View this article online: https://www.insurancejournal.com/news/national/2014/04/16/326537.htm
RPX Corp., a provider of patent risk management products, has launched a new insurance service for businesses facing patent infringement litigation with non-practicing entities (NPEs). As a coverholder at Lloyd’s, RPX Insurance Services, LLC will provide marketing, underwriting, and claims management services on behalf of a syndicate at Lloyd’s. As part of its entry to this new service, RPX has formed a reinsurance company that will share a portion of the underwritten risk.
Any company today that provides a technology-based product or service is at risk from the growing threat of NPEs, also known by the “patent troll” moniker, according to RPX. RPX’s insurance product focuses on the underlying causes of NPE risk. Through market intervention, RPX acquires patents before NPEs can assert them against its network of 168 clients. The company has deployed more than $100 million annually to acquire patents in each of the past six years. This acquisition activity has led to companies in the RPX network receiving more than 430 dismissals from over 60 litigations.
Using the data from this acquisition activity to drive its actuarial model and underwriting methodology, RPX can model patent risk for policyholders and offer effective risk transfer.
According to John A. Amster, chief executive and co-founder of RPX the Lloyd’s coverholder approval paves the way for RPX to offer a mainstream insurance product that could become as widely accepted as D&O or cyber liability coverage.
NPE patent litigation costs companies worldwide almost $13 billion in defense expenses and settlements last year, up from roughly $5 billion in 2008, RPX found. Also, RPX research shows the volume of NPE patent suits over the past five years increased nearly 600 percent, from approximately 600 in 2008 to more than 3,600 in 2013, impacting approximately 8,000 companies in the same period.
As of December 31, 2013, RPX had invested over $750 million to acquire more than 4,200 U.S. and international patent assets and rights on behalf of the 168 members of its client network in seven key sectors: consumer electronics and PCs; E-commerce and software; financial services; media content and distribution; mobile communications and devices; networking; and semiconductors.
RPX Corp. was founded in 2008 and is based in San Francisco.