Tuesday, 26 April 2011

Before-the-event IP litigation insurance

The IP Finance blog has received information concerning what has been described as "an innovative solution to the intellectual property protection requirements of small and medium sized enterprises", following cooperation between McDaniel & Co Solicitors and FirstAssist Legal Protection.  According to the information received,

"The Patents County Court reforms [in England and Wales] are likely to create a forum for the resolution of IP disputes which will improve access to justice by limiting and controlling the costs of litigation. The reforms will undermine litigation which currently uses a conditional fee agreement and an after-the-event legal expenses insurance policy in line with wider challenges regarding recovery of the success fee and insurance premium.

The difficulty with IP litigation at present is the absence of clear rules or guidance on whether an action will proceed in the Patents County Court, where costs are tightly controlled, or the High Court where additional liabilities are potentially recoverable in full from the opponent.

Before-the-event legal expenses insurance is available which will indemnify an IP owner’s legal costs when it is necessary to pursue an infringer. This type of insurance demonstrates that the custodians of a company have made an assessment of litigation risk and obviates the need to hold large cash reserves or seek finance to pay legal fees.

The legal protection available to clients of McDaniel & Co is a before-the-event legal expenses policy in respect of which a premium is payable annually. If a matter proceeds in the Patents County Court, the policy will, subject to terms and conditions, indemnify the costs incurred by McDaniel & Co for bringing the action and any costs awarded to the opponent. In the event the matter needs to proceed in the High Court the policy will indemnify a proportion of McDaniel & Co’s costs and the IP owner’s disbursements such as counsel’s and experts’ fees and can be used to support other funding arrangements.

The McDaniel & Co/FirstAssist Legal Protection solution allows IP owners to factor into their risk management equation the reduction to the overall costs of IP litigation brought in by the introduction of the Patents County Court costs regime. ... Clients of McDaniel & Co can also opt for FirstAssist’s standard before-the-event intellectual property legal expenses policy which can provide cover in jurisdictions throughout the world. ..."
The IP Finance weblog is always keen to receive readers' comments -- particularly from SMEs, since the viability and profitability of insurance schemes such as this one depends on making them sufficiently attractive and well-priced to persuade them to buy into them.

1 comment:

Filemot said...

Nice business model that ensures the lawyer keeps the client. One of the downsides I have noticed of insured clients is that they are constrained to use the law firm recommended by the Insurer without so much as a second opinion and therefore Bye Bye client