more on cgl insurance policy coverage for patent disputes

Following up on my August 16 post concerning coverage for patent infringement claims under the “advertising injury” provision of a company’s Comprehensive General Liability (“CGL”) policy, Judge Kane of the U.S. District Court for the District of Colorado issued an opinion recently in which he offered a fairly bright line distinguishing what is covered from what is not.

In Dish Network v. Arch Specialty Ins. Co., Judge Kane explained:

…the fact that a patented technology is capable of advertising goods or carrying promotional messages does not transform the technology into an advertising idea. Patent infringement may, however, constitute an advertising injury where an entity uses an advertising technique that is itself patented. The crucial inquiry, therefore, focuses on whether the complained of advertisement incorporates a patented advertising techniques as an element. If so, then the alleged infringement may constitute ‘advertising injury.’ If, however, the alleged infringement concerns the method of conveyance there is no ‘misappropriation of advertising idea.’


The patents in suit addressed methods of automated telephone call processing. Claim 219 of one of the patents in suit, "Telephone interface call processing system with call selectivity" claimed “A telephone interface system according to claim 199, wherein said select interactive operating format involves advertising of a product for sale."  Claim 199 claimed a telephone interface system for individually interfacing callers at a multitude of remote terminals for voice-digital communication through a telephone communication facility….”

The Court held that the patents involved technology that was capable of advertising goods or carrying promotional methods rather than advertising techniques, and that the insurer had no duty to defend or indemnify Dish Network with respect to the patent infringement claims.
 

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