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Court Rules Against Insurers in Dish Network Patent-Infringement Suit

Source: A.M. Best

Posted on 21 Oct 2011

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A federal appeals court has effectively determined that several primary general liability and excess liability insurers will have to defend Dish Network Corp. in a patent infringement case. The U.S. Court of Appeals for the 10th Circuit in Denver overturned a lower court's summary judgment that found the insurers were not obligated to defend the satellite television company.

Dish Network Corp. and Dish Network L.L.C., a subsidiary, purchased a series of primary general liability and excess liability from five insurance companies between 2001 and 2004, according to the 10th Circuit's opinion, written by Chief Judge Mary Beck Briscoe. The companies that sold the policies included

Arrowood Indemnity Co., Travelers Indemnity Co., XL Insurance America, Arch Specialty Insurance Co. and National Union Fire Insurance Co. Arrowood and Travelers provided primary coverage, while XL, Arch and National Union provided excess coverage.

All of the policies promise to defend and indemnify Dish against claims alleging "advertising injury," among other things, Briscoe wrote.

The opinion said Dish was hit with a federal patent infringement suit filed by Ronald A. Katz Technology Licensing that alleged Dish had infringed one or more claims in 23 separate patents. Dish sought to have the insurers indemnify it and provide legal representation, but was denied coverage.

Dish filed suit against the insurers, seeking a court order requiring them to provide a defense against the patent infringement case. Dish also claimed breach of contract and insurers' duty of good faith and fair dealing. Insurers moved for summary judgment, which the district court granted.

But the 10th Circuit panel determined, despite the district court's finding otherwise, a claim for patent infringement can constitute an "advertising injury" and the claims in the patent infringement lawsuit falls within the terms of the policies' language.

"While we agree with the district court's conclusion that patent infringement may, under certain circumstances, constitute 'misappropriation of advertising ideas,' we disagree with its ruling that the patented means of conveying advertising content at issue here could not be 'advertising ideas' within the meaning of Dish's commercial general liability policies," Briscoe wrote.

The 10th Circuit remanded the case back to the U.S. District Court for the District of Colorado to address several other issu