Everest and Jennings, Inc. v. American Motorists Insurance Company

Opinion by Judge BRIGHT.

Burke Incorporated (Burke), a wheelchair manufacturer, sued its competitor Everest and Jennings (E & J) alleging patent infringement. E & J requested its insurer, American Motorists Insurance Company (AMICO), to defend E & J in the Burke suit, and indemnify E & J in the event Burke won a damage award. After AMICO declined to defend or indemnify E & J, E & J instituted this action seeking a declaratory judgment as to AMICO’s duties, and damages for breach of contract and breach of an implied covenant of good faith and fair dealing. AMICO moved for dismissal on the grounds that the advertising injury and personal injury provisions in E & J’s business insurance policy did not require AMICO to defend or indemnify E & J in an action for patent infringement. The district court found AMICO had no duty to indemnify or defend and dismissed the case.

E & J now appeals, contending that the district court erred (1) in determining that the advertising injury provision of the contract did not cover patent infringement claims; and (2) in granting the motion for dismissal without adequately considering E & J’s separate coverage under the personal injury provision. We…