Advertising Injury coverage? Yes, it exists. It is fairly standard in most commercial general liability policies with personal injury coverage, which insures a company from its advertising of its goods or services, such as libel, slander, copyright infringement, trademark infringement. As a trademark attorney, I routinely inform my clients about the benefits of this type of coverage, and if they already have it, to make sure it covers trademark infringement.
If your company already has advertising injury coverage, does it include, or possibly exclude, trademark infringement coverage? In a recent case in a Minnesota federal district court, a defendant’s insurance carrier disclaimed trademark infringement coverage, which caused the infringing company to pay damages out of pocket.
Excell Consumer Products sued Smart Candle for their use of the protected trade name and trademark “Smart Candle” relating to LED lights. Smart Candle requested that its insurance carrier, Selective Insurance Company, defend the lawsuit. However, Selective Insurance disclaimed coverage under Smart Candle’s policy. Selective Insurance focused on the personal and advertising injury coverage, which the policy defined as injury resulting from “Infringing upon another’s copyright, trade dress or slogan in your ‘advertisement.’” The policy excluded from coverage injury “arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights.” Notably, this exclusion did not apply to the infringement resulting from the companies advertising of copyright, trade dress, or slogan.
Smart Candle claimed that “slogan” in the policy required Selective Insurance to defend or indemnify Smart Candle in the Excell Consumer Products lawsuit. The federal district court granted Selective Insurance’s motion for summary judgment. Notably, the policy failed to define the term “slogan” so the court used the “popular and ordinary meaning”. Since the Excell Consumer Products lawsuit centered upon the use of “Smart Candle” as a mark, trademark, trade name, and name, a reasonable jury would not determine that Excell Consumer Products’ lawsuit was based on slogan infringement. The appellate court agreed with the district court’s interpretation of the policy.
If you currently have advertising injury coverage, it is critical that you check to find out what the policy covers and what it does not cover. With any business decision, fully understanding the liabilities and risk to your business will aid in the decision making process. Instead of fighting a significant infringement lawsuit expecting insurance coverage, it may be worthwhile to settle the lawsuit early on and limit your exposure. If you do not have advertising injury coverage, investigate obtaining coverage that will adequately protect your business.
The intellectual property attorneys at Assouline & Berlowe, P.A. are fully equipped to review your policies and provide feedback as to whether advertising injury coverage protects your business for trademark infringement and other intellectual property causes of action.
For any questions about advertising injury coverage relating to intellectual property, or general questions about patents, trademarks, and copyrights, please contact Greg Popowitz below.
Greg M. Popowitz, Esq.
Registered Patent Attorney
AV Rated by Martindale-Hubbell
Intellectual Property Litigation
ASSOULINE & BERLOWE, P.A.
213 East Sheridan Street, Suite 3
Dania Beach, Florida 33004
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