Case Notes

In Hartford Casualty Insurance Co. v. Swift Distribution, Inc., et al., No. S07172 (Cal. June 12, 2014), the California Supreme Court, applying California law, held that the personal and advertising injury section of an insurance policy did not afford coverage for various infringement and unfair trade claims asserted against a policyholder because the advertisements upon which the claims were based did not disparage the claimant or its products and thus did not support a claim for product disparagement. In so ruling, the court disagreed with the theory of disparagement accepted by an intermediate appellate court in Travelers Property Casualty Co. of America v. Charlotte Russe Holding, Inc., 207 Cal. App. 4th 969 (Cal. Ct. App. 2012).

The policyholder advertised and sold a product, the “Ulti-Cart.” Subsequently, the policyholder was sued by another company that manufactured and sold a similar product, the “Multi-Cart,” for patent and trademark infringement, unfair competition, dilution of a famous mark, and misleading advertising. The claimant attached advertisements for the Ulti-Cart to its complaint, but those advertisements did not name or expressly refer to the claimant, its products (including the Multi-Cart), or the products of any other company. The policyholder tendered the suit to its insurer and sought coverage under the personal and advertising injury section of its policy, but the insurer denied coverage. In a coverage action that followed, the trial court granted summary judgment in favor of the insurer, and the intermediate appellate court affirmed.