The only right a patent gives the inventor is the right to defend it in a court of law. And as mentioned earlier, patent infringement litigation can be costly. How much? Ask Diane B. Loisel, a nurse from Bowie, Maryland. After obtaining a patent for a cap she had invented for use in neonatal respiratory therapy, she claimed that a company to whom she had presented the concept had begun to manufacture and market it without her permission.

Loisel’s patent attorney told her that to litigate would cost her $250,000 in legal fees. “If you’re going to get a patent, you’re going to have to fight,” her lawyer had told her previously. “But he never told me it would cost so much money,” she said.

To help inventors shoulder the risk and responsibility for enforcing their patents against infringers, insurance companies market policies designed to reimburse the litigation expenses incurred by a patent owner in enforcing his or her U.S. patents.

Patent attorney Robert W. Faris, a partner in Nixon & Venderhye of Arlington, Virginia, says of this kind of policy, “One of the downsides of this type of insurance is that the insurance company is reimbursed for its expenses out of the settlement or judgment. This means that if the recovery is on the order of the legal expenses incurred for the litigation, the patent owner could come away with practically no financial recovery although his patent rights will have been vindicated.”

Faris adds that the program seems pretty risky for the insurance company. “I don’t know how they are able to predict with any certainty what the risks would be beforehand. They would have to be only taking on patents whose chances for infringement are very remote.”

One such company permits its insured to choose patent counsel. However, before the company will open the tap and start paying bills, the policyholder must provide a written opinion from his or her attorney attesting to the fact that the matter is one that can be litigated, and the policyholder must show proof that the alleged infringement will cause economic damage.

Would Faris recommend patent infringement insurance? “I might well recommend that certain clients look into it because it is the only way some small businesses might be able to enforce their patent rights,” he concludes.

He points out that patent infringement insurance does not cover the inventor if his or her U.S. patent infringes an existing patent. In other words, it could protect you (the inventor) from someone infringing your patent, but it is of no help to you if your patent infringes the patent of another inventor.