Infringement Defense Cost Reimbursement Coverage Reimburses you for your legal expenses when you must defend yourself against intellectual property (IP) infringement lawsuits.

The following material is for promotional purposes only, and in no way changes the terms or effect of the Policy language. Consult a copy of the Policy itself for any specific questions that you may have.

FEATURES OF INTELLECTUAL PROPERTY (IP) DEFENSE COST AND (OPTIONAL) DAMAGES REIMBURSEMENT INSURANCE

What is IP Defense Cost Reimbursement Insurance?

• IP Defense Cost Reimbursement Insurance reimburses you for your LEGAL EXPENSES when you have to defend yourself against lawsuits brought in the U.S. for patent/trademark/copyright infringement.
• IP Defense Cost Reimbursement Insurance reimburses your legal costs when you assert patent invalidity as a defense to a charge of patent/trademark/copyright infringement.
• The policy will reimburse the cost of reexamination proceedings initiated by the Named Insured as a defense strategy arising our of a lawsuit for patent/trademark/copyright infringement.
• Optionally coverage for reimbursement of DAMAGE awards against you can be purchased.

Why do I need IP Defense Cost Reimbursement Insurance?

• Your ability to defend yourself in infringement lawsuits may be the key to your company’s survival. Every lawsuit charging infringement must be taken very seriously and defended to the utmost no matter how frivolous the suit may be.
• The alternatives to insurance available to you for dealing with INFRINGEMENT are as follows:
• Abandon your accused products
• Attempt to obtain a license from the accuser from a position of financial weakness.
• Defend yourself using your cash reserves and available credit lines.
• The first two alternatives are not acceptable as they may result in you having to capitulate to an aggressive accuser or incur a burdensome royalty payment. Insurance is the best vehicle for defending an infringement suit.
• Litigation is expensive! Median litigation costs for an infringement suit through trial can range from $250,000 for copyrights to $2,000,000 for patents for the U.S. as a whole.
• Now with IP Defense Cost Reimbursement Insurance you can insure that litigation and indemnification funds will be available when needed.

What are the advantages of having IP Defense Cost Reimbursement Insurance?</p>

• Prevents abandoning of market share by timely and forceful defense of infringement charges.
• Prevents unexpected cash drain on operations.
• Provides litigation funds to optimize a favorable decision for you.
• Reduces pressures upon you to settle infringement cases because of mounting legal expenses.
• Insurance strengthens the viability of your company.

What are the key terms of the policy?

• IP Defense Cost Reimbursement Insurance policies can be obtained with limits of coverage of $100,000 to $3,000,000.
• The policy reimburses you for your legal cost of IP defense until the aggregate limit of your policy has been reached. Coinsurance options of 90/10% and 75/25% available. Minimum self-insured retentions are 2% of the per claim limit. Higher options available.
• IP Defense Cost Reimbursement Insurance is written on an annual basis. The policy us issued as claims made and the INFRINGEMENT action against you must begin while the policy is in effect.
• The Insured has control over the litigation in that:
• The Insured selects the counsel of his choice, subject to Company approval;
• The Insured dictates the settlement terms if any, not the Company.
• The Insured may invoke the policy by 1) notifying the Insurance Company of a lawsuit filed against it and other relevant facts on a claim form supplied by the Company; 2) providing the Company with a favorable opinion letter from an intellectual property counsel regarding the issues of enforceability, validity and INFRINGEMENT. Upon compliance with the policy terms, the Company will then authorize the suit and the policy will begin to reimburse the Insured for his LEGAL EXPENSES.

How much does it cost to protect my products?

• The actual cost per product will vary and depends upon many factors. All premium quotes are given only after application has been submitted for insurance.
• Minimum premiums range from $1,700 for $100,000/$100,000 (75/25 copay) to $8,600 for $1,000,000/$1,000,000 (75/25 copay).

How is the premium paid?

• The premium can be paid annually or it can be financed over a nine (9) month period with as little as 20% of the premium (plus any applicable taxes) as down payment.

How can I obtain a quote?

• Simply complete the appropriate online application form and submit it. You are under no obligation.

NOTE: Applicant should refer to the Specimen Policy for all terms and conditions of the Policy as well as all Exclusions. The above material in no way changes the terms or effect of the Policy language.

© 2006 Intellectual Property Insurance Services Corporation 9720 Bunsen Parkway, Louisville, Kentucky 40299 (502) 491-1144