In 2015, companies with less than $100 million in revenue accounted for more than 60% of those involved in non-practicing entities patent infringement lawsuits. RPX responds with an insurance policy that allows policyholders to transform an unpredictable threat into a manageable cost of doing business.
PRODUCT: Patent litigation coverage
COMPANY: RPX Insurance Services LLC, backed by Lloyd’s of London
BEST RATING: A (Excellent)
AVAILABILITY: Coverage is available through appointed retail and wholesale brokers.
FOCUS: Today’s patent demands have significant consequences for emerging companies. In 2015, companies with less than $100 million in revenue accounted for more than 60% of those involved in non-practicing entities (NPE) patent infringement lawsuits.
Also known as “patent trolls,” NPEs account for most patent litigation. NPE lawsuits have increased significantly in the last few years, and according to a recent National Venture Capital Association survey, the cost of preparing for and defending against patent demands tends to exceed $50,000 per startup. A number of companies report costs in the millions of dollars, not including internal time.
RPX responds with an insurance policy that allows policyholders to transform an unpredictable threat into a manageable cost of doing business. This affordable insurance helps emerging companies reduce the risks and costs associated with patent infringement lawsuits.
“This program allows early-stage companies to focus their finite resources on building their businesses, unfettered by the costly diversions posed by patent litigation,” explains Paul Scola, senior vice president, RPX Insurance Services. “It’s a game changer because it levels the playing field for developing companies.”
UNDERWRITING: Coverage includes expert claims management, which reduces the burden of selecting counsel and overseeing cases; policy limits up to $10 million, though limits are typically set at $1 million or $2 million; copays as low as 10%; and access to RPX patent risk experts and a dedicated claims management team. The policies cap financial exposure for companies, minimize distractions and ensure uninterrupted operations.
A simple application is available online that most companies can complete in minutes. RPX turns around applications quickly and often binds coverage within days. Companies with active assertions or prior claims are eligible for protection.
MINIMUM PREMIUM: $5,000 for $1 million of coverage.
TARGET: Startups and young companies that are just beginning to face patent risk.
COVERAGE TERRITORY: All 50 U.S. states.
CONTACT: Paul E. Scola, senior vice president, RPX Insurance Services; RPX Corporation, One Market Plaza, Steuart Tower, Suite 800, San Francisco, CA 94105; 866-779-7641.
Ronimarie Acord is an IA contributor.
