Appeals court says Travelers had duty to defend infringement suit

The 8th U.S. Circuit Court of Appeals said Monday that Travelers Cos. Inc. erred when it refused to defend a computer networking products reseller against a suit lodged by Cisco Systems Inc. and a related unit.

The three-judge panel said in Dexon Computer Inc. v. Travelers Property & Casualty Company of America that allegations in Cisco’s July 2020 suit did not relate back to actions that predated a retroactive period in Dexon’s communications and media liability policy.

The appeals court ruled that a federal judge in Minneapolis correctly found that Dexon only needed to show that one of Cisco’s trademark infringement claims fell within its policy coverage and that Travelers did not successfully demonstrate that the company engaged in a series of related acts of trademark infringement.      

“Travelers was aware that the alleged acts of infringement occurred at different times, involved different customers who were sold different products sourced from different suppliers, and that Dexon had received no prior claims involving products sourced from any of these suppliers,” the court said.

Dexon’s claims-made policy from Travelers that was in effect from May 2020 until May 2021 had a retroactive date going back to May 18, 2019. Cisco said in its July 2021 lawsuit that Dexon engaged in 35 acts that infringed on its trademarks between 2015 and 2020. Dexon tendered its defense to Travelers, which refused on the ground that the allegations related back to before the retroactive date, court records show.

The Minneapolis-based computer resale company then sued Travelers, seeking a court determination on the insurer’s duty to defend. Travelers moved to dismiss the suit, arguing that the claims in Cisco’s suit were related to allegations that predated the policy.

Representatives for the parties did not respond to requests for comment.