Sherman Act Antitrust Coverage A

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Sherman Act Antitrust Coverage A Powered By Docstoc
					                              INSURANCE COVERAGE FOR
                           SHERMAN ACT ANTITRUST CLAIMS


         This is reminder to our clients that Sherman Act Antitrust claims may be covered under

general liability insurance programs. Allegations of anti-competitive conduct such as false or

disparaging assertions of patent and trademark infringement in the marketplace, or that meritless

suits are being improperly brought in order to stifle competition, would potentially trigger

coverage. Another example would be false assertions that the products were defective or didn’t

work properly.


         Such assertions support claims for the common law offenses of defamation or

disparagement, i.e. trade libel, and malicious prosecution, all of which are expressly covered

under the standard “personal injury” and “advertising injury” coverages found in general liability

policies. Though the complaint in which this type of allegation is found may not contain a

specific cause of action entitled “defamation,” “trade libel,” or “malicious prosecution,” the law

of many jurisdictions supports the position that their inclusion in the “antitrust” cause of action

trigger an insurer’s “duty to defend” the entire action.


         Depending upon the assertions made, a duty to defend could also be triggered under a

variety of other covered advertising or personal injury offenses. See, for example, CNA Casualty

v. Seaboard Surety Company, 176 Cal. App. 3d 598, 607-609, 222 Cal. Rptr. 276 (1986)

(Allegations in antitrust action claiming violation of Sherman and Clayton Acts held to trigger

duty to defend under “libel,” “slander,” “defamation,” “unfair competition,” “idea

misappropriation” and “piracy” personal injury and advertising injury offenses).




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         Because the costs of defending antitrust claims may be significant, insurance carriers

often are willing to contribute to the resolutions of the claim or make a lump sum payment to the

insured, “buying out” the claim.


         Consequently, whether asserted directly in a complaint, or as part of a counter or cross

complaint filed in response to a patent or trademark infringement suit (or in some other context),

Sherman Act Antitrust claims implicate coverage and a policyholder should take care to assure

that a notice of claim is timely filed with insurers during applicable policy periods.


         The Firm can assist in determining whether Sherman Act Antitrust claim (or underlying

facts as determined during discovery) trigger personal or advertising injury coverage. For more

information about these issues, please contact any of the lawyers listed below and we will direct

you to the right member of our 100-lawyer Insurance Recovery Group with offices across the

U.S. and Europe:


         Los Angeles           David Halbreich        dhalbreich@morganlewis.com
                               Stan Shure             sshure@morganlewis.com

         New York              Eric Rothenberg        erothenberg@morganlewis.com
                               John Failla            jfailla@ morganlewis.com

         Chicago               John Shugrue           jshugrue@morganlewis.com

         San Francisco         David Weiss            dweiss@morganlewis.com

         Washington D.C.       Howard Weir, III       hweir@morganlewis.com




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