The phrases misappropriation of advertising ideas or style of doing business refer, at least in general, to trade dress type claims.¹ The former phrase, however, should extend to an idea for calling public attention to a product,² and the latter phrase should extend to the comprehensive manner in which the claimant conducts its business.³ Occasionally, however, these phrases have been interpreted much more broadly.⁴

The phrase infringement of copyright, title, or slogan has been held not to encompass trademark infringement⁵ or patent infringement.⁶ The case law is inconsistent as to what the word title refers to. Some courts have given it a broad meaning.⁷ Other courts have given it a narrow meaning, because of the context in which it is used in the policy.⁸

Some policies include the offense of piracy in the definition of advertising injury. A couple of courts have held that since the term must be read in the context in which it is used in the policy, piracy means misappropriation or plagiarism found in the elements of the advertisement itself -- in its text form, logo, or pictures -- rather than in the product being advertised.⁹

Some, mostly older, policies include the term unfair competitionas one of the offenses listed in the definition of advertising injury. The words unfair competition should not be held to refer to a violation of any state or federal statutory right. Rather, the words unfair competition relate to conduct that a reasonable layperson would consider competition that is unfair - the conduct encompassed by the common law tort of unfair competition.¹⁰

Assuming the requisite offense is involved in the claim against the insured, one basic question remains. Was the offense by the insured committed in the course of advertising¹¹ the insured's products? A causal nexus is required between the advertising and the offense.¹² For example, it has been held that the requisite causal connection can exist with regard to a trademark infringement claim,¹³ but not a patent infringement claim. The manner in which the courts have handled coverage claims for patent infringement illustrates how the foregoing issue has been addressed.

Most courts have held that patent infringement is not covered under the advertising injury coverage part because patent infringement is not committed in or by advertising. Advertising is not even actionable; in fact, advertising is irrelevant to a patent infringement claim. The statutory offense of patent infringement consists of the making, using, or selling of the patented invention. Accordingly, it would be incorrect to say that the offense of patent infringement is committed in the course of advertising.¹⁴

¹ See, eg., St. Paul Fire & Marine Ins. Co. v. Advanced Interventional Sys., 824 F. Supp. 583, 585 (E.D. Va. 1993), aff'd, 21 F.3d 424 (4th Cir. 1994) (the court equated the phrase style of doing business with the term trade dress, which refers to the packaging or labeling of goods); St. Paul Fire & Marine Ins. Co. v. Advanced Interventional Sys., slip op at 4 (citing Medd v. Boyd Wagner, Inc., 132 F. Supp. 399 (N.D. Ohio 1955)) (California law) ("[tlhe term 'style of doing business,' as it appears in the insurance policy, has been used by courts to refer to a company's comprehensive manner of operating its business.... essentially the same concept as the more widely used term: 'trade dress' [citation]"); Shakeys, Inc. v. Martin, 430 P.2d 504 (Idaho 1967); Ross v. Briggs & Morgan, 520 N.W.2d 432, 434, 435 (Minn. Ct. App. 1994) (claim that insured "prepared advertisements that looked like [the plaintiff's] advertisements" constituted the "taking of advertising ideas or style of doing business"), rev'd, 540 N.W.2d 843 (Minn. 1995);

Poof Toy Prods. v. United States Fidelity & Guar. Co., 891 F. Supp. 1228, 1233 (E.D. Mich. 1995) (both trademark and trade dress infringement claims are encompassed by the phrase "misappropriation of style of doing business"); Advance Watch Co. v. Kemper Nat'l Ins. Co., 878 F Supp. 1034, 1043 (E.D. Mich. 1995), rev'd on other grounds, remanded, 99 F.3d 795 (6th Cir. Mich. 1996) ("the term 'misappropriation of style of doing business'...is broad enough to embrace claims that the insured copied a design explicitly protected by trademark. When the claims are found to arise out of advertising activity, the cases support a finding if insurer liability." Accordingly, trade dress and trademark infringement claims triggered a duty to defend because they "arguably arose, at least in part, from ... the publication of the advertisement catalog" in which the insured falsely designated a connection between the insured's product and the plaintiff's product); American Economy Ins. Co. v Reboans, Inc., 900 F. Supp. 1246, 1254 (N.D. Cal. 1995) (on motion for reconsideration); Dogloo, Inc. v. Northern Ins. Co., 907 F. Supp. 1383, 1388-89 (C.D. Cal. 1995). Contra Advance Watch Co. v. Kemper Nat'l Ins. Co., 99F.3d 795, 802 (6th Cir. Mich. 1996), reh'g, en banc, denied, 1996 U.S. App. LEXIS 34340 (6th Cir Dec. 30, 1996) (Michigan law) ("the term 'misappropriation of advertising ideas of style of doing business' ...refers to category of actionable conduct separate from trademark and trade dress infringement").

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² E.g., Atlantic Mut. Ins. Co. v. Badger Medical Supply Co., 191 Wis.2d 229, 528 N.W.2d 486, 490 (1995) ("An 'advertising idea' is an idea for calling public attention to a product or business, especially by proclaiming desirable qualities so as to increase sales or patronage").

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³ E.g., id. ("'Style of doing business' is a phrase used by the courts to refer to a company's comprehensive manner of operating its business"); Sentex Sys. v. Hartford Accident & Indem. Co., 882 F. Supp. 930, 942 (C.D. Cal. 1995), aff'd, 93 F. 3d 578, 96 C.D.O.S. 6156, 96 Daily Journal D.A.R. 10105 (9th Cir. 1996) ("style of doing business" refers to manner or method in which a business is conducted); Poof Toy Prods. v. United Stated Fidelity & Guar Co., 891 F. Supp. 1228, 1232 (E.D. Mich 1995) ("' style of doing business,' as it appears in the insurance policy, refers to a company's 'comprehensive manner of operating its business'"); Applied Bolting Tech. Prods. v. United States Fid. & Guar. Co., 942 F. Supp.1029, 1034 (E.D. Pa. 1996).

It has been held that "'misappropriation of style of doing business' necessarily involves a competitor." Heritage Mut. Ins. Co. v. Ricart Ford, Inc., 105 Ohio App. 3d 261, 663 N.E.2d 1009, 1012 (1995). But see Tynan's Nissan v. American Hardware Mut. Ins. Co., 917 P.2d 321,325 (Colo. Ct. App. 1995) (phrase "style of doing business" does not encompass "a generic style of doing business not related to advertising activities").

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⁴ See, e.g., Merchants Co. v. American Motorists Ins Co., 794 F. Supp. 611, 618-19 (N.D. Miss. 1992):

JA Brundage Plumbing & Rotor-Rooter, Inc. v. Massachusetts Bay Ins Co., 818 F Supp 553, 557-59 (W.D.N.Y. 1993) (court held that the offense of trademark infringement was encompassed by the policy term covering "misappropriation of style of doing business"), PJ Noyes Co. v American Motorists Ins. Co., 855 F. Supp. 492, 494-95 (D.N.H. 1994) (trademark infringement claim covered because use of product name in advertising "falls within the ambit of misappropriation of advertising ideas or style of doing business or infringement of title or slogan").

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⁵ Houston Gen. Ins. Co. v. BSM Corp., 1993 US Dist LEXIS 4725, pp 17-19 (N.D. Ill. 1993) (held that there was no advertising injury coverage for trademark infringement under the interpretive principle inclusio unius est exclusio alterios). Contra PJ Noyes Co. v American Motorists Ins. Co., 855 F. Supp. 492 (D.N.H. 1994).

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⁶ E.g., St. Paul Fire & Marine Ins. Co. v. Advanced Interventional Sys., Civ. No. 92-1634-A (E.D. Va. June 21, 1993) (California law) ("it is nonsense to suppose that if the parties had intended the insurance policy in question to cover patent infringement claims, the policy would explicitly cover infringement of 'copyright title or slogan,' but then include patent infringement, sub silentio, in a different provision"); Atlantic Mut. Ins. Co. v Brotech Corp., 857 F. Supp. 423, 429 (E.D. Pa. 1994); Gencor Indus. v Wausau Underwriters Ins. Co., 657 F. Supp. 1560, 1564, 1565 (M.D. Fla. 1994):

The court also rejected the assertion that a patent infringement claim was encompassed by the offenses, listed in the policy, of piracy and unfair competition.

The court in Clary Corp. v. Union Standard Ins. Co., 33 Cal. Rptr. 2d 486, 489, 494 (Ct. App. 4th Dist. 1994), said: "When considered in context, 'infringement of title' refers to claims based on the confusion of names or designations, not the slander or disparagement of a third party's legal title to its property.' " Accordingly, the court rejected the insured's claim that there was coverage because the insured's advertising wrongfully indicated that the insured, and not the plaintiff, owned the title to a particular patent. There was no coverage for patent infringement claims.

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⁷ See e.g., Merchants Co. v. American Motorists Ins. Co., 794 F. Supp. 611, 618 (S.D. Miss. 1992):

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⁸ E.g., Atlantic Mut. Ins. Co. v. Brotech Corp.., 857 F Supp 423, 429 (E.D. Pa. 1994):

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⁹ Iolab Corp. v. Seaboard Sur. Co., 15 F.3d 1500, 1506 (9th Cir. 1994) (California law) (patent infringement does not constitute "piracy"); Atlantic Mut. Ins. Co. v. Brotech Corp., 857 F. Supp. 423, 428 (E.D. Pa. 1994) (patent infringement does not constitute "piracy"); Gencor Indus. v. Wausau Underwriters Ins. Co., 857 F. Supp. 1560, 1565-66 (M.D. Fla. 1994) (patent infringement not encompassed by the offense of piracy; piracy refers to misappropriation of the elements of the advertisement itself, not the product being advertised). Contra Davila v. Arlasky, 857 F. Supp. 1258, 1263 (N.D. Ill. 1994) ("we acknowledge that piracy ... might be construed as encompassing the idea of patent infringement").

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¹⁰ See, e.g., Atlantic Mut. Ins. Co. v. Brotech Corp., 857 F. Supp. 423, 428-29 (E.D. Pa. 1994) (holding that term unfair competition did not encompass a patent infringement claim because the term does not "include within its meaning the violation of a state or federal statutory right," but "refers only to the common law tort"); Standard Fire Ins. Co. v. Peoples Church of Fresno, 985 F.2d 446, 449 (9th Cir. 1993); Bank of the West v. Superior Court, 2 Cal.4th 1254, 10 Cal. Rptr.2d 538, 833 P.2d 545 (1992); A. Meyers & Sons Corp. v Zurich Am. Ins. Group, 74 N.Y.2d 298, 546 N.Y.S.2d 818, 545 N.E.2d 1206 (1989); Graham Resources, Inc. v. Lexington Ins. Co., 625 So.2d 716, 721 (La. Ct. App. 1993); Smartfoods, Inc. v. Northbrook Property & Cas. Co., 35 Mass. App. Ct. 239, 618 N.E.2d 1365 (1993); Seaboard Sur. Co. v. Ralph Williams' Northwest Chrysler Plymouth, Inc., 81 Wash.2d 740, 504 P.2d 1139, 1141 (1973) (a competitor must have been damaged in order for there to be insurance coverage for damages resulting from unfair competition); Ruder & Finn, Inc. v. Seaboard Sur. Co., 52 N.Y.2d 663, 422 N.E.2d 518, 522 (1981) (phrase unfair competition in policy requires that "another's commercial advantage" has been misappropriated); Pine Top Ins. Co. v. Public Util. Dist. No. 1, 676 F. Supp. 212, 216-217 (E.D. Wash. 1987) (the term "'unfair competition' is not to be equated with the far more amorphous term "commercial unfairness'...... 'Unfair competition' is a term of art which must be taken as set forth under the narrow but well-settled common law definition;" accordingly, the court explained, the term unfair competition when used in an insurance policy is limited to the misappropriation of a business "organization or its expenditure of labor, skill and money"). See generally Swanson Broadcasting, Inc. v. Clear Channel Communications, Inc., 752 S.W.2d 165, 169 (Tex. Ct. App - San Antonio 1988):

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¹¹ To constitute an advertisement, a communication should be to the public and constitute an attempt to interest the public in buying a product or service. See, eg., Playboy Enter. v. St. Paul Fire & Marine Ins. Co., 769 F.2d 426, 426 (7th Cir. 1985) (Illinois law):

Some courts, however, have held that a communication need not be addressed to the public in order to constitute advertising. E.g., John Deere Ins. Co. v. Shamrock Indus., 696 F. Supp. 434, 440 (D. Minn. 1988):

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¹² See, e.g., Lazzara Oil Co. v. Columbia Gas Co., 683 F. Supp. 777, 779-80 (M.D. Fla. 1988), aff'd, 868 F.2d 1274 (11lth Cir. 1989). The insureds (jobbers of Amoco products) were sued by operators of Amoco service stations for illegal price fixing. The insureds "asserted that the allegation that they compelled the plaintiffs to post certain prices should be considered advertising which constitutes unfair competition. . . ." The court rejected the assertion:

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¹³ E.g., PJ Noyes Co. v. American Motorists Ins. Co., 855 F. Supp. 492, 494-95 (D.N.H. 1994) (trademark infringement occurred as a result of use of infringing words in advertising, thereby satisfying the requisite causal connection to advertising activities); Safeco Ins. Co. v. Pencon Int'l. Inc., 922 F.2d 845 (9th Cir. 1991) (California law) (court held that a trademark infringement claim was not covered because it did not involve advertising, but apparently only because the complaint did not allege that the infringing trademark had been advertised, and the insured "failed to make any showing that its alleged acts occurred 'in the course of advertising' as required by the policy").

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¹⁴ See, e.g., National Union Fire Ins. Co. v. Siliconix, Inc., 729 F. Supp. 77, 80 (N.D. Cal. 1989) (court granted the insurer summary judgment on the ground that a patent infringement claim was not covered as a matter of law because "patent infringement does not occur in the course of advertising;" the court reasoned (1) that "the infringing act is the making, using, or selling of a patented invention, not the mere advertising of the invention," and (2) that, as a result, although advertising is related to the selling of an infringing product, there was no coverage for a patent infringement claim under a policy extending coverage to an offense "occurring in the course of the named insured's advertising activities"); Bank of the West v. Superior Court, 2 Cal.4th 1254, 10 Cal. Rptr. 2d 538 (1992) (the supreme court, quoting a portion of the Siliconix opinion with approval, stated as follows: "A claim of patent infringement does not 'occur in the course of advertising activities' within the meaning of the policy even though the insured advertises the infringing product, if the claim of infringement is based on the sale or importation of the product rather than its advertisement"); Sentry Ins. v Flom's Corp., 818 F. Supp. 187, 191 (E.D. Mich. 1993) (court quoted, with approval, the discussion in the Siliconix case that patent infringement claim was not covered because the plaintiffs injury was caused by the infringement, not by the advertising); A Meyers & Sons Corp. v. Zurich Am. Ins. Group, 74 N.Y.S.2d 298, 546 N.Y.S.2d 818, 821 (App. Div. 1969) (the insured was sued for patent infringement; under the advertising injury language of the policy at issue, the insurer provided coverage for an offense "occurring in the course of named insured's advertising activities;" the court held that there was no coverage and no duty to defend because the "alleged harm arose out of the importation and sale of products which infringed upon patents. . ., not injury arising out of [the insureds] advertising activities;" the court concluded that "it is clear that the policy, when read in context, does not cover acts ... arising out of the illegal manufacturing ... and sale of goods in violation of another's patent rights"); New Hampshire Ins. Co. v. RL Chaides Constr. Co., 847 F. Supp. 1452,1456-59 (N.D. Cal. 1994) (claim of inducing infringement also not covered); Intex Plastics Sales Co. v. United Nat. Ins. Co., 23 F.3d 254, 256 (9th Cir. 1994) (California law); Everest & Jennings, Inc. v. American Motorists Ins. Co., 23 F.3d 226, 229 (9th Cir. 1994) (California law); Gitano Group, Inc. v Kemper Group, 31 Cal.Rptr.2d 271, 277 (Ct. App. 2d Dist. 1994); Atlantic Mut. Ins. Co. v. Brotech Corp., 857 F. Supp. 423, 429 (E.D. Pa. 1994):