High Hazard Patent Insurance

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High Hazard Patent Insurance

Existing defensive patent insurance provides valuable protection. However, it only covers a portion of the patent hazard. While there are hazards that will probably never be insurable, we are working on a solution that will allow for the pooling and sharing of risk in specific high-hazard situations. As an aid to understanding, we first diagram how the insurance world views and covers the risk of patent infringement litigation being brought against a defendant.

Patent Hazard Matrix

 

Knowledge     Court Loss Likely          Loss Not Likely

 

Known
Threat

Insurance
Unlikely to be
Available

High
Hazard
Patent
Insurance

Unknown
Threat

???

Traditional
Defensive
Patent
Insurance

 

??? – Perhaps the traditional markets will make coverage in this quadrant available. Right now it is not.


Traditional defensive patent insurance provides coverage against patent infringement litigation where the asserted patents are relatively weak. Specifically, the policy contract requires that a determination be made at the outset of hostilities, finding that the insured is likely to be successful in the litigation. For instance, a letter from an independent attorney to that effect may be required.


In addition to this contractual language, the policies are carefully underwritten. If known threats are identified, then it is likely that the underwriter will require a high retention (like a deductible) or an exclusion in relation to the specific threat.


So traditional defensive patent insurance is designed to protect against the fortuitous risk that someone will assert a weak patent (finding of infringement unlikely and/or the patent is probably invalid).


We are working within the existing market to try to make some form of coverage available for the fortuitous risk of a strong claim being made. Perhaps this can eventually be accomplished when full clearance has been conducted and a strong freedom-to-operate opinion has been provided. If we were to accomplish this the pricing on such a policy would obviously be higher.


Contact Us For High Hazard Patent Insurance

And of course as we said, we are working on a high hazard product where the threat is relatively well known, but the patent in question is weak in relation to the policyholder.


If you are the subject of a weak patent assertion or were declined or offered restricted terms by an insurance carrier because of what they felt was a known hazard, you should have your counsel contact us. Our High-Hazard Patent Insurance product may be just what you need.


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