What is Patent Infringement Insurance

Patent Infringement Insurance (also called IP Defence Insurance) protects you if someone accuses you of infringing their patent - whether you did it knowingly or completely by accident.

If you’re sued for patent infringement, this insurance helps cover :

Solicitor and barrister fees
Court costs
Expert witness costs
Settlement payments
Damages if you lose the case
Negotiated licensing fees (sometimes)

Without insurance, defending against a patent lawsuit can cost hundreds of thousands - or even millions of pounds, even if you are innocent.

Why Might You Need It ?

You are launching a new product, technology, or service.
You manufacture, sell, or distribute goods in a crowded market.
You operate in industries like tech, medical devices, engineering, software, or consumer products — all sectors prone to patent disputes.
Even if you do your own patent searches, it's easy to infringe accidentally because there are millions of active patents.

Important

Patent infringement doesn’t have to be deliberate. You can still be sued if your product unknowingly overlaps with someone else's patent rights.

What Patent Infringement Insurance typically covers

Legal defence costs
Court fees and expert testimony
Settlements and damages (sometimes)
Licensing negotiations (sometimes)

What Patent Infringement Insurance does not cover

Deliberate or wilful infringement
Criminal penalties
Patents outside of covered regions
Claims arising from expired patents

Example Scenario

Imagine you design a new wearable fitness tracker. A year after launch, a competitor accuses you of infringing their patented biometric sensor design.

You have two choices :

Fight an expensive court battle without insurance
or let your patent infringement insurance fund your legal defence, expert witnesses, and possible settlement. Which could save you from bankruptcy while you fight or settle the claim.

Quick Pros and Cons

Pros :

Shields your business finances
Protects your reputation
Makes you look stronger to competitors
Gives you leverage in negotiations

Cons :

Can be expensive (especially in risky industries)
Policies often have limits and exclusions
Might not cover all types of patents or claims

Typical Cost

Premiums usually depend on your industry, revenue, number of products, and litigation history.
It could cost anywhere from £5,000 to £50,000+ per year depending on your situation.
High-risk industries (like tech or medical) are usually on the more expensive end.

In short

Patent infringement insurance = protecting yourself if someone claims you copied their invention.
It covers the massive cost of defending yourself, whether you're guilty or not.