System and method for financing an insurance transaction
View Patent ↗A method for structuring an insurance transaction. The method includes providing insurance coverage to reimburse an insured entity in the event that the insured entity incurs a loss based on the occurrence of one or more defined events, designating an insurance premium amount to be paid by the insured entity as an insurance premium. The method further includes requiring that the insurance premium amount be paid, at least in part, by a transfer of intellectual property assets, each intellectual property asset including a plurality of intellectual property rights.
1. A method for structuring an insurance transaction, comprising:
providing insurance coverage to reimburse an insured entity in the event that the insured entity incurs a loss based on the occurrence of one or more defined events;
using a processor that executes instructions contained in memory to determine an insurance premium amount to be paid by the insured entity as an insurance premium;
requiring that the insurance premium amount be paid, at least in part, by a transfer of intellectual property assets, each intellectual property asset including at least one intellectual property right; and
using a computer system to generate a license agreement for licensing at least a portion of the intellectual property rights associated with the intellectual property assets back to the insured entity in exchange for one or more payments under a variable royalty rate in addition to payments of the insurance premium,
wherein the initial royalty rate is set by the computer system to a nominal value;
wherein the variable royalty rate changes from the nominal value when the insured entity incurs a loss based on the occurrence of the one or more defined events;
wherein the variable royalty rate is determined by the computer system based on the amount that has been paid to the insured entity as claims under the insurance coverage;
wherein the insurance premium amount is set by the insurer according to the probability and magnitude of risk being assumed by the insurer and said insurance premium amount does not increase based on said one or more defined events;
wherein the one or more defined events are related to an intellectual property lawsuit.
2. The method of claim 1 , further including requiring that a second portion of the insurance premium amount be paid by other than the transfer of intellectual property assets.
3. The method of claim 2 , wherein the second portion of the insurance premium amount to paid by other than a transfer of intellectual property assets is determined based on a calculation of the fair market value of the transferred IP asset.
4. The method of claim 1 , wherein the variable royalty rate is set to repay in full the amount paid to the insured entity as claims under the insurance coverage and a return of capital fee.
5. The method of claim 4 , wherein the repayment amount is calculated to repay the claim payout plus return of capital over the remaining term of the license.
6. The method of claim 4 , further including creating a grouping of intellectual property assets including at least the transferred intellectual property assets.
7. The method of claim 6 , further including generating income from the grouping of intellectual property assets.
8. The method of claim 7 , further wherein the income is generated by licensing at least part of the grouping of intellectual property assets to third parties.
9. The method of claim 7 , wherein the generated income is applied to reduce the variable royalty rate.
10. The method of claim 1 , further including providing an additional layer of insurance coverage based on the one or more defined events.
11. The method of claim 10 , wherein the additional layer is a captive layer.
12. The method of claim 1 , further including creating a grouping of intellectual property assets including at least the transferred intellectual property assets.
13. The method of claim 1 , further including generating income based on the transferred intellectual property assets to offset the expense of paying claims under the insurance coverage.
14. A system for generating an insurance agreement, comprising:
an input device within a computer system to receive insurance coverage information including an insurance coverage amount to reimburse an insured entity in the event that the insured entity incurs a loss based on the occurrence of one or more defined events;
a processor that executes instructions contained in memory to determine an insurance premium amount to be paid by the insured entity as an insurance premium,
wherein the insurance premium amount is to be paid, at least in part, by a transfer of intellectual property assets, each intellectual property asset including at least one intellectual property right;
an output device configured to generate an insurance agreement including the insurance coverage amount and the insurance premium amount;
the computer system programmed to generate a license agreement, wherein the license agreement licenses at least a portion of the intellectual property rights associated with the intellectual property assets back to the insured entity in exchange for one or more payments under a variable royalty rate in addition to payments of the insurance premium,
wherein the initial royalty rate is set by the computer system to a nominal value;
wherein the variable royalty rate changes from the nominal value when the insured entity incurs a loss based on the occurrence of the one or more defined events;
wherein the variable royalty rate is determined by the computer system based on the amount that has been paid to the insured entity as claims under the insurance coverage;
wherein the insurance premium amount is set by the insurer according to the probability and magnitude of risk being assumed by the insurer and said insurance premium amount does not increase based on said one or more defined events; and
wherein the one or more defined events are related to an intellectual property lawsuit.
15. The system of claim 14 , wherein a second portion of the insurance premium amount is to be paid by other than a transfer of intellectual property assets.
16. The system of clam 15 , wherein the amount to paid by other than a transfer of intellectual property assets is determined based on a calculation of the fair market value of the transferred IP asset.
17. The system of claim 14 , wherein the processor is further configured to set the variable royalty rate to repay in full the amount paid to the insured entity as claims under the insurance coverage and a return of capital fee.
18. The system of claim 17 , wherein the repayment amount is calculated to repay the claim payout plus return of capital over the remaining term of the license.
19. The system of claim 14 , wherein the processor is further configured to create a grouping of intellectual property assets including at least the transferred intellectual property assets.
20. The system of claim 19 , wherein the processor is further configured to generate income from the grouping of intellectual property assets.
21. The system of claim 20 , wherein the processor is further configured to apply the generated income to reduce the variable royalty rate.
22. The system of claim 14 , wherein the processor is further configured to generate the insurance agreement to include an additional layer of insurance coverage based on the one or more defined events.
23. The system of claim 22 , wherein the additional layer is a captive layer.
24. A method for generating value from intellectual property assets, comprising:
providing insurance coverage to reimburse an insured entity in the event that the insured entity incurs a loss based on the occurrence of one or more defined events;
using a processor that executes instructions contained in memory to determine an insurance premium amount to be paid by the insured entity as an insurance premium;
requiring that the insurance premium amount be paid, at least in part, by a transfer of intellectual property assets, each intellectual property asset including at least one intellectual property right; and
using a computer system to license at least a portion of the intellectual property right associated with the intellectual property assets back to the insured entity in exchange for one or more payments under a variable royalty rate in addition to payments of the insurance premium,
wherein the initial royalty rate is set by the computer system to a nominal value;
wherein the variable royalty rate changes from the nominal value when the insured entity incurs a loss based on the occurrence of the one or more defined events;
wherein the variable royalty rate is determined by the computer system based on the amount that has been paid to the insured entity as claims under the insurance coverage and a return capital fee;
wherein the insurance premium amount is set by the insurer according to the probability and magnitude of risk being assumed by the insurer and said insurance premium amount does not increase based on said one or more defined events;
wherein the one or more defined events are related to an intellectual property lawsuit.
25. The method of claim 24 , further including creating a grouping of intellectual property assets including at least the transferred intellectual property assets.
26. The method of claim 25 , further including generating income from the grouping of intellectual property assets.
27. The method of claim 26 , wherein the generated income is applied to reduce the variable royalty rate.
28. The method of claim 24 , further including providing an additional layer of insurance coverage based on the one or more defined events.
29. The method of claim 24 , further including creating a grouping of transferred intellectual property assets including at least the transferred intellectual property assets.
30. The method of claim 29 , further including generating income based on the transferred intellectual property rights to offset the expense of paying claims under the insurance coverage.