In H5G, LLC v. Selective Insurance Company, 2017 U.S. Dist. LEXIS 23937 (S.D. Oh. Feb. 21, 2017), an Ohio federal district court granted an insurer’s motion for summary judgment with respect to its obligations to defend or indemnify its insured against an underlying trademark infringement suit.
In the underlying suit, High 5 Sportswear (High Five) alleged H5G infringed its trademarks and committed cybersquatting. H5G’s CGL policy issued by Selective Insurance Company afforded coverage for the infringement of another’s copyright, trade dress, or slogan, but excluded claims for the infringement of a patent, trademark, trade secret or other intellectual property rights. When Selective refused H5G’s demand for defense in the underlying suit, H5G filed a declaratory judgment action seeking a determination that Selective had a duty to defend and indemnify H5G. In its motion for summary judgment, Selective argued that the underlying lawsuit did not trigger its duty to defend because High Five’s claims were based on trademark infringement and cybersquatting and, thus, fell outside the policy’s grant of coverage. In response, H5G maintained that the underlying complaint alleged trade dress or slogan infringement, thereby bringing the claims within the ambit of the policy definition of “personal and advertising injury.” Specifically, H5G argued that the policy’s grant of coverage for “infringing upon another’s copyright trade dress or slogan” should be interpreted as covering trademark infringement generally.
However, the district court, applying Wisconsin law, squarely rejected H5G’s argument. The district court first reasoned that a slogan is distinct from a trademark. Further, since the trademarks did not advertise phrases to promote High Five’s products, but rather, were variations of High Five’s company name brand that did not convey a separate meaning apart from the product’s identity or source, they could not be slogans. Also, H5G asserted that the trademarks could be considered trade dress. Again, the district court refused H5G’s argument and concluded that the High Five trademarks could be not trade dress, as the trademarks were words, names, and symbols intended by High Five to identify and distinguish its goods – the trademarks neither constituted “the ‘total image’ nor the design or packaging of High Five’s products.” Thus, Selective’s duty to defend was never triggered, as the plain language of the insurance policy did not provide coverage for either trademark infringement or cybersquatting. Notably, the district court also held that even if the insuring agreement was satisfied, the policy’s Prior Publication Exclusion and Intellectual Property Rights Exclusion would bar coverage.
This case reminds insurance practitioners that courts will not rewrite the policy language and expand the bargained-for coverage.