Almost all major companies or corporations purchase some form of commercial general liability (CGL) insurance or similar general-liability insurance coverage. For the period of time between 1981 and 2001, these CGL or general-liability policies often included broad coverage for enumerated “advertising-injury” offenses, but with little explanation as to what that term meant or what risks it was intended to protect against. Policyholders soon relied on the advertising-injury provision to access coverage for lawsuits alleging any type of infringing activity regardless of the circumstances surrounding or leading to the infringement.
Eventually, insurance companies adjusted advertising-injury provisions by excluding coverage for advertising injury arising out of the infringement of copyrights, patents, trademark, trade secrets, or other intellectual property rights if the infringing material is not in the policyholder’s advertisement but specifically including coverage for the infringement of copyright, trade dress, or slogan within the policyholder’s advertisement. Accordingly, recent litigation involving potential insurance coverage for underlying allegations of infringement has focused on whether the infringing material was part of an advertisement and, if so, whether the allegations met the definition of “trade-dress” or “slogan” infringement. Several courts have provided a set of standards to be used for determining whether an underlying claim meets these definitions and qualifies for advertising-injury coverage under the liability-insurance policies.