The problem, particularly if you’re a SME, is finding the resource to manage your intellectual property (IP) and then to enforce your rights if they’re infringed. The good news is that IP insurance offers a solution.
Registering your IP assets puts you on the same footing as larger competitors and gives you the right to challenge infringements. But enforcement can be costly, complex and time consuming, leaving you at a disadvantage when battling against bigger firms with deeper pockets.
Here are three examples of how our IP cover helped clients fight their corner successfully.
Pursuit of IP infringement
In a claim we managed, a small renewable energy company had developed and was selling energy saving devices for homes, which incorporated machine learning technology.
They discovered a competitor was selling similar products in the US and believed the firm had infringed one of their US patents.
After issuing a cease-and-desist communication, followed by a notice of intent to issue legal proceedings, the competitor agreed to negotiate a license agreement. This included compensatory payment to the renewable energy company and royalty payments on future sales of the competitor’s device.
Legal costs ran to six figures, which would have fallen to the business had they not had IP insurance. Instead, our cover meant they only paid a fraction of these costs – they also secured a future revenue stream.
Contractual obligation
A software developer client (turnover: $1m) had created AI-enabled software to link investors to fund managers. They’d successfully completed a funding round which included strategic investment from a financial company on a joint venture basis.
The new joint venture partner noticed a third-party competitor was infringing the IP. The partner was concerned this would put their investment at risk.
The contract with the joint venture partner required the software developer to enforce IP rights once either party became aware of an infringement.
The cover under our IP policy enabled them to pursue the competitor for infringement. As a result, the third party ceased trading and the software developer protected both their contract and their market share.
Contract breach
We supported a design company that discovered a previous contract party was using its designs without paying the contractually agreed royalty.
The company had developed designs for a unique bicycle suspension technology, but the contract party – a larger firm – chose not to use them in its bikes, and so royalty for derived revenue was not applied.
But, the contract party later used an identical design in a new range of bikes. Despite generating revenue from the sale of these bikes, it didn’t pay royalties for derived revenue from the designs. This represented patent infringement and trade secret misappropriation.
Calling on our IP insurance, the design company was able to enforce its contractual rights and remedy the IP infringement. The policy covered the legal costs, while the associated action secured compensation from the contract party.
IP insurance gives you the support necessary to put some bite into your IP registrations and the firepower to enforce them against infringements. The cover can also provide guidance in selecting appropriate legal representation for cases that are generally complex and require specialist skills.
Your IP makes up a large part of your corporate value – making sure you can enforce it will stop others using it to their own advantage.
Contact IP@cfc.com to find out more.
