Your intellectual property can be vital to the success of your business. Understanding what it is and how to protect it is therefore crucial.
Intellectual property (IP) is a broad term which is used to describe the legal rights arising out of intangible business assets that often differentiate companies from their competitors. These can include your brand, a product or process, a piece of software or even a customer database.
IP rights enable your business to invest in and reap the benefits of what makes it unique – your creativity, innovation, and branding – and prevent others from copying what you have developed.
Unfortunately, few businesses know precisely what their IP is worth, or how to protect it.
Intellectual property 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.
There’s a lot of terminology surrounding IP. Here are a few key definitions that you need to know:
Patent
A UK patent can help if you want to take legal action against someone who uses your invention without your permission. A patent lasts for five years but you can renew it each year up to a maximum of 20 years. A patent must be new, inventive and useful. It provides the right to prevent others from making, using or selling an invention however, the patent holder has to enforce their rights.
Trade mark
A trade mark protects your brand, for example the name of your product or service. Trade marks can be many things that identify your brand, product or service, including a word, symbol, name, design, fragrance or colour, or some combination of these. The purpose of obtaining a trade mark is to identify and distinguish a good, product or service as belonging to a particular seller or provider.
Copyright
Put simply, copyright protects your work and stops others from using it without your permission. Copyright protection exists automatically – you do not have to apply or pay a fee – and as such, there is no register of copyright works in the UK.
Trade Secrets
A trade secret can be many things. It’s essentially a confidential piece of information, i.e. a secret, that provides an organisation with a competitive edge. Trade secrets can be extremely valuable and can include sales methods, supplier lists and secret ingredients, such as the Coca-Cola formula, or far more mundane items such as the contents of a presentation to potential investors.IP infringement
IP rights are infringed when a product, creation or invention protected by IP laws are exploited, copied or otherwise used without the permission or consent of the person who owns those rights or their representative.1This can range from the use of technology protected by a patent to the sale of counterfeit
medicines or software to copying a film and making it available online as well as selling counterfeit goods such as clothing, makeup, and DVDs.
What should intellectual property insurance include?
IP cover is usually best arranged as a stand-alone policy. Some professional indemnity insurance policies do include an element of IP insurance, but often with specific exclusions for patents and trade secrets.
These are the key areas that you should look at when considering IP insurance:
- Infringement defence – A good IP insurance policy will cover the costs of defence against infringement allegations and out of court settlements, or damages. The defence cover also includes cover for contractual liability as well as contract breach allegations made by contract parties.
- Infringement pursuit – Pursuing IP infringement can be very costly, and not every business can afford to protect their IP by taking legal action. IP infringement pursuit cover provides for the costs incurred enforcing IP rights against third-parties.
- Invalidation challenges – Invalidation challenges from third parties are often an uninsured exposure and can be very costly to resolve unless there is IP insurance in place.
- IP oppositions – When you make an application to register your IP, it is impossible to know whether the application is going to be of concern to other businesses. Resolving IP opposition issues can cost thousands in legal expenses, but IP insurance can cover this risk.
- Breach of contract pursuit – If a contract is breached and your IP is infringed, you could take legal action to resolve the breach of contract. This can be expensive, complicated, and time-consuming – but can be covered by IP insurance that includes breach of contract pursuit cover.
- Loss of an IP right – If your IP rights are revoked or invalidated because of infringement, this can have a huge impact on your business. IP insurance can provide cover to reimburse fees that you paid to register and maintain the IP right.
- Loss of future profit – The inability to use an IP right can be a significant loss to your company’s activity. Therefore, you should consider cover for the loss of potential future income.
1 IP crime and enforcement for businesses – GOV.UK
Find out more about protecting your intellectual property
To learn more about IP and how to protect your business from the associated risks, talk to our team of experts.