Trademark

Trademark - Insurance Coverage Advice and Litigation

Trademark infringement, since the 1986 ISO form was in place, has broadly encompassed a variety of trademark, trade dress, trade name and other related torts. Beginning in 2001 the Insurance Services Office added a trademark exclusion to the standard policy. The coverage was thereafter limited to "trade dress infringement in your ‘advertisement.' " However, from 1998-2001 the phrase "use of another's advertising idea" was found sufficiently broad to cover a number of trademark infringement and trade name claims. Many insurers have variant versions of trademark coverage, which focuses on coverage for "trademarked titles or slogans". Particular policy language must be evaluated in this respect. Gauntlett & Associates has litigated a number of cases under the exceptions to the trademark infringement exclusion, such as those for "infringement of slogan" or "trademarked title or slogan".

Representative Cases:

Indian Harbor Ins. Co. v. Hartford Cas. Ins. Co., No. B192829, 2007 WL 2955564, at *9 (Cal. Ct. App. Oct. 11, 2007) ("The facts presented here are similar to those in El-Com Hardware, Inc. v. Fireman's Fund Ins. Co. (2001) 92 Cal.App.4th 205 . . . . The underlying complaint in El-Com did not refer to or describe any of the insured's advertising or promotional literature, nor did it use any variation of the word ‘advertise.' . . . Here, as in El-Com, the Skechers catalog depicting allegedly infringing products put Hartford on notice of claims potentially covered under its policy. Moreover, the Adidas complaint itself specifically alleged injury caused by Skechers's advertising products that purportedly infringed upon Adidas's Three-Stripe Mark.").

Santa's Best Craft, LLC, et al. v. St. Paul Fire & Marine Ins. Co., No. 04 C 1342, 2004 WL 1730332 (N.D. Ill. July 28, 2004) (Slogans "New Technology"; "worry-free lighting") (The court found four distinct slogans, including the two referenced above. These included: "Patent-pending ‘Stay-On' feature keeps bulbs lit" and "String Stays Lit even if a bulb is loose or missing!" The unfair competition claims premised on the improper use of these slogans articulated in various counts, including causes of action for false advertising and false designation of origin, did not fall within the scope of the intellectual property exclusion. In any event, they were within the exception to that exclusion. The "infringement of slogan" claims did not fall within the exception for "trademarked slogans" where the term "slogan" was defined as "a phrase that others use and intend to attract attention in their advertising." The court rejected arguments that the slogans were mere components of the trade dress infringement claim, emphasizing that " ‘[The court] give[s] little weight to the legal label that characterizes the underlying allegations. Instead, [the court] determine[s] whether the alleged conduct arguably falls within at least one of the categories of wrongdoing listed in the policy.' Lexmark Intern., Inc. v. Transportation Ins. Co., 327 Ill.App.3d 128, 135-36 (Ill.App. 1st Dist.2001)."),

Zen Design Group, Ltd. adv. Cincinnati Ins. Co., 329 F.3d 546 (6th Cir. (Mich.) 2003) (Slogan "Wearable Light") (The court found the slogan "The Wearable Light" fell within the policy's coverage for "infringement of slogan." Zen's competitor, ASP, specifically alleged that Zen's use of advertisements and packaging utilizing and bearing ASP's WEARABLE LIGHT trademark in connection with the sale of handheld LED flashlights without ASP's authorization or consent impacted ASP's reputation and its trademark and trade dress rights. Since "The Wearable Light" was a form of LED flashlight within the "SAPPHIRE" line of flashlights, as depicted on the advertisement in issue, a defense was triggered.).

Ultra Coachbuilders, Inc. v. General Security Ins. Co., 229 F. Supp. 2d 284 (S.D.N.Y. 2002) (100% of recoverable defense fees with 10% interest from date of invoice) (applying California law) (The court found that prejudgment interest at 10% per annum was due from date of invoice. In awarding 100% and 10% prejudgment interest on Knobbe, Martens, Olson and Bear's defense fees, it found that their rates, as well as the fees themselves, were reasonable in light of the complexity of the lawsuit and the favorable results obtained therein. See Safeguard Scientifics, Inc. v. Liberty Mut. Ins. Co., 766 F. Supp. 324, 333-34 (E.D. Pa. 1991), aff'd in part, rev'd in part on other grounds, 961 F.2d 209 (3d Cir. 1992). The prosecution of counterclaims alleging unfair competition and interference with competitive advantage was used to argue (albeit unsuccessfully) that the injunction application was not barred by the doctrine of "unclean hands"; thus they were inextricably intertwined with the defense of counterclaims and necessary to the defense of the litigation as a strategic matter. Thus, there was no reason to diminish the full amount of defense fees owed because of the asserted counterclaims.).

Finger Furniture Co., Inc. v. Travelers Indemnity Co. of Conn., No. H-01-2797, 2002 WL 32113755 (S.D. Tex. Aug. 19, 2002) (Slogan/title "True Value") (Bob Finger's Houston furniture store's use of the phrase "True Value" as a promotional statement to attract customers constituted both a title and a slogan, falling within the policy's coverage for "infringement of title or slogan." The court also independently found that claims for trademark infringement associated with that promotional campaign implicated coverage under the "misappropriation of advertising ideas or style of doing business" offense. References in the complaint to marketing meet one causal nexus to advertising necessary so as to implicate potential coverage under the "advertising injury" provision.).

Ultra Coachbuilders, Inc. v. General Security Ins. Co., No. 02 CV 675 (LLS), 2002 WL 31528474 (S.D.N.Y. July 15, 2002) (Slogan "Quality Vehicle Modifier" or "QVM") (Judge Stanton ruled that a defense arose for claims falling within the "infringement of slogan" offense, under an exception to the trademark exclusion, for the slogan "QVM" which stands for "Quality Vehicle Modifier." The term "Quality Vehicle Modifier," abbreviated by the letters "QVM," qualified as a slogan sufficient to trigger a defense duty where it served as a descriptive name of a service program, which the claimant used to promote both the program itself and the use of its other products, Ford vehicles, to limousine converters. Ultra Coachbuilders stretched Ford Navigators into limousines, but did not have permission from Ford to do so. The court noted that, "A slogan is a brief attention-getting phrase used in advertising or promotion or a phrase used repeatedly, as in promotion.").