March 16, 2016

IP Insurance Terminology

Intellectual Property: Rights in patents, trademarks, copyrights, trade dress and trade secrets; or, products and/or services being made, used, sold, offered for sale and/or imported in commerce.

Abatement: Part of the word “Abate” meaning to stop others. Used by IPISC as stopping others from infringing activities.

Self-Insured Retention: An SIR is similar to a deductible, except it does not reduce policy limits. The retention is paid out-of-pocket before the policy begins reimbursement.

Co-Pay: The amount shared between the Insured and the Insurer. For example, a 80/20 policy means the Insurer is responsible for 80% of the expenses and the Insured responsible for the remaining 20%.

Additional Insured: Party(ies) added to and covered for the insured products stated within the terms of the Insured’s policy.

Licensee: Party(ies) licensing intellectual property from the Insured. Claims Made & Reported: Infringing activity must occur and the Claim is to be reported within the policy period.

Choice of Counsel: Endorsement allowing the Insurer to select counsel, may be a mandate to offering coverage to control risk, or, requested by applicant as a means to reduce premium.

Patent: Gives the holder the right to exclude others from making, using, selling, and offering for sale, manufacturing or importing the invention for a given period-of-time. A patent, however, does not necessarily guarantee that another will not copy, or infringe, on those rights claimed in the invention. The U.S. patent office does not enforce IP rights.

Trademark: Basically, a trademark protects a mark specifically identifying goods or services sold in commerce. A trademark can be words only, a design only or a combination of words and designs. A fact of interest: sounds, smells and tastes can also be trademarks, i.e., Corning® pink insulation and the NBC® chime - ding-ding-ding - are trademarked, but not the Harley Davidson engine sound. Harley fought for six years before the US Patent and Trademark Office before withdrawing its application (see: Harley-Davidson quits trying to hog sound, LA Times, 21 June 2000).

Copyrights: Copyrights are forms of expressions. Think artwork, music, books, software and clothing designs, just to name a few. Here is the kicker, though a copyright does not have to be registered, to enforce the copyright in court it must be first be registered at the U.S. Copyright office.

Trade Secrets: Anything held secret by a company, which gives it an advantage over its competition. Some famous examples are the KFC® eleven herbs and spices recipe, Coca-Cola® formula, WD-40®, the Twinkie® recipe and the Krispy Kreme ® recipe. Non-disclosure of these secrets keeps these, and other, companies successful.

Trade Dress: Products that are immediately and inherently distinguishable, and do not require a trademark to accompany them in order for each to be recognized is trade dress. The way a particular thing looks many times is just as important as holding a trademark. Think the design of a Taco Bell building, the look and shape of a Coca-Cola bottle, a color combination, such as Kodak’s yellow and red pattern.