We should all remain excited to see how things unfold as this piece of the industry moves forward.
The post Timely Lessons From A Contingent Risk Insurance Conference appeared first on Above the Law.
Last year, I had the good fortune to be invited to attend the first Contingent Risk Insurance Conference hosted by a leading insurance brokerage, CAC Group, at one of Washington, D.C.’s more historic addresses, the Mayflower Hotel. I shared some takeaways of consequence for IP litigators on these pages following the event, including an exhortation to this readership to “continue to look at how litigation finance and insurance can independently and collectively support their practices and the aims of their clients.” That advice remains just as relevant and timely now as it was last year, even as the insurance market is very upfront about some of the challenges it faced in the past year, particularly with respect to its most popular product to date, judgment preservation insurance (JPI) policies. Despite those challenges, however, there is a lot of justified excitement about how insurance can be of benefit to IP owners in particular, as the industry continues to evolve alongside litigation finance to expand the tools available for IP owners ready and willing to take on well-heeled and dug-in infringers.
Eager to hear the latest developments, I was excited to have the opportunity to attend this year’s installment, the second annual CRICON. As with all invitees, CAC was kind enough to cover my room and board, within the stately confines of the Mayflower once again. Just like last year, the event featured a notable keynote speaker, former solicitor general and legendary appellate advocate Paul Clement, as well as multiple panels stacked with a diverse set of panelists including insurance, litigation finance, and law firm practitioners active in the insurance markets for contingent risk today. Manning the till on those panels were members of CAC’s own contingent risk team, which, in the past year, has expanded commensurate with the growth of interest and activity in the contingent risk insurance space. As you would probably expect, each of the CAC moderators brought an in-depth knowledge of both insurance and legal practice to the respective discussions, enhancing the quality of the panels alongside the warm hospitality shown to all of the attendees — a group 15% larger than at the initial CRICON, providing further evidence of the burgeoning interest in contingent risk insurance products amongst the legal and financial communities.
Packing a lot of content into its relatively-short running time, CRICON II offered a lot to consider for IP litigators and their clients. To start, it seems like we are in a “best of times, worst of times” scenario when it comes to insurance options for IP owners. Let’s explain.
On the one hand, the headwinds in the JPI markets are likely to blow steadily for at least the next few years as insurers work through the winners and losers of extant policyholders. During that period, claim limits for JPI policies can be expected to be lower, premiums higher, and stricter due diligence the order of the day for prospective policyholders. For IP owners, in particular, the federal circuit’s perceived unpredictability — or even bias against large judgments — presents a specific challenge for patent holders fortunate to have secured a large judgment and in the market for a JPI policy to lock in some of the expected gains. At the same time, opportunities to secure a JPI policy are not going away — and it is a sign of a healthy, maturing market when the players are able to assimilate lessons from the past to help guide to a healthier future. As just one example, insurers are now keen to get an understanding of the settlement history of a dispute as part of their JPI diligence. For obvious reasons, of course, but this level of attention is evidence of a more expansive approach to diligence that will serve everyone in good stead going forward.
So much for the “worst of times” bit. On the other hand, the possibilities for insurance products of interest outside of JPI policies are as robust as ever. In part because insurers are looking to offer portfolio-based products with a long time to claim and many opportunities to get off risk. Whether that is in terms of a policy backed by a contingency law firm’s accrued work in progress, or an IP owner’s expected return from enforcement of a given portfolio, the dynamic nature of patent licensing and enforcement revenue is a good fit for the market’s current appetite. The demand is there, so it will be up to IP owners and their lawyers to bring the supply of good portfolios to the insurance markets to help get deals done going forward. In order to do so, working with knowledgeable and forward-thinking brokers like the team at CAC will be an essential element of the process.
Ultimately, I, for one, remain excited to see how things unfold and am a grateful participant in trying to move this piece of our industry forward. That excitement was evident amongst other CRICON attendees and I think part of the success of this year’s conference was in energizing attendees to go forward and help create the success stories for discussion at next year’s event. Thanks again to the good people at CAC Specialty for once again putting on such a productive and timely event and I continue to 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. It will be fascinating to see how the contingent risk market continues to flourish and interact with the IP licensing and enforcement market in 2025 and beyond.
Please feel free to send comments or questions to me at [email protected] 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 [email protected] or follow him on Twitter: @gkroub.
