Amazon.com v. Am. Dynasty Ins. Co.,
120 Wn. App. 610 (Wash. Ct. App. 2004)
Facts: Intouch group owns patents for software that allows people to listen to music over the internet and through kiosks. Intouch claimed that Amazon.com infringed on their patents with software on their website that allows customers to preview music before the buy it. Amazon has two insurance carriers, Am. Dynasty which covers patent infringement as an excess coverage and Atlantic Mutual Insurance Company, who is their general liability carrier. Both carriers refused to cover the suit.
Procedural Posture: Amazon initiated a declaratory judgment action against American Dynasty and the parties settled. American Dynasty reimbursed Amazon for the Intouch litigation, and Amazon assigned its rights in the suit against Atlantic Mutual to American Dynasty. American Dynasty then brought this action against Atlantic Mutual because they should have defended Amazon. They claim Intouch's claims were an advertising injury. Both parties filed for summary judgment and Atlantic Mutual won.
Issue: Whether the original claim was one of patent or advertising injury.
Holding: The court reversed, holding that the injury was derived from not only the appropriation of a code involved in the patent, but also is use to market their goods for sale on their website.
Analysis: The court found that Atlantic’s policy covered injuries resulting in advertising and marketing Amazon’s products. Intouch’s patent is for software that allows user to listen to sections of pre-selected songs over the internet. The court said that “misappropriation of an advertising idea may be accomplished by the wrongful taking of another's manner of advertising, by the wrongful taking of an idea concerning the solicitation of business and customers, or by the wrongful taking of the manner by which another advertises its goods or services.†The court found that the injury was one of advertising because the patent technology was an advertising method. Amazon used this technology so that its customers could listen to the music before they bought it. This shows the requisite causal connection between the patented technology and its use in advertising. Atlantic had the duty to defend since the patent holder's injuries were conceivably covered under the policy, which stated it cover misappropriations of advertising ideas.
120 Wn. App. 610 (Wash. Ct. App. 2004)
Facts: Intouch group owns patents for software that allows people to listen to music over the internet and through kiosks. Intouch claimed that Amazon.com infringed on their patents with software on their website that allows customers to preview music before the buy it. Amazon has two insurance carriers, Am. Dynasty which covers patent infringement as an excess coverage and Atlantic Mutual Insurance Company, who is their general liability carrier. Both carriers refused to cover the suit.
Procedural Posture: Amazon initiated a declaratory judgment action against American Dynasty and the parties settled. American Dynasty reimbursed Amazon for the Intouch litigation, and Amazon assigned its rights in the suit against Atlantic Mutual to American Dynasty. American Dynasty then brought this action against Atlantic Mutual because they should have defended Amazon. They claim Intouch's claims were an advertising injury. Both parties filed for summary judgment and Atlantic Mutual won.
Issue: Whether the original claim was one of patent or advertising injury.
Holding: The court reversed, holding that the injury was derived from not only the appropriation of a code involved in the patent, but also is use to market their goods for sale on their website.
Analysis: The court found that Atlantic’s policy covered injuries resulting in advertising and marketing Amazon’s products. Intouch’s patent is for software that allows user to listen to sections of pre-selected songs over the internet. The court said that “misappropriation of an advertising idea may be accomplished by the wrongful taking of another's manner of advertising, by the wrongful taking of an idea concerning the solicitation of business and customers, or by the wrongful taking of the manner by which another advertises its goods or services.†The court found that the injury was one of advertising because the patent technology was an advertising method. Amazon used this technology so that its customers could listen to the music before they bought it. This shows the requisite causal connection between the patented technology and its use in advertising. Atlantic had the duty to defend since the patent holder's injuries were conceivably covered under the policy, which stated it cover misappropriations of advertising ideas.