There has been tremendous recent growth in the range of specialized insurance policies offered to protect against intellectual property (IP) claims. “Traditional” policies may cover a given IP claim, but specific IP policies are growing in popularity as policyholders with IP-related risks look to bolster that aspect of their coverage portfolio. Because specialized IP policies are less common, less standardized, and less tested in courts, it is important that policyholders be knowledgeable about the market for IP coverage, including the types of coverages and specific policy wordings being offered. Here are a few practical tips to consider when securing such policies.
The world of patent defense insurance is evolving. What once was governed by a routine part of the “advertising liability” section of the Commercial General Liability policy is now the focus of specialized insurance products, the contours of which are still being defined.
Imagine that your company has finally released its new flagship product, which is slated to be the new lifeblood of the company. You’re elated when early sales far exceed expectations. But soon you are hit with a demand letter from a competitor alleging that the product infringes its patents, and threatening suit. Remembering that your company purchased comprehensive coverage under its commercial general liability (CGL) policy, you feel some initial relief—but soon your insurer tells you that the general policy does not provide patent coverage, or even expressly excludes such claims. Suddenly, you’re left wondering how your company will weather a costly patent lawsuit while continuing to roll out its new product.