Working With Underwriting To Define And Sell The Insurable Risk. Maureen Veterano

WORKING WITH UNDERWRITING TO DEFINE THE INSURABLE AND SELLABLE RISK

PRESENTED BY: MAUREEN VETERANO & ROBIN FLETCHER

Celebrating 20 Years as the Industry Leader in

Intellectual Property Insurance

Patent Insurance Institute Pi2

2010

Brokers and Underwriters

Flow of Information

Insured

IPISCBroker

Flow of Information

Insured

IPISCBroker

ApplicationQuote Binder

TechnicalPrivilegedClaims

Considerations for Underwriting

Scheduling IP for coverage

Scheduling Products for coverage

Abatement / EnforcementDefense

Abatement / Enforcement

Abatement / Enforcement

Any protectable intellectual property:

Patents Trademarks Copyrights Trade Secrets

Abatement / Enforcement

Patents: Issued or Pending # if published or issued. Unpublished: Docket or serial # and copy

of filing

Abatement / Enforcement

Trademarks: registered, pending or common law

# if registered or pending. Identifying mark and scope of use if

common law (products / geography).

Abatement / Enforcement

Copyrights: registered or with rights pre-filing

# if registered. Registered or not, need information on the

work – samples, online, description, photo, design.

Abatement / Enforcement

Trade Secrets Uniform Trade Secrets Act protects:

information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons … and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Abatement / Enforcement

Trade Secrets – Scheduling

Defined as submitted or by reference, so underwriting can understand scope and protection.

May not need to reveal actual secrets Reference to recipe, formula or customer list

Abatement / Enforcement

Foreign Equivalents ? PCT’s ?

Abatement / Enforcement

Must Have:

Ownership, Right To Enforce or Protectable Interest. No “clouds on title.”

Abatement / Enforcement

Ownership Issues? Inventorship questions? Shop rights / ex-employers or ex-

employees?

Abatement / Enforcement

NOT YET INFRINGED / NO COMMERCIAL ACTIVITY

Objective test: Unauthorized INFRINGEMENT, or the

manufacture, use, sale, off er for sale or the development to the point of being ready for sale must first begin during the POLICY PERIOD or during a previous continuously insured POLICY PERIOD

Abatement / Enforcement

INSURE EARLY AND OFTEN

Patent applications as soon as filed

Abatement / Enforcement

WHO IS A GOOD CANDIDATE?

Valuable rights? % of actual or expected sales? Current licensing revenues?

Abatement / Enforcement

Best Candidates for Abatement:

Protecting advantage in market Lacks ready cash or credit to self-fund Recent experience with IP conflict Licensor to well-positioned licensee who may be tempted to breach

Abatement / Enforcement

Less Attractive Candidates for Abatement: Patent holding companies Business of finding existing infringers

inconsistent with pre-existing exclusion.

Defense

Defense

Scheduled Coverage Defined “Product”

Physical product Process Method of business Trademarks Product configuration / trade dress Websites – technical and content Software Media

Defense

Defining the “product”: Schematics Flow charts Submit actual sample

Defense

Defining the “product”:

Defined by insured’s own IP: As “disclosed and claimed” in patent Better to have specific claims than broad

application claims BUT: IP may not cover entire product to be sold

Defense

Collections of “products” Catalogs / .pdf’s

Defense

With opinion supplied

Non-infringement opinion with specific IP distinguished

Relying on invalidity arguments

Defense

Time on the market Long time – lower risk Emerging against well-established

industries: Insurable, but Higher risk

Defense

Source of products: Develop own products? Buy from others? Diligence?

Chance to network with attorneys.

Defense

Contract Requirements:

Defense

Offering as benefit to customers

INSURED THROUGH:

What are the applicant’s

concerns?

Specific known risk?

Most important terms: Price? SIR/Coinsurance? Exclusions?

Deal breakers?

Tell Underwriters Up Front:

On Market / Sales Independent developmentRisk management/clearanceContract requirementCompetitive pressuresInsurable Risk

CopyistInvalidity defenseExisting disputesBusiness Risk

Low techLow sales

Would Write

Would BuySellable

Write More Business

Insured

IPISCBroker