Intellectual property insurance defends the rights of individuals or companies who own intellectual property. The insurance company investigates and sends a letter to the infringing party to stop, and covers legal fees. The insurance holder cannot knowingly violate intellectual property rights, and must provide documents before obtaining the insurance.
Intellectual property insurance is available to any company or individual who has rights to intellectual property, and helps defend those rights. This saves the owner time because when a violation is discovered, the intellectual property insurance company will investigate the matter and send a letter asking the infringing party to stop. If this doesn’t work, then the insurance covers the legal fees, whether the owner is suing or is sued. Someone cannot get this insurance if he or she knowingly violated an intellectual property, and the documents that say as much must be filed before getting this insurance.
There are many products, works of art, and inventions that are the legal property of a person or company. To enforce this ownership, the owner may apply for a trademark, patent, or copyright to legally recognize ownership. Most intellectual property insurance policies protect the owner regardless of what rights they have, but some may only cover one or two types of rights, such as patents and copyrights.
When another company or person violates property rights, the owner has to investigate the item to see if it actually violates the rights. He or she also has to locate the offending party, and a letter must be written asking the offender to stop the breach. This can be time consuming and stressful for an owner who does not know the proper protocol for this initial step. With intellectual property insurance, the owner contacts the insurer about the potential infringement, and the insurer handles the investigation and writing.
The legal costs of an intellectual property lawsuit are high and can easily bankrupt a person or company. Regardless of whether the IP insurance holder is suing or being sued, this insurance will cover some or all of the legal costs, depending on the policy. If the owner of the intellectual property is suing and is awarded money, the insurer will usually claim part of the proceeds.
Some intellectual property owners may knowingly violate another person’s rights and then use intellectual property insurance to keep legal costs down by trying to ruin the other person’s business or bankrupt it. To prevent this from happening, most insurers require several documents before giving someone this insurance. The prospective policyholder must submit documents showing that she has completed an official intellectual property search; copyright, patent or trademark documents must also be submitted.
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