Over the past 20 years or so, courts have developed an extensive and conflicting body of "advertising injury" case law, as judges have struggled to delineate the scope of coverage that commercial general liability (CGL) policies provide for intellectual property claims.1 However, the advertising injury coverage in standard-form CGL policies that policyholders are buying today is not the same coverage that is described in almost any court decision on the books. Current case law is useful for understanding the issues the insurance industry attempted to address in rewriting the coverage in recent years. But the coming generation of CGL coverage issues involving trademark, trade dress, copyright, patent, and trade secret claims in many instances will turn on new policy language.
Some would argue that the success policyholders enjoyed in the past 20 years in securing coverage for IP claims was a windfall and could not last. In any case, it is clear that insurers have shrunk the coverage for IP cases under standard-form CGL policies. At a minimum, the new policies require all parties to evaluate coverage for IP cases under new contractual standards. As a consequence of the new policy language, now, more than ever, companies that face significant IP risks should not rely solely on CGL policies. They should consider purchasing specialty insurance products that are designed to cover those risks.
I. KEY ADVERTISING INJURY COVERAGE PROVISIONS
If CGL coverage is available for IP claims, the coverage generally is under the policy’s advertising injury provisions. Most CGL insurers use standard insurance forms provided by a national organization, Insurance Services Office. Some insurers may promptly adopt newly published ISO forms, and others may lag in doing so or modify ISO’s standard provisions. ISO has introduced successive editions of standard advertising injury coverage forms, principally in 1976, 1986, 1998, and 2001. ISO’s 1998 and 2001 revisions substantially revise – and shrink – the coverage for IP claims. Let’s look first at the policy provisions themselves and then at the case law interpreting them.
A. ISO’s 1976 Broad Form EndorsementISO introduced a "Broad Form Comprehensive General Liability Endorsement"2 in 1976. The endorsement included coverage for advertising injury, which the endorsement defined as injury arising out of enumerated "offense[s]" occurring "in the course of the named insured’s advertising activities." The specified offenses included "piracy, unfair competition, or infringement of copyright, title or slogan." However, the endorsement specifically excluded coverage for "infringement of trademark, servicemark, or trade name, other than titles or slogans, in connection with goods, products or services sold, offered for sale or advertised."
B. ISO’s 1986 CGL Policy Form
ISO’s 1986 and later CGL forms incorporated the advertising injury liability coverage within the standard policy form. The 1986 coverage grant stated:
We will pay those sums that the insured becomes legally obligated to pay as damages because of "personal injury" or "advertising injury" to which this insurance applies.
. . .
This insurance applies to:
. . .
"Advertising injury" caused by an offense committed in the course of advertising your goods, products, or services;
but only if the offense was committed in the "coverage territory" during the policy period.3
The 1986 ISO form defined "Advertising Injury" as "[i]njury arising out of one or more of the following "offenses":
(a) Oral or written publication of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products, or services;
(b) Oral or written publication of material that violates a person’s right of privacy;
(c) Misappropriation of advertising ideas or style of doing business; or
(d) Infringement of copyright, title or slogan."
The 1986 revision made three significant changes to the coverage under the 1976 endorsement: First, ISO deleted the offenses of "piracy" and "unfair competition" that policyholders frequently argued required insurers to defend IP cases.4 Second, ISO added the offense of "misappropriation of advertising ideas or style of doing business." Third, ISO deleted the exclusion for trademark infringement. (Insurers later sometimes argued that the trademark exclusion was deleted because ISO’s elimination of coverage for "unfair competition" made the exclusion unnecessary.5)
C. 1998 and 2001 ISO CGL Policy FormsISO revised the CGL form in 19986 and again in 2001.7 These editions of the form combine "personal injury" and "advertising injury" into a single coverage:
We will pay those sums that the "insured" becomes legally obligated to pay as "damages" because of "personal and advertising injury" to which this insurance applies. This insurance applies to "personal and advertising injury" caused by an offense arising out of your business but only if the offense was committed in the "coverage territory" during the policy period.
In defining "personal and advertising injury," the 1998 and 2001 ISO forms replace two of the enumerated offenses with new ones. The offense of "[m]isappropriation of advertising ideas or style of doing business" is replaced by "[t]he use of another’s advertising idea in your ‘advertisement.’" ("Advertisement" is a term that ISO introduced in 1998; it replaces "advertising.") "Infringement of copyright title or slogan" becomes "[i]nfringing upon another’s copyright, trade dress or slogan in your ‘advertisement.’"
In contrast to the 1986 form, which did not define "advertising," the 1998 CGL defined "advertisement" as "a notice that is broadcast or published to the general public or specific market segments about your goods, products or services for the purpose of attracting customers or supporters." The 2001 CGL form refines the definition to include specified Internet activities:
- material placed on the Internet or on similar electronic
means of communication; and - regarding web-sites, only that part of a web site that is about your goods, products or services for the purposes of attracting customers or supporters.
ISO also introduced four significant exclusions in 2001. The most important, which we will call "the intellectual property exclusion," excludes "personal and advertising injury arising out of copyright, patent, trademark, trade secret or other intellectual property rights." However, the exclusion does not apply to "infringement, in your ‘advertisement,’ of copyright, trade dress or slogan." Second, ISO excluded advertising injury coverage entirely for web site designers and "Internet search, access, content or service provider[s]." (This change expanded the businesses for which a CGL does not afford advertising injury coverage. Traditionally, the list had included policyholders whose business was advertising, broadcasting, publishing or telecasting.) Third, ISO added an exclusion for "personal and advertising injury" arising out of an electronic chat room or bulletin board that the policyholder hosts, owns, or over which the policyholder exercises control. Fourth, ISO added an exclusion for unauthorized use of another’s name or product in the policyholder’s "e-mail address, domain name or metatag or any other similar tactics designed to mislead another’s potential customers."
Coverage is available for most of the risks excluded by ISO’s 1998 and 2001 revisions—under specialized insurance products. These products include advertisers’ liability, multimedia, cyber-liability, intellectual property, and errors and omissions policies.8 By excluding CGL coverage for these exposures, the insurance industry may spur demand for these specialty products and avoid coverage overlaps.
II. SHRINKING ADVERTISING INJURY COVERAGE
We begin with the critical requirement of a covered advertising injury offense. We will look at CGL coverage for trademark and trade dress, copyright, patent, and trade secret claims before and after the recent revisions. Then we will consider the changes in the "advertising" and "casual connection" requirements.
A. Coverage For Trademark and Trade Dress Infringement Claims, Then and Now
1. Then: Under the 1986 CGL
ISO’s 1976 Broad Form Endorsement specifically excluded trademark or trade name infringement.10 However, ISO’s 1986 CGL form deleted this exclusion and added coverage for "misappropriation of advertising ideas or style of doing business." The 1986 CGL also included among the enumerated advertising injury offenses "infringement of copyright, title or slogan."
Although trademark infringement was not a specifically enumerated offense under the 1986 CGL, numerous courts concluded that, at least for purposes of the duty to defend, trademark infringement fell within misappropriation of an "advertising idea" or "style of doing business."11 As discussed below in connection with the "advertising" requirement, some courts treated trademark or trade dress itself as "advertising."12 Some courts also found trademark infringement to be within the covered offense of infringement of "title"
or "slogan."13 On the other hand, a few courts, led by the Sixth Circuit in Advance Watch Co. v. Kemper Nat’l. Ins. Co.,14 reasoned that where an insurance policy identifies specific torts and omits others, such as trademark infringement, that indicates an intention not to cover the omitted torts.15 This minority view rejected coverage for trademark infringement because it was not a specifically enumerated offense.
Similarly, the vast majority of courts required insurers to defend or indemnify trade dress infringement claims. Under the 1986 CGL, these courts typically found trade dress infringement to fall within the offense of misappropriation of "style of doing business."16
2. Now: Under the 1998 and 2001 CGLs
ISO’s 1998 CGL deleted the advertising injury offenses of "infringement of title" and "misappropriation of advertising ideas or style of doing business" upon which many courts had relied to find coverage. The 1998 CGL substituted new, narrower offenses of "infringing upon another’s copyright, trade dress, or slogan in your advertisement," and "use of another’s advertising idea in your advertisement." (Emphasis added.) Nevertheless, in Central Mutual Ins. Co. v. StunFence, Inc.,17 a 2003 case, Judge Milton Shadur in the Northern District of Illinois still found that a trademark "easily qualifies as an ‘advertising idea’" and upheld coverage under the 1998 CGL.
The 2001 CGL goes further than the 1998 version. It specifically excludes liability arising out of infringement of "trademark . . . or other intellectual property rights," except for infringement of copyright, trade dress or slogan in the insured’s "advertisement." Judge Shadur, in StunFence, recognized that "trade dress" is a subset of trademark law; and he rejected the proposition that the lesser includes the greater.18 Since the 2001 intellectual property exclusion excludes trademark coverage, except for trade dress infringement, Judge Shadur’s reasoning will support insurer arguments that all trademark claims other than trade dress are now excluded. Because numerous jurisdictions had recognized trademark infringement as a potentially covered offense under the 1986 CGL, the 2001 intellectual property exclusion works a major reduction in coverage.
B. Coverage for Copyright Infringement Claims, Then and Now
1. Then: Under the 1986 CGL
"Infringement of copyright" was one of the enumerated offenses in the pre-1998 CGL. Thus, copyright infringement typically was covered, if the alleged infringement occurred in the course of advertising the policyholder’s goods, products or services.19
2. Now: Under the 1998 and 2001 CGLs
ISO’s 1998 and 2001 CGLs limit copyright infringement coverage to infringement "in" the policyholder’s "advertisement." Under the new forms, it is insufficient that an alleged unauthorized reproduction or distribution of protected material occurred "in the course" of the policyholder’s advertising. As discussed below in connection with the causal nexus requirement, this change narrows the coverage for copyright infringement under the 1986 CGL, as construed by some courts.
C. Coverage for Patent Infringement Claims, Then and Now
1. Then: Under the 1986 CGL
A large majority of courts concluded that patent infringement was not covered under the 1986 CGL.20 For example, in Green Machine Corp. v. Zurich-American Ins. Group,21 the underlying complaint alleged that the policyholder’s manufacture, sale, and promotion of concrete-cutting saws infringed the claimant’s products and methods patents and that the policyholder induced others to infringe them. Since the complaint alleged only misappropriation of a method for cutting concrete, a nonadvertising idea that was made the subject of advertising, the Third Circuit held that the insurer owed no duty to defend.22 Other courts held, as a matter of law, that patent infringement could not occur in the course of advertising activities.23 A few courts, however, found coverage.24
After Congress amended the Patent Act to add "offers to sell" within the definition of patent infringement,25 it was no longer clear that advertising could never give rise to a direct patent infringement action. Still, several courts rejected policyholder arguments that the insurers owed a duty to defend, because patent infringement was not a covered advertising injury offense.26
2. Now: Under the 1998 and 2001 CGLs
Both the 1998 CGL and the 2001 CGL eliminate the advertising injury offenses of "infringement of title" and "misappropriation of advertising ideas or style of doing business" that policyholders typically argued supported coverage for patent infringement. Moreover, the 2001 CGL specifically excludes liability arising out of patent infringement. These changes close the door on any realistic hope of indemnification for patent infringement under the current standard-form policy.
D. Coverage for Trade Secret Misappropriation Claims, Then and Now
1. Then: Under the 1986 CGL
Policyholders had the most success in obtaining coverage for trade secret claims when the alleged trade secrets were the claimant’s advertising materials and strategies. For example, in Sentex Systems, Inc. v. Hartford Acc. & Indem. Co.,27 a competitor sued the policyholder for inducing an employee to breach his non competition agreement and, through him, misappropriating trade secrets, including customer lists, marketing strategies, and other confidential information. The claimant alleged that the policyholder used this information to solicit the claimant’s customers. The Ninth Circuit questioned whether the alleged misappropriation of a customer list alone could trigger coverage for "misappropriation of advertising ideas." However, the court concluded that misappropriation of trade secrets for use in advertising strategies and sales materials constituted the covered offense of "misappropriation of advertising ideas." Therefore, the insurer owed a duty to defend.28
Courts typically declined to find coverage, however, where the trade secret at issue related to the manufacture or design of a product, instead of advertising, and thus did not involve an alleged offense committed in the course of advertising.29
2. Now: Under the 1998 and 2001 CGLs
The 1998 CGL deleted "misappropriation of advertising ideas or style of doing business" and "infringement of title" as enumerated advertising injury offenses. The 2001 CGL specifically excludes liability arising out of trade secret or other intellectual property rights, except for infringement of copyright, trade dress, or slogan "in" the policyholder’s "advertisement." Therefore, policyholders are unlikely to find coverage for trade secret claims under the current standard-form policy.
E. The Advertising Requirement, Then and Now
1. Then: "Advertising" Under the 1986 CGL
Pre-1998 CGL forms did not define the term "advertising," and its meaning presented a problem for courts interpreting coverage. Courts responded by adopting one of three approaches.
The majority approach held that "advertising" requires widespread promotional activities directed to the public at large.30 A minority view held that advertising could also encompass one-on-one personal solicitations, such as letters, bid proposals, oral sales pitches, and product demonstrations.31 A third view adopted a case-by-case approach: Whether a policyholder’s promotional activity was "advertising" hinged on "the context of the overall universe of customers to whom a communication may be addressed."32 Under this view, where the audience was small, but still comprised all or a significant number of a competitor’s customer base, the advertising requirement was met.
Most recently, in Hameid v. National Fire Ins. of Hartford,33 the California Supreme Court adopted the majority approach, and held that the term "advertising injury" as used in the 1986 CGL policy "requires widespread promotion to the public such that one-on-one solicitation of a few customers does not give rise to the insurer’s duty to defend the underlying lawsuit." A competitor sued the policyholder for stealing its customer list and soliciting its customers. The insured’s CGL policy included coverage for "advertising injury" arising out of the "misappropriation of advertising ideas or style of doing business." The policyholder argued that customer solicitation, for a small business like his beauty parlor, qualified as "advertising."34 The court, however, rejected any case-by-case approach to deciding whether particular activities are "advertising." It noted that "[s]tandardization of policy terms is important to insurers and insureds alike" and reasoned that "giving identical policy language different meaning for different insureds would eliminate the clarity and certainty that is essential to the insurance industry."35
Several decisions have treated trademark or trade dress itself as "advertising." In Lebas Fashion Imports of USA, Inc. v. ITT Hartford Ins. Group,36 for example, a California appellate court addressed the issue of coverage for a claim that the policyholder had infringed the trade name and trademark of the claimant by using that name and mark on the policyholder’s products. The court held that the use of the trademark involved in that case constituted advertising, and it approvingly quoted authorities stating that a purpose of a trademark is to advertise the product and that "a trademark is but a species of advertising."37 Other courts took the view that trademark or trade-name infringement necessarily involved advertising or use of the mark to identify the policyholder’s goods or services. Thus, under this view advertising injury was caused by the trademark infringement.38 In holding that advertising requires widespread promotion to the public in Hameid, the California Supreme Court did not address the Lebas line of cases that deem "a trademark . . . a species of advertising." Whether this line of cases survives Hameid is likely already a subject of 1986 CGL coverage disputes.39
2. Now: "Advertisement" Under the 1998 and 2001 CGLs
The 1998 and the 2001 CGLs define "advertisement" as "a notice broadcast or published to the general public or specific market segments . . . for the purpose of attracting customers or supporters." (Emphasis added.) ISO’s "advertisement" definition clearly excludes personal solicitations, such as were alleged in Hameid. However, by including notices to market segments, ISO’s definition may offer broader coverage than envisioned in court decisions, such as Hameid, requiring promotion to the public at large and may open the way for more coverage disputes. Although the Hameid court left open whether widespread promotional activities directed at specific market segments constitute advertising under the 1986 CGL, the court interpreted "advertising" to mean widespread promotional activities "usually" directed to the public at large.40 Already, in one post-Hameid "market segment" decision, a federal district court in California found that package inserts arguably constitute "advertising."41 Trade show displays also qualify, according to at least two courts.42
ISO’s 2001 CGL revises the definition of "advertisement" to include "material placed on the Internet or similar electronic means of communication." Under the 1986 CGL, which was silent concerning web sites, courts treated web site promotional material regarding the policyholders’ goods or services as advertising.43 As mentioned earlier, the 2001 CGL "advertisement" definition includes only "that part" of a web site "that is about your products, goods or services for the purposes of attracting customers or supporters." In this respect, the 2001 CGL’s definition is consistent with a 2004 Maryland federal district court decision. In Teletronics Int’l., Inc. v. CNA Ins. Co.44 the court concluded that the mere presence of a parts installation manual on the policyholder’s web site was "not sufficient to convert it into ‘advertising’" under the 1986 CGL.
The 2001 revision also adds several exclusions. One eliminates coverage for web designers and Internet search, access, content, or service providers. Another excludes advertising injury arising out of an electronic chat room or bulletin board that the policyholder hosts or over which it exercises control. A third excludes unauthorized use of another’s name or product in an e-mail address, domain name, or metatag, or other similar tactics to mislead another’s potential customers. Overall, policyholders probably had better prospects for coverage for Internet-related activities under the 1986 CGL than they have under the 2001 CGL.
F. The Causal Nexus with Advertising, Then and Now
1. Then: Causation Requirement Under the 1986 CGL
For coverage to apply under the 1986 CGL, the alleged injury had to arise out of an offense committed "in the course of" the policyholder’s advertising. For example, if the court found no nexus between alleged trademark or trade dress infringement and the policyholder’s advertising, the insurer had no duty to defend.45 In Bank of the West v. Superior Court, a 1976 Broad Form Endorsement case, the California Supreme Court held that the advertising injury "must have a causal connection with the insured’s ‘advertising activities’ before there can be coverage."46 The court said that the injury for which coverage is sought must be caused by the advertising offense itself, rather than some other wrongful act, and that it must result from the "advertising activity" involved, rather than other causes.47 Although courts have struggled with the exact nature of the causal connection, most of the recent cases hold that one of the enumerated "advertising injury" offenses must occur in advertising or that the advertising must directly cause the damage.48
In Frog, Switch & Mfg. Co. v. Travelers Ins. Co.,49 the underlying complaint alleged that the policyholder had misappropriated the design of a dipper bucket and then advertised the resulting product. The Third Circuit held that this was not misappropriation of an "advertising idea" and thus the insurer owed no duty to defend. Since the injury was complete in the misappropriation of the design, and was not complete in the advertisement of the dipper bucket, the causation requirement was not met.50 The court then went on to advocate the approach of "requiring that the injury be complete in the advertisement, requiring no further conduct," in order to be covered.51
In other recent cases, courts have found a sufficient causal connection. For example, in CAT Internet Services, Inc. v. Providence Washington Ins. Co.,52 another Third Circuit case, the owner of the domain name "MAGAZINES.COM" sued the owners of the domain name "magazine.COM." The underlying complaint alleged trademark and trade name infringement, unfair competition and violation of the Tennessee Consumer Protection Act. In affirming the district court’s finding of a duty to defend, the Third Circuit noted that CAT Internet Services was distinguishable from cases in which coverage had been denied, because the policyholders in this case were charged with the wrongful use of a name "as a method of gaining customers." The court held that "when a complaint alleges that an insured misappropriates and uses trademarks or ideas in connection with marketing and sales and for the purpose of gaining customers, the conduct constitutes ‘misappropriation of an advertising idea or style of doing business’ under Pennsylvania law."53
Some courts have been satisfied with a minimal connection between the policyholder’s advertising and the alleged offense. In a 1988 case, John Deere Ins. Co. v. Shamrock Inds., Inc.,54 for example, the policyholder sent letters touting products that the claimant alleged infringed its patent rights and misappropriated trade secrets. The insurer argued that the claimant’s injury did not "arise out of" the policyholder’s advertising activities but out of the alleged infringement. The federal district court in Minnesota rejected this argument because there was no express requirement in the policy that the advertising activity be the proximate cause of the injury. Because the claimants’ misappropriation claim "arguably" fell within the coverage, the insurer owed a duty to defend.55
2. Now: Causation Requirement Under 1998 and 2001 CGLs
The ISO’s 1998 and 2001 CGL delete the requirement of a covered offense committed "in the course of" advertising activities and substitute a requirement that the offense occur "in your advertisement." Thus, under the new ISO wording, it is not enough that a causal connection exits between a covered offense and advertising. The offense must occur "in" an advertisement.
A 2003 Missouri decision, King v. American Family Mut. Ins. Co.,56 is an example of a case that should come out differently under the 1998 CGL. There, the claimant sued a custom homebuilder for copyright infringement after he allegedly built a home using the plaintiff’s design. The plaintiff did not allege that the builder had used the plaintiff’s plans in his advertising, nor did he seek damages stemming from the builder’s advertising or sale of the home. The builder had placed a two-foot by three-foot sign bearing his company name on the front lawn of the home. The court likened a contractor’s sign to a highway billboard and deemed it "advertising." The pivotal issue then became whether the policyholder’s building a home based on the plaintiff’s copyrighted plans was "in the course of" the policyholder’s advertising. The court held that it was. That seems an extraordinary stretch under the 1986 CGL. It seems doubtful, though, that even the King court would hold that the alleged infringement was "in" an "advertisement," as those terms are used in the current CGL.
Changing policy language, however, will change insurers’ obligations only if insurers’ counsel persuade judges that the new requirement that the offense occur "in your advertisement" entails a more specific causal link than the 1986 standard of "in the course of" advertising activities. Otherwise, courts may continue to apply familiar 1986 CGL standards. A Wisconsin appellate court did exactly that in 2003 decision.57 The policy covered trade dress infringement "in your advertisement." The court held that the insurer owed a duty to defend because the policyholder had "engaged in advertising" and it was "reasonable to infer" that the advertising activities contributed to the claimant’s injury.58 The court simply did not address whether any alleged infringement was "in" an advertisement.
In another 2003 case, an Ohio appellate court seemed to read the requirement that the infringement occur "in your advertisement" out of a 1998 CGL policy.59 Apparently the court concluded that to require that the alleged trade dress infringement must occur in the policyholder’s advertisement would render the coverage illusory. This perception might seem ironic to insurers who have defended or paid claims that arguably alleged trade dress or copyright infringement in their policyholders’ advertising.60
In any event, the Wisconsin and Ohio cases perhaps give policyholders some early basis for hope that some courts will construe the new CGL policies--at least ones without the 2001 intellectual property exclusion—more broadly than insurers do. For now, both sides probably can agree that "in your advertisement," is a key phrase in the current CGL definition of "personal and advertising injury" as well as the 2001 intellectual property exclusion. What "in your advertisement" means seems destined to be a major battleground under new CGL policies.
III. NEW CHALLENGES AND OPPORTUNITIES
Although this discussion focuses on only a few of the issues, several observations and suggestions can be offered:
- Read the Fine Print
- For Policyholders, The Best Offense Is an Old Offense
- Check Your Umbrella
- What Will Revisions Mean?
- Advertisement, or Not?
- Explain the Coverage Theory
- Defamation Usually Yields a Defense
- Review It All, Report It All
- Specialty Coverages Exist for a Reason
Although most insurers use standard-form language, some modify it. Endorsements may change what is included or excluded. Large purchasers of insurance sometimes negotiate policy language. Advertising injury court decisions deal – not with general principles of law – but rather interpretation of a contract, albeit a special kind of contract. Read the policy language and beware of generalizations.
Older occurrence-based policies should not be overlooked for claims that allege wrongful acts that predate the policy that is in effect when the claim is filed. It will be important to analyze pleadings and discovery responses to determine whether the first alleged wrongful act dates back to a time when an older policy was in effect. That policy may be broader than the current policy.
Umbrella liability policies do not necessarily follow CGL wording. Some umbrella policies, especially older ones, may not include all the coverage limitations in current standard-form CGL policies.
Policyholders sometimes point to insurers’ subsequent policy revisions in arguing that coverage exists under the provision before it was re-drafted. Insurers argue that later revisions are irrelevant. We may see another round of these disputes. Whether courts will entertain arguments based on subsequent revisions remains debatable.61
On the crucial question of what constitutes an "advertisement," we can expect to see disputes that focus on the meaning of all of the substantive terms in ISO’s "advertisement" definition, such as "notice," "broadcast," "published," "general public," and, especially, "specific market segments." One-on-one product demonstrations, bid proposals, and sales calls are out;62 but what about trade show exhibits and demonstrations, free sample copies of software, loud announcements or handbills on street corners, store displays, neighborhood flyers, junk faxes,63 and direct mail pieces? Is product labeling and packaging an "advertisement," or just marketing? Is the product an advertisement for itself?64 Also, ISO’s definition of "advertisement" literally requires a broadcast or publication to specific market "segments," plural. What is a "segment," and is one enough? In Internet cases, what "part" of a web site is "about your goods, products or services for the purposes of attracting customers or supporters"?
It is more important than ever for policyholders to clearly articulate to insurers the basis for a claim of advertising injury coverage. If the "advertisement" is not set out in the plaintiff’s complaint, this critical task begins with providing the advertisements and explaining how they fit into the plaintiff’s claim.
If a complaint does not allege a potentially covered intellectual property claim, the policyholder still will be entitled to a defense if the claimant alleges some other claim that potentially is covered. For example, a complaint that alleges defamation or disparagement (both enumerated offenses in current CGL forms) may trigger a defense.65 It is a safe bet that we will see more such claims pled by insurance-savvy claimants’ counsel who want to tap the defendant’s coverage.
Policyholders confronted with IP claims should review all possibly-relevant policies, including advertisers’ liability, media, Internet, errors and omissions, and directors’ and officers’ liability policies. The policyholder should promptly report any possibly-covered claim to the insurer. Giving prompt notice takes little time and may save an insurance claim that can be lost by failure to comply with policy notice requirements.
The insurance industry offers a variety of insurance products specifically designed to protect against intellectual property risks – with no advertising requirement. IP litigation often is complex and costly, and it may involve important corporate assets and "bet the company" issues. Businesses that face significant IP risks by all means should consider purchasing insurance that is designed to cover them.
IV. CONCLUSION
The language of the insurance policy at issue governs coverage. Since the policy language in new policies has changed, yesterday’s case law must be read with caution. As in the past, policyholders’ and insurers’ counsel will have ample opportunities for creative lawyering; but the argument for purchasing insurance that is specifically designed to cover IP risks has never been stronger.
William Campbell is a partner in the San Francisco office of Piper Rudnick LLP and is a member of the firm’s Insurance Coverage and Litigation and Insurance and Reinsurance practice groups. This article previously appeared in Coverage, the journal of the Insurance Coverage Litigation Committee of the ABA Section of Litigation and IPL Newsletter, the journal of the ABA Intellectual Property Law Section.
Endnotes
1 See, e.g., Fireman’s Fund Ins. Co. v. Bradley Corp., 261 Wis.2d 4, 14 n.3, 660 N.W. 2d 666 (2003).
2 ISO Form GL 04 04.
3 ISO Form CG 00 01 11 86.
4 E.g., Iolab Corp. v. Seaboard Sur. Co., 15 F.3d 1500, 1506 (9th Cir. 1994) ("piracy" means misappropriation or plagiarism in the elements of the advertisement itself, i.e., in its text, form, logo or pictures); New Hampshire Ins. Co. v. R.L. Chaides Const., 847 F.Supp. 1452, 1456 (N.D. Cal 1994) ("piracy" ambiguous and includes patent infringement); National Union Fire Ins. Co. v. Siliconix, Inc. 729 F.Supp. 77, 79 (N.D. Cal. 1989) (same); (Bank of the West v. Superior Court, 2 Cal.4th 1254 (1992) ("unfair competition" covers only common law unfair competition claims, not statutory unfair trade practices).
5 See American Economy Ins. Co. v. Reboans, Inc., 582 F. Supp. 875, 882 (N.D. Cal. 1994); Lebas Fashion Imports of USA, Inc. v. ITT Hartford Ins. Group, 50 Cal. App 4th 548, 562, 59 Cal.Rptr.2d 36 (1996).
6 ISO Form CG 01 07 98. For discussion of CGL "personal injury" coverage, a subject beyond the scope of this article, see Beth D. Bradley, Recent Developments in Personal and Advertising Injury Coverage, 11 Coverage 37 (2001), and Michael Sean Quinn, Coverage B Personal and Advertising Injury Liability--1998 Revisions, 11 Coverage 47 (2001).
7 ISO Form CG 00 01 10 01.
8 For discussion of some of these policies, see David M. Brenner, Emerging Internet and Multimedia Policies: Gap Fillers or Gimmicks?, 12 Coverage 18 (2002).
9 Hameid v. National Fire Ins. of Hartford, 31 Cal.4th 16, 21-22, 1 Cal.Rptr.3d 401 (2003).
10See Aloha Pacific, Inc. v. California Ins. Guar. Ass’n., 79 Cal. App. 4th 297, 319-322, 93 Cal.Rptr.2d 148 (2000) (no coverage for trademark and related trade dress claims).
11 E.g., State Auto Property & Cas. Ins. Co. v. Travelers Indem. Co., 343 F.3d 249 (4th Cir. 2003) (use of trade Nissan trademark qualifies as an alleged misappropriation of advertising idea); CAT Internet Services, Inc. v. Providence Washington Ins. Co., 333 F.3d 138, 141-43 (3d Cir. 2002) (trademark infringement deemed misappropriation of advertising idea or style of doing business); Hyman v. Nationwide Mut. Fire Ins. Co., 304 F.3d 1179, 1188-89 (11th Cir. 2002) (artwork used in ads and model numbers confusingly similar to claimant’s constitute misappropriation of advertising ideas or style of doing business); Adolfo House Distributing Corp. v. Travelers Property & Cas. Ins. Co., 165 F. Supp. 2d 1332, 1339 (S.D. Fla. 2001) (allegations of trademark and trade dress infringement constitute misappropriation of advertising ideas or style of doing business); Lebas Fashion Imports of USA, Inc. v. ITT Hartford Ins. Group, 50 Cal. App. 4th 548, 564-66 (1996) (reading policy through eyes of lay person, trademark infringement could reasonably be considered misappropriation of an advertising idea or a style of doing business; insurer owed duty to defend); American Employers’ Ins. Co. v. DeLorme Publishing Co., 39 F. Supp. 2d 64, 77 (D. Me. 1999) (trademark infringement deemed misappropriation of style of doing business and infringement of copyright, title or slogan); P.J. Noyes Co. v. American Motorists Ins. Co., 855 F.Supp. 492, 495 (D.N.H. 1994) (claim of trademark infringement was included within offense of misappropriation of advertising ideas or style of doing business because alleged trademark infringement would not have existed but for use of allegedly infringing term in policyholder’s packaging, literature and advertisements); Bay Electric Supply, Inc. v. Travelers Lloyds Ins. Co., 61 F.Supp.2d 611, 615-618 (S.D. Tex. 1999) (trademark and trade dress claims deemed misappropriation of advertising ideas or style of doing business). But see Sport Supply Group, Inc. v. Columbia Cas. Co., 335 F. 3d 453 (5th Cir. 2003) (a trademark is not a marketing or advertising device; trademark infringement is not misappropriation of advertising ideas).
12 See Section E below.
13 E.g., Cincinnati Ins. Co. v. Zen Design Group, Ltd., 329 F.3d 546 (6th Cir 2003) (use of phrase "The Wearable Light" to describe flashlight brand is potentially within infringement of "slogan"); American Economy Ins. Co. v. Reboans, Inc., 900 F. Supp. 1246, 1253-54 (N.D. Cal. 1994) (infringement of Dunhill trademarks); J.A. Brundage Plumbing v. Massachusetts Bay Ins. Co., 818 F.Supp. 553, 558-559 (W.D.N.Y 1993) (infringement of Roto-Rooter trademark).
14 99 F.3d 795, 803 (6th Cir. 1996).
15 E.g., Callas Enterprises, Inc. v. Travelers Indem. Co. of America, 193 F.3d 952, 956-57, 1999 U.S. App. LEXIS 25638 (8th Cir. 1999) (trademark infringement is not misappropriation of an advertising idea or infringement of copyright, title or slogan); American Nat’l. Fire Ins. Co. v. Methods Research Corp., No. 99 C 7484, 2000 U.S. Dist. LEXIS 17748 at *11 (N.D. Ill. Dec. 4, 2000),
16 See, e.g., Adolfo House Distributing Corp. v. Travelers Property & Cas. Ins. Co., 165 F. Supp. 2d 1332, 1338-39 (S.D. Fla. 2001); Bay Electric Supply, Inc. v. Travelers Lloyds Ins. Co., 61 F. Supp. 2d 611, 615-18 (S.D. Tex. 1999); Dogloo, Inc. v. Northern Ins. Co., 907 F. Supp. 1383, 1389-90 (C.D. Cal. 1995); Poof Toy Products, Inc. v. United States Fid. Guar. Co., 891 F. Supp. 1281, 1233 (E.D. Mich. 1995); American Economy Ins. Co. v. Reboans, Inc., 900 F.Supp. 1246, 1254 (N.D. Cal. 1994) (trade dress claims based on policyholder’s "passing off" its goods as those of plaintiff).
17 292 F.Supp.2d 1072, 1079 (N.D. Ill. 2003). For a view that a trademark is a label or identifier, rather than an advertising idea, see Sport Supply Group, Inc. v. Columbia Cas. Co., 335 F. 3d 453 (5th Cir. 2003). The Fourth Circuit, in turn, declined to follow Sport Supply Group in State Auto Property & Cas. Ins. Co. v. Travelers Indem. Co., 343 F.3d 249, 258 n.12 (4th Cir. 2003) (trademark, by identifying and distinguishing trademark holder’s products, promotes those products to the public).
18 292 F. Supp. 2d 1072 at 1077-78.
19 See Specific Impulse, Inc. v. Hartford Cas. Ins. Co., No. 5:02-cv-02849-JW, 2002 U.S. Dist. LEXIS 25600 at *8-13 (N.D. Cal. Sept. 17, 2002) (complaint alleged web design and development company stole graphic design firm’s proprietary software and advertised it as its product on its website); Interface, Inc. v. Standard Fire Ins. Co., No. 1:99-cv-1485-MHS, Copyright L. Rep. (CCH) ¶ 28, 164, 2000 U.S. Dist. LEXIS 14019 at *10-11 (N.D. Ga. 2000) (complaint alleged copyright infringement through design, production, distribution and sale of carpets bearing infringing patterns; claimant sought discovery of advertising material displaying the allegedly infringing patterns); Ben Berger & Son, Inc. v. American Motorist Ins. Co.,36 U.S.P.Q. 2d (BNA) 1105, 1995 U.S. Dist. LEXIS 8976, at *11 (S.D.N.Y. 1995) (marketing of designs in catalog was "advertising injury caused by copyright infringement" triggering duty to defend); J.I.P., Inc. v. Reliance Ins. Co., Nos. 97-55385, 97-55422, 1998 U.S. App. LEXIS 27538 at *4 (9th Cir. 1998).
20 See, e.g., Iolab Corp. v. Seaboard Sur. Co., 15 F.3d 1500, 1505 (9th Cir. 1994) (infringement claim based on manufacture and sale of patented product did not arise out of the insured’s advertising activities and was not covered by the policies); Everest & Jennings, Inc. v. American Motorists Ins. Co., 23 F.3d 226, 229 (9th Cir. 1994) (reaching the same conclusion); Simply Fresh Fruit, Inc. v. Continental Ins. Co., 94 F.3d 1219, 1222 (9th Cir. 1996), cert. den., 519 U.S. 965 (1996) (confirming the Ninth Circuit’s prior holdings that, "as a matter of law, patent infringement cannot occur in the course of an insured’s advertising activities"). The court in Simply Fresh noted that the infringement claims before it were based on use of the patented device alone, and that under the policy "the advertising activities must cause the injury — not merely expose it." Simply Fresh Fruit v. Continental Ins. Co., 94 F.3d 1219, 1223 (9th Cir. 1996). (Emphasis in original.) Accord EKCO Group v. Travelers Indem. Co., 273 F.3d 409, 415 (1st Cir. 2001) (no coverage because physical reproduction and sale of look-alike teapot were not done and did not cause injury "in the course of" advertising); Mez Industries, Inc. v. Pacific Nat’l Ins. Co., 76 Cal. App. 4th 856, 873-74 (1999) (patent infringement does not constitute infringement of "title" because "title" refers to literary, musical or artistic titles).
The Mez court also reasoned that in order to be found liable for inducing patent infringement the defendant must have the specific intent to induce another to infringe the patent holder’s prior right. Therefore, the court held, coverage for inducing patent infringement is barred by California Insurance Code section 533, which precludes coverage for "willful" misconduct. Mez Industries, Inc. v. Pacific Nat’l Ins. Co., 76 Cal. App. 4th 856, 876-77, 90 Cal.Rptr.2d 721 (1999).
21 313 F.3d 837, 841 (3d Cir. 2002)
22 313 F.3d at 841.
23 E.g., Aetna Cas. Surety Co. v. Superior Court, 19 Cal. App. 4th 320, 328, 23 Cal.Rptr.2d 442 (1993) (a patentee is not injured because of advertisement of an infringing product, but by its manufacture and sale).
24 E.g., ECKO Group, Inc. v. Travelers Indem. Co., No. 99-236-JD, U.S. Dist. LEXIS 17702 (D.N.H. Nov. 29, 2000) (design patent claim sufficiently similar to trade dress infringement claim to permit reasonable insured to expect coverage), rev’d, 273 F.3d 409 (1st Cir. 2001); Union Ins. Co. v. Land & Sky, Inc., 247 Neb. 696, 529 N.W.2d 773 (1995) (patent infringement within enumerated offense of "piracy" under 1976 Broad Form Endorsement).
25 35 U.S.C. § 271, as amended effective January 1, 1996.
26 E.g., Homedics, Inc. v. Valley Forge Ins. Co., 315 F.3d 1135 (9th Cir. 2003) (misappropriation of advertising ideas or style of doing business cannot be read in objectively reasonable manner to include patent infringement); Everett Associates, Inc. v. Transcontinental Ins. Co., 159 F.Supp.2d 1196, 1208 (N.D. Cal. 2001) (patent infringement "offer to sell" claim is not a covered advertising injury offense); Tradesoft Technologies, Inc. v. Franklin Mutual Ins. Co., 329 N.J. Super. 137, 150, 746 A.2d 1078 (App. Div. 2000) (rejecting coverage, even for "offer to sell"); Maxconn, Inc. v. Truck Ins. Exch., 74 Cal. App. 4th 1267, 1274, 1279 (1999) (patent infringement not an enumerated offense).
27 93 F.3d 578 (9th Cir. 1996).
28 93 F.3d 578, 580 (9th Cir. 1996). See also Tradesoft Technologies, Inc. v. Franklin Mutual Ins. Co., 329 N.J. Super. 137,153, 746 A.2d 1078 (App. Div. 2000) (allegations of misappropriation of customer surveys, business plans and marketing studies triggered advertising injury coverage).
29 See Frog, Switch & Mfg. Co., Inc. v. Travelers Ins. Co., 193 F. 3d 742, 748-750 (3d Cir. 1999) (no duty to defend because alleged misappropriation of trade secrets related to dipper bucket design was not advertising injury); Simply Fresh Fruit, Inc. v. Continental Ins. Co., 94 F.3d 1219, 1223 (9th Cir. 1996), cert. den., 519 U.S. 965 (1996) (no duty to defend where claimant’s trade secret misappropriation allegations related to competing fruit slicer, rather than advertising); Microtec Research, Inc. v. Nationwide Mut. Ins. Co., 40 F.3d 968, 971 (9th Cir. 1994) (no duty to defend where claimant alleged that policyholder passed off claimant’s compiler code as its own; although defendant advertised the product, the claim arose out of misappropriation of code, not by the advertising itself); Novell, Inc. v. Federal Ins. Co., 141 F.3d 983, 988 (10th Cir. 1998) (injury arose from creation of competing product based on trade secrets, not advertising of product); Zurich Ins. Co. v. Amcor Sunclipse North America, 241 F.3d 605, 607 (7th Cir. 2001) (applying California law, the Seventh Circuit held that insurer owed no duty to defend because individual customer solicitation does not constitute "advertising," misappropriation of customers does not constitute misappropriation of "advertising ideas," and misappropriation of trade secrets is not an infringement of "title"); Transportation Ins. Co. v. Freedom Electronics, Inc., 264 F. Supp.2d 1214 (N.D. Ga. 2003) (trade secrets related to diagnosis, repair, re-manufacture and shipping of products).
30 Bank of the West v. Superior Court, 2 Cal. 4th 1254, 1276 n.9, 10 Cal.Rptr.2d 538 (1992) (noting majority rule); Playboy Enterprises, Inc. v. St. Paul Fire & Marine Ins. Co., 769 F.2d 425, 428-29 (7th Cir. 1985); Teletronics Int’l., Inc. v. CNA Ins. Co., No. AW-03-1348, 2004 U.S. Dist. LEXIS 1719, *7 (D. Md. 2004) (motion for reconsideration pending); Smartfoods, Inc. v. Northbrook Property & Cas. Co., 35 Mass. App. Ct. 239, 243-44, 618 N.E.2d 1365 (Mass. App. 1993); American States Ins. Co. v. Vortherms, 5 S.W. 3d 538, 542 (Mo. App. 1999); International Ins. Co. v. Florists’ Mut. Ins. Co. 201 Ill. App. 3d 428, 432-33, 559 N.E.2d 7 (Ill. App. 1990); MGM, Inc. v Liberty Mut. Ins. Co., 17 Kan. App. 2d 492, 495, 839 P. 2d 537, 540 (Kan. App. 1992).
31 Charter Oak Fire Ins. Co. v. Hedeen and Cos., 280 F. 3d 730, 737 (7th Cir. 2002) (unknown number of letters sent by business "with a very limited commercial audience" constitute advertising); John Deere Ins. Co. v. Shamrock Industries, Inc., 696 F.Supp. 434, 439-440 (D. Minn. 1988), aff’d, 929 F.2d 443 (8th Cir. 1991); American States Ins. Co. v. Canyon Creek, 786 F.Supp. 821, 827-828 (N.D. Cal. 1991); USF&G v. Star Technologies, Inc., 935 F. Supp. 1110, 1114-15 (D. Ore. 1996).
32 New Hampshire Ins. Co. v. Foxfire, Inc., 820 F. Supp. 489, 494 (N.D. Cal. 1993).
33 31 Cal.4th 16, 19, 1 Cal. Rptr.3d 401 (2003).
34 The policyholder relied on New Hampshire Ins. Co. v. Foxfire, Inc., 820 F.Supp. 489, 494 (N.D. Cal. 1993), where the court held that "‘[a]dvertising activity’ must be examined in the context of the overall universe of customers to whom a communication may be addressed. Where the audience may be small, but nonetheless comprises all or a significant number of a competitor’s client base, the advertising activity requirement is met."
35 Hameid, 31 Cal.4th at 28-29.
36 50 Cal. App. 4th 548, 59 Cal.Rptr.2d 36 (1996).
37 50 Cal. App, 4th at 557.
38 See Poof Toy Products, Inc. v. United States Fid. & Guar. Co., 891 F.Supp. 1228, 1235-1236 (E.D. Mich. 1995); J.A. Brundage Plumbing & Roto-Rooter, Inc. v. Massachusetts Bay Ins. Co., 818 F.Supp. 553, 558 (W.D.N.Y. 1993), vacated in light of settlement, 153 F.R.D. 36 (W.D.N.Y. 1994); Dogloo, Inc. v. Northern Ins. Co. of New York, 907 F.Supp. 1383, 1391 (C.D. Cal. 1995).
39 In Peerless Lighting Corp. v. American Motorists Ins. Co., 82 Cal.App.4th 995, 98 Cal.Rptr.2d 753 (2000), a California appellate court rejected the policyholder’s argument that an allegation of "advertising" was "inherent" in an allegation of trade dress infringement. In that case, the policyholder had sold lighting fixtures specifically manufactured to meet the needs of a single customer. A competitor alleged that the fixture design infringed its trade dress. In a conference call with the adjuster, the policyholder conceded that it had never "advertised" the tailor-made fixtures. In view of the policyholder’s admission, the court concluded that the alleged infringement was not "committed in the course of advertising" and held that the insurer owed no duty to defend. Peerless Lighting Corp., 82 Cal.App.4th at 1016.
40 31 Cal.4th at 24 n.3.
41 Hewlett Packard Co. v. ACE Property & Cas. Co., No. 99-20207 JW (N.D. Cal. Nov. 25, 2003) (denying motion for reconsideration based on Hameid decision). In its previous ruling reported at 2003 U.S. Dist. LEXIS 3586 (Mar. 3, 2003), the court had denied the insurer’s motion for summary judgment on the duty to defend because the insurer had not conclusively negated the potential for coverage.
42 Bear Wolf, Inc. v. Hartford Ins. Co., 819 So.2d 818 (Fla. App. 2002), rev. denied, 839 So.2d 698 (Fla. 2003) (display of copyrighted design; nonstandard CGL policy); Fireman’s Fund Ins. Co. v. Bradley Corp., 261 Wis.2d 4, 53, 660 N.W.2d 666, 682 (2003) (display of misappropriated designs; nonstandard CGL policy).
43 See, e.g., State Auto Property & Cas. Ins. Co. v. Travelers Indem. Co., 343 F.3d 249, 259 (4th Cir. 2003) (injury allegedly suffered from insured’s use of misleading domain name and claimant’s logo on website occurred "in the course of" advertising). See also CAT Internet Services, Inc. v. Providence Washington Ins. Co., 333 F.3d 138 (3d Cir. 2002) (insured allegedly used claimant’s domain name to redirect traffic to insured’s web site); Specific Impulse, Inc., v. Hartford Cas. Ins. Co., No. 5:02–cv–02849-JW, 2002 U.S. Dist. LEXIS 25600 at *12-14 (N.D. Cal. Sept. 17, 2002) (insured allegedly advertised claimant’s proprietary work on website).
44 No. AW-03-1348, 2004 U.S. Dist. LEXIS 1719, *19 (D. Md. Feb. 2, 2004) ( decision not yet final). But see Westfield Cos. v. O.K.L. Can Line, 2003 Ohio 7151, *P17 (Ohio App. 2003) ("A web page is advertising under any definition.").
45 E.g., Sentry Ins. v. R.J. Weber Co. Inc., 2 F.3d 554, 557 (5th Cir. 1993); Advance Watch Co. v. Kemper National Ins. Co., 99 F.3d 795, 806-07 (6th Cir. 1996); Simply Fresh Fruit, Inc. v. Continental Ins. Co., 94 F.3d 1219, 1221 (9th Cir. 1996).
46 2 Cal. 4th 1254, 1277, 10 Cal.Rptr.2d 538 (1992).
47 2 Cal. 4th at 1277.
48 See EKCO Group, Inc. v. Travelers Indem. Co., 273 F.3d 409, 413, 415 (1st Cir. 2001) (misappropriation offenses alleged were physical reproduction and sale of look-alike teapot, not design of brochures or annual reports, nor misappropriation of graphics or typography; offenses charged were in reproduction and sales of teapot, not in advertising); Simply Fresh Fruit, Inc. v. Continental Ins. Co., 94 F.3d 1219, 1222 (9th Cir. 1996) (an enumerated offense must be caused by policyholder’s advertising; patent infringement cannot occur in the course of advertising); Iolab Corp. v. Seaboard Sur. Co., 15 F.3d 1500, 1507 (9th Cir. 1994) (no coverage for patent infringement despite heavy advertising of product; advertising did not cause the infringement; it was "merely evidence of the commercial nature of the infringing activities"); Gitano Group, Inc. v. Kemper Group, 26 Cal. App. 4th 49, 58 (1994) (causal connection lacking because underlying patent infringement plaintiffs alleged no separate harm suffered from policyholders’ advertising of infringing product); Microtec Research, Inc. v. Nationwide Mut. Ins. Co., 40 F.3d 968, 971 (9th Cir. 1994) (where policyholder "passed off" claimant’s software code as its own, harm was caused by misappropriation of the code, not advertising).
49 193 F.3d 742, 750 (3d Cir. 1999).
50 193 F.3d at 748.
51 193 F.3d 742, 750 n.8 (3d Cir. 1999). Accord Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 339 n.3 (9th Cir. 1996).
52 333 F.3d 138 (3d Cir. 2002).
53 333 F.3d at 142.
54 696 F. Supp. 434, 440 (D. Minn. 1988), aff’d, 929 F.2d 413 (8th Cir. 1991).
55 John Deere Ins. Co., 696 F. Supp. at 440.
56 2003 Copyright L. Rep. (CCH) ¶ 28701, 2003 Mo. App. LEXIS 1677 at *4-5 (Mo. App. 2003).
57 Indiana Ins. Co. v. Super Natural Distributors, Inc., 2003 Wis. App. 244, 671 N.W.2d 864 (2003).
58 Super Natural Distributors, 2003 Wis. App. at *P39–*P49.
59 Westfield Cos. v. O.K.L. Can Line, 2003 Ohio 7151, **P18 (Ohio App 2003).
60 Cf. R.C. Bigelow, Inc. v. Liberty Mutual Ins. Co., 287 F.3d 242 (2d Cir. 2002) (trade dress displayed in ads and packaging); Fidelity Guar. Ins. Co. v. Kocolene Marketing Corp., 2002 U.S. Dist. LEXIS 8518, *36-*37 (S.D. Ind. Mar. 26, 2002) (cigarette packaging trade dress was "a form of advertising," distinct from products themselves); Interface, Inc. v. Standard Fire Ins. Co., 2000 U.S. Dist. LEXIS 14019 (N.D. Ga. Aug. 10, 2000) (ads allegedly bore images of claimant’s copyrighted carpet patterns).
61 See McKee v. State Farm Fire & Cas. Co., 145 Cal. App. 3d 772, 777-78, 193 Cal.Rptr. 745 (1983) (later revision not probative on issue of liability under provision as originally drafted); Carey-Canada, Inc. v. California Union Ins. Co., 118 F.R.D. 242, 245 n.10, 1986 U.S. Dist LEXIS 24860 (D.D.C 1986), affirmed in part, vacated in part and remanded on other grounds, Carey-Canada, Inc. v. Columbia Casualty Co., 291 U.S. App. D.C. 284, 940 F.2d 1548 (D.C. Cir. 1991) (subsequent revision relevant, but may be inadmissible for public policy reasons).
62 In an unpublished post-Hameid decision, a California court of appeal held that seriatim bid solicitations did not constitute the requisite "broadcast" or "publication" within the meaning of "advertisement." Scottsdale Ins. Co. v. MV Transportation, Inc., No. B150991 (Cal. App. Feb. 23, 2004)
63 In TIG Insurance Co. v. Dallas Basketball, Ltd., No. 05-03-00134-CV, 2004 Tex. App. LEXIS 1838 (Feb. 11, 2004), the underlying class action complaints alleged Telephone Consumer Protection Act and privacy claims arising out of unsolicited advertisements for basketball tickets sent to fax machines. The court held that these claims fell within the defendants’ advertising injury coverage.
64 Compare ECKO Group, Inc. v. Travelers Indem. Co., 273 F.3d 409, 414 (1st Cir. 2001) (advertising refers to "conventional advertising – something separate from the product"), and Farmington Cas. Co. v. Cyberlogic Technologies, 996 F.Supp. 695, 705 (E.D. Mich. 1998) (allegedly infringing product given as free sample could not be an advertisement for itself), with Adolfo House Distributing Corp. v. Travelers Property & Cas. Ins. Co., 165 F.Supp.2d 1332, 1339 (S.D. Fla. 2001) (product label and packaging might be considered advertising). For an interesting discussion of the "advertisement" issue, see Michael Sean Quinn, Coverage B Personal and Advertising Injury Liability—1998 Revisions, 11 Coverage 47, 49-50 (2001).
65 See KLA-Tencor Corp. v. Travelers Indem. Co., No. C-02-05641 RMW, 2003 U.S. Dist. LEXIS 10456 at *16-17 (N.D. Cal. April 11, 2003) (nonstandard intellectual property exclusion did not apply to counterclaim in patent infringement suit that alleged policyholder disparaged claimant’s financial condition and future viability and informed others that claimant had lost large orders); Superperformance Int’l., Inc. v. Hartford Cas. Ins. Co., 332 F.3d 215, 223-24 (4th Cir. 2003) (even if claims could arguably be characterized as disparagement claims, nonstandard trademark exclusion precluded coverage).
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