Back to Business & Finance News
RPX Insurance Services Announces Cost-effective Patent Insurance for Small and Emerging Growth Companies
Monday, November 10, 2014
RPX Corporation (NASDAQ: RPXC), the leading provider of patent risk management solutions, today announced that emerging growth companies will now be able to purchase affordable insurance designed to reduce the risks and costs created by patent infringement lawsuits filed by non-practicing entities (NPE), often called patent trolls. RPX research shows that more than 60% of companies involved in NPE patent infringement lawsuits in 2013 had revenues less than $100 million. This new insurance will allow small and early-stage companies to focus their finite resources on building their businesses, unfettered by the costly diversions posed by NPE litigation.
“This is a game changer because it levels the playing field for small companies by transforming a previously uninsurable threat into a manageable business risk,” said John A. Amster, Chief Executive and Co-founder of RPX. “This insurance policy for small companies now enables RPX to offer insurance for any sized company, from the smallest start-up to multi-billion dollar enterprises,” Amster added.
NPE lawsuits have increased fivefold in the last five years, and small companies have been particularly hard hit. According to a 2013 study by the National Venture Capital Association, 75% of VC respondents and 60% of CEOs reported that patent demands had either a highly or moderately significant impact on the companies that received them. The legal expenses alone—which are historically about half the total costs of NPE litigation and can quickly reach six figures or even millions of dollars—are disproportionately damaging to a start-up. In the coming months, RPX Insurance Services (RPXIS) will bring additional insurance products to market that will cover a broad spectrum of risk and are intended to further protect companies from the damaging effects of NPE litigation.
“Small companies are the lifeblood of innovation, and the increasing threat from trolls threatens their creativity and growth,” said Randy Komisar, a general partner at Kleiner Perkins Caufield and Byers and an RPX director. “Even a baseless claim can undermine legitimate invention because of the costs involved in responding and defending. RPXIS provides the confidence small businesses and their investors need to invent the future.”
The RPX NPE patent litigation insurance premiums start at $7,500* for $1 million of coverage, which is issued by an A-rated Lloyd’s of London underwriting syndicate. The policies cap exposure for policy-holding companies and ensure uninterrupted operations.
Additional features and benefits of this new insurance include:
- Protection for small companies from the fear of unbounded risk and significant reduction in the disruptive effect on small companies of patent suits
- Expert claims management reduces burden of selecting counsel and managing cases
- Premiums typically start from $7,500 – $10,000*
- Per claim retentions of $25K and co-pays as low as 10%
- Access to RPX experts in patent risk, and dedicated claims management team
The insurance offering is administered by RPX Insurance Services LLC, a wholly owned subsidiary of RPX Corporation and a Lloyd’s coverholder. Binding Authority UMR Number: B0618FB14A605A; California License Number: 0H74909
RPX Corporation (NASDAQ: RPXC) is the leading provider of patent risk solutions, offering defensive buying, acquisition syndication, patent intelligence, insurance services and advisory services. Since its founding in 2008, RPX has introduced efficiency to the patent market by providing a rational alternative to litigation. The San Francisco-based company's pioneering approach combines principal capital, deep patent expertise, and client contributions to generate enhanced patent buying power. By acquiring patents and patent rights, RPX helps to mitigate and manage patent risk for its growing client network.
As of September 30, 2014, RPX had invested over $890 million to acquire more than 4,900 US and international patent assets and rights on behalf of the 195 members of its client network in seven key sectors: consumer electronics and PCs, E-commerce and software, financial services, media content and distribution, mobile communications and devices, networking, and semiconductors.
*Above pricing assumes average experience / settlement costs. Final pricing is contingent upon completed application. Insurance costs estimated annually. RPX membership may be required.
Back to Business & Finance News