IP Outreach Research > IP Use and Awareness


Title: Intellectual Property & Legal Expense Insurance
Author: Kerry S Beynon, Iwan R Davies and Nigel J Moore [University of Swansea/IP Wales]

Swansea University - IP Wales Research

Year: 2003


Subject/Type: IP Knowledge, IP Protection
Focus: Commercialisation, Economic / Financial Impact, Enforcement
Country/Territory: United Kingdom
Objective: To examine the phenomenon of insurance as a mechanism for supporting small and medium-sized enterprises in legal disputes involving the enforcement or defence of their intellectual property rights.
Sample: 985 intellectual property professionals and small and medium-sized enterprises in England (random sample) and Wales (IP Wales members)
Methodology: Electronic questionnaire

Main Findings

58% of respondents stated that they were not in possession of intellectual property (1.5% of a random test sample of this group did have registered UK trademarks, however); 24% reported that they were not interested in intellectual property (33% of a random test sample of this group did in fact hold registered UK trademarks though).

The intellectual property (IP) right most commonly held by the remaining 18% was that of copyright (held by 46%), followed by trademarks (held by 45%), industrial design rights (held by 20%), and patents (held by 18%). While IP practitioners were more likely than small and medium-sized enterprises (SMEs) to hold trademarks and copyright ownership, the latter were more likely to claim ownership of industrial designs. The four most common reasons for not owning IP were: unawareness of IP, non-importance/irrelevance of IP to the respondent's business, lack of resources, and "other".

71% of IP asset owning respondents indicated that they were not aware of any infringement of that asset; of those reporting an act of infringement (29%), 57% reported that it had had an insignificant effect on their business (26% and 17% stated a moderate and significant effect, respectively). A majority (60%) of those affected by IP infringements chose to seek legal advice. Actions taken against infringers include: cease and desist notifications (47%), no action (26.5%), pre-court settlements (15%), and court action (just under 12%). The action considered most effective in combating an infringement were cease and desist notifications (47%); 33% believed that no action was effective, and pre-court settlements and court action were deemed effective by 17% and 7%, respectively.

Conversely, 62% of respondents stated that they were concerned about infringing another's IP assets, while 38% were not. 91% reported of respondents reported that they had not infringed another's IP rights, while 9% had done so. Actions taken against those admitting to infringement include: no action (63%), cease and desist notifications (31%), and court action (6%). Respondents prefer to resolve IP disputes informally (77%).

57% of respondents reported being aware of IP enforcement insurance (insurance covering the legal expenses incurred as a result of enforcing IP rights), and 49% said they were aware of IP infringement insurance (insurance covering the legal expenses of defending the claim of a breach of another's IP rights). The awareness of legal expense insurance for IP was at 62%. IP practitioners were more likely than SMEs to have an awareness of any of the insurance types. The vast majority of respondents reportedly had not purchased either IP enforcement/infringement (96%) or legal expense insurance (88%). Reasons for not purchasing IP insurance include "not necessary" (29%), lack of awareness of its availability (28%), "too expensive" (20%) and "other" (13.5%). Specific concerns raised relate to insurances' exclusion clauses and procedural requirements.

[Date Added: Aug 18, 2008 ]