In business, there are some secrets worth sharing – particularly if they can help maximize profits and mitigate risks. And while many innovative ideas are not necessarily original, merely bringing oft-neglected ones into the light can do a lot of good for companies that wish to use them to their competitive advantage. So with this in mind, let’s start the New Year with a provocative statement: your company’s most valuable assets most likely are not insured against theft, damage, or loss to a competitor.
Yes, that’s right — your intellectual property is showing.
Got IP Insurance?
It is now a well-accepted business valuation maxim that intangible assets such as brands, copyrights, patents, and trade secrets are often valued greater than tangible assets consisting of buildings, inventory, and equipment. Despite this, a vast majority of businesses fail to carry stand-alone intellectual property insurance coverage. Why the disconnect? It begins with a lack of awareness and education of the need for intellectual property insurance products. For example, in recent articles by Forbes and Entrepreneur that discussed over 10 types of business insurance coverage a company should carry, not one of them was intellectual property insurance.
Yet, consider the following trademark protection and litigation cost facts:
- In 2012, over 243,000 new trademark applications were filed with the United States Patent and Trademark Office
- In 2013, there were 5,278 trademark oppositions filed in the U.S. Trademark Trial and Appeal Board
- There are approximately 3,500 or more claims for trademark infringement that are instituted in the United States each year, according to the William Mitchell College of Law Study on Trademark Litigation
- According to the American Intellectual Property Association, the average cost of trademark litigation through trial for cases with the amount in controversy of $1 million or less is $373,000. Where the amount in controversy is $1M to $10M, the average cost of litigation through trial is $710,000.
Trademark Insurance: Your New Year’s Resolution
Quite often, commercial general liability (CGL) policies specifically exclude claims for trademark infringement. Now is the time to consider trademark insurance coverage to protect against the costs and expenses of trademark infringement and/or to mitigate the costs of trademark enforcement. Specialty trademark insurance coverage may be found through insurers such as Intellectual Property Insurance Services Corporation, one of the pioneers in intellectual property insurance coverage in the United States. Trademark protection insurance polices include coverage for trademark defense (including trademark infringement), abatement insurance, and multi-peril policies.
By having trademark insurance, companies can be confident that they are protecting their valuable brands in a sensible and cost-effective manner.