Mez Industries, Inc. v. Pacific National Insurance Company

90 Cal. Rptr. 2d 721 (1999)

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Mez Industries, Inc. v. Pacific National Insurance Company

California Court of Appeal
90 Cal. Rptr. 2d 721 (1999)

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Facts

Mez Industries, Inc. (Mez) (plaintiff) manufactured and sold components used in heating and air-conditioning systems. A competitor called Ductmate Industries sued Mez, asserting that Mez’s advertising activities had induced Mez’s customers to infringe four of Ductmate’s patents by encouraging Mez’s customers to buy Mez’s component parts and put them together in a way that infringed Ductmate’s patents. Mez distributed pamphlets and other promotional materials illustrating how Mez’s components could be used as a substitute for Ductmate’s patented products. Mez filed a claim with its insurance company, Pacific National Insurance Company (Pacific) (defendant), asking Pacific to defend it against Ductmate’s action. Mez’s policy with Pacific included an advertising-injury provision that promised to indemnify and defend Mez for misappropriation of another company’s advertising ideas or style of doing business and for infringement of copyright, title, or slogan. Pacific denied Mez’s claim, arguing that induced infringement of a patent was not covered by the plain language of the policy. Mez sued Pacific, seeking a declaratory judgment that Pacific should cover Mez’s claim under the policy. Pacific filed a demurrer, arguing that it had no duty to defend. The trial court ruled for Pacific and dismissed the suit. Mez appealed.

Rule of Law

Issue

Holding and Reasoning (Croskey, J.)

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