The five main types of Intellectual Property explained

John Goodson recently joined the Macbeth team and has worked in Intellectual Property Insurance for over 25 years. With the rise of AI, John predicts that IP insurance will become as common and critical for businesses as Cyber Insurance. In this article, John shares how the world of IP has changed and explains the four different types of intellectual property…

Why is IP so important right now?

Thanks to AI, everyone’s talking about intellectual property. Online AI tools have created new risks because code or creative content might ‘unintentionally’ infringe someone’s intellectual property. And the biggest problem with IP disputes? They can lead to injunctions that stop product sales. So, without insurance, some businesses could be wiped out. Especially startups or companies launching new product lines.

How have attitudes to IP insurance changed over the years?

In the early days, IP insurance was a niche product for highly inventive people. It was complicated, costly, and required extensive upfront research which made it inaccessible for most businesses. Insurance brokers and businesses didn’t really know much about IP insurance and so didn’t prioritise it. The good news is it’s now really simple to buy and much more affordable.

What are the 4 main types of intellectual property?

There are 4 main types of intellectual property (and one lesser known one):

1. Patents AKA legal protection for inventions, proving originality and priority
2. Copyright AKA protection for original works like written content or software
3. Designs AKA legal protection for how a product looks
4. Trade marks AKA legal protection for brand names and logos

And what’s the lesser known one?

Trade secrets are also a type of intellectual property. They may be unregistered and confidential but they belong to you, and most probably give your businesses an advantage. Theft of trade secrets by a former employee would be considered an infringement of IP.

Ok, so what do businesses need to know about Patents?

Patents are legal proof that your idea or invention is original and they protect your inventions from being copied without your permission. But, having a patent alone isn’t enough; without patent insurance, you might not be able to afford to defend your rights especially against larger competitors.

Patents can ‘alert’ others to your invention, which can increase the risk of being copied or challenged. But having IP insurance can deter potential infringers because it shows you can afford to defend your idea.

And what do we need to know about Copyright?

Copyright is an automatic intellectual property right that protects original ‘works’ from being copied without permission. People tend to think of copyright as protecting creative things like music and sound, film and photography, or art and literature. But it also protects things like computer software, websites and databases.

Copyright insurance (AKA Intellectual Property Insurance) is becoming particularly important for software and creative companies because AI tools are making it so easy to accidentally infringe someone’s copyright. Copyright issues can come up in contracts too, where a business might be liable if they breach someone else’s copyright.

What do businesses need to know about Design in terms of intellectual property?

Registered designs help you protect the unique look of your product. Design IP is about how something looks, not how it works (the function of a product would be covered by a patent). A registered design might be a 2D design like a pattern, logo or typeface, or, it could be something 3D like packaging or an unusually shaped product.

Protecting design work is especially important for businesses launching new products and it’s relevant both pre- and post-patent registration. But, as with all intellectual property, even if you have a registered design, you need to be able to afford to defend or pursue an infringement claim which is where IP insurance comes in.

What do businesses need to know about trade marks?

A trade mark is something that officially identifies you as the owner of your brand, your business, your products or your services. Lots of things can be registered as a trade mark but brand names and logos (along with their colours, shapes and sounds) are the most common.

Why do businesses need IP insurance if they have legally registered their IP?

It’s one thing to have legal ownership, but it’s another to have the financial means to defend or pursue a claim in court. Intellectual Property Insurance covers your legal costs so you can afford to defend your intellectual property.

So IP insurance pays for you to defend or pursue a claim, but are there any other benefits?  

Just having IP insurance can be enough to deter potential litigants from suing, because it sends a clear signal that you can afford to defend your rights. Having IP insurance can also reassure investors that your business IP is protected which can make investment more attractive.

How do I get a quote for IP insurance?

Insurers no longer need to do extensive research before quoting so getting a quote is easy. We’ll ask you for a few business details like your trading name, website details and business turnover and help you work out what protection you need.

Want straight-talking advice from an IP insurance expert?

Find out more about Intellectual Property Insurance or email John today.