Opinion ID: 149882
Heading Depth: 2
Heading Rank: 1

Heading: The relevant parties.

Text: The present litigation has its roots in August 2002, when JLJ sent SBC a cease-and-desist letter, demanding that SBC change the packaging of its Stay-On lights. JLJ claimed that the Stay-On lights boxes aped the look and slogans of JLJ's Stay Lit lights. SBC forwarded the letter to St. Paul, which responded that the commercial general liability (CGL) coverage policy SBC purchased did not cover the claims in the demand letter. Specifically, St. Paul claimed that false representation claims were not covered by the policy in the first instance and that two policy exclusions, relating to intellectual property and material previously made known or used, meant that it owed no defense for the remaining claims. In November 2002, JLJ sued SBC in federal court in the southern district of Ohio for Lanham Act trademark infringement, false designation of origin, false advertising, trademark dilution and deceptive trade practices. See JLJ, Inc. v. Santa's Best Craft, LLC, No. C-3-02-00513, 2004 WL 5655875 (S.D.Ohio). St. Paul again denied coverage. In 2004, after JLJ joined as defendants Santa's Best and H.S. Craft Manufacturing Co., two principal members of SBC, as well as Monogram, St. Paul continued an investigation of its duties, but reserved the right to determine that the policy provided no coverage. SBC did not wait for St. Paul to finish its investigation. In February, SBC and the other plaintiffs filed this declaratory action to compel St. Paul to defend them and, in June, St. Paul counterclaimed for a declaratory judgment that it had no such duty. In December 2004, the underlying action settled after SBC and its members agreed to pay JLJ $3.5 million and to refrain from using the mark Stay-On or any colorable imitation of the Stay Lit mark. As noted above, Monogram was added as a defendant in the underlying action based on claims of unjust enrichment and conspiracy for approving SBC's use of the allegedly offending marks and slogans. Monogram, a General Electric (GE) Company subsidiary, and SBC had entered into a trademark licensing agreement (Licensing Agreement) in which SBC promised to defend, indemnify and hold harmless [Monogram] and GE ... from and against any and all claims ... arising out of or in connection with ... the Licensed Products including ... any infringement of any rights ... in connection with the manufacture, advertising, promotion, sale, possession or use of [the] Licensed Products. Santa's Best (recall, one of the members of SBC, which is a limited liability company) reimbursed Monogram's defense expenses of approximately $1.3 million. St. Paul's CGL policy requires it to defend its insured's contract indemnitees, assuming certain control and cooperation requirements are satisfied. These requirements include the indemnitee's obligation to provide St. Paul notice of each legal paper as soon as possible after it is received; St. Paul's obligation to first determine that there is no conflict between the insured's interests and those of the indemnitee; and the indemnitee and insured's agreement in writing that they can share the same counsel. Monogram never tendered a defense to St. Paul. Instead, in August 2004, the plaintiffs advised St. Paul that, under the Licensing Agreement, they believed that Monogram was a contract indemnitee and that St. Paul owed coverage. Monogram, in the underlying action, was represented by counsel separate from plaintiffs', although the two legal teams coordinated a defense.