Picture this: you’ve just launched your innovative new product, and you’re understandably brimming with excitement. Suddenly, a competitor throws a legal curveball and accuses you of infringing on their patent. The pressure mounts, legal fees loom, and the future of your product hangs in the balance.

Here’s where you might think your Professional Indemnity (PI) policy will swoop in to save the day. Unfortunately, in the UK, PI coverage for patent infringement accusations can be a tricky subject. Let’s dive into it.

The patent accusation gap

While PI insurance offers a safety net for many UK professionals, it often excludes coverage for defending against patent infringement allegations. This means your standard PI policy might not be able to financially support you if a competitor accuses your business of infringing on their patent – even if you believe the claim is unfounded.

Why the exclusion?

Several factors contribute here:

Uncertainty of infringement

Unlike simpler negligence claims covered by PI, patent infringement can be a complex legal issue. Accusations might be based on interpretations or similarities that require expert analysis, and insurers might be hesitant to cover the risk of an uncertain outcome.

Potential for prior art

Even with good intentions, it’s possible your product unknowingly infringes on an existing, obscure patent. Insurers may be wary of covering situations where the insured might have been negligent in their research.

High cost of defence

Patent litigation is notoriously expensive. Legal fees and potential damages can quickly spiral, making insurers reluctant to take on this significant financial burden, especially for unproven claims.

Understanding copyright vs. patent protection

It’s important to distinguish between copyright and patent protection. PI policies typically offer no coverage for patent infringement but should cover copyright issues.

Copyright protects original works of authorship, such as creative expression in writing, music, art, or software code. Copyright protects the way things are expressed, not the underlying ideas or functionality. An infringement might occur if you copy substantial, original parts of someone else’s copyrighted work.

A patent protects new inventions, processes, or improvements to existing products. A patent grants the owner exclusive rights to make, use, sell, or import the invention for a set period. An infringement might occur if your product incorporates the core functionality or design protected by someone else’s patent.

How to protect yourself against patent infringement accusations

Being proactive is key to minimising the risk of patent infringement accusations and the associated legal costs. Here’s what you can do:

Rigorous patent searches

Before launching a product, conduct thorough patent searches. Consider hiring a patent lawyer to help identify potentially conflicting patents and advise on design modifications to avoid infringement.

Freedom to operate analysis

Conducted by a patent lawyer, this analysis can assess the risk of your product infringing on existing patents. It’s a proactive step that can provide valuable peace of mind and help you avoid costly legal battles.

Consider standalone Intellectual Property insurance

While less common, specialised patent defence cover often included within dedicated Intellectual Property packages can offer financial support for legal costs associated with defending against a patent infringement accusation.

Stay protected with RiskBox

No business wants to get embroiled in a costly patent infringement battle, which is why understanding potential gaps in your insurance is essential before launching any new product.

Got questions about your existing insurance coverage? Reach out to RiskBox and consult with our expert team of insurance specialists and claims managers. Because if the worst does happen, it pays to have the right support on your side.

Remember: This blog is for informational purposes only and doesn’t constitute legal advice. Always consult with a qualified professional for specific guidance regarding patents and insurance coverage. By taking these steps, you can focus on what matters most: your innovative product and its success.

Photo by Ben Rosett on Unsplash