The appellants, a software developer and its CEO, appealed the dismissal of their application for a declaration that their insurer had a duty to defend them in an underlying action.
The underlying action alleged copyright infringement and misuse of confidential information in the development of competing software.
The appellants argued these claims fell under the 'advertising injury' coverage of their commercial general liability policy.
The Court of Appeal dismissed the appeal, finding that the policy required a direct causal link between the advertising activity and the alleged offence.
Because the underlying statement of claim did not allege that the copyright infringement or misappropriation occurred in the course of advertising, the duty to defend was not triggered.
