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Foundation for Blood Research v. Marine6/3/1999
Reporter of Decisions
Argued: May 5, 1999
The United States District Court for the District of Maine (Carter, J.), acting pursuant to 4 M.R.S.A. ยง 57 (1989) and M.R. Civ. P. 76B, has certified the following question to this Court:
"Does a duty to defend exist under the legal "comparison test" in the context of the "advertising injury" or "personal injury" provisions of the General Liability Policy issued by St. Paul for an underlying third-party complaint which asserts claims of inducing patent infringement when the complaint is devoid of any concrete factual allegations describing the circumstances of the alleged injury?"
St. Paul issued a commercial general liability policy to the Foundation for Blood Research (FBR), a Maine corporation, which policy was effective from October 5, 1996 to October 5, 1997. In December 1996, the Biomedical Patent Management Corporation (BPMC) filed a complaint against FBR in the United States District Court for the Northern District of California. The complaint asserted, among other claims, inducement of patent infringement.
FBR furnished the complaint to St. Paul in a timely fashion and demanded that St. Paul provide a defense. St. Paul responded that it had no duty to defend or indemnify FBR and refused the demand. FBR eventually settled the lawsuit with BPMC and filed the action against St. Paul for breach of contract in the United States District Court for the District of Maine. The parties agree that Maine law governs this case.
It is black letter law in this State that an insurer's duty to defend is determined by comparing the allegations in the underlying complaint with the provisions of the insurance policy. See Gibson v. Farm Family Mut. Ins. Co., 673 A.2d 1350, 1352 (Me. 1996). This is the "comparison test." If the underlying complaint discloses a potential or a possibility for liability within the coverage of the policy, the insurer has a duty to defend. See id; Travelers Indem. Co. v. Dingwell, 414 A.2d 220, 227 (Me. 1980).
A crucial step in a duty to defend case is the examination of the underlying complaint. The complaint filed against FBR states:
7.On 25 February 1992, United States Patent 4,874,693 ("the '693 Patent"), entitled "Method for assessing placental dysfunction," was duly and legally issued to Mark Bogart, Ph.D. By assignment, Plaintiff now owns and holds all rights to enforce the '693 patent, and is solely entitled to recover for all past, present and future acts of infringement. A true and correct copy of the '693 patent is attached hereto as Exhibit 1.
8.Defendant performs diagnostic services which infringe and are continuing to infringe the '693 patent.
9.On information and belief, Plaintiff alleges that prior to Defendant's acts of infringement, it was aware of the '693 patent and its application to the services performed by Defendant. On information and belief, therefore, Defendant's infringement is willful, making this an exceptional case entitling Plaintiff to treble damages and attorneys fees.
10.Defendant's infringement of Plaintiff's exclusive rights under the '693 patent is damaging and will continue to damage Plaintiff's business, causing irreparable harm for which there is no adequate remedy at law. Defendant's infringement will continue unless enjoined by this Court.
11.Plaintiff has been injured by Defendant's infringing acts in an amount not yet determinable. Plaintiff seeks a reasonable royalty and other forms of monetary damages.
CLAIM THREE - INDUCING LITERAL PATENT INFRINGEMENT
16.For its third claim, Plaintiff incorporates herein p
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