Tenth Circuit Continues the Ambiguity of "Advertising Injury"

A rather ambiguous message was handed down from the Tenth Circuit in a recent case brought by Dish Network against its Commercial General Liability (CGL) carriers, making it is essential that companies not rely on the unpredictability of the courts to determine if they have coverage under their CGL policies. End Quote

(1888PressRelease) October 22, 2011 - A rather ambiguous message was handed down from the Tenth Circuit in a recent case brought by Dish Network against its Commercial General Liability (CGL) carriers, where Dish had been sued on patents claiming call center technology. Although unlikely, some CGL policies may still be interpreted to have some coverage for patent infringement claims if the patent is claimed to be on a way of advertising a product. In Dish Network Corp. v. Arch Specialty Insurance Co., Dish argued that the CGL coverage for "advertising injury" was potentially triggered by the asserted patents' claims which purportedly included advertising or product promotion.

Although "numerous cases do, indeed, categorically rule out 'advertising injury' coverage for patent infringement," the appeals court noted that under Colorado law "where an advertising technique itself is patented, its infringement may constitute advertising injury." The court noted that allegations of patent infringement by a product are consistently held to not be within advertising injury coverage, regardless of how that product might be advertised. Only when both the accused activity and the patent's claims are within the scope of advertising does the potential for coverage attach. The insurers continued to assert various intellectual property (IP) exclusions and causation arguments, and the case will return to its trial court for further litigation.

Obtaining CGL coverage for patent litigation continues to be a difficult and unpredictable endeavor. When cases like Dish continue to be litigated in the courts, you can be sure that carriers will attempt to further limit any plausible type of IP exposure under their commercial insurance policies. It is essential that companies not rely on the unpredictability of the courts to determine if they have coverage under their CGL policies.

Companies are well advised to proactively obtain insurance coverage specifically tailored to address their most valuable assets, intellectual property. Instead of taking the chance on CGL coverage, a company can obtain a dedicated policy where patent infringement allegations can be explicitly insured without the need to litigate coverage through trial and appeals courts. These dedicated IP policies can even cover the cost of pursuing a CGL carrier in those exceptional cases where it should provide coverage. Surprisingly, despite the established availability of IP insurance policies, most companies have not been made aware of the existence of IP insurance. Equally surprising is the number of companies who think they will be covered for IP risk under their CGL policy. It is important to discuss IP insurance with a knowledgeable insurance professional. - by Robert Fletcher.

Robert Fletcher is the founder and President of Intellectual Property Insurance Services Corporation (IPISC). IPISC continues to be the leading provider of intellectual property risk management products and services insurance in the United States and worldwide, with over twenty (20) years of expertise and experience. For further information, please contact Karrie Lewis, Marketing Director at IPISC, at 502.855.5310 or klewis ( @ ) patentinsurance dot com dot

Please visit our website at www.patentinsurance.com.

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