Growing your business? Here's how to make sure your ideas stay yours

Intellectual property can be the cornerstone of your company, and yet it’s often not something you can put on your company’s balance sheet. So what is it, how can you insure it, and what’s happening in the world of IP right now?

What is intellectual property?
Intellectual property is anything you create with your mind — it’s an umbrella term for intangible assets. It covers everything from ideas and inventions, designs and artwork, symbols and logos, stories and brand names.

While intellectual property isn’t something you can necessarily hold, it is a highly valuable asset as it represents a company’s competitive advantage. It’s also not something that comes easily — intellectual property comes with time and skill, it’s an investment in people and the nurturing of talent.

Intellectual property, therefore, is a hugely valuable commodity, often worth much more than a company’s physical assets.

The different types of intellectual property
Intellectual property is usually ring-fenced into categories such as patents, trademarks, and copyrights. These categories allow the owners to ensure they have exclusive legal rights to use their intellectual property.

Patents cover things like code and inventions; trademarks cover unique business identifiers, such as logos; and copyrights cover the written word as well as photography, music and online content.

Digital assets are also increasingly thought of as intellectual property and cover a variety of assets from proprietary code, algorithms and software to online content such as NFTs, or non-fungible tokens.

What is intellectual property insurance?
Intellectual property insurance – or IP for short – may not be suitable for every business but it does, however, provide potentially useful cover for companies in the tech and tech development space.

Fintech, medtech and gaming are research-heavy industries and with this comes an increased need to protect a company's assets and creativity from interference by competitors.

These are also spaces of rapid, global innovation with both well-established and startup players.
IP insurance can be crucial to obtain as a smaller tech business to try to fend off more long-standing companies from taking your intellectual property.

Depending on the cover you get, IP insurance may include legal costs and any damages involved in defending or settling a claim of infringement. It could also cover legal costs if you want to take action against another party for infringing on your IP.

There have been several high-profile IP cases over the years. Recently, Nintendo filed a lawsuit against the small Japanese gaming studio, Pocketpair, for patent infringement claiming similarities between the characters and their personalities in its game Palworld and that of Pokémon.

In the gaming world, it can be easy to cross this line. It could be argued the breach was intentional given the popularity of the Pokémon characters. Some smaller studios might be tempted to do this to gain instant traction as the characters are easily recognisable and draw users to their game.

According to a Games Radar article, “One analyst reckons that Nintendo's laundry list of patents means it could have sued countless games over the years, but the company is only targeting Palworld over its similarities to Pokémon now because it's inclined to do so”.

IP claims can be long and strenuous and involve a lot of evidence. In this case, it could be argued that the Pocketpair team came up with their own ideas through focus groups and customer feedback, which is why it's important to have a policy that can assist with legal costs.

There are, however, several companies that eschew their intellectual property rights, and instead open source their inventions or ideas.

Take Moderna — a key player in the Covid vaccination roll-out — that chose to waive its IP rights to the Covid-19 vaccine, allowing researchers in South Africa to copy the vaccine.

While an extraordinary breakthrough on the path to mass inoculation across the developing world, an equally extraordinary breakthrough in the patent debate, by allowing the world to benefit from their research.

Intellectual property across the globe
If you’re a global company, it’s important to note that once you register your intellectual property in one country, it’s not automatically registered globally.

There's also not a globally consistent definition of intellectual property or consistent rights.
To that end, it’s advisable to register your intellectual property in each country you operate in, and be aware of the various laws and regulations that govern your IP.

When considering registering your intellectual property in the US especially, it’s important to consider “patent trolls”. This is a term for those who exploit loopholes in the current US patent system to make their money.

They do this by filing for patents without any ambition to develop a product and instead file false claims against anyone who infringes these patents.

Should I consider intellectual property insurance?
Intellectual property insurance is something you might consider if you have intellectual property that’s valuable to your business model. For some companies, it won’t be right, but for others, it’ll be paramount.

Understanding whether you need it is, however, important as the complex nature of IP litigation and the level of expertise required by lawyers, any defence costs can be substantial. There have been cases where companies that don’t have this cover in place have ended up closing up shop due to IP litigation.

Intellectual property isn’t just a concern in the country you’re headquartered in, but is a global issue. With eight billion people in the world, can you guarantee you’re the only person that’s thought of the exact tech you’ve built?

Want to explore your intellectual property insurance needs?
Superscript’s tech specialist brokers have helped global companies scale and thrive, raising billions of pounds while protected by our tailored cover.

We’ve been underwriting global success stories for over 10 years, getting businesses like yours the best deal, so you can save time — and money — on your premium. Get in touch with one of our experienced team to learn more.