Can Patents be Insured? An Analysis of Patent Insurance

Patents have always been an indicator of innovation capabilities. One of the measures of many high-tech companies and innovative companies is the number of core patents of the company and its global layout. As China pays more and more attention to intellectual property rights, patents have gradually been directly linked to the country's comprehensive national strength, scientific and technological competitiveness and global economic trade, and are closely related to the economic life of the people.

However, the protection of intellectual property rights is closely related to the ecological environment of intellectual property operation in the whole country. According to the 2017 China Patent Survey data report of the State intellectual property Office, the proportion of patentees who have experienced patent infringement has reached 10.7 percent, while the proportion of enterprises that have suffered infringement is significantly higher than that of universities, scientific research institutions and individuals, accounting for 13.4 percent. According to another data, for enterprises, among the main reasons that hinder the benefits from technological innovation activities, more than 60% of them choose to "cannot effectively prevent other market entities from imitating their own technological innovation", accounting for 63.2. It can be seen that in the process of intellectual property protection, the problem of patent infringement exists on a large scale, and has brought actual losses to the patentee. However, in practice, because it is difficult to obtain evidence in patent infringement litigation, the legal cost is expensive and the time period is long, many enterprises give up using reasonable and legal means to fight for their rights.

Insurance has always had the role of "small capital, large leverage". Therefore, patent insurance has the functions of economic compensation and risk prevention, which can effectively reduce the cost of safeguarding intellectual property rights, and can significantly enhance the willingness and ability of enterprises to safeguard their rights. to ensure the role of intellectual property rights in maintaining the order of fair competition in the market, and this is the more important link in the intellectual property protection system.

At present, the main patent insurance has the following:

(1) Patent licensing insurance: the product mainly covers the loss of the principal's agency fee due to the negligence, error or omission of the patent agency or patent agent in the process of providing professional services, resulting in the client's invention patent application not conforming to the novelty or creativity and being rejected by the Patent Office;

(2) Patent enforcement insurance: the product mainly covers the legal expenses and travel expenses incurred for the infringement of the patent right when the patentee defends his patent right through legal proceedings;

(3) Patent infringement liability insurance: when the applicant infringes the patent right of another person, if the patentee makes a claim for compensation for patent infringement to the insured for the first time during the insurance period, the insurance company shall bear the economic loss to the insured;

(4) Loan guarantee insurance: Pledging intellectual property rights as property rights to financial institutions is one of the ways for SMEs to obtain financing. The insurance is mainly the insurance company to the beneficiary of the loan guarantee insurance (I. e. the investor) commitment, if the policyholder (I. e. the debtor, in this case the intellectual property owner) does not perform its obligations in accordance with the contract or the law, the insurance company shall be liable for compensation;

(5) Legal Expenses Insurance for Patent Disputes in Overseas Exhibitions: If an enterprise goes overseas to participate in or hold an exhibition, the insurance company will pay for the rights protection expenses. The economic losses covered here mainly include legal expenses related to legal fees, administrative handling expenses and litigation expenses for patent infringement disputes.

Although China's patent insurance is developing rapidly, there are still some problems. First of all, the enterprise's understanding of patent insurance is insufficient, the participation rate is low, and the allocation ratio is out of balance. Many companies have not yet learned about the existence of patent insurance, let alone the importance of preventing patent risks; and most insured companies also choose offensive patent enforcement insurance in their insurance portfolio, and some defensive patent insurance, Such as patent infringement liability insurance, legal fee insurance for patent disputes in overseas exhibitions, few people pay attention to it, and it is difficult to promote it. Secondly, the management capabilities of my country's insurance institutions in patent insurance need to be improved. Many property insurance companies are still in the competitive stage of "competing for premiums and expenses". For niche insurance with high technical content and strong professionalism such as patent insurance, Lack of medium and long-term planning and insufficient investment have led to limited types of patent insurance products in my country, single liability, and high insurance thresholds, can not meet the market demand well, in addition, patent risk management means are limited, risk assessment is a mere formality, resulting in "disease insurance" and other situations are difficult to avoid, further promoting the comprehensive cost of patent insurance.

To solve the problems of patent insurance in my country, on the one hand, it is necessary to increase publicity, increase enterprises' understanding of patent insurance, and increase their willingness to participate in insurance; on the other hand, professional technology insurance companies can be established to make insurance companies understand technology Risk management is more professional, and the development trend of technology and the protection of patents have a deeper understanding.