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Patent and IP Insurance: Protect Your Ideas

Carl Niedbala - Founder Shield
Carl Niedbala

COO & Co-Founder


So what exactly is the value of an idea? These days it can make or break your business.


There has been a 71% increase in patent lawsuits over the last 6 years. There was a mind-blowing number – 2,754 to be exact – of patent infringement lawsuits filed in 2015; for which the litigation costs an average of $3 million+ and can take 1-3 years to resolve. Trademark and Copyright infringement suits are a little bit “cheaper, ” but can still end up costing you a whopping $700k. The kicker? Commercial General Liability Insurance (CGL) covers some of these types of claims, and Errors And Omissions Insurance (E&O) or Media Liability Insurance will cover copyrights and trademarks depending on your policy, but you won’t find patent coverage included in any of them.  

You must be thinking “WHAT THE ^&*%, I’m screwed!! How do I protect myself from this madness?!” The answer? Intellectual Property Insurance.


Intellectual Property Insurance: The Lowdown

How do you know if you need IP Insurance? It’s pretty simple: if 1) you hold patents for your product or service or 2) you operate in an industry in which the products/services are commonly patented (and therefore patent trolls are lurking).  

What risk factors should you consider when deciding whether or not to purchase IP Insurance? An IP suit can bankrupt your business, forfeit your rights to sell products and servicesreduce your market share, revoke technological advances, rob you of valuable time for growth during the suit, ruin your company’s public image, or even force you into ugly licensing deals.


Other Quick Facts

  1. Services can be patented too! A product doesn’t have to be tangible to be subject to infringement.
  2. Sometimes just having an IP Insurance policy in place will deter patent trolls from coming after you.
  3. Cost: steeper than most policies (given the novelty and uncertainty of the current state of the law) and incredibly dependent upon your industry.


Enforcement (Abatement) Insurance vs. Defense Insurance

  1. Enforcement: a policy that helps you enforce your IP rights when they’ve been infringed upon
    • Competitors steal strategic assets (patents/trademarks/copyrights) on a daily basis!
    • Many companies do not budget for this kind of suit and are susceptible to loss of market share if a suit arises.
  2. Defense: covers the gaps left in other traditional insurances that leaves you open to the costs that come with IP suits.
    • All companies with novel (and therefore patentable) technology or business processes run the risk of infringing upon another business’s intellectual property.  Technically you don’t even have to own IP to get caught in a costly suit!  Simply being accused of infringing on someone else’s rights can be enough.
    • Many companies do not budget for this kind of suit and are susceptible to financial ruin if a suit arises.  It happens more than you’d think.


Your intellectual property is one of your most valuable assets as a business.  We can provide both enforcement and defense coverage and even have partnerships with companies that provide proactive monitoring and patent troll prevention services.  If you feel like this coverage may be a good fit for you, don’t hesitate to reach out!  

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