IP Lawsuit Triggers Insurers’ Duty to Defend

A federal court in Pennsylvania has held that Liberty Mutual must defend its insured, Hershey Creamery Company, in an intellectual property infringement lawsuit because the suit raises claims that potentially implicate coverage under the policies’ personal and advertising injury coverages. The court further found that the alleged wrongful conduct was not subject to the policies’ IP infringement exclusion. Hershey Creamery Company v. Liberty Mutual Fire Insurance Co. arose from a suit against Hershey Creamery by a competitor in Delaware, concerning a line of frozen milkshake products that the competitor alleged was confusingly similar to the competitor’s products. The underlying suit alleged that Hershey Creamery “unlawfully copied [the competitor’s] self-serve milkshake machine and related marketing designs, display, and verbiage.” Hershey Creamery provided notice of the claim to Liberty Mutual, and the insurer agreed to defend Hershey…

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