2009 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 9-23-2009 

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. P A Mf r As s n Ins C o P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 08-4815

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w . vi ll anova . e du/thir dc ir c uit_2009/616NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT N o. 08- 4815 T RA NS P OR T AT I ON I NS UR ANC E CO M P ANY v. P E NNS YL VANI A M ANUF AC T UR E RS ' AS S OC I AT I ON

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( D . C . C i vi l N o. 06- cv- 05430) D i s tr i ctJ udge: H onor abl e Petr es e B . T ucker Subm i t t ed U nderT hi r d C i r cui tL A R 34. 1( a)

Sept ember21, 2009 B efor e: B A R R Y , FI SH E R and J O R D A N , C i r cui tJ udges

( O pi ni on Fi l ed: Sept ember23, 2009)

OP I NI ON

B A R R Y , C i r cui tJ udge Penns y l vani a M anufa ctur er s ’ A s s oci at i on I ns ur ance C om pany( “PM A I C ”) and T r ans por t at i on I ns ur ance C om pany( “TIC”) i s s ued comm er ci al gener al l i abi l i ty( “C G L ”)-2-

in su ra n c e p o licie s to G & B S p e c ialities (“ G & B ” ) th a t w e re m a ter iallyin d istin g u ish a b le exce ptforthe r es pect i ve cove r age pe r i od. T he TIC pol i cycover ed the def ens e and i ndemni fi cat i on of G & B agai ns tact i ons s eeki ng damages for“‘ per s onal and adve r t i s i ng i nj ury ’ caus ed byan off ens e ar i s i ng outof [i t s ] bus i nes s . . . dur i ng the pol i cyper i od” that ext ended f

r om A pr i l 24, 1999 t o A pr i l 24, 2000. ( A pp. at187. ) T he PM A I C pol i cy p ro v id e d th e sa m e sc o p e o f c o v e ra g e f

o r th e f o llo w in g y e a r – f

ro m A p ril 2 4 , 2 0 0 0 to A p ril 2 4 , 2 0 0 1 . E a c h p o licyc o n tain e d a “ p rio r p u b lica tio n ” e x c lu sio n , sta tin g : “[ t]h is i ns ur ance does notappl yt o . . . ‘ [p] er s onal and adve r t i s i ng i nj ury ’ . . . [a] r i s i ng outof or al orw r i t t en publ i cat i on of m at er i al w hos e fi r s tpubl i cat i on t ook pl ace befor e the begi nni ng o f th e p o li cyp eriod . ” (A p p . at 14 6 , 1 8 7 . ) T h e c ase b ef

o re u s inv o lves a c o v era g e d ispu te be tw ee n T IC an d P M A IC reg ard ing an ac ti o n b rou g h t byP o h l C o rpo rati o n ag ains t G & B in the U . S . D istri ct C o u rt forthe East ern D i s tr i ctof Penns y l vani a and f i l ed on J ul y18, 2000 ( the “unde r l y i ng act i on”) . I n t he under l y i ng act i on, Pohl al l eged that , “[b] egi nni ng i n A ugus t1999 and cont i nui ng t o t he [t i m e of f i l i ng] , ” G & B “ha[ d] been c ont act i ng cus t om er s and cl i ent s of P o h l” a n d re p re se n tin g th a t P o h l’s p ro d u c ts in f rin g e d o n a p a ten t h e ld b yN o rf o lk Sout hern R ai l w ayC om pany( “N or fol k Sout hern”) . ( A pp. at57. ) G & B t ender ed the un derl y i ng cl ai m t o T IC and P M A IC i n acco rdance w i th b oth poli ci es, seeki ng defe nse and i ndemni fi cat i on. I n O ct ober2000, T I C as s um ed def ens e of the ac t i on, and cont i nued to d e f e n d G & B u n til J u ly 2 0 0 6 , w h e n G & B e n te re d in to a s e ttle m e n t w ith P o h l.-3-

PM A I C , on t he otherhand, di s cl ai m ed cove r age, s t at i ng thatthe fa ct s al l eged i n the u n d e rl y in g c o m p la in t d id n o t tr ig g e r a d u ty to d e f e n d u n d e r t h e la n g u a g e o f its p o lic y . T IC f ile d th is a c tio n o n D e c e m b e r 1 1 , 2 0 0 6 , s e e k in g , in tera lia , r ei m bur s ementfor a share of t he co st s i ti ncu rr ed in defen ding and i nd em nify i ng G & B . R uli ng on cross m ot i ons fors um m aryj udgm ent , the D i s tr i ctC our tfound i n favorof TIC and or der ed P M A IC to p a yh a lf

o f th e c o s ts in c u rr e d b yT IC . T he cen tral i ssue befo re the D i stri ctC ou rtw as the sam e as the is sue bef ore us, namel yw hetherthe under l y i ng act i on fal l s w i thi n the PM A I C “pr i orpubl i cat i on” excl us i on. T he C our tans w er ed thatques t i on i n the nega t i ve, concl udi ng thatthe r el evant “pr i orpubl i cat i on” exc l us i on w as ambi guous and i nappl i cabl e. A l though the “pr i or p u b lic a tio n ” e x c lu s io n h a s b e e n c o n s id e re d a m b ig u o u s in o th e r c ir c u m s ta n c e s , s e e , e .g ., Maddox v. St . P aulF i r e & M ar i ne Li f e I ns ur ance Co. , 1 7 9 F . S u p p . 2 d 5 2 7 , 5 3 0 ( W. D. Pa. 2001) ( Sm i th, J . ) , i ti s notambi guous i n the ci r cumst ance s befor e us . B eca us e the u n d e rly in g c o m p lain t cle a rlysta tes th a t a ll of the r el evantconductbegan i n A ugus t1999 – m or e than s i x m onths befor e the PM A I C pol i cyper i od comm ence d – w e conc l ude that th e “ p ri o r p u b lic a tio n ” e x c lu s io n b a rs c o v e ra g e , a n d w ill r e v e rs e . I . Backg r ound A . T he U nderl y i ng A ct i on G & B and Pohl ar e compet i ng m anufa ctur er s of r ai l r oad s w i t ch s t ands , and, on J ul y18, 2000, Pohl fi l ed the under l y i ng act i on agai ns tG & B . T he compl ai nts t at es t hatT he under l y i ng act i on w as cons ol i dat ed w i th a dec l ar at oryj udgm entact i on Pohl had 1 fil ed ag ains t N o rfo lk S o u thern o n Ju ly2 5 , 2 0 0 1 see k ing a d ec larati o n that N o rfo lk’s pat entw as i nval i d. Pohl fi l ed a s econd a m ended c om pl ai nton J ul y25, 2003, addi ng, in tera lia , a d d i t i o n a l c l a i ms o f p a t e n ti n v a l i d i tya g a i n s tNo r f o l k S o u th e rn , a n d two c l a i ms thatG & B i nt ent i onal l ym i s m arked i t s r ai l r oad s w i t ch pr oduct s as pat ent ed. O n J ul y28, 2006, Pohl and G & B ent er ed i nt o a s ett l ement , w hi ch pr ovi ded thatG & B w oul d pay P o h l $ 2 5 0 ,0 0 0 to d is p o s e o f th e c la im s a g a in s t it.

-4- G & B m anu factured rai l road sw i t ch st and s for N orfol k S ou thern an d thati tw as a lic e n s e e o f

N o rf o lk S o u th e rn ’s p a te n t o n a p u rp o rt e d ly im p ro v e d ra ilr o a d s w itc h s ta n d . Pohl , how ever , di s put ed the enf or cea bi l i tyof N or fol k Sout hern’ s pat ent , cont endi ng t hat its e le m e n ts w e re n e ith e r n e w n o r n o n o b v io u s . D es pi t e the pat entdi s put e, G & B al l egedl ybegan c ont act i ng Pohl ’ s cus t om er s and di s par agi ng the Pohl r ai l r oad s w i t ch s t and. T he compl ai ntal l eges , i n r el evantpart , that “[b] egi nni ng i n A ugus t1999 and cont i nui ng t o the [t i m e of f i l i ng] , G & B ha[d] been con t act i ng cust om ers and cl i ents of P oh l and m i sr epresent i ng that”: “P oh l [w as] i nfr i ngi ng [on] N or fol k [Sout hern’ s ] [p] at ent s ”; “Pohl [w as ] s el l i ng r ai l r oad s w i t ch s t and d esig n s tha t [w ere ] st o len f rom G & B an d N o rfo lk [ S o u thern ]”; an d “p ast an d fu ture pu rchase of P oh l ’s sw i t ch st and s const i tuted [patent ] i nfri ng em ent . . . for w hich tho se cu stom ers a n d cli en ts w o u ld b e li ab le . . . . ” (A p p . at 57 . ) P o h l cl aim ed that G & B ’s conductgave r i s e t o l i abi l i tybeca us e i t s “mi s r epr es ent at i ons and thr eat s ” vi ol at ed Sect i on 4 3 (a ) o f th e L a n h a m A c t, s ee 15 U . S. C . § 1125( a) . Pohl al s o r ai s ed thr ee s t at e l aw c laim s – u n f

a ir c o m p e tit io n , co m m e rc ial d isp a ra g e m e n t, an d to rtio u s in ter f e re n c e w ith bu si ness r el at i on shi ps. 1-5- B . T he P M A I C P ol i cy T he PM A I C C G L pol i cypur chas ed byG & B cover ed a pe r i od thatext ended f r om A pr i l 24, 2000 t o A pr i l 24, 2001. I n gener al , the pol i cypr ovi ded def ens e and i ndemni fi cat i on agai ns t“‘ per s onal and adve r t i s i ng i nj ury ’ caus ed byan off ens e ar i s i ng outof [G & B ’ s ] bus i nes s butonl yi f the off ens e w as comm i t t ed . . . dur i ng the pol i cy per i od. ” ( A pp. at146. ) “‘ Per s onal and adve r t i s i ng i nj ury ’ ” w as a def i ned t erm , w hi ch i ncl uded, i n r el evantpart , an i nj ury“ar i s i ng outof . . . [o] r al orw r i t t en publ i cat i on of m at er i al that. . . di s par ages a per s on’ s oror gani zat i on’ s goods , pr oduct s ors ervi ces . ” (I d. at 15 3 . ) T h e re w e re , h o w e v e r, a n u m b e r o f e x c lu s io n s , th re e o f

w h ic h a re re le v a n t h e re . T he PM A I C pol i cydi d “notappl yt o . . . ‘ [p] er s onal and adve r t i s i ng i nj ury ’ . . . ar i s i ng outof or al orw r i t t en publ i cat i on of m at er i al w hos e fi r s tpubl i cat i on t ook pl ace befor e the b e g in n in g o f

th e p o lic yp e ri o d ” (“ p ri o r p u b lic a tio n ” e x c lu s io n ). (I d. at146. ) C over age w oul d al s o notext end i f the per s onal and adve r t i s i ng i nj uryw as “[c ] aus ed by. . . the i ns ur ed w i th t he know l edge thatthe ac tw oul d . . . i nfl i ct‘ per s onal and adve r t i s i ng i nj ury ’ ” ( “i nt entt o i nj ur e” e xcl us i on) , ori f the i nj uryar os e “outof or al orw r i t t en p u b l i c a t i o n o f

m a t e r i a l , i f

d o n e b y . . . th e i n s u r e d w i th k n o w l e d g e o f i t s f a l s i ty” (“ k n o w le d g e o f

f a ls ity” e x c lu s io n ). (I

d. ) C . T he P res ent A ct i on It is u n d isp u ted th a t G & B ten d e re d th e u n d e rly in g c laim in O c to b e r 2 0 0 0 to b o thA ddi t i onal l y , the C our tconcl uded thatw hi l e the “i nt entt o i nj ur e” a nd “know l edge of 2 fal s i ty ” exc l us i ons m ayhave ba r r ed partof the under l y i ng cl ai m , Pohl coul d have est abli shed li abil i tybyproving t hat G & B act ed in a r eckles s or negl i gen tm ann er. T hu s, P M A IC ’s d u ty to d e f

e n d w a s n o t e x tin g u is h e d . (I d. a t 1 6 ); s ee Frog, Sw i t ch & M f g. C o. v. Trav el ers I

ns . C o. , 193 F. 3d 742, 746 ( 3d C i r . 1999) ( “[I ] f a s i ngl e cl ai m i n a -6- T I C and PM A I C , and thatPM A I C di s cl ai m ed cove r age. A ft erPohl fi l ed i t s s econd am en d ed co m p lai n t i n Ju ly2 0 0 3 , G & B ag ain re q u ested co v era g e u n d er the P M A IC pol i cy . E xpl ai ni ng i t s r efus al t o ext end cove r age, PM A I C s t at ed thatthe s econd a m ended compl ai ntdi d nottr i ggercover age, and, al t ernat i vel y , thatthe above - des cr i bed exc l us i ons a p p lie d . P M A IC re ite ra te d its p o s itio n b yle tte r d a te d M a y2 5 , 2 0 0 6 . Fol l ow i ng the r es ol ut i on of the under l y i ng act i on, T I C fi l ed thi s act i on, cl ai m i ng thati texpende d i n exce s s of $230, 000 i n defe ndi ng G & B , and that , pur s uantt o an a g r e e m e n tb e twe e n i ta n d G & B , T I C p a i d $ 1 7 5 , 0 0 0 t o wa r d s th e s e t t l e m e n tG & B r eac hed w i th Pohl . T I C s oughta dec l ar at i on that , l i ke i t s pol i cy , PM A I C ’ s pol i cy m an d ated d ef

en se a n d ind em n ifi ca ti o n . T IC also so u g h t r eim b u rsem en t fo r P M A IC ’s s h a re o f th e c o s ts it in c u rr e d in d e f e n d in g a n d in d e m n if

y in g G & B . T he D i stri ctC ou rtgrant ed sum m aryj ud gm ent i n fav or of T IC . T he C ou rtfi rs t c o n c lu d e d th a t th e u n d e rly in g a c tio n a lleg e d a “ p e rso n a l an d a d v e rtisin g in ju ry ” w ith in the ambi tof the PM A I C pol i cy , and thatPM A I C w as obl i gat ed t o pr ovi de cove r age unl es s i tcoul d demonstr at e thata pol i cyexcl us i on appl i ed. N ext , the C our taddr es s ed the “pr i orpubl i cat i on” exc l us i on, and conc l uded thati tw as ambi guous . C ons trui ng the a m b i g u i ty i n f

a v o ro f th e i n s u r e d , th e C o u r tc o n c l u d e d th a tth e e x c l u s i o n d i d n o ta p p l y. 2m u lti c laim law su it i s p o ten tiallyc o v e re d , the in su re r m u st d e f e n d a ll cla im s u n til th e re is n o p o s s ib ility th a t th e u n d e rl y in g p la in tif f c o u ld re c o v e r o n a c o v e re d c la im ” ). T h e Di s tr i c tCo u r te x e r c i s e d d i v e r s i tyj u r i s d i c t i o n u n d e r2 8 U. S . C. § 1 3 3 2 , a n d we 3 h a v e ju ri s d ic tio n o v e r t h e f in a l o rd e r o f

th e D is tr ic t C o u rt p u rs u a n t to 2 8 U .S .C . § 1 2 9 1 . -7- A ft erconcl udi ng thatPM A I C had an unmetdutyt o defe nd, the D i s tr i ctC our thel d that P M A IC w a s e q u ita b ly es to p p e d f ro m a s s e rt in g th a t it h a d n o d u ty to in d e m n if yG & B . Ac c o r d i n g l y , th e Co u r tf o u n d P M AI C l i a b l e f

o rh a l f o f th e d e f e n s e c o s t s b o rn e b yTI C, a n d f o r h a lf o f th e in d e m n ity p a id b yT IC to G & B . I I . D i s cus s i on “O urs t andar d of r evi ew of a gr antof s um m aryj udgm enti s pl enary . ” G ar dnerv. Stat e Farm F i r e & C as . C o. , 5 4 4 F . 3 d 5 5 3 , 5 5 7 (3d C ir . 2 0 0 8 ). 3 U nderPenns y l vani a l aw , w hi ch the part i es agr ee i s appl i cabl e her e, the in terp re tatio n o f

a n in su ra n c e c o n tra c t re g a rd in g th e e x iste n c e o f c o v e ra g e is g e n e ra lly p e rf o rm e d b yth e c o u rt . Id
. a t 5 5 8 ; s ee Kvaer ner Metal s D i v. of KvaernerU. S. , I

nc. v. C om m er ci alU

ni on I ns . C o. , 908 A . 2d 888, 897 ( Pa. 2006) ( “The i nt erpr et at i on of an i n s u r a n c e p o l i c yi s a q u e s t i o n o f l a w th a twe wi l l r e v i e w de novo .” ). “O uri nqui r yi s s tr ai ght fow ar d. ” N at i onw i de Mut . I

ns . C o. v. C

PB I nt ’ l , I nc. , 562 F . 3 d 5 9 1 , 5 9 5 (3d C ir . 2 0 0 9 ). O u r firststep “is t o d eterm ine th e sc o p e o f th e p o li cy ’s cover age, ” G ener alA cci dent I ns ur ance Co. of

A m er i ca v. A l l en , 692 A . 2d 1089, 1095 (P a . 1 9 9 7 ), a n d th e k e y s to n e o f th a t d e te rm in a tio n is th e p la in la n g u a g e o f th e p o lic y . N at i onw i de , 562 F. 3d at595. “W hen the l anguage of the pol i cyi s cl earandP M A IC c h a llen g e s o n lyth e D istric t C o u rt’s d e ter m in a tio n th a t ith a d a d u tyto 4 d e f e n d G & B in th e u n d e rly in g a c tio n . T h e lim ited n a tu re o f P M A IC ’s a p p e a l im p lied ly c o n c e d e s th a t, i f

it d id h a v e a d u tyto d e f e n d , ita lso m u st c o n trib u te to T IC ’s in d e m n ity p a ym e n t. See Cadw al laderv. N ew A m s t er dam C as . C o. , 152 A . 2d 484, 488 ( Pa. 1959) ( “I ti s cl earthatw her e a c l ai m pot ent i al l ym aybecome one w hi ch i s w i thi n the s cope of th e p o licy , the in su ra n c e c o m p a n y ’s r e f u sa l to d e f

e n d a n t at th e o u tse t o f

th e c o n tro v e rsy i s a d ec isi o n that itm ak es a t i ts ow n p eril ”). -8- unambi guous , w e mustgi ve ef fec tt o thatl anguage . ” Kvaerner , 908 A . 2d at897 (q u o tatio n m a rk s a n d c itatio n o m itt e d ). “H o w e v e r, ‘w h e n a p ro v isio n in th e p o licyis am biguou s, the p oli cyi s t o b e con strued i n fav or of t he insur ed to further the co ntr act [’s ] pr i m e purpos e of i ndemni fi cat i on and aga i ns tthe i ns ur er , as the i ns ur erdr aft s the pol i cy and contr ol s the cove r age. ” D on ega lMut. Ins. C o. v. B au m ha m m ers , 938 A . 2d 286, 290 ( Pa. 2007) ( quot i ng Kvaerner , 9 0 8 A .2 d a t 8 9 7 ); M a d iso n C o n st. C o . v. H

a rle y sv ill e Mu t. I ns . C o. , 735 A . 2d 100, 106 ( Pa. 1999) ( “W e w i l l not. . . di s t or tthe meani ng of the la n g u a g e o r r e s o rt to a s tr a in e d c o n tr iv a n c e in o rd e r t o f in d a n a m b ig u ity.” ). A ft erdet erm i ni ng the s cope of cover age, w e “e xami ne the compl ai nti n the under l y i ng act i on t o as cert ai n i f i ttr i gger s cover age, ” A l l en , 69 2 A . 2d at10 95 , becau se a n in su re r’s “ d u ties to d e f e n d a n d in d e m n if

ya n in su re d in a su it b ro u g h t b ya th ird p a rty depend upon a det erm i nat i on of w hetherthe [unde r l y i ng] compl ai nttr i gger s cover age, ” B ua m ha m m ers , 9 3 8 A .2 d a t 2 9 0 (q u o tatio n m a rk s a n d c itatio n o m itt e d ). O u r f o c u s, in part i cul ar , i s on t he “f

actual al l egat i ons cont ai ned i n the [unde r l y i ng] compl ai nt , ” id
. at 291, w hi ch ar e “t o be t aken a s true and l i ber al l ycons trued i n favorof the i ns ur ed, ” Fr og, Sw i t ch, & M

f g. C o. , 193 F. 3d at746. 4-9- A . Scope of

C overage T her e i s l i t t l e ques t i on thatthe under l y i ng compl ai ntal l eges “‘ per s onal and a d v e rtisin g ’ in

ju ryto w h ich [ P M A IC ’s] in su ra n c e a p p lies .” (A p p . at 1 4 6 .) A s d e f in e d in the pol i cy , “per s onal and adve r t i s i ng i nj ury ” i s an i nj uryar i s i ng outof “[ o] r al orw r i t t en publ i cat i on of m at er i al that. . . di s par ages a per s on’ s oror gani zat i on’ s goods , pr oduct s or s ervi ces . ” (I

d. at153. ) T he under l y i ng compl ai ntal l eges pr eci s el ys uch an i nj ury– t hat G & B h a d b e e n c o n tac tin g P o h l’s c lien ts a n d m isre p re se n tin g th a t P o h l’s p ro d u c ts i nfr i nged on an e xi s t i ng pat ent . T he l anguage s tr es s ed byPM A I C – that“w e w i l l have no dutyt o defe nd the i ns ur ed aga i ns tany‘ s ui t ’ s eeki ng damages for‘ per s onal and advert i s i ng i nj ury ’ t o w hi ch thi s i ns ur ance does notappl y ” ( i d. at146) – r efe r ence s not the gene r al s cope of

cover age, butthe exc l us i ons w i thi n thats cope. I ti s , s i m pl y , an a rg u m e n t th a t o n e o f

th re e e x c lu s io n s a p p lie s . B . “P ri or Pu bl i cat i on” E x cl usi on “W her e an i ns ur err el i es on a pol i cyexcl us i on as the bas i s fori t s deni al of cover age . . . the i ns ur erhas as s ert ed an a ffi r m at i ve def ens e and, acc or di ngl y , bear s the bur den of pr ovi ng s uch a de fens e. ” M ad ison C on str. , 735 A . 2d at106. T he foc us of PM A I C ’ s ar gum enti s i t s “pr i orpubl i cat i on” exc l us i on, w hi ch deni es cover age f orany i nj ury“[a ] r i s i ng outof or al orw r i t t en publ i cat i on of m at er i al w hos e fi r s tpubl i cat i on t ook p lace b ef o re the b eg inn ing o f th e p o li cyp eriod . ” (A p p . at 14 6 . ) “U n d er the ex clus ion ’s pl ai n t erm s the ‘ fi r s tpubl i cat i on’ dat e i s a l andmar k: i f the i nj ur i ous advert i s ementw asA s th e S e v e n th C irc u it h a s s tate d : 5 T h e p u rp o se o f th e ‘p rio r p u b lica tio n ’ e x c lu sio n (a c o m m o n c lau se in l i abil i ty -i nsurance co ntr act s, tho ug h rar el yl i t i gated) can b e i l l ust rat ed m ost c le a rl yw ith re f

e re n c e to lia b ility in s u ra n c e f o r c o p yri g h t in f

ri n g e m e n t. Suppose a fe w m onths befor e i ns ur ance began on O ct ober7, 1997, the i ns ur ed publ i s hed an i nfr i ngi ng book thati tcont i nued s el l i ng aft erO ct ober 6. T he ‘ pr i orpubl i cat i on’ excl us i on w oul d barcover age be caus e the w r ongful behavi orhad begun pr i ort o the ef fec t i ve dat e of the i ns ur ance pol i cy . T he purpos e of i ns ur ance i s t o s pr ead r i s k – s uch as the r i s k thatan advert i s i ng campai gn m i ghtbe dee m ed t or t i ous – and i f the r i s k has al r eady -10- ‘ fi r s tpubl i s hed’ befor e the pol i cycover age be gan, then cove r age f orthe ‘ advert i s i ng i nj ury ’ i s excl uded. ” Appl i ed Bol t i ng Tech. P r oduct s v. U ni t ed Stat es F i d. & G uar . C o. , 9 4 2 F . S u p p . 1 0 2 9 , 1 0 3 6 (E .D . P a . 1 9 9 6 ). H er e, the PM A I C pol i cyper i od began on A pr i l 24, 2000. T he ce ntr al fac tual al l egat i ons of the under l y i ng act i on ar e that , begi nni ng i n A ugus t1999 and cont i nui ng unt i l the t i m e of the fi l i ng of the compl ai nt , G & B had bee n cont act i ng cus t om er s and cl i ent s of Pohl and, in tera lia , m isr ep rese n ti n g that p ast an d fu ture p u rch ase o f P o h l’ s sw itch sta n d s c o n stitu ted p a ten t in f rin g e m e n t f

o r w h ich th o se c u sto m e rs a n d c lien ts w oul d be l i abl e. T her e i s no i ndi cat i on i n the compl ai ntthatG & B ’ s al l eged m i s r epr es ent at i ons change d i n s ubs t ance betw een w hen theyw er e fi r s tm ade a nd the f ili n g o f th e c o m p lain t. G & B ’s c o n d u c t, th e re f o re , fa lls sq u a re lyw ith in th e p lain la n g u a g e a n d p u rp o s e o f th e e x c lu s io n . See M

addox , 179 F. Supp. 2d at530 ( “[L] ogi cal l y [, ] the poi ntof the exc l us i on i s t o pr eventa[] [companythat ] has caus ed an injuryfro m b u y ing insu ran ce so that [it ] ca n co n ti n u e [ it s] i n juri o u s b eh av ior. ”). 5m a t e r i a l i z e d , w h a ti s th e r e t o i n s u r e ? T h e r i s k h a s b e c o m e a c e r t a i n ty.

Taco B el lC or

p. v. C ont ’ lC as . C o. , 3 8 8 F .3 d 1 0 6 9 , 1 0 7 2 -7 3 (7 th C ir . 2 0 0 4 ) ( P o s n e r, J .) (c ita tio n o m itte d ). -11- T I C cont ends ot herw i s e, ar gui ng thatthe ext entof the i nj ury– and the audi ence f o r G & B ’s m isre p re se n tatio n s – g re w a f ter A u g u st 1 9 9 9 , an d th a t th e e x c lu sio n is ther efor e i nappl i cabl e. T hatar gum enti s unper s uas i ve, beca us e underthe “pr i or publ i cat i on” exc l us i on, “[i ] ti s i r r el evantthatl at erpubl i cat i ons , m ade a ft erthe pol i cy beca m e ef

fec t i ve, al s o caus ed ‘ advert i s i ng i nj ury ’ ori ncr eas ed the damages . ” Appl i ed B ol t i ng , 942 F. Supp. at1036. U nl es s l at erpubl i cat i ons cont ai ned “ne w m att er ” – i e. subst anti velydiffer ent cont ent – that the u nd erl i ng com plai nt “al l ege[ d] [w ere] fres h w ro n g s ,” th e “ p ri o r p u b lic a tio n ” e x c lu s io n a p p lie s . T a c o B e ll , 3 8 8 F .3 d a t 1 0 7 4 . T he D i s tr i ctC our t ’ s concl us i on t o the contr aryr el i es on M a dd o x , w hi ch hel d that th e “ p rio r p u b lica tio n ” e x c lu sio n “ is a m b ig u o u s b e c a u se it i s re a so n a b lysu sc e p tib le to m or e than one i nt erpr et at i on. ” 179 F. Supp. 2d at530. A s the Supr eme C our tof P en n sy lvan ia ha s stated, th e term s in a n insu ran ce p o li cy“a re a m b igu o u s if theyare s ubj ectt o m or e than one r eas onabl e i nt erpr et at i on w hen appl i ed to a par t i culars et of fa c ts . ” Mad ison C on str. , 7 3 5 A . 2 d at 10 6 (em p h asis ad d ed ). T h u s, term s tha t are s tr a ig h tf o rw a rd in o n e c o n te x t m a yb e a m b ig u o u s in th e n e x t. T her e i s l i t t l e doubtthatthe exc l us i on w as ambi guous w hen cons i der ed i n l i ghtof the fa ct s i n Maddox . T here, the insur ed h ad p erform ed in a ban d n am ed “T he M arcel s”-12-

sin c e 1 9 6 1 , an d h a d p u rc h a se d C G L in su ra n c e y e a rlyb e g in n in g in 1 9 9 2 . T h e p lain tiff in the under l y i ng act i on had obt ai ned a tr ademar k forthe M ar cel s m ark i n J une 1996, and s ubs equent l ybr oughts ui tagai ns tthe i ns ur ed al l egi ng tr ademar k i nfr i ngement . T he i ns ur erdeni ed cove r age, s t at i ng thatthe “l aw s ui tfel l underthe ‘ [pr i or ] publ i cat i on’ pol i cyexcl us i on” bec aus e the fi r s tpubl i cat i on had occ urr ed pr i ort o the pol i cyper i od b e g in n in g in 1 9 9 2 ; th e in s u re d b ro u g h t a d e c la ra to ry ju d g m e n t a c tio n s e e k in g c o v e ra g e . Maddox , 179 F. Supp. 2d at529. T he M addox courtconcl uded thatthe “pr i orpubl i cat i on” excl us i on w as ambi guous underthos e ci r cumst ance s , “as a r eas onabl e per s on i n the p o sit ion o f th e ins u red w o u ld u n d erstan d the e x ce p ti o n to m ea n that an ad v erti sing injury i s onl yexcl uded w hen ther e w as a w r ongful publ i cat i on pr i ort o the pol i cyper i od . . . . ” I d. at530. T he under l y i ng compl ai nt , of cour s e, di d notal l ege a pr i orus e of the tra d e m a rk th a t p re -d a ted th e in su re r’s p o licyp e rio d – n o r c o u ld it, a s th e p o licyb e g a n in 1 9 9 2 , a n d th e tr a d e m a rk w a s n o t r e g is te re d u n til 1 9 9 6 . H ere , h o w ev er, th e u n d erly ing co m p lai n t al lege d that G & B m isr ep rese n ted P o h l’ s pr oduct s begi nni ng i n 1999. T he compl ai ntdoes nots ugges tthatG & B ’ s publ i cat i ons w er e, atone poi nt , perm i s s i bl e, and l at erbeca m e i nj ur i ous . R ather , i tal l eges that , dat i ng back t o A ugus t1999, the publ i cat i ons w er e c o n sis ten tly i nj ur i ous . G i ven thos e fa ct s , t he s ame excl us i on thatw as ambi guous i n M addox is un am b igu o u s h ere : PM A IC ’s “i ns ur ance does notappl yt o . . . ‘ [p] er s onal and adve r t i s i ng i nj ury ’ . . . [a] r i s i ng outof or al orw r i t t en publ i cat i on of m at er i al w hos e fi r s tpubl i cat i on t ook pl ace befor e [A pr i l 24,Be c a u s e we c o n c l u d e th a tP M AI C’ s p r i o rp u b l i c a t i o n e x c l u s i o n b a rr e d c o v e r a g e , we 6 n e e d n o ta d d r e s s th e a p p l i c a b i l i ty o f th e “ i n t e n tt o i n

j u r e ” a n d “ k n o w l e d g e o f f a l s i ty” e x c lu s io n s . -13- 2000] . ” ( A pp. at146) . A ccor di ngl y , the “e xcl us i on i n the pol i cypr event s [PM A I C ] fr om h a v in g to d e f

e n d o r i n d e m n if

y ” G & B a g a in s t th e u n d e rl y in g a c tio n . See M ut ualB en. I ns . C o. v. H

aver , 7 2 5 A . 2 d 7 4 3 , 7 4 6 (P a. 19 9 9 ). 6 I I I . C oncl usi on W e w ill re v e rse th e ju d g m e n t o f th e D istric t C o u rt a n d re m a n d w ith d ire c tio n s to e n te r s u m m a ry ju d g m e n t in f a v o r o f P M A IC .