Trade Infringement Does Not Constitute Personal and Advertising Injury for Purposes of Coverage

Feldman Law Group, P.C. v. Liberty Mutual Ins. Co. (S.D.N.Y., August 10, 2011)

This was an action by policyholder against defendant insurer to defend it in an underlying action alleging common law trade dress infringement, unfair competition and copyright infringement. Policyholder had a standard general liability policy that included coverage for claims seeking damages for “personal and advertising injury.” Insurer denied coverage in this matter, alleging that claims involving intellectual property rights do not constitute a “personal and advertising injury.” Pennsylvania law was held to apply, and the court held that insurer was not required to defend because there must be some causal connection between the injury alleged and the advertising activities of the insured. When an action stems from alleged misappropriation of a product, rather than an advertising concept, the claim can no longer be fairly characterized as alleging advertising injury.