INTELLECTUAL PROPERTY LAW CLIENT ALERT: Advertising Clause Required Defense of Patent Suit

    29 June 2010

    An insurer for Hyundai Motor America was required by California law to defend the auto maker in a patent infringement suit under a clause in the contract between the two that applied to advertising liability, the U.S. Court of Appeals for the Ninth Circuit held April 5.

    Hyundai was sued for patent infringement for two of the advertising methods on its website that allow customers to build their own vehicle and customize parts on them. After the insurers refused to defend Hyundai, it defended itself. It lost the suit, and sued the insurers to recover its costs. The insurers claimed that the alleged patent infringement did not constitute “advertising injury” under the contract. The Ninth Circuit disagreed.