You may have recently seen that Spineology lost a patent infringement case against Wright Medical. Spineology sued Wright Medical in 2015 for infringing on their patent and the case went back and forth on appeals, finally ending in July of 2018 with Spineology on the losing end. A high-level synopsis can be found here.
I bring this to your attention because patents are the life-blood of many companies in the life science industry and yet many companies are vulnerable to either having their patent infringed upon or being forced to defend their patent. The cost for either is never cheap. The case went on for three years and one can only imagine how much money was spent in legal fees. What so few companies know is that there is actually an insurance policy that can insure your patents, it can be set up to both defend and enforce your patents.
Why is patent coverage important and what are the benefits? Here are a few reasons:
- If you are and R&D company with no revenue you may not have the financial strength to protect your patent.
- There are plenty of patent trolls that have bought low-quality patents and use these patents as a basis for demanding royalty payments from you and a patent policy can help defend against these trolls.
- If you are trying to raise money you can inform investors that you not only have a patent but it is insured which will give them some added comfort.
There are many other reasons to look at patent insurance, but one reason not to dismiss it is because you have hired great IP attorneys. Having quality IP attorneys is important and recommended, in fact it could help lower the cost of IP insurance, but it can’t help protect you against a third party infringing upon your patent, having to defend your patent, and patent trolls.
What many clients are surprised to learn is how easy it is to determine the economics of the coverage and whether it makes sense to move forward and put it into place. Many times the initial application can be completed in 15-30 minutes which allows us to get pricing indications. The worst case is the pricing does not make sense but at least you can report to your board of directors that you did the due diligence on how to protect your patent. The best case scenario is that you have taken the right steps to protect the patent and the terms and pricing of the insurance reflect that, resulting in an easy decision to put coverage in place.