Insurance is an important tool in managing IP value

Today, it may be intangibles are a company’s most important assets. BVR’s study of purchase price allocations puts intangible assets at 72% of acquired companies’ total assets. These assets do not exist risk free.

Essentially, there are two issues:

  • A competitor might take your ideas – your competitive advantage;
  • A competitor might accuse you of taking their ideas, their competitive advantage. reports there were over 11,500 IP suits filed in 2006, a 42% increase from 2002. Excluding judgments and damages, the cost to defend or prosecute an IP case can run into the mid-seven figures.  (Related costs may include attorneys and paralegal services, travel and living expenses, costs for court reporters, copies, couriers, exhibits, analytical testing, expert witnesses, translators, surveys, jury advisors, etc.)

Consider these additional developments:

  • “Non-practicing entities” – or “trolls” – are now major risk factors;
  • Opportunity costs, use of executive time, may double the actual expense of an IP dispute;
  • The Uniform Commercial Code, 2-312(3), includes an implied warranty against infringement by any seller of goods to their buyers. If you are selling a product, you are taking on the responsibility to indemnify should accusations of infringement arise.
IP managers are now looking to insurance to help protect valuable intangible assets.  On June 13, BVR welcomes attorney Chuck Baxter and expert Karrie Lewis presenting Why It's Time to Consider IP Insurance, an exclusive webinar exploring available IP insurance products and how IP insurance plays a role in any IP value protection strategy.