Reed Smith on Tenth Circuit Finds Duty to Defend Patent Infringement Allegations

Reed Smith on Tenth Circuit Finds Duty to Defend Patent Infringement Allegations

In this Analysis, Timothy P. Law and Jeremy F. Heinnickel discuss the Tenth Circuit's decision in Dish Network Corp. v. Arch Specialty Ins. Co., 2011 U.S. App. LEXIS 20955 (10th Cir. Colo. Oct. 17, 2011) [enhanced version available to subscribers / unenhanced version available from lexisONE Free Case Law]. The Tenth Circuit held that allegations of patent infringement can fall within the advertising liability coverage section of commercial general liability (CGL) insurance policies. The authors write:

     A patent infringement action was brought against Dish Network by Ronald A. Katz Technology Licensing, L.P. (RAKTL) alleging infringement of automated telephone service patents. The technology allegedly allowed Dish Network's customers to "perform pay-per-view ordering and customer service functions over the telephone." Dish Network requested a defense from its insurance companies for the RAKTL litigation, but its request was denied. Consequently, Dish Network filed an action in Colorado federal court seeking a declaration that the insurance companies had a duty to defend and indemnify.

     The district court entered summary judgment in favor of the insurance companies. Although the district court found that RAKTL alleged that Dish Network engaged in advertising, the district court ruled that Dish Network's activities did not constitute "misappropriation of advertising ideas or style of doing business" because RAKTL's allegations focused on Dish Network's use of the patented technologies to convey content, rather than the incorporation of patented technologies into Dish Network's advertising.

     The Tenth Circuit reversed the district court's ruling. The Tenth Circuit acknowledged that some courts have categorically denied coverage for patent infringement cases but noted that "the bulk of published case law discussing patent infringement as advertising injury deals with products the insured happened to advertise, rather than a means of advertising that the insured used to market its own products."  ...

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