Intellectual property (IP) insurance. Sounds complicated and do you really need it?
Intellectual property is an intangible business asset that often helps set companies apart from their competitors. Unfortunately, few businesses know precisely what their IP is worth, or how to protect it.
IP insurance is key to supporting your business when defending itself against claims of IP infringement and can help you pursue those who are infringing on your patent, copyright or trademark.
Busting IP insurance myths
In collaboration with CFC Underwriting, here’s our quick guide to some common misconceptions surrounding IP insurance.
1. I run a small business – IP is only relevant to large organisations
Smaller businesses can present an easy target for IP infringement claims because they lack the resources to properly address or defend them. Many SMEs could struggle to survive an IP dispute. Consider what would happen should your business face an injunction preventing you from selling your product? Or if you were required to pay significant damage or royalties to the rights holder?
The cost of simply defending a claim can be significant for a small business even if they believe they are not infringing.
2. We don’t/do have a patent so we can’t infringe
Infringement is the result of a business activity. Holding an IP right (patent, copyright, trademark) doesn’t protect you from infringing on someone else’s IP, nor does lack of IP rights indicate that you can’t infringe. IP rights often overlap and rarely cover an entire product or process. Sometimes patents are granted to different parties for the same thing, and there are cases where an awarded patent will later be invalidated.
3. We came up with the idea ourselves – we can’t be infringing on anyone else’s IP
Although it may be true that you developed an idea from scratch, most inventions today are a ‘next step’ innovation rather than an entirely new idea.
Sometimes multiple parties in a sector will come up with the same solution to a problem without realising it. Just because a company develops something in-house, doesn’t mean it can’t infringe on another’s IP rights and just because they aren’t aware of someone else’s IP, it also doesn’t mean they aren’t infringing. Even if a business feels confident that it is not infringing, it doesn’t mean that someone won’t allege that they are, and it is important to be able to defend such allegations.
4. Only tech companies need to worry about IP
IP is valuable in most, if not all, sectors. If it is valuable to a business, then it is probably valuable to a competitor and is worth protecting! Here are some other key sectors that share the patent or trade secret risk with the technology industry:
- Agriculture
- Automotive
- Chemical
- Energy
- Food and drink
- Life sciences
For business operating in the fashion, homeware and other consumer sectors, trademark, copyright, and design are often important. Simply using technology in a business could result in infringement.
5. It’s difficult and complicated to get a quote for IP insurance
It’s actually very straightforward – all we need to know is:
- Company website address
- Turnover or funding amount.
With this information, we can help you understand your exposure to IP risk and quickly provide you with a quotation.
Apart from helping protect what you already own, intellectual property insurance can also help your business grow. Allowing you to licence your idea to others can make your business attractive to potential investors, knowing your invention or unique idea can’t be stolen by someone else.
To find out more, speak to our team, or for further information on IP insurance, take a look at our guide to understanding intellectual property risk.