Eighth Circuit Finds No Duty to Defend Trademark Infringement Action
The United States Court of Appeals for the Eighth Circuit recently held that an insurer had no duty to defend under an advertising liability policy that covered title or slogan infringement but excluded coverage for trademark infringement.
In Interstate Bakeries Corp. v. OneBeacon Insurance Co., No. 11-1802 (July 24, 2012), Flowers Bakeries Brands, Inc. (“Flowers”) sued Interstate Bakeries Corp. (“IBC”) for trademark infringement and unfair competition, asserting that IBC’s marks of “Nature’s Pride” and “Nature’s Choice” were confusingly similar to Flowers’ mark, “Nature’s Own.”
IBC’s advertising liability policy with OneBeacon Insurance Co. (“OneBeacon”) provided coverage for losses resulting from infringement of title or slogan, but excluded coverage for trademark infringement claims. After OneBeacon refused to defend IBC in the underlying lawsuit, IBC filed a motion for partial summary judgment seeking a declaration that OneBeacon had a duty to defend in the underlying litigation because “Nature’s Own” was a “slogan” and “title” under the policy. The district court rejected IBC’s contentions and denied the motion. IBC appealed.
On appeal, the Eighth Circuit affirmed the lower court and held there was no duty to defend because the complaint in the underlying litigation failed to allege facts that would indicate the phrase “Nature’s Own” was used as a “title” or “slogan.” In reaching this decision, the court first found the mere use of “Nature’s Own” on the wrapper of the product did not indicate the phrase was a title. Additionally, the court found the underlying complaint failed to allege facts indicating “Nature’s Own” qualified as a slogan under the dictionary definitions of the term.
In conclusion, the Eighth Circuit held, the insurer had no duty to defend under an advertising liability policy that covered title or slogan infringement, but not trademark infringement, where the allegations in the complaint showed only that the underlying plaintiff marketed its products using the mark, not that it used the mark as a title or slogan.