Professional-liability insurance policy doesn’t cover patent infringement, says Penn. appeals court

“For two reasons, we reverse and direct that judgment be entered in [insurance company] Caliber’s favor.

• “First, because we find that a patent infringement action brought by another vendor is not a ‘professional liability’ action under the terms of the policy.
• “Second, this is an action for inducing a third party to violate a patent, not a direct patent infringement action. Because that patent action can only be brought if the violation is knowing, and there is an exclusion in the policy for ‘knowing’ actions, there is no coverage for this action.”

Transcore LP v. Caliber One Indemn. Co., 2009 Pa. Super. 81, No. 3352 EDA 2007, slip op. at 1-2 (Pa. App. Div. Apr. 27, 2009) (emphasis, extra paragraphing, and bullets added).

The court later elaborated that “a professional liability insurance policy is not designed for claims brought by third parties, such as contract or patent infringement claims. Professional liability typically encompasses those claims made by entities that have a professional relationship with the insured.” Id. at 4 (emphasis added).