Intellectual Property

3 IP Takeaways From A Contingent Risk Insurance Conference

The relevance of insurance to IP practice is a real phenomenon, worthy of our discussion and continued thought.

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Intellectual PropertyBefore taking a break from discussion of the latest round of  litigation finance conferences of relevance to IP lawyers and their clients, I have one more unique event to recap. Hosted by the leading litigation finance insurance brokers, CAC Specialty, the most recent event of interest took place at the iconic Mayflower Hotel in Washington D.C., over a beautiful late fall end of week in October. Styled by the organizers as the “first annual Contingent Risk Insurance Conference,” the invitation-only gathering packed a lot into a Thursday afternoon and Friday morning.

Even though the event itself was not specifically geared toward IP professionals, there was plenty of relevant content on that front, from the keynote address by former Federal Circuit Chief Judge Paul Michel as well as in-depth discussion on the intersection of litigation finance and insurance in high-stakes IP disputes. As the first-ever contingent risk insurance conference, the very fact that the gathering came to pass illustrates the increasingly important role that insurance is playing in the litigation finance space, including with respect to the patent litigation matters that are often a bulwark of litigation finance investment portfolios.

(Before getting into three relevant IP takeaways from the conference, I would like to disclose that as an invitee to the event, my room and board were covered by the good folks at CAC, as was the case for all invitees. I was also fortunate that their team made very gracious accommodations for both kosher food and even wine for me to enjoy, with the latter allowing me to enjoy the wonderful presentation over dinner by legendary Le Bernardin sommelier, Aldo Sohm. All that was left for me to do was pack an overnight bag and make my way to Washington D.C. Given the timing and beautiful weather, I decided to make the drive from Brooklyn down the 95, rather than by train or air. And I am glad I did, as there was plenty to learn from the robust discussion at the event.)

To start, having Judge Michel as a keynote speaker was of immediate interest to the patent players in the crowd. He spoke with conviction as to his opinions on Federal Circuit jurisprudence since he left the bench, as well as his tireless current efforts in support of patent-reform legislation. The crowd also enjoyed his responses during the Q & A session. Of particular interest on the litigation finance side was Michel’s acknowledgment that larger verdicts can often encounter more intense scrutiny from Federal Circuit panels. With judgment preservation insurance continuing to make up a large percentage of issued contingent risk policies — and patent verdicts serving as a measurable percentage of those judgments seeking insurance — that data point underscored the importance of effective post-verdict diligence and Federal Circuit handicapping for insurers as well as insured parties.

Second, in addition to Michel’s presentation, there was plenty of discussion around the increased role that insurance has started to play in terms of funding patent licensing and enforcement efforts. While the aforementioned judgment preservation insurance products continue to dominate the market in terms of issued policies, the discussions clearly indicated that there is plenty of interest in expanding the types of insurance products on offer for those in the patent enforcement and licensing space. Whether those products will take the form of insurance for funded cases in progress, or even prelitigation products that will help patent owners seek better funding terms from a wider suite of funders, there is a lot of excitement around what the market will offer going forward. In anticipation of an increased focus on IP opportunities, it was impressive to see that some insurers had added to their already significant IP diligence capabilities with impressive hires, paralleling how litigation funders also have added to their IP capabilities over time. It will be interesting to see how the impact of those hires plays out in terms of helping bring IP-focused insurance products to market, as well as with respect to streamlining the diligence and negotiation process for policies already on offer.

Third, I would be remiss if I didn’t conclude with a nod to one of the defining features of this inaugural conference, namely the quality of attendees from both the litigation finance and insurance sides, respectively. To the credit of the organizers, a lot of focus at the conference was for bringing the “buyers and sellers” in the burgeoning market together, in the hopes of accelerating productive discussion toward the mutual goal of allowing the contingent risk market to reach its full potential. On that score, the conference was a real success, as industry participants from each side of the table had the opportunity to discuss their perspectives — both on the panel presentations over the course of the event and also during the networking breaks and mealtimes. The deepening of relationships as a result of those interactions should serve as a potent reminder to all of us of the importance of fostering such relationships, especially as we navigate through the changing IP landscape we all face. If you had told me even a few years ago, for example, that I would be an interested participant in an insurance conference in the fall of 2023, I would have probably struggled to figure out what had happened to my career — as I might have assumed that I was no longer practicing IP law but rather had taken a detour into the insurance defense field. Thankfully, however, the relevance of insurance to IP practice is a real phenomenon, worthy of our discussion and continued thought, as we watch more insured deals get done in the coming months and years.

Ultimately, I, for one, am excited to see how things unfold and am a grateful participant in trying to move this piece of our industry forward. Thanks again to the good people at CAC Specialty for putting on such a productive and timely event, in the hopes of helping the already substantial momentum associated with the contingent risk market gain even more steam. Based on my experience, as well as that of the other attendees I spoke to, their efforts led to a resounding success on that front. I hope that this readership will continue to look at how litigation finance and insurance can independently and collectively support their practices and the aims of their clients. And I am sure that the collective efforts of everyone along those lines will provide even more fodder for the next contingent risk insurance conference.

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Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

 

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