Intellectual Property (IP) insurance is designed to protect companies against several key exposures including copyright, trademark, and patent infringement. It provides coverage for third party-claims that allege infringement of protected content, ideas, products or service marks.
Over the last several years, IP litigation has skyrocketed, underscoring the need for this specialized coverage – as without the proper insurance in place, companies put their businesses assets at real risk. It’s important to note that standard general liability insurance does not cover intellectual property infringement claims.
Traditionally, publishers of magazines, newsletters, and books as well as entertainment companies purchased a media liability policy to protect their ideas and content. Yet with the emergence and proliferation of online content the entire media sphere has changed, with the potential for IP infringement impacting many types of businesses across various industries.
Another significant change within the IP arena is the spike in patent infringement litigation from sources other than competitors. In the past, most litigation cases involved a company’s competitor; for example, a tech firm or manufacturer with a product patent would sue another firm for infringement.
In the last several years, non-practicing entities (NPEs) or patent trolls have emerged as the principal source of lawsuits. These entities purchase blocks of patents from companies to aggressively target businesses alleging patent infringement in exchange for payment to the NPE or to extract a licensing fee. NPEs, in fact, accounted for approximately 90% of all 2018 high-tech litigation. As a rule, NPEs obtain patents for products but don’t develop or market them.
Small to midsize entities (SMEs) without legal counsel or operating with a small balance sheet are typically targets of NPEs, as the attorney fees to fight infringement allegations in court can be astronomical – with hourly rates for patent attorneys starting at $600 to $700 per hour on the low end to $1,200+ per hour in larger cities. Many SMEs either opt to pay the plaintiff NPE a one-time fee or enter into a licensing agreement, as it can often take years to defend a lawsuit and end up costing millions of dollars in legal fees.
RPS provides solutions for intellectual property infringement through many different carriers. We have also developed an exclusive Patent Insurance with RPX Corp. that provides defense coverage for patent infringement lawsuits by NPEs. With more than 10 years of experience, RPX has built a rich database of patents and risk management tools to help insureds fight claims from NPEs and their direct competitors. RPX also provides a strong claims and litigation team to insureds. In addition to the defense and legal costs, the IP policy will also pay for damages if applicable.
The RPS program is the ONLY patent insurance policy available today on a rate-quote-bind-issue basis for protection against NPEs; coverage for competitor firms can also be included and quoted on the portal. Our exclusive program with RPX is available for companies with up to $200 million in revenue. Policy limits can be purchased up to $10 million. Agents and brokers can access our on-line portal for a quote and to bind coverage.
Source: Unified Patents