Intellectual Property (IP) theft is big business, however the time and cost of bringing criminal charges and a possible court case may often prohibit a business from pursuing the theft. Adviser spoke to David Higgins, Technology Insurance Specialist about the origins of IP insurance and why it has risen to the top of the agenda for many businesses.
P rofessional Indemnity insurance may give some level of protection, but as more of our daily business activities are undertaken online, it has become increasing important for businesses in all sectors to put measures in place to secure their intellectual capital. Many businesses fear that the integrity of their IP may be challenged in the courts, and the cost of this litigation can drive businesses into insolvency or weaken their negotiating position. The UK Intellectual Property Office (formerly known as The Patent Office) works to educate businesses and individuals and to support and grant IP rights for creations and innovations. However, they have reported that 72% of UK companies do not check whether or not they are infringing anyone else’s IP rights, and 96% of UK companies have no idea of the value of their intellectual property*. These figures become even more worrying for businesses trading with overseas markets, where the security of intellectual property is paramount to protecting a design, process or service in a new territory. What is Intellectual Property and why would I need insurance for it? Intellectual Property (IP) is defined as “creations of the mind: invention and artistic works, symbols, names, images and designs used in commerce”(World Intellectual Property Office). The purpose of Intellectual Property insurance is to protect a business’s innovative designs and developments or unique ideas, tangible or otherwise. Many businesses today understand that their competitive advantage relies on the development and delivery of new ideas. A strong, unique IP is arguably a business’s most valuable asset when differentiating themselves from the competition. their IP. Defending your business against an allegation of infringement can result in considerable legal fees, even if ultimately the accusation is dismissed. How would you define assets when it comes to Intellectual Property? A patent usually relates to a tangible good/ invention. Patents will generally last for a twenty-year period. A patent provides the right to exclude others from making using or selling an invention; the most often sighted definition of an invention is something that solves “a specific technological problem that applies to a product or process”. (Mary Bellis, Thoughtco.com) Unsurprisingly, businesses are prepared to go to considerable lengths in order to safeguard
A trademark is also one of the better-known assets. This can be in the form of a logo, a word mark or a strapline that helps to identify one’s products or services and helps to cultivate a brand. The power of a logo/trademark is of considerable importance in many sectors and as such it is important to safeguard your business against a third party imitating your brand or confusing consumers with a logo/ wordmark that is similar or identical to your own. There are strict rules surrounding what can and cannot be trademarked. For example, if a trademark is deemed as overly descriptive it may well run into issues when progressing through the stages of the intellectual property officers’ examination. Copyright is also much talked about, but equally easy to infringe, even inadvertently. Copyright grants the creator of the original idea exclusive rights to decide if and how that idea, production or product can be used by other third parties. Copyrights are most commonly associated with the entertainment sector, for example music producers, photographers, artists and even software producers, but it can apply to all sectors who produce imagery or ideas which might be replicated by others. Many brands today align themselves with imagery or ideas in order to promote their own products: a recent example of this is the TV campaign run by Halifax UK which uses the Top Cat characters to promote their financial services. Obviously for a national brand like Halifax, obtaining consent from the copyright owner would not have been in question, but for a business without the luxury of a large legal and marketing department the temptation to use imagery, especially that which may have been designed decades ago, can be tempting. Yet without the correct agreements, a business would clearly fall foul of a copyright infringement. How can someone protect themselves if they may need to protect their own IP, or are thinking of using someone else’s IP? Firstly, if you are thinking of using imagery or concepts which have been created by someone else you must go through the process of obtaining permission from the copyright owner. There are professional agencies which can help you do this and who can provide you with a contract which can be used to prove your rights should any copyright claims against you be made. Equally, if you are producing designs or concepts which you think someone might replicate, you will need to get them registered to you. In both instances it is possible to obtain insurance cover to protect you against the cost of a claim. For example, if you think you might need to use imagery or concepts produced by someone else, you can consider Intellectual
Property cover (also known as Infringement Liability) which will kick in should a third party (ie the owner of an IP) allege that you or your company has infringed upon their IP. If you think that your own IP might be replicated, or used by a third party, you can take out Intellectual Property cover to help you with legal costs, for example should you need to take action and pursue an infringement claim against someone. Don’t assume you are covered Whilst you will often see IP cover incorporated into broader business policies such as Professional Indemnity, this may not provide the level of specialist cover you need, particularly for businesses working in media or design. In cases where it could be likely that you might infringe someone else’s copyright, or they infringe on yours, it is recommended that you speak to your broker about a standalone IP insurance policy which could give you greater coverage. Why is IP insurance currently receiving so much attention? An increasingly competitive global marketplace allied with the proliferation of the world wide web has exponentially increased business opportunities and visibility. But at the same time many businesses are now more vulnerable to having their IP stolen or inadvertently stealing that of others. The temptation and ease of ‘cut and pasting’ words, images and huge swathes of information has left all brands exposed to IP infringement. We are also living in the age of the brand, where image and reputation have become commodities in themselves, to the point where large corporations actually employ whole legal departments simply just to defend and protect their IP. David regularly works with business of all sizes to help them protect their own Intellectual Property and ensure that they have the right insurance protection in place to protect them should a claim of infringement be made against them. To find out more about insuring your concepts and designs, contact David Higgins on 01206 838418 or email hello@scruttonbland.co.uk
*Innovation and Growth Report 2018-19, Intellectual Property Office, https://assets.publishing.service.gov.uk
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