Call us toll-free (800) 537-7863
9720 Bunsen Parkway
Louisville, Kentucky 40299
(502) 491-1144
(800) 537-7863
May 28, 2009
We hope that you are able to join us for this in-depth look at intellectual property (IP) insurance and how it may help manage your clients’ IP exposure and the high costs associated with enforcing or defending an IP lawsuit.
June 24, 2009 / 3:00-4:30 EDT
…
December 18, 2008
June 25, 2009- Defense
July 15, 2009- Abatement
July 29, 2009- Defense
June 25, 2009, 2:00 EDT. Intellectual Property Insurance: Defense Insurance Training Webinar. An introduction to Intellectual Property Defense …
Defense: Defense summary; FAQ; Defense Application
Abatement: Abatement summary; FAQ; Abatement Application
IP Risk Services: Sample Invoice, Early Intervention Program
IPISC is an intellectual property insurance and risk management services company. We provide intellectual property (IP) insurance policies and professional services to help reduce IP exposure, and mitigate the cost and consequences of litigating IP cases. In addition to abatement and defense patent insurance, we offer trademark insurance and copyright insurance. We also offer insurance to cover business interruption in the event of an adverse IP lawsuit, and insurance which backs IP to make it available as an asset.
Intellectual Property Insurance Service Corporation (IPISC)
WEBSITE TERMS OF USE AGREEMENT
Use of the IPISC website and its services are subject to the following Terms of Use Agreement
(”TOU”). IPISC reserves the right to update the TOU at any time without notice. By using this
website, you acknowledge and agree to these limitations as set forth.
DESCRIPTION OF SERVICES
IPISC provides you with access to a variety of resources (”Services”) including general information,
message and/or communication facilities, downloads, and calendars, etc. and may include a Members
Only section that can be accessed only by IPISC staff and members. The Services, including any
updates, enhancements, new features, and/or the addition of any new web properties, are subject to the
TOU.
USE OF CONTENT
Use of IPISC content (documents, whitepapers, graphics, logos, software, forums, polls, etc.) is for
informational and non-commercial or personal use only. You may not modify any content, copy,
distribute, transmit, display, perform, reproduce, publish, license, create derivative works from, transfer,
post on any network, broadcast in any media or sell any information, software, products or services
obtained from the Services unless expressly permitted by IPISC. Elements of IPISC websites
are protected by copyright, trade dress, trademark, unfair competition, and other laws and may not be copied or
imitated in whole or in part. Content other than that belonging to IPISC is licensed or otherwise
published by IPISC with the permission of the owner of the material. All rights in such materials are
reserved to the respective owners.
LIMITS OF LIABILITY
IPISC makes no warranties or representations of any kind that the services provided by this website
or any linked site will be uninterrupted, error-free, or that the site or the server that hosts the site are free
from viruses or other forms of harmful computer code. All such information is provided “as is,” and
with specific disclaimer of any warranties of merchantability, fitness for a particular purpose, title, or
non-infringement. In no event shall IPISC, its agents, or anyone else who has been involved in the
creation, production, or delivery of these pages, be liable for any direct, incidental, or consequential
damages resulting from the use of this website or any linked site.
With respect to goods or services purchased directly from IPISC through the website, IPISC’s
liability, in any case, is expressly limited to replacement of defective goods, or the repayment or
crediting to you an amount equal to the purchase price of the goods or services, if IPISC so chooses.
EXTERNAL LINKS
Links to other websites do not imply an endorsement of the materials disseminated at those websites,
nor does the existence of a link to another site imply that the organization or person publishing at that
site endorses any of the materials at this site. Links to other websites are provided by IPISC as a
convenience to its users. IPISC is not responsible for the materials contained at any website linked
to this site.
UNLAWFUL OR PROHIBITED USE
As a condition of your use of the Services, you will not use the Services for any purpose that is unlawful
or prohibited by these terms, conditions, and notices. You may not use the Services in any manner that
could damage, disable, overburden, or impair any IPISC website, or interfere with any other party’s
use and enjoyment of the Services. You may not attempt to gain unauthorized access to any Services, computer systems or networks connected to any IPISC server or to any of the Services, through
hacking, password mining or any other means. You may not obtain or attempt to obtain any materials or
information through any means not intentionally made available through the Services.
IPISC — 9720 Bunsen Parkway Louisville, Kentucky 40299
Copyright © 2008, Intellectual Property Insurance Services Corporation (IPISC). All rights reserved.
Intellectual Property Insurance Services Corporation (IPISC), WEBSITE Terms of Use Agreement, Updated 3/31/08.
Philosophy
Intellectual Property Insurance Services holds the privacy and security of our site visitors and members in the highest regard. The following information explains what kind of information is gathered on our site and how that information is used.
We can be reached via email at info@ipisc.com, postal mail at 9720 Bunsen Parkway, Louisville, KY 40299, or you can contact us by telephone at 502-491-1144. Please bring to our attention any instance where you feel these policies have been violated.
What’s collected and what’s not?
You can visit the public parts of our site without telling us who you are or revealing any personal information. While IP addresses (the Internet address of a computer) are logged to track a user’s session, the user remains anonymous. Tracking IP addresses gives us an idea of which parts of our site users are visiting and how long they spend there. We do not link IP addresses to anything personally identifiable. This means that a user’s session is tracked, but the user is anonymous. The user’s browser also lets us know the type of computer and operating system being used.
The rest of IPISC is password-protected Web site areas and, naturally, we will know who those visitors are.
How is email information used?
Email addresses are used by IPISC to send email through our subscription based mailing lists and to communicate with you about your application and the services we provide. We do not sell, rent, or loan our email lists to outside firms.
Who has access to my application if I apply for insurance on-line?
All submitted information is treated as confidential by our staff, affiliates, and advisors. We never show the information gathered in the application process to anyone outside IPISC evaluation team without your permission. If you wish, we can execute confidentiality agreements before receiving patent applications. Much of the information you send us is protected by law from discovery by third parties.
IPISC periodically hosts Webinars for insurance agents and brokers discussing our products and services. We explore the basics of intellectual property as well as the risk and coverage in depth.
Please download our visit our home page www.ipisc.com for the next scheduled webinar.
As an independent insurance agent, you have a duty to advise your client on the availability of this coverage. If your client is making, using or selling a product of any kind, they are at some degree of risk for being forced to defend in an infringement lawsuit. If your client owns intellectual property, patents, trademarks or copyrights, they are at risk of a competitor infringing and depleting the value of the IP. There are obviously varying degrees of IP exposure, but simply advising your client of the availability of IP Infringement Insurance will greatly reduce your E&O risk. We highly recommend a proactive approach to making all of your clients and prospects aware of the coverage and are willing to help you create marketing materials specialized to your agency.
Claims Process
Abatement Policy Early Intervention (EI) Program
Insured:
Informs IPISC of concern with regard to possible infringement
IPISC:
Tailors an EI letter to the situation and sends to the suspect, copies the Insured
and receives any response from the suspect.
IPISC:
Utilizes our IP and legal expertise, and explains to the Insured any defenses raised
regarding the strength of the infringement case against accused.
IPISC:
Encourages and facilitates resolution through negotiation of a license, if possible.
Claim & Litigation Management Services
Insured:
Files timely Claim Form and supporting materials required under the Policy.
IPISC:
Responds promptly to questions or concerns from Insured during the claims process.
Insured & IPISC:
Collaborates with IPISC on choice of opining and litigating counsel, and ensures
Litigation and Billing Guidelines are being adhered to and reviews the budget.
Insured:
Submits Opinion Letter
IPISC:
Ensures that all materials are received and all terms are complied with; forwards claims
materials to the carrier.
Upon claim authorization:
Insured & Litigating Counsel:
Submits invoices to IPISC for payment, noting payments made by Insured.
IPISC:
Reviews invoices for compliance with Billing Guidelines and submits invoices to the carrier for payment.
IPISC:
Collects from counsel periodic litigation status reports and discusses the strategies in the case with counsel and/or the Insured until litigation ends or policy limits are exhausted.
IPISC:
Arranges for repayment from Insured to reinstate applicable policy, limits within mutually agreeable terms, if Economic Benefit applies.
© Intellectual Property Insurance Services Corporation (1991-2009)
9720 Bunsen Parkway, Louisville, KY 40299
Ph: 502.491.1144, Fax: 502.491.4888, info@ipisc.com, www.ipisc.com
The Application is fairly involved, though not as daunting as it may first appear. Our goal is to give the underwriter as much information as possible regarding the product or Intellectual Property (IP) to be insured. Often this will require the underwriter and a technical specialist from the applicant company to teleconference to help facilitate understanding. As a general guideline, we follow this process:
During our underwriting process, the IPISC underwriters will discern the potential for a lawsuit, a determination related to the possibility of actual infringement. They accomplish this with a quantitative and a qualitative analysis. Quantitatively they examine the classes of patents that the product/IP falls within. The risk is then measured according to the number, type and severity of litigation that has arisen within those subject classes. Among other calculations, they also examine the litigation history of the industry, including an assessment (for a Defense policy) of the likelihood of litigation by particular competitors. Qualitatively, the differentiation and the strength of the IP/products is evaluated as it compares to claims of other IP in the marketplace. The underwriters can generate a report of the specific IP risk (Defense policy), our Insurability Review service, for an increased search fee. This report is not a legal opinion, as we are discerning the insurability of the IP/products, rather than providing an opinion of non-infringement.
Underwriting generally takes 3–5 weeks for Defense, and 2-4 weeks for Abatement. Please be aware that the underwriting time could increase for complex technology, as well as a large amount of IP to be searched. The Defense underwriting many times requires a conference call between the underwriter and the client’s technical expert(s) regarding the IP/product(s) make-up. This interview enables the underwriter to ascertain specifics and answer any questions he may have to ensure complete understanding of the IP/product(s).
Once the underwriters have completed their search and initial rating of the product/IP, an initial quote is formalized which sometimes includes limitations through endorsements. Endorsements are used as a way to limit the carrier’s exposure by differentiating insurable risk as opposed to business risk. An underwriter may sometimes place limitations due to a lack of information, such as how a product differs from a particular IP, or the exact makeup of the process or product to be insured. These limitations and the “Schedule of Manufactured Products” clarify positions and concerns of the underwriter; once shared with the client there is often a willingness to share more information. The underwriter and client can then begin to come to agreement regarding specific discrepancies. Again, we do this through conference calls and submissions of potential language. This can often consume several weeks. Once an agreement is reached regarding what risk the underwriter will assume and what limitations the client will accept, a final quote will be issued.
IPISC employs the brightest minds in Intellectual Property (IP) law, science and technology. Our IP programs have remained strong and viable for almost 20 years due to the caliber of professionals we employ. Our underwriters are highly educated critical thinkers who are able to understand underlying technology and science relative to IP risk. Our sales and support staff brings the experience and knowledge necessary to facilitate conversations and enable our clients to understand their IP risk.
We periodically have openings for career minded individuals in Sales, Underwriting and other departments. We offer a positive, productive work environment with an attractive compensation and benefits package. We encourage you to watch for available positions or feel free to forward your resume to Sheila Van Meter at SVanMeter@ipisc.com.
Mr. Fletcher is President and Chief Executive Officer and plays a direct role in creating new products and finding partner backing, as well as the more routine tasks of analyzing, evaluating, and selecting patent licensing/enforcement opportunities, claims management, underwriting and product development. In addition to his other duties, Mr. Fletcher oversees the Underwriting Staff and actively participates in underwriting of special risk cases and cases needing final sign-off. Mr. Fletcher is a registered Patent Attorney and has over 30 years of intellectual property experience. He holds Chemical Engineering and Law (J.D.) degrees from the University of Wisconsin and an MBA from the University of Louisville.
Prior to IPISC, he served in the patent departments of General Electric Company, American Air Filter, and Standard Oil of Indiana. In addition, he is a member of the State Bars of Wisconsin, Illinois, and Kentucky, and is admitted to practice before the U.S. Patent & Trademark Office.
Ms. VanMeter is Senior Vice President and Treasurer. Her responsibilities include marketing, product development, management of operations, sales, accounting and database research and maintenance.
She holds a Bachelor of Science degree in Business Administration and an Associate degree in Applied Sciences from the University of Louisville. Prior to IPCC, she was Assistant to the Chief Patent Counsel at American Air Filter Corporation and Vice President of HLPM Inc., the patent licensing subsidiary of the Hilliard-Lyons Investment Banking Company in Louisville, KY. She has over twenty five years of experience involving patents and other IP.
Software Industry:
A patent troll tried to enforce his patents to collect licensing revenue. The patent holder does not produce a product, but uses litigation to broadly assert the rights of a patent in the industry. The tactic is to assert patent rights against smaller companies unable or unwilling to fight a court battle. Once several smaller companies have settled, the troll pursues larger companies as well as their clients and suppliers. Defense insurance gave the insured the ability to possibly invalidate the accusing patent or settle, as well as strong advice regarding the decision making process.
Shoe Industry:
A small shoe manufacturer/distributor was recently accused of infringement by an attorney patent troll. The troll has a patent that he has successfully enforced against smaller manufacturers who could not pay to defend themselves; therefore, forcing them to sign license agreements and pay royalties. The insured discussed the situation with our Claims Management Department, which was able to offer guidance regarding how to handle the discussion and respond to the accuser and his attorney. Unlike the other small manufacturers that were forced to give up their rights to manufacture, our insured used the power of his defense policy, and would have been prepared to fight this weak allegation against him.
Electronic Article Surveillance Industry:
An industry leader was successfully defeated in the plaintiff friendly Eastern District of Texas by our insured after the claim of patent infringement of their electronic surveillance tags was rejected by the jury. If our insured would have lost, they could have easily been put out of business. Happily the money was available to fund a successful defense. Our insured was quoted as saying, “You never know when you will need insurance”. It was the first verdict for the defendant, our insured, out of the past 20 (twenty) cases tried in this district.
Artificial Sweetener Industry:
A competitor sued numerous companies in the industry for patent infringement. The Insured had limited their insurance to cover only the “most valuable” products. However, the plaintiff brought in several pieces of technology that were outside the scope of the insured’s coverage. By trying to guess what may happen in the future, the insured set themselves up for coverage on a pro-rata basis, instead of having the foresight of insuring all of their products. Nevertheless, the suit was dropped against them because they did have the insurance to fight the accuser.
Personal Fitness Industry:
Our insured is a producer of a mechanism for personal fitness machines. He was able to sue a competitor for using that mechanism in their production and sales because he had the funds through his Abatement Policy to enforce his patent. The competitor was forced to withdraw from the market and pay a financial settlement to the insured. The personal fitness industry is one of the most litigious art areas.
Music Industry:
Our insured purchased a policy for their invention which was in the application stage pending registration. Before the patent issued, a large competitor began producing an infringing product. Once the patent had issued, the insured was able to pursue the alleged infringer and assert their patent rights. Without the insurance policy providing the funds to enforce their rights, the competitor would have been able to continue to take the insured’s market share. The insured would have possibly gone out of business or lost a high percentage of their market share.
Construction Industry:
Our insured sued a competitor for literal infringement of their major structural patented product, and asked for a permanent injunction and award of damages and lost profits due to the infringement. The inability to enforce their patents would have seriously impacted their market share, as well as the reputation that they have worked hard to build in their market industry.
Engineering Manufacturer:
Our insured, a leading engineering manufacturer, had the foresight to insure their invention while in the patent application stage. , The insured was able to make the alleged infringer aware of their patent application and that it they had insurance. Though unable to assert their rights until the patent issued, by insuring while in the application stage, the insured had secured their rights to pursue the alleged infringer once the patent issued, and pursue damages, lost profits, as well as injunctive relief to stop the infringement of the claimed invention.
Promotions Company:
Our insured had an existing working relationship with the manufacturer of his patented invention who, according to the insured, was a huge part of their team and the success of the company. The insured alleged that the manufacturer went behind his back and knowingly shared his work with insured’s competitors. Ultimately the insured found a new manufacturer and recovered costs for lost revenues.
Bicycle Manufacturer:
Our longtime insured was able to successfully halt the production of the infringing products by utilizing our IP Abatement policy. The insured negotiated licensing agreements, and used our Early Intervention Program to notify the alleged infringers of his patent rights and insurance policy.
Aerospace Parts Supplier:
Our insured was sued for patent infringement. Since he held an Abatement policy, the insured was able utilize the policy because he had a right to file a counterclaim in response to the IP claim for the aspects related to their intellectual property, on a pro rata basis. This is a major component of the Abatement policy.
So, just how costly is an IP lawsuit? The American Intellectual Property Law Association conducts a bi-annual study of the costs associated with IP law. As part of this study, they issue a survey to law firms and corporations asking for typical costs of IP litigation, based on the amount in controversy. Below are the mean (average) costs of litigation reported for patent, trademark and copyright infringement. These costs are based upon three categories of amounts at risk, and are presented as of two stages of a suit – through the discovery period and inclusive of discovery, motions, hearing and post-hearing. The costs consist of outside as well as local counsel, associates and paralegal services, travel and living expenses, fees and costs for court reporters, copies, couriers, exhibit preparation, analytical testing, expert witnesses, translators, surveys, jury advisors, and similar expenses. Awards and damages are not included in the results.
| $ at Risk | < $1MM | $1MM-$25MM | > $25MM |
|---|---|---|---|
| End of Discovery | $461,000 | $1,589,000 | $3,340,000 |
| Inclusive, all costs | $767,000 | $2,645,000 | $5,499,000 |
| $ at Risk | < $1MM | $1MM-$25MM | > $25MM |
|---|---|---|---|
| End of Discovery | $184,000 | $437,000 | $868,000 |
| Inclusive, all costs | $327,000 | $790,000 | $1,586,000 |
| $ at Risk | < $1MM | $1MM-$25MM | > $25MM |
|---|---|---|---|
| End of Discovery | $179,000 | $435,000 | $838,000 |
| Inclusive, all costs | $310,000 | $749,000 | $1,292,000 |
Having done extensive research on IP risk for almost 20 years, we are also able to produce many intelligence reports which enable you to make ongoing business decisions regarding your intellectual capital, regardless of insurance coverage. From an insurability review, which can be used for underwriting our Defense policies, to IP valuations, we’ve become experts at researching and analyzing your intellectual capital and the market in which it thrives. Here are a few of these services:
The leading companies in our economy are utilizing their IP as another tool in the toolbox for increased revenue potential and market share. IPISC can assist you in maximizing these tools and reducing the chance of loss by supporting intelligent decision making.
When a company becomes involved in IP litigation, they rarely comprehend the time and effort required of senior management to participate successfully in the suit. IP litigation is a complicated battle of ideas and tactics, with differing motives and expectations, and is one of the most expensive types of litigation in the U.S. In order to maximize the probability of a successful outcome, your company must control the suit, the litigating counsel and the information flowing from that counsel. Senior management must be able to make intelligent decisions as the suit advances. With that end in mind, control and intelligent decision making, our Litigation Management services are included with Abatement and Defense coverage. We also offer this service on an hourly basis for risks not covered by insurance.
The service includes:
These services typically save our clients 20% or more in fees alone, not to mention increased decision making intelligence. Download an example of a typical first bill and you will notice that there are many hours billed that fell outside of the agreement. Subsequent bills don’t normally have as many adjustments.
IPISC provides an extensive array of services to enable clients to make the best possible decisions regarding their intellectual capital. After almost 20 years in the business, we have become experts in clarifying and managing IP risk. From Litigation Management to research and reporting, we can help you reduce your exposure and the cost of achieving your goals.
Our services are offered on a per-project or hourly basis by professionals with the expertise and experience to routinely place millions of dollars in insurance behind their work.
DEFENSEIndustry |
Limits of Liability |
Premium |
|---|---|---|
| Electronics | $1 million | $27,000 |
| Electronics | $3 million | $150,000 |
| Medical Device | $2 million | $60,000 |
| Medical Device | $3 million | $80,000 |
| Software | $2 million | $72,000 |
| Software | $2 million | $40,000 |
| Distributor/Auto Acc. | $1 million | $112,000 |
| Lighting | $1 million | $24,000 |
ABATEMENTIndustry |
Limits of Liability |
Premium |
|---|---|---|
| Medical Device | $1 million | $48,000 |
| Medical Device | $2 million | $103,000 |
| Electronics | $1 million | $35,000 |
| Industrial Equipment | $1 million | $37,000 |
| Agriculture | $1 million | $12,000 |
| Building | $1 million | $11,000 |
| Tools | $1 million | $13,000 |
NOTE: These sample premiums are from actual policies IPISC has issued in the past. They vary by number of insured products or IP and by risk factors. This representation is meant as an example only and can not be taken as an indication of premium for a risk IPISC has not yet quoted.
As the owner of a patent, trademark or copyright, you invest in an enforcement policy. Time passes, then a competitor begins selling a product that you suspect infringes your intellectual property. If the case can be made that the product does infringe on your intellectual property, we can first write a letter notifying the competitor of your IP, and identify your financial ammunition for legal enforcement, our insurance. This is called our Early Intervention program and often results in licensing negotiations or termination of infringement. If the competitor ignores this notification, you would then consider bringing suit against him. In order to be sure, we will help you obtain a legal determination, giving you specific information regarding a suit. We then can help you find an approved attorney to litigate the case. We’ll make sure you get an estimate of how much litigation will cost and have the attorney agree to specific billing guidelines. Upon complying with the policy terms, we will authorize your case. You and your attorney will have control over the lawsuit, including the negotiation of settlements. IPISC cannot force you to settle. During the course of the litigation, your attorney will send invoices to you and us, which we will periodically reimburse, after deducting the coinsurance and deductible portion, up to the limits of your policy.
If the suit concludes in your favor, you and IPISC will share in the Economic Benefit relative to the amount of money each has contributed to the lawsuit. However, IPISC’s share of the Economic Benefit is limited to the amount we’ve actually reimbursed, plus a 25% surcharge if you receive a large monetary settlement. This will reinstate the full limits of the policy for use in another claim. Should you fail in your attempt to enforce IP, there is no payback requirement, since you have not received an Economic Benefit.
After completing an application, you submit a Freedom to Operate Opinion from your attorney, or allow IPISC to perform an Insurability Review. The opinion or review will determine the scope of coverage that your policy will provide. Once the insurance is bound and the waiting period has passed, the policy will respond if someone accuses you of infringement. Your first step is to determine whether or not the threat against you is credible, and to determine whether you infringe. In order to be certain, we will help you obtain a legal determination, which will give you specific information regarding the suit. We then can help you find an approved attorney to litigate the case. We’ll ensure you get an estimate of the cost of litigation and have the attorney agree to specific billing guidelines. Once you understand the likelihood of success and the potential expense, you will be able to make an informed business decision about whether you want to apply your policy limits to litigating, or to settling the dispute. Upon complying with the policy terms, we will authorize your case. You and your attorney will have control over the lawsuit; IPISC cannot force you to settle. During the course of the litigation, your attorney will send invoices to you and us, which we will periodically reimburse, after deducting the coinsurance and deductible portion, up to the limits of your policy.
Suppose you own a business, and you have just purchased a Defense Insurance policy, an Enforcement policy, and a full scope Multi-Peril Reimbursement policy. Time passes, and you are accused of infringement, even though you have your own patent. Unfortunately, the court awards a preliminary injunction in the interim while the case is pending. The Defense Cost Reimbursement coverage reimburses your litigation expense. But as a result of the injunction, your processes stop, and you lose profits. Further, your licensees are also enjoined, and you lose your royalty income. The Multi-peril policy reimburses for these losses that could put you out of business, regardless of whether or not you ultimately win the suit. If you do lose the suit, the Multi-peril policy reimburses the cost of developing a non-infringing alternative, within policy limits, allowing you to remain in business.
What if you counter-claim infringement against the party that sued you, and unfortunately, the court finds against you? As a result, your IP is invalidated and you permanently lose all income from your intellectual property and your commercial advantage in the market. The Multi-peril policy could reimburse your loss of research and development invested in your invalidated intellectual property, and the cost to redesign your product.
During our underwriting process, the IPISC underwriters will discern the potential for a lawsuit, a determination related to, but not necessarily driven by, the possibility of actual infringement. They accomplish this with a quantitative and a qualitative analysis. Quantitative analysis includes an examination of the classes of patents that the product/IP falls within. The risk is then measured according to the number, type and severity of litigation that has arisen within those subject classes. Among other calculations, they also examine the litigation history of the industry, which includes an assessment (for a Defense policy) of the likelihood of litigation by particular competitors, is made. Qualitatively, the differentiation and the strength of the IP/products is evaluated as it compares to claims of other IP in the marketplace. The underwriter can produce a report of the specific IP risk (Defense policy), our Insurability Review service, for an increased search fee. This report is not a legal opinion, as we are discerning the insurability of the IP/products, rather than providing an infringement opinion.
Underwriting generally takes 3–5 weeks for Defense and 2-4 weeks for the Abatement policy. Please be aware that the underwriting time could increase for complex technology, as well as a large amount of IP to be searched. The Defense underwriting many times requires a conference call between the underwriter and the client’s technical expert(s) regarding the IP/product(s) make-up. This interview enables the underwriter to ascertain specifics and answer any questions which arise to ensure complete understanding of the IP/product(s).
IP insurance policies reimburse clients for their expenses resulting from accusations and litigation of IP infringement. They are written to cover risk from patent, trademark, trade dress, trade secret and copyright infringement, and include Litigation Management and Early Intervention (with Abatement) services. These policies are designed to provide coverage for insurable risk, as opposed to standard business risk, and are restricted by a Self-Insured Retention (similar to a deductible) and Co-Insurance provisions, among other limitations. Please review the policy specimen and consult with your professional advisor for all of the details.
© Intellectual Property Insurance Services Corporation (1991-2009)
9720 Bunsen Parkway, Louisville, KY 40299
Ph: 502.491.1144, Fax: 502.491.4888, info@ipisc.com, www.ipisc.com
Intellectual Property (IP) Abatement Insurance, also called enforcement insurance, assists IP holders in enforcing their intellectual property rights against alleged infringers. The insurance provides funds and services to enable policy holders to more effectively negotiate, protect and enforce their IP rights.
Abatement insurance reduces the pressure to settle due to a limited resource of funds. It discourages potential infringement by demonstrating the financial ability to enforce intellectual property. It also prevents loss of market share by quick, decisive responses to infringers, and makes your technology more attractive to investors considering your business.
Infringement Abatement policies include an Economic Benefit provision. This policy, like most insurance, is designed to indemnify a loss, not serve as a speculative opportunity to provide the insured with a profit. Therefore, in the event you win and realize an Economic Benefit from the litigation, you are required to repay litigation expenses reimbursed by the company, up to 125%. You retain the balance of the Economic Benefit. Once the policy is reimbursed, your policy limits will be reinstated for use in another claim during the policy period. Should you fail in your attempt to enforce your IP, there is no payback requirement since you have not received an Economic Benefit.
Abatement policies are written to cover scheduled IP by number – patents, trademarks and copyrights – as well as patent provisionals and applications, both US and foreign. Patent provisionals and applications, although unenforceable, are insured so as to begin a timeline for covered infringement. Upon issue, the policy could respond to infringement that began while the IP was an insured application – infringement that would otherwise be considered pre-existing. Premiums are calculated based on the number of insured IP and their relative risk. One patent, of average risk, at $1 million in limits, is approximately $7000 - $9000 annual premium. Our average Abatement policy, regardless of limits and number of IP, is about $13,000.
This Claims-Made and Reported policy is restricted by a Self-Insured Retention, Co-Insurance and an Economic Benefit provision. Pre-existing infringement, whether known or unknown, is excluded. Please review the policy specimen and consult with your professional advisor for all of the details.
Please download a Program Summary and Frequently Asked Question, or an Application for the IP Abatement Insurance policy.
IP Defense insurance can put in place the funding mechanism to cover standard indemnification clauses for IP infringement found in many Retail/Supplier contracts. Defense insurance protects the substantial investment in the products being offered and the revenues they produce. The policy reduces the impact of litigation and may enable the insured’s operations to continue virtually uninterrupted.
The Defense policy responds to a scheduled product or products. Therefore, it is important that the underwriters understand the IP landscape surrounding the technology, and the product specifications to be covered by performing an Insurability Review. The review includes an underwriting search summary and provides an abbreviated list of patents and patent applications or other IP found relevant to the company’s operations. The cost is usually much less than other search options. For an additional fee, we can include an insurability opinion, which includes the list of IP listed above as well as an in-depth review of a companys’s risk associated with that IP.
Do you already have a Freedom to Operate? We can accept this opinion in lieu of the above insurability review, however, the scope of coverage will be limited to what has been opined upon.
AVERAGE POLICY PREMIUMS
What can you expect on average?
Annual premiums for the Defense policy are based upon the number of products to be insured and the associated risk.
1 (One) product/process, standard risk, at $2MM/$2MM policy limits: $13,700.00.
2 (Two) products/processes, standard risk, at $2MM/$2MM policy limits: $20,600.00.
All Defense Policies carry a Minimum Self-Insured Retention of 2% of policy limits and a 10% Co-Pay. There is a 90-Day Exclusionary period on the front-end of the Defense policy. The 90 days is added-on to the end of the policy period.
This is a Claims-Made and Reported policy. Pre-existing threats of infringement are generally excluded. Please review the policy specimen and consult with your professional advisor for all of the details.
Please download a Program Summary and Frequently Asked Question or an Application for the IP Defense Insurance policy.
Request a policy specimen.
Multi-Peril insurance is available to any company or individual with an insurable interest in their intellectual capital. The policy provides coverage for losses incurred as a result of an unsuccessful attempt to defend or enforce in an IP infringement suit.
There are several reasons to carry Multi-Peril Reimbursement Insurance:
Multi-Peril Reimbursement Insurance protects your substantial investment in the products that you offer and the revenues they produce. It pays you directly in the event you are involved in an intellectual property lawsuit and lose.
The Multi-Peril policy responds after the final adjudication of a Civil Proceeding that directly caused the loss of value. The Civil Proceeding (i.e. the precursor to loss of IP value) must be initiated during the policy period. The corresponding Abatement and/or Defense policies are required. Please review the policy specimen and consult with your professional advisor for all of the details.
Request a policy specimen and application.
The policy provides coverage for losses incurred relating to IP, including the IP’s value. The coverages are described below and may be chosen individually or collectively:
This coverage can serve as the basis for writing IP on your balance sheet as an asset for its insured value, even though the IP was developed in-house.
IPISC places a high value on our insurance distribution partners. We are committed to supporting the efforts of independent insurance agents and brokers in understanding Intellectual Property (IP) risk and coverage and in helping their clients do the same. We offer training on the complexities of IP risk and coverage, and assistance in marketing and promotional efforts. Your IPISC representative can also help you prepare a PowerPoint presentation. Please download our Broker’s Packet and Agent Training Manual to better understand our coverage. For a generic premium indication, complete an Indication Request and we will get back with you within 24 hours.
IP Insurance is a complex product which often covers complex technology. In each case there are unique conditions that require the full commitment of the client, the agent and IPISC to a process of understanding and agreement. It is the responsibility of IPISC sales staff and the clients’ independent agent to facilitate this process and ensure efficiency. Due to these complexities, applications, quotes and negotiations are often derailed by a lack of information. Therefore, the underwriters must completely understand the product, the client must understand implications of the quote and policy, and clients’ attorneys often need additional information to feel comfortable with limitations, etc. Consequently, there are many opportunities built into our sales process to connect IPISC’s underwriters with decision-makers and knowledge-holders within the client’s company. The most important aspect to recognize is that IP insurance is not standardized and must be approached as a knowledge and risk-sharing partnership. This partnership often takes time and effort to establish. We rely heavily on the client’s independent agent to facilitate this relationship and partnership building.
IPISC
9720 Bunsen Pkwy
Louisville KY 40299
800-537-7863
info@IPISC.com
What’s your biggest asset? What’s your competitive advantage? Is it your buildings or real estate? Equipment and machinery? Or, is it the idea behind your product? Your reputation in the marketplace? Your process for efficiency and quality? You have achieved success because your competitive advantage is unique, different, the un-common approach. These designs and inventions, your marks and slogans, your intellectual capital, serve as the foundation upon which your business is built.
Your intellectual capital is the most important asset you possess. You are not alone.
Many theorists define the difference between a company’s market value and book value as its intellectual capital – an estimated 2/3’rds of the market value of all publicly traded companies.
As business executives, we know and insure against risk associated with most of our assets. Property/casualty, errors and omissions, general and professional liability, to name a few. Do you know what risk is associated with your intellectual capital?
There are essentially two issues to be concerned with:
Often the resolution for either of these issues is an expensive legal confrontation.
According to the USCourts.gov, there were over 11,500 total IP suits commenced in 2006, including patent, trademark and copyright suits. That’s up from 8200 in 2002.
The expense of such a suit is substantial, up to $5.5 million dollars in legal fees alone.
View typical litigation costs from the AIPLA 2007 survey here.
The concern of a competitor taking your ideas can be mitigated by first codifying your intellectual capital into intellectual property; in other words, attaining the constitutional right to exclude others from making, using or selling a product that infringes by obtaining a patent or protecting your trademark or rights of authorship.
Once you have begun this process you can attempt to stop, or abate, another’s alleged infringement, through the court system.
On the other hand, if you are making, using or selling a product, or have words or marks in the marketplace, there is a chance that you could be accused of infringing another’s intellectual property, even if the suit is frivolous. Again, an expensive legal battle.
Consider these additional risks:
IPISC has developed products to provide funds and expertise to reduce financial exposure and help manage IP litigation. You can concentrate on your core competency – your business.
In 1989 our Founder, Robert Fletcher, wrote the first-ever IP Infringement Abatement insurance policy. Since then we’ve been the industry leader in the assessment and transfer of IP infringement risk. We’ve developed several more insurance policies and services to identify and mitigate risk, as well as assist in using IP as a financial tool to add value and benefit.
The Defense and Abatement policies are uniquely designed to align the interest of the insured with the interests of the insurance carrier. IP insurance is ultimately a partnership formed to achieve two functions in the incidence of litigation:
Both policies work to give the client a realistic view of the progress and ultimate outcome of the litigation, which enables superior decision making and mitigates costs. Several Services are included with our policies. The Multi-Peril Policy provides funds that enable you, the insured, to recoup your investment or lost revenue, up to policy limits, in the event that litigation is unsuccessful.
We provide an array of services that empower clients to make the best decisions possible regarding their intellectual capital. After almost 20 years in the business, we have become experts in clarifying and managing IP risk. From Litigation Management to IP Intelligence, we can help you reduce your exposure – and the amount of funds necessary to achieve your goals.
Our services are offered on a per project or hourly basis and are backed by the expertise and experience of professionals who routinely place millions of dollars behind their work.
© Intellectual Property Insurance Services Corporation (1991-2009)
9720 Bunsen Parkway, Louisville, KY 40299
Ph: 502.491.1144, Fax: 502.491.4888, info@ipisc.com, www.ipisc.com
Our Founder, Robert Fletcher, wrote the first-ever IP Infringement Abatement insurance policy. As a chemical engineer, patent attorney and highly successful businessman, Bob began his IP career as patent counsel for Standard Oil. He then worked for companies such as GE, American Air Filter and Hilliard Lyons. His experience valuing and commercializing patented technologies for an investment banking firm set the stage for the development of an IP insurance company. IPISC, which was formed in 1990, was the first to offer the Infringement Abatement Insurance policy. In the years to come, Bob developed the Defense and Multi-Peril insurance policies. Bob continues to lead IPISC in the development of other insurance products and services.
With almost 20 years of experience, IPISC is a full service IP risk management firm. As the original architects of IP insurance, we provide insurance products and professional risk management services to help identify and reduce IP exposure and expense. IPISC’s success is attributed to our ability to retain some of the best and brightest in the insurance industry. Our highly educated and experienced team is the key factor in IPISC’s continued growth and success. The cohesiveness of our team, along with the passion for what we do, truly sets us apart as industry leader, setting the standard in the IP insurance industry.
Betterley Risk Consultants, Inc., publishers of The Betterley Report, have completed their 2008 Intellectual Property Market Survey. Please follow the link to view the 2008 survey: http://www.betterley.com/adobe/ipims_08_nt.pdf