Sailing Unchartered Waters : Insurance Coverage for Intellectual Property Disputes Arising from the Internet

The Internet has established a dominant role in the lives of individuals and businesses everywhere. Businesses are taking their services and products to the electronic realm in hopes of tapping into a new source of consumer demand. This new resource, however, brings with it corresponding risks of its uncertainty. One particular risk making its way into the legal headlines is the financial risk posed by intellectual property disputes. Whether Internet related or not, intellectual property disputes can place a substantial financial risk on the companies involved. And with so many companies leaping into the world of e-commerce, many are coming to learn too late the implications of these claims. As companies become more aware of the risks involved in Internet-related business, they have begun to search for insurers that might underwrite the financial risks posed by their new ventures. The substantial risk of copyright, patent and trademark litigation have particularly left companies looking into the language of their insurance policies in hopes of finding coverage. This article attempts to peer into an interesting aspect of this uncharted territory: the intersection between insurance coverage and intellectual property disputes on the Internet. The text will first present an overview of the availability of insurance coverage for non-Internet intellectual property issues, which will be followed by a brief synopsis of the expanding range of scholarly works addressing the availability of insurance coverage for Internet-based claims. Finally, the test will explore the growing range of intellectual property disputes arising from Internet use. After providing a basic understanding of the traditional applications of intellectual property law, this article suggests that future developments largely depend on the reactions of insurers and insureds by squarely addressing the potential liabilities arising from Internet-related intellectual property disputes. Among other concepts, this article suggests that businesses and their insurers must carefully consider how the traditional forms of insurance coverage will handle the expansion of intellectual property issues on the Internet, and whether specialized insurance will be required to address the particular intellectual property liabilities posed by the Internet