With the advent of exclusions that preclude coverage for liability imposed under the Telephone Communications Privacy Act ("TCPA") and other statutes that address or apply to the sending, transmittal of certain materials or information, some of insurers' concern about coverage for that type of liability has waned. Nevertheless, such claims continue to generate coverage issues. In a recent decision before a federal appellate court, insurers prevailed on a key issue - whether TCPA claims potentially involve "personal and advertising injury" arising out of the offense of "oral or written publication of material that violates a person's right of privacy." In Auto-Owners Ins. Co. v. Stevens & Ricci, Inc., 835 F.3d 388 (3d Cir. (Pa.) 2016), the court held that TCPA claims do not involve "personal and advertising injury." 

In affirming summary judgment for the insurer as to its duty to indemnify, the court analyzed the scope of the right-of-privacy offense. Viewed in the context of the other advertising-related offenses, the offense encompasses only those privacy rights that protect a person's right to secrecy, not those that protect a person's right to seclusion. The language of the offense itself cemented the court's conclusion. Applying the "last antecedent" rule, the court concluded that the phrase "that violates a person's right of privacy" serves solely to describe the type of "material" that is encompassed by the offense; it must be the material, rather than its publication, that violates a person's privacy rights. 

The court also analyzed the nature of the underlying TCPA claims. The TCPA shields people from unsolicited messages, therefore, the sole type of privacy the TCPA protects is the right to seclusion -- the right to be left alone -- rather than any right of secrecy. The court observed that, consistent with the TCPA's intent, the underlying claimants complained only that the subject faxes "unlawfully interrupted [their] privacy interests in being left alone" and made no mention whatsoever of their content. Because there was no overlap between the scope of the offense and the TCPA claims against the insured, the court held that the claims did not involve an enumerated offense under Coverage B and did not implicate coverage.

CGL policies often provide "advertising injury" coverage for injury arising out of one or more enumerated offenses. Among these offenses is the "use of another's advertising idea in [the named insured's] 'advertisement'", commonly referred to as the advertising idea offense. Policyholders may look to the advertising idea offense when seeking coverage for claims of trademark infringement. Because "advertising idea" is usually undefined, success can depend upon whether the applicable jurisdiction agrees that a trademark is an "advertising idea." 

The Central District of California weighed in on this issue, which has split various courts. In Infinity Micro Computer, Inc. v. Continental Cas. Co., the court granted summary judgment to the insurer, finding no duty to defend or indemnify the insured in connection with an underlying trademark infringement action. The insured argued that a lawsuit alleging it wrongfully infringed the plaintiff's trademarked logo implicated the advertising idea offense because the plaintiff alleged injury arising out of the use of the plaintiff's advertising idea. The court rejected this argument. The court noted that while the policy did not define advertising idea, it excluded coverage for trademark infringement. Therefore, the insured "could not have reasonably expected trademark infringement to fall within the definition of 'advertising idea.'" The court further noted that the term "advertising idea" would be rendered meaningless if interpreted so broadly as to encompass any act taken in the course of marketing, including the use of a trademarked logo. Infinity Micro Computer, Inc. v. Continental Cas. Co., 2016 WL 5661755, at *5 (C.D. Cal. Sept. 29, 2016).