Implicit Disparagement Implicated by Unfair Competition

Burgett, Inc. v. Am. Zurich Ins. Co., 830 F. Supp. 2d 953 (E.D. Cal. 2011)

Coverage for explicit disparagement was implicated by the false advertising claims in light of prior authority including E.piphany, Inc. v. St. Paul Fire & Marine Ins. Co., 590 F. Supp. 2d 1244, 1252-1253, N.D. Cal., 2008 [litigated by G&A]. The court found that because Burgett represented to Samick [claimant] it was the only holder of the SOHMER trademark, potential coverage for implied disparagement arose. "Persis alleges that Plaintiff made false representations that harmed Persis ‘by implying to the marketplace that Burgett had the superior right to use the SOHMER trademark,' and thus, by implication, represented that Persis did not have the rights to the SOHMER trademark." Id. at 962. The trademark exclusion was of no moment because "while the underlying complaint does not explicitly state a claim of disparagement, the Court finds that the complaint could be amended to state a claim for the same. Thus, the trademark exclusion does not apply to bar coverage." Id. at 964.)