Insurance exists to protect against dangers, but given the potentially high stakes, manufacturers should have some understanding of what is covered, what is not, and what are the basics to making an insurance claim.
Dale R. Kurth, Counsel at Partridge IP Law
1. Enumerated Offenses
Your insurance policy will list qualifying PAI offenses, and the claim brought against you must fall within that list to be covered. Many of these listed items are basically terms of art that require more legal interpretation, so be sure to have legal counsel review your insurance policy terms. Of particular importance to IP-related claims are the two common enumerated offenses of “the use of another’s advertising idea in your advertisement” and “infringing upon another’s copyright, trade dress or slogan in your advertisement.” Although the term “advertising idea” is usually undefined in the policy, it has often been legally construed to mean something used to call public attention to a product or business, especially for proclaiming its desirable qualities so as to increase sales. This concept often encompasses trademarks and trade dress, and sometimes certain patents.
2. “Advertisement”
Note that the two IP-related offenses mentioned above require that the use or infringement must take place “in your advertisement” in order to be covered by the policy. Since 1998, the term “advertisement” has been defined in policies to be “a notice that is broadcast or published to the general public or specific market segments about your goods, products or services for the purpose of attracting customers or supporters.” For a company website, only the portions that are about the company’s goods or services and put there to attract customers are considered to be “advertisement.” For example, copyright violations committed in other non-advertising parts of the site would not be covered.
