476 F. App'x 913
2d Cir.2012Background
- FLG, as assignee of Hyman, sued Liberty for defense costs in Van Cleef’s copyright/trade dress action against Hyman.
- Van Cleef alleged Hyman copied and sold infringing jewelry designs, causing damages to Van Cleef.
- Liberty denied coverage, asserting no defense obligation under Hyman’s policy for the alleged claims.
- District court dismissed for failure to state a claim; district court ruled no duty to defend.
- Second Circuit reviews de novo and applies Pennsylvania law: duty to defend determined by four corners of policy vs. complaint.
- Policy covers personal and advertising injury but excludes injury arising from IP rights; advertising injury requires a paid advertisement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Van Cleef’s complaint trigger advertising injury coverage? | FLG argues the complaint could reference advertising injuries. | Liberty contends the complaint does not allege an advertisement or paid announcement. | No; complaint does not allege any paid advertisement or public-facing promotional injury. |
| Are allegations of reproduction and distribution of designs enough to trigger advertising injury? | FLG points to references to reproduction and distribution by sale as potential ads. | Hyman’s actions concern design and sale, not advertising, under the policy definition. | No; alleged acts concern design/manufacture/sale, not an advertising injury. |
| Does Century 21 affect the determination of a duty to defend here? | FLG relies on Century 21 to broaden advertising coverage. | Century 21 does not apply because the underlying complaint lacks marketing/advertising allegations. | No; Century 21 does not compel a broader interpretation here. |
Key Cases Cited
- Famous Horse Inc. v. 5th Ave. Photo Inc., 624 F.3d 106 (2d Cir. 2010) (setting standard for reviewing motions under Rule 12(b)(6))
- Jerry’s Sport Ctr., Inc. v. American & Foreign Ins. Co., 2 A.3d 526 (Pa. 2010) (duty to defend determined by four corners of policy vs. complaint)
- Am. & Foreign Ins. Co. v. Jerry’s Sport Ctr., Inc., 2 A.3d 526 (Pa. 2010) (same underlying framework for coverage analysis)
- Century 21, Inc. v. Diamond State Ins. Co., 442 F.3d 79 (2d Cir. 2006) (expanded view of advertising under broader policy)
- Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888 (Pa. 2006) (duty to defend analyzed from four-corners of contract and complaint)
- Frog, Switch & Mfg. Co. v. Travelers Ins. Co., 20 F. Supp. 2d 798 (M.D. Pa. 1998) (advertising injury requires advertisement itself to infringe rights)