Insights
Publications

Insurance Coverage Against Patent Infringement Suits by Non-Practicing Entities

11/26/2012 Articles

Looking for a possible new strategy to protect yourself against patent infringement lawsuits filed by non-practicing entities (NPEs)?  There is an innovative new potential option to evaluate as part of your strategy to manage the threat and expense of NPE litigation.

 

In response to the continued rising tide of patent infringement lawsuits filed by NPEs, RPX Corporation and Aon Risk Solutions have recently announced that they will begin offering small and medium-size companies up to $2.5 million in insurance coverage against NPE lawsuits. The insurance is currently available only to U.S. based companies with $1 billion or less in annual revenue. Although RPX has long offered defensive patent licensing strategies to help companies combat NPEs, this is the first time that it has offered insurance aimed at protecting defendants from NPEs.

 

Numerous academics and legal market observers have noted the sharp rise in NPE lawsuits in recent years. For example, a 2012 study from Boston University School of Law found that NPE lawsuits are “growing rapidly” and that such suits imposed an estimated $29 billion in legal costs in 2011 alone.[1]  The study further found that much of the burden of NPE lawsuits falls on small and medium-size companies: 82% of defendants in NPE cases are companies that generate less than $100 million in annual revenue.[2]

 

Not only are NPEs targeting companies of many different sizes, they are also expanding beyond traditional high-technology companies. For example, a 2012 study by PatentFreedom shows that although NPEs have historically targeted well-known technology companies more than others, NPEs are gradually shifting focus away from those top companies and broadening the range of targets they pursue.[3]

 

NPE lawsuits can pose a significant threat and create great uncertainty for smaller companies. A 2011 PricewaterhouseCoopers study of patent litigation shows that median damages awards in patent litigation have varied between $2 and $10 million in the past six years.
 

It is difficult to assess the value of this new insurance product in light of the lack of publicly available information about the terms of coverage and cost.  Further information can be obtained by contacting RPX.  See:  http://www.rpxcorp.com/index.cfm?pageid=32&itemid=201 and www.aon.com/ip.

 



[1]           James Bessen and Michael J. Meurer, The Direct Costs from NPE Disputes 2 (Boston University School of Law, Working Paper No. 12-34), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2091210.

[2]           Id.

[3]           See PatentFreedom, Exposure by Industry, available at https://www.patentfreedom.com/about-npes/industry/.

Firm Highlights

Publication

Are Losses Resulting from Phishing Incidents Covered by Crime Policies Insuring Against Computer Fraud?

It is an all-too-common dilemma. As phishing schemes have become more prevalent and more sophisticated, businesses of all sizes have fallen victim to these attacks where a fraudster will use a spoofed email or other...

Read More
Publication

Trade Secret Hygiene for Current Employees

Published on  ACCDocket.com . By Walt Norfleet, Smiths Group plc and Eugene Y. Mar, Farella Braun + Martel LLP In the first two parts of this series on best practices in protecting trade secrets, we...

Read More
Publication

Securing Against Trade Secret Pitfalls and Dangers Arising From Employee Mobility Situations

Published on ACCDocket.com . By Walt Norfleet, Smiths Group plc and Eugene Y. Mar, Farella Braun + Martel LLP Picture this: Your company is in a highly competitive industry with several leading players heavily supported...

Read More
Publication

How Defense Strategies Can Go Awry When Pursuing Concurrent PTAB Relief in Financial Services Patent Litigation

United States Automobile Association (USAA), a financial services company that provides insurance, banking, investment, and retirement products and services for members of the military and their families, filed a surprising patent infringement complaint against Wells Fargo...

Read More
Publication

Practices to Protect Trade Secrets in Failed Acquisitions and Customer Relationships

Published on  ACCDocket.com . By Walt Norfleet, Smiths Group plc and Eugene Y. Mar, Farella Braun + Martel LLP In part one of this three-part series on best practices for protecting trade secrets and guarding...

Read More
Publication

Facebook Suspends Apps That Scrape Data From Its Platform Following Cambridge Analytica Scandal

Read More
Publication

Who 'Owns' a Secret? Whether Trade Secret Licensees Have Standing to Sue in California

If the eye-popping damages awards in several recent lawsuits are any indication, companies are increasingly coming to see their private information as one of their most valuable assets—and California juries apparently agree. For example...

Read More
News

Farella Braun + Martel Ranked Among “Best Law Firms” by U.S. News & World Report and Best Lawyers

Read More
Publication

What California’s New Security Law Means to Your Business

Commonsense IoT security steps that startups and small business should consider to comply with California’s new law California recently enacted a new law, Senate Bill 327, that requires companies that make Internet of Things...

Read More
Event

2020 Insurance Coverage Litigation Committee CLE Seminar

Raymond Sheen will speak at the 2020 Insurance Coverage Litigation Committee CLE Seminar session, "Fingerprints, Facial Recognition, Permission? Oh My! Biometric Privacy Coverage Litigation Arriving Soon in Your State." Details: The Illinois Biometric Privacy Act...

Read More