A Pennsylvania federal judge has ruled that four units of Nationwide Mutual Insurance Company are not obligated to defend a marker manufacturer in a lawsuit filed by a competitor. The competitor alleges that the manufacturer colluded with former employees to misappropriate trade secrets and other proprietary information.
The case, titled Harleysville Insurance Company et al v. SKM Industries, Inc. et al, was filed in the U.S. District Court for the Middle District of Pennsylvania under case number 3:23-cv-00967. The lawsuit centers on claims that SKM Industries, Inc. engaged in unfair competition by utilizing confidential information obtained through former employees of the competitor.
Nationwide’s subsidiaries argued that their insurance policies do not cover the allegations presented in the underlying lawsuit. They contended that the claims fall outside the scope of coverage, particularly concerning “personal and advertising injury” provisions. The court agreed, determining that the insurer has no duty to defend SKM Industries in this matter.
This decision underscores the importance for businesses to thoroughly understand the specifics of their insurance coverage, especially regarding claims related to trade secrets and unfair competition. Companies should ensure that their policies explicitly address such scenarios to avoid potential gaps in coverage.
For further details on this case, refer to the article on Law360: Insurers Say No Coverage For Marker Co. In Trade Secret Suit.