1 August 2010Copyright

Munich Re launches IP insurance scheme

Corporate Insurance Partner, a direct insurance division of Munich Re, has launched an intellectual property insurance policy to help companies protect themselves against the high cost of defending against infringement claims.

The policy, which was announced in June, was co-drafted by Alexander Carter-Silk of Speechly Bircham. It aims to protect companies against infringement actions by covering the costs of their defence and, in circumstances where a company has accidentally infringed another party’s IP, to cover any damages payment.

Erik Alsegård, senior IP underwriter at Munich Re, said the policy is designed “to provide the cover that clients may actually need”. He added: “We don’t limit the cover to listed patents or products, but we cover all business activities in a comprehensive policy.”

Alsegård said that, to start with at least, Munich Re is “focusing on the UK, especially small and medium-sized businesses, and particularly in the renewable energy, software, hardware and pharma industries”.

Of course, much IP litigation ends in settlement. The policy covers that eventuality as well. “The decision [to settle] has to make commercial sense, but we are happy with that in principle,” Alsegård said. “In cases where the client has the option to litigate or settle, we assume the best decision will be made, although we do have to have a say on a case-by-case basis. This commercial approach is also taken in respect of pre-emptive and assertive actions, which we agree can be a suitable defence strategy at times.”

Carter-Silk said: “More than ever before, IP claims involving patent, copyright and trademark infringements are being filed and litigated at a very high cost indeed. IP is fast rising up the asset-class ‘food chain’ and a competitor can wreck another’s business simply by bringing a claim. Companies that do not have funds to pay costs for all legal fees are at a tremendous risk. The situation is compounded by rapid technological advances and convergence, which means it is harder than ever to isolate and identify IPR.”

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