System and method for managing intellectual property-based risks
View Patent ↗Presented herein are methods and systems for managing an entity's risks of patent coverage. More specifically, the present invention is directed to methods and system for insuring an entity against damage awards in patent litigation. The presented methods and systems allow a manufacturer to minimize their exposure to damage awards in patent litigation by conducting pre-emptive analyses and properly allocating funds for royalty payments and/or damage awards. An insurance captive is also established as a risk management tool to insure the manufacturer against excessive damage awards.
1. A method for managing exposure to monetary liability for patent infringement by a product or a service through a computer system, comprising the steps of:
performing a patent search executed by use of instructions stored in a computer readable storage medium to identify an infringement relevancy group, wherein the infringement relevancy group includes at least a first patent and a second patent;
determining a total fair royalty for the product or the service executed by use of instructions stored in the computer readable storage medium;
allocating the total fair royalty among the at least the first patent and the second patent in the infringement relevancy group executed by use of instructions stored in the computer readable storage medium to determine a willing fair royalty for the first patent;
offering the determined willing fair royalty to an owner of the first patent;
receiving a premium for an intellectual property damages insurance policy from a manufacturer of the product or the service, wherein the premium for the intellectual property damages insurance policy is based on the owner of the first patent refusing the willing fair royalty of said offering step, the intellectual property damages insurance policy determined by performing an intellectual property Value-at-Risk assessment to identify risks related to intellectual property and instituting process and control to manage the risks related to the intellectual property, the Value-at-Risk assessment including use of a database of issued patents, a database of pending patents, and a calculation of a patent-based maintenance value.
2. The method of claim 1 , wherein the intellectual property damages insurance policy indemnifies patent infringement damages liability owed to the owner of the first patent.
3. The method of claim 1 , wherein the intellectual property damages insurance policy indemnifies patent infringement damages liability owed to an owner of a patent not in the infringement relevancy group.
4. The method of claim 1 further comprising the step of assessing the validity of the first patent.
5. The method of claim 1 further comprising the step of requesting the determined total fair royalty from the manufacturer of the product or the service, wherein said requesting step does not identify each of the patents of the infringement relevancy group.
6. The method of claim 1 , wherein the intellectual property damages insurance policy is provided by an intellectual property umbrella captive.
7. The method of claim 1 , further comprising the step of employing at least one of a sale transaction and a leaseback transaction.
8. The method of claim 1 , further comprising the steps of:
creating an intellectual property umbrella captive; and
reinsuring the intellectual property umbrella captive.
9. A method for managing exposure to monetary liability through a computer system for patent infringement by a product or a service, comprising the steps of:
performing a patent search by use of instructions stored in a computer readable storage medium to identify on a user interface an infringement relevancy group, wherein the infringement relevancy group includes at least a first patent;
determining a first willing fair royalty for the first patent by use of instructions stored in a computer readable storage medium;
displaying the first willing fair royalty on the user interface;
submitting as an offer the first willing fair royalty to a first owner of the first patent by use of instructions stored in a computer readable storage medium;
accepting a rejection of the offer of the first willing fair royalty by the first owner of the first patent by use of instructions stored in a computer readable storage medium;
receiving the first willing fair royalty as a premium for an insurance policy from a manufacturer of the product or the service, wherein the insurance policy indemnifies damages based on infringement by the product or the service of at least the first patent by use of instructions stored in a computer readable storage medium; and
calculating a premium for the insurance policy by use of instructions stored in a computer readable storage medium, wherein the premium for the insurance policy is based on the owner of the first patent refusing the willing fair royalty of said offering step, the insurance policy determined by performing an intellectual property Value-at-Risk assessment to identify risks related to intellectual property and instituting process and control to manage the risks related to the intellectual property, the Value-at-Risk assessment including use of a database of issued patents, a database of pending patents, and a calculation of a patent-based maintenance value.
10. The method of claim 9 , wherein the infringement relevancy group includes at least a second patent, the second patent having at least one claim covering the product or the service, the method further comprising the steps of:
determining a second willing fair royalty for the second patent; and
illustrating the second willing fair royalty on the user interface.
11. The method of claim 10 , further comprising the step of offering the second willing fair royalty to a second owner of the second patent.
12. The method of claim 10 , wherein the second willing fair royalty is the same as the first willing fair royalty.
13. The method of claim 11 , wherein the insurance policy has a policy coverage limit based on the second owner accepting the second willing fair royalty and the insurance policy indemnifies damages based on infringement by the product or the service of the second patent.
14. The method of claim 10 , further comprising the step of receiving a total fair royalty from the manufacturer of the product or the service, the total fair royalty including at least the first willing fair royalty and the second willing fair royalty.
15. The method of claim 9 , wherein the insurance policy indemnifies damages based on infringement by the product or the service of a second patent, the second patent is not in the infringement relevancy group.
16. The method of claim 9 , further comprising the step of assessing the validity of the first patent.
17. The method of claim 9 , wherein the insurance policy has a policy coverage limit based on insurance risk calculations.
18. The method of claim 9 , wherein the insurance policy is provided by an intellectual property umbrella captive.
19. The method of claim 9 , further comprising the step of employing at least one of a sale transaction and a leaseback transaction.
20. The method of claim 9 , further comprising the steps of:
creating an intellectual property umbrella captive; and
reinsuring the intellectual property umbrella captive.
21. The method of claim 1 , wherein the intellectual property damages insurance policy has a policy coverage limit based on insurance risk calculations.
22. The method of claim 1 further comprising the step of performing an intellectual property Value-at-Risk assessment to identify risks related to the product or the service by reviewing one or more selected from an assessment group comprising of: licenses, cross licenses, nondisclosure agreements, non-compete agreements, joint ventures, partnerships, patent-based maintenance value calculations, threats to an intellectual property portfolio, inventory of intellectual property assets, strategic objectives for an intellectual property portfolio, policies related to patentability, policies related to intellectual property protection, protocols for open claims, utilization of current insurance assets, management of intellectual property counter-party risks, directors' and officers' risks, and error and omissions risks.
23. The method of claim 9 further comprising the step of performing an intellectual property Value-at-Risk assessment to identify risks related to the product or the service by reviewing one or more selected from an assessment group comprising of: licenses, cross licenses, nondisclosure agreements, non-compete agreements, joint ventures, partnerships, patent-based maintenance value calculations, threats to an intellectual property portfolio, inventory of intellectual property assets, strategic objectives for an intellectual property portfolio, policies related to patentability, policies related to intellectual property protection, protocols for open claims, utilization of current insurance assets, management of intellectual property counter-party risks, directors' and officers' risks, and error and omissions risks.
24. The method of claim 1 , wherein said determining step further comprises the step of considering one or more selected from a group comprising of: actual revenue generated from a sale of the product or the service, expected revenue generated from a sale of the product or th service, actual revenue generated from a licensing of the product or the service, expected revenue generated from a licensing of the product or the service, actual profit generated from a sale of the product or the service, expected profit generated from a sale of the product or the service, actual cost of the product or the service, estimated cost of the product or the service actual sale price of the product or the service, estimated sale price of the product or the service, number of patents covering the product or the service, type of intellectual property embodied in the product or the service, one or more of the number of patents covering the product or the service, an established royalty for one or more comparable patents, an established royalty for a comparable product or a comparable service, and a fair maximum potential liability for the product or the service.
25. The method of claim 9 wherein said determining step further comprising the step of considering one or more selected from a group comprising of: actual revenue generated from a sale of the product or the service, expected revenue generated from a sale of the product or the service, actual revenue generated from a licensing of the product or the service, expected revenue generated from a licensing of the product or the service, actual profit generated form a sale of the product or the service, expected profit generated from a sale of the product or the service, actual cost of the product or the service, estimated cost of the product or the service, actual sale price of the product or the service, estimated sale price of the product or the service, number of patents covering the product or the service, type of intellectual property embodied in the product or the service, one or more of the number of patents covering the product or the service, an established royalty for one or more comparable patents, an established royalty for a comparable product or a comparable service, and a fair maximum potential liability for the product or the service.