How does it work?
Abatement
An owner of a patent, trademark or copyright invests in an enforcement policy. Time passes, then a competitor begins selling a product that allegedly infringes the intellectual property. If the case can be made that the product does infringe on the intellectual property, IPISC can first write a letter notifying the competitor of the IP, and identify the financial ammunition for legal enforcement, the insurance. This is called the Early Intervention program and often results in licensing negotiations or termination of infringement. If the competitor ignores this notification, the Insured would then consider bringing suit against him. In order to be sure, IPISC will help obtain a legal determination, giving specific information regarding a suit. IPISC then can help find an experienced IP litigating attorney to litigate the case. IPISC ensures that the Insured will receive an estimate of how much litigation will cost and have the attorney agree to specific billing guidelines. Upon complying with the policy terms, the carrier will authorize the case. The Insured controls the lawsuit, including the negotiation of settlements. The carrier will not force a settlement. During the course of the litigation, counsel will send invoices to the Insured and the carrier for reimbursement, after deducting the coinsurance and deductible portion, up to the limits of your policy.
Should the Insured win the lawsuit, they and IPISC will share in the Economic Benefit relative to the amount of money each has contributed to the lawsuit. The carrier’s share of the Economic Benefit is limited to the amount actually reimbursed to the Insured. Once the policy is reimbursed, the full limits will be reinstated 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.
Defense
At the time of completing a defense application, IPISC performs an underwriting search for our own due diligence, which results in coverage of all except specifically excluded patents. There is a nominal fee to search the products on the defense side. For that fee the underwriter will break down the technology to specific art areas for searching out patents that have any relevance to the applicant’s products. The underwriter will perform keyword searches in each art area and then search the referenced patents on the relevant patents. Further, the underwriter will search assignee names of companies and individuals who are known to compete or have markets in the art area. Once the patents have been reviewed and distinguished from the applicant’s products they will receive a list of the patents searched.
In lieu of the search fee, IPISC will accept a Freedom to Operate opinion from outside counsel for the required due diligence provided that it is:
1. Six (6) months old or less and,
2. Comprehensive and well reasoned
If the Freedom to Operate is limited in scope, coverage will be limited to the patents that have been opined upon.
Once the insurance is bound and the waiting period has passed, the policy will respond if the insured is accused of infringing another’s intellectual property. The first step is to determine whether or not the threat against the Insured is credible, and to determine whether there is infringement. IPISC will help the Insured obtain a legal opinion, which will provide specific information regarding the suit. IPISC can help find an experienced IP litigating attorney to litigate the case, and ensure the receipt of an estimate of the cost of litigation and have the attorney agree to specific billing guidelines.
Once the likelihood of success and the potential expense is determined, an informed business decision can be made about whether the Insured wants to apply the policy limits to litigating, or to settling the dispute. Upon complying with the policy terms, we will authorize your case. The Insured controls the lawsuit, including the negotiation of settlements. The carrier will not force a settlement. During the course of litigation, counsel will send invoices to the Insured and the carrier for reimbursement, after deducting the coinsurance and deductible portion, up to the limits of your policy.
Multi-Peril
The insured has purchased a Defense Insurance policy and/or an Enforcement policy along with Multi-Peril policy. Time passes, and the insured is accused of infringement, even though they own their 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, the Insured's processes stop, and they lose profits. Further, their licensees are also enjoined, and they lose royalty income. The Multi-peril policy provides first party coverage for these losses that could put the Insured out of business, regardless of whether or not they ultimately win the suit. If the lawsuit is lost, the Multi-peril policy will reimburse the cost of developing a non-infringing alternative, within policy limits, allowing the Insured to remain in business.
What if the Insured counter-claimed infringement against the party that sued them, and unfortunately, the court finds against the Insured? As a result, the IP is invalidated and the Insured permanently loses all income from their intellectual property as wll as any commercial advantage in the market. The Multi-peril policy could reimburse the loss of research and development invested in the invalidated intellectual property, and the cost to redesign the product.
