How IP Insurance Protects Your Innovations In the Plastics Industry // PlastikCity Insurance Blog

How IP Insurance Protects Your Innovations In the Plastics Industry // PlastikCity Insurance Blog

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As we are all aware, the UK Plastic Industry is at the forefront of product innovation and process development, with tens of billions spent on R&D annually.  We all know, for some unscrupulous companies, it’s a lot easier to let others do all that heavy-lifting and just steal the idea once it’s been approved and commercially available. In this article, PlastikCity Insurance will look at what can be done to protect your ideas and how to take action should another business try and appropriate your innovations.

Intellectual Property (IP) insurance provides businesses with coverage for legal costs, damages, and expenses related to protecting their inventions, trademarks, copyrights, and trade secrets, helping safeguard both cash flow and future growth.

Understanding Intellectual Property and Its Importance

Intellectual property refers to creations of the mind, including inventions, artistic works, designs, business names and logos, symbols, and other commercially valuable creative output.

IP rights can be registered or automatically arise (e.g., copyright), and they allow creators to control and benefit financially from their ideas. Protecting IP is essential to prevent infringement, maintain competitive advantage, and enhance the value of a business for investors, lenders, or potential buyers.

Companies within the plastic industry can protect IP under laws such as the Copyright, Designs and Patents Act 1988, the Trade Marks Act 1994, and other statutory and international frameworks, including trade secrets protection and contract law.

Specific types of IP include:

  • Patents: Protect technical inventions for up to 20 years with exclusive commercial rights.
  • Trademarks: Protect brand identifiers, logos, and names, renewable indefinitely every 10 years.
  • Copyrights: Automatically protect literary, artistic, and software works, generally lasting for the author’s lifetime plus 70 years.
  • Design Rights: Protect the visual appearance of products.

Trade Secrets/Confidential Information: Protect non-public, commercially valuable information with non-disclosure agreements (NDA’s) and internal controls.

What Is Intellectual Property Insurance?

IP insurance is a form of liability insurance that protects businesses against the financial consequences of IP disputes, including legal claims for infringement or challenges to the validity of their own IP

IP Insurance typically covers:

  • Defence costs: Legal expenses incurred when defending against allegations of IP infringement.
  • Pursuit of infringers: Legal costs for enforcing your rights against those unlawfully using your IP.
  • Damages and settlement costs: Compensation you may owe or recover in IP disputes.
  • Contractual indemnities: Coverage arising from obligations under licensing or collaboration agreements.
  • Loss of IP rights or revenue: Protection against financial impact if IP rights are invalidated or profits are lost due to infringement.

Insurance may also include specialised products depending on industry needs, such as cyber-related IP breaches, software disputes, or patent invalidity challenges.

Types of IP Insurance Coverage

  • Before-the-Event (BTE) Legal Expenses Insurance: Covers potential disputes before any infringement occurs, helping mitigate future risks
  • Opinion Only Cover: Pays for legal opinions on enforceability or validity before starting litigation.
  • Defence and Enforcement Cover: Covers costs for defending claims against your IP or enforcing your rights against infringers.
  • Damages Cover: Protects against financial loss if an infringement action requires payment.
  • Validity Cover: Legal defence for challenges to the validity of your rights.

Domestic coverage is usually more affordable than worldwide insurance, and insurers may allow expansion as your business grows.

Benefits of IP Insurance

  • Protects cash flow: Legal disputes can be expensive; insurance ensures you can defend or enforce your IP without tying up operating capital
  • Deterrent: Competitors may be less likely to infringe if they know insurance is in place.
  • Improves negotiation: Knowledge of insured resources can strengthen licensing or settlement negotiations.
  • Adds business value: Investors, lenders, and potential partners gain confidence knowing IP assets are protected

Practical Steps for UK Businesses

  • Identify IP Assets: Audit and record all trademarks, patents, designs, copyrights, and trade secrets.
  • Secure IP: Register rights where possible and use contracts with employees and contractors to assign ownership to your business
  • Reduce Exposure: Use NDAs, confidentiality agreements, and restrict disclosure of proprietary information.

Enforcement and Claims

Enforcing IP rights in the UK may involve cease-and-desist letters, negotiation, mediation, or legal proceedings, including using the Intellectual Property Enterprise Court (IPEC) for smaller disputes.

Insurers often require a legal opinion confirming a reasonable prospect of success before funding litigation.

Key Takeaways

IP insurance is crucial for start-ups, SMEs, and established businesses to protect ideas and intangible assets from legal and financial risks.

Coverage should be customised depending on your IP type, industry, and risk profile.

Combining IP registration, contractual agreements, confidentiality measures, and insurance provides robust protection for your ideas, reputation, and future growth.

In summary

Businesses within the plastics industry can use IP insurance alongside legal registration and internal safeguards to ensure their intellectual property is defended, monetised effectively, and their competitive advantage is preserved. Strategic investment in IP insurance not only mitigates risk but supports innovation, growth, and long-term financial stability.

PlastikCIty Insurance are specialists in Intellectual Property Insurance, and can help either review your current cover or get you the right policy to protect you, your business and your ideas!

PlastikCity Insurance’s policies are arranged and administered by PHL Insurance Brokers Limited.

Read more about PlastikCity Insurance here.

PlastikCity Insurance

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