Insurance Patents: Everything You Need to Know
Patent insurance, or patent infringement insurance, is a type of intellectual property insurance that protects you against unauthorized use of your patent.3 min read
2. Two Types of Patent Infringement Insurance
3. Importance of Patent Insurance
4. How Much Does Patent Insurance Cost?
5. Facts About Patent Insurance
What Is Patent Insurance?
Patent insurance, or patent infringement insurance, is a type of intellectual property insurance that protects you against unauthorized use of your patent. It protects you against business loss if someone uses your patent without your permission. It is primarily a liability policy targeted at manufacturers.
A patent infringement policy can cover the legal costs both for someone accusing and for someone accused of violating a patent. If you don't intend to steal someone else's idea you may think patent insurance is unnecessary, but patent violation is quite common.
Even if you are using an idea in a non-threatening manner, a patent holder can still take legal action against you for the losses. Although you are not required to purchase both types of patent insurance, doing so for a comprehensive policy is common. Your insurance agent can recommend the right solution after analyzing your situation.
Two Types of Patent Infringement Insurance
- A defensive patent insurance covers the legal costs if someone else sues you for infringing upon their patent.
- A patent litigation policy covers the legal costs when you are suing someone else for infringing upon your patent.
Importance of Patent Insurance
- Patent infringement claims are becoming more common since businesses are competing to develop new ideas.
- Traditional business policies do not protect you against the theft of your patent or against someone else's claim of patent violation against you.
- It's extremely important to be able to defend an idea whether or not you originally developed it.
- A large international company may try to sue you for infringement even though you hold a patent. Most people can't afford those kinds of legal fees.
- Small and mid-sized businesses could need help with legal fees from large companies and patent holders alike
- Multinational companies should start exploring intellectual property insurance as they continue to grow internationally.
- You can't apply for a patent policy if you have a legal case pending against you.
Make sure you are proactive during the application process; it increases your chances of approval.
The Facts of Patent Filing as of June 2014
Getting your patent approved takes about 29.8 months on an average.
The Facts of Patent Filing as of June 2015
As many as 591,785 patent applications lie unexamined.
The Facts of Patent Filing as of June 2016
A track one patent application takes about 4.8 months to move from petition grant stage to allowance.
The Facts of Patent Filing as of June 2017
A total number of 408,202 patents were filed during this fiscal year.
The Facts of Patent Filing as of June 2018
There will be about 7,740 patent examiners during this year.
The Facts of Patent Filing as of June 2019
About 100,403 patents will be waiting for continued examination.
The Facts of Patent Filing as of June 2020
Patent approval rate will be about 69.4 percent.
How Much Does Patent Insurance Cost?
- For patents worth between $1 million and $25 million, an infringement lawsuit costs about $2.8 million.
- Amount of damages claimed is about $9 million, which can easily send small companies out of business.
- Patent insurance premiums are far less when compared to the actual legal costs involved.
- Annual premiums usually begin from a few thousand dollars and can go over $25 thousand.
- Just like other commercial policies, patent policy premiums depend upon a number of factors.
- The insurance company takes into account the number of patents you hold and the nature of your business.
- The amount of premium also varies depending upon the limits and amounts of coverage.
The major benefit of buying a patent policy is the underwriting process; it lets you analyze strengths and weaknesses of your patent. Based upon it, you can take measures to prevent making a claim, and keep your premiums low.
Facts About Patent Insurance
It sounds strange when someone asks whether you can have a patent for an insurance product. As of now, you can't, at least not in the United States.
Though you can have a patent for a specific method of insurance business, you cannot have a patent for the insurance as such. This brings into usage terms like "patent protected insurance product" and "patented method of providing insurance".
If you need help with insurance patents, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.