For today’s innovators and entrepreneurs, a great idea can be a fast track to a great fortune. This could mean an inadvertently successful glitter-mailing business or being part of a multi-billion dollar acquisition by Facebook.
Still, whether your idea requires a tub of shiny sprinkles or the hottest new messaging app, they all started out as a concept. For various start-up and high-tech companies, a lot of their book value is represented by intangible assets in the form of intellectual property.
But, while people don’t think twice about protecting their physical assets, these ‘creations of the mind’ could be exceptionally valuable and underpin future growth and financial success. So what can you do to protect them?
The answer is simple; Intellectual Property (IP) Insurance. This is a specialist form of cover that protects your business from the legal costs associated with either defending or pursuing an allegation of IP-related infringement.
Enforcing and defending your IP
Anyone who has been involved in IP litigation will testify that it can be a long, drawn-out and extremely costly process. With the added threat of injunctions and lost revenue – including whilst it is ongoing – the damage can be irreparable.
Not only can IP insurance offer protection against legal costs and resultant awards, it can also provide cover for various loss mitigation measures, (such as counter claims and product recalls) as well as providing financial assistance for minimizing any reputational injury or protecting the brand.
Should the claim be upheld then the cover can also offer some financial easement in the form of repaid fees and lost future profit.
Clearly all that is great from a defense perspective, but what the insurance can also provide is the financial backing to bring a legal action against a party who has infringed your IP, which let’s be honest could well be the cornerstone to your entire business model.
Needless to say, as with any form of insurance, there is an expectation that due consideration is given to understanding and managing your risk. Depending on the nature of the Intellectual Property, whether it be a Patent, TradeMark, Copyright or Registered / Unregistered Design you need to be confident that you have the legal ownership / entitlement and/or exclusive / territorial rights.
Therefore, as is common to other areas of your business, when it comes to your intellectual property, understanding your peers and your competition is just as important. Obviously, if you are not familiar with what already exists then you are more likely to infringe upon it.
However, from an (insurers) underwriting perspective, undertaking the relevant searches and making the appropriate filings is absolutely critical. This can be a time consuming exercise and interpreting and understanding existing filings can be a complicated process, so if you are unsure, engaging with a Patent and Trade Mark Attorney or similarly qualified legal counsel should definitely be considered.
The government portal https://www.gov.uk/browse/business/intellectual-property offers some insightful articles, reference points and external links to assist in this area.
Taking the next steps
If your business is working on a new innovation, you should take action now to ensure you are properly protected: It’s time businesses are fully aware of their rights. We live in a day and age where there are more claims being made than ever.
The media is littered with examples of IP disputes, with one such recent case being highlighted between Nokia and a small UK start up technology firm ‘Lowdownapp’. In a real David vs Goliath situation, Nokia has taken the smaller firm to task over its use of the word ‘HERE’ on its ‘check in’ location app, stating that it is infringing upon their own HERE brand name for apps and software relating to mapping and navigation.
Cases like these only serve to show why IP insurance is so important in today’s business environment.