IP Coverage Disputes Flare Anew
Disputes concerning the applicability of Coverage B to intellectual property disputes have flared anew in three recently filed suits.
On January 29, 2009, Intel sued American Guarantee & Liability Insurance (Zurich) in the federal district court in San Francisco seeking to impose coverage for claims by Advanced Micro Devices that Intel engaged in unfair marketing practices in the sale and distribution of computer microprocessor chips. Beginning in mid-2005, chip rival Advanced Micro Devices and consumers filed lawsuits against Intel, alleging that the chipmaker engaged in anticompetitive conduct and unfair business practices in the sale, promotion, and marketing of its microprocessors. Intel claims that it has exhausted a $5 million fronting policy and $11 million in coverage afforded by Old Republic and may now access the $50 million excess policy issued by American Guarantee. Intel claims that it is entitled to $50 million in defense costs. American Guarantee has filed an action of its own in Delaware Chancery Court
Seagate Technology has sued National Union seeking recovery of $6 million out of a total of $10 million spent defending patent infringement claims with Cornice, Inc. that the insurer refused to pay owing to disputes over hourly rates, the reasonableness of the sums and costs attributable to prosecuting claims that were not “defense” related. Seagate is represented by Orrick Herrington; National Union by Drinker Biddle.
MGA Entertainment has brought suit against its liability insurers in the federal district court in Riverside, California seeking a declaration that it is entitled to CGL coverage for trade disparagement dispute with Mattel involving its popular line of Bratz™ dolls. It has been reported that more than $63 million in legal fees is at issue. In April 2008, MGA filed three separate DJs against Crum & Forster; Hartford and Lexington. The cases have since been consolidated into a single proceeding
