For today’s innovators and entrepreneurs, a great idea can be a fast track to a great fortune. This could mean an inadvertently successful glitter-mailing business or being part of a multi-billion dollar acquisition by Facebook.
Still, whether your idea requires a tub of shiny sprinkles or the hottest new messaging app, they all started out as a concept. For various start-up and high-tech companies, a lot of their book value is represented by intangible assets in the form of intellectual property.
But, while people don’t think twice about protecting their physical assets, these ‘creations of the mind’ could be exceptionally valuable and underpin future growth and financial success. So what can you do to protect them?
The answer is simple; intellectual property (IP) insurance.
What is intellectual property insurance?
Intellectual property insurance is a liability policy. Its purpose is to protect a business against legal fees, damages and expenses incurred in a judicial proceeding relating to IP.
There are two main types of intellectual property cover:
- A standalone intellectual property policy that can cover either defence or pursuit of an IP infringement claim.
- Defence cover provided under a tech professional indemnity policy for issues arising out of media content, user generated content, or the policy holder’s business activities.
However, as every risk is different and each tech company’s requirements may vary, cover can be tailored to suit a business’s individual needs.
What does intellectual property insurance cover?
IP insurance can help protect your business against a number of disputes relating to a breach of:
- Trademarks - which protects brand names and logos used on goods and services.
- Copyright - which protects the owner against others copying or reproducing their work.
- Patent infringement – which protects a company if they are accused of infringing upon someone else’s patent.
- Trade secrets – which protects private information that is important to a business because it gives the business a competitive advantage in its marketplace.
To decide if your business could benefit from investing in IP insurance you firstly need to recognise, understand and if appropriate, protect your IP. The Intellectual Property Office (IPO) has a range of free online tools to help you understand more about trademarks, designs, patents and copyright.1
Intellectual property and technology
When it comes to technology, specifically computer software in the UK, it is protected by copyright as it is seen as a work of literature. Here are the top 3 types of client dispute scenarios seen in the sector:
Software creation/adaptation - Replicating a software product is not classed as copyright infringement unless the software code is copied, however this does not stop claims being made for legal costs to defend against the allegations.
Development - When businesses outsource software development to third party contractors, the IP created is generally owned by the contractor even though they are being paid to develop it. That’s why it’s important to have clear terms in place when outsourcing development work.
Software under licence - When software is being used by a business under licencing agreements, they should be clear on any restrictions to how many users they can have to use the software, otherwise they could be exposed to breaching IP rights.
How we can help
We have a dedicated team of technology insurance experts on hand to discuss your business’s needs. They can arrange the right level of cover to protect against the unknown. We can help.
Need advice? Request a call back or get in touch now.