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

The following questions and answers are 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.

INTELLECTUAL PROPERTY (IP) DEFENSE COST REIMBURSEMENT INSURANCE-QUESTIONS & ANSWERS

Q. Are INVALIDITY COUNTERCLAIMS a separate election or is the assertion of invalidity as a defense included in the coverage of the policy with no additional increase in premium?
A. INVALIDITY COUNTERCLAIMS are covered by the policy without increase in premium.

Q. Can coverage be obtained if there is a known problem IP at the time insurance is sought?
A. Yes. However, the defense of a lawsuit against you on the problem IP will be excluded from coverage under the policy.

Q. Are the expert witness fees and other non-legal costs associated with defending against a charge of INFRINGEMENT covered by the policy?
A. Yes, all outside costs necessary to defend against a claim of INFRINGEMENT and assert any INVALIDITY COUNTERCLAIM, including travel costs of expert witnesses, are covered.

Q. Are declaratory judgments covered?
A. No, Declaratory Judgment actions brought by or against the Named Insured are not covered.

Q. Which part, if any, of the costs associated with anti-trust counterclaims is covered by the policy?
A. None. The policy reimburses defense only and damages if option is chosen, of course, INVALIDITY COUNTERCLAIMS and REEXAMINATION PROCEEDINGS brought as a defense strategy.

Q. What happens when I am sued?
A. Once you are sued, you must notify the Company on a standard claim form provided by the company. In addition to information submitted on the claim form, you are also required to secure and deliver to the Company a favorable opinion letter from outside IP counsel (independent of the counsel chosen to litigate) on matters of validity and INFRINGEMENT. If you do not have counsel willing to provide such a letter, the Company can, upon request, refer you to counsel who will do so at a very reasonable cost. Having complied with the above and all of the other policy terms, if the Company finds the suit to be COVERED LITIGATION under the policy, reimbursement will begin.

Q. Is the rating of my product prior to quoting a premium discoverable in a subsequent trial?
A. The Company takes all steps possible to ensure that the rating worksheets are Company confidential and cannot be discovered. They are not disseminated to outsiders and are strictly the work product of the rating committee, all of whom are attorneys. Since rules of discovery vary from jurisdiction, however, we suggest you check with your counsel to confirm that rating materials would not be discoverable.

Q. How can I be sure my preference in intellectual property counsel is on your Company’s list?
A. Our list presently includes almost all of the U.S. Patent and Trademark Office registered patent attorneys (with a few exceptions). Should you desire to ensure that your patent attorney and/or his/her firm is listed, you should provide us the name(s), addresses and phone numbers, as well as their U.S. Patent Office Registration Nos. We will then advise if they are included on our list.

Q. What are the exclusions?
A. Principle exclusions are:

• Lawsuits between two Named Insureds under the same policy
• INFRINGEMENT known or existing prior to the effective date of the policy.
• Willful infringement
• Criminal acts
• Anti-trust or anti-competition matters

Q. Am I covered should someone infringe my IP?
A. No! You should seek information on IP Infringement Abatement Insurance to cover enforcement of your patents, copyrights, copyrights and/or trademarks.

Q. Can IP Defense Cost Reimbursement insurance protect me against my liability under Section 2-312(3) of the Uniform Commercial Code (UCC)?
A. Yes, IP Defense Cost Reimbursement insurance will reimburse your LITIGATION EXPENSES and DAMAGES, if option is chosen for INFRINGEMENT, under circumstances where you must legally defend another for his INFRINGEMENT.

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