"Run for Cover(age): Emerging Trends in Advertising Injury and IP Litigation," DRI’s The Voice August 10, 2016

“Courts have become stricter in interpreting advertising injury clauses, coming down almost uniformly on the side of the carriers. Now, denial of coverage for infringement actions will be routinely upheld, especially when no allegations exist that the mark in question has literally been used in ‘advertising,’” writes Jason L. Ederer, an associate in Goldberg Segalla’s Intellectual Property and Global Insurance Services Practice Groups.

In this article, Jason examines the courts’ evolving application of advertising injury provisions in general liability policies. In the past, courts have ruled that under such provisions, insurance companies have a broad duty to defend insured parties in trademark infringement actions, Jason writes.

But the courts’ view on this issue has altered over the past few years, and in a recent case, the Second Circuit upheld the denial of coverage for injuries relating to the use of a counterfeit brand label, ruling that  liability in the underlying action was based on “the sale — not the advertising — of counterfeit products.”

“So what now? In determining the existence of coverage, it seems that an insurance company need only look at the face of the pleading to see if there is any allegation that the infringement occurred in advertising,” Jason writes. “While this may be good for the insurance companies, it certainly undermines the purpose of advertising injury coverage.”

 Read the full article here: