Corporate Advertisers’ Group Offers Patent Troll Insurance

The Association of National Advertisers has launched an insurance program to protect marketers against the expense of Patent Assertion Entities (PAEs), often known as “patent trolls.”

Companies can face millions of dollars in legal fees to defend against patent infringement claims filed against them by PAEs. This insurance program, the ANA Patent Infringement Defense Insurance, provides members with patent infringement defense insurance protection for marketing and advertising activities.

According to ANA, patent claims have been filed against a number of common advertising practices, including using QR codes to direct a mobile device user to web content and putting a store locator on a website.

The ANA insurance will permit the insured party to challenge the validity of the patent, or otherwise defend against the assertion, with reduced out-of-pocket expenses.

“Patent trolls have been a growing issue for in the advertising industry in recent years, costing advertisers and agencies millions of dollars in fees in order to avoid paying even more to defend themselves in court,” said Bob Liodice, president and CEO of the ANA.

The ANA membership includes more than 680 companies with 10,000 brands that collectively spend over $250 billion in marketing and advertising. Its board includes executives from USAA, Toyota, AT&T, Ford, Johnson & Johnson, Coca-Cola, Walmart, Fidelity, McDonald’s, Target and others major corporations.

The “patent troll” defense coverage is underwritten by Scottsdale Insurance. Intellectual Property Insurance Services Corp. of Kentucky is the managing underwriter and Minnesota-based Twin City Group is the retail broker.

The coverage provides funds to defend against charges of U.S. patent infringement and filing a U.S. Patent Office administrative challenge It includes litigation expense and post-grant challenge expense.

The member can select to cover only services purchased from outside sources or to add coverage for in-house developed advertising and marketing services as well, which costs more.

The limits are $500,000 per claim per year/$1,000,000 aggregate claims all year. The premium runs between $10,000-$20,000 per year for product without coverage for in-house services. The premium for in-house product coverage depends upon the extent and type of in-house developed marketing or advertising programs. Higher limits are also available.