Intellectual property legal expenses insurance

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Delta’s dedicated IP insurance offering has been designed to make it easy for Singapore companies to cover their legal costs in a court battle over intangible assets.

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Singapore ranked fifth most innovative country amongst 126 nations in the Global Innovation Index (GII) 2018 report. R&D expenditure rose by 47% since 2010 to reach $9,519m in 2016, as Singapore businesses capitalised on innovation to keep them ahead of their competition. With the government support, Government commits S$19b to new 5-year plan for R&D initiatives RIE2020.

Intellectual Property insurance helps Singapore companies unlock the potential

of their IP through covering legal expenses to help them deal with infringement

or enforcement related issues.

A 2016 study of 900 local companies found that more than one-third of their

assets were intangibles, up from 20 per cent in 2010.

As our knowledge-based economy grows, Singapore’s most valuable ideas and

brands need to be protected from exploitation and intellectual property (IP)

risks. Singapore products are increasingly being devalued by knock-offs and

trademark theft - part of a global trend of illegal competition.

A first for Singapore

Delta’s dedicated IP insurance offering has been designed to make it easy for

Singapore companies to cover their legal costs in a court battle over intangible assets.

Until now, no single policy in Singapore has adequately covered intellectual property

to help businesses deal with infringement and enforcement-related issues.

Having an insurance policy that covers legal expenses gives financial confidence to

companies to manage risks in an effective way.

An IP policy helps Singapore companies to realise the value of their IP while they

commercialise their ideas with confidence.

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Having an insurance that covers legal expenses allows businesses to swiftly respond to difficult situations they may encounter while commercialising their IP.

> Protect your financial resourcesThe policy protects the financial position of your

company by reimbursing you for the legal

expenses you incur while defending or enforcing

your IP.

> Unlock the potential of your IP Licensing is a common way of commercialising the

IP. The policy helps in attracting larger licensees

who often demand indemnification against

infringement disputes arising out of use of your IP.

> Comfort investors and lendersHaving this policy reassures investors and lenders

that the business is well equipped to face

infringement disputes. It makes them confident

that the funds they are providing would be used to

grow the company rather than fending off legal

issues related to its IP.

IP coverage and claims examples

Defence Cover for Infringement DefencePays for legal expenses to defend an allegation of

infringement against you.

Example

The insured recently secured a patent for an

advanced tractor suspension system. Whilst the

insured is a relatively new and fast-growing

company, they were careful to do their research

before bringing the product to the market. Their

patent agent conducted extensive searches and

freedom to operate advice was received.

However, following adoption and agreement of

exclusive use licences with a major tractor

manufacturer, a cease and desist letter was received.

The insured felt that the action against them was

groundless and thus was prepared to strenuously

fight any allegation of infringement. The insured was

covered by the Legal Expenses Insurance for the

SGD 57,000 of legal costs incurred in defending the

allegations and subsequently had their patent

validated by the Court.

Pursuit Cover for Infringement PursuitPays for legal expenses to pursue a third party for an

allegation of infringement of your intellectual property.

Example

The insured, an exporter of Manuka honey, uses its

registered trademark as a branding tool as well as a

certification mark to show potential customers that

the product meets strict quality standards and

regional authenticity. Following receipt of

information that an unauthorised company was

using the trademark on their packaging, the insured

felt they must undertake cease and desist measures.

The insured engaged lawyers to prevent the

unauthorised user from continuing to use the

trademark and sought damages. Following initial

resistance, court proceedings followed. The insured

was ultimately successful and managed to recover

some 35% of the legal costs incurred. However, the

remaining amount of the SGD 36,000 incurred were

covered by the Legal Expenses Insurance and

further abuse of the trademark was prevented.

Revocation Cover Pays for legal expenses to defend an action

disputing the legitimacy of your intellectual property.

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Contractual dispute protection for Licensee PursuitPays for legal expenses you incur because of a

dispute with a licensee over the use of your

intellectual property.

Example

The insured agreed with a distributor to grant an

exclusive licence to manufacture trademarked toys

in China for later distribution in the Singapore

market. The licensee was granted a twelve-month

exclusive intellectual property usage and

manufacturing agreement. Part-way through the

contract the insured discovered the manufacturer

was also distributing the toys in the Chinese market.

The insured was forced to seek a replacement

manufacturer to maintain exclusivity and

manufacturing standards. The insured was covered

by the Legal Expenses Insurance to pursue for the

additional costs of working incurred and breach of

intellectual property rights, obtaining an out of

court settlement.

Protection of exclusive licensee for Licensee DefencePays for legal expenses you incur to defend an

infringement allegation against your licensee arising

out of use of your intellectual property.

Example

The insured granted their patented solution to a

major semi-conductor manufacturer in Taiwan.

Following many years of partnership, a new entrant

came in to the market. The new entrant began

proceedings against several Taiwan based semi-

conductor manufacturers for alleged breaches of a

patent portfolio they had acquired recently, in

addition to their own innovations. Not only were they

seeking damages but also revocation of the alleged

infringers’ patents.

Whilst the licence agreement did not specifically

require the insured to indemnify the licensee for any

infringement defence costs, given the close and

profitable relationship that the insured and licensee

held, the insured was happy to assist the licensee in

their infringement defence.

The insured was indemnified for the costs incurred

by the licensee, as well as their own defence of

revocation costs, by the Legal Expenses Insurance.

This amounted to some SGD 143,000, although

some limited recovery of costs was later achieved.

Public relations expensesPays for public relations expenses arising out of

covered disputes under scenarios listed above.

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