IP Abatement Insurance

Enabling Market Share

Intellectual Property (IP) Abatement Insurance, also called enforcement insurance, assists IP holders in enforcing their intellectual property rights against alleged infringers. The insurance provides funds and services to enable policyholders to more effectively negotiate, protect and enforce their IP rights.

There are several strategic reasons to carry intellectual property enforcement insurance:

  • To strengthen the owners negotiation position and licensability of intellectual properties
  • To provide enough funds to support a strong legal front, thereby increasing the likelihood of a favorable outcome
  • To make funds available when necessary, rather than utilize operating capital or attempt financing
  • To limit the risk of unsuccessful litigation through more informed decision making
  • Litigation Management and Early Intervention services included

Abatement insurance reduces the pressure to settle due to a limited resource of funds. It discourages potential infringement by demonstrating the financial ability to enforce intellectual property. It also prevents loss of market share by quick, decisive responses to infringers, and makes your technology more attractive to investors considering your business.

Infringement Abatement policies include an Economic Benefit provision. This policy, like most insurance, is designed to indemnify a loss, not serve as a speculative opportunity to provide the insured with a profit. Therefore, in the event you win and realize an Economic Benefit from the litigation, you are required to repay litigation expenses reimbursed by the company, up to 125%. You retain the balance of the Economic Benefit. Once the policy is reimbursed, your policy limits will be reinstated for use in another claim during the policy period. Should you fail in your attempt to enforce your IP, there is no payback requirement since you have not received an Economic Benefit.

Abatement policies are written to cover scheduled IP by number – patents, trademarks and copyrights – as well as patent provisionals and applications, both US and foreign. Patent provisionals and applications, although unenforceable, are insured so as to begin a timeline for covered infringement. Upon issue, the policy could respond to infringement that began while the IP was an insured application – infringement that would otherwise be considered pre-existing. Premiums are calculated based on the number of insured IP and their relative risk. One patent, of average risk, at $1 million in limits, is approximately $7000 – $9000 annual premium. Our average Abatement policy, regardless of limits and number of IP, is about $13,000.

This Claims-Made and Reported policy is restricted by a Self-Insured Retention, Co-Insurance and an Economic Benefit provision. Pre-existing infringement, whether known or unknown, is excluded. Please review the policy specimen and consult with your professional advisor for all of the details.

 

For more information, please contact:

PremierSource Risk Managment


(405) 228-7699 • (918) 574-3030 • (866) 239-4015