What is Intellectual Property?
Many businesses hold Intellectual Property (IP), which involve a number of different rights which the businesses can possess and own. They can have a value and can be bought, sold, or licensed to others or sometimes used as collateral for loans.
The main IP rights usually contested are:
- Trademarks
- Patents
- Registered designs
- Copyright
- Some IP rights have to be registered, but some automatically are created under the law
It is important to remember that your IP is an asset to your business and is a competitive advantage in your sector of business and isn’t something that should be given away lightly or remain unprotected.
IP is a hidden value to your business and it isn't reflected in your balance sheet and as such it is difficult to place a true value on it. The only time that the value of IP can truly be measured is in the event of a breach of that IP. For example, if a trademark or patent you have developed was lost or infringed it could seriously harm your overall business value.
Intellectual Property
Why do I need to protect it?
In today's litigious society any business should protect its IP portfolio. Obviously registering any part of the IP is the first part of any IP protection plan, but this doesn't mean that you are fully protected. Firstly, you need to monitor what your competitors are doing to ensure you are not breaching someone else's IP or they're not breaching yours.
When you register patents or trademarks and such, whilst in theory you are protected by law, it might not stop other people infringing those rights (deliberately or otherwise) and one way to resolve the situation is legally.
Larger companies know that it is so expensive to bring a legal action to court and they might deliberately infringe your IP knowing you can't afford to defend yourself. On the other hand, if you have no IP insurance in place, could you afford to start proceedings against a competitor knowing the costs could easily reach hundreds of thousands of pounds?
So, smaller companies often have to relinquish their rights because they just do not have the resources to defend themselves let alone attack someone that is breaching their own IP and then subsequently lose value in the business.
But the costs involved a legal battle are the last thing wanted by anyone and before that happens negotiations should start to see whether a resolution can be reached. Maybe by buying or selling a licence to use the items involved.
Insurance to protect IP?
This is where insurance can help. An Intellectual Property Insurance policy can be bought to provide cover for Defence and Pursuit if required.
IP insurance is a form of legal expenses cover that can be purchased for both defence and pursuit costs. This means that should someone infer you are infringing their IP you have resources to defend yourself. Likewise, should you find that someone is infringing your IP you have the resources to pursue them in order for them to cease using your IP.
Insurers will look at the intellectual property involved and the way IP is maintained within the company before arriving at a premium. Depending on the countries involved and the excesses sought, premiums will always be far less expensive than a court case.
So, before you go to an online service, just make sure that you are sure of what you need for your business.
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If you have any questions to ask us about this, or any of our other insurances, we'd be delighted to help. Please don't hesitate to either give us a call on 0808 178 3155 or contact us via our contact page