees.

Discovery Costs and Depositions

Taking depositions involves court reporter fees and transcription costs, which can be large in quantity. Document production is part of this process. Gathering and producing documents, especially with electronic discovery (e-discovery), can be labor-intensive and expensive.

Trial Preparation and Pre-trial Motions Costs

These are the costs associated with filing and arguing pre-trial motions. Preparing witnesses for trial can also incur additional costs. On top of that, if the trial or depositions require travel, these expenses can add up quickly.

Settlement Costs

Many cases are settled before going to trial. While this can save on trial costs, negotiating a settlement also incurs legal fees.

Trial Costs

The average cost, per side, to litigate a copyright case through trial is $1.4 million (American Intellectual Property Law Association 2023 Report of the Economic Survey, amount in dispute between $10 million and $25 million).

Miscellaneous Costs Administrative Costs

This includes expenses for copying, mailing, and other administrative tasks. Technology fees can be a part of this too, which are costs for legal research databases and other technology tools used in preparing the case.

Potential Damages and Penalties

If you lose the lawsuit, you may be required to pay damages or costs. These can include statutory damages, actual damages, and possibly the other side’s attorneys’ fees.

The total cost of a copyright infringement lawsuit can vary depending on the factors mentioned above, but one thing is for sure. The costs can be extremely high and overwhelming without sources of funding like intellectual property insurance. For more information and to explore how IPISC can protect you for intellectual property risks and mitigate potential litigation expenses, contact us here at https://ipisc.com/contact-us/

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Unlocking Potential: The Power of Intellectual Property in Driving Innovation

Tue, 23 Apr 2024 15:37:00 GMT

The U.S. Chamber of Commerce recently released its latest Internation IP Index, titled “The Pillars of Free Enterprise Rest on IP.” The IP Index reaffirms the importance of protecting intellectual property rights as they drive innovation, creativity, and economic growth. Intellectual property rights protect novel, practical inventions through patents, protect the shape or patterns of recognizable products through design rights, shield brand names through trademarks, safeguard artistic works through copyright, and guard confidential business information such as recipes or processes through trade secrets.   

Strong IP protections lead to a considerable increase in access to the best and latest innovations in healthcare and technology while providing economic opportunities and allowing innovators to protect their hard-earned inventions. The IP industry in the U.S. makes up about 40% of the nation’s GDP or $7.8 trillion and supports tens of millions of jobs. Individuals employed in IP-intensive industries generally experience greater access to specialized training, higher wages, and enhanced job security.   

The report says international discussions continue to have misconceptions regarding how vital intellectual property is in addressing pressing issues such as pandemics, global hunger, and energy deficiencies. Disputes concerning IP waivers and coerced technology transfers have repercussions across various sectors of the global economy, encompassing fields like healthcare and sustainable technology. Such debates could impede the progress of essential solutions in these domains.  

  The Chamber argues that developed economies risk losing IP leadership due to damaging policy proposals that threaten innovation. In the U.S. this can be seen in moves to invoke “march-in rights” for implementing price controls for prescription drugs. In Europe, leaders are proposing restrictions on regulatory data and patent protections. Politicians’ decisions in both the U.S. and Europe pose significant challenges to these nations’ continued leadership in intellectual property.   

Efforts to combat online piracy are underway globally. Many countries, such as Argentina, Brazil, Canada, India, and Singapore, have turned to using dynamic injunctions for shielding copyrighted works on the internet. Further, India has begun implementing criminal penalties for copyright infringement.   

Intellectual property decisions made today will shape our collective future. The International IP Index seeks to guide leaders when deciding complex issues that surround innovation and progress. The data provided in the International IP Index advocates for a brighter future for innovation and progress by providing information on what has worked and what needs to be changed in IP policy. The International IP Index is available at https://www.uschamber.com/intellectual-property/2024-ip-index .   

Join us at IPISC in safeguarding innovation and creativity worldwide. The experts here at IPISC have been insuring business’s IP infringement risks for over 30 years! If you are interested in protecting your IP against future infringers, and/or insuring costs of defending your activities, visit our website and connect with us at https://ipisc.com/solutions/ .  

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Taco Tuesday Goes Free

Tue, 12 Mar 2024 11:34:00 GMT

Picture this it’s Tuesday evening, you’re craving a sizzling taco. It’s Taco Tuesday – a beloved tradition for many. But what if behind this innocuous weekly tradition lies a simmering legal feud?

In May 2023, Taco Bell filed a petition with the US Patent and Trademark Office (USPTO), challenging their competitor’s—Taco John’s—trademark of “Taco Tuesday.” Taco John’s trademarked the phrase in 1989 and had rights to the trademark in every state except New Jersey (which had been held by Gregory’s Restaurant and Bar since 1982). For over thirty years Taco John’s has sought to protect their mark by sending cease and desist letters to those who used it without permission. Though Taco John’s was rather litigious in its protection of the “Taco Tuesday” mark, it rarely made headlines outside of local newspapers.

While the statements made by both companies have been somewhat tongue in cheek, Taco Bell’s complaint raises a serious issue within the world of trademarks. Trademark attorney Josh Gerben stated that “[Taco Tuesday] has become a cultural phenomenon,” which severely weakens its power as a mark.

In its complaint to the USPTO’s Trademark Trial and Appeal Board (TTAB), Taco Bell asserted that the trademark had become a common phrase. Trademark law states that words, phrases, and logos that are considered by examiners to be “common” or “generic” cannot be trademarked. While the Lanham Act allows virtually anything—be it a sound, smell, color, name, phrase, or logo—to be trademarked, it must be capable of denoting the source of the goods and be distinctive. This standard of distinction is pivotal because a mark, if properly maintained, can be renewed indefinitely. Where patents and copyrights expire over time, trademarks can give a business the monopoly on a mark in perpetuity. If marks were granted for “common speech,” trademark disputes would be overwhelming and everlasting.

When determining whether a mark should be granted or not, USPTO examiners determine to what degree a mark is distinctive. Marks that are considered generic are almost always denied registration—for example, the mark “Milk” for whole milk. Marks that are found to be descriptive are more difficult to successfully register but are slightly more imaginative than generic marks—for example, TurboTax for software that makes reporting taxes quicker. Suggestive and arbitrary trademarks are considered strong. Suggestive marks have some description of the good or service but require a level of imagination and creativity that the former kinds of marks lack. Microsoft, Netflix, and Coppertone are all suggestive trademarks. Arbitrary marks use words that have seemingly no relation to the product at hand—like Apple for computers, Dove for chocolate, or MILK for makeup. The strongest type of trademarks are those deemed fanciful. These marks are words that did not exist prior to their use as a mark (like Kodak or EXXON).

At the time of filing, “Taco Tuesday” was a suggestive trademark, but over time this term has become generic. When a trademark becomes so commonly used that it no longer identifies the source of goods or services, it has suffered from “genericide.” Taco John’s is not the first business to have a mark become generic; genericide has affected previous marks like “Aspirin” and “Escalator,” and now claims “Taco Tuesday.” While every business wants their mark to become a household name, the more widespread a mark becomes the more the potential for genericide mounts.

Though Taco John’s attempted to protect its mark—sending cease and desist letters to accidental infringers—their efforts were not enough to preserve its novelty. Former marketing executive Billie Jo Waara even stated that despite the fact “that the unauthorized use [of Taco Tuesday] is prolific,” the company has “asserted our trademark against national companies, restaurants big and small, and even pharmaceutical companies.”

In July 2023, Taco John’s declared that it was going to abandon the “Taco Tuesday” trademark. After only a few months, the legal battle to protect the mark had become too steep and due to the high legal costs Taco John’s was forced to end the fight. TTAB cases have the potential to last two years before receiving a decision—an incredibly long conflict to finance when the outcome is not likely to be good. Even if Taco John’s had continued to fight and successfully managed to defeat the complaint, the power of a surviving “Taco Tuesday” mark likely would not live up to the investment put into preserving it.

In October 2023, Taco Bell successfully won the battle for full removal of the legalities surrounding the “Taco Tuesday” trademark when the lone holdout, Gregory’s Restaurant and Bar, surrendered its trademark registration. Gregory’s Restaurant and Bar had owned the “Taco Tuesday” mark in New Jersey for the past 40 years. Trademark attorney, Josh Gerben, stated that surrendering the trademark was the “right move” as the chance to “successfully defend the cancellation action against the ‘Taco Tuesday’ mark were extremely low” and the legal fees would have been an “extreme burden to bear for any small business.”

All businesses run the risk of having their marks challenged by others, or even going to court for infringement – as Taco John’s did for nearly four decades! Trademarks are essential to businesses, with being able to protect and enforce them even more so. Your company can be sued for IP infringement for the basic act of making, using, selling, importing, or offering for sale any good or service. Insuring your business’s trademark rights against infringement is something the experts here at IPISC have been doing for decades! If you are interested in protecting your IP against future infringers, visit our website and connect with us at https://ipisc.com/solutions/ .

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Intellectual Property Looks Pretty On You – Jewelry and IP

Sat, 03 Feb 2024 17:32:00 GMT

Valentine’s day is right around the corner and jewelry is a popular gift to exchange on this romantic holiday. Last year, Americans spent $5.5 billion on jewelry to celebrate Valentine’s Day. Pretty as they are, these accessories are subject to intellectual property protections such as copyrights, trademarks, utility patents, and design patents.

Copyright Protection

Copyrights are an effective tool for protecting jewelry designs. Copyrights grant the creator protections for artistic expressions so long as (1) the expression is original to the creator, and (2) the work is fixed in a tangible form. Jewelry fits into the category of sculpture works pursuant to the Copyright Act. Copyright grants the author exclusive rights in their original work including the rights of reproduction, distribution, and to create derivative works from the original. However, there are some limitations on copyright. The Useful Article doctrine states that if an object has a practical or useful function, copyright protection applies only to the creative elements “that can be identified separately from the utilitarian aspects of an object” and do not extend to the functional portion of the design.

A design has originality if the design is created independently, absent copying anyone else’s creations. The level of creativity required is minimal. Many jewelry designs include elements that are not covered by U.S. copyright law such as circles, squares, or loops. However, the selection and arrangement of such elements in a design may entail the minimal degree of creativity needed to afford the design copyright protections.

Although copyrights exist from the moment the jewelry design is in a tangible form, the copyright must first be registered with the U.S. Copyright Office to commence a lawsuit in federal court for infringement. Once registered, the copyright owner may recover up to $150,000 per protected design for willful infringement. Additionally, the registration serves as prima facie evidence of a copyrighted design’s originality.

In Van Cleef & Arpels Logistics S.A. v. Landau Jewelry, the court held that the military clover insignia design was copyrightable. Despite the commonness of the shape and metal frame, the court’s conclusion was based on the arrangement of elements of the design being sufficiently original. Since the court had established that the design had a valid copyright, the court determined the defendant’s jewelry infringed Van Cleef’s copyright because it was substantially similar to the protected design. There is a two-part test for the “substantially similar” determination: (1) whether the defendant’s product ideas, patterns, themes, organization, and other details were substantially similar to the plaintiff’s copyrighted design, and (2) whether a lay observer would find the “concept and feel” of the defendant’s product designs to be substantially similar to the plaintiff’s protected jewelry design. Thus, there must be a level of originality that distinguishes the similarly designed or “inspired by” jewelry from the original protected design.

Trademark and Trade Dress Protection

Trademarks function as source identifiers for the jewelry allowing for immediate association with the original designer of the piece. Counterfeit jewelry tends to implicate trademark infringement. For example, in 2021 Chanel, famous for its CC monogram trademark, sued jewelry company Shiver and Duke LLC for trademark infringement for selling earrings, bracelets, and necklaces that were designed using Chanel buttons with the CC monogram. The packaging of the jewelry did not state that it was not authorized or associated with Chanel. In its complaint, Chanel alleged that the “Defendants’ jewelry is based on the use of Chanel’s iconic trademark on the jewelry and the use of the CHANEL name to promote and market the jewelry.” Chanel was awarded a permanent injunction and monetary damages for Shiver and Duke’s trademark infringement.

Trade dress is a type of trademark protection that applies when the overall configuration of products or packages serves as identification of their source. To be protectable, trade dress generally requires evidence of “secondary meaning.” A product or jewelry has “secondary meaning” if it functions as a “single source identifier” which means a consumer can immediately recognize the source of the product or jewelry by viewing the design. The factors considered by a court when determining whether a product design has attained secondary meaning include: (1) advertising expenditures, (2) purchaser perception, (3) unsolicited media coverage of the design, (4) number of customers as well as sales success, (5) attempts to plagiarize the product design, and (6) length of time and exclusivity of the use. Packaging or product configurations like Tiffany Blue Boxes® or the LOVE® bracelet by Cartier are examples of trade dress in the jewelry industry.

Design Patent and Utility Patent Protection

A design patent protects the shape or configuration including ornamentation or coloration for jewelry and other inventions. A design patent is generally granted for items with ornamental features such as surface decoration, specific configuration, or distinct shape. The design patent grants protection for 15 years from the filing date.

In 2023, Ox, an independent jewelry brand, sued H&M for allegedly infringing upon its design patent by copying and selling a cheaper version of the patented “Ourglass” design. The design protected consists of two hourglass shaped components that intersect to create one continuous piece which is set with diamonds that are visible from all angles of the jewelry piece.

Less frequently, a piece of jewelry may be protected by a utility patent. A utility patent protects an invention, such as product or process, that is useful, novel, and nonobvious. Examples of utility patents in jewelry include the method in which stones are set or a novel fastener for brooches.

All jewelers run the risk of having their designs infringed by others. If you believe that your IP rights are valuable, then being prepared to assert these rights is instrumental. Insuring your business’s IP risks is something the experts here at IPISC have been doing for over thirty years! Visit our website to connect with us and learn more about what we offer at: https://ipisc.com/solutions/

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Steamboat Willie Sets Sail: Disney’s Copyrights on Public Domain Day 2024

Mon, 08 Jan 2024 16:41:00 GMT

Public Domain Day is observed every year to spotlight the expiring copyright materials that are entering the public domain. On this year’s Public Domain Day, January 1, 2024, thousands of works from 1928 and sound recordings from 1923 lost their copyright protection. These works are now a part of the public domain and are available to anyone for use and further innovation. The most prominent of these works is Steamboat Willie, the 1928 Disney short film directed by Walt Disney and Ub Iwerks that introduced the beloved characters Mickey and Minnie Mouse. News outlets have already announced the use of Mickey Mouse from Steamboat Willie in an upcoming horror film. Additional famous works that entered the public domain in 2024 include J.M. Barrie’s play Peter Pan, Virginia Woolf’s book Orlando, and the motion picture The Circus directed by Charlie Chaplin.

Originally, Steamboat Willie was set to enter the public domain in 1984. However, the Copyright Act of 1976 extended its copyright protection until 2004. Then in 1998 the Copyright Term Extension Act, which has been called the “Mickey Mouse Protection Act” by critics as Disney was a prominent supporter of the lobbying efforts, led to Steamboat Willie’s copyright protection being extended until 2024.

The public domain is the realm of material that is unprotected by intellectual property rights and free for anyone to use and further innovation. The public domain incentivizes innovation and creativity by providing the general public access and the right to use, recreate, and innovate based on existing creative works. Judge Kozinski of the Ninth Circuit further explained the purpose of the public domain:

Overprotecting intellectual property is as harmful as under protecting it. Creativity is impossible without a rich public domain. Nothing today, likely nothing since we tamed fire, is genuinely new: Culture, like science and technology, grows by accretion, each new creator building on the works of those who came before. Overprotection stifles the very creative forces it’s supposed to nurture.

Without the public domain much of today’s literary canons and motion pictures would disappear as they draw inspiration or build upon the ideas from works authored by Shakespeare, Victor Hugo, Lewis Carroll, and many other famous authors. For instance, Disney’s popular motion picture Frozen was inspired by Hans Christian Andersen’s The Snow Queen, whereas Disney’s motion picture The Lion King drew inspiration from Shakespeare’s play Hamlet as well as Biblical stories.

While the public domain incentivizes creativity by allowing public use of older creative works, intellectual property rights incentivize creativity and innovation by granting exclusive rights to the author or inventor so these individuals will be able to profit commercially from these works without the threat of commercial copies competing against the copyrighted work or patented invention. As a result of the Mickey Mouse Protection Act, copyright protection is granted for the life of the author plus 75 years or 95 years after corporate authorship. Copyright protection provides the exclusive right to reproduce the work in copies or phonorecords, prepare derivative works based upon the copyrighted work, distribute copies or phonorecords of the work to the public by sale or other transfer of ownership, perform the work publicly, display the work to the public, and perform the work publicly by means of a digital audio transmission if the work is a sound recording. Much like copyright, a patent holder has the exclusive right to commercially, make, use, distribute, import, license, or sale the invention or process described in the patent for 20 years. The commercial protection and control which offer the opportunity for the patent inventors or copyright authors to receive a return on investment of their creative or innovative works creates the incentive for further creativity and innovation in the future. Unlike the other intellectual property rights, trademarks are not granted for a limited period and thus do not move into the public domain. However, this is consistent with the purpose of trademarks which is to negate customer confusion.

IPISC is celebrating this year’s momentous Public Domain Day and the further innovation it will curate. We also encourage artists and creators to be continuously aware of intellectual property liability and potential infringement as they pioneer future works. If you’re interested in learning more about insurance for copyright infringement and how IPISC can assist in mitigating copyright risk visit our website, connect with us at https://ipisc.com/solutions/ .

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Copyright Conundrum: Don’t Let The Grinch Sled Your Photographs Into Infringement

Wed, 13 Dec 2023 22:58:00 GMT

In the photography industry, artistic expression often clashes with legal boundaries. Recent events involving Dr. Seuss Enterprises and photographers have brought the issue of copyright infringement into the spotlight. The world-famous, Christmas-hating Seuss character, the Grinch, has become a focal point of contention during the holiday season, inciting discussions online about the importance of respecting intellectual property rights.

“The Grinch,” as well as other variations of the word, like “Grinchmas,” are registered trademarks under Dr. Seuss Enterprises, L.P. Not only are the words themselves part of Dr. Seuss’ intellectual property assets, but the likeness and attributes of the fictional character also make up copyrighted material. A character can be protected by copyright law if it has a distinctive appearance and traits. The Grinch, clearly, is a distinct figure that is easy to recognize in popular culture.

Legal issues have been popping up for several photographers, with some situations even going viral online. Because of this, warnings to photographers are being shared this season to avoid receiving a cease-and-desist letter from Dr. Seuss Enterprises. Those using the likeness of the Grinch for their own marketing and profit run this risk. Examples include advertising Grinch photoshoots and family photos. It is being circulated to the industry that Dr. Seuss Enterprises has a legal team dedicated to seeking out those using the Grinch in their photo sessions to put a stop to them, either by letter or potentially litigation.

These legal actions against photographers highlight the necessity for the photography community to be vigilant and informed about copyright laws. While inspiration from popular culture often drives creativity, it is essential to understand the legal implications of incorporating copyrighted elements into one’s artistic endeavors.
Copyright laws serve as the legal backbone of creative industries, offering creators protection for their original works. However, the use of iconic characters like the Grinch for profit in photography without proper authorization raises concerns about the boundary between artistic expression and legal compliance. At the end of the day, it is always important to acknowledge other creators’ intellectual property and respect it.

In all this, intellectual property insurance can be a tremendous asset in its ability to safeguard against copyright infringement claims. Intellectual property coverage offers protection to photographers and other creative minds by helping cover legal expenses in the event of litigation related to intellectual property disputes. Investing in insurance can provide peace of mind and financial security for those navigating the complex landscape of copyright law. Utilizing the protection that intellectual property insurance provides may be worth looking into for some creators.

The Grinch controversy serves as a reminder for photographers and artists alike to be mindful of copyright law. Engaging in ethical practices, respecting intellectual property rights, and considering proactive and protective measures are pivotal in today’s fast moving, digital environment. As both IP creators and potential users, visual artist know infringement can be “Stink, Stank, Stunk!”

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A Pharma Patent Battle and The Risk of Intellectual Property Liability

Mon, 20 Nov 2023 19:00:00 GMT

The post A Pharma Patent Battle and The Risk of Intellectual Property Liability appeared first on IPISC .

Does The AI Machine Infringe? A Closer Look at Artificial Intelligence and the Risk of Copyright Infringement

Fri, 13 Oct 2023 18:22:00 GMT

As companies develop Artificial Intelligence (“AI”) models further, the ramifications of their use continue to grow. Teaching image-generating and large language model AIs is no small task, and the amount of information fed to them can be massive. Disputes are arising over the source of data, as well as who should be the “owner” of the outputs. This year’s rash of AI-centric legal battles started in February 2023, with the US Copyright Office’s final denial of Kris Kashtanova’s attempts to copyright AI generated images.

Using Midjourney—a command-based image generating AI—Kashtanova penned the comic Zarya of the Dawn and sought to have the work copyrighted. The US Copyright Office, in a crucial decision after multiple appeals, denied Kashtanova the right to register copyright to the images. However, Kashtanova was granted the rights for the text included in the comic, as she was the sole author of the text. This decision follows the verdict from AI comic A Recent Entrance to Paradise’s appeal from only a few weeks prior, and shows that the US Copyright Office is cementing its stance on AI-generated material. As of now, all copyrightable works must be principally made by human creativity, regardless of the creator’s “sweat of the brow.” This means that the time, effort, skill, and cost of creating a work have no bearing on whether a work ought to be copyrightable or not.

While the decision has been made, the future of generative AI is still uncertain. Objections to this ruling claim that generative AI are mere implements to foster human creativity. Photographs are works that are wholly capable of having copyright protection—they are images, fostered by a human mind’s creativity, but captured and produced through use of a tool. What sets AI apart from this is unclear. In regard to Zarya, the US Copyright Office merely stated that the extensive commanding and editing done by AI users to generate images does not satisfy the requirement of an “implement”.

While this decision somewhat settles the debate over the protection of AI generated images, generative AI itself is being challenged in courts across the country. One lawsuit, led by comedian Sarah Silverman, brings another question to the table.

Silverman, leader of two class action lawsuits , is suing Meta and OpenAI for copyright infringement, as the companies have trained their large language model AIs using her copyrighted works without purchase or permission. Specific to the suit against OpenAI, the authors (Silverman, Christopher Golden and Richard Kadrey) provide exhibits of ChatGPT summarizing their books—which they claim violates their copyrights. Furthermore, the chatbot fails to produce copyright notices within each of the authors’ books.

Both of the OpenAI and Meta lawsuits allege that “OpenAI’s ChatGPT and Meta’s LLaMA were trained on illegally-acquired datasets containing their works, which they say were acquired from ‘shadow library’ websites like Bibliotik, Library Genesis, Z-Library, and others.” The works from the websites that ChatGPT and LLaMA scraped were not “publicly available content,” and would have required purchase had they not been illegally uploaded. Both lawsuits claim multiple copyright violations, negligence, unjust enrichment, and unfair competition, and the authors are looking for statutory damages and restitution of profits, among other things.

AI Companies OpenAI and Meta are steadfast in their stances amidst the dozens of lawsuits. The companies purport that their AIs’ creations are fair use. They argue that training their AIs on public data—scraping websites—is not copyright infringement, seeing as the AI outputs rarely resemble source material to the degree necessary to prove infringement. They also claim that the AI outputs are transformative and cannot be considered infringement. In the world of the arts, where everyone is inspired by everyone, AI is merely doing the same.

These lawsuits are only two of the many that are currently unfolding. Technology companies are fighting for their ability to continue to test and develop their inventions, and to protect the practices they employ to teach them—one of the reasons that OpenAI does not disclose their AIs learning data. Artists are trying to protect their copyrighted works from infringement while seeking transparency from the companies that have acquired their works illicitly and have used them without permission.

These issues walk the line between the importance of protecting existing intellectual property while encouraging the further development of technology and creative works—the beating heart of copyright and patent law. The law is still trying to find the balance between adjudicating genuine complaints of copyright violation and allowing the tech industry to develop without unnecessarily restrictive limits. In the near future, we are likely to see the answers to this dilemma.

What constitutes as use and fair-use, when it comes to AI? Do AI companies need to get explicit permission to use copyrighted works? What kind of recovery—if any—is owed to copyright owners if their copyright is infringed upon by AI?

All businesses run the risk of having their intellectual property assets infringed by others. Copyright infringement can cause substantial damage to businesses in the form of diversion of trade, loss of profits, and a diminishment in the value of its designs and products, rights, and reputation. Insuring your business’s intellectual property rights is something the experts here at IPISC have been doing for over thirty years! If you’re interested in defending your intellectual property against future infringers or trolls, click here and get connected with us!

IPISC intern.

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That Dog Don't Hunt: Insuring Your Trademarks Against Infringement

Wed, 09 Aug 2023 21:52:00 GMT

In June of this year, the Supreme Court ruled on a case between Jack Daniel’s and a chew toy company who made toys that mimicked Jack Daniel’s products (with a funny spin). Bad Spaniels’ “The Old No. 2 On Your Tennessee Carpet,” chew toy was the topic at hand.

Frequently, in cases like this, there would be no issue of infringement because the product in question would be considered a parody of the original. If something is a parody—like Bad Spaniels purported that their toys were—it would be deemed fair-use and avoid infringement. Parody is a form of commentary that is generally exempt from many of the policies surrounding trademark usage. In the interest of free speech, commentary, critique, parody, and some educational purposes all constitute fair-use. Trademark protection was never intended to prevent all mentions of brands or their products, and certainly was not intended to silence free speech—an aspect of the law that Bad Spaniels capitalized on.

The first ruling in this case came out in Jack Daniel’s favor, but upon appeal in the Ninth Circuit, the decision unanimously fell in Bad Spaniels’ favor. Jack Daniel’s argued that Bad Spaniels infringed on its trademarks, tarnished its marks’ reputation, and diluted them. Bad Spaniels argued that not only were its dog toys non-diluting and non-tarnishing, but that its toys were “expressive works” which granted them protection under the First Amendment and the Rogers test.

The Rogers test, as established in Rogers v Grimaldi , protects expressive works that include trademarks within them. The use of the marks must have “artistic relevance to the underlying work” and that they cannot “explicitly mislead as to the source or the content of the work.” This means that a book or movie that mentions a brand in a non-plot relevant and transitory manner has used the mark fairly, and that the brand mentioned has not been harmed or affected by the use. Traditionally, Rogers has been used instead of the typical likelihood of confusion test when it comes to things like parody, comment, or mere mention.

Under Rogers, the burden of proof to show that an expressive work has infringed on a trademark is high. The Ninth Circuit remanded the case, asking the lower court to rule on whether Jack Daniel’s could satisfy the high bar of the Rogers test. Upon remand, the district court found that Jack Daniels could not offer enough evidence to pass Rogers and granted summary judgement for Bad Spaniels. Jack Daniel’s then appealed to the Supreme Court.

On June 8 ^th , the Supreme Court ruled in favor of Jack Daniel’s, handing down a decision that impacts the Rogers test, as well as how parodies are regarded. The Court decided that the Rogers test had no merit—that it did not protect fair-use, expressive works— when “an alleged infringer uses a trademark in the way the Lanham Act more cares about: as a designation of source for the infringer’s own goods.” In this case, the Court put heavy emphasis on Bad Spaniel’s brand and its portfolio of similarly parodic toys: “Doggie Walker,” “Mountain Drool,” “Dos Perros,” “Canine Cola,” and “Smella Arpaw.” Since the company was using its parodies as brand identification and had even trademarked the words “Bad Spaniels” with trade dress for it, the Court found that the use reached beyond fair expression and into infringement.

The Court further added that regardless of whether Bad Spaniels’ toys were considered parody, “fair use exclusion has its own exclusion: It does not apply when the use is ‘as a designation of source for the person’s own goods or services,’” as was the case here. This affects the Rogers test, as the ruling now makes an exception in its protection for when the expressive use of a mark is as a mark.

The whittling away of the Rogers test is something that the Court seems to have gone to great lengths to be precise about. While the majority opinion stressed that this exception could only be used in this specific scenario, the decision to chip away at Rogers was unanimous, and through concurring opinions three justices remarked that the future of Rogers v Grimaldi was uncertain in their eyes.

As of now , Rogers— in this slightly modified form—still stands, and it looks as if like the Court has no intention of overturning it just yet. However, it seems that the Court may soon entertain more cases pertaining to the Rogers test and similar issues, likely to decide whether Rogers can (and/or should) continue to stand. Without Rogers (or a suitable replacement), the way companies “clear” the use of brands in media would mean that the typical likelihood of confusion test would be applied if a lawsuit were to arise—a test that is less clear cut, and with a lower bar.

Brand recognition is pivotal for a business’s success, as is the ability to stop others from diluting and infringing on your marks. In a world where Rogers is in jeopardy, previously non-infringing use may become infringing. Insuring your trademarks against infringement is something the experts here at IPISC have been doing for decades! If you’re interested in protecting your IP against future infringers or are interested in learning more about what we can offer, visit our website and connect with us at https://ipisc.com/solutions/ .

IPISC intern.

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