Let's learn about professional indemnity insurance

It has been a difficult month for most IP Solo lawyers as the underwriters have taken their time to give quotes, and refused to insure some firms. I personally have been extremely worried and distracted by this issue, but thankfully now it’s all sorted for Azrights. However, I feel great empathy for anyone still trying to secure insurance so late in the day.

The whole experience has left a nasty after taste. The fact that ones business can be so arbitrarily at risk of ending up in the assigned risks pool, and having to pay 27.5% or more of turnover for insurance cover, is mind boggling. Some law firms have had to take a rapid decision to shut down, and provide their services as non regulated experts. It is shocking to have to take such action so suddenly, when you have not had time to survey your clients first in order to establish the likely impact on securing future work. On the other hand if you secure insurance for a vastly inflated premium your run off cover premium is going to be that much higher if you shut down next year.

What is unclear is whether the assigned risks pool is actually likely to happen to any firm with a clear record who still hasn’t found insurance cover by 1st October, and wants to stay in business as a law firm. The assigned risks pool is, after all, supposed to be for firms that are a poor risk due to their level of past claims or other extreme circumstances. Is it the case that for firms that do not fit the profile of an assigned risks pool firm, they are likely to find that one of the insurers will quote, albeit at a steep price (hopefully lower than 27.5% of turnover though).

It is difficult to get accurate information about what is going on and why. Is it a combination of market conditions, and the fact that the SRA has raised the bar for being a regulated law firm so high, that explains why some firms are now facing this terrible situation? Another noteworthy point is that some firms that have been dropped by AON have managed to get alternative quotes, often by reclassifying their work as ‘commercial’ rather than IP. It seems the market has hardened more for IP than for commercial work in general. There is a particular problem if you have ‘US domiciled’ clients, and anecdotal evidence is that if your turnover is less than £50,000 you are unlikely to secure insurance as an IP practice.

Jeremy suggested we run an event soon where we invite an insurance broker along to discuss this whole question of IP risk. I am willing to organise this, and would also want to invite PAMIA along (PAMIA insures trade mark and patent attorney firms for extremely low premiums). I would be curious to know who insures barristers and whether they have a broker we could also invite along.

However, it would first be useful to establish whether there is sufficient interest for such an event. Please let me know here, or indeed let me have any comments by email or on this blog.

Domain names as property

Yesterday, I presented what CLT call a Webinar on the subject of domain names. I was inspired to devise the presentation in the first place because it was clear that other lawyers would talk about domain names, URLs, IP addresses and other things as if they were all the same thing, so a brief technical explanation (a brief one, composed withte dubious aid of Wikipedia, being all I was qualified to compose) seemed likely to be of some utility. I then realised that there was a further substantive legal issue involved, concerning how domain names are treated in law. Are they, or are they not, property? The fact that no-one told me yesterday that I am worrying unnecessarily encourages me to post this here.

The question is still open, of course, but there is at least a strong argument for saying that domain names registered with Nominet aren't property: the terms and conditions are pretty clear about that. But in transactions, domain names frequently do get treated as another type of intellectual property - and it seems to me that this might not work, and lawyers who allow their clients to proceed on this basis are doing them a disservice.

First, contracts and other documents (including many, if not all, precedents) include domain names in the definition of Intellectual Property. This is doubtful enough to begin with, but the consequence is that the document will purport to transfer or assign the domain names in the same way as everything else included in that definition, and worse still will give warranties to the effect that the transferor owns them.

The assignment clause, taken together with the further assurance clause (of course there will be one of those, won't there?), probably serves the purpose of getting the domain name registration transferred. It's not elegant, but it works. I don't think it's right for a lawyer to present his or her client with a solution that merely works, though: our job is to ensure that it is done properly, and that means that the contract should deal with domain names in the way that the registry says they should be dealt with.

It's the warranties that worry me most. If they state that the transferor owns the Intellectual Property, and the Intellectual Property includes domain names, there's a strong likelihood that there is a breach of warranty. Indeed, if the transaction includes a Nominet registration, the warranty is patently at odds with the terms and conditions of the registration. The breach may be de minimis, but surely no lawyer should allow a client to sign up to such a warranty. The problem is that, as far as I know, the precedents that our non-IP colleagues work from lump domain names in with the IP.

Authors wanted for Trademark Reporter

If you feel inspired to put pen to paper and write something about trade marks, may I invite you to consider approaching someone on INTA's Trademark Reporter committee - such as me? I'd be delighted to hear from you ...

An area for co-operation?

I received instructions from a friend in India today (yes, as it happens, one of my INTA running friends) to file a priority application for a CTM. When the papers arrived in a later email, it transpired that I have about 48 hours in which to secure the priority. He's still a friend, but he's living a little dangerously.

Not for the first time, I thought how much simpler life would be if I had a deposit account at OHIM. And then I thought, perhaps the SoloIP group could set up a deposit account for members' use. There would be some careful bookkeeping to be done, of course, but it struck me as something that we could do together that individual members probably couldn't. Similarly, a deposit account could be opened at the Patent Office. OK, you know the place I mean ...

Is there any interest in such an idea? Or am I actually the only person who doesn't have a deposit account already?

What's going on with Professional Indemnity insurance?

It is always interesting to compare notes when meeting other practitioners. So, it was reassuring on Wednesday when chatting with other sole practitioners to discover that the vast majority have yet to receive a Professional Indemnity renewal proposal. At least I'm not the only one I thought.

I have since asked around and found out that some SPs have already received quotes, but they are invariably clients of Zurich or Travellers. I gather there are only 3 insurers for IP solicitors - QBE, Zurich and Travellers.

Zurich seems to have been quick to tell those SPs they were not going to offer terms to. They were given at least 2 months notice. Other Zurich clients seem to have received their terms already.

However, it was only today following a lunch of (non IP) sole practitioners, that I discovered that no one has received a quote from AON. What is going on at QBE (AON's tied insurer)?

I know AON dropped some SPs only last week, which is appallingly short notice. But who knows whether it is just sole practitioners who have been kept waiting by AON.

It may comfort the sole practitioners who were there on Wednesday, and were clearly extremely worried, to know that IP lawyers are not the only ones who have yet to receive renewal proposals.

AON is certainly cutting it fine to leave law firms dangling for this long - especially given that some people filled in their proposal forms back in July. Whatever is going on - we will find out in due course. However, in the meantime, one has to question the wisdom of having the entire legal market renewing on the same date. Most firms I am coming across do not feel the current rules are satisfactory or make for a competitive framework.

Reflections of LexisNexis SOLO Meeting at Olswang

A group is not a community unless it meets face to face. The nice picture by Phisica illustrates that a mirror may provide instant gratification for a child. But it's not enough for a solo IP practitioner.

On Wednesday evening Jeremy Phillips kindly hosted us at Olswang's offices and a select band of solo IP practitioners could be observed vaulting over boardroom tables and large leather chairs to get to talk to one another. The presentation for the evening was by Lexis Nexis and this had brought out many practitioners who practice on the softer side of IP. There was a diverse range of experience both of the law and practice alone. We had competition on the night from an IPI presentation at which the CEO of the UK Intellectual Property Office, Ian Fletcher was speaking on the future of IP, which sadly meant that some of our agency-focused members had defected to that, even though they did have to pay £50.

The Lexis Nexis team told us about their four pillars of activity deemed to provide all the IT tools that any practice of any size could ever want. Most of the audience were familiar with the case law research tools and had, perhaps like myself experienced training sessions on the use of the user interface. It's that interface and its ease of use rather than the data that provides a competitive advantage to companies like Lexis Nexis and Westlaw. However, neither outfit seems to have access to all the resources which can be frustrating for those who cannot afford to learn to use two interfaces let alone pay for them. Jeremy Phillips has already started a debate on this on the IPKat.



The team also introduced the client development and practice management tools and spent some time explaining the suite of patent research and drafting tools, which were of particular interest to me. These are products that have been primarily aimed at the US market, which is far more sophisticated in their business models, and it will be interesting to see how the rather more fragmented and parsimonious UK patent agency world regards them. Once we have tried them out look out for more on this subject.



It surprised me that several people expressed an interest in precedents especially as last year only one solo member took up the offer of a trial subscription to the Lawtel product. Let me know if you're still interested. Meanwhile Peter Groves - the famous IP runner, volunteered to start contributing to our blog and it occurred to us that we could use our GoogleGroups page to load documents that we were prepared to share. No warranties, no promises and no liabilities of course - we are all lawyers and responsible for our own work product. This page is only accessible to members of the group which you can join by using the link on the left to receive postings by e-mail.

Another subject of debate both during the meeting and at the Bung Hole afterwards was exchanging recommendations to overseas lawyers. Between us we certainly have a wealth of knowledge which mostly we would be delighted to share. While the group has been in existence I have certainly put quite a number of members in touch with each other and made some good connections that are very helpful in my own practice. Perhaps we now need to move to a more sophisticated solution for exchanging references. Any ideas? However, good conversation over a glass of wine is often an excellent way to build up a working relationship and we will certainly be arranging more meetings in the future.

As regards new meetings, the credit crunch seems to have made people slightly more relucant to offer me free rooms. A warm dry space with chairs and access to basic refreshments is all that is needed and you get masses of publicity for your generosity. So once again thanks to Olswang for hosting this meeting. As they probably now have the sole remaining UK legal patent prosecution team, I do hope Lexis Nexis made a sale there.

This week's meeting

Don't forget: this coming Wednesday, 10 September, is the date of the forthcoming SOLO IP group meeting (details here). It's 5pm to 6.30pm at the London office of Olswang (address and map here). Speaker: Stuart Greenhill (LexisNexis), aided by Bruce Dullea. A great chance to network, partake in a pleasant refreshment and let off some steam. All welcome, no admission charge. If you're planning on coming but haven't yet said so, please email me here and let me know.

An Alternative Business Model based on Quality

Consumers of business legal services including intellectual property who seek value, have discovered that direct access to barristers is a great way to go straight for the experience and expertise they need .

The barristers of Northern Intellectual Property Chambers embraced the opportunity of direct access since it first became possible in July 2004. NIPC continues this tradition today and as many of our readers know, Jane Lambert is a very effective networker devoted to enabling clients achieve their objectives. Last night she arranged a great gathering in Bradford of experts from her panel. Hence the picture of the National Museum of Photography, Film and Television taken by Gunnar Larsson . I took the opportunity to visit this wonderful exhibit (or rather a small bit of it) while straying so far from my London basement.

Jane hopes to build on her current practice by expanding the network to provide a Quality -Guaranteed referral network. As business people know the best advisers are those which come personally recommended by other clients. A recommendation from a peer comes without bias but a business peer may not know whether he has received the best possible device only other advisers know that. Jane is hoping to build a network that can leave Solo practioners running their own practices but with a platform that enables them to work in teams to provide the services the client needs. This is a great idea because there are business consumers who need experience and are offered only inexperience when they approach big branded law firms because they are compelled to ask for the lowest possible fee. Judging by the company last night there are huge opportunities for businesses to achieve excellent value by using solo practitioners and other great value practices that Jane has sought out.

I look forward to seeing how things develop as well as contributing to the clinics, publications and training as well as other initiatives. Entrepreneurs and established businesses can only benefit. This approach to putting the client's needs first is likely to help many solo practitioners develop their own practices while retaining their independence.