Insurance is part of our daily lives. Health insurance reimburses us if we get sick, life insurance safeguards loved ones if we pass away, and auto insurance reimburses others in case we cause an accident and injure someone else unexpectedly. Likewise, intellectual property (IP) insurance protects your company from the potentially high cost of litigation involving IP. The two main types of IP insurance are:
- intangible asset protection insurance: insurance that covers the cost of enforcing your company’s IP if it is stolen
- IP risk insurance: insurance that covers the cost of defending against claims of infringement made by others.
Intangible asset protection insurance provides funds to enforce your company’s IP and reimburses a company for financial loss caused by IP theft. This type can be most useful for small to mid-sized manufacturing companies that may not be a typical target for patent enforcement actions. Such companies’ value is in their trade secrets and knowhow, which gives them a competitive advantage. The risk for these companies is a former employee misappropriating trade secrets to benefit a competitor, with litigation costing up to millions of dollars. Instead of paying for those enforcement costs out of pocket, insurance allows for a small and predictable payment on an annual basis such that if misappropriation...
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