Unlike the industrial economy of yesteryear, today’s global economy is dependent on innovation, ingenuity, and the development of new processes and applications. If you’re in the technology business, that means your intellectual property (IP) is even more critical than your tangible assets. After all, your intellectual property is your only legal means of converting your innovations into money making assets.
But many business owners still struggle with the intangible. While it’s easy to understand insurance for building, inventory and even liability exposures, business owners struggle with the concept of intellectual property insurance.
Below are a few pointers to help you better understand and protect this key business asset.
What is Intellectual Property?
According to the World Intellectual Property Organization (WIPO), intellectual property (IP) refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce. IP is everywhere – in product design and packaging, trade secrets, advertisements and marketing protected by copyrights, and business models, processes, and applications. Basically anything that’s written, visually created, and unique to an individual is intellectual property.
Why is protecting your intellectual property so critical?
New companies are constantly competing to be the first to market with new products and ideas. If you don’t protect your ideas, you’ll have no proof that the idea was yours when another company takes it to market.
Failing to protect your IP also opens you up to a host of growing risks and threats. Costly IP claims involving infringement of patent, copyright, and trademark have risen dramatically in recent years. According to the Intellectual Property Insurance Services Corporation (IPISC), 5,189 patent actions were recorded in 2012, an increase of 29 percent over 2011. There has also been a sharp increase in infringement allegations from patent assertion entities (PAEs) who sue companies for the sole purpose of bleeding them for licensing fees.
When it comes to intellectual property claims, the stakes can be extremely high, as the recent intellectual property lawsuit between Samsung and Apple illustrated.
Do you need intellectual property insurance?
Almost every company from small to large has an IP risk. IP insurance protects you or your company from losses that can arise out of copyright, trademark, and patent infringement suits. It also protects you against libel, slander, unfair competition, and misappropriation of advertising ideas. And if you’re ever put in a position to defend your intellectual property in a suit, an IP policy will pay your defense costs and any judgment up to your policy limits.
The technology businesses that thrive in today’s global economy are the ones that understand intellectual property and how to protect it. To get specialized coverage that fits your needs and budget, contact the experts in Heffernan’s insurance for tech companies practice. We know how to protect your most vital – and most intangible – business assets.