Reset A A Font size: Print

Court of Appeal, Fourth District, Division 3, California.

CLARY CORPORATION, Plaintiff and Appellant, v. UNION STANDARD INSURANCE COMPANY, Defendant and Respondent.

No. G013805.

Decided: August 30, 1994

John Guerin, Huntington Beach, and Lewis James Runchey, Escondido, for plaintiff and appellant. Cassidy, Warner, Brown, Combs and Thurber and Glen A. Stebens, Santa Ana, for defendant and respondent.



The 1986 version of the CGL (commercial general liability) insurance policy typically offers coverage under the heading of “advertising injury” for “infringement of title.”   What, one might ask, is infringement of title?

The question is important because one hotly-litigated topic in insurance coverage law is whether CGL advertising injury coverage includes liability for patent infringement claims.   Most of the case law to date has focused on the lack of a causal connection between the underlying patent infringement claim and the advertising activity of the insured.1  Surprisingly little has focused on the infringement of title clause.   We say “surprisingly” because, at least superficially, the infringement of title clause would seem to be a natural one to be invoked by a policyholder seeking coverage for a patent infringement claim.   By advertising a product that allegedly infringes on someone's patent, has not the policyholder violated that person's title to the patent?   As one practitioner who espouses this view has written, “A patent infringement suit necessarily alleges conduct by the insured that calls into question the legitimacy of the exclusive rights to title asserted by the patent holder and infringement upon the rights of that title held by the patent.”  (Gauntlett, Establishing Intellectual Property Defense Coverage (With Checklist) (1992) 38 No. 2 Practical Law. 43, 51).2

The policyholder in the instant liability coverage case, however, has not left this stone unturned, and has asserted that the infringement of title clause provided it with the potential for coverage when it was sued for patent infringement in federal district court in Texas.   The insurer turned down the policyholder's request for a defense, the policyholder sued, and the trial court determined the insurer owed no duty to defend the infringement suit.

We affirm because, as explained below, the patent infringement suit presented no possibility of liability which might be covered under the infringement of title clause.   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.   Moreover, in this case, even if “infringement of title” could mean slander, there was no potential for any such slander claim.   Slander of title to a patent is different from infringement of a patent.   The two claims arise under entirely different sets of law.   Here, no facts connected with the underlying patent infringement claim suggested that the policyholder was disparaging someone else's title to a patent.

The policyholder was also sued in state court in Texas for deceptive trade practices for having made false promises to its dealers.   We also affirm as to the absence of any duty to defend that claim.   It is well established that the CGL does not cover liability for false promises, even if those promises were only negligently made.


The relevant terms of the CGL policy issued by defendant Union Standard Insurance Company to plaintiff Clary Corporation effective October 22, 1988, are set out in the margin.3  The operative form is a standard 1986 CGL.4

In February 1990 Mitek Holdings sued Clary in federal district court for the northern district of Texas on a single cause of action for patent infringement.   The text of the complaint did not exceed three pages, and consisted of no more than eight paragraphs prior to the prayer, and of those eight, only two set forth the substantive claim.   In those two paragraphs, Mitek alleged it was the owner of the “entire right, title, and interest, in and to U.S. Patent No. 3,823,861, dated July 16, 1974, and entitled ‘Repair Press for Pallet Stringers.’ ” 5  Upon information and belief, Mitek alleged that Clary “infringed the claims of the '861 patent, and continues to commit acts of infringement, by making and or selling and or inducing the making and/or sale of, within this judicial district, pallet repairing presses made in accordance with the '861 patent.   Defendant will continue to commit such acts of infringement unless enjoined by this Court.''

On May 8, 1991, Clary's broker sent Union a letter requesting defense of the Texas patent infringement suit.   The letter included a copy of the complaint.   Union formally refused to defend in a letter sent to Clary, care of its broker, on July 12.   Within the month the patent infringement case was completely settled, with Clary paying about $79,000.

Clary then instituted this action against Union for breach of contract.   At trial Clary presented evidence that it advertised its product as “exclusive” and claimed, in at least one advertisement, that a patent application was pending.6  After a bench trial, judgment was entered declaring Union owed nothing to Clary.



 We summarily dispense with Clary's first two arguments, which do not pose the thorny infringement of title problem.   Clary first contends that the prospect of its being held liable for inducing the infringement of the Mitek patent is sufficient to raise the possibility of advertising injury coverage.   Not so.   As Aetna Casualty & Surety Co. v. Superior Court, supra, 19 Cal.App.4th 320, 23 Cal.Rptr.2d 442, pointed out, it is impossible to be held liable for negligently inducing a patent infringement claim.  “To be liable for inducing infringement, a party must have the specific intent to induce another to infringe.”  (Id. at p. 330, 23 Cal.Rptr.2d 442.)   Inducing infringement is, by its “very nature,” an intentional act precluded from coverage under section 533 of the Insurance Code.7  (See Aetna Casualty, supra, 19 Cal.App.4th at p. 333, 23 Cal.Rptr.2d 442.)

 Clary next asserts that claiming “a product is yours when it belongs to another is manifestly a disparagement of the product of the true owner.”   No, it is not.   A similar argument was recently rejected by the Ninth Circuit in Everest and Jennings v. American Motorists Ins. (1994) 23 F.3d 226 [wheelchair manufacturer sued competitor].   The Everest and Jennings court dismissed the argument that a “patent infringement claim amounts to an allegation of ‘disparagement’ of title,” reasoning that it would “warp” the meaning of the word disparagement.  (See 23 F.3d at p. 230.)  (We also discuss Everest and Jennings below in the context of what it had to say about “title.”)

While not binding on us, the point on which Everest and Jennings rests is sound.   It does indeed warp the idea of “disparagement” beyond its usual, ordinary meaning to apply it to a patent infringement case.   Fundamentally, patent infringement is contradictory to the ordinary meaning of “disparage.”   The definitions of “disparagement” given in Webster's Third New International Dictionary (1986) (Webster's) at page 653, are:  “diminution of esteem or standing:  indignity, disgrace,” “the expression of a low opinion of something:  detraction,” and “low opinion:  contempt.”   Whatever disparagement is, it is not complimentary.  (Cf. Leonardini v. Shell Oil Co. (1989) 216 Cal.App.3d 547, 572, 264 Cal.Rptr. 883 [quoting Second Restatement of Torts, section 626 for proposition that trade libel is an “injurious falsehood that involves disparagement of quality”].)  A suit for patent infringement, on the other hand, like a suit for plagiarism, is predicated on a wrong that is an implied compliment:  There is something good about the patented product (or the copyrighted words) that is worth appropriating.   Patent infringement, like other imitation, is the sincerest form of flattery.


We now come to Clary's infringement of title argument.   Clary contends the patent infringement claim against it represented potential exposure for “infringement of title.”   The theory, to put the gloss on it most favorable to Clary, is that in the course of advertising, Clary wrongfully indicated that it—and not Mitek—owned the “title” to the patent for pallet repairing presses, and thereby “infringed” on Mitek's title.

As mentioned above, there is a surprisingly paucity of case law addressing the infringement of title language within the definition of advertising injury.   Hence we begin with a quick survey of the existing cases.

The issue was touched on briefly in Everest and Jennings v. American Motorists Ins., supra, 23 F.3d at page 230, where the insured argued that allegations of patent infringement “necessarily imply a disparagement of title.”   Besides the “warping” of the word “disparagement” required by this argument, the court also rejected it for its overbreadth.   Such an interpretation “would permit coverage far exceeding the objectively reasonable expectations of the insured based on the explicit language of the policy.”   While the court did not identify the “explicit language of the policy” to which it referred, the context of its discussion (see id. at pp. 229–230) would suggest that it was referring to a “personal injury” provision which protected against claims for disparaging someone else's goods.   That personal injury provision, however, specifically excluded “advertising.”  (Id. at p. 229.)

Merchants Co. v. American Motorists Ins. (S.D.Miss.1992) 794 F.Supp. 611, 618, held that a policyholder's unauthorized use of a third party's customer list could be said to involve “an infringement” of the true owner's title to that list.   The court reasoned that giving “infringement” its plain and ordinary meaning—which would include the “violation” of a right—the word could include an allegation that a defendant had “improperly utilized” the list without “right or license to do so.”  (Ibid.)  The court did not comment on the meaning of “title”;  the insurer's primary defense centered on the connection between the use of the list and advertising activity.   The insurer lost because the policyholder had sent a flyer to some of the true owner's customers;  hence there was such a connection.

J.A. Brundage Plumbing v. Massachusetts Bay Ins. (W.D.N.Y.1993) 818 F.Supp. 553, 558–559, vacated by reason of settlement, J.A. Brundage Plumbing v. Massachusetts Bay Ins. (W.D.N.Y.1994) 153 F.R.D. 36, 38,8 came to the same result, again without much explication.  Brundage held that a policyholder who was a “Roto–Rooter” franchisee and who was sued for improperly using Roto–Rooter trademarks and entering into a competing business was covered under the infringement of title provision.   The court noted that “title” could mean a distinctive appellation, quoted Black's Law Dictionary (6th ed. 1990) at page 1485 for the idea that titles may be a subject of property (e.g., title of a newspaper or other business entity), and concluded, without further elaboration, that “[c]learly, then, infringement of ‘title’ can include trademark or tradename infringement.”  (Brundage, supra, 818 F.Supp. at p. 559.)

Atlantic Mutual Insurance Co. v. Brotech Corporation (E.D.Pa.1994) 857 F.Supp. 423, on the other hand, held that there was no coverage for a CGL policyholder sued for patent infringement because “title” in the context of advertising injury must refer “to a distinctive name or designation used to identify a literary or artistic work and not to the legal concept of ownership of property.”  (857 F.Supp. at p. 429.)   Ironically enough, Brotech relied on Brundage to so restrict the meaning of “title,” pointing out that Brundage itself was a trademark case.   The court also indicated, apropos Everest and Jennings, that reading “title” to include evidence of property ownership rather than name or designation would be unreasonably broad.  “Under defendant's proffered reading, the insurance companies could be liable under this provision for an insured's theft, misappropriation or conversion of any personal property of another if such were then advertised for sale.”  (Id. at p. 429.)

Even more recently, Ross v. Briggs & Morgan (Minn.App.1994) 520 N.W.2d 432 held that a former employee's use of a name similar to that under which his former employer was doing business was enough to show the possibility of infringement of title under the employee's CGL policy.   There, a dermatologist worked for a business known as “Skin Diseases P.A.”   The practice was advertised as the “Institute of Cosmetic Surgery and Hair Transplants.”   The dermatologist then set up shop under the name “Skin Physicians, P.A.” and advertised the opening of his new business using the name “Institute of Cosmetic and Laser Surgery.”   When the dermatologist was sued by his former employer for, among other things, deceptive trade practices, his attorneys failed to make a claim to his CGL insurer.   In the subsequent legal malpractice suit, the appellate court pointed out that the use of the names “Skin Physicians” and “Institute of Cosmetic and Laser Surgery” meant the claim was within the infringement of title coverage.   Relying on Brundage's “distinctive appellation” language, the court concluded that the “similarity” in the names, i.e., “titles” between those used by the dermatologist's employer and the ones under which he began to do business, “arguably constituted an infringement of [the employer's] titles or slogans that was covered by the insurance policy.”  (Id. at p. 436.)

Our brief survey answers one rhetorical question which Clary asks forcefully in its reply brief:  If the infringement of title clause does not cover patent infringement suits, what in the world does it cover?

 The answer is supplied by Brundage, Brotech and Ross:  “infringement of title” refers to claims based on the confusion of names or designations.   The word “title” denotes “a descriptive or general heading” or “distinguishing name,” 9 such as “Roto–Rooter” in Brundage, or “Skin Disease” in Ross.   Coverage for infringing on someone else's “title” (that is, name) makes perfect sense in the context of advertising injury protection for infringement of copyright or slogan:  advertisements themselves are likely to be the source of any claim based on one business masquerading as another.   As Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1263–1264, 10 Cal.Rptr.2d 538, 833 P.2d 545 pointed out, advertising injury coverage includes claims for unfair competition based on “ ‘passing off’ one's goods as those of another.”   It is reasonable therefore to conclude that the infringement of title clause extends coverage for “passing off” oneself, like the dermatologist in Ross, as someone else.

The tougher question is whether the concept of “title” extends to “title” in the legal sense, as in “title to” a piece of property (e.g., title to Blackacre).  Merchants assumed that it could, but without discussing the multiple meanings of the word “title.”   For the court in Merchants, it was enough that the concept of improper use came under the rubric of “infringement.”

 Everest and Jennings and Brotech, on the other hand, rejected as inherently too broad the reading of title to mean legal title in the sense of property ownership.   For the court in Everest and Jennings, such a reading would exceed reasonable expectations of the insured “based on the explicit language of the policy.”   But that language in Everest and Jennings excluded advertising, whereas in the case before us advertising is specifically included.   Moreover, the Everest and Jennings court was clearly focused on the word “disparage,” which, as we have already seen, is incompatible with patent infringement in any event.  Everest and Jennings thus does not necessarily stand for the proposition that “infringement of title” cannot mean infringement of title in the sense of title ownership.   It simply holds that “disparagement” of title cannot reasonably include patent infringement under personal injury coverage which excludes advertising.  (See Everest and Jennings, supra, 23 F.3d at pp. 229–230.)

As for Brotech, it rejected the “title to” interpretation because such a reading would mean coverage for thievery.   All the insured would need to do is advertise the stolen goods as its own.   Beyond this reductio ad absurdum, Brotech did not confront the problem posed by the ambiguity in the word “title.”

There is no doubt, of course, that as a matter of “abstract philology,” as Bank of the West might put it, “title” can include legal title, including legal title to a patent.   The very second definition given in Webster's Third New International Dictionary (1979) at page 2400 is “the union of all the elements constituting legal ownership,” which is a definition identical to that given in Black's Law Dictionary.10  And one can, indeed, own the “title” to a patent (Arachnid, Inc. v. Merit Industries, Inc. (Fed.Cir.1991) 939 F.2d 1574, 1579 [necessity of having legal title to a patent during the time of the infringement] ), as well as be sued for claiming title to a patent that someone else claims title to.  (See e.g., Hold Stitch Fabric Mach. Co. v. May Hosiery Mills (Tenn.1946) 195 S.W.2d 18, 21 [holding that action “to determine the title to a patent” was properly in state court].)

 But it is not enough that language be ambiguous in the abstract to invoke the possibility of coverage.   It is well established in insurance coverage law—indeed, all contract interpretation for that matter—that a proposed interpretation must be objectively reasonable.  (Bank of the West, supra, 2 Cal.4th at pp. 1264–1265, 10 Cal.Rptr.2d 538, 833 P.2d 545.)  “In summary, a court that is faced with an argument for coverage based on assertedly ambiguous policy language must first attempt to determine whether coverage is consistent with the insured's objectively reasonable expectations.”  (Id. at p. 1265, 10 Cal.Rptr.2d 538, 833 P.2d 545.)

 We agree with Brotech's conclusion that the “title” in the CGL “infringement of title” language cannot reasonably refer to legal title,11 but offer a different rationale.   That rationale is context.  “[T]he court must interpret the language in context, with regard to its intended function.”  (Bank of the West, supra, 2 Cal.4th at p. 1265, 10 Cal.Rptr.2d 538, 833 P.2d 545.)   As our Supreme Court has admonished, context is critical to the proper interpretation of the insurance contract.  (Ibid.)

 The context in which the word “title” appears in CGL advertising injury coverage is as one of a series of sets of legal rights which can generate “infringement” actions.   The obvious question that must be asked is what does it mean to “infringe” something?

It is not to slander it.   The thread that runs through the ordinary meaning of infringement is penetration into some sort of zone.   Webster's gives a number of synonyms—breach, violation, encroachment, trespass—that necessarily imply the concept of a zone.  (See Webster's Third New Internat. Dict. (1979) at p. 1161.) 12  By contrast, “slander” of title does not import a meaningful sense of trespass into a zone.   The essence of “slander” is disparagement.   Both Webster's and Black's give no definition of slander of title which does not use the word “disparage.”   Webster's defines the term as “disparaging a person's title to property to his special damage” (Webster's New Internat. Dict. (3d ed. 1986) at p. 2137);  Black's definition is “disparagement of a person's title to real or personal property.”  (Black's Law Dict. (5th ed. 1979) at p. 1244, col. 2.) 13

Trespass into some zone is perfectly consistent with the sense of title articulated in Brundage, Ross and Brotech, i.e., the protection of a business's name.   It is easy to see how one can “infringe” on another business's name in connection with advertising activity:  if a name is too similar, the very advertisement itself, by creating confusion in the minds of the other business's customers, will cause harm.

On the other hand, to read “infringe” as synonymous with slander or disparagement tortures the word in the context of advertising activity.   Even in its broadest sense, to disparage a title one must do something to identify the third party's property, and indicate that the title to that property is no good.   This is not the sort of thing in which advertising is likely to be involved.   It strains the imagination to believe that any sane business would spend its advertising dollars disparaging its competitors' title to their products.   A business might advertise that Brand X detergent does a lousy job of cleaning clothes, but it is not going to spend good money to tell the world that the maker of Brand X does not really have good title to the patent on which Brand X is based.

“Infringement of title” therefore does not reasonably refer to legal title.   Mitek's patent infringement suit thus raised no infringement of title claims against Clary.

Moreover, even if we were to read “infringement of title” to include slander of title to a patent, there were still no facts to raise such a claim and thereby invoke Union's duty to defend.   There is a difference between patents and titles to them.   Patent infringement claims and slanders of titles to patents are separate kinds of claims, litigated in different forums and governed by the laws of different jurisdictions.

 There is, in fact, no claim under federal patent law for disparaging or slandering the “title” to a patent.  (See Muskegon Piston Ring Company v. Olsen (6th Cir.1962) 307 F.2d 85, 87 [“Libel and slander, threats against plaintiff's customers and interference with plaintiff's right to enjoy the benefits of its patents, give rise to a cause of action under state law.”];   Hold Stitch Fabric Mach. Co. v. May Hosiery Mills, supra, 195 S.W.2d at p. 21 [holding that action “to determine title to a patent,” including allegations that certain claims of defendant had put “clouds” on the plaintiff's “title” to them, was properly in state court].) 14  Such claims are matters of state property and contract law.  (See Hold Stitch, supra, 195 S.W.2d at p. 21 [“[W]here the gist of the action is to determine the title to a patent, the federal courts are without jurisdiction, even though questions of validity or infringement of the patent are involved in connection with such determination.”].)

 In the instant case, the patent infringement complaint filed in federal court against Clary centered exclusively on the infringement issue.   In both form and substance, Mitek's claim was that Clary's product infringed Mitek's patent, not that Clary was claiming that Mitek did not really own United States Patent No. 3,823,861.   Clary's repair presses were specifically alleged to have been “made in accordance with the '861 patent” owned by Mitek.

Nor did the fact Clary might have advertised the repair presses as “exclusively” its own raise the potential for a slander of patent title claim.   The concatenation of inferences required to progress from (1) the statement that Clary's product was “exclusive” to (2) the idea that Clary was claiming that Mitek's title to U.S. Patent No. 3,823,861 was no good, is simply too attenuated to raise the possibility of harm to Mitek's interest in its title without some specific identification of Mitek's title in the advertisement itself.   To make the inferential leap, a reader of Clary's advertisement would already have to be aware of Mitek's patent, the nature of the invention protected by that patent, and of sufficient facts about the relationship between Clary and Mitek to deduce that Clary was indicating that Mitek's title to its patent was no good.   That is just too long a stretch to reasonably implicate a slander of title claim.


The second Texas lawsuit was a counterclaim in a lawsuit Clary initiated against Fairfield Distributors for accounts receivable.   In their counterclaim the distributors alleged that Clary had engaged in deceptive trade practices by making certain false statements about “the benefits they would have” if they became Clary distributors.   These benefits included the exclusive right to sell in 22 East Coast states, sales commission, a $60,000 credit limit, and advertising allowance, sales training programs, free literature for trade shows, and that Clary products had a certain standard of quality.

 The law is well settled that the economic injury stemming from broken promises, even if negligently made, is not “property damage” within the purview of the CGL.  (See e.g., Fresno Economy Import Used Cars, Inc. v. United States Fid. & Guar. Co. (1977) 76 Cal.App.3d 272, 282, 142 Cal.Rptr. 681 [false representations about used car].)  Nor does a claim based on broken promises even come close to any of the categories in the definition of advertising injury.  (Standard Fire Ins. Co. v. Peoples Church of Fresno (9th Cir.1993) 985 F.2d 446, 450 [rejecting idea that claims for negligent misrepresentation are covered under advertising injury provisions of CGL because such a result would not comport with objectively reasonable expectations about the policy].)


The judgment is affirmed.


1.   See Gitano Group, Inc. v. Kemper Group (1994) 26 Cal.App.4th 49, 59–60, 31 Cal.Rptr.2d 271 (no coverage because no causal connection with advertising activity since underlying plaintiffs made no claim for separate harm suffered from the advertising);  Iolab Corp. v. Seaboard Sur. Co. (9th Cir.1994) 15 F.3d 1500, 1506–1507 (no coverage because no causal connection;  piracy did not occur in the advertising itself);  Aqua Queen Mfg., Inc. v. Charter Oak Fire Ins. (C.D.Cal.1993) 830 F.Supp. 536, 538 (coverage because “piracy” encompassed patent infringement;  sub silentio overruled by Iolab, supra);  National Union Fire Ins. Co. v. Siliconix Inc. (N.D.Cal.1989) 729 F.Supp. 77, 80 (no coverage for “piracy” because no causal connection with advertising);  Meyers & Sons v. Zurich American Ins. (1989) 74 N.Y.2d 298, 545 N.E.2d 1206, 546 N.Y.S.2d 818, 820–821 (no coverage under unfair competition provision of advertising injury for importation of infringing products because harm to third party did not arise from advertising activities);  see also Aetna Casualty & Surety Co. v. Superior Court (1993) 19 Cal.App.4th 320, 330–333, 23 Cal.Rptr.2d 442 (no coverage because inducing infringement necessarily requires specific intent to induce);  Intex Plastics Sales Co. v. United Nat. Ins. Co. (9th Cir.1994) 23 F.3d 254, 256–257 (following Aetna );  St. Paul Fire & Marine v. Advanced Interventional (E.D.Va.1993) 824 F.Supp. 583, 585 (no coverage for patent infringement under coverage for misappropriation of “style of doing business” because patent infringement claim does not approach “pervasive similarity in overall manner of doing business” required for business style misappropriation).

2.   Like a growing number of law review and journal articles, Gauntlett's article is also available online in the text and periodicals database of a major computer legal research service.   As a practical matter, such articles are far more likely to be available to the average attorney by means of computer research, either online or by means of compact disc, than the old-fashioned way of trooping off to a major law library.   We mention this because the time is already here when some materials to which a court or practitioner may wish to refer are available only via computer.   While cases that exist exclusively in what in the mid–1990's is often called “cyberspace” (that is, solely in computer databases or on compact disc) are not “published” for purposes of rule 977(a) of the California Rules of Court (see ACL Technologies, Inc. v. Northbrook Property & Casualty Ins. Co. (1993) 17 Cal.App.4th 1773, 1783, fn. 34, 22 Cal.Rptr.2d 206), the rule does not extend to noncase material.   Such material is functionally like any other book which a court might refer to.Substantively the distinction makes sense.   The problem with “citing” a “nonpublished” opinion that has somehow found its way into a computer database is that the authoring court itself never intended that opinion for use as precedent.   The same cannot be said for an article, essay or practice guide that is “published” by being incorporated into a computer database or put on compact disc.   In that instance, the author's work is just as available for reference by a court or practitioner as any conventionally published book or journal article.Of course, the impact of technological advances on the medium in which texts are presented is not exactly an issue of first impression.  (See Boorstin, The Discoverers (1983) at pp. 529–530 (noting arguments made against printed material in 15th Century Venice;  “Corrupt printed versions, they said, were driving out of the market the reliable old manuscript texts.”).)

3.   Here is the actual text (quotation marks omitted):COVERAGE B. PERSONAL AND ADVERTISING INJURY LIABILITY1.  Insuring Agreement.a.  We will pay those sums that the insured becomes legally obligated to pay as damages because of ‘personal injury’ or ‘advertising injury’ to which this insurance applies. .    .    .    .    .c. This insurance applies to ‘advertising injury’ only if caused by an offense committed:(1) In the ‘coverage territory’ during the policy period;  and(2) In the course of advertising your goods, products or services. .    .    .    .    .SECTION V—DEFINITIONS1. ‘Advertising injury’ means injury arising out of one or more of the following offenses:a.  Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services;b. Oral or written publication of material that violates a person's right of privacy;c. Misappropriation of advertising ideas or style of doing business;  ord. Infringement of copyright, title or slogan.

4.   See Comment, Advertising Injury Coverage:  An Overview (1992) 65 So.Cal.L.Rev. 919, 927 (describing 1986 changes to CGL form).   The definition of “advertising injury” in the present case is identical with that of the standard definition given in the 1986 form.

5.   We do not pretend to be able to describe what “pallet stringers” are, much less “repair presses” for them.

6.   In one of its ads, Clary made reference to “The Exclusive Clary Pallet Plate.* ” and “The Exclusive Clary Pallet Plater.* ” and in fine print, at the bottom of the page, stated “ *Patent and Trade Mark Pending.”

7.   Patent infringement is different from certain other intentional acts in that it does not encompass any “lesser included” acts which might entail unintentional states of mind but which still give rise to liability.   That is what distinguishes Aetna Casualty from Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263, 54 Cal.Rptr. 104, 419 P.2d 168, Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865, 151 Cal.Rptr. 285, 587 P.2d 1098, and Horace Mann Ins. Co. v. Barbara B. (1993) 4 Cal.4th 1076, 17 Cal.Rptr.2d 210, 846 P.2d 792.   In each of the latter, while the insured was being sued for an intentional act, the fact remained that he might be held liable for an un intentional act.   Thus a suit for assault for striking an individual who jerked open a car door might lead to liability for simply exceeding the reasonable bounds of self-defense.  (See Gray, supra, 65 Cal.2d at p. 277, 54 Cal.Rptr. 104, 419 P.2d 168.)   A suit for shooting and killing one's employer might be based on the insured's “paranoid delusions” which deprived the insured of the capacity of having the intent to shoot and harm the victim.  (See Clemmer, supra, 22 Cal.3d at p. 878, 151 Cal.Rptr. 285, 587 P.2d 1098.)   And a suit against a teacher for “sexual and other misconduct” entailed conduct “apart” from the molestation.  (Horace Mann, supra, 4 Cal.4th at pp. 1082–1084, 17 Cal.Rptr.2d 210, 846 P.2d 792.)

8.   After the decision came down, the insurer appealed, then the parties settled contingent upon the court vacating its prior order.  (153 F.R.D. at p. 37.)   Most of the court's subsequent opinion is taken up with its reservations and disapproval of the attempt to expunge its prior decision by settlement.  (E.g., 153 F.R.D. at p. 37 (“ ‘When a clash between genuine adversaries produces a precedent ․, the judicial system ought not allow the social value of that precedent, created at cost to the public and other litigants, to be a bargaining chip in the process of settlement.   The precedent, a public act of a public official, is not the parties' property.’ ”);   see also Neary v. Regents of University of California (1992) 3 Cal.4th 273, 286, 10 Cal.Rptr.2d 859, 834 P.2d 119 (dis. opn. of Kennard, J.) (noting public as well as private interests inhere in court judgments).)   Despite its reservations, however, the Brundage court complied with the request “as a courtesy to the attorneys involved and to assist their efforts to bring finality to this case.”  (153 F.R.D. at p. 38.)Despite the ostensible vacation of the case, we examine Brundage anyway.   The case represents at least some measured judicial attention to an issue relevant to the case before us.   Moreover, the practice of insurers of trying to erase unfavorable precedent by postopinion settlements is to be devoutly discouraged.   If a precedent is wrong, insurers should be prepared to demonstrate that fact in open argument (see Fed.Rules Civ.Proc., rule 11, 28 U.S.C. [provision for good faith effort to effect reversal of existing law] ) rather than try to buy the expungement of the opinion from the law books.

9.   See Webster's Third New International Dictionary (1986) at page 2400.

10.   Fascinatingly enough, the definition of “title” in Black's begins with the various senses in which the word means name or appellation, and mentions the “title of a patent” not as some evidence of ownership, but as the “short description of the invention.”  (Black's Law Dict. (5th ed. 1979) at p. 1331, col. 1.)   Only after several paragraphs elucidating the meaning of the word as an appellation does Black's mention legal title, where, under the heading of real property law, it provides the definition found in Webster's.

11.   The court in Brotech simply, if understandably, recoiled at the prospect of coverage for any thief clever enough to advertise its ill-gotten booty as its own.   Mere recoil at the prospect of coverage for bad acts, however, cannot be the test of objectively reasonable interpretation, particularly where the issue is the duty to defend—the policyholder might be innocent.   Our Supreme Court has held that there was the possibility of coverage and therefore the duty to defend where claims were made against policyholders for child molestation (Horace Mann Ins. Co. v. Barbara B., supra, 4 Cal.4th 1076, 17 Cal.Rptr.2d 210, 846 P.2d 792 [because claim against insured also included nonsexual “conduct apart from molestation”] ), murder (Clemmer v. Hartford Insurance Co., supra, 22 Cal.3d 865, 151 Cal.Rptr. 285, 587 P.2d 1098 [because insured might not have had the mental capacity to act willfully] ), and battery (Gray v. Zurich Insurance Co., supra, 65 Cal.2d 263, 54 Cal.Rptr. 104, 419 P.2d 168 [because insured might simply have exceeded the reasonable bounds of self-defense].)  The theft rationale is therefore insufficient to restrict the word “title” from meaning legal title.   Also, when we examine the context of the infringement clause, it clearly allows for coverage for claims based on activity that amounts to theft.   Infringement of copyright is plagiarism, which is a kind of intellectual theft.

12.   The only synonym given by Webster's that does not import the idea of a zone is “nonfulfillment,” but that idea is even farther away from slander or “calling into question” than the others:  nonfulfillment implies a preexisting duty to live up to some affirmative obligation.Interestingly, Webster's also gives a legal definition of infringement in the patent context:  “the unlawful manufacture, use, or sale of a patented or copyrighted article.”  (Ibid., italics added.)   Such a definition supports the conclusion of the decisions mentioned in footnote 1 that there is no causal relationship between patent infringement and advertising activity.   Manufacture, use and sale represent harms separate from advertising activity, a theme that runs through the cases mentioned in that footnote that have already grappled with patent infringement claims.

13.   Webster's also gives this definition:  “broadly:  a disparagement of the property of a person․”   We have already seen that if the reference is to the property, as distinct to its title, that it would “warp” the ordinary meaning of disparagement to apply it to patent infringement.

14.   If ever there were claims for slander of title to a patent, they were presented in Muskegon Piston Ring and Hold Stitch.   In the former, the plaintiff directly alleged slander of plaintiff's title to its patent.  (Muskegon Piston Ring, supra, 307 F.2d at p. 87.)   In the latter, the plaintiff alleged that the defendant had wrongfully claimed certain patents as its “exclusive” property and these claims “constituted clouds” upon its title to the patents.  (Hold Stitch, supra, 195 S.W.2d at pp. 19–20.)

SILLS, Presiding Justice.


Copied to clipboard