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Trade Dress Infringement is Different From Trademark Infringement 

In State Farm Fire And Casualty Company v. Jason Hines, Individually and  doing business as Dedicated Business Systems International LLC;  Dedicated Business Systems International, LLC; Tri-State Communication  Services LLC, doing business as U.S. Voice and Data, LLC Jason Hines;  Dedicated Business Systems International, LLC, No. 21-2354, United  States Court of Appeals, Third Circuit (October 14, 2022) an insurer  found no duty to defend because of a trade mark infringement exclusion.  

FACTUAL BACKGROUND  

An insurance coverage dispute arose concerning the scope of two  commercial liability insurance policies was presented to the Third  Circuit. The policies cover advertising injuries arising out of  infringement upon another\'s trade dress, but they exclude injuries  arising out of trademark infringement.  When the insured was sued for trademark infringement, the insurer  initially agreed to defend the insured with reservations, but now the  insurer wishes to withdraw from that representation. The insurer sued,  seeking a declaratory judgment, and the District Court entered summary  judgment in its favor: the policies\' coverage of trade dress  infringement claims did not extend to the suit for trademark  infringement. 

The Insurance Policies  

The two commercial insurance policies at issue were issued by State  Farm. In 2013, both policies used the same language in providing  coverage for "personal and advertising injury." That coverage included  the obligation to defend against suits arising out of infringement "upon  another\'s copyright, trade dress or slogan in your \'advertisement.\'"  (emphasis added). But that advertising injury coverage excluded claims  "[a]rising out of the infringement of copyright, patent, trademark,  trade secret or other intellectual property rights." (emphasis added).  Under both policies, that exclusion did not apply to infringement in an  advertisement "of copyright, trade dress or slogan." (emphasis added).  Dedicated Business Systems International (\'DBSI\') purchased those  policies from State Farm for itself and its officers when conducting  DBSI business.  The Underlying Lawsuit  For a time, DBSI was an authorized reseller of Avaya communications  technology. The authorized-reseller arrangement terminated in 2013, but  DBSI and one of its officers allegedly continued to access Avaya  software license portals afterwards - without Avaya\'s authorization. By  doing so, they were allegedly able to distribute pirated licenses to  customers for a handsome profit, all the while using Avaya\'s trade name  and marks to falsely represent that the software was "valid and  authorized by Avaya."  Believing that DBSI engaged in a "massive illegal software piracy  operation," Avaya sued DBSI and its officer. Avaya\'s eight-count  complaint included federal claims for trademark infringement and  copyright infringement.   

Consistent with that reservation of rights, State Farm sued for a  judgment declaring that it did not have to defend or indemnify DBSI and  its officer in the Avaya lawsuit.