IP Insurance: CIPA's Paper

Lloyd's of London

(c) 2011 Lloyd's: all rights reserved

Source Wikipedia

Creative Commons Licence

Jane Lambert

It will cost you several thousand pounds to get a patent for the UK and considerably more if you require patent protection elsewhere in the world especially outside Europe but unless you can enforce your monopoly in the civil courts you may as well spend the money on a new car or exotic holiday or even down the pub.

The cost of patent litigation has come down considerably in England and Wales (though not in Scotland and Northern Ireland) with the changes to CPR Part 63 in 2010 (see New Patents County Court Rules 31 Oct 2010 NIPC Law) but it is still not cheap. The costs that you may recover from the other side are capped at £50,000 for the trial on liability plus another £25,000 for an account or inquiry but you will probably have to pay at least as much out on your own solicitors and counsel and probably a great deal more. As for litigation in the Patent Court there are no limits though the judges will do their best to keep the parties focused on the issues and avoid unnecessary expense.

So what are your options if you are an inventor or small business owner?

• "Legal aid?" Sorry, chum, that was abolished for business disputes by paragraph 1 (h) of Schedule 2 to the Access to Justice Act 1999 although it may become available for litigation in the Unified Patent Court (see Legal Aid for the UPC 23 Jan 2016), 
• "How about no win, no fee?" No mate!  That may be a perfectly sensible way of funding personal injuries claims against insurance companies but intellectual property litigation isn't like that. For a start liability (whether your patent has been infringed) and the account or inquiry (how much money is due to you) are separate proceedings separated by many months and sometimes years. There's a great deal more uncertainty. Several lawyers have got their fingers burnt (see Success Fees and ATE Premiums in the Patents County Court: Henderson v All Around the World Recordings Ltd. 4 May 2013 NIPC Law).
• Litigation funding? Possibly but unlikely. Most funds shy away from IP litigation for the same reason lawyers steer clear of no win no fee retainers in this area of law.
• Legal indemnity insurance? You will find that most policies specifically exclude IP litigation.

No your best bet is IP insurance. Two of my most popular posts in this blog have been IP Insurance 3 Sept 2005 and IP Insurance Five Years On 23 Oct 2010.

More than five years have elapsed since my 2010 update but I have decided not to update it because the Chartered Institute of Patent Attorneys have just done that job for me.  They have published a 10 page report entitled IP Insurance and other IP litigation funding arrangements which can be downloaded from the CIPA's website. This report discusses before and after-the-event insurance and various alternative funding arrangements and then lists the brokers, insurers and other associations who offer IP cover. 

Anyone wishing to discuss this article, the CIPA report or IP insurance in general should call me during on 020 7404 5252 during office hours or send me a message through my contact form.