Today many companies’ success, regardless of their size, is based on their intangible assets. It is thought that over 80% of some businesses value can be derived from intangible assets – those that are not physical in nature, including a company’s intellectual property.
Here we will consider why it is so important that companies not only understand their own business make up but also that they take adequate steps to protect their intellectual property including intellectual property insurance.
What is intellectual property?
Intellectual property is something which is unique to your business and has arisen from your creativity. Inventions, designs, technical drawings, business names, logos and websites are all examples of intellectual property.
Not sure if you own intellectual property? According to gov.uk you do if any of these apply:
– You created it (and it meets the requirements for copyright a patent or a design)
– You bought intellectual property rights from the creator or a previous owner
– You have a brand that could be a trade mark, eg a well-known product name
How can you protect your Intellectual property?
Some intellectual property protection comes automatically such as copyright and design right. Whilst others you have to apply for such as patents, trademarks and registered designs.
However, whilst having these rights in place is of significant importance, the enforcement of intellectual property rights, the validity of them and contractual disputes are increasingly common and aren’t covered by simply owning a trademark or patent.
Whilst copyrights, trademarks and patents may provide a legal right to take action if someone tries to copy your idea/product you are still required to cover legal costs to protect your interests. If you can’t afford this then disputes and infringements become harder to resolve.
What are the risks to you as a small business?
There are two key risks when it comes to intellectual property
1. That someone infringes your intellectual property – for example another business copies your product, name or service. You may therefore want to start legal proceedings to resolve this
2. That someone files a claim against you for infringing their intellectual property – a third party may feel that you have infringed their intellectual property and file a claim against you, bringing with it its own expenses
What is intellectual property insurance?
Intellectual property insurance is designed to provide indemnity for losses and costs incurred as a result of an intellectual property infringement. Intellectual property insurance can also be a deterrent to those who think that your business may not have the resources to pursue an infringement claim.
What can intellectual property insurance cover?
The product has developed significantly over the last decade in response to the increase in intellectual property disputes and can provide coverage across a number of areas including:
• Infringement defence, legal costs and damages awarded by the court
• After the event (ATE) coverage
• Breach of an agreement, such as non payment of milestones or royalties
Whilst Intellectual property insurance isn’t a legal requirement, if IP makes up a significant proportion of your business value then it is something you should consider to adequately protect your business and rights.
At Anthony Jones, we are passionate about protecting the rights and ideas of individuals that’s why we are also a member of IPAN (Intellectual Property Awareness Network). Our team of experts can work with you to identify if IP insurance is necessary for your business and if so help tailor a policy which meets your unique requirements.