Independent Inventor Insurance
Our inventor insurance product is designed specifically for independent inventors just starting on their journey. It is designed for the period from when you file your first patent application to when you begin selling product or beginning licensing discussion.
It is the first step in protecting your patent as you get your product to market or seek out licensing opportunities.
This policy costs between $300-400/mo and typically has $250,000 of enforcement coverage.
The First Step to Making a Business out of Your Invention
If you have a patent on your invention, who is going to enforce it?
Patent lawsuits can be brutally expensive, and you have to pay your attorneys out of your own pocket to enforce your patent.
In fact, many people never bother to get a patent because they do not have the money to enforce.
Patent Enforcement Insurance is the First Step
Patent enforcement insurance is the First Step to transition from just being an inventor to starting to harvest value from your patent.
Patent enforcement insurance gives you the strength to go after someone who steals your idea, so you no longer need to fear showing your patented (or patent-pending) idea to manufacturers or competitors.
Patent enforcement insurance is the biggest step you can take to make your patent a business tool, not just a plaque on the wall.
Feel Confident About Sharing Your Idea
When you *know* you can go after an infringer, you have no fear about talking to manufacturers or sharing your idea.
Let everyone know about your patent – even if it is still pending. You have the financial ability to enforce your rights when your patent is insured.
Does My Patent To Be Granted Before I Can Use It?
No! Once your patent application is filed, it establishes your rights. Those rights may be negotiated through the examination process with the Patent Office, and your rights will be enforceable after the examiner grants your patent.
Be Confident About Licensing Your Idea
If you license your patent to a manufacturer – or you want to – there are special endorsements to an insurance policy that helps you enforce your patent against the licensee.
For example, what if someone takes a license, signs a contract, and ‘forgets’ to pay you. A licensee endorsement allows you to sue your licensee using patent law, which triples the damages that you will receive.
Can I Get Patent Enforcement Insurance If I Only Have a Patent Pending?
Yes – absolutely. Even with a provisional patent application, patent enforcement insurance gives your patent enormous strength.
The reason why: patent enforcement insurance does not cover ‘preexisting conditions.’
You need insurance in place before someone copies your idea – so your patent needs to be *continually* insured.
But My Patent Has Not Issued – Why Buy Insurance Now?
Yes, your patent is still pending, but having insurance now means you can enforce as soon as your patent is granted. By being continually covered – even while in patent pending status – you will be able to enforce the patent right out of the gate.
How Do I Enforce My Patent With Insurance?
Enforcing your patent under an insurance policy is straightforward. You let the insurance company know right away when you realize someone might be infringing.
There will be a detailed analysis of whether or not they actually infringe, which can be done by the insurance company or by a disinterested third party patent attorney. If they say there is a better chance that not (51%) that your case will succeed, the insurance kicks in.
Is There a Deductible?
Our insurance policies have a Self Insured Retention (SIR), which is similar to a deductible. Typically, the SIR is 5% of the policy limit, but this can be adjusted up or down to increase/decrease the cost of the insurance. Talk to your IP.Insure licensed insurance broker to see the effects of different SIR amounts.
Is There a Copay?
Our insurance policies often have a copay requirement. This might be as low as 5%, but you can choose a higher amount. Talk to your IP.Insure licensed insurance broker about different options.
Will The Insurance Company Help Me With Infringers?
Yes! The insurance company will send cease and desist letters on your behalf to an infringer.
These letters are on the insurance company’s letterhead, and show the infringer that your patent is insured – and that you have the ability to enforce your patent against them.
Why Does The Insurance Company Send Letters to Infringers for Me?
The insurance company will send letters to infringers because it makes good business sense.
Once an infringer knows that you have the power to enforce your patent, they often will negotiate a licensing agreement or come to some other settlement.
This type of settlement is much less costly than a full blown case in Federal Court.
Does The Insurance Company Go Out Looking For Infringers?
No. Finding infringers is your responsibility, and that makes sense. You are the closest to your industry and you know what your competitors are doing.
As you find infringers, you submit a claim to the insurance company, and they will assist you from there.
If My Patent Is Challenged, Will I Be Covered?
Yes. Patent Enforcement Insurance covers challenges under Inter Partes Review (IPR) or other challenges to the validity of your patent.
Who Is This Policy Designed For?
This policy is designed for independent inventors with 1 to 3 patents and current revenue less than $100K.
The policy is an entry-level policy designed to protect an inventor while the inventor is beginning to bring a product to market, or to explore licensing opportunities.
As your business grows and you begin to land licensing deals or start to have significant sales, we have policies designed specifically for licensing, as well as policies designed for companies selling their own products.
I Want To License My Patent – Is This The Right Policy?
Our entry-level policy is the right insurance while you are putting together a licensing package. Your licensing package might include working prototypes, manufacturing drawings, and other materials that help your licensee put your product in production.
Once a license appears imminent, you probably want to upgrade the insurance policy to include a Licensee Endorsement. A Licensee Endorsement will make your license much more powerful, since you can enforce your patent against a licensee if the licensee backs out of the license. For example, the licensee can just quit paying you royalties but continue to make and sell your product. Here, the insurance will pay for enforcing your patent.
My Product is Sold to Other Businesses – Is This The Right Policy?
When you sell a product or service to another business, you are indemnifying your customer from lawsuits relating to your product.
This situation requires an upgrade to the independent inventor policy.
If your customer gets sued for patent infringement because of your product, you must defend your customer in court. This situation is covered by a patent defense insurance policy, which is different from our entry-level policies.
Please talk to your IP.Insure licensed insurance broker to upgrade your policy to include patent defense indemnification coverage.
Can I Cancel My Policy?
Absolutely. You can cancel at any time. When a policy is cancelled, you will no longer be covered for any infringement, and any insurance premium paid up front will be refunded to you on a pro-rata basis. Note that if you financed your insurance and have a monthly payment, there is typically no refund, as you have not paid for your premium up front.
Want to Know More?
Trademark enforcement as part of your IP.Insure intellectual property insurance policy gets you the ability to go after people who ride on your branding coattails.
This includes sending letters to infringers, Amazon/eBay/Etsy take down actions, DMCA take down notices, and appropriate lawsuits in state and/or federal court.
Many times, small companies have a trademark on their product but larger companies will merely start using it without doing a clearance search. For example, the Cleveland Indians baseball team changed their name to the “Guardians” – only to recognize afterward that the Guardians already existed as a local roller derby team.
IP enforcement insurance gives you the financial horsepower to go after infringers and preserve your investment in your brand.
Registered trademarks are far more powerful to enforce than unregistered trademarks, and we encourage you to register your trademarks whenever possible.
The registration process guarantees that you have the full rights to your branding. In addition, the laws are very powerful for owners of registered trademarks to enforce their rights.
Trademarks represent your investment in your business. Your reputation takes a long time to build, and your logos, marketing phrases, color palette, font choices, graphics, packaging, and other elements represent your company’s ‘look and feel’ as well as the instantly-recognized elements of your brand.
Your brand takes a tremendous amount of work to create and maintain, and being able to keep other companies from copying you preserves your investment.
IP enforcement insurance for your trademarks will give you the power to keep others from copying you – and preserve that investment you have in your reputation.
One way to know if you might infringe someone else’s patent is through a “Freedom to Operate” search, which is sometimes called a “clearance search” or “right to use search.”
An FTO search is performed for each of your *products* (not your patents) and searches for existing patents that might be used to sue you.
A defensive intellectual property insurance policy will use a freedom to operate search as part of the underwriting. If you have an attorney do a clearance search or freedom to operate search, the insurance underwriters will use that search to help them identify the risk.
Freedom to operate searches are done on each of your products or each product family, and once you have an initial search done, periodic updates to the search should be done whenever you modify or update your product/product family.
No. The standard forms for General Business Liability were changed in the late 1990’s to *remove* any coverage for intellectual property damages.
This means that trademark infringement (where another company starts using your brand’s likeness) is not covered.
This means that patent infringement (where another company copies your patented product) is not covered.
This means that copyright infringement (where someone copies your images, your website, your blog, your content) is not covered.
It also means that inbound lawsuits (when someone accuses *you* of infringing) is not covered.
The only way to get coverage for IP-related risks is through IP-specific insurance policies.
In the same way you cannot buy fire insurance while your house is burning, most insurers will not cover you for IP infringement that you know about – or should have known about.
Underwriters will often do patent searches, litigation searches, and competitive analysis to uncover the risks of your IP – either the risk that you will need to enforce your IP or the risk that you might be sued by someone else. Some industries are more litigious than others, and so insurance costs more.
Some insurance policies may have a delay, such as 90 days, where they will not pay a claim for litigation. They make that up by extending the policy period for 90 days on the back end.
The pre-existing conditions limitation is an incentive for you to get insurance early – well before you run into trouble. Not only can you sleep better, you will have the resources there when you need it.
Each patent insurance company has its own suite of services. In general, insurance companies want to minimize their risk exposure, so it makes sense for them to help you in many different ways.
Some companies will – for free, as part of your enforcement policy – send letters to possible infringers. These letters are from the insurance company, which signals that you have muscle behind you. Patent infringement lawsuits are often a big game of “chicken” where both sides threaten to “go the distance.” Once the infringer knows you are protected by insurance and your expenses are already covered, they are much more likely to settle sooner.
Many insurance companies will reimburse your attorney’s fees, but they want to make sure the attorneys have experience. They will not reimburse for any attorney who is willing to take your case, but will reimburse for experienced attorneys with former first-chair experience in Federal Court for your type of litigation. The insurance companies want you to win.
BlueIron will always help you with patent strategy and with evaluating the IP you already have. We invest in IP, so we look at your IP from the standpoint of value. We are always here to help you get the best value out of your IP.
An independent insurance broker does not work for any insurance company.
We work for you.
Our job is to negotiate a policy that fits your needs, not sell you a policy that benefits the insurance company.
Each of the dozen or so providers for IP-related insurance has a particular interest. Some companies like semiconductor IP, while other companies prefer medical devices. (Nobody seems to like pharmaceutical patents, by the way.)
Also, each policy has different sets of triggers which pay for your loss, different amounts they will pay in certain circumstances, and so forth. Our job – as independent brokers – is to negotiate with the underwriters to address your specific needs.
For very simple situations, there are policies that are, more or less “off the rack.” These policies have standardized pricing and can be issued very quickly.
Other times, your risk exposure might not fit a cookie-cutter approach, so there is room to tailor the coverage.
Note that custom-designed insurance policies do *not* mean expensive. In many cases, a broker can tailor-make your policy so that you eliminate coverage for things you don’t need.
Yes! BlueIron is a licensed insurance agent, and acts as an insurance wholesaler for many brokers and agents. Please have your insurance agent contact us.
If you do not have an agent, you can purchase insurance directly through BlueIron.
BlueIron does not provide any other insurance other than Intellectual Property related insurance.
We offer IP-related insurance from over a dozen different insurance companies. One of the benefits of being an independent broker is that we can pick from many providers so you get the coverage that works best for you.
For example in patent insurance, some carriers prefer troll-only insurance, while other carriers prefer competitor-only insurance without troll coverage. Each carrier has a different sweet spot of the risks they want to insure – and the risks they want to avoid insuring.
BlueIron has relationships with over a dozen different providers, and we know which insurance company would be the best fit for you. When we quote a policy, we can have several different insurers competing for your business.
In general, IP insurance is a specialty insurance where several different companies compete. The underlying insurance carrier is usually a group of Lloyd’s of London syndicates that focus on intellectual property insurance.
Absolutely. We know you have good relationships with your attorneys, and we are happy that you want to use them.
Our only requirement is that the attorneys have prior first-chair experience in intellectual property litigation in federal court. If your attorney does not have this experience, we are happy to recommend attorneys who do.
We do offer a discount if you use attorneys who we have previously vetted, but you are not required to use them.
With our patent enforcement insurance policies YOU control all aspects of how to enforce your patent.
Sometimes you may wish to strongly enforce their patent to prevent a specific competitor from operating in your space. Other times, you may want to obtain a license agreement from a competitor. Still other times, you may want to cross license your patent for a technology a competitor may have.
In every case, YOU control how the enforcement proceeds.
This is why patent insurance is so important.
Without insurance, you have to use contingency fee attorneys. Contingency fee attorneys usually get the power to settle the lawsuit, so they determine when to quit, not you. In so many cases, a contingency fee attorney might settle for exactly what their fees were – and you get nothing.
Patent insurance comes in two basic forms: patent enforcement and patent defense. Enforcement is where someone infringes your patent and you need to enforce your rights. Defense is when someone else accuses you of infringing their patents. This can be a competitor or a patent troll.
Enforcement insurance typically costs about 1-1.5% per year of the total amount of insurance. For example, $1,000,000 of patent enforcement insurance will cost about $10,000/year.
Defense insurance typically costs about 1.5% per year. $1,000,000 of patent defense insurance will cost about $15,000/year.
These amounts are guidelines, and your actual premiums will only be determined after due diligence and underwriting.