<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=1557350231232256&amp;ev=PageView&amp;noscript=1">

Protect Yourself Against Copyright Infringement Lawsuits

Posted by Jeffrey Forbes on Aug 17, 2015 9:05:00 AM


Copyright infrigement lawsuits


The costs of pursuing or defending yourself in copyright, patent, or trademark infringement lawsuits can be jaw-dropping.  Even in cases where the amount in controversy does not reach seven figures- litigation costs can be over a half million dollars. 


The unfortunate reality is that any company can find itself on the wrong end of infringement litigation. Even without any wrongdoing- a company could be facing a six figure loss only through litigation costs.


Many companies assume that that their standard Commercial General Liability policy will cover them in the event of infringement litigation.  While it’s true that a CGL policy may provide some coverage for patent infringement, it is likely to be extremely limited in nature.  In fact, intellectual property infringement often constitutes a significant insurance coverage gap for many companies.


To fill this gap, insurance companies have created additional insurance policy products that are available to you. 


What type of Copyright Infringement policy may be necessary to properly cover a company will depend heavily on the nature of that company’s activities as they relate to intellectual property.


There Are Additional Insurance Coverage Options Available To Protect You In Cases Of Copyright Infringement


Defense And Indemnity Policies

Cover claims brought against an insured for activities related to the use, distribution, advertising, and sale of its product.  This type of policy covers not just defense costs in Copyright infringement lawsuits, but damage awards and settlement payments.

A special note:  Customers purchasing these types of copyright insurance policy must pay close attention to the limits of the coverage, as the cost of litigation can significantly erode those limits when it comes time to pay an award or settlement.


Infringement Abatement Coverage

Covers the insured’s costs of prosecuting in a case of copyright infringement.  These policies typically cover around 75 percent of litigation costs but do not cover liability for judgments or damages.  Additionally, these policies often provide for the insurance company to share in any money recovered from the suit.


Patent Defense Coverage

Exists as a type of patent insurance policy solely to cover an insured’s defense costs in patent litigation.  It does not cover any potential damage awards or settlement against the insured where they are accused of infringement.


Steps You Can Take

While you may not think your company deals with enough intellectual property, issues to make such coverage necessary. In trademark issues, even simple advertising can lead to an expensive lawsuit. 

  • If a claim of infringement has been made against your company, you should notify your insurance company as soon as possible.
  • Companies are advised to consult with their insurance agent to ensure they are properly covered as each organization’s risk will be different.

Topics: Intellectual Property, For Your Business, startup