As more businesses use the internet to advertise their goods and services, more business owners are discovering copyright and trademark infringement issues that impact their businesses.  People duplicate photos, logos, portions of books, manuals, and websites that they find on the Internet – but they don’t obtain permission from the original owner of the copyrighted work or trademark.

Since business owners are increasingly beginning to understand the value of protecting their trademarks and obtaining copyright registrations for their original works, more cases of trademark and copyright infringement are being filed in federal courts.

Many companies accused of trademark or copyright infringement look to their insurance company to cover the cost of defending these allegations. Unfortunately, more often than not, the insurance policy will not cover the defense of infringement claims.

Does Your Business Have Coverage for Trademark or Copyright Infringement?

To determine if your business has the necessary coverage, you should look at your Standard Commercial General Liability policies. There are two types of coverage: Coverage A and Coverage B.

Coverage B might cover “personal and advertising injury liability.” This type of coverage is typically implicated in intellectual property infringement suits. It usually protects a policyholder against liability arising out of certain claims, such as:

• libel,
• slander,
• defamation,
• violation of privacy,
• copyright infringement,
• infringing upon another’s trade dress or slogan in “your advertisement”,
• or use of another’s advertising idea.

If you are facing a lawsuit, ask your intellectual property attorney to review your insurance policies to see if the policy will cover the defense of the allegations listed in the complaint. If you do not have a copy of your insurance policy, your attorney should request a copy from your insurer and place the company on notice of the claim as soon as possible.

The insurer must review the complaint and the policy to determine if there is coverage for the allegations stated in the lawsuit. If there is any reasonable possibility that coverage exists to pay for damages claimed under any of the allegations, the insurance carrier is duty bound to provide a defense for the entire lawsuit.

Don’t Wait until a Suit Is Filed: Check Your Coverage Now

The law varies from state to state, so if you are a business owner, take the time to review your Commercial General Liability policy now. Confirm with an experienced IP lawyer that you have purchased Coverage B that includes “personal and advertising injury liability.” If not, consider finding a new policy, so your business is protected before a lawsuit arises.