Aetna Casualty & Surety Co. v. SUPERIOR COURT OF ORANGE CTY.

The primary issue in this case is whether a standard comprehensive general liability policy (CGL) which includes coverage for “advertising injury” potentially affords coverage for inducing or contributing to patent infringement so as to trigger an insurer’s duty to defend.

Facts and Procedural Background

Aetna Casualty and Surety Company and Industrial Indemnity Company issued standard CGL policies to Watercloud Bed Co., Inc., and its president, Richard LaBianco (collectively Watercloud). The policies provide the insurers will pay “all sums which the insured shall become legally obligated to pay as damages because of . . . advertising injury to which this policy applies . . . and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such injury.” Advertising injury is defined as “injury arising out of an offense committed during the policy period occurring in the course of the named insured’s advertising activities, if such injury arises out of libel, slander, defamation, violation of the right of privacy, piracy, unfair competition, or infringement of copyright title or slogan.” In Bank of the West v. Superior…