Intellectual property consists of many types of intangible assets including patents, trademarks, copyrights and trade secrets. Many businesses use these intangible assets to build a market segment, which differentiates them in the marketplace. Rights to a valid patent, trademark or copyright can also be licensed thereby creating a new revenue source. However, most often times, protecting these rights involve the initiation of or a defense to a lawsuit.   Intellectual property litigation, whether pursuing or defending against infringement, can be expensive.[1] Of course, many factors such as the nature of the product, amount of money at issue, jurisdiction, etc., will influence these costs and cause them to vary greatly.

For many businesses, the cost of attorneys’ fees and expenses, including experts, will deter or preclude the initiation of a intellectual property lawsuit.  Conversely, those businesses who find themselves defending against a claim of infringement may be unable to fund the defense and a substantial damage award. Unless a business has a well-informed risk manager or a savvy insurance agent, businesses who believe they have intellectual property insurance coverage, through a commercial general liability policy, may find themselves without insurance coverage for the defense of an infringement claim.

Certain businesses with substantial reserves and/or cash flow often self-insure against these risks.  Other businesses, however, choose to manage/offset them through the procurement of intellectual property insurance.  For those concerned with protecting their intellectual property and/or potentially having to enforce their intellectual property rights against a potential infringer, abatement/enforcement insurance policies are available for the reimbursement of litigation costs and other expenses.  For those concerned with potential inadvertent infringement of another’s intellectual property, insurance policies exist which can reimburse against litigation costs as well as pay for all or part of a damage award.

Abatement/Enforcement insurance is generally written on an annual basis and is not prohibitively expensive when considering the cost of litigation.  One insurer reports that in 2006 average premiums were just over $20,000 per year.  Abatement/Enforcement insurance policies are issued as "property coverage."  The acts of the alleged infringer must begin after the policy is in effect, but may have begun during a previous continuous policy period.  To commence litigation against an infringer and to trigger coverage, the insured is required to provide the insurer with a favorable legal opinion letter from qualified intellectual property attorney regarding issues of enforceability, validity and infringement.  If the policy terms are met, the insurer will authorize suit by counsel of the litigant’s choice, subject to the insurance company’s approval.  The litigation expenses will then be reimbursed according to the terms of the policy.  These policies generally have these characteristics: limits per claim offered between $250,000 to $5,000,000; a significant retention or deductible; payment of 80% of the costs of litigation by the insurer; and a provision which allows some or all of these costs incurred by the insurer, in the event of a final judgment in favor of the insured, of partial recovery.

Similarly, coverage is available for litigation expense reimbursement where the insured is sued for intellectual property infringement.  The two primary types of policies available to cover these suits are known as legal defense only or legal and indemnity insurance.  Once post-compliance issues are satisfied and the insurer accepts coverage, the insurer will authorize payment of defense costs under the terms of the policy. The insurer will then share in a pro rata amount of attorneys’ fees and costs up to the amount the company has to spend to defend against the covered litigation.  With legal defense only coverage, the damages which could be awarded against the insured are not covered; for this type of coverage, an insured would need to procure legal and indemnity insurance coverage. The costs associated with these types of policies are similar to those for abatement/enforcement policies with legal and indemnity insurance policies costing slightly more.

Depending on your type of business and the associated risk of having to pursue or defend intellectual property lawsuits, intellectual property litigation insurance should be carefully considered.  It may provide a cost effective means of allowing you to take the necessary steps to preserve your competitive niche.  The attorneys at the Law Office of David S. Farber, P. A. have extensive experience working with insureds through insurance coverage to defend lawsuits and assisting clients in all intellectual property matters.

Political, social, and economic changes may be on the horizon for Cuba.  In August 2010, Raul Castro, Cuba's interim President, expressed a willingness and desire for the influx of foreign investment in Cuba (Arreola, 2010). He suggested that the development of high-end resorts and golf courses, owned and managed by foreign-based companies, would assist Cuba's economy (Arreola, 2010).  Ultimately, he expressed that the Cuban people be afforded the opportunity to work for these foreign companies to increase their standard of living and Cuba's gross domestic product.  While most legal practitioners and those following the Cuban political, social, and economic climate believed the foregoing to be unlikely, it appears that this movement may have gained momentum.

In January of 2011, Fidel Castro met with President Barack Obama to discuss the United States embargo on Cuba.  To maintain and advance President Obama's message of "change," not only for the American people, but for the political, socio-economic health and welfare of a United Nation, he took steps to reduce some of the restrictions imposed by the embargo; to include, allowing increased travel to Cuba and raising the amount of money a Cuban citizen could receive from his American relative.  While some heralded these efforts both positively and negatively, it demonstrated the potential possibility for U.S. involvement in the future development of Cuba's political, social, and economic growth.  In April, 2011, with Raul Castro becoming the Secretary of the Cuban Communist Party, former U.S. President Jimmy Carter met with him in Cuba to further discuss Cuba's anticipated direction given his ascension.  Consistent with his August 2010 statements, Raul Castro advised that he was entertaining allowing foreign investors to obtain land rights in Cuba to allow for the development of resorts and golf courses as well as opening Cuba's housing market to "luxury tourists" (Arreola, 2010).

With Raul Castro's rise to power in 2008 as President, Cuba may be moving away from its otherwise isolationism and accepting foreign influence.  If this is indeed correct, Cuba is about to become one of the most fertile marketplaces for those wishing to create, maintain, protect, and grow Brand recognition and integrity.  As these golf courses, resorts, and Cuban workers experience "luxury tourists," Cuba's infrastructure, through travelers, will benefit from further exposure to foreign Brands these travelers know and love and the Cuban people may embrace.  Therefore, we anticipate that companies who are poised to enter the Cuban marketplace or who have already taken steps to secure their intellectual property in Cuba will have a significant advantage on those who have otherwise taken or will take a "wait and see" approach.  Since counterfeiters and infringers with no scruples abound worldwide, they will undoubtedly enter the Cuban marketplace with knock-offs and hijack established Brands (similar to cybersquatting which is at an all time high).  Honest, hardworking businesses who have invested substantial time, effort, and expense to conducting a legitimate business with an emphasize on Intellectual Property, may find that inaction in Cuba could result in diminished market share worldwide and diluted, abandoned, or stolen Intellectual property.

At the Law Office David S. Farber, P. A., we have analyzed these issues and look forward to discussing with you and your company how we can best anticipate the upcoming changes in Cuba.  Without significant thought and consideration of these issues and proper planning, your brand, market share, quality control, and investment may be in jeopardy.

¹Arreola, G. (2010, 08). En 2011 comenzarán las negociaciones con inversionistas privados: ministro Marrero Cuba se abre al turismo de lujo; venderá casas a extranjeros y construirá 16 campos de golf. La Jornada , 2.

Florida Trend's Legal Elite names David S. Farber to its 2010 List

The Law Office of David S. Farber, P.A. is pleased to announce that Managing Partner, David S. Farber, has once again been chosen as one of the Florida’s Legal Elite in the 2010 edition of “Florida Trend Magazine.” This seventh annual edition of Florida Trend’s Legal Elite names the top attorneys who have earned the trust and endorsement of their peers — those who know their work best. This year’s Legal Elite is a prestigious roster representing a small percentage from the over 60,000 active Florida Bar members who practice in Florida.  

Mr. Farber has been named by his peers in Florida Trend Magazine in its 2006, 2007, 2008 and 2009 editions as one of Florida's Legal Elite.  

Mr. Farber was recently admitted to practice law in the State of Texas and will be co-counseling cases in Texas to meet the needs of his varied client base and to represent commercial and residential property owners who have sustained property and casualty insurance losses.

Dismantlement of the Netherlands Antilles

As per October 10, 2010 the islands of Bonaire, Saba and Sint Eustatius became a municipality of the Netherlands. The Benelux Office for Intellectual Property (the “BOIP”) in the Hague, the Netherlands will act as the Trademark Office for the BES-islands. Although the BES-islands became a municipality of the Netherlands, Benelux and/or CTM trademark registrations will not be extended to the BES-islands or vice versa. The BES-islands have their own trademark legislation, entitled the BES Trademark Act (‘BTA’). The BTA provides for trademark protection on the BES-islands only.

According to transitional law, the existing Netherlands Antilles trademarks should be confirmed for the BES-islands by means of a maintenance depot. Trademark holders could apply for a maintenance depot within 1 year (until October 10, 2011) with the Benelux Office for Intellectual Property (the “BOIP”) to enjoy continued protection for their (Netherlands Antilles) trademark registrations on the BES-islands after the dismantlement.

The Bureau for Intellectual Property of Curacao will also act as the Trademark Office for St. Maarten during a transitional period of one year (until October 10, 2011).

The Law Office of David S. Farber, P.A. is proud to serve both domestic and foreign clients in their legal needs especially, in Florida and Texas. Depending upon your legal need, we offer a free initial consultation. Contact us so we can help you find the legal solutions that are right for you.