A Pennsylvania Superior Court has clarified the amount insurance companies are required to pay in legal fees for a client defending a patent infringement suit.

The court ruled in Transcore vs. Caliber One Indemnity Co. that the insurance company is only responsible for $800,000 in coverage if the action was brought by a vendor, not a customer, and falls outside the purview of the company’s professional liability coverage.

The case overturned a Philadelphia judge’s ruling requiring Caliber One to pay all legal fees for Transcore’s subsidiary, Amtech, which supplies and installs transponders and readers used to automatically record and bill highway tolls in the EZ Pass type systems in use in many states.

Judge Robert B. Klein said Caliber One’s policy on Amtech did not warrant full payment because the patent infringement action was brought by another vendor who had no affiliation with the covered party, Amtech, and because the action did not come from a customer. Therefore, the claim did not meet the definition of a “professional liability” action as written in the policy.

The original case stemmed from a suit filed by X-Cyte, which alleged that Amtech infringed on its patent on the technology used to record and bill highway tolls. Caliber refused to defend and indemnify Amtech in the suit. Amtech then filed suit against Caliber, which it won, leading it to seek reimbursement for $822,982 in legal fees it said the insurer should have covered, according to the report.

The trial court ruled that the installation of the technology constituted inducing infringement and ruled that because the installation was a professional service fell under the “professional liability” coverage. Klein disagreed, saying professional liability policies aren’t meant for third-party use, but rather for professional relationships. He did not believe Amtech had any relationship with X-Cyte.