22 Oct, 2018

Defense Insurance

Are You Prepared to Defend Your Intellectual Property?

Intellectual Property (IP) is your company's most valuable asset, and the ability to defend it against charges of infringement may be key to your company's survival. Every lawsuit charging infringement should be taken very seriously and defended to the best of your ability. Even if the lawsuit is overly broad or completely off-base, common sense alone is not enough to fund a solid defense.

IP Defense Insurance ensure that litigation and indemnification funds will be available when you need them.

The Defense policy reimburses:

  • The Litigation Expenses to defend against charges of intellectual property (IP) infringement
  • The costs to assert patent invalidity as a defense.
  • The cost of re-examination proceedings as a defense.

 

The IP Defense Policy Covers:

  • Making, using, selling, offering for sale, importing in commerce.
  • Any product, process or method of doing business.
  • Any word or mark being used in commerce.
  • Any copyrightable material.

 

Advantages to the IP Defense Policy:

  • Prevents abandoning market share by timely and forceful defense of infringement charges.
  • Prevents unexpected cash drain on operations.
  • Provides adequate litigation funds to optimize a favorable outcome.
  • Deters frivolous suits by demonstrating the ability to be financially protected.
  • Reduces the pressure to settle infringement cases because of mounting legal expenses.
  • Makes a company more attractive to investors.
  • Strengthens the viability of a company.

 

What are my Alternatives?

  • Abandon the accused infringing product.
  • Attempt to obtain a license from the accuser from a position of financial weakness.
  • Incur a burdensome royalty payment.
  • Pay for the legal defense costs using cash reserves or credit lines, if any are available.

 

How Can I Protect Myself Today?

To find out more about how you can protect your company and your Intellectual Property, contact  This e-mail address is being protected from spambots. You need JavaScript enabled to view it  at 339-200-8668 to obtain:

  • a fillable PDF application emailed to you. Email the completed Defense application along with a comprehensive overview of what the applicant wishes to insure to Trilogy Insurance Group.
  • a copy of the IP Defense specimen policy.

 

For the Defense underwriting due diligence, the applicant must include along with the application the underwriting insurability search fee, or in lieu of the search fee, a comprehensive freedom to operate opinion from outside counsel that is 6 (six) months old or less.

Include product descriptions of what is to be insured, i.e. product brochures, operational manuals, relevant patent claims, if any, sample specimens and/or source code.

 

What Are The Terms?

  • Limits Available: $250,000 up to $10,000,000 (Higher limits may be available).
  • Policy terms available up to three (3) years
  • The Defense Insurance Policy is Claims Made and Reported.
  • The Defense Insurance Policy is written on an annual basis.
  • 10% Co-Pay (Policy usually pays 90% of the legal costs until the per claim limit has been reached).
  • 2% minimum Self-Insured Retention (SIR) of per claim limits. Higher options available.

 

Pre-existing threats of infringement are excluded from coverage under this Defense Policy. Threats include, but are not limited to, warning letters and/or emails accusing infringement and verbal threats of infringement. Under this policy the threat of litigation must be made during the policy period. Damages will be covered back to the date the infringing activity began, not the actual threat itself.

There is a 90 Day Exclusionary Period under this Defense Policy. That means that any threats of infringement brought during the initial 90 (ninety) days of the policy are excluded from coverage. The 90 (ninety) days are not lost; they are added to the end of the last Defense Policy held by the Insured.

 

What Can I Expect For Premiums?

  • Average Policy Premium (Based upon applicants quoted); Policy Limits of $2MM/$2MM; Average Risk
  • Coverage for 1 Product: $20,300
  • Coverage for 2 Products: $30,400
  • The actual cost per insured IP will vary according to type, subject matter and other factors.
  • All premium quotes are given only after an application has been submitted for insurance.
  • Premium indications can be obtained by contacting Trilogy Insurance Group.
  • The premium can be paid up-front or financed.
  • A down-payment of 20% of the premium (plus any applicable taxes) is due fifteen (15) days after binding coverage.

 

How Does The Claims Process Work?

The Insured may invoke the policy by:

  1. Notifying the Company of the threat of infringement and other relevant facts by completing a claim form provided by the Company.
  2. Providing the Company with a favorable opinion letter from independent IP counsel regarding the issues of non-infringement.
  3. Upon compliance with the policy terms, the Company will then authorize the suit and the policy will begin to reimburse the Insured for the Litigation Expenses.

 

Who Controls the Lawsuit?

The Policy Holder controls the lawsuit.

The Company may suggest reliable and preferred counsel to the Insured but the Insured ultimately chooses. Counsel must, however, adhere to litigation and billing guidelines set-forth by the Company to ensure the full value of the policy is realized. The Insured dictates the settlement terms, if any, not the Company.

 

Applicant should consult a copy of the Specimen Policy itself for all terms and conditions of the Policy or for any specific questions. The above marketing material in no way changes the terms or effect of the Policy language nor is it meant to replace the Policy language.

 


Litigation Is Expensive!

According to a recent AIPLA Survey, the average litigation costs for an infringement suite through trial (excluding damages) is:

  • Between $1MM and $25MM when the amount is in controversy
  • $600K for copyrights
  • $2.5MM for patents

Request a Quote

Please Contact Garen Suzan at 339-200-8668 to obtain:

  • PDF application
  • Copy of the sample policy

Have a Question?

  • Call us at 339-200-8668