Two IPs In A Pod
Brilliant inventions, fresh product designs, iconic brand names and artistic creativity are not only the building blocks of successful business - they deliver a better world for us all. But these valuable forms of intellectual property must be protected in order to flourish. We are the Chartered Institute of Patent Attorneys - the UK's largest intellectual property organisation. Our hosts Lee Davies and Gwilym Roberts chat with entrepreneurs, creatives, patent attorneys and the occasional judge about how patents, trade marks, designs and copyright can improve our lives and solve problems for humanity.
Two IPs In A Pod
Illuminating the World of Intellectual Property Insurance with Lewis Parle
Join Lee and Gwilym as they welcome Lewis Parle, an IP insurance expert, who shares his fascinating journey into this niche field and helps unravel the complex, yet critical, aspects of insuring intellectual assets. They discuss the challenges of insuring against infringements, and the importance of asserting IP rights. From the challenges posed by Non-Practicing Entities in the IP landscape to the critical role of IP insurance in the creative and life sciences sectors, this episode covers all you need to know about the world of IP insurance!
Lee Davis and Gwilym Roberts are the two IPs in a pod and you are listening to a podcast on intellectual property brought to you by the Chartered Institute of Patent Attorneys. Hey Gwilym, how are you Very good thank you. How are you?
Speaker 3:I'm really really good. It's getting near Christmas. We're recording this podcast in the run-up to Christmas. Are you feeling like really festive? It always looks to me like you've got a snowflake over your shoulder on that chair you sit in. But it's not, is it? It's just the pattern.
Speaker 1:That's not an anti-work statement is it there?
Speaker 3:you go it.
Speaker 1:oh, it looks a bit snowflakey oh, that's my grandmother's chair that I had re um reupholstered, did you? Oh, that's cool. Yeah, the cats went for it instantly oh I I.
Speaker 3:I thought you meant that you had inherited it and decided to make it more fashionable, or something like that no, I did.
Speaker 1:That's exactly what I didn't. I should make it. I didn't reupholster my grandmother, I reupholstered her chair okay, okay anything exciting happening in the world of roberts there, okay, okay, anything exciting happening in the world of roberts? Um, you will put the christmas tree up. Um, there are more fairy lights in this house than I think. You might see a slight drop in the national grid when we turn all the lights on in the house now because, uh, beth was very excited to see them all, so he got a bit carried away.
Speaker 3:Um, I think, how many lights have you got? Do you know how many lights you've got?
Speaker 1:individually, or how many screens individually? I've encountered that.
Speaker 3:No did you know, it tells you. It tells you on the instructions, either on the box, on the little kind of safety label that's attached to your lights, how many individual lights are on there.
Speaker 1:So do you? Do you keep your lights in the boxes year after year after year no, but I keep the instructions the instructions for fairy lights.
Speaker 3:You never know when you're going to need them.
Speaker 1:So we plumber. I know my electricity, but if you could do plumbing I think you could plug in a fairy light wait.
Speaker 3:So we we live in an area where outside christmas lights is a big thing, uh, and it's all highly competitive, so I know exactly how many lights I have on the outside right oh, oh is your house.
Speaker 1:You've got father christmas big inflatable Santa climbing walls.
Speaker 3:No, I don't do the tacky sort of inflatables and stuff like that. It's very tasteful, I can tell. I make lanterns I buy kind of throughout the year. If I'm in like a secondhand shop and there's like an old ship's lantern or something like that, I'll buy it and then stuff it full of fairy lights so that it becomes its own like unique Christmas feature stuff it full of fairy lights, so that it becomes its own unique.
Speaker 1:Christmas feature. Good grief, I'll send you some pictures.
Speaker 3:I think you should.
Speaker 1:yeah, I've got 7,750 lights on the outside of the house this year. That's why you've been counting them. Have you counted everyone else's lights? Just to know.
Speaker 3:Oh, no, no, no, I'm not that ridiculous.
Speaker 1:And the longest single string I put up was a thousand lights. That's unbelievable. When did you start?
Speaker 3:No, I did most of that in one day. Okay, I took Monday off this week. You might have seen my out of office. So my out of office went something along the lines of I'm out of the office, please don't contact me because I'm doing something really, really important, unless it's a matter of life and death and you want to drag me off the top of a very long ladder.
Speaker 1:Excellent, I see I can see why you need instructions for a thousand fairy lights string as well, so I retract that.
Speaker 3:I'll send you some pictures so that you can appreciate it from afar.
Speaker 1:Good Lord. Podcast today about insurance and IP ip. How exciting is that? Are you up for this one? I obviously am. Love ip, love insurance. Bring them together, holy shimoli. But actually it is an area I've never. Clients often come and say shouldn't we get insured? It seems like a really sensible question, but actually I'm always a little bit unsure about the answer. So after this one we will have the answer and we've never done it before.
Speaker 3:This is a new area for us. Absolutely. So it's really exciting, so should we get Lewis on? Yes, lewis, welcome to the podcast. Hello.
Speaker 4:Thanks for having me.
Speaker 3:You're really welcome. So your job, your first job, is to help us understand who you are. So tell us a bit about the story of Lewis Pyle and who he is and what he's doing.
Speaker 4:OK, well, I'll explain how I sort of fell into IP insurance because, well, I think you'd find that no one or very, very rarely do you find anyone that works in insurance wakes up. You know, as a child my destiny is to work in insurance. Usually people end up by accident, not by design. So I was training as a lawyer in private practice quite some years ago and ended up on a secondment at an insurer that was specialising in ensuring IP risk. And just so happened they had quite a lot us um patent litigation that they were handling, um, and I was one of the few lawyers that just happened to be in the business at that time.
Speaker 4:I knew nothing about ip at that point and they just said, all right, you're a lawyer, can you just go and try and sort these out? Um, and just sort of very, very quickly tried to reverse engineer, um, some understanding of of of ip law and practice and really just fell in love with it and then from there started working as an underwriter specializing in IP. So really then making the decisions on what you know who can get terms to ensure what and that includes designing new products and then really kind of exploring where can IP insurance be useful and took that to sort of the next level in the M&A space where obviously you can encounter all kinds of complicated IP issues in certain transactions. But latterly I've become an insurance broker. So I joined a company called Lockton last year to set up an IP risk advisory and insurance practice. So that's where I'm at at the moment.
Speaker 3:So before Gwilym dives in with all sorts of technical questions, I found the name of the firm quite interesting Lockton. Is there a story behind?
Speaker 4:that. Oh, it's Lockton or Lockton. Now you make me feel like there should be, although there's a lot of Locked In puns to do with locking on.
Speaker 3:Maybe I saw a pun. Perhaps that's what I read, maybe I'm in a pun.
Speaker 4:Plenty of those, but no, so it's a very large international insurance brokerage, so we have sort of like I think it's about 11,000 people now spread across the globe, but it's still one of the few family-owned sort of insurance businesses. Okay, cool. So our founder is called Ron, or current CEO is Ron Lockton, so it's a family name. And you find 11,000 people and you find yourself in a little pod, exactly, and in the realm of IP insurance it's lonely enough as it is. So, yeah, I do feel very much, you know, needling a haystack.
Speaker 1:For context, Lewis is broadcasting from a pod. Do you have 11,000 pods at Lockton? Is it like the matrix?
Speaker 4:Yeah, I wish, I wish. No, it's very open plan, but um, I very much love being in these little pods and just shut the world out.
Speaker 1:Yeah, can I also just quickly comment on the idea that most people fall into insurance accidentally. Isn't there some irony there? Somewhere shouldn't you be able to claim?
Speaker 1:against that trip and slip yeah, um, okay, I'm, I'm in, so I can. The context, as it were. As you know, lewis, we there's a lot of patent attorneys, people in the ip world, um generally listen in um, and I suspect many, many people have been asked um about um just broadly. It's an obvious question, isn't it? You know, when I'm doing my due diligence, shall I get insured on this thing? And the IP one comes up a lot and I've always struggled with it over the years. Well, principally because I had to get my head around what sort of areas of insurance there could be. And I'll kick off and then you tell me if these are all things or not.
Speaker 1:Because there's insurance against theoretically, I suppose, against against, theoretically, I suppose, against launching a product and being sued for ip infringement. There's insurance for um, uh, asserting your own ip against a copier or infringer, so that basically your legal costs are covered um, and then I think there's some. There's other areas, including the one that you do, but can we start off on those first two? I know they're not your kind of what you tend to send out, but do you give any kind of comments on the sort of insurances that are out there and what the market thinks about it?
Speaker 4:um, so I well so on the ones you just mentioned. So we do, um, I do actually work in in in those areas um as well, um, so the way that we've set up and I'll explain the logic behind it in reverse back into the products, because there is a reasoning behind it um, the way we've set ourselves up is, first and foremost, to align ourselves with ip advisors, so of all varieties, so patent attorneys, trademark attorneys, commercial ip lawyers, m&a lawyers, specializing in particular areas, um, because each of those has its own unique kind of sets of challenges that each practitioner is dealing with and they all look and feel quite different, then again, depending on the vertical that that problem sits in. So what we've been doing over the past year is doing a lot of that groundwork and reversing back into well, what, what are the products that these practitioners need to be useful? Um, so, um, what? What you have referred to, there is what you might call or used. You know people used to call bte or before the event type insurances, which I I actually don't like that, that terminology, I think it's confusing um, but essentially, um, you've got, um, those insurances for what I will otherwise call unknown risks. So, um, this is really where one of your clients or it might just be business management decided right. As part of our risk management, we're going to consider putting in place some sort of IP insurance to primarily probably cover off infringement of third party IP risk and, generally speaking, the market will offer cover for all types of IP infringement or trade secret misappropriation allegations in all jurisdictions. So it's quite broad and those same types of policies have actually grown over the years to cover lots of other additional risks in some shape or form.
Speaker 4:So, for example, oppositions, which I think is quite a useful thing that's been added in a couple of years ago. So this is both in the sense of trademark oppositions when you're looking to file and you get to that opposition period, and also in terms of patents. So you know post-grant oppositions, or in the US you know sort of post-grant oppositions and or in the us you know sort of post-grant reviews and iprs, that sort of thing, and that's covering legal expenses, not just obviously it's not not damages, but you are on the flip, on the flip side of that um, or it's slightly more rare um, because it's quite, it's quite a different risk profile, because you're you're effectively giving someone a blank check, is. It is giving someone legal expenses cover to bring claims against third-party infringers. But crucially, at the point they take the insurance out, they can't know there's a third-party infringer.
Speaker 4:And that's one of the challenges that we've been overcoming with the insurance products is there's the products for unknown and known and it's knowing which products are right for the problem, and quite often, actually, a client might come to us thinking they're going to buy this general, before the event type insurance, but actually what they've come to seek insurance for is something they know about. So it might be that a client, for example, is going to license their product, so there might be a patent license that comes along with that, and they said well, actually our competitor has just been sued in Germany or the US by this other competitor and we're slightly worried that we're next. So there's this known element of risk which creeps in, and so then our job is to find the right solution for that, because there's one of one sort of trip wire, if you like, with these insurances, which is for the bte inverted commas or the unknown insurance, um, you have to give a declaration and there's a as an exclusion which sits alongside this, which says that the, the management team and the company or the group don't know that there's any risk which the underwriter should know about. And if they do know about something, it's also excluded. So our job is then to find a solution for that known matter. So you walk into a different set of insurances which are very, very kind of narrow specialist tools for specific problems, so they can be really for anything. So you mentioned product launches. So it might be that you've assisted a client with an FTO and you might have assessed X number of patents and you've effectively cleared most.
Speaker 4:But there might be a few where you're saying, well, there's some chances here that claims could read onto your product, but there's ways of working around it. You can do that working around and take the commercial risk, but you can't eliminate all risk. In that case we might sort of work with you and say, well, actually we can structure some specialist insurance around that so the client can go ahead with their strategy and then ensure the risk that it doesn't quite pan out as they planned. And then you've got on the other end of the spectrum. You've got insurance around litigation and more sort of the new kid on the block is using IP as collateral for loans. So what we will do there is look to typically ensure um, usually it will be a bank who will be um, uh, basically using the ip as collateral, probably for some early stage business. That's going into my commercialization phase, so I'll take a breather, but there's, there's, there's more, but there's. There's quite a lot of different variants and it's a case of picking the right tool out of the toolkit for the problem.
Speaker 1:That's a great listing, actually, and I think I quite like the idea of that kind of product list rather than oh, ip insurance, which is generally what we get asked In terms of that kind of I know you don't like the phrase, but in terms of the before the event stuff which is probably what most people think about. For, fundamentally, the first question on insurance is you know, I don't know what's going to happen, how do we get some insurance for it? And I think when you boil it down, it does come down to those two key categories of either being sued or being infringed. It's never really taken off. I mean, my feeling is, you know, over the years I've been in it for a while and it comes up every few years and people look at it, but it's never completely taken off, which is unusual because insurance normally does seem to work. Do you think there are particular problems in that market for it?
Speaker 4:I was going to ask you first actually, if it could be cheeky, why you think it's not worked.
Speaker 1:No, no, I'm happy to do that and I've kind of got a kind of a real world answer from something that somebody told me. So give me the answer, that kind of.
Speaker 3:It's always nice to see input on the spot as well, which is yeah, you love this, don't you?
Speaker 1:No, I think that the real-world one for me has always been that it's just. It's such a case-by-case thing and also realistically, exactly just getting down to the nitty-gritty, what are you actually insuring for? So, is it for legal expenses, is it for damage? And sometimes it's that lack of clarity that people don't have at the outset. I think that's part of it. Also, realistically, the moment you do know what's going on, you can actually come to a very clear cut idea about what the risk actually is. So it's not, as you say, it's not really an insurance thing anymore, it's a risk management thing. That you might want to go to a litigation fund at that point rather than an insurer, for example, I don't know. And then the external answer I got is that the sample is too small. It's quite difficult to actually really come to any kind of statistical views on risk without extra knowledge. That's the two things.
Speaker 4:That's my two answers, and in fact that resonates at all um, that, yeah, some some of those, some of those reasonings do, um, and what I've spent always but it probably is three or four years doing now is is spending a lot of time, um, with practitioners in sort of all different guises, working out really what, what would be useful. And coming back to what you said, and it's sort of the conclusion I came to quite quickly. But I think historically, ip insurance has been presented as this amorphous blob of a thing which is, it appears, quite generic on the surface and I think quite a lot of hand-holding and advisory work is required to help all parties involved figure out where does it fit in the greatest, you know, the grandest scheme of, you know, businesses ip strategy, and it should always have a place, but it takes a bit of work to to find that role. So a lot of our time is therefore spent with clients. Actually, I mean, we've been just to sort of go back, we've been housed a lot of the industry standard IP tech, so the free to use and the proprietary tools really, so that when we're talking to the client, we already know the world that they're sitting in, so we can look at the pinch points of risk. And that's what we're talking about it's. We know that you're working're talking about. We know that you're working in this area. We know this is the environment and these are the challenges and these are the specific things that you're probably already concerned about or your advisor is concerned about. But we can also see that and this is where you have your risk management strategy it might be you've got other risk transfer means. It might be that you've got partners where you use contracts to do some of that work for you, but actually insurance can then sit on top of all that.
Speaker 4:So it's being able to articulate that, I think, is the key thing, which sort of helps get over that sort of lack of clarity about what it's, what it's for and it's, I think, it's being able to switch gears. So, um, you know, our practice in particular is really focused at ip advisors but, but quite often we will get c-suite management sort of asking us without much knowledge about ip insurance but also maybe only a headline knowledge about ip, and so we sort of have to switch gears to. Well, we actually have to cover a lot of bases here on the ip front plus the ip insurance and risk management front, and then maybe sometimes even direct them to right. We actually go and speak to a patent on this point or the commercial ip lawyer on on that point, um, but this is where sort of ip insurance fits in. So I think being able to uh, uh, sort of modulate really the the technicality of the discussion is is a real help in moving forwards the conversation whether this is useful tool or not.
Speaker 4:So it's very rare, in fact incredibly rare, that I've had a conversation where there's something I've picked up off the shelf and gone right, there's the solution for you done. It never works that way. Ip is messy, uh, usually the problems are novel. Solutions have to be novel, um, and I would say actually um half the time or maybe more. The discussion and the pricing, uh kind of discussion actually crystallizes people's perception of the risk anyway, and they kind of go do you know what we now feel, that you've priced the risk for us, so we're comfortable to take that risk without insurance. And that's part of our job actually is to help people sort of make a decision what to do. What I would say is there is a cultural difference in approach approach.
Speaker 4:So, uh, two binaries that we quite often work with are uk clients and lawyers and us clients and lawyers extremely different approaches, um, as you can imagine, uh, the us approach is far more, um, commercially aggressive, um, and that means in terms of negotiating risk transfer. They're far more aggressive in mandating insurances to put in place so that you know, if possible they push down the supply chain, the risk to someone else, and they've got to go and get insurance. So it's more prevalent in the US to have insurances in place for IP. But also, I think there's a slightly different perceived risk environment. I think most corporates in the US of a certain size have probably dealt with some sort of non-practicing entity claim and that triggers certain discussions at board level about getting insurance, at least for patent infringement, which then opens up a further discussion, and that's less common, I think, in the UK unless that company's got a large footing in the US and they've had sort of concerns. So I think that creates some cultural differences in how insurance is used.
Speaker 1:Oh, there are so many rich seams here, lee, I don't know which one to go down, so I'm going to you mine away, gwilym, I will, I'll mine away. I'm going to ask just quickly on some of the kind of more detailed things then, because, oh, actually no, first I wanted to say, lee, I should have said which is the beginning, this isn't about professional indemnity insurance. I think that's that's fair to say in the lewis.
Speaker 4:That's not your, that's not your bag professional indemnity, not car insurance, not your content insurance.
Speaker 3:No, no so just just for the record all the things that are the bane of my life and, um, yes, I do spend a lot of time thinking about. I never, ever think about ip insurance.
Speaker 1:Well, we've got to fix that, yeah yeah, um, the um actually the us one's really interesting, isn't it? Um, I think it's um usually the case that things happen there and then they happen here. So the NPE thing there are concerns that's coming over here much more, with the UPC, for example, and we've actually done a couple of podcasts with some people with concerns about that and some of the kind of products out there. Oh, I think you know the license on termination people and stuff like that. You know some of these kind of mitigations out there I guess should we be looking at. Are you looking to what's happening in the states for models for what you could be offering over here?
Speaker 4:so we, uh, so I, I. I again just come back to some of our first principles about how we're approaching this. I don't think it's possible for us to look at ip in a jurisdictional vacuum. I think for us to be effective and it's a difficult job is we've kind of got to have this panoptican view of every jurisdiction, because pretty much every week we'll have a client that's got operations or products being sold or customers in every jurisdiction that matters from an IP perspective, and so we've got to know enough to be dangerous to be able to help with each of those territories.
Speaker 4:But you are right that the US often leads the way with adoption of some of these kind of practices and products. And I think one thing that you mentioned on, you know non-practicing entities and UPC. So we're mindful that there used to be a very specialist product in the market which was just for cover for non-practicing entities, which was very useful, actually very effective. So it was quite an actively risk-managed insurance product with some specialist claims handlers who sort of knew the ins and outs of the patent trolls and their behaviors. And well, we know that one. If you throw fifty thousand dollars it will just go away.
Speaker 4:Uh, versus this one actually, um, yeah, you might need to sort of uh, look to some prior art and sort of threaten, threaten them, um, with some sort of validation proceedings, um, and that that's sort of come out the market, unfortunately. So what we've done is tried to create a new replacement, but that was focused on the US. And, yeah, we do know that NPE activity is ticking up in Germany and it might at some point spread beyond patents as one of the main tools. So there's a very novel case in the open source world, for example, what's going on in the US at the minute called Sc and vizio, and that that could, uh, really open the floodgates for potentially even like an open source kind of troll environment. So there's all these kind of moving parts at the minute, um, in different jurisdictions. So, yeah, we've got to be able to help clients where forum shopping might become an issue.
Speaker 1:So, yeah, yeah, it's, it's, it's a live matter at the minute thank you, and also, you've mentioned quite a lot about how you know you and other insurers, uh, do your own kind of risk assessment, as, of course, I'm sure you always would. Um, it reminded me of when you know, when you try to decide which way an election is going to go, the best people to ask is the bookies. Um, maybe, maybe for maybe for an offline conversation. I'd love to know what products you guys are using to help look at the risk side on pre and tour freight and things. You need nothing to tell me on the podcast, by the way, but that's a really interesting proposition. But you know, if you want to know the real risks, ask the insurers well, um, I'm sorry to throw this back again, but so back to the principles point.
Speaker 4:So it's, first and foremost, we want clients that have got advice To borrow a friend's phrase on this topic, and it doesn't sound too kind, but you'll get what I mean, we're not in the business of trying to ensure stupidity. We, we want clients to take advice and be smart and know what they're doing, um, with some clarity and therefore why they're using insurance. What we don't want is insurance to be used as this sticking plaster, uh, because if there's an imperfect ip position, no amount of insurance is going to fix that business. So it's it's, it's a, it's not a useful tool in place of getting proper advice. I think that's, that's a key, a key message, um. But in terms of the tools and how we use them, I mean, we're taking a 50 foot thousand view, um, and relying on, you know, patent attorneys to get us closer to the ground um, and you know, I know a lot of patent attorneys actually don't like using fto as the description of of what that document does, and we don't. Normally I'm just using it as a shorthand, but for us that is the perfect risk review document which we can piggyback off um. But yeah, we, we um have onboarded um, you know, the like I say the industry I won't name names, but the main industry standard tools across all ip types to help us make that.
Speaker 4:I guess you could call it a quick and dirty assessment initially, so we can have an idea about. You know, let's say, from a red, amber, green kind of standpoint, where does that client's problem sit? Um, a particular issue? Um, but we're not pretending to be ip practitioners taking the job of ip lawyers absolutely not. Our job is to use those tools to be ip practitioners taking the job of ip lawyers absolutely not. Our job is to use those tools to be able to interface with the problem. Um, so when we do these risk review, um discussions with clients, yes, we, we will. If we found something where we think that might be a concern, we'll flag it, but always with the caveat that we're not giving you advice on this point. You've got your ip advisor. They're the ones that should're not giving you advice on this point. You've got your IP advisor. They're the ones that should be giving you some guidance on this. And yeah, so we're not.
Speaker 1:We're not taking um any ip as lawyers jobs here no, no and um, honestly, I think I I think there's risk attached to assessing risk, so I'm really happy to share that and definitely share that risk if I'm not really stressful I think this is this is where I think insurance can be quite useful for a practitioner, because there are ways and means of us, the insurance industry, working with IP professionals.
Speaker 4:That takes the heat out of that advisory work. So, you know, you might have a client where you've got like, say, we go back to an FTO kind of issue and there's a product launch. You can set out all the different permutations of what might happen should the client proceed with A, b, c or D strategy and then being able to sort of then take that to the next level and be able to add on to that. Well, actually there is this other risk mitigation set of tools that you can use to deal with some of these risks and that might enable that client to actually have the confidence to progress with that strategy. It's probably something that's really useful. And being able to offhand the risk on that discussion to to us or you know, some other broker or insurer um is probably quite, quite useful because you've added some value to the client and you. You might have helped them um, to use our tagline remove a barrier to investing in that innovation um, and I think that's what we're trying to get to with with.
Speaker 1:What we're doing is enable that that to happen, which I think historically hasn't been done effectively thank you, but I think I'm nearly done, lee, because I'm well, I got this rich seams, but I'm going to go for one more, which is, um, I think you've mentioned a couple of kind of the more the additional tools in your toolkit, as it were, beyond the kind of the aim authors blob stuff. One of them was collaterals on. I'd use a collateral on the loan, but if I may, I want to talk about the M&A one in particular, because I think that I know you and I've chatted about that before and that sounded quite interesting because that's extremely focused but also extremely relevant. So can you just talk through quickly what you're ensuring there and how that works?
Speaker 4:So this is a really interesting area for a few reasons. So in the M&A space what's developed over the past is about 20 well, let's say it's been absolutely rapidly increased in. In use is a product called warranty indemnity insurance in mna transactions and effectively what that product does is shift the risk of a breach of the warranties in a in a purchase agreement away from the seller and onto an insurer.
Speaker 4:So, theoretically, if you know, the buyer buys a business, gets under the hood post-completion and realises, yep, this isn't quite what we thought there might be. I don't know, might be a tax risk. There could be a I don't know chain of titles IP problem that rears its head. Instead of suing the sellers, they effectively sue the insurer instead, so it takes the heat out of the transaction. Uh and um. Also, if you've got, you know, innovative spaces, you've probably got the seller's management carrying on, so you don't want to be suing your uh, your r&d specialist going forward. That's not going to make for a happy ship. But one problem that that arose in this environment was if you have, let's say, life science transactions or deep tech transactions or anything where ip is really at the core music, creative industry is another one they get quite complex quite quickly and the risk becomes obviously very narrowly focused on things like title validity and infringement. And quite often we see that insurers weren't happy to insure those transactions. Quite often there would be problems found in those transactions in one of those buckets of risk, and sometimes the diligence scope wasn't always quite adequate, to speak to the risk entirely tiling. Get everyone a clearer picture about what that does. So what we've spent time doing is finding a way to get those transactions insured and again it's it's, it's trying to find a way to help a buyer get more comfortable to progress that transaction. So what we've seen, seen commercially over the past couple of years after COVID, is that buyers on the private equity, vc and corporate fronts have all been more cautious. So they're doing more DD, taking fewer risks. So they're looking at insurance more and more to shift the risk over. So very long winded way of saying what we've started doing has been quite interventionist in those transactions.
Speaker 4:So I'll give you a couple of examples. So, um, we had a um in the life sciences space, a transaction where, um it, there was a quite substantial upfront um consideration and very, very substantial post-completion milestone payments. Um, you know, should that client get to uh sorry, target, get to certain um commercialization points, the buyer had actually done a really, really solid FTO and had identified patterns that were risk. So this becomes a negotiation point then. So the buyer will say, well, we've got this risk now, when we acquire this business and it's it's gonna, you know, potentially crystallize and it's a one product business if we don't have the ability to sell this product as well, we've just basically wasted all our money.
Speaker 4:So it's high stakes stuff, and typically that would historically be uninsurable, and the buyer might go back to the sellers and say, well, do you know what? Take X amount off the purchase price so they lose money. Or they might say, well, do you know what? Take X amount off the purchase price, so they lose money. Or they might say well, the other way of doing this is you indemnify us if this goes wrong. So then the seller's sort of sitting there with the big liability sat on their books. So what we've done in those circumstances is we've actually pulled in patent attorneys into the space to help sorry, outside of the buyers of the patent attorneys, we pulled in other patent attorneys to kick the tires on the process and help the insurers come up with a strategy on how to ensure that risk so that, effectively, that FTO work gets affirmatively insured, so it shifts the heat out of the transaction away from the sellers and buyers negotiation on to insurer.
Speaker 4:What's the key bit to this, though, is back to that we're not insuring a stupidity point. The buyer and their patent attorney has got to have a solid risk management strategy in place and post-completion plan to try and mitigate that risk. And that's where I think the interesting collaboration that happens between what we're doing insurance and what the patent attorney's role is in these transactions, and that's what makes this work. And so we have had some really quite interesting examples where certain transactions might not have gone ahead if we hadn't had this quite tight partnership with patent attorneys helping us find a way through, I guess, the fog of war, if you could call it um, in some of these quite complex pattern areas, uh, and that's really what we're trying to do. So it's quite often you might say that the risk is not crystallized, it's not high risk at that point, but when the buyer is looking at this quite substantial sum of money and really pausing for thought, it's how do we get everyone comfortable with that? And this is where we're trying to fit in.
Speaker 3:So, yeah, that's an interesting space so well, I've got one eye on the clock. As you know, that's my um, one of my jobs on the podcast. When I'm not asking questions, uh, when it's a subject that's so far left field for me, um, I can't dive in. It's to keep it on the clock. But I have come up with a couple of questions.
Speaker 3:So, um, I know, I know william and I have both got sort of like hard stop just before 11 o'clock, um, but I think we've got a few minutes maybe for me to dive in and ask a couple of us, if that's okay. These aren't going to be difficult ip or insurance questions, because I'm I do the elephant in the room questions. So, so the first one is quite interested in your story. Uh, so, if I remember, right back to when we started this 35, 40 minutes ago, minutes ago, you started off as a solicitor, yeah, yeah. Now I don't want to call you an insurance broker. I don't know if that's the right thing to call you or not, but that's the world that you work in?
Speaker 3:Which skills do you draw on the most? Do you still see yourself as a solicitor who happens to be working in the world of IP insurance, or are you sort of a full-on insurance person?
Speaker 4:um, it's really difficult. So half the time I feel a complete imposter in all worlds. Um, um, yeah, there's always this sense of uh straddling a lot of different um disciplines, um, and trying to tie things together. So it it really does often require drawing on all all potential kind of skills as a lawyer, thinking as a, you know, an insurance broker wait, you are, you're trying to, you're always trying to find solutions and try and find a way for uh insurers to get comfortable. So you end up having to be a diplomat um, half the time as well.
Speaker 4:So it's, it's bringing together a number of different skills, but from the sort of the sort of you know, sort of using your legal skills. Um, you're working on m&a transactions, we are negotiating around um purchase agreements and you know the basic stuff understanding what warranties do and indemnities and, um, how to structure an insurance product. It kind of you do kind of get to keep your skills sharp, but you know we are further away from the coalface. So knowing where to pass that buck back to you know, in this case you guys to deal with the complex stuff is, yeah, is key.
Speaker 3:And actually you've segued nicely into my second question because you said about the distance you are from the cold face. So in my world, kind of leading SEPA as I do, sepa membership organisation, patent attorneys, that's my circle, yeah. And then, moving out from that, think about it as kind of like a planetary kind of experience, if you like, you get those other professions that have a relationship or an association so accountants clearly have a relationship from that. Think about it as kind of like a planetary kind of experience, if you like you get those other professions that have a relationship or an association so accountants clearly have a relationship um marketeers, those kinds of things hadn't really thought about where insurance brokers fit in this great sort of um planetarium of of associated professions. How do you manage those connections? How do you build connections with patent attorneys and how do you sort of manage that set of relationships?
Speaker 4:The patent attorneys, I think, are a slightly more tricky one, because I think that they're maybe inherently a bit more sceptical about insurance and, to be honest, you can just imagine going to a dinner party anyway or any sort of social event, and someone asking, what do you do? And you say, say, insurance. It quite often is a conversation killer, just right there. So, um, quite often you're just thinking creatively on how to engage in a discussion where you don't actually mention the dirty word insurance at all, where possible. Um, but, but really coming back to what I said earlier, um, I think this is about meeting the different professions on home turf where possible, so knowing really what are the key issues you might be advising your client on at the minute that are quite topical and where do we think you know patentees might wish that they could offer something else and be able to have that discussion.
Speaker 4:I think that's really key and you know, we all know that I'm definitely quite geeky. That but also I know that patentings are quite geeky and trying to trying to engage in some of those geeky interests which they inherently have, I think I think helps. So, yeah, trying to trying to bridge together some of those like technical points and just sort of. Again coming back to trying to be a diplomat, I think it is it's key. No, no, your audience yeah, yeah, that's.
Speaker 3:That's probably the great point, isn't it? Know your audience. So, lewis, we're coming to the end of time now. Thank you so much for um for guesting on the podcast for us. It's um, and I know this one we're going to have really well with our pat and tony listeners, who perhaps haven't thought too closely or too much about the world of ipn insurance, so, um, so they've got this to look forward to. But we always end the podcast with some kind of tangential question. It might be related to something that we've said and it's always my job to come up with that and, rather annoyingly for me, I've come up with two, and I don't know which one to use Gwilym. So Gwilym one's really Christmassy-ish, and the other one is sort of quite related to things we've been talking about and might be a bit, pat and Tony, geeky-ish. Which way do you want me to go?
Speaker 1:Well, looking at knowing your audience, if my two-year-old were listening and I said, do you want to hear about Christmas or insurance, I'm afraid she'd say Christmas, got it Okay.
Speaker 3:So in the event that Beth might listen to this, or one of my many grandchildren as you know, let's do the the christmas here, so people wouldn't have heard this, because I think you said it so off mic just before we started recording. But I'm a bit concerned because the light in the room that I'm in makes me look a bit beetrooty and you said I don't look like a beetroot other than in shape I feel bad.
Speaker 3:I feel bad so I'm gonna ask you, and then I'm gonna ask lewis, what is your favourite Christmas vegetable?
Speaker 1:Christmas vegetable? Oh, sprouts, obviously sprouts. I hate sprouts, I hate everything about them, but I think that they embody Christmas in the way that people don't really latch on to. We did a gig once, a Christmas gig, and we called it Sprout Because I felt it was because almost everything else is sorry. You've got to be going here. I was thinking about Christmas songs as well. Actually, there's a Christmas song about almost everything. Now you know, if you think everyone's got every angle going, I don't think there's been one about sprouts yet. So, as an aside, not only is it my Christmas vegetable, I think it's an absolute huge candidate for a major Christmas hit. Well, maybe we should do that.
Speaker 3:Perhaps that's something we could work on together. Two IPs and a sprout that's, perhaps that's something we could, um, we could work on together. Two ips and a sprout yeah, two sprouts in a pod yeah, it works. Come on, lewis, so you must have a favorite christmas vegetable. You look like the sort of person who really loves a christmas vegetable.
Speaker 4:I don't know what to say to that. Um, I well, I'm, I'm with william, I'm gonna one up it. Um, it's gonna be sprouts with a lot of butter, garlic and bacon.
Speaker 1:Fancy sprouts, fried sprouts, yeah.
Speaker 3:No, I'll take that. Are you going to?
Speaker 1:ask me. Are you going to ask me? Yeah, go on, Lee. What's your favourite Christmas dish?
Speaker 3:I'm just going to build on the experience because I'm with Lewis. So for years now I've been frying my sprouts with a little bit of garlic and bacon and butter. But last year I've been frying my sprouts with a little bit of garlic and bacon and butter but last year I had a cheese sauce and that transformed even. I do love cauliflower cheese and I didn't have any cauliflower in the house at Christmas. I thought let me try sort of a Brussels sprout cheese and it was amazing.
Speaker 1:I see and I'm guessing you have all the windows and let that smell waft down the road so that everyone knows that not only have you got the best lights but you got the best sprouts if you say so, um I you know, of course I.
Speaker 3:I have this ongoing issue with um nasal polyps, so I have amnesty. I can't even say it, I can't smell at the moment, so I'm not even going to appreciate the christmas smells, this christmas oh no, I'm sorry to hear that yeah, yeah, no sense. Sense of smell. Lewis, thank you so much for coming on. It's been a pleasure having you on, gwilym. I will see you on the next recording, which is fairly soon in fact. We've not got too long to wait Three hours yeah.
Speaker 3:But we'll just remind our listener that if he or she wants to leave a nice sort of review on the podcasting platform of their choice, then it'll help other people find the podcast. And also we're hoping that Lewis is going to plant this around all of his various insurance contacts so that we break the world of insurance. We'll see you next time. The End.