Intellectual property insurance is available to any business or individual that holds rights to an intellectual property, and it helps defend those rights. This saves the owner time because, when a violation is discovered, the intellectual property insurance company will research the matter and send a letter asking the infringing party to stop. If this does not work, then the insurance covers legal fees, whether the owner is suing or being sued. Someone cannot get this insurance if he or she knowingly violated an intellectual property, and documents saying as much must be submitted prior to getting this insurance.
There are many products, artworks and inventions that are legally owned by a person or business. To enforce this ownership, the owner can file for a trademark, patent or copyright to legally recognize the ownership. Most intellectual property insurance policies protect the owner, regardless of what rights he or she has, 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 research the item to see if it really violates the rights. He or she also has to locate the violating party, and a letter asking the violator to stop the infringement has to be written. This can take a lot of time and may be 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 possible infringement, and the insurer handles the research and writing.
Legal costs for an intellectual property suit are high and can easily bankrupt a person or company. Regardless of whether the intellectual property insurance holder is suing or being sued, this insurance will cover some or all of the legal costs, depending on the policy. If the intellectual property owner is suing and he or she is rewarded money, the insurer will typically claim part of the earnings.
Some intellectual property owners may knowingly violate someone else’s rights and then use intellectual property insurance to keep legal costs low while trying to ruin the other person’s business or bankrupt him or her. To keep this from happening, most insurers require several documents before giving someone this insurance. The would-be policy holder must submit papers showing that he or she completed an official intellectual property search; copyright, patent or trademark papers also must be submitted.