Patent Infringement Suit Not "Advertising Injury" Under Insurance Policy

An American insurer has no duty to defend or indemnify an insured against patent infringement allegations under a general liability policy, the U.S. Court of Appeals (3d Cir.) found on December 20, 2002 in Green Machine v. Zurich American Insurance. The insured, Green Machine Corporation, was accused of infringing or inducing infringement of patents for concrete-cutting saws, owned by Chiuminatta Concrete Concepts. Among other allegations, Chiuminatta argued that Green Machine gave sales demonstrations encouraging cutting concrete by Chiuminatta's patented method. The Court of Appeal found that the Zurich-American Insurance Group, Green Machine's insurer, had no duty to defend or indemnify Green Machine under the "advertising injury" clause of its general liability policy. The policy defined "advertising injury" as an injury arising out of the "misappropriation of advertising ideas or style of doing business." The Court said that the fact that Green Machine stole a patented method for cutting concrete and also advertised the results of that theft did not convert the underlying theft into an "advertising injury". For a copy of the decision, visit: http://www.ca3.uscourts.gov/opinarch/013635.pdf http://news.com.com/2100-1023-978296.html