Hunton Insurance Recovery Blog

The Second Circuit has ruled a claim alleging an “offer for sale” infringed on a patent constitutes an advertising injury sufficient to trigger a defense under commercial general liability insurance.  In High Point Design LLC v LM Insurance Corporation, the plaintiff High Point brought a declaratory-judgment action against Buyer’s Direct, Inc. after the latter directed High Point to cease-and-desist in the sale of its Fuzzy Babba slippers.  Buyer’s Direct responded with a counterclaim alleging trade dress infringement, claiming that High Point’s offers for sale in retail catalogs infringed on Buyer’s Direct’s own slipper trade dress.  Buyer’s Direct sought discovery of all advertising, marketing and promotional materials related to High Point’s fuzzy footwear to substantiate its claims.

In an article published in Law360, Hunton & Williams LLP partners Walter Andrews, Malcolm Weiss, and Paul Moura discuss two recent decisions in Tree Top Inc. v. Starr Indem. & Liab. Co., No. 1:15-CV-03155-SMJ, 2017 WL 5664718 (E.D. Wash. Nov. 21, 2017).  There, the Eastern District of Washington rejected an insurer's attempt to escape insurance coverage for a Proposition 65 lawsuit filed against juice-maker Tree Top Inc.

In a decision of import to businesses facing intellectual property infringement lawsuits, the Southern District of Florida has ruled that a commercial general liability policy’s “knowing violation” and “infringement” exclusions do not apply to lawsuits involving allegations of intent and knowledge in the context of advertising injury. E.S.Y., Inc., et al. v. Scottsdale Insurance Company, No. 15-21349 (S.D. Fla. October 14, 2015) (“E.S.Y.”).