United States Court of Appeals

For the Eighth Circuit

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No. 23-1328

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Dexon Computer, Inc.

lllllllllllllllllllllPlaintiff - Appellee

v.

Travelers Property Casualty Company of America

lllllllllllllllllllllDefendant - Appellant

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Appeal from United States District Court 

for the District of Minnesota

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 Submitted: October 19, 2023

Filed: May 20, 2024

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Before SMITH, Chief Judge,1 LOKEN and COLLOTON,2 Circuit Judges. 

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LOKEN, Circuit Judge.

1

Judge Smith completed his term as chief judge of the Circuit on March 10,

2024. See 28 U.S.C. § 45(a)(3)(A). 

2

Judge Colloton became chief judge of the Circuit on March 11, 2024. See 28

U.S.C. § 45(a)(1).
Dexon Computer, Inc. (Dexon), is a reseller of computer networking products. 

Dexon sources new and used brand name products from many different suppliers,

including Cisco, Hewlett Packard, Juniper, and Dell; subjects the products to quality

control measures; and resells them to its customers. In July 2020, Cisco Systems, Inc.

and Cisco Technologies, Inc. (together, Cisco), sued Dexon in the Northern District

of California (the Cisco Action). Cisco’s complaint included claims of federal

trademark infringement and counterfeiting in violation of the Lanham Act, 15 U.S.C.

§ 1114. The complaint recited alleged trademark infringements between 2006 and

2010 that were the basis of a previous suit dismissed with prejudice in 2011, and then

alleged some thirty-five acts of infringement between 2015 and 2020. For each act,

the complaint named the recipient of the allegedly counterfeit Cisco product, the

number of allegedly counterfeit products Dexon sold to the recipient on that occasion,

the product code associated with each product, and the date of the transaction.

Dexon tendered defense of the Cisco Action to Travelers Property Casualty

Company of America (Travelers) under the claims made liability policy Dexon

purchased from Travelers for the period May 18, 2020 to May 18, 2021 (the Policy). 

Travelers denied coverage and a duty to defend the Cisco Action. Dexon filed this

action in the District of Minnesota, seeking a declaratory judgment that Travelers has

a duty to defend and indemnify. Travelers moved to dismiss the complaint. The

district court3 denied the motion to dismiss these claims. Travelers timely appeals the

ensuing Order for Judgment, arguing the district court erred in concluding Travelers

had a duty to defend the Cisco Action and in granting a consent judgment in favor of

Dexon. Interpreting the insurance policy de novo, we affirm. 

3The Honorable Patrick J. Schiltz, Chief Judge of the United States District

Court for the District of Minnesota.

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I. Background and Procedural History

The Policy includes a Communications and Media Liability Coverage section

covering losses caused by a “‘communications and media wrongful act’ committed

anywhere in the world.” It defines these wrongful acts to include acts of trademark

infringement, provided the wrongful act “was committed on or after the

Communications and Media Retroactive Date shown in the CyberFirst Declarations

and before the end of the policy period.” The Policy’s Retroactive Date is May 18,

2019. The Policy also includes a “prior acts” or “retroactive date” provision:

Each “communications and media wrongful act” in a series of “related”

“communications and media wrongful acts” will be deemed to have been

committed on the date the first “communications and media wrongful

act” in that series is committed.

The Policy defines “related” to mean “connected, tied or linked by any fact,

circumstance, situation, event, transaction, cause or series of related facts,

circumstances, situations, events, transactions or causes.”

Thirteen of the specific acts of infringement alleged in the Cisco complaint

took place during the Policy period. In denying Dexon’s tender of defense, Travelers

claimed that all the alleged acts of trademark infringement are “related acts” under

the Policy and thus are deemed to have been committed on the date of the first alleged

infringement, well before the Policy’s Retroactive Date. Dexon responded, disputing

the denial of coverage. Dexon provided Travelers additional information about the

suppliers from whom Dexon sourced the allegedly counterfeit products. Dexon noted

that no two acts of alleged infringement involved the same or related suppliers,

Dexon had worked with one supplier for over twenty years without incident, and,

prior to the Cisco Action, Dexon had received no claims involving products sourced

from these suppliers.

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Travelers adhered to its denial of coverage. Dexon sued for a declaratory

judgment of coverage and a duty to defend plus damages for breach of contract and

bad faith. Travelers moved to dismiss, and the parties briefed their conflicting

interpretations of the related acts provision. Travelers provided copies of the Cisco

complaint and the Policy. Dexon provided its Amended Answer in the Cisco Action,

its two letters to Travelers tendering defense of the Cisco Action, and evidence

Cisco’s 2011 lawsuit was dismissed. 

After a lengthy motion hearing, the district court granted Travelers’ motion in

part. The court dismissed the bad faith claim for failure to state a claim, consistent

with Dexon’s concession at oral argument. However, the court denied the motion to

dismiss Dexon’s claims for a declaratory judgment that Travelers has a duty to defend

and indemnify Dexon in connection with the Cisco Action. Initially, the court held

that the documents submitted by the parties concerning the coverage dispute are not

“matters outside the pleadings” and therefore may be considered in ruling on the

motion to dismiss. See Zean v. Fairview Health Servs., 858 F.3d 520, 526 (8th Cir.

2017). Applying Minnesota law, the court held that Travelers must defend the entire

action “[i]f any part of any claim asserted in the Cisco Action is even ‘arguably’

within the scope of coverage.” 

Turning to Travelers’ reliance on the “related acts” provision in the Policy, the

court observed that relatedness “is a nebulous concept,” and both parties agree that

the Policy definition of related “cannot be applied literally” because “every claim that

any litigant has ever made against Dexon is ‘linked’ by the ‘fact’ that the claims were

made against Dexon.” Therefore, the issue “is whether each of the infringing acts

alleged in the underlying Cisco Action is related enough to an infringing act that

occurred prior to the Retroactive Date” -- “such questions of degree are difficult to

answer without a fully developed factual record.” 

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The court noted that, in tendering defense of the Cisco Action, Dexon informed

Travelers “that the allegedly counterfeit products cited by Cisco in its complaint were

(1) different products (2) that had been purchased at different times (3) from different

sources (4) by different Dexon employees and then (5) sold to different customers.” 

Given the information that Dexon provided to Travelers, the court concluded that it

“cannot hold, as a matter of law, that every act of trademark infringement alleged in

the Cisco complaint is necessarily related to an act of trademark infringement that

occurred prior to the Retroactive Date. . . . [I]f even one of the post-Retroactive Date

acts of infringement is even arguably unrelated to any pre-Retroactive Date act of

infringement, Travelers owes Dexon a defense.” Cisco’s allegations of “longstanding

‘counterfeit trafficking schemes’ is largely irrelevant to its legal claims against

Dexon,” and the allegation “finds almost no factual support in the complaint.”

Six months after this ruling, the parties filed a Stipulation for Entry of Final

Judgment and for the Dismissal Without Prejudice of Certain Claims Pursuant to

FRCP 41. The parties stipulated to entry of judgment in favor of Dexon and against

Travelers for costs related to Travelers’ duty to defend. Dexon agreed to dismiss

without prejudice its claims for indemnification, “specifically preserving all future

claims for indemnity against Travelers relative to the claims asserted against Dexon

by Cisco in the Cisco Action.” Travelers “reserve[d] all rights on appeal . . . as to

whether . . . Dexon established that Travelers owes a duty to defend Dexon under the

Policy.” The Stipulation stated that Travelers intended to “take an immediate

appeal.” The parties also filed a Proposed Order in “accordance with, and subject to,

the terms of the [Stipulation].” 

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The next day, the district court entered a signed Order for Judgment, adopting

verbatim the parties’ proposed order. The Clerk of Court entered judgment in favor

of Dexon. This appeal of the court’s duty-to-defend ruling followed.4

II. Discussion 

We review de novo the district court’s denial of a motion to dismiss a diversity

action and its interpretation of state law. Simmons Foods, Inc. v. Indus. Risk

Insurers, 863 F.3d 792, 797 (8th Cir. 2017). The sole issue on appeal is whether

Travelers had a duty to defend Dexon in the Cisco Action. The parties agree that

Minnesota substantive law governs this issue. See Murray v. Greenwich Ins. Co., 533

F.3d 644, 648 (8th Cir. 2008). 

4The parties intended the Order for Judgment to be an appealable final order

to expedite appellate review of what might otherwise be an interlocutory ruling. “We

have repeatedly condemned . . . attempts to manufacture jurisdiction because they

undermine the final judgment rule.” Clos v. Corr. Corp. of Am., 597 F.3d 925, 928

(8th Cir. 2010). The district court entered the proposed Order for Judgment. In this

circuit, a decision is “final” when there is “some clear and unequivocal manifestation

by the trial court . . . that the decision made, so far as [the court] is concerned, is the

end of the case.” Reinholdson v. Minnesota, 346 F.3d 847, 849 (8th Cir. 2003)

(quotation omitted). Here, following entry of the Order for Judgment, the Clerk

issued a “Judgment in a Civil Case” declaring that “a decision has been rendered” and

reciting the judgment as set forth in the district court’s order. This is “evidence of

finality” that confirms the district court intended to end the case. See id. at 850. This

was not the type of “conditional” dismissal that concerned us in Ruppert v. Principal

Life Ins. Co., 705 F.3d 839, 842-43 (8th Cir.), cert. denied, 571 U.S. 825 (2013). It

is often helpful to resolve a duty-to-defend suit between insured and insurer while the

third-party action against the insured is still pending. Cf. Crum v. Anchor Cas. Co.,

119 N.W.2d 703, 711-12 (Minn. 1963). 

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Under Minnesota law, an insurer’s “duty to defend is different from and

broader than an insurer’s duty to indemnify.” Id. As the Supreme Court of

Minnesota has repeatedly explained:

The duty to defend is broader than the duty to indemnify in three ways: 

(1) the duty to defend extends to every claim that “arguably” falls within

the scope of coverage; (2) the duty to defend one claim creates a duty to

defend all claims; and (3) the duty to defend exists regardless of the

merits of the underlying claims [against the insured].

Wooddale Bldrs., Inc. v. Md. Cas. Co., 722 N.W.2d 283, 302 (Minn. 2006) (citation

omitted). The duty to defend is a contractual obligation; “[w]hether an insurer has a

duty to defend is a question of law.” Murray, 533 F.3d at 648. 

1. Travelers argues on appeal that, contrary to the district court’s ruling, only

the Cisco complaint can be considered in determining its duty to defend. But this

ignores controlling Minnesota and Eighth Circuit precedents applying Minnesota law. 

As the Supreme Court of Minnesota explained decades ago:

This court has consistently stated that where the insurer has no

knowledge to the contrary, it may make an initial determination of

whether or not it is obligated to defend from the facts alleged in the

complaint against its insured. Where the pleadings do not raise a claim

arguably within the scope of coverage, the insurer has no duty to defend

or investigate further . . . . 

Of course, if the insurer is aware of facts indicating that there may

be a claim, either from what is said directly or inferentially in the

complaint, or if the insured tells the insurer of such facts, or if the

insurer has some independent knowledge of such facts, then the insurer

must either accept tender of the defense or further investigate the

potential claim.

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Garvis v. Emps. Mut. Cas. Co., 497 N.W.2d 254, 258 (Minn. 1993) (emphasis added;

citations omitted). In FACE, Festivals & Concert Events, Inc. v. Scottsdale Insurance

Co., 632 F.3d 417, 420 (8th Cir. 2011), citing Garvis, we held that “[t]he insurer may

not simply rely on the [third-party] pleadings . . . if it has independent knowledge of

facts that indicate there may be a covered claim, or if the insured tells the insurer of

such facts.” Travelers’ contrary contention is without merit. 

2. At oral argument (but not in its briefs), Travelers argued the district court

committed an error of law when it ruled that, “if even one of the post-Retroactive

Date acts of infringement is even arguably unrelated to any pre-Retroactive Date act

of infringement, Travelers owes Dexon a defense.” Even if preserved, this argument

is completely without merit, as the above quotation from the opinion in Wooddale

Builders makes clear. The Supreme Court of Minnesota held many years ago, “[i]f

any part of a cause of action is arguably within the scope of coverage, the insurer

must defend. . . . If the claim is not clearly outside coverage, the insurer has a duty to

defend.” Prahm v. Rupp Const. Co., 277 N.W.2d 389, 390 (Minn. 1979); see F.D.

Chapman Constr. Co. v. Glen Falls Ins. Co., 211 N.W.2d 871, 872 (Minn. 1973)

(concluding the insurer had a duty to defend because the third-party complaints

“inferentially alleged a species of [covered] injury”); AMCO Ins. Co. v. Inspired

Techs., Inc., 648 F.3d 875, 880-81 (8th Cir. 2011).

3. Travelers’ primary argument on appeal is that the Policy defines “related

acts” broadly, the allegations in the Cisco complaint control the issue, Cisco alleged

a “unified, continuous counterfeit trafficking scheme spanning more than 15 years,”

and therefore “Cisco’s allegations confirm that Dexon’s infringing acts before and

after the Policy’s May 18, 2019 retroactive date are ‘connected, tied or linked’ by . . .

a series of facts and transactions [that] . . . are deemed to have occurred prior to the

retroactive date, foreclosing coverage.” 

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(a) In American Commerce Insurance Brokers, Inc. v. Minnesota Mutual Fire

& Casualty Co., 551 N.W.2d 224 (Minn. 1996), the Supreme Court of Minnesota

considered whether an employee’s 155 acts of embezzlement were more than one

“series of related acts,” and therefore more than one covered “occurrence,” under the

employer’s business insurance policy. The Court initially held that, “as used in the

policy in this case,” the phrase “series of related acts” is not ambiguous even though

“the word ‘related’ covers a broad range of connections;” the phrase “is intended to

encompass a continuous embezzlement scheme in which the dishonest employee

converts funds from an employer by a common scheme on a constant basis.” Id. at

228. The Court concluded that the insured’s employee embezzled funds by two

different methods and therefore “as a matter of law that two occurrences arose under

the circumstances of this case.” Id. at 231. 

In Kilcher v. Continental Casualty Co., 747 F.3d 983 (8th Cir. 2014), we

interpreted a similar “Interrelated Wrongful Acts” provision in a claims-made

professional liability policy. We reversed the district court’s decision that the joint

settlement of claims by four investors against their financial advisor for giving similar

wrongful investment services resolved at least two separate claims, which subjected

the insurer to the policy’s aggregate coverage limit of $2 million, rather than the

coverage limit of $1 million per claim. Applying American Commerce, we held that

the insured advisor’s individual wrongful acts of offering unsuitable investments to

each plaintiff and a claim of churning by one plaintiff were all interrelated under the

policy, which defined “Interrelated Wrongful Acts” as “any Wrongful Acts which are

logically or causally connected by reason of any common fact, circumstance,

situation, transaction or event.” Id. 987-90. “That [the advisor] harmed each Plaintiff

individually and uniquely is not enough to overcome the Policy’s broad language.” 

Id. at 990. However, we recognized, “at some point a logical connection may be too

tenuous reasonably to be called a relationship.” Id. at 989, quoting American

Commerce, 551 N.W.2d at 228. 

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The related acts policy provisions at issue in American Commerce and in

Kilcher may have been similarly worded to the Policy’s “related acts” provision in

this case, but the coverage issues were very different. In those cases, the issue was

“not excluding coverage entirely but deciding only how to apply coverage limits.” 

USA Gymnastics v. Liberty Ins. Underwriters, Inc., 27 F.4th 499, 527 (7th Cir. 2022)

(concluding this is a distinguishing factor when interpreting “related”). And the issue

decided by the court was the duty to defend the Cisco complaint, not the extent of the

duty to indemnify. As the district court observed during the motions hearing:

As I understand the law, when you look at the four corners of the

[third-party] complaint and essentially only two things can happen: 

either the [insured] is going to be found . . . not liable so there will be

nothing to indemnify or if the [insured] is found liable, there will

necessarily be no coverage . . . . it’s either no liability or uncovered

liability. . . . The judge on the 12(b)(6) motion in the coverage action can

say no duty to defend.

But where you look at the four corners of the complaint and

there’s three possible options in the underlying action -- no liability on

the insured’s part so nobody to indemnify, liability that is uncovered or

liability that is covered, then there is a duty to defend.

I think we have the latter case here.

In our view, that is an accurate summation of Minnesota law as it applies to the dutyto-defend issue presented by this appeal. See Reinsurance Ass’n of Minn. v. Timmer,

641 N.W.2d 302, 315 (Minn. App. 2002):

[B]ecause [the insurer] is arguably required to indemnify the [insureds]

against [some of the third-party] claims . . . [the insurer] must defend the

[insureds] against all the claims in the [third parties’] underlying

complaint. . . . But, because the [third parties’] other claims are not

arguably indemnifiable, . . . the district court should have limited its

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summary judgment to the issue of [the insurer’s] duty to defend and

reserved . . . the issue of indemnification, to await a final determination

in the [third-party] action. 

(b) In arguing that all the “communications and media wrongful acts” alleged

in the Cisco complaint were a series of “related acts” that must be deemed committed

prior to Policy’s Retroactive Date, Travelers relies heavily on the use of the word

“scheme” in the Cisco complaint:

[I]t was error for the district court to ignore Cisco’s allegation that a

common scheme connected Dexon’s infringing conduct. To be sure,

Cisco could have alleged Dexon engaged in discrete acts of trademark

infringement, entirely unrelated to any infringing acts prior to May 18,

2019. . . . Instead, Cisco brought its case as against a serial trademark

infringer. 

We agree with the district court that this contention is contrary to wellestablished Minnesota law regarding a liability insurer’s duty to defend because it

improperly “focuse[s] on some of the conduct being asserted [by Cisco] to prove the

claim.” AMCO, 648 F.3d at 882 (quotation omitted; emphases in original). Cisco

pleaded, individually and in detail, thirty-five distinct infringing transactions. Of

course, Cisco’s attorneys hoped to prove a “scheme” showing Dexon is a “serial

trademark infringer.”5 That would no doubt entitle Cisco to significantly enhanced

Lanham Act remedies. But if Cisco could not prove that theory, is there any doubt

that it would then seek to recover damages and injunctive relief for each transaction

that it proved was a sale of a “counterfeit Cisco product?” Under Minnesota law, the

duty to defend turns on whether any part of Cisco’s cause of action inferentially

5

“A ‘scheme’ is in the eye of the beholder, since whether a scheme exists

depends on the level of generality at which criminality is viewed.” H.J. Inc. v. Nw.

Bell Tel. Co., 492 U.S. 229, 241 n.3 (1989). And the existence of a scheme does not

necessitate a finding of relatedness. 

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alleged a species of covered injury that is arguably within the scope of coverage. “If

the claim is not clearly outside coverage, the insurer has a duty to defend.” Prahm,

277 N.W.2d at 390 (emphasis added). Our decision in Sletten & Brettin

Orthodontics, LLC v. Continental Casualty Co., 782 F.3d 931 (8th Cir. 2015), on

which Travelers relies, did not address this issue and is readily distinguishable. 

 

(c) “[A]ll [Dexon] must show at the duty-to-defend stage is that one of

[Cisco’s trademark infringement] claims is arguably within the policy’s scope. If it

can, then the burden shifts to [Travelers] to establish that the claims fall clearly

outside the scope of coverage.” Westfield Ins. Co. v. Miller Architects & Bldrs., 949

F.3d 403, 405 (8th Cir. 2020) (citations and quotations omitted; emphases in

original).

“If the [third party] claim is not clearly outside coverage, the insurer has a duty

to defend.” Prahm, 277 N.W.2d at 390 (emphasis added). We agree with the district

court that the four corners of the Cisco complaint, combined with the facts Dexon

furnished to Travelers in tendering defense of the Cisco Action, “substantially

undermined” Travelers’ categorical assertion that the thirty-five transactions were a

series of related acts of trademark infringement. Travelers was aware that the alleged

acts of infringement occurred at different times, involved different customers who

were sold different products sourced from different suppliers, and that Dexon had

received no prior claims involving products sourced from any of these suppliers. 

Like the district court, we cannot say, as a matter of law, that every act of

infringement committed after the Retroactive Date is related to a pre-Retroactive Date

act of infringement. 

III. Conclusion

The only issue before us is the duty to defend. “In determining whether a duty

to defend exists, we look at the duty as of the time the insured tendered the defense

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to the insurer.” FACE, 632 F.3d at 420. We agree with the district court that

Travelers has a duty to defend Dexon in the entire Cisco Action. Of course, as the

parties recognized in their Stipulation, this does not resolve whether Travelers has a

duty to indemnify, and if so, the extent of that duty. The answer to those questions

will turn on the ultimate resolution of the Cisco Action. 

The judgment of the district court is affirmed.

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