Tri-State Insurance Company wrote a commercial general liability policy to B & L Products, Inc. The policy was issued in 1994 and included coverage for advertising injury which the insured might commit while advertising any B & L goods, products or services. The next year, B & L was sued by Geographics, Inc., which accused B & L of infringing on the use of the name used by Geographics for a line of paper products. Both companies marketed their products through large retailers and Geographics filed suit after discovering that a product created by B & L called "Koolnotes" was similar in name and appearance to their "GeoNotes."

Tri-State insurance denied B & L's defense under the CGL policy on the basis that the lawsuit did not involve a claim for damages that resulted from advertising. B & L filed for a declaratory judgment, requesting defense coverage from Tri-State, as well as payment for any resultant settlement or judgment, as well as defense and court costs connected with the copyright infringement action. After Tri-State filed a motion requesting affirmation of their decision to deny coverage, the lower court ruled in favor of B & L Products.

Tri-State appealed the decision arguing, in essence, that the injuries claimed by Geographics were not caused by B & L's advertising activities. Since the claim did not stem from advertising. Tri-State's assertion was that "advertising" involves promoting products or services to the public at large., so their CGL policy was not applicable to the loss. The appeals court reviewed the several factors and reached the same conclusion of the lower court. The court first looked at different definitions of "advertising" and that some, but not all, included the element of promotions aimed at the general public. In light of this finding, the court believed that the term (which was not specifically defined in the policy) could be considered ambiguous.

The court noted the fact that the CGL policy's definition of "advertising injury" included copyright infringement. Geographics' claim against B & L included a request that the latter be barred from marketing or selling a product that wrongfully resembled their own, copyrighted product. In other words, their underlying complaint sought a stop to B & L activities which they claimed infringed upon their product. In light of the confusion surrounding the term "advertising" and the complaint being based upon copyright infringement, an activity specifically mentioned as covered by Tri-State's CGL policy, the court affirmed the lower courts decision, requiring Tri-State to provide legal defense and, if applicable, indemnification.

(Tri-State Insurance Company, Appellant v. B & L Products, Incorporated dba Bycin Industries Incorporated, Appellee. ArkCtApp. No. 97-389. March 11, 1998. CCH 1998 Personal and Commercial Liability Cases, Paragraph 7021.)