Source: http://pa.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180315_0000618.EPA.htm/qx
Timestamp: 2019-04-25 05:48:35+00:00

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FindACase | TELA Bio, Inc. v. Federal Insurance Co.
TELA Bio, Inc. v. Federal Insurance Co.
This insurance coverage case stems from a New Jersey state court lawsuit wherein it was alleged that a company and two of its individual co-founders stole a competitor's employees and trade secrets, in an effort to develop and sell competing products. In the case before me, Plaintiffs-TELA Bio, Inc. (“TELA Bio”) and its individual co-founders, Anthony Koblish and Maarten Persenaire-seek a judicial declaration that Defendant, Federal Insurance Company (“Federal Insurance”), had a duty to defend them in the underlying state suit, under an insurance policy that Federal Insurance issued to TELA Bio.
Pending are Federal Insurance's Motion to Dismiss for Failure to State a Claim, and TELA Bio's Motion for Partial Summary Judgment. For the reasons that follow, Federal Insurance's Motion will be granted. Accordingly, I need not reach TELA Bio's Motion, which will be denied as moot.
Unless otherwise noted, the following facts are derived from TELA Bio's Complaint and the exhibits attached thereto, which include the complaint in the underlying state suit and the insurance policy at issue.
by any person or organization (including any insured) of any intellectual property law or right.
B. Further, this insurance does not apply to the entirety of all allegations in any claim or suit, if such claim or suit includes an allegation of or a reference to an infringement or violation of an intellectual property law or right, even if the insurance would otherwise apply to any part of the allegations in the claim or suit.
In its Motion to Dismiss, Federal Insurance contends that TELA Bio has failed to state a claim for two reasons. First, Federal Insurance maintains that it had no duty to defend the LifeCell Suit because none of the factual allegations in the LifeCell Suit Complaint triggered coverage under the Policy's Libel and Slander Provision. Second, Federal Insurance contends that, even if the allegations in the LifeCell Suit Complaint triggered coverage under the Policy's Libel and Slander Provision, the Policy's IP Rights Exclusion precludes coverage for the entire suit such that Federal Insurance had no duty to defend.
For the reasons that follow, I conclude that Federal Insurance is correct on both points, and will therefore dismiss this action with prejudice for failure to state a claim.
To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The plausibility standard requires more than a “sheer possibility that a defendant has acted unlawfully.” Id. While it “does not impose a probability requirement at the pleading stage, ” plausibility does require “enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary elements of a claim.” Phillips v. Cty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008).
To determine the sufficiency of a complaint under Twombly and Iqbal, a court must take the following three steps: (1) the court must “tak[e] note of the elements a plaintiff must plead to state a claim;” (2) the court should identify the allegations that, “because they are no more than conclusions, are not entitled to the assumption of truth;” and (3) “where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief.” Burtch v. Milberg Factors, Inc., 662 F.3d 212, 221 (3d Cir. 2011) (citations omitted). Courts must construe the allegations in a complaint “in the light most favorable to the plaintiff.” Id. at 220.

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