Low-Ball Independent Counsel Defense Rate Evidences Bad Faith

Plaintiff in an IP matter against a larger competitor, which sued under a counterclaim, thus triggering coverage. Given that proof that the counterclaim was not viable involved the same legal work necessary to win its suit as plaintiff for violation of IP rights, the competitor, by pursuing the counterclaim, funded the litigation against it. Indeed, when a dispute arose over the rate of reimbursement, which was resolved in arbitration under California law, the insurer's unwillingness to pay the full rate was found to be improper.

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