How to Protect Your Advertising

It is a difficult part of business but completely essential to figure out what exactly the company or product message is. Once you painstakingly figure out your slogan and what exactly you want to convey after you’ve taken all the time to actually produce and come up with what the product is, you want to make sure that the phrase you are using to advertise is something that won’t get you in trouble. 

Companies purchase commercial general liability (“CGL”) insurance policies to protect themselves in the event they are sued for various reasons, including injury caused due to the company’s advertising. Yet, the question remains: Does your CGL policy actually protect you from potential lawsuits due to your advertising in the way you need it or do you need additional insurance coverage?

Advertising injury coverage has become a standard in CGL policies and potentially provides insurance coverage for various types of claims including when the insured’s advertisements infringe upon another’s intellectual property rights. Typical to insurance policies, the coverage for advertising injuries is also subject to a myriad of exclusions, including exclusions for the exact claims you want covered, such as trademark infringement.

Exclusions to coverage for advertising injury includes, among others, when the injury is a result of a breach of contract or where the insured assumed liability, when the injury arises out of a criminal act the insured either committed or directed, or when the injury was caused by or done at the direction of the insured with the knowledge the act would violate another’s rights. In 2001, CGL policies began to include a new exclusion related to coverage for advertising injury related to infringement of copyright, patent, trademark or trade secret. This language was further modified in 2007 and typically excludes injuries:

arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights. Under this exclusion, such other intellectual property rights do not include the use of another’s advertising idea in your “advertisement.” However, this exclusion does not apply to infringement, in your “advertisement,” of copyright, trade dress or slogan.

Based on this language, CGL policies exclude coverage for trademark infringement but provide coverage for infringement of a “slogan.” What exactly is a slogan and how does it differ from a trademark?

The line between trademark and slogan is incredibly thin.  Both are used to promote, market and sell products or services. Both can be registered with the United States Patent and Trademark Office. A trademark, however, can be anything from a partial word, such as COMP® to a long string of words and/or phrases, such as THE BEST MARGARITAS COME FROM MARGARITAVILLE®.

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