Excess insurer wants out of Campbell Soup patent suit

November 10, 2016

Cans of Campbell's soup line the shelves at a local grocery store in GoldenAn excess insurer has filed a complaint in intervention in a bid to avoid defending or indemnifying Campbell Soup Co. against a suit accusing the food company of infringing patents for supermarket canned soup dispensers.

In a complaint in intervention filed in the U.S. District Court for the District of New Jersey, American Guarantee & Liability Insurance Co. says no coverage is owed under its umbrella policies because the underlying allegations do not seek damages for injury arising from any covered “advertising injury” offense.

AGLIC’s complaint came after the insurer successfully moved to intervene in a declaratory judgment action filed by Campbell’s primary insurer, Travelers Property & Liability Insurance Co., alleging it has no duty to defend or indemnify the soup maker against the patent infringement claims.

Gamon Plus Inc. sued Campbell last year in the U.S. District Court for the Northern District of Illinois, claiming the company has knowingly infringed or induced infringement of Gamon’s patents related to rack systems used by retail stores to stock and dispense canned products. Gamon Plus Inc. et al. v. Campbell Soup Co. et al., No. 15-cv-8940, complaint filed (N.D. Ill. Oct. 8, 2015).

The underlying suit also names as defendants Campbell’s supplier of the allegedly infringing dispensers, Trinity Manufacturing LLC, and retail stores Meijer Inc. and Kroger Co.

The Travelers suit

Travelers agreed to provide Campbell a defense under its primary policies, subject to a reservation of rights.

However, in a declaratory judgment action filed in December 2015, Travelers contends no coverage is owed because Gamon has not alleged that Campbell infringed its rights through the advertisement of goods, products or services.

In the event that Gamon’s suit is deemed to allege a covered “advertising injury,” coverage is barred because Campbell purportedly caused the alleged injury with the “knowledge that the subject conduct would violate the rights of another and would inflict ‘advertising injury,’” Travelers’ complaint says.

Coverage is also precluded because the alleged conduct was committed prior to the beginning of Campbell’s policy period, Travelers says.

Additionally, intellectual property exclusions in the relevant primary policies bar coverage for any purported infringement of patent, copyright, trademark and other intellectual property rights, Travelers says.

AGLIC: No obligation

AGLIC now alleges it also has no duty to defend or indemnify Campbell because its policies are “excess to and follow form to Travelers policies.”

Further, AGLIC’s umbrella policies contain “similar or identical terms and conditions” to those listed in Travelers’ primary policies, according to the complaint in intervention.

AGLIC seeks a court ruling that it “does not now and never had any obligation” under its policies to defend or indemnify Campbell in connection with the Gamon action.

Travelers Property Casualty Co. of America v. Campbell Soup Co., No. 15-cv-8708, complaint in intervention filed, 2016 WL 6211161 (D.N.J. Oct. 21, 2016).