Commercial General Liability

Circuit Panel Rules Trademark Claim Not Covered by Policy for Trade Dress Infringement

"For State Farm to have a duty to defend the Avaya lawsuit against DBSI and its officer, Avaya’s operative complaint must potentially state a claim for trade dress infringement. But it does not," Judge Peter Phipps of the Third Circuit wrote.

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State Farm insurance office. Photo: Diego M. Radzinschi/ALM

The U.S. Court of Appeals for the Third Circuit ruled that a commercial liability insurance policy’s coverage of trade dress infringement claims does not extend to losses for trademark infringement.

The appeals court upheld a ruling from the U.S. District Court for the District of New Jersey that said the insurer is not obligated to cover trademark or copyright infringement claims by Avaya, a communications technology company, against an alleged seller of pirated Avaya software licenses.

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