Advertising Injury
When sued for infringement of someone’s intellectual property, it is important to review your insurance coverage carefully to determine if there is coverage for the claim. Often a commercial general liability (CGL) policy will contain coverage for “personal injury” and “advertising injury.” As defined in the standard CGL policy issued by the Insurance Services Office (ISO), advertising injury covers damages arising out of actions conducted in the course of advertising activities, if they arose out of:
- Oral or written material that slanders or libels a person or organization or disparages another’s goods, products, or services
- Oral or written publication of material that violates a person’s right of privacy
- Misappropriation of another’s advertising ideas or style of doing business
- Infringing a copyright, trade dress, or slogan in an advertisement
Whether the claims made against you arose out of an “Advertisement” is often a key decider of coverage. It is commonly understood as a notice, broadcast or published to the general public or specific market segment about goods, products, or services being sold, for the purpose of attracting customers or supporters. The definition may, however, be broader or narrower depending upon which state the lawsuit has been brought. Some courts require that the advertisement be widespread, and find no coverage where the advertisement is one on one.
Coverage Standards Under Case Law
What we call “case law” are decisions by the courts on some issue of importance. Case law varies from state to state, and it can provide guidance on whether there is a reasonable possibility of coverage for your claim. “Advertising Injury” coverage is one of those “hot topic” areas where the law changes often, sometimes on a daily basis. Its important, therefore, to keep up on the latest decisions.
In some decisions, case law has interpreted “Oral or written material that slanders or libels a person or organization” as including libel, slander and trade libel (an example being an intentionally negative statement about the quality of a competitor’s property that often is either untrue or depicts the product in an untrue light).
Many courts have held that the phrase “misappropriation of another’s advertising ideas or style of doing business”, as used in Advertising Injury coverage, includes trademark infringement and/or unfair competition. Your insurance policy may, however, have exclusions for these claims.
For coverage to exist for an intellectual property claim, you might be required to demonstrate a causal connection between the injury and your advertising activities. That’s why its important that if you are sued on an intellectual property claim, you immediately contact an experienced attorney who knows the scope of Advertising Injury coverage.
