by LAWPRO

Working in IP law requires meticulous attention to detail and proactive management of deadlines, documentation, and communication. In Ontario, the average IP claim costs about $45,000, and some claims can arise as late as 14 years after the original work was performed. With around 45 claims reported to LAWPRO annually, it is vital for IP lawyers to implement strategies to safeguard their practice and minimize risk.

Below are a few real world examples of claims LAWPRO has seen. See our IP law claims fact sheet for a summary of risks and claims prevention tips.

Common Causes of IP Claims

Time Management (27%): Common mistakes include entering incorrect dates in tickler systems, missing deadlines, or failing to follow up on important reminders.

LAWPRO Example: A Claimant retained a lawyer to represent it in applying for two Canadian trademarks used in its business. The Claimant was also interested in registering marks in other jurisdictions in Asia. The Insured delayed filing the Canadian applications by one month. The Claimant discovered that unknown parties filed trademark applications in China for the same mark and certain other related word and design marks. The Claimant asserted damages suffered as a result of the increased complication associated with seeking such trademarks in China and the risk that they would not be awarded to the Claimant.

Risk Management tip: Avoid Last-Minute Filings Filing documents or making payments well before the deadline ensures that you have time to address any unexpected issues, like payment errors or technical problems. This proactive approach gives you the flexibility to resolve issues before the deadline passes.

Clerical and Delegation Errors (26%): Errors such as missing fees, submitting incorrect or incomplete information on applications, or filing the wrong documents are frequent.

LAWPRO Example: An Insured was retained to assist with the application of a Canadian patent for its start-up business. The Insured failed to appropriately docket the due date for filing a Canadian National Phase patent application. This oversight resulted in a missed deadline with no available fix, resulting in a large settlement payout.

Risk Management tip: Double-Check All Dates Errors related to deadlines are one of the most frequent causes of claims in IP law. Ensure that you and your staff are meticulous in recording and verifying important dates. Double-check that deadlines are accurately entered in your systems to avoid costly mistakes.

Communication Issues (23%): Failing to respond to and documenting correspondence, miscommunicating with foreign agents, or losing documents like emails, letters, or faxes can lead to significant claims.

LAWPRO Example: An Insured was retained to help a client apply for industrial designs used in its business. The Insured failed to remind their client to file for US protection for its industrial designs within the required time. Although the issue was ultimately resolved through legal recourse, it caused considerable stress and disruption for everyone involved, straining the lawyer-client relationship and resulting in unnecessary legal expenses and time spent resolving the matter.

Risk Management tips:

Be Cautious About Foreign Law: LAWPRO’s base insurance coverage applies to claims involving Canadian law. If your client needs assistance with foreign legal issues, it is advisable to have them retain a foreign agent directly. This reduces your exposure to claims arising from non-Canadian legal matters and potential miscommunications. Consider LAWPRO’s optional Intellectual Property Business Coverage provides coverage for extra-jurisdictions services.

Always Confirm Receipt of Correspondence: When sending communications, particularly to foreign agents, always ask for confirmation of receipt. If you do not hear back within a reasonable timeframe, follow up. This simple step can avoid missed deadlines or misunderstandings.

Final Thoughts

Managing an IP practice comes with its own set of risks, but being diligent with deadlines, documentation, and client communication including clearly outlining the scope of your responsibilities can help minimize the likelihood of a claim. By implementing these best practices and maintaining clear boundaries, especially when dealing with foreign law or potential conflicts of interest, you can help protect both your clients and your practice.

LAWPRO offers an endorsement that meets CPATA’s insurance requirements.

This article is by Kim Barbosa , Associate Claims Counsel at LAWPRO.