Saturday, April 15, 2017
A recent case out of the Sixth Circuit, Vitamin Health, Inc. v. Hartford Casualty Insurance Co., No. 16-1724, settled a dispute between Vitamin Health and its insurance company over Vitamin Health's expenses defending against a false advertising suit. Bausch & Lomb alleged that Vitamin Health was making false statements about its own products in its advertisements. Vitmain Health sought coverage from Hartford as "personal and advertising injury," but Hartford denied defense.
The court agreed with Hartford. The "personal and advertising injury" covered under Hartford's policy was defined in the policy as disparagement of other people's goods or services. At issue in the false advertising case was Vitamin Health's statements about its own products, which were not disparaging. There was no "disparagement."
Vitamin Health's theory was that its statement about its products disparaged its competitors' products by implication. The Sixth Circuit didn't buy that theory, though. Vitamin Health's statements did not make claims about the superiority of its product compared to its competitors, so even if disparagement-by-implication were a valid doctrine. The case was simply about false advertising, not disparagement, and hence not covered by Hartford's insurance policy.