Patent insurances can aid patent owners in paying the litigation costs connected to enforcing their patent rights against patent infringers. In December 2007 the first generic patent insurance product was offered to the Danish companies by a private insurance provider.
Cross-country analyses show that small and medium sized companies (SMEs) do not patent their inventions to the same extent as large firms. Surveys among SMEs indicate that this is partly due to the fear of high expenses in the enforcement of patent rights through litigation. This suggests that the high patent litigation costs to an inexpedient degree restrain the SMEs from protecting their inventions through patents. Ultimately, we risk that high litigation costs hamper innovation by SMEs.
For these reasons The Danish Patent and Trademark Office has for some years strongly urged the private insurance providers to offer patent insurances to the Danish market. In december 2007 the first insurance provider took up this challenge and began to offer a generic patent insurance product to the Danish companies. Until then, it had only been possible for the Danish companies to buy tailor-made patent insurance products and such insurance products have usually been so expensive that only large companies could afford to take out such insurances.
The first generic patent insurance product is offered via Lloyd's in London and is mainly targeted at SMEs. The insurance product offers some choises in regard to eg the financial and the geographical coverage so SMEs can adapt the patent insurance to their needs.
The Danish Patent and Trademark Office hopes that more insurance companies will begin to offer patent insurance products and that this type of insurance will be widely distributed on an European scale. On a European level it would be preferable if the insurance type would be broadened to cover all types of intellectual property rights.
In 2008 the European Commission established an expert working group which looked at "Best Practice on Enforcement of IPR/Making IPR work for SMEs". The sub-group for "Funding and Evaluation" worked on strengthening the European industry's possibilities of obtaining patent insurances in Europe and of obtaining insurances covering all types of intellectual property rights. The sub-group's work ia included a case study of the Danish patent insurence and Niels Holm Svendsen from the DKPTO was rapporteur for the sub-group. The outcome of the sub-group's work is reflected in a final report which concludes that access to patent insurance is one of the important elements which can aid small and medium sized companies' in enforcing their IP rights. You can find the sub-group's final report here including the case studies and other relevant documents. The entire report containing all the recommendations from the expert working group looking at "Making IPR work for SMEs" can be found here.
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