Insurance patents
New assurance products can now be protected from copying with a business method patent in the United States.
A recent example of a new insurance product that is patented is Usage Based auto insurance. Early versions were independently invented and patented by a major US auto insurance company, Progressive Auto Insurance (U.S. Patent 5,797,134) and a Spanish independent inventor, Salvador Minguijon Perez (EP 0700009).
Many independent inventors are in favor of patenting new insurance products since it gives them protection from big companies when they bring their new insurance products to market. Independent inventors account for 70% of the new U.S. patent applications in this area.
Many insurance executives are opposed to patenting insurance products because it creates a new risk for them. The Hartford insurance company, for example, recently had to pay $80 million to an independent inventor, Bancorp Services, in order to settle a patent infringement and theft of trade secret lawsuit for a type of corporate owned life insurance product invented and patented by Bancorp.
There are currently about 150 new patent applications on insurance inventions filed per year in the United States. The rate at which patents have been issued has steadily risen from 15 in 2002 to 44 in 2006.
Inventors can now have their insurance US patent applications reviewed by the public in the Peer to Patent program The first insurance patent to be granted was including another example of an application posted was US2009005522 "risk assessment company". It was posted on March 6, 2009. This patent application describes a method for increasing the ease of changing insurance companies
Intellectual property insurance (IP insurance)
Intellectual property (IP) infringement occurs when someone uses your IP without your permission.
As an owner of IP you have the right to prevent other people from using your IP.
Taking action against a person who infringes your IP is known asenforcement.
One way of preparing for possible enforcement costs is to take out an insurance policy to cover the costs of legal proceedings, known as an intellectual property insurance policy.
For other ways you can protect your IP, take a look at ourOwnership of IP information on preventing infringement.
IP insurance can protect you financially from trademark or patent infringement claims up to your policy limits.
IP insurance policies and coverage can differ significantly from insurer to insurer, so it is important that you read the terms of your policy carefully before going ahead.
An IP insurance broker should be able to advise on what IP rights can be covered based on your individual situation. However, there are a number of general rules that usually apply to these products. We've explained some of them below to help you understand IP insurance.
IP insurance explained
The possibility of an unexpected or a deliberate infringement of your IP could be costly, but is insurable and often affordable by comparison.
You may consider that protecting your IP is critical, regardless of the upfront cost, as it may save you money down the track, should the need ever arise to defend or enforce your IP.
The basic idea behind obtaining IP insurance is that your legal costs will be paid if you need to go to court.
Types of IP insurance
IP insurance can be obtained to provide protection for:
- enforcing claims against infringers who breach your IP - legal costs relating to IP breaches includes damages, such as loss of profits or reputation and settlements to any IP right in Australia or worldwide
- defending infringement claims made against you - this includes infringement claims against you as well as claims made against your customers or licensees. Infringement claim often refers to a violation of a copyright or some other type of IP theft. The claim is often based on plagiarism, meaning someone steals the creative work of another person in an attempt to earn some sort of reward, be that in the form of notoriety, or money
- both defending and enforcing claims.
IP insurance should cover the expenses you incur as a result of prosecuting an infringer (pursuit expenses) for a breach of your IP or defending proceedings, or both, whichever is applicable.
What you should know when it comes to IP insurance
Insurers control the payment of legal expenses and the decision to incur legal expenses.
This means your insurer:
- will need to be satisfied that your case has a good chance of success before funding legal action, especially where enforcement claims are involved
- may have the right to withdraw funding if, for example, you don't accept reasonable negotiated settlement offers
- will not fund unlimited legal expenses. IP Cover is limited by the policy amount you wish to purchase.
The extent of the policy's cover will be based on the policy conditions and limits that you have chosen to select and pay for.
How IP insurance works
Every IP insurance policy is different, so it is important that you carefully read and understand the policy terms and conditions of making a claim, in the event you need to take action.
For you to take action to protect your IP:
- your insurance policy must be current at the time of the claim, and
- the sums that you are insured for need to be adequate, to meet your possible legal costs.
If you think IP insurance cover might be beneficial to your IP, you should contact a licensed insurance broker who can provide you with advice on the type of IP insurance products that would best suit you, based on your specific needs.
