Patent Infringement

Generally speaking, McGriff will tackle most Intellectual Property (IP) dilemmas in one of five program structures, although many variations may be constructed to better target your intentions and constraints.

Conceptual Types of Coverage

  1. Patent Enforcement—covers 90% of the insured’s litigation expense when it elects to enforce its patent rights and covers legal fees for countersuits for invalidity
  2. Patent Infringement Defense—covers insured’s litigation expenses (defense/ settlement/ judgment) to defend infringement allegation and patent invalidity counterclaims
  3. Multiperil policy—can cover loss of commercial advantage, business interruption, loss of royalty/licensing fees; loss of benefit of R&D, loss of covered IP value; cost of redesign, remediation and/or reparation; loss of trade dress identity; and loss of trade secret advantage—sold as a rider or stand-alone alongside A or B above
  4. Portfolio Program—manuscripted approach usually placed excess of significant retention and following comprehensive underwriting of covered IP
  5. Part of a broadly written Errors & Omission Policy with No Exclusion for patent infringement (policy endorsement is required to amend definition of "claim" and to provide definitive grant of IP cover).

For patent infringement insurance, defense coverage can be obtained through both domestic and European markets to reimburse the insured for outside legal expenses and judgments or settlements including past lost profits and/or royalties (per policy terms/conditions). Defense insurance offers many benefits, such as:

  • Provides the insured with a position of strength and first chair defense resources
  • Complements an insured's strategy to defend a qualified position and to resist yielding to licensing pressures prematurely or unnecessarily
  • Often improves litigation outcomes
  • Addresses costs and expenses incurred in asserting invalidity counterclaim or initiating re-examination proceedings that are a direct consequence of covered litigation
  • Lightens the burden on the insured’s operating capital
  • Can be used to discourage frivolous lawsuits following an offer to license
  • Can help preserve market share
  • Provides reimbursement for indemnification obligations in retail/supplier contracts
  • Some insurers offers exceptional litigation resources