RPX Corporation, a patent risk management solutions provider, has rolled out a new insurance service for businesses facing patent infringement litigation with non-practicing entities (NPEs).
As a coverholder at Lloyd’s, RPX Insurance Services will offer marketing, underwriting, and claims management services on behalf of a syndicate at Lloyd’s.
In order to ensure successful management of this new service, RPX has established a reinsurance company that will share a portion of the underwritten risk.
Concentrating on the underlying causes of NPE risk and through proactive market intervention, RPX reduces risk exposure by acquiring patents before NPEs can assert them against its network of 168 clients.
The company has invested over $100m annually to purchase patents in each of the past six years, which helped firms in the RPX network receiving more than 430 dismissals from over 60 litigations.
Leveraging the unique data from this industry acquisition activity to drive its actuarial model and underwriting methodology, RPX can model patent risk for policyholders and offer effective risk transfer.
RPX chief executive and co-founder John Amster said, "Our approval as a coverholder at Lloyd’s further endorses our unique approach, and paves the way for RPX to offer a mainstream insurance product that could become as widely accepted as D&O or cyber liability coverage."
"We hope this RPX solution can enable patent risk to become a reasonable and predictable line item in companies’ budgets, as opposed to the highly unpredictable risk it is today."
According to estimation, NPE patent litigation costs companies approximately $13bn in defense expenses and settlements last year across the globe, up from about $5bn during 2008.