Opinion ID: 782001
Heading Depth: 4
Heading Rank: 2

Heading: Slogan Infringement

Text: 20 The broad question we must address is whether the ASP complaint arguably stated any claim for liability for an advertising injury, as defined in Cincinnati's insurance policy. Freeman, 443 N.W.2d at 737. More specifically, this dispute requires us to resolve whether the allegations in ASP's complaint that Zen used the phrase The Wearable Light in its advertisements results in a claim for infringement of slogan covered by the insurance policy such that Cincinnati has a duty to defend the entire action. 21 According to Cincinnati's policy, advertising injury coverage has three requirements. First, there must be an advertising activity by the insured. Second, the underlying action must implicate a specific advertising injury covered by the policy. Third, there must be a causal relationship between the alleged advertising injury and the insured's advertising activity. See GAF Sales & Serv., Inc. v. Hastings Mut. Ins. Co., 224 Mich.App. 259, 568 N.W.2d 165, 167 & n. 2 (1997) (interpreting identical or near identical policy language). The district court determined that in the present case there was an advertising activity with a sufficiently close nexus to the asserted liability and concluded that Cincinnati was required to defend Zen because the allegation that Zen used the phrase The Wearable Light in Zen's advertisements possibly raised an infringement of slogan claim. Although the district court expressed many doubts about whether The Wearable Light was a slogan, 4 it was unable to conclude that coverage under the Policy [was] not possible for [Zen] on this claim. J.A. at 113-14 (Dist. Ct.Op.). As Zen notes in its appellate brief, Cincinnati does not dispute that the causation and advertising injury elements of its policy are met. Accordingly, we limit our review to whether the potential slogan-infringement allegations in ASP's complaint invoke coverage under Cincinnati's policy. 22 Cincinnati's initial argument on appeal is that the district court's conclusion that The Wearable Light was a slogan was erroneous. In support, Cincinnati comments that the district court noted that ASP's complaint never referred to The Wearable Light as a slogan, but rather claimed that it was a valuable trademark in and of itself. Moreover, ASP's complaint states that it uses this phrase to market and sell its SAPPHIRE lights and never states that it promotes the sale of those lights by creating a separate impression from the actual name of product itself. Appellant's Br. at 15. In Cincinnati's estimation, The Wearable Light appears to be nothing more than an alternative name for LED lights. Cincinnati relies heavily on a Second Circuit case, Hugo Boss Fashions, Inc. v. Federal Insurance Co., 252 F.3d 608 (2d Cir.2001), to support its alternative argument for finding no allegation of slogan infringement. Hugo Boss noted that federal courts have defined trademarked slogans as phrases used to promote or advertise a house mark 5 or product mark, 6 in contradistinction to the house or product mark itself. Hugo Boss, 252 F.3d at 618. Cincinnati uses this case to argue that The Wearable Light is the house or product mark itself rather than a tool to promote or advertise the flashlights. 7 23 In opposition, Zen points out, first, that the fact that ASP's complaint never called The Wearable Light a slogan 8 does not immunize Cincinnati from a duty to defend. Second, the definition lifted from Hugo Boss and cited by Cincinnati was limited to trademarked slogans, whereas in Cincinnati's policy the coverage extends to infringement ... of slogan, without any requirement that it be trademarked. J.A. at 64 (Compl., Attach.2). Zen argues, therefore, that the only relevant issues in the determination of slogan infringement are: (1) whether ASP alleged in its complaint that it owned the slogan, and (2) whether ASP alleged that Zen's use of the slogan infringed on ASP's rights. Third, Zen argues that even if the Hugo Boss definition for trademarked slogans is applicable, the phrase The Wearable Light meets its requirements. 24 We agree with the district court's analysis and determine that summary judgment for Zen is appropriate with respect to Cincinnati's duty to defend on ASP's potential slogan infringement claim. The Michigan Court of Appeals has stated that [a]n insurer has a duty to defend, despite theories of liability asserted against any insured which are not covered under the policy, if there are any theories of recovery that fall within the policy. Radenbaugh, 610 N.W.2d at 275 (quotation omitted) (emphasis added). The Michigan Supreme Court instructs courts interpreting its laws to focus on the basis for the injury, not the precise terminology used in the complaint. Freeman, 443 N.W.2d at 737. Similarly, Advance Watch provides that the terminology ... used by the underlying plaintiff in the complaint is not dispositive. 99 F.3d at 799 (quotation omitted). Rather, as we stated in Advance Watch, the only concern is whether ASP's complaint raised charges that arguably fall within the language of the policy. Id. (quotation omitted). Moreover, [a]ny doubt as to the insurer's liability must be resolved in favor of the insured. Id. (quotation omitted). Thus, the complaint's failure to refer to The Wearable Light as a slogan and its failure to include infringement of slogan as a specific claim does not alleviate Cincinnati's duty to defend. 25 In the present case, ASP's complaint states that [Zen's] use of advertisements and packaging utilizing and bearing ASP's WEARABLE LIGHT trademark in connection with the sale of handheld LED flashlights without ASP's authorization or consent, has been with full knowledge of the industry's association of the WEARABLE LIGHT mark with ASP ... [and] was commenced with and for the purpose of willfully trading on the reputation of ASP and its flashlights. J.A. at 140 (ASP Compl. ¶ 54). In addition, the complaint asserts that Zen appropriat[ed] ... ASP's WEARABLE LIGHT trademark, and that the marketing and selling handheld LED flashlights using ASP's WEARABLE LIGHT trademark has resulted in adverse economic impact on the business and reputation of ASP. 9 J.A. at 137, 140 (ASP Compl. ¶¶ 36, 54). Freed from the precise language of the allegations, we look to the underlying complaint's basis for recovery. 26 In determining whether Zen's alleged use of the phrase The Wearable Light states a claim for slogan infringement within the definition of the policy, we turn first to the policy itself. See Tenn. Valley Auth. v. Exxon Nuclear Co., 753 F.2d 493, 496 (6th Cir.1985) (When clear contract language itself reveals the intent of the parties, it is unnecessary to turn to rules of construction.). Unfortunately, Cincinnati never defined the term slogan within the policy, and thus we must use other methods to discern the term's meaning. See Advance Watch, 99 F.3d at 802 (advocating a resort to an established dictionary meaning or a meaning derived from case law); see also Hugo Boss, 252 F.3d at 617 ([E]ven where a contract does not define a particular ... term, a body of state law or an established custom [may] fill[] in the gaps left by the drafters.). Slogan is defined in the dictionary as a distinctive cry, phrase, or motto of any party, group, manufacturer, or person; catchword or catch phrase. Random House Unabridged Dictionary 1800 (2d ed.1993). 10 Although in the proper context... a slogan[] can serve as a trademark... [a] slogan is certainly not by definition a trademark. MicroStrategy Inc. v. Motorola, Inc., 245 F.3d 335, 342 (4th Cir.2001). Thus, because slogan is easily defined by resort to common tools, such as dictionaries, it will be considered unambiguous and will be interpreted in [its] plain, ordinary, and popular sense. Poe, 143 F.3d at 1016 (quotation omitted) (alteration in original). 27 Next, we must determine whether the phrase The Wearable Light, as used in ASP's advertisements, potentially constitutes a slogan such that Zen's alleged infringement invokes Cincinnati's duty to defend. The Joint Appendix contains an ASP advertisement for its LED flashlight that allows us to consider this question for ourselves. 11 In this ASP advertisement, SAPPHIRE followed by the registered trademark emblem is in large bold print above the picture of the LED flashlight. Directly beneath SAPPHIRE, the phrase The Wearable Light appears smaller and notably is not followed by the registered trademark emblem. From this advertisement, SAPPHIRE appears to be the name of the product, while The Wearable Light can easily be construed as a catchword or catch phrase used by the manufacturer to promote its product. See Random House Unabridged Dictionary 1800 (2d ed.1993). Relying on other common definitions of slogan, The Wearable Light, as used in the ASP advertisement also can be considered [a] brief attention-getting phrase used in advertising or promotion. Palmer v. Truck Ins. Exch., 21 Cal.4th 1109, 1120, 90 Cal. Rptr.2d 647, 988 P.2d 568 (1999). 28 ASP's assertions of ownership over the phrase The Wearable Light together with Zen's alleged use of the same phrase in connection with its LED flashlights are arguably allegations of slogan infringement. See Advance Watch, 99 F.3d at 799. When a potential claim for slogan infringement is derived from the allegations in ASP's complaint, the duty to defend arises because there are ... theories of recovery that fall within the policy. Radenbaugh, 610 N.W.2d at 275 (citations and quotations omitted). Moreover, the insurer's duty to defend lasts until there is sufficient factual development to confine the claim to a recovery that the policy [does] not cover. Protective Nat'l Ins. Co. of Omaha v. City of Woodhaven, 438 Mich. 154, 476 N.W.2d 374, 376 (1991). Under Michigan's broad interpretation of the duty to defend, summary judgment for Cincinnati on the slogan infringement claim hardly would be proper. Thus, the district court properly granted Zen's motion for partial summary judgment because it is certainly arguable that slogan infringement coverage would apply in this situation, thereby triggering Cincinnati's duty to defend. 12