The insurer, Halifax, appealed an order to pay the insured's legal costs, and the insured, Innopex, cross-appealed a summary judgment declaring Halifax had no duty to defend it in a US trademark infringement lawsuit brought by Gucci.
The Court of Appeal allowed the cross-appeal, finding that the motion judge erred by relying on extrinsic evidence to determine the 'true facts' rather than relying on the pleadings.
The Court held that the Gucci complaint contained allegations that could potentially fall within the 'advertising liability' coverage and the 'title' exception to the trademark exclusion in the policy.
Halifax was ordered to defend the action, and the summary judgment dismissing Innopex's counterclaim for punitive damages was set aside.
