A number of different types of patent insurance are available, including:

(Source: ALRC 2010)

Patent enforcement litigation insurance (provides coverage for the legal costs a patent holder incurs as a result of legal proceedings to protect and enforce its patent rights).

Patent infringement liability insurance (provides coverage for the legal costs involved in defending a patent infringement claim and, in some cases, may also cover damages awards if liability is found).

Intellectual property litigation insurance (covers the legal costs incurred in the enforcement of all intellectual property rightsfor example, trademarks, copyrights and rights in computer software, as well as patents).

Consideration and Costs

A commercial adviser should be engaged to provide an insurance opinion.  A freedom to operate search should be considered as part of the insurance opinion.

The Australian Patent Office provides a short summary of considerations at https://www.ipaustralia.gov.au/ip-infringement/more-about-ip-infringement/ip-insurance.  For example, as part of the insurance policy you may have to accept reasonable negotiated settlement offers.  Another summary of  considerations and costs is available on: https://blog.patentology.com.au/2016/08/patent-litigation-insurance-what-is-it.html.

Further sources of information are available online including:

(AU Source: http://www.professionalrisk.com.au/pages/types-of-cover/patent-insurance.php)

Premiums for patent insurance depend on the patent and/or the product being protected. The rates are usually between 2 to 5% of the insured amount. Damages can be covered up to $1 billion under the insurance, while $20-30 million are common. Insurance limits up to $15 million coverage per patent are available. Deductibles can start around $50,000 to $100,000 and include a co-insurance percentage after the deductible. The co-payment can vary from 15% to 25%. Defence expenses such as legal fees, declaratory statements, injunctions, and appeals are usually covered by the policies. The insurance coverage premiums for a $1 million patent start at $25,000 plus charges.

(US Source: https://www.obrienpatents.com/patent-infringement-insurance/)

However, patent infringement insurance isn’t cheap. Offensive insurancefor covering the cost of going after an infringertypically costs around $15,000 to $30,000 per year. Defensive insurance, which covers infringement claims lodged against you, costs about $50,000 to $80,000 per year. Policies that cover both will cost just a bit more than a defensive-only policy.


*As with all information provided by this website, the content of this webpage is subject to our disclaimer. The material provided is not to be relied upon under any circumstances.