Intellectual Property Insurance – Looking Ahead – Intellectual Property
The booming start-up culture in India has led to a massive influx of investment into the Indian market, creating entrepreneurs on the fly. In 2020, India is only second to China in venture capital funding. Many of these start-ups possess some form of valuable intangible assets, in the form of intellectual property. It can be a patented technology, a trademarked logo or slogan.
If you’re a start-up CEO or entrepreneur, insuring your intellectual property can alleviate many worries while adding an extra veneer of protection to your company’s assets, trade secrets, and technology.
There are widely four types of insurance policies–
Breach Defense Coverage
This policy provides money for defense costs, when a company is accused of infringing another company’s intellectual property. The insurance company takes charge of the dispute and the settlement of any dispute against you. If you are found liable for infringing a patent, trademark, copyright, or other form of intellectual property, you don’t have to fund the litigation out of your own pocket. A defensive policy protects the insured against any intellectual property owner who brings an action for infringement against him during the term of the policy. Coverage under such a policy may encompass charges of patent, copyright, and trademark infringement, but may be limited to one or more of these rights, or a combination thereof. , according to the police. The Insurer pays defense counsel’s fees and any settlement costs or damages (if any) awarded under this policy. Defensive policies rely on a duty to defend the insured, which is triggered when the plaintiff alleges a claim that the insurance policy may or may not cover.
Commercial liability insurance
Standard CGL plans often cover “publicity damages” (sometimes referred to as “personal and publicity damages”), which can cover various forms of intellectual property claims depending on how those terms are defined in the policy.
However, not all intellectual property claims will be covered by the “public injury” coverage of a CGL policy. Due to differing definitions of “publicity damage”, many of the exclusions included in some CGL policies, the specific facts of the claims, and the legal theories stated, the insureds, have had mixed results. Claims of copyright, trademark, service mark, and trade dress infringement, for example, are often covered by a CGL policy’s “public injury” coverage (unless excluded). In contrast, obtaining coverage for unfair competition claims under the CGL policy’s “publicity harm” coverages may be more difficult unless the claims include “misappropriation of advertising ideas or style of business conduct” or “use of another’s advertising concept”.
Coverage for the enforcement of intellectual property rights
This policy helps the insured to take preventive measures and to quickly assert his rights. This helps build an offensive approach, where violators are prosecuted at the first sign of illegal IP infringement and use. The litigation will be funded by the insurance company, allowing you to stop infringement of your trademarks, copyrights or patents, while also seeking damages resulting from past infringement and use. Typically, the policy covers the cause of action arising from copyright infringement, trademark infringement, misappropriation of slogan or title, commercial defamation, violation of the right to life privacy and publicity and breach of implied contract arising out of the alleged use of the Submission’s idea or other material. However, the policies do not insure the insured for any kind of offensive litigation.
Media liability insurance
Media liability plans address the risks faced by businesses such as media and entertainment companies that create or use non-patentable types of intellectual property. Liabilities arising from the dissemination of the policyholder’s creative works and/or publicity for these works throughout the term of the insurance are normally covered by the policies. In addition, they are often “named risk” policies, which means that they cover only a limited number of causes of action, such as one or more of the following: violation of the right to authorship, theft of non-copyrighted ideas, trademark infringement, and breach of implied contract relating to a third party’s submission of an idea or other intellectual property. Submission of an idea or other creative content to the policyholder, defamation, commercial libel, infliction of emotional distress and invasion of privacy rights are all covered by the policy .
In the United States, the rise in patent litigation, especially in the pharmaceutical industry, is driving up product prices sharply. Insurance against patent infringement as well as offensive litigation solves this problem. Intellectual property litigation can be expensive, and it is only getting more so. The high stakes of intellectual property litigation can, in some cases, jeopardize a company’s survival. Additionally, the likelihood of a specific company becoming embroiled in intellectual property litigation increases. Given these realities, it is reasonable that some insurers have developed policies specifically for companies concerned about these risks. In general, the extent of protection offered by one of the many policies can often be tailored to the particular needs of the insured.
Intellectual property insurance is now commonplace in states, especially in technology-specific industries or those that require protection against infringement due to the considerable reliance of their business on their intellectual property.
For some companies, intellectual property insurance may not be necessary. The right level of insurance protection could mean the difference between survival and mortality for a small tech company whose intellectual property portfolio is its most valuable asset, or for a new competitor trying to break into an industry where Aggressively enforced intellectual property rights are the rule. rather than the exception. Given the value of intellectual property, an increasing number of policyholders are negotiating tailored insurance policies to better manage their intellectual property risks.
In India, intellectual property insurance is relatively new. The 161st Report of the Standing Committee on Commerce Related to the Department speaks briefly to the future of intellectual property insurance legislation. The Committee suggests that the insurance industry participate in covering/protecting the growing financial loss of an intellectual property in order to reduce the monetary risks, by amending the Insurance Act to incorporate insurance for the intellectual property of value.
Considering recent trends in the global market, India is likely to follow in the footsteps of the United States, where specific insurance policies will be available for businesses to provide protection against claims arising from diversion. , theft, misuse or infringement of any intellectual property.
Intellectual Property Insurance – A Look Ahead
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.