Association of National Advertisers Launches Patent Troll Insurance

The ANA (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.”

PAEs are firms with the sole business purpose of launching patent claims against targeted companies which can then cost millions of dollars of fees to defend.

In the adver­tising space, PAEs have been increasingly in the news by claiming ownership of many common advertising practices, including using QR codes to direct a mobile device user to web content and putting a store locator on a website.

To address this issue, the ANA is introducing a program to provide members with focused patent infringement defense insurance protection for marketing and advertising activities. The insurance will permit the insured party to challenge the validity of the patent, or otherwise defend against the assertion, with greatly reduced out-of-pocket expenses.

Coverage is offered through Scottsdale Insurance Co. with managing underwriter Intellectual Property Insurance Services Corporation responsible for underwriting and claims and retail insurance broker Twin City Group responsible for soliciting and advising ANA members.

Coverage benefits include:

• Provides funds to defend against charges of U.S. patent infringement, and filing a Patent Office administrative challenge for example, commencing with a threat received from a patent holder. The demand can be oral, written, or a Federal Court complaint.
• Includes litigation expense and post-grant challenge expense such as “Inter Partes Review” trials for the asserted patent.
• Provides predictability for the advertising budget. Places a “risk collar” around unexpected litigation expenses.
• Allows the member to remove themselves from the potentially disruptive, time-consuming, and expensive process of demanding reimbursement under a vendor indemnity agreement.

Limits include $500,000 per claim per year/ $1 million aggregate of all claims per year. Higher limits are available.

Bob Liodice, president and CEO of the ANA, commented: “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. In order to offer a level of protection to members, we are introducing ANA Patent Infringement Defense Insurance.”

The ANA was founded in 1910 with membership that includes more than 680 companies with 10,000 brands that collectively spend over $250 billion in marketing and advertising. The ANA also includes the Business Marketing Association (BMA) and the Brand Activation Association (BAA) which operate as divisions of the ANA, and the Advertising Education Foundation which is an ANA subsidiary. The ANA advances the interests of marketers and promotes and protects the marketing community.