Intellectual Property Insurance: The Ultimate Guide
Intellectual property or IP is the creation, a work, an invention that comes from a person’s creativity. It can be in the form of a product design, a manuscript, a symbol, an invention, an image or name that is commonly used in business, a literary work, or a piece of art. And you, as a creator, have the right to obtain intellectual property. IP aims to legally protect any individual concerning their work in the form of patent, copyright, and trademarks. In return, you will be rewarded for your creativity through financial benefit and recognition for your creation.
In the business world, intellectual property is the beginning of all the potential opportunities. It is the start, the horizon, as well as the end. With this, every company will do whatever it takes to protect intellectual property from their competitors. Here’s everything you need to know about intellectual property insurance.
What is Intellectual Property Insurance?
Intellectual property insurance, also known as IP insurance, protects you and supports you from the legal costs embodied while you file a lawsuit like theft and infringement of intellectual property. You are also protected with appropriate and essential protection if you do not want to suffer financially from the legal defense costs.
What Type of Insurance Covers Intellectual Property?
If you want to explore intellectual property insurance, it is most commonly divided into three basic types.
This intellectual property coverage focuses on the infringement of a contract or similar situation where you use, sell, and offer a product or service protected by law. Infringement defense will help you cover all the claims against you.
Abatement Enforcement Coverage
This intellectual property insurance coverage allows you to pursue infringement claims. Your insurance company will provide you with financial resources to protect your property and enforce your intellectual property rights.
It is one of the types of IP that focuses its scope on business. It protects you as the owner from any theft of your property. Your IP insurance company will also cover the cost and losses that happen during this period. You are entitled to infringement claims and guaranteed a free legal defense and court services.
Types of Intellectual Property Risks
The most common risk that one can encounter in intellectual property insurance is infringement by a third party. However, there are still risks that you can relate to IP. The following are the processes and situations that you need to take into account:
- IP Terms and Conditions for Commercial and Development Agreements Associated with Third Parties: the terms and conditions are important, especially in your business. It is the bloodline of the brain itself of your business. That is why it is one of the primary targets and directly suffers from risks. If you are starting a business and do not know much about the terms and conditions, review it first and ask an expert. Signing a contract without reading and understanding the content can lead to unfavorable results.
- The Activities of Your Business: for example, publication, advertisement, and even the designs. When it comes to your business, your publication, advertisement, and designs play an important role. As long as it is catchy and follows the market trend, your competitor’s mindset will not allow you to win. They can do whatever it takes, even obtaining your ideas – intellectual property.
- Usage of the Open-Source Software: if you are using open-source software, it means that you are giving your authority to other users to access your data. It is not a good idea, and it can also lead to theft. It would be best if you would secure and protect your data using private source software.
- Involvement in Standard Inter-Operation Activities: It involves the standardization of activities. It actually involves a process of performing two or more operations using the same shared network. If you are not careful, a third party might get or worse, use your system.
- Involvement in Open Innovation Activities or Gatherings: Gatherings and activities are ways to attract potential investors. However, if you present all of your data, there is a possibility that they will copy and use it with their own business operation.
How Much Does Intellectual Property Litigation Cost?
The International Risk Management Institute (IRMI) states that IP litigation continues to increase every year. In most cases, the increasing stakes of IP litigation pose a threat that can destroy your company and business. That is the reason why it is costly and has a substantial impact on your business or company. Engaging in a risk transfer is also a necessity if things get worse.
In the United States, for example, the process of litigation is long. If you include the damages, settlements, and litigation expenses, the IP case costs are reaching five to six figures for small businesses. At the same time, large companies and organizations spend more than eight figures.
If you have intellectual property insurance, you will not suffer financially. Your intellectual property insurance company will cover all the costs and help you with the court defense and claims. It would be best to look into the IP insurance policies to understand the processes and your coverage.
Depending on the size of your business, intellectual property coverage rates start at around $500 a year to provide basic coverage.
How to Manage the Financial Impact of Intellectual Property Risks
The rule of thumb is to prepare for every possible outcome that you might encounter. Once you prepare and manage IP litigation risks, it goes through the root cause of your organization’s understanding of IP. Once you know and understand the processes, it would be best to register your IP right away to claim its ownership. Remember, the easiest way to protect your IP is to register it with a patent, trademark, or copyright rather than having it unregistered for a long time.
Moreover, you can enter your company into an agreement by having a written agreement to protect your IP assets further. The written agreements include a non-disclosure agreement, employment contract, licensing agreement, and non-competitive agreement. Also, keeping track and keeping a paper trail of the people involved is essential.
Why Protecting Your IP is Important
Many companies do not have any idea what is the essence of IP. Some do not even know its value and do not keep track of its ongoing potential. Some copyright and trademark are indeed acceptable even if you do not register them. However, registration plays an important role in maximizing its potential and enjoying benefits. Once you register your service or your trademark in the United States Patent and Trade Office (USPTO), you will have a constructive notice to the public about your claim of ownership.
Once you successfully register your mark, you are entitled to the following:
- Just right to use your mark under certain terms and conditions;
- A presumption of validity of the mark, the ownership and the exclusivity to use the mark in your business;
- The right to ask for costs, treble damages, and attorney’s fees during infringement lawsuits. You can ask three times the actual amount of your financial losses;
- Right to destroy the infringing articles; and
- The ability and right to litigate your case in the federal court.
Intellectual Property Cover FAQs
Does Professional Liability Insurance Cover Intellectual Property?
Many business owners today only have general liability coverage. While the typical general liability policy provides coverage for claims of property damage and bodily injuries, most insurers will deny the most common types of IP claims, such as trademark, trade dress, copyright and patent infringement, as they are beyond the scope of the policy.
What type of Insurance Covers Patent Infringement?
Patent insurance is a form of intellectual property insurance designed to protect you in case someone infringes upon your patent and causes you a business loss. This type of insurance is more of a liability policy for manufacturers.
How to Register Service Mark and Trademark
The first step in registering your company’s intellectual property is through an electronic application. The Lanham Act guides the trademark registration, and it allows service marks and trademark owners to pay at least a $350 fee. After this, you can file your application and get your verified statement in the United States Patent and Trade Office (USPTO).
The first question that you need to answer is when and in what case you first use the mark. If you use it in your business, make sure that you include describing the goods related to it and the mark itself. If you get your verified statement, you must state and justify the mark. It would be best to use it in your business, and no other individual will have the right to use your mark.
How to Register a Copyright
Registering your copyright in the United States Copyright Office can give you lots of benefits in your judicial proceeding. As a copyright owner, you will receive a certificate of copyright registration that constitutes prima facie evidence of your copyright validity and the facts under your copyright certificate.
The online application is applicable in registering your intellectual property rights. To apply, you need to pay $35 as a filing fee, and you need to provide your name and address, type of work, the year you created your document, and other identification information. The processing time can take you eight months.
How to register a Patent
Registering a patent is more complicated than copyright and trademark. It often requires a patent attorney who has experience in the filing and drafting process. You need to pay a fee, produce an oath, and include the specification and a drawing of your invention. You will require to state an oath and indicate that you are the first inventor of the machine, manufacture, process, or improvement. In the specification, you will include the written description of your invention and the process and manner on how to use it.
Finally, the financial cost of intellectual property cases is expensive, and it will continue to increase over time. That is the reason why investing some of your money to have intellectual property insurance is a good thing. Do not let other people steal your hard-earned ideas. Think of the threat that it will bring to your company once you suffer from patent infringement or copyright loss. It is like a nightmare, and no one would want to face it if you are not insured and protected.
People are now facing significant changes because of the digital era. The needs of every individual depend on their risk and their way of living. To address this issue, there are various policies that you can choose from, and you can evaluate them and connect them with your needs. Intellectual property insurance is essential to every company, especially if your primary focus is on artificial intelligence. You can defend your intellect and move through with your business without experiencing hassle.
Did you like this article? If so, make sure you read more about data breach insurance as well
Get A Quote And Get Coverage Today
Our Insurance agents are ready to help you out.