Under the coverage provisions in standard comprehensive general liability insurance policies, there is often coverage for what is known as “Advertising Injury.” Depending upon the wording of the particular policy, coverage for Advertising Injury often exists with respect to claims made against the insured for copyright infringement, trademark and trade dress (product design and packaging) infringement and sometimes for patent infringement as well.
Although this coverage is of critical importance, its very existence often comes as a surprise to those business executives who need it most and often to their counsel as well. The reasons for this “unawareness” are not clear, although, in part, could be attributed to the lack of case law in this area prior to a landmark decision in California in 1995 in the case of American Economy Ins. v. Reboans, 900 F. Supp. 1246 (N.D. Cal. 1995), which held that a claim for trademark infringement was covered under the “misappropriation” and “infringement of title” provisions in the insured’s liability insurance policy. Even after this decision and a multitude of others finding for the insured, today the existence of this coverage is still one of the most important but least understood weapons available to those faced with claims of trademark or copyright infringement.
