Opinion ID: 615422
Heading Depth: 2
Heading Rank: 2

Heading: The Duty to Defend Under Colorado Law

Text: In determining whether there is a duty to defend, Colorado courts adhere to a four corners rule or complaint rule, under which the courts compare the allegations of the underlying complaint with the terms of the applicable policy. In the duty to defend context, the `complaint rule' operates to cast a broad net, such that when the underlying complaint alleges any facts or claims that might fall within the ambit of the policy, the insurer must tender a defense. Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74 P.3d 294, 301 (Colo.2003). Insurers have a heavy burden to overcome in avoiding the duty to defend, such that the insured need only show that the underlying claim may fall within policy coverage; the insurer must prove it cannot. Id. (internal quotation marks omitted). This liberal approach recognizes the reality that notice pleading does not contemplate detail and specificity, id., and a complaint may initially lack detail necessary to conclusively establish the duty, Ganim v. Columbia Cas. Co., 574 F.3d 305, 307 (6th Cir.2009) (internal quotation marks omitted). The patents-in-suit, which combined occupy hundreds of pages, were referenced but not reproduced in RAKTL's amended complaint. See Aplt.App. at 163-67 (complaint); id. at 2177-2744 (patents-in-suit). Both the parties and the district court, however, discussed the substance of at least some of the claims that RAKTL potentially alleges were violated. Dish, 734 F.Supp.2d at 1176 (Dish asserts claims in some of the patents are relevant.... For example, Claim 219 of patent-in-suit # 5828734 states that the patent claims `[a] telephone interface system ... wherein said selective operating format involves advertising a product for sale.'); Ins. Resp. Br. at 60; Dish Opening Br. at 6-9. Although Insurers suggest that such material is extrinsic evidence inappropriate for consideration under the complaint rule, Ins. Resp. Br. at 61, the complaint explicitly alleges infringement of one or more claims of each of the patents identified, Aplt.App. at 167. The content of these patent claims is not disputed, and is not itself the subject of the underlying suit. See Pompa v. Am. Family Mut. Ins. Co., 520 F.3d 1139, 1147-48 (10th Cir.2008) (predicting that Colorado courts would recognize an exception to the four corners rule for an indisputable fact that is not an element of either the cause of action or a defense in the underlying litigation). Accordingly, a Colorado court might well consider the substance of these claims in determining whether a duty to defend exists. We need not decide the issue, however, because Insurers concede that the RAKTL technology has potential advertising uses. See Ins. Resp. Br. at 39 (While the patented technology could theoretically be used for advertising purposes, this changes nothing.). The real substance of the parties' dispute focuses not on specific patent claims, but on whether, under Colorado law, RAKTL's allegation that Dish infringed its patents by allow[ing its] customers to perform pay-per-view ordering and customer service functions can be read to allege advertising injury.