According to a Pennsylvania federal district court, the “prior publication” exclusion in advertising injury liability insurance applies where the advertising injury arises from a “new” advertisement during the policy period if that advertisement contains the same injurious content that was used in a previously published advertisement for other products. In The Hanover Insurance Co. v. Urban Outfitters, no. 2:12-cv-03961-TON, 2013 U.S. Dist. LEXIS 116889 (E.D. Pa. Aug. 19, 2013), the Hanover Insurance Company (Hanover) sought a declaratory judgment that it did not have a duty to defend or indemnify the insured, Urban Outfitters, in an underlying advertising injury suit. The United States District Court for the Eastern District of Pennsylvania, applying Pennsylvania law, granted judgment on the pleadings in favor of the plaintiff, Hanover, based on a “prior publication” exclusion in relevant policies.
In the underlying action, the Navajo Nation sued Urban Outfitters for committing alleged “advertising injuries” by marketing, both in stores and online, products that used the names “Navajo” or “Navaho” and that used “Indian identifiers, styles, designs, tribal patterns or motifs” in order to “falsely represent” that the “products advertised were of genuine Indian or Native American origin.” Id. at *2-3. The suit alleged that Urban Outfitters’ use of the Navajo name and Indian identifiers commenced at least by March 16, 2009. Id. at *4-*6.
Hanover issued commercial general liability (CGL) and umbrella liability policies to Urban Outfitters for two policy periods, from July 7, 2010 to July 7, 2011 and from July 7, 2011 to July 7, 2012.. Id. at *6-7. The policies all contained “personal and advertising injury” provisions that,inter alia, provided coverage for liability arising out of “[t]he use of another’s advertising idea in your ‘advertisement’” and “[i]nfringing upon another’s copyright, trade dress or slogan in your ‘advertisement.’” Id. However, the policies also contained “prior publication” or “first publication” exclusions. Id. at *8. These exclusions eliminated coverage for “‘[p]ersonal and advertising injury’ arising out of oral or written publication of material whose first publication took place before the beginning of the policy period.” Id. at *8-9.
After initially providing a defense, subject to a reservation of rights, under the policy’s “personal and advertising injury” coverage, Hanover brought a declaratory judgment action. Id. at *9. Hanover claimed that “[b]ecause the offending publications . . . allegedly began by March 2009,” prior to the inception date of both of the policies, “Hanover has no potential duty to indemnify and thus no duty to defend [Urban Outfitters] in the underlying suit.” Id.
The Court agreed with Hannover and found that, “taking the underlying amended complaint as true . . . it is clear that the advertising injuries are alleged to have begun prior to the policy inception date and thus are excluded from coverage.” Id. at *16.
The Court then addressed a more complicated issue, whether Urban Outfitters could receive coverage for injury caused by the advertising of certain newer products, bearing the Navajo name or “Indian identifies,” where the advertisements for those products took place only after the inception of the policies. Id. at *16-17. The Court found this distinction “immaterial.” Id. at *16. This was so because, under Third Circuit precedent, “the ‘prior publication’ exclusion applies” to publications that continue during the policy period “[u]nless later publications contained ‘new matter’--i.e. substantively different content--that the [underlying] complaint ‘allege[d] [were] fresh wrongs.’” Id. at *17 (quoting Transp. Ins. Co. v. Pa. Mfr.’s Ass’n Ins. Co., 346 F. App’x 862, 867 (3d Cir. 2009)). In this case, the Court concluded that “the alleged advertising injury is identical irrespective of the product being advertised” because “they infringe upon the same trademarked word and thus cause advertising injuries to the Navajo Nation in the same way.” Id. at *17.
This is a good example of a court applying the plain language of the “prior publication” exclusion to bar coverage for claims based on publication of advertising content during the policy period that contains the same, or “substantially” the same, injurious content that was included in the insured’s prior publication of a different advertisement.