قالب وردپرس درنا توس
Home / Insurance / Insure your intellectual property – CoverLink insurance

Insure your intellectual property – CoverLink insurance



As intellectual property becomes an important part of more companies’ assets, companies must consider the additional exposures they face.

There are several types of intellectual property rights protected under federal law: trademarks, copyrights, patents, trade dress, and trade secrets. To protect your business, there are two types of intellectual property protection: the first protects a company sued for infringement by paying for legal defense, and the second helps pay the legal costs of suing an alleged infringement.

If there is a threat that (1) your company may be sued by a competitor for infringement or theft of intellectual property, or (2) you do not have the funds to cover legal fees associated with defending your patent or trademark, it is important that you purchase this coverage. Defending infringement lawsuits can cost hundreds of thousands of dollars, not including the cost of damages and preliminary rulings. In patent infringement cases, legal fees can easily exceed $1

million.

Budgeting and planning for the protection of intellectual property rights can not only save your company a significant amount of capital; it can also help keep your business profitable when legal bills accumulate quickly. There are several options for covering these exposures: the “advertising damage” provision of the standard commercial general liability policy; approvals of errors and omissions policies; and specialized policies offered by certain insurance companies specifically designed to protect intellectual property rights.

Commercial General Liability Policy – Advertising Damage

The Commercial General Liability Policy, or CGL, is a standard liability policy that offers broad coverage. Coverage for an advertising injury often falls under Coverage B of a CGL. Any act by the insured that in any way infringes or violates the rights of others (referred to in the policy as a crime) is subject to personal and commercial liability, even if only those acts specifically stated in the policy are covered. The coverage under the provision “advertising damage” is limited to the damages that are directly related to the advertisement. Therefore, the insurance covers liabilities incurred by the insured as a result of claims made against it.

Coverage B sometimes provides policyholders with coverage in cases involving trademark infringement; however, copyright claims are only successful if they are directly related to advertising, and patent claims are rarely covered by the “advertising injury” provision. The cases that allow coverage in a patent infringement case are generally limited to cases where a court finds contributory infringement or encouragement of infringement through an advertising medium. Because the “advertising damage” provision in a standard CGL is quite limited, many companies consider additional coverage.

Special Recommendations and Policies

In addition to CGL, specialized policies may be better suited to a company’s unique exposures. These are error and omission liability policy recommendations that can vary in focus from media and communications to patent infringement. Note that these policies have not been the subject of much litigation, and thus legal guidance on coverage determinations is comparatively limited. It is important to consider multiple carriers, as available coverage varies widely from carrier to carrier.

Infringement defense and reduction insurance

A third option relates primarily to patents, although copyright and trademark riders may be available. Carriers have developed policies specific to intellectual property rights, usually with patents in mind. When it comes to patents, there are three basic policy types: (1) defense and indemnification; (2) defense only; and (3) offending, or offending, reduction insurance.

A defense and indemnity policy would provide defense coverage in a patent infringement lawsuit and, if the party in question is found liable, would pay for damages, including prejudgment interest. A defense-only policy, pretty much what it sounds like, only covers the costs of the defense and does not cover damages awarded to the successful party, while an offensive policy only covers the costs of pursuing an infringement. Some carriers will modify some of the above policies to include endorsements for trademark and copyright infringement for an additional premium.

Exceptions to coverage

In addition to specific exceptions, there is a general exception to the CGL that states that there is no coverage “for an offense committed by an insured whose business is advertising, broadcasting, publishing or telecasting.” With the increase in claims, many carriers are drafting exclusions that specifically exclude coverage for copyrights that fall outside the scope of infringement of copyrighted advertising materials, patents, trademarks, and the like.

It is important to be aware of the exclusions of any insurance policy that you purchase. The most common exclusions listed in intellectual property policies are for willful infringement, antitrust violations, infringement existing or known at the effective date of the policy, and criminal acts

Claim coverage

To maximize coverage, there are a number of steps your business should follow. Failure to investigate the existence of coverage in a timely manner can absolve a carrier from liability and create grounds for a malpractice suit against the intellectual property counsel. Although courts have held third-party intellectual property agents liable for failure to enforce coverage decisions, companies should still proactively recognize and review the potential for insurance coverage to protect their intellectual property.

If a claim has been made against your company, you have an obligation to notify your carrier. In fact, it is in your best interest to notify your carrier immediately as a delay may be grounds for denying coverage. In cases where a formal complaint has been made to the company, the following six steps are recommended.

  1. The policy or policies should be analyzed by an attorney to determine under which policies the damages may be covered. At this stage, the complaint should be scrutinized for the types of issues raised and should be compared to relevant policy clauses.
  2. The company should immediately file a defense with the carrier. The tender should identify any insurance that may provide cover, including the specific clauses.
  3. Request a quick response to the offer. If a sufficient extension of time to respond is not granted, it is possible that an answer to the complaint will be filed before the issue of coverage is resolved. If so, defense counsel should be retained until the issue of coverage is resolved.
  4. Review the carrier’s response to the company’s tender. The carrier may accept defenses; it may defend under a reservation of rights; the carrier or policyholder may seek a declaratory judgment to establish coverage; or it may reject the tender.
  5. If there is a conflict in the interests of the carrier and the policyholder, the policyholder should insist on the right to control the dispute and should further insist on independent counsel.
  6. Be careful what documents are shared with the carrier, especially in cases where the carrier has reserved the right to deny coverage. Although the policyholder has a duty to cooperate with the carrier, in a case where a reservation of the right to deny coverage has been filed, the presentation of certain documents to the carrier may result in a waiver of the attorney-client privilege on the subject matter. question about the documents produced.

Compare policies

Insuring your company’s intangible assets and its liabilities is an important part of risk management. Insurance for both intellectual property infringement and for an infringement claim against your business can provide financial security and safety.

CoverLink Insurance can help you compare your desired coverage with the specifically named crimes in policies based on listed risks, and our advisors can investigate any exclusions that may weaken the coverage you’re seeking. We can further help you identify the dangers associated with intellectual property and technology companies and can help you choose the right policy for you. Contact us today at 937.592.9076 to see if the coverage you are purchasing meets your needs in today’s marketplace.


Source link