Strategic Considerations for IP Litigators and Corporate Counsel Prosecuting and Defending IP Disputes: Securing Coverage Despite Limited Intellectual Property Coverage

Intellectual Property Insurance Coverage

The preferred commercial general liability (CGL) policy language insures against “personal and advertising injury,” which includes: (1) “[o]ral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, product or services”; (2) “[t]he use of another’s advertising idea in your ‘advertisement’”; and (3) “[i]nfringing upon another’s copyright, trade dress or slogan in your ‘advertisement.’”¹ ISO’s policy form,² like Hartford’s,³ excludes under Coverage B “‘[p]ersonal and advertising injury’ arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights. Under this exclusion, such other intellectual property rights do not include the use of another’s advertising idea in your ‘advertisement’. However, this exclusion does not apply to infringement, in your ‘advertisement’, of copyright, trade dress or slogan.”

Problematic CGL policies include similarly restrictive policies issued by both Hartford and Travelers that provide, via endorsement: “there is no coverage under personal and advertising injury or damage alleged in any claim or suit that alleges infringement or violation of any intellectual property right,”⁴ and “this insurance does not apply to . . . ‘advertising injury’ arising out of . . . infringement or violation of any of the following rights or laws . . . [p]atent.”⁵ Both these policy forms are under attack as they fail to advise the insured of the diminution in coverage from the duty to defend all claims of a lawsuit of any one claim rule, which universally applies pursuant to coverage law nationally.⁶

Similarly objectionable are CGL policies that preclude coverage for claims of “unfair competition, unfair trade practices, or other similar practices,” or that provide no relevant offense-based coverage beyond “libel or slander.”⁷

Opportunities to Secure CGL Policy Benefits

Once the available policy language is located, the next task is to determine when asserted IP claims (whether in a cease and desist letter or in a lawsuit) implicate potential coverage. At this point, five considerations are germane:

First, IP tort claims, including those for patent as well as trademark infringement, may fall within a CGL policy. So long as the contractual statute of limitations has not expired after the final resolution of the underlying action, the earliest policy period implicated may not include any, or at least a less problematic, IP exclusion.

Second, assuming a policy form with an IP exclusion, claims for relief implicating coverage for disparagement, defamation, or unfair competition proceeding under a variety of causes of action conjoined with an excluded IP claim such as patent infringement may give rise to a defense.

Third, where an insurer issues a variant policy form that renders the pursuit in litigation of an excluded IP claim a ground for denying coverage, a defense may still arise where the claims asserted are not IP violations, such as “patent misuse.”⁸

Fourth, the best protection may be a standard CGL policy with a broader umbrella policy, still available in some markets.

Fifth, tender early. Unlike automobile accidents, IP infringement is driven by a company’s particular competitive circumstance by which it distinguishes itself in the marketplace. This may not pose an ongoing risk of further litigation once brand confusion issues are addressed.

D&O and E&O Policies

While D&O policies typically include an IP exclusion, it only applies to claims against the insured organization under the Side A difference in conditions (DIC) policies. Individual officers and directors are covered under Side B, which does not typically include an IP exclusion so that mere allegations of “wrongful acts,” which necessarily include IP torts, are covered. Significant recovery has arisen for patent infringement lawsuits under this form of coverage. For example, in Acacia Research Corp. v. National Union Fire Insurance Co. of Pittsburgh, PA, the insured secured a judgment of $31,070,981.62 plus $310,492.99 (the present value of future royalty payments) that was due to the insurer’s improper delay and denial of a defense.⁹

A variety of E&O policy forms exist. Many embrace coverage for IP or unfair competition torts. Some, but not all, exclude claims for trade secret misappropriation, patent infringement, and antitrust violations.

Several cases involving E&O policies provide a pathway to coverage or reveal when it will be unavailable. In Research Corp. v. Westport Insurance Corp., “allegations of conversion, fraudulent concealment, and breach of fiduciary duties raised claims of ‘wrongful acts.’”¹⁰ In Transcore, LP v. Caliber One Indemnity Co., however, “[i]nducement of patent infringement . . . is an intentional act . . . and therefore is specifically excluded from coverage.”¹¹

No policy benefits were due in American Century Services Corp. v. American International Specialty Lines Insurance Co., where wrongful acts included patent infringement, but exclusion for “actual or alleged gaining of profit or advantage to which the Insured is not legally entitled” precluded settlement for “past or future use of a valuable technology in the course of its business.”¹²

The logic of these later cases is questionable in light of subsequent Federal Circuit authority culminating in Global-Tech Appliances, Inc. v. SEB S.A.¹³ It allows inducement of patent infringement liability to attend without evidence of actions undertaken with an intention to harm a competitor. Subsequent case law has refined this standard to extend inducement liability to circumstances when the defendant is “willfully blind.”

Why Insurer Denials of IP Claims May Not Be Well Taken

First, insurers rarely consider all the potential bases for coverage factually implicated by the underlying lawsuits they address. For example, in DISH Network Corp. v. Arch Specialty Insurance Co., the “[i]nsurers concede[d] that at least six of the claims [the insured] may have infringed explicitly mention advertising or product promotion.”¹⁴

Second, narrow fact constructions of allegations often lead insurers to underassess potential coverage for offense-based coverage, as these “categories of wrongdoing” often proceed under a bewildering variety of labeled causes of action. In DISH Network, “[w]hen the technology’s patented advertising capabilities are considered in conjunction with the vague factual assertions made in the complaint, the allegations are sufficiently broad to encompass ‘distribution of promotional materials,’ ‘dissemination of information to promote a product,’ or ‘calling something to the attention of the public.’”¹⁵

Third, the insurer’s ability to appreciate a potential for coverage requires an ongoing and “neutral assessment” of developments in coverage case law. The DISH Network court observed that the insurers misapprehended the applicable legal standard. Determining that the question “is not whether the complaint unequivocally spells out the specific advertising activities [the insured] engaged in, but rather whether ‘the alleged facts even potentially fall within the scope of coverage,’” the court concluded that it was “not clear from the complaint whether or not [the insured] is alleged to have infringed advertising-related claims in [the patentee’s] patents by conveying promotional information.”¹⁶

Fourth, when case law favorable to policyholders arises, it is not disseminated with appropriate instruction to caution claims personnel to its significance.¹⁷

Fifth, “willful blindness” may arise for case developments antithetical to claims representatives understanding their rights to investigate coverage and control the defense. As to investigating coverage, the DISH Network court observed:

Although the cases are rare in which an allegedly infringed patent is itself an advertising idea rather than merely an advertised product, we find persuasive the Hyundai and Amazon courts’ approach to this unusual situation. Construing ambiguous policy language in favor of coverage, as we must under Colorado law, we hold that “[d]epending on ‘the context of the facts and circumstances of th[e] case,’ patent infringement can qualify as an advertising injury if the patent ‘involve[s] any process or invention which could reasonably be considered an “advertising idea.”’”¹⁸

How to Plead Outside of Coverage under a CGL Policy

Limiting the scope of what is covered is complex. Damages can encompass attorney fees or a prayer for “such other and further relief.” For example, a compensatory damages remedy may arise for “unlawful, unfair, and fraudulent business acts and practices alleged above.” Neither attorney fees¹⁹ nor compensatory damages,²⁰ however, are available for violation of California Business and Professions Code (BPC) section 17200. The claimants’ prayer for “such other and further relief” could create potential coverage where discovery in the underlying action reveals that the claimants are preserving their right to recover damages for the alleged unlawful, unfair, and fraudulent business acts dependent on proof at trial.²¹

By clarifying that damages are “any amount that the insured shall be legally required to pay because of judgment rendered against the insureds or for settlements negotiated with the written consent of the company,” an award of attorney fees would constitute damages under this definition.

Where unfair competition is expressly alleged, but limited to a BPC section 17200 claim,²² disgorgement of ill-gotten gains has been held not to be damages. By waiving any recovery of damages and not pleading claims for “such other and further relief” or recovery of attorney fees or prejudgment interest, claimants can avoid triggering the “as damages” provision and the defendants’ rights. But, no similar limitation applies to BPC section 17500 or violations of the Consumers Legal Remedies Act, Civil Code sections 1770 et seq.²³

In Limelight Productions, Inc. v. Limelite Studios, Inc., the court found that “ill-gotten profits” are equivalent to “lost profits,” which were fully recoverable under the asserted Lanham Act claims.²⁴ The mere characterization of damages sought as “disgorgement of ill-gotten gains” did not bar a defense.

How to Plead within Coverage under a CGL Policy

What Are the Facts in Analyzing Insurance Coverage?

In reciting what constitutes facts for coverage analysis purposes, the California Supreme Court in Scottsdale Insurance Co. v. MV Transportation concluded that “the duty to defend [arises] where, under the facts alleged, reasonably inferable, or otherwise known, the complaint could fairly be amended to state a covered liability.”²⁵ Also germane is the view that “[t]he technical label on a cause of action does not dictate the duty to defend whether the claimed cause of action was omitted out of negligence or ‘for strategic adversarial reasons.’”²⁶ And, the understanding that “remote facts buried within causes of action that may potentially give rise to coverage are sufficient to invoke the defense duty . . . [and the] law does not require that the insured’s conduct proximately cause the third party claim in order to trigger the defense duty.”²⁷

Coverage Cases Look to “Facts Known to the Insurer”

California

The insurer’s duty to investigate is limited to facts that suggest a potential liability under the policy but require further evaluation. “The key issue in determining whether the insurer conducted a reasonable investigation is the nature of the facts known to it. . . . If there is nothing in those facts which suggests a potential liability under the policy, there is no duty to investigate further.”²⁸

Facts that come to light in the underlying action, such as interrogatory responses, can clarify a duty to defend.²⁹

Illinois

Illinois increasingly places the burden on the insured to evaluate and forward all pertinent facts that could evidence coverage or risk establishing potential coverage and, critically, not properly providing notice in accord with the notice provisions and therefore losing any potential coverage benefits. Pekin Insurance Co. v. Precision Dose, Inc., recognized that coverage was implicated by the facts alleged in “Koopman’s affidavit” but could not be relied upon as its substance was not provided to the insurer at the time of defense of the underlying acts: “[T]here is no dispute that, when the complaint and amended complaint were filed in the underlying suit, defendants had all the information contained in Koopman’s affidavit[.]”³⁰

Minnesota

The failure to apprise an insurer of interrogatory responses that asserted factually based claims for coverage disparagement, which were propounded after the insurer’s denial of a defense, precluded coverage where these facts were not brought to the insurer’s attention until after resolution of the underlying action. In COMSAT Corp. v. St. Paul Fire & Marine Insurance Co., the court found no duty to defend even though it would have been established by answers to interrogatories because the insured “failed to meet its burden to provide evidence to the insurer in a timely manner.”³¹

New York

A Second Circuit decision in a copyright suit found no defense was due. The prayer sought destruction of “catalogs, circulars and other printed material . . . displaying or promoting the goods that were or are being advertising [sic], promoted, offered for sale or sold” and suggested that they may well have existed but were not identified as creating a basis for liability in the underlying action.³² No facts brought to the insurer’s attention clarified how jewelry products were “offered for sale” even though discovery might have revealed this was accomplished through the widespread dissemination of product catalogs that were “paid advertisements” as required by the policy’s restrictive “advertising injury” coverage.

Facts That Come to Light May Reveal Coverage That Was Not Evident at Commencement of the Lawsuit

Proceeding to Trial Implicates Problematic Proof of Liability

Coverage for a judgment against the insured requires a close analysis of what facts implicate coverage verses a defense. Insurer defenses based on “lack of notice” or “willful infringement” may be easier for an insurer to establish after a trial. An indemnitor’s failure to fund a settlement, which then exposes its indemnitee to greater monetary risks, could create liability for the indemnitor.

Duty to Indemnify Can Be Broader Than Duty to Defend

Typically, an insurer’s obligation to defend does not mean that it owes indemnity. This fact can limit an insurer’s duty to fully fund a settlement.³³ Even though a lawsuit may include a number of potentially covered claims, unless the damage exposure from a potentially covered claim is equivalent to uncovered claims, there is no duty to pay in settlement a sum commensurate with the exposure to an uncovered claim.³⁴

Exclusions often have exceptions that require proof of conduct that may not be evident until a trial in the underlying action. Thus, in many fact scenarios coverage may not apply to a corporation but be available to an individual officer or director once he or she is named as a party defendant, especially under a D&O policy. Similarly, proof of “infringement of copyright in your ‘advertisement’” may implicate defense where an infringement of copyright claim is excluded.

Explore and Make Evidence Known

As one court, applying California law, stated: “Since the . . . pleadings did not, on their face, give rise to a duty to defend, and any such duty expired at the conclusion of the . . . litigation, plaintiffs’ tender of extrinsic material after the conclusion of the lawsuit did not trigger a duty to defend.”³⁵

Looking for Coverage “Outside the Box”

CGL Policy Forms That Do Not Include IP Exclusions (Think Canada)

Canadian issued policies continue to include earlier policy forms that do not categorically exclude IP claims. Thus, patent coverage arose where the insureds showed “that their advertising activities contributed to or added to the injuries.”³⁶

International Insurance Coverage

International policies issued to U.S.-based companies trigger a defense where the injurious conduct arose within the coverage territory (outside the United States) but the lawsuit is pending in the United States. As the court in Hewlett-Packard Co. v. CIGNA Property & Casualty Insurance Co. concluded, “In short, nothing in the Policy restricts covered Advertising Injury claims to those in which all damages must be suffered outside of the United States, its territories or possessions . . . . The territorial limitation in the CIGNA Policy emphasizes the location of the occurrence, not the location of the resulting damages.”³⁷

Post-Lawsuit Procured Policies May Provide Coverage for Ongoing Lawsuit

Absent express inquiry in a policy application, CGL insurers rarely ask prospective insureds if they are engaging in conduct that may soon be the subject of a lawsuit. Thus, policyholders need to be wary of policy applications that ask whether an insured is aware of facts that “could (might)” or “probably” give rise to a claim. But, insurers as well need to be careful what claims they seek to exclude. A leading pro-insurer treatise writer conceded that there are circumstances where an insurer may have a duty to defend a lawsuit (filed before issuance of a policy) where the conduct at issue, during the policy period, is similar to that which precipitated that lawsuit: “[A] policy will not be interpreted to create illusory coverage. . . . [W]hen an insurance policy purports to afford coverage for acts taking place prior to the inception of the policy, an insurer cannot deny coverage because the insured was aware of facts that ‘might’ result in a claim.”³⁸ As a Texas court held, the phrase “could have reasonably foreseen” in an exclusion could not be applied as written because if no coverage existed whenever a claim could reasonably have been foreseen, then coverage could exist only if a claim was frivolous.³⁹ Only frivolous claims would constitute claims that could not reasonably have been foreseen.

What Constitutes Recoverable Defense

Attorney Fees “Conducted against Liability” May Include Fees Expended in Prosecution of IP Claims

Applicable law clarifies that there are many circumstances where pursuit of another claim is defensive because it is “conducted against liability.” The prosecution of a complaint after the filing of the covered counterclaim is often an essential strategic element of an insured’s defense to the defamation-based cross-claims, requiring affirmative prosecution as activity “conducted against liability,” which is therefore subject to reimbursement.

D.R. Horton, Inc. v. Mountain States Mutual Casualty Co. recognizes that prosecution expenses for activity “conducted against liability” are recoverable as part of the insurer’s duty to defend.⁴⁰ In D.R. Horton, a developer and general contractor for a residential community, Trimark, was sued by a homeowners association for construction defects. Trimark filed a third-party complaint against the subcontractors, who were also named as defendants in the homeowners association suit. Several insurers were involved in the case, but one carrier, Mountain States, refused to pay its full contribution.⁴¹

Mountain States took the position that it did not have to pay for the pursuit of the affirmative claims in the third-party complaint against the subcontractors because “those costs are not reasonably part of its duty to defend Trimark.”⁴² The court disagreed, noting that the insurer has a “duty to defend any ‘suit’ seeking those damages to which [the] insurance applies.”⁴³ The court further explained that pursuit of the third-party complaint was properly considered part of a defensive strategy.

The court emphasized that “the simple answer is that if Mountain States owes Trimark a defense, and if Trimark’s pursuit of third-party claims against the subcontractors was a reasonable defense strategy . . . , then those costs are part of the defense costs,” noting that “Trimark’s intent was to shift as much of its potential liability as possible to the subcontractors.”⁴⁴ The court further explained that “[a] duty to defend would be nothing but a form of words if it did not encompass all litigation by the insured which could defeat its liability.”⁴⁵

In this context, “the subjective motivations of the insured and/or its attorneys are not relevant in the analysis.”⁴⁶ Instead, determining when reasonable and necessary expenses incurred in defense may be deemed reimbursable as “conducted against liability” is done on an objective basis.

As the California Supreme Court recognized in Aerojet-General Corp. v. Transport Indemnity Co., defense expenses may do double duty; an insurer may not complain if the insured gets additional benefit, such as bringing affirmative claims, from expenses “conducted against liability.”⁴⁷ To the extent there is any dispute as to whether specific conduct meets this standard, that merely establishes the potential for coverage.⁴⁸

Thus, where separate and independent counsel has been retained to pursue affirmative claims that are deemed strategically necessary and that are factually intertwined with the defense of claims brought against the insured, reimbursement of such prosecution fees that are “conducted against liability” is warranted.⁴⁹

Prosecution Attorney Fees May Be Recoverable Where They Are a “Setoff”

As the court in CDM Investors v. Travelers Casualty & Surety Co. noted, “a setoff affirmative defense could constitute a suit seeking damages for purposes of a CGL policy if the affirmative defense (1) would unquestionably have been a suit for damages if asserted in a court of law, and (2) fell within the scope of the contractual obligation.”⁵⁰

Reimbursement for Uninsured Codefendants’ Attorney Fees

Retailers often expect manufacturers and distributors to indemnify them for claims of IP violations that may be asserted against them for products they are the last to receive in the chain of distribution. In High Point Design, LLC v. LM Insurance Corp., additional retailers sued along with a distributor were entitled to the same defense as the principal retail defendant whom the insured was obligated to indemnify.⁵¹ The court explained: “[T]here is no support in precedent or logic by which an insurer’s obligation to defend its insured is steadily diminished as the insured’s opponent in the underlying action adds parties to the insured’s side of the caption.”⁵²

Duty to Defend Continues until Liability Is Established or Avoided

Terminating the duty to defend by eliminating claims for damages is harder than many claimants realize. In General Casualty Co. v. Four Seasons Greetings, LLC, the court concluded that Four Seasons had infringed on copyrighted material.⁵³ The court recognized that there was no duty to defend claims for injunctive relief, but that even a possible award of damages created a defense, finding no obligation of an insurer to respond to a claim for an injunction unless that claim was coupled with a claim for damages.⁵⁴ Even a dismissal of potentially covered claims will not suffice, as the dismissal of the covered claim was not final under state law. However, a subsequent settlement that secured a dismissal with prejudice of those claims sufficed. Once the insurer settled and paid the claims, there was no further right of appeal and no further duty to defend.⁵⁵ This will not permit a claimant and insurer to collude in a manner that deprives the insured of ongoing defense benefits.

Similarly, in Lockwood International, B.V. v. Volm Bag Co., the Seventh Circuit held that the claimants’ re-pleading of fact allegations in an antitrust lawsuit to avoid covered claims of disparagement by eliminating factual detail was of no avail since the claimant maintained the right to have the claims conform to proof at trial.⁵⁶

IP Counsel May Have Heightened Duty to Secure Assistance of Coverage Counsel

Clients defending IP lawsuits look to their defense counsel for advice on all aspects of the case. This fact is contemplated by Federal Rule of Civil Procedure 26(f). It requires defense counsel to advise the court and opposing counsel about any insurance policies that could respond to asserted claims and cover any settlement contemplated.

A standard paragraph included by many IP counsel in their retainer agreements may no longer suffice. For example:

We are being retained as your intellectual property counsel. We do not practice insurance coverage law nor will we render advice on whether or not claims asserted against an insured are potentially covered or which insurers should be notified of a claim. Our representation is limited to the underlying intellectual property litigation matters.

The referenced admonition may be effective in jurisdictions where the applicable coverage law limits the facts for coverage lawsuits to a review of the policy and complaint. But even in such “four corners” jurisdictions, issues arise as to which insurers to notify. It is often unclear in the complaint when the wrongful conduct commenced and if damages would exceed primary CGL policy limits for any offense-based coverage issued on an “occurrence” basis. In assessing which policies may be implicated so as to give appropriate notice under all pertinent prior policies, further investigation and analysis of coverage may be required.

Conclusion

Corporate counsel and IP litigators enhance their prospects for recovery of the defense attorney’s fees expended in IP lawsuits or prosecution as well as avoid opposing parties from securing litigation funding by becoming insurance savvy. As Chief Judge Becker of the Third Circuit stated: “The definition of ‘advertising injury’ in standard business insurance policies has . . . confounded courts for years. . . . [Such litigation] often proceeds under a bewildering variety of different labels covering the same material facts.”⁵⁷

The diffuse character of fact allegations in IP lawsuits render facts that come to light as litigation progresses a distinct basis for securing policy benefits. While many of the processes to secure coverage are straightforward, explaining their applicability in light of often contradictory and terse opinions in coverage lawsuits presents challenges that make the retention of coverage counsel worthwhile.

Endnotes

1. See, e.g., Ins. Servs. Office, Inc. (ISO), Commercial Gen. Liab. Coverage Form CG 00 01 04 13, ¶¶ I.B.; V.14.d., f., g.

2. Id. ¶ I.B.2.i.

3. Hartford, Commercial Gen. Liab. Coverage Form HG 00 01 09 16, ¶ I.B.2.i.

4. See, e.g., Hartford, Cyberflex Amendment of Coverage B - Pers. & Advert. Injury Form HC 00 88 12 10.

5. See, e.g., Travelers Indem. Co., Amendment of Coverage B - Pers. & Advert. Injury Liab. - Tech. Form CG D4 36 07 08.

6. Classic Distrib. & Beverage Grp., Inc. v. Travelers Cas. & Sur. Co. of Am., No. CV 11-07075 GAF RZX, 2012 WL 3860597 (C.D. Cal. Aug. 29, 2012), vacated, 2012 WL 5834570 (C.D. Cal. Nov. 6, 2012) (“[T]he Court finds the Endorsement invalid under governing Ninth Circuit law. In Fibus, the Court of Appeals held that a paragraph printed on the first page of an eight-page ‘Amendatory Endorsement’ was insufficiently conspicuous to provide the requisite notice to the policyholder. 855 F.2d at 633. Addressing similar facts in Devaney, . . . the new exclusion was contained in one of four paragraphs set out in the separate endorsement. Id. Although ‘the cover letter referred to “changes” in the endorsement pages used to determine “amended,” no document explicitly state[d] that there had been a “reduction” or “diminishment” of coverage . . . .’”).

7. See, e.g., Great Am. Ins. Co., Exclusion of Claims & Suits Alleging Infringement of Intellectual Prop. or Unfair Competition Form GAI 7326; Chubb Ins. Co. of Can., Gen. Liab. Form CE 80-02-2000 (Rev. 4-01).

8. See St. Paul Mercury Ins. Co. v. Tessera, Inc., 624 F. App’x 535 (9th Cir. 2015).

9. No. CV 05-501 PSG (MLGx), 2008 U.S. Dist. LEXIS 96955, at *19 (C.D. Cal. Feb. 8, 2008).

10. 289 F. App’x 989, 992 (9th Cir. 2008).

11. 972 A.2d 1205, 1208–09 (Pa. Super. Ct. 2009).

12. No. 01 Civ. 8847 (GEL), 2002 U.S. Dist. LEXIS 15016, at *26–27 (S.D.N.Y. Aug. 14, 2002).

13. 131 S. Ct. 2060, 2062 (2011).

14. 659 F.3d 1010, 1013 (10th Cir. 2011).

15. Id. at 1022.

16. Id. at 1022–23.

17. Id.

18. Id. at 1020 (alterations in original).

19. Cell-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 83 Cal. Rptr. 2d 548, 560 (1999) (“Plaintiffs may not receive damages . . . or attorney fees.”).

20. Cacique, Inc. v. Robert Reiser & Co., 169 F.3d 619, 624 (9th Cir. 1999) (finding that BPC § 17200 cannot be used in a trade secret action to recover royalties).

21. Prichard v. Liberty Mut. Ins. Co., 101 Cal. Rptr. 2d 298, 307 (Ct. App. 2000) (“Just because evidence has closed in the underlying case does not mean the facts against the policyholder have necessarily calcified.”).

22. Bank of the W. v. Superior Court, 2 Cal. 4th 1254, 1272 (1992) (“[T]he Unfair Business Practices Act does not authorize an award of damages, and a definition of ‘unfair competition’ that cannot support a claim for damages cannot reflect the objectively reasonable expectations of the insured. Accordingly, we hold that the policy term ‘unfair competition’ does not refer to conduct that violates the Unfair Business Practices Act.”).

23. Energex Sys. Corp. v. Fireman’s Fund Ins. Co., No. 96-CIV-5993 (JSM), 1997 WL 358007, at *5 (S.D.N.Y. June 24, 1997) (“While Anton/Bauer’s prayer for relief does not specifically seek damages, it does seek whatever relief the Court deems just and proper. Under New York law, this encompasses a claim for damages and the insurer must defend.” (citing Doyle v. Allstate Ins. Co., 1 N.Y.2d 439, 443 (1956))).

24. 60 F.3d 767 (11th Cir. 1995).

25. 31 Cal. Rptr. 3d 147, 153–54 (2005).

26. Hudson Ins. Co. v. Colony Ins. Co., 624 F.3d 1264, 1269 (9th Cir. 2010).

27. Pension Tr. Fund v. Fed. Ins. Co., 307 F.3d 944, 951 (9th Cir. 2002).

28. S. Cal. Gold Prods., Inc. v. Zurich-Am. Ins. Grp., No. B234720, 2012 Cal. App. Unpub. LEXIS 3355, at *19 (May 3, 2012).

29. Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Seagate Tech., Inc., 233 F. App’x 614, 616 (9th Cir. 2007) (“In an answer to an interrogatory, Convolve added that Seagate had embarked on a campaign to prevent Convolve from profiting on its product by ‘falsely disparaging Convolve’s image and its technologies.’. . . A trade libel claim by Convolve against Seagate could proceed and succeed even if, as Seagate maintains, it never misappropriated Convolve’s technology.”).

30. 968 N.E.2d 664, 679 (Ill. App. Ct. 2012).

31. 246 F.3d 1101, 1106, 1107 (8th Cir. 2001).

32. Feldman Law Grp. v. Liberty Mut. Ins. Co., No. 11-4483-cv, 2012 WL 1323966 (2d Cir. Apr. 18, 2012).

33. New Century Mortg. Corp. v. Great N. Ins. Co., No. 07-640-GMS/MPT, 2009 U.S. Dist. LEXIS 100033, at *21–23 (D. Del. Oct. 26, 2009).

34. Raychem Corp. v. Fed. Ins. Co., 853 F. Supp. 1170, 1176 (N.D. Cal. 1994) (“The party seeking coverage must show the existence and extent of a loss covered by the policy.”).

35. Basalite Concrete Prods., LLC v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, No. 2:12-cv-02814, 2013 U.S. Dist. LEXIS 70597, at *24–25 (E.D. Cal. May 16, 2013).

36. Grayson v. Wellington Ins. Co. (1997), 37 B.C.L.R. 3d 49, at ¶ 29 (Can.).

37. No. 99-20207 SW, 1999 U.S. Dist. LEXIS 20655, at *13–14 (N.D. Cal. Aug. 24, 1999).

38. 1 Allan D. Windt, Insurance Claims and Disputes § 6:46A (4th ed. 2001).

39. Westport Ins. Corp. v. Atchley, Russell, Waldrop & Hlavinka, LLP, 267 F. Supp. 2d 601 (E.D. Tex. 2003).

40. 69 F. Supp. 3d 1179 (D. Colo. 2014).

41. Id. at 1188.

42. Id. at 1198.

43. Id.

44. Id. at 1200.

45. Id. at 1199.

46. Barratt Am., Inc. v. Transcon. Ins. Co., 125 Cal. Rptr. 2d 852, 859 (Ct. App. 2002).

47. 17 Cal. 4th 38, 62 (1997).

48. Howard v. Am. Nat’l Fire Ins. Co., 187 Cal. App. 4th 498, 520 (2010) (“If coverage depends on an unresolved dispute over a factual question, the very existence of that dispute would establish a possibility of coverage and thus a duty to defend.”).

49. See, e.g., Hartford Fire Ins. Co. v. Vita Craft Corp., 911 F. Supp. 2d 1164, 1183 (D. Kan. 2012) (finding that the insurer’s duty to defend the insured in the underlying case included the costs of the insured’s counterclaims that were “intertwined” and were part of the “defensive strategy to reduce its liability”).

50. 139 Cal. App. 4th 1251, 1269 (2006) (citing Constr. Protective Servs., Inc. v. TIG Specialty Ins. Co., 29 Cal. 4th 189 (2002)).

51. No. 14-cv-7878 (KBF), 2016 U.S. Dist. LEXIS 12690 (S.D.N.Y. Feb. 3, 2016).

52. Id. at *12.

53. Nos. A04-518, -920, 2004 Minn. App. LEXIS 1457 (Dec. 28, 2004).

54. Id. at *34 (citing Fallon McElligott, Inc. v. Seaboard Sur. Co., 607 N.W.2d 801, 805 (Minn. Ct. App. 2000)).

55. Meadowbrook, Inc. v. Tower Ins. Co., 559 N.W.2d 411, 417 (Minn. 1997).

56. 273 F.3d 741, 746 (7th Cir. 2001).

57. Frog, Switch & Mfg. Co. v. Travelers Ins. Co., 193 F.3d 742, 744, 747 (3d Cir. 1999).