The United States Court of Appeals for the Third Circuit recently affirmed a district court’s ruling that applied Pennsylvania law in finding there was no duty to defend trade secret and unfair competition claims under a commercial general liability (“CGL”) policy. In Tela Bio, Inc. v. Federal Insurance Company, No. 18-1717, 2019 WL 211507 (3rd Cir. January 16, 2019), the insured, a hernia mesh manufacturer, sought insurance coverage for a suit accusing it of misappropriating confidential trade secrets and “poaching” employees from a competitor. Before the insurer had even provided its coverage position, the insured filed a declaratory judgment action against it in federal district court in New Jersey. Thereafter, the coverage action was transferred to the U.S. District Court for the Eastern District of Pennsylvania. That court subsequently granted the insurer’s motion to dismiss the complaint for failure to state a claim on the basis that the insurer had no duty to defend. On appeal, the issues were essentially three-fold: (1) whether the substantive laws of New Jersey or Pennsylvania applied to this dispute; (2) whether there was an obligation on the part of the insurer to defend these claims under the CGL policy’s personal and advertising injury coverage for libel and slander; and (3) even if coverage were triggered, whether the policy’s “IP rights” exclusion would apply. As to the threshold choice of law issue, there was a “vigorous dispute” between the parties over whether the legal standards applicable to the duty to defend in Pennsylvania or New...