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⚖️ '''Patent infringement''' occurs when a party makes, uses, sells, or imports a patented invention without the patent holder's authorization — and in the insurance context, it represents a category of [[Definition:Intellectual property (IP) insurance | intellectual property exposure]] that can generate both first-party defense costs and third-party [[Definition:Liability insurance | liability]] for [[Definition:Policyholder | policyholders]] across technology, manufacturing, pharmaceutical, and increasingly [[Definition:Insurtech | insurtech]] sectors. Standard [[Definition:Commercial general liability (CGL) | commercial general liability]] policies typically exclude patent claims through [[Definition:Intellectual property exclusion | intellectual property exclusions]], which means businesses must turn to specialized [[Definition:Intellectual property (IP) insurance | IP insurance]] products for meaningful protection.

🔍 Coverage for patent infringement generally comes in two flavors. Defensive, or "abatement," policies reimburse the insured's legal costs when it is accused of infringing someone else's patent — a scenario that has become alarmingly common as non-practicing entities ("patent trolls") target companies across industries. Offensive, or "pursuit," policies fund the insured's litigation to enforce its own patents against infringers. [[Definition:Underwriting | Underwriters]] evaluating these risks examine the strength and scope of the patent portfolio, the litigiousness of the industry, the jurisdiction (U.S. patent litigation costs can reach tens of millions of dollars), and any prior [[Definition:Claim | claims]] history. [[Definition:Premium | Premiums]] tend to be high relative to other specialty lines because patent cases are complex, slow-moving, and unpredictable in outcome.

💡 The relevance of patent infringement to the broader insurance industry has grown sharply as carriers and [[Definition:Insurtech | insurtechs]] themselves develop proprietary technologies — [[Definition:Artificial intelligence (AI) | AI]]-driven pricing models, [[Definition:Telematics | telematics]] platforms, [[Definition:Blockchain | blockchain]]-based smart contracts — that may inadvertently infringe existing patents or become targets for enforcement actions. Beyond insuring others, insurers must manage their own patent exposure through internal [[Definition:Risk management | risk management]] programs. For [[Definition:Insurance broker | brokers]] advising clients, understanding the nuances of patent infringement coverage — including how [[Definition:Retention | retentions]], [[Definition:Policy limit | policy limits]], and choice-of-counsel provisions interact — is critical to placing effective programs in a market where capacity remains limited and claim severity continues to escalate.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Intellectual property (IP) insurance]]
* [[Definition:Technology errors and omissions (E&O) insurance]]
* [[Definition:Media liability insurance]]
* [[Definition:Defense cost]]
* [[Definition:Specialty insurance]]
* [[Definition:Litigation risk]]
{{Div col end}}

Definition:Patent infringement - Revision history

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