Patenting Your Invention: the Ugly Truth – Page 6
What about insuring your patent against infringement? Basically, forget it. Or at least forget it as things stand at present. IP insurance products exist, but most are aimed at established companies with a track record of managing IP. We invite anyone to prove us wrong, but we’ve never heard of a private inventor or small company benefiting from patent insurance. All insurance is about making money from risk, so a priority for insurers is to ensure that their own risk is low. First-time inventors are very high risk, so they either won’t get cover at all, or premiums will be unaffordable, or exclusions will be so numerous that the policy has no teeth.
Typical US premiums are around $25,000 per $1m of cover, though many of the overall costs of patent litigation won’t be covered. IP insurance schemes exist in the UK, and we found one firm offering cover from around £40 per month. But there will a lot of exclusions for that price, so it may not cover the real risks inventors face. Insurers tend also to go for conciliation – reaching a compromise agreement – to avoid the expense of a lawsuit. This is sensible, but then all an infringer has to do is refuse to settle amicably and the insurer may back off.
In 2004 the UK Patent Office was ‘considering proposals for the creation of a mutual insurance association for small or medium-sized patent holders to give them financial help to enforce their patent rights, with premiums fixed in proportion to risk.’ Not much seems to have happened to the idea since then.
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