IP Insurance by BlueIron
All of your intellectual property - patents, trademarks, copyrights, trade secrets - can be protected with affordable insurance products.
Enforcement insurance gives you the power to go after infringers who steal your patented invention or copy your trademarks. Defense insurance protects you when someone sues you.
Startup companies especially do not have the money to spend on patent enforcement, and could be put out of business with an incoming lawsuit. These insurance products protect the company and are essentially pre-paid legal fees for these special cases.
Many startup companies operate in very perilous intellectual property regimes. They may be unknowingly stepping on patents held by a big competitor or by a nefarious patent troll.
Disruptive startup companies who are breaking new ground WILL have copycats. That is why you get patents to cover your innovations.
Patent enforcement insurance will give you pre-paid legal fees so that you can go after those infringers. You have full control over the enforcement, and you can get a license, have them cease and desist, or do take some other action as you - and only you - decide.
A patent loan will come with several other components, including insurance for patent enforcement and patent defense.
Because a patent loan is specifically designed to help you expand your business, we want you to focus on generating revenue, not litigation. Therefore, we require that you maintain at least $2,000,000 in patent enforcement insurance and patent defense insurance.
The due diligence process for the loan program will include due diligence for the other insurance products.
The patent loan program requires several items about your patents and your business plan. This is not a complete list.
100% ownership of your patents.
Your patents must be completely unencumbered and must be owned by the operating company. Some investors will attach liens to intellectual property, which is a non-starter. In many cases, the inventors may have “forgotten” to assign their rights to a company. There are countless ways that a startup company may not have full, unrestricted rights to “their” IP, but we will require that this be completed before applying for a loan.
The patents must be of the highest quality.
Everybody believes their patents are good, but sadly, at least 95% of all patents are worthless. Patents fail our due diligence for many different reasons, such as being over-broad, not having any prior art references, being poorly written, mistakes in patent prosecution, and countless others.
One of the biggest ways patents fail is that there may be other ways to solve the same problem. If the patent does not capture the single best way to solve a problem, your competitor will just use the alternative solution and never need to take a license from you.
The business needs to be at the right stage.
A good loan candidate can put capital to use – but must be able to repay the loan. Startups that are in the ‘idea phase’ are not good candidates because they probably have not built out their manufacturing, marketing, and sales pipelines.
A good candidate has tested a marketing and sales funnel and knows their Cost to Acquire a Customer, along with a projected Lifetime Value. They have developed enough sales to know what works and what doesn’t, and they can put a large amount of cash to use to generate revenue quickly.
Another type of candidate needs operating capital, such as to purchase inventory for an existing order or for ongoing expansion. These companies typically have access to small amounts of capital, but a collateralized loan will give them much more.
You need to apply.
We are anxiously waiting your phone call. Please contact us and discuss your situation. In many cases, we can process a loan in 2-4 weeks.
We provide an insurance policy that will guarantee a lender (typically a bank) using the patents as collateral.
The Collateral Protection Insurance product is similar to mortgage insurance, where the bank has protection if there is a default on the loan.
The CPI product requires investment-grade patents and a solid business plan. The patents must be litigation-worthy, but must also capture real economic value.
Your patents and your business plan will undergo a due diligence analysis, where the patents will undergo a “patent busting” search, looking for any weaknesses. Your business plan will also need to show the use of funds and the way you are going to put the money to use.
As part of the patent loan program, we require at least $2,000,000 in patent enforcement and patent defense insurance. We want you to spend the loan proceeds by growing your company and generating revenue – not by litigating the patents in court.