Court Opinion

ID: 4588002
Source: CourtListenerOpinion
Date Created: 2020-11-19 19:02:09.199987+00
Date Added: 2024-06-11T08:48:39.133656
License: Public Domain

SUPERIOR COURT
                                         OF THE
                                  STATE OF DELAWARE
PAUL R. WALLACE                                              NEW CASTLE COUNTY COURTHOUSE
     JUDGE                                                    500 N. KING STREET, SUITE 10400
                                                               WILMINGTON, DELAWARE 19801
                                                                       (302) 255-0660

                         Date Submitted: November 17, 2020
                          Date Decided: November 19, 2020

 Michael F. Duggan, Esquire                       Steven L. Caponi, Esquire
 Marc Sposato, Esquire                            Matthew B. Goeller, Esquire
 Riley B. MacGray, Esquire                        K&L Gates LLP
 Marks, O’Neill, O’Brien,                         600 N. King Street, Suite 901
 Doherty & Kelly, P.C.                            Wilmington, DE 19801
 300 Delaware Avenue, Suite 900
 Wilmington, DE 19801                             David F. McGonigle, Esquire
                                                  Lucas J. Tanglen, Esquire
 Jonathan S. Zelig, Esquire                       K&L Gates LLP
 Day Pitney LLP                                   210 Sixth Avenue
 One Federal Street, 29th Floor                   Pittsburgh, PA 15222
 Boston, MA 02110
                                                  Steven P. Wright, Esquire
 Daniel J. Raccuia, Esquire                       K&L Gates LLP
 Day Pitney LLP                                   One Lincoln Street
 242 Trumbull Street                              Boston, MA 02111
 Hartford, CT 0610

       RE: Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
       Civil Action No. N20C-02-014 PRW CCLD

Dear Counsel:

       As the parties are considering the need for any further proceedings in this matter,

the Court provides this Letter Opinion in lieu of a more formal written decision to

resolve their pending cross-motions (D.I. 30, 32) on the duty to defend.
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
November 19, 2020
Page 2 of 22

                               I. INTRODUCTION

      This case involves an insurance coverage dispute in which Indian Harbor

Insurance Company claims it has no duty to defend SharkNinja Operating LLC (and

affiliates—collectively, “SharkNinja”) against a patent infringement and false

advertising lawsuit brought by a competing vacuum manufacturer (the “iRobot

Action”). Indian Harbor contracted with SharkNinja to provide the latter protection

from exposure to what the subject policies call “personal and advertising injury.”

SharkNinja says the iRobot Action is such an injury and demands that Indian Harbor

come to its defense. Indian Harbor seeks a declaration that SharkNinja must face the

iRobot Action on its own.

      The parties have filed cross-motions for judgment on the pleadings contesting

Indian Harbor’s defense duties. Those motions require the Court to interpret certain

subject insurance policy terms using Massachusetts law. For the reason now-explained,

Indian Harbor must—under the law of Massachusetts—defend SharkNinja against the

iRobot Action. Accordingly, Indian Harbor’s motion is DENIED and SharkNinja’s

motion is GRANTED.
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
November 19, 2020
Page 3 of 22

                             II. FACTUAL BACKGROUND

    A. THE INSURANCE POLICIES

        Indian Harbor issued SharkNinja two commercial general liability insurance

policies (collectively, the “Policies”) that, taken together, insured SharkNinja from

November 14, 2017, through November 14, 2019.1 Each policy provides primary

insurance coverage for “personal and advertising injury” liability.2 As relevant here,

“personal and advertising injury” is defined as an injury “arising out of one or more of

the following offenses” . . .

          (d) Oral or written publication, in any manner, of material that slanders or
              libels a person or organization or disparages a person’s or organization’s
              goods, products or services; . . .

          (f) The use of another’s advertising idea in your “advertisement”; or

          (g) Infringing upon another’s copyright, trade dress or slogan in your
              “advertisement”[.]3

1
    Indian Harbor’s Complaint (“Compl.”) ¶¶ 9-10 (D.I. 1).
2
    Id. ¶ 13.
3
    Compl., Exhibit A, § 5.14 (“Definitions”). For the purposes of this review, the Policies are
interchangeable. So, the Court cites just one of them when referencing both.
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
November 19, 2020
Page 4 of 22

Other than “advertisement,” none of the terms in these particular subsections is further

defined.4

          Litigation involving personal and advertising injury ordinarily triggers Indian

Harbor’s defense duties.5 According to the Policies, Indian Harbor has “the right and

duty to defend the insured against any ‘suit’ seeking . . . damages” for “personal and

advertising injury.”6 But the Policies also contain a number of exclusions that relieve

Indian Harbor of its duty to defend certain species of personal and advertising injury.7

There are two such exclusions invoked by Indian Harbor here: the “Failure to Conform

Exclusion” and the “IP Infringement Exclusion.”8 Under the Failure to Conform

Exclusion, Indian Harbor will not defend where “personal and advertising injury

aris[es] out of the failure of goods, products or services to conform with any statement

of quality or performance made in your ‘advertisement.’”9 Under the IP Infringement

Exclusion, Indian Harbor will not defend where “personal and advertising injury

4
    See generally Definitions; see also id. § 5.1 (“Advertisement means a notice that is broadcast
or published to the general public or specific market segments about your goods, products or
services for the purpose of attracting customers or supporters.” (internal quotation marks omitted)).
5
    See id., Coverage B – Personal and Advertising Injury Liability § 1(a).
6
    Id.
7
    See id. § 2 (“Exclusions”).
8
    Id. §§ 2(g), (i).
9
    Id. § 2(g).
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
November 19, 2020
Page 5 of 22

aris[es] out of the infringement of copyright, patent, trademark or other intellectual

property rights.”10 Relevant to these arguments and these exclusions, “advertisement”

and “personal and advertising injury” are the only policy-defined terms.11

     B. THE IROBOT ACTION

         In the fall of 2019, things got messy for SharkNinja. iRobot Corporation, a rival

vacuum cleaner maker, sued SharkNinja in federal court alleging violations of the

Lanham Act.12 In its complaint, iRobot accuses SharkNinja of infringing several iRobot

patents and advertising falsely about the capabilities of its “Shark IQ” vacuum cleaner

to the detriment of iRobot’s products and goodwill.13 Specifically, iRobot has alleged

SharkNinja deployed a smear campaign calculated to target, and to assert false

advantages over, iRobot’s vacuum cleaners, and to mislead consumers about the

legitimacy and fairness of iRobot’s pricing in comparison to its own pricing.14 This

fusillade of alleged misinformation purportedly has threatened or actually impaired

10
     Id. § 2(i).
11
     See generally Definitions.
12
   Compl. ¶ 19; id., Exhibit C (Second Amended Complaint, iRobot Corp. v. SharkNinja
Operating LLC, et al., No. 1:19-cv-12125-ADB (D. Mass. Dec. 9, 2019), ECF No. 84 (hereinafter
“iRobot SAC”)).
13
     See, e.g., iRobot SAC ¶¶ 1-4.
14
     See, e.g., id. ¶¶ 19-43.
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
November 19, 2020
Page 6 of 22

iRobot with lost sales, price erosion, reputational harm and depreciation of market

share.15 iRobot seeks injunctive relief and damages.16 SharkNinja has admitted no

wrongdoing.17 And the case is now active in federal district court in Massachusetts.18

     C. THE PRESENT COVERAGE DISPUTE

         On November 20, 2019, SharkNinja notified Indian Harbor of the iRobot Action

and requested a defense and indemnification for any settlement or adverse judgment

above the retention premium it bears.19 But Indian Harbor declined and in a February

2020 letter, explained why it felt it has no duty to defend against the iRobot Action.20

According to Indian Harbor, the false advertising claim doesn’t meet the definition of

“personal and advertising injury” because the claim doesn’t allege a “disparagement”

of iRobot’s products.21 Even if the false advertising claim were covered, Indian Harbor

15
     See id. ¶ 21.
16
     See id. Prayer for Relief.
17
    See Compl., Exhibit D (Underlying Answer in iRobot Action ¶¶ 23-28, 30, 33-35, 38);
SharkNinja Answer and Counterclaims Against Indian Harbor ¶¶ 24-25, 28-31 (“Answer”) (D.I.
20).
18
     iRobot Corp. v. SharkNinja Operating LLC, et al., No. 1:19-cv-12125-ADB (D. Mass.).
19
     Compl. ¶ 32.
20
     Id. ¶¶ 32-33.
21
     Id. ¶ 34.
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
November 19, 2020
Page 7 of 22

says, a defense would be unavailable because the Failure to Conform Exclusion

applies.22 And lastly, Indian Harbor suggests, a defense against the patent infringement

claims is unavailable because the IP Infringement Exclusion applies.23

           For good measure, Indian Harbor then sued in this Court seeking a declaration

that it has no duty to defend SharkNinja.24 SharkNinja answered with breach-of-

contract counterclaims and also has requested a declaration that Indian Harbor must

defend it.25 The parties are proceeding on these cross-motions for judgment on the

pleadings under a Court-approved interim case management order.26 Thereunder, the

parties have stipulated that Massachusetts insurance law governs their duty-to-defend

dispute.27 The Court heard argument on the motions earlier this week28 and they are

now ripe for resolution.

22
     Id.
23
     Id.
24
     Id. ¶¶ 36-45.
25
     See generally Answer.
26
     D.I. 28.
27
     Id.
28
     D.I. 46.
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
November 19, 2020
Page 8 of 22

                                     IV. DISCUSSION

     A. STANDARD OF REVIEW

           A party may move for judgment on the pleadings under this Court’s Civil Rule

12(c).29 “In determining a Rule 12(c) motion, the Court is required to view the facts

pleaded and the inferences to be drawn from such facts in the light most favorable to

the non-moving party.”30 The Court “must take the well-pleaded facts alleged in the

complaint as admitted.”31 The Court “also assumes the truthfulness of all well-pled

allegations of fact in the complaint.”32 And the Court “accords a party opposing a Rule

12(c) motion the same benefits as a party defending a motion under Rule 12(b)(6).”33

As a result, “[t]he standard for a motion for judgment on the pleadings is almost

identical to the standard for a motion to dismiss” under Rule 12(b)(6).”34

29
     Super. Ct. Civ. R. 12(c).
30
    Catlin Specialty Ins. Co. v. CBL & Assocs. Props., Inc., 2017 WL 4784432, at *6 (Del. Super.
Ct. Sept. 20, 2017) (citation omitted).
31
   Desert Equities, Inc. v. Morgan Stanley Leveraged Equity Fund, II, L.P., 624 A.2d 1199, 1205
(Del. 1993) (citations omitted).
32
     Catlin Specialty, 2017 WL 4784432, at *6.
33
     Id.
34
    Silver Lake Off. Plaza, LLC v. Lanard & Axibund, Inc., 2014 WL 595378, at *6 (Del. Super.
Ct. Jan. 17, 2014) (internal quotations omitted).
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
November 19, 2020
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           “Cross-motions for judgment on the pleadings function in a similar manner to

cross-motions for summary judgment.”35 In turn, where cross-motions for judgment on

the pleadings are filed on a particular issue and no material facts are in dispute thereon36

“the Court shall deem the motions to be the equivalent of a stipulation for decision on

the merits based on the record submitted with the motions.”37 So upon such cross-

motions for judgment on the pleadings, this Court will grant judgment on that particular

issue to one of the moving parties.38 And on that issue, the questions before this Court

are questions of law—not of fact—the merits of which are ripe for decision.39

     B. MASSACHUSETTS LAW AND THE DUTY TO DEFEND

           Though the law applied to these motions may be foreign, the analysis required is

very familiar. Indian Harbor’s duty to defend turns on the threshold question of whether

35
     Id.
36
    See Almah LLC v. Lexington Ins. Co., 2016 WL 369576, at *4 (Del. Super. Ct. Jan. 27, 2016)
(“The Court may grant a motion for judgment on the pleadings only when no material issue of fact
exists and the movant is entitled to judgment as a matter of law.”); see also Anolick v. Holy Trinity
Greek Orthodox Church, 787 A.2d 732, 738 (Del. Ch. 2001) (But “[t]he presence of cross-
motions ‘does not act per se as a concession that there is an absence of factual issues.’” (quoting
United Vanguard Fund, Inc. v. TakeCare, Inc., 693 A.2d 1076, 1079 (Del. 1997))).
37
     Silver Lake, 2014 WL 595378, at *6 (citing Super. Ct. Civ. R. 56(h)).
38
    See Health Corp. v. Clarendon Nat. Ins. Co, 2009 WL 2215126, at *11 (Del. Super. Ct. July
15, 2009) (describing standard for cross-motions for summary judgment).
39
     See id.
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
November 19, 2020
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the allegations undergirding the iRobot Action spell out a potentially-covered “personal

and advertising injury” under the Policies. If the iRobot Action satisfies that definition,

then the Court evaluates next whether Indian Harbor has carried its burden to show an

exclusion absolves it from its defense duties. If the Court concludes that burden has

not been met, then Indian Harbor must honor its duty to defend SharkNinja as a matter

of law.

        “‘It is settled that an insurer’s duty to defend is independent from, and broader

than, its duty to indemnify.’”40 And in Massachusetts, “[a]n insurer’s duty to defend is

triggered where the allegations in the complaint ‘are reasonably susceptible of an

interpretation that states or roughly sketches a claim covered by the policy terms.’”41

That is true even if “the merits of the claim are weak or frivolous”42 or “the insurer

could eventually be determined to have no duty to indemnify the insured.”43 To

determine if a defendable claim has been “roughly sketched,” the Court “‘compar[es]

40
   Holyoke Mut. Ins. Co. in Salem v. Vibram USA, Inc., 106 N.E.3d 572, 576 (Mass. 2018)
(quoting Metro. Prop. & Cas. Ins. Co. v. Morrison, 951 N.E.2d 662, 667 (Mass. 2011)).
41
   Vibram, 106 N.E.3d at 576 (quoting Billings v. Commerce Ins. Co., 936 N.E.2d 408, 414
(Mass. 2010)).
42
     Vibram, 106 N.E.3d at 576 (citation omitted).
43
     Morrison, 951 N.E.2d at 668 (internal quotation marks omitted).
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
November 19, 2020
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the allegations in the third-party complaint against the provisions of the insurance

policy.’”44

        “The underlying complaint need only show, through general allegations, a

possibility that the liability claim falls within insurance coverage.”45 Put differently,

“[t]here is no requirement that the facts alleged in the complaint specifically and

unequivocally make out a claim within . . . coverage.”46 And the manner in which the

plaintiff stylizes her accusations need not “mirror the policy’s coverage language.”47

The Court’s task is simply to “envisag[e] what kinds of losses may be proved as lying

within the range of the allegations . . . and then see[] whether any such loss fits the

expectation of protective insurance reasonably generated by the terms of the policy.”48

Any “uncertainty as to whether the pleadings include or are reasonably susceptible” to

coverage is “resolved in favor of the insured.”49

44
   Vibram, 106 N.E.3d at 577 (quoting Deutsche Bank Nat’l Ass’n v. First Am. Title Ins. Co., 991
N.E.2d 638, 641 (Mass. 2013)).
45
     Vibram, 106 N.E.3d at 577 (emphasis added) (internal quotation marks omitted).
46
     Id. (internal quotation marks omitted).
47
   Id. (citing Bos. Symphony Orchestra, Inc. v. Commercial Union Ins. Co., 545 N.E.2d 1156,
1159 (Mass. 1989)).
48
   Vibram, 106 N.E.3d at 577 (internal quotation marks omitted); see Morrison, 951 N.E.2d at
668.
49
     Vibram, 106 N.E.3d at 577 (internal quotation marks omitted).
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
November 19, 2020
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        “As with any contract, in interpreting an insurance policy,” the Court “begin[s]

with the plain language of the policy.”50 The Court gives “full effect to the document

as a whole, . . . considering what an objectively reasonable insured . . . would expect to

be covered.”51 And when there is ambiguity, the Court will “construe the policy terms

in favor of the insured and against the . . . insurer.”52 Finally, the insurer bears the

burden of showing that any exclusion precludes defense coverage.53 But, the Court will

strictly construe exclusions and resolve any ambiguity in those too against the insurer.54

        1. The iRobot Action “Roughly Sketches” “Personal and Advertising Injury.”

        Recall that the Policies define a “personal and advertising injury” expansively as

one “arising out of”—(d) a “publication . . . that slanders or libels . . . or disparages an

organization’s . . . products;” (f) “the use of another’s advertising idea;” or

50
     Mount Vernon Fire Ins. Co. v. Visionaid, Inc., 76 N.E.3d 204, 208 (Mass. 2017).
51
   Vibram, 106 N.E.3d at 577; see Golchin v. Liberty Mut. Ins. Co., 993 N.E.2d 684, 687 (Mass.
2013).
52
    Vibram, 106 N.E.3d at 577 (internal quotation marks and brackets omitted); see J. D’Amico,
Inc. v. City of Bos., 186 N.E.2d 716, 721 (Mass. 1962) (Court “aided by the principle that doubts
about ambiguous insurance policy provisions are to be resolved against the insurance company.”).
53
    See, e.g., Camp Dresser & McKee, Inc. v. Home Ins. Co., 568 N.E.2d 631, 633 (Mass. App.
Ct. 1991); see also Billings, 936 N.E.2d at 416.
54
   Hakim v. Ma. Insurers Insolvency Fund, 675 N.E.2d 1161, 1165 (Mass. 1997) (“[A]ny
ambiguity in [an] exclusion must be construed against the insurer.” (internal quotation marks
omitted)); Preferred Mut. Ins. Co. v. Gamache, 675 N.E.2d 438, 444 (Mass App. Ct. 1997), aff’d,
686 N.E.2d 989 (Mass. 1997).
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
November 19, 2020
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(g) “infringing upon another’s . . . slogan.”55 SharkNinja contends iRobot’s allegations

fit squarely within all of these offenses.56 Perhaps that’s so. But a plain reading of the

disjunctive “or” separating each qualifying offense (and its suboffense) makes such a

determination unnecessary. For the Court may find a “rough[] sketch[]” of personal

and advertising injury if any one is “general[ly] alleg[ed].”57

           Take, for example, “disparages . . . an organization’s . . . products.”58 Looking

to the iRobot Action’s complaint, iRobot generally alleges SharkNinja –

            (1) “directly targets iRobot’s Roomba vacuums . . . [by] expressly and falsely
                claim[ing] that the Shark IQ offers the same technological advancements
                as iRobot, but at less than half the price;”59

            (2) makes “false comparisons to iRobot’s vacuums [that] threaten iRobot with
                . . . reputational harm;”60

            (3) makes “false statements about its—and iRobot’s—vacuums [to] deceive
                consumers about the performance and capabilities of these products;”61

55
     Definitions, § 5.14.
56
     SharkNinja Op. Br. at 15-27 (D.I. 32).
57
    Vibram, 106 N.E.3d at 576-77 (internal quotation marks omitted); see Visionaid, 76 N.E.3d
at 208 (endorsing plain language analysis in contracts).
58
     Definitions, § 5.14(d).
59
     iRobot SAC ¶ 20.
60
     Id. ¶ 21.
61
     Id.
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           (4) “tries to convince consumers” misleadingly “that it offers the same
                benefit[s] as iRobot’s patented technology;”62

           (5) “mimic[s] iRobot’s [marketing] claims regarding the performance and
                technological advancement of its own Roomba vacuums” by asserting
                false superiority to or equivalence with the Roomba while “hid[ing] the
                shortcomings of” the Shark IQ;63

           (6) “compares its products directly to iRobot’s vacuums, falsely telling
                consumers that the Shark IQ offers the same benefits as iRobot’s products
                ‘at less than half the price;’”64

           (7) “expressly refers to iRobot’s Roomba vacuums by name throughout its
                advertisements,” which “exacerbated . . . [the] false advertising. . .” during
                peak quarters;65 and

           (8) “direct[ly] diver[ts] . . . sales from iRobot to SharkNinja” through a “false
                and deceptive campaign” against iRobot resulting in “a loss of
                goodwill.”66

No doubt, SharkNinja’s advertising has singled-out iRobot for quite a bit of negative

advertising talk. But, has SharkNinja potentially “disparage[d]” iRobot as a matter of

law? For the purpose of determining this coverage question, a Massachusetts court

would likely say so.

62
     Id. ¶ 32.
63
     Id. ¶¶ 38-39, 41-42.
64
     Id. ¶ 41.
65
     Id. ¶¶ 42-43.
66
     Id. ¶ 121.
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        Under Massachusetts law, “[d]isparage means, among other things, to lower in

rank and estimation by actions or words or to speak slightingly of.”67 Here, iRobot’s

allegations are “reasonably susceptible of an interpretation” that SharkNinja’s assault

on iRobot’s products was meant to “lower [them] in rank and estimation” or, in context,

would be considered “speak[ing] slightingly of” iRobot and its products. And it appears

iRobot is prepared to marshal evidence probative of lost sales, diminished goodwill,

reputational harm and depreciated market share.68 A measurable decrease in margin

and desirability usually signals devaluation.

        Too, by suggesting iRobot’s products are overpriced, SharkNinja allegedly has

spoken (at least) “slightingly of” them.69 If iRobot’s clients are told the Roomba is

unjustifiably expensive, then they might reallocate their investments and pursue more

cost-effective options (e.g., the Shark IQ). Accordingly, because liability (and injury)

need only be a “possibility” or “roughly sketche[d]” to activate the duty to defend,

SharkNinja’s alleged “disparage[ment] [of] . . . [iRobot’s] products” plainly summons

a defense.70

67
     Bos. Symphony, 545 N.E.2d at 1159 (internal quotation marks omitted).
68
     iRobot SAC ¶ 21.
69
     Bos. Symphony, 545 N.E.2d at 1159 (internal quotation marks omitted); iRobot SAC ¶¶ 20, 41.
70
     Vibram, 106 N.E.3d at 577 (internal quotation marks omitted); Definitions, § 14(d).
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        For the sake of completeness, coverage also attaches from the “use of another’s

advertising idea” injury alleged.71 The Supreme Judicial Court of Massachusetts

construed the same phrase in Vibram. After considering an array of definitions, the

court observed the term “advertising idea” encompasses myriad meanings, including:

“an idea about the solicitation of business and customers;” “ideas in connection with

marketing and sales and for the purpose of gaining customers;” and “an idea for calling

public attention to a product or business, especially by proclaiming desirable qualities

so as to increase sales. . . .”72 Ultimately, the court held the insurer had a duty to defend

Vibram because the complaint generally alleged an intentional “connection between”

Vibram’s and the underlying plaintiff’s marketing strategies designed “to attract

customers” or to promote a “business venture.”73

        Here, iRobot provides a line-item chart detailing the ways in which SharkNinja

“mimic[ked]” iRobot’s marketing claims about the Roomba’s “selected cleaning” and

“recharge/resume” features to influence purchasing decisions.74 This is no “rough[]

sketch[]” of using another’s advertising idea—it’s a well-drawn illustration.

71
     Definitions § 5.14(f).
72
     Vibram, 106 N.E.3d at 578; see id. at 578-80 (collecting cases).
73
     Id. at 580-81 (citations omitted).
74
     iRobot SAC ¶¶ 38-39.
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        The allegations clearly limn the “possibility” that SharkNinja achieved Shark

IQ’s success by connecting iRobot’s advertising ideas to its own for the purpose of

attracting customers and diverting gains from iRobot.75 And because personal and

advertising injury largely revolves around commercial advertisements, the Court

“envisag[es]” that defense coverage for losses incurred from SharkNinja’s allegedly

improper sales tactics is “reasonably generated by the terms of the” Policies.76

Accordingly, “use of another’s advertising idea” paves a second path to Indian Harbor’s

duty to defend.

        To avoid coverage, Indian Harbor suggests alternate reads of the Polices’ plain

language.77 But even if one were to entertain Indian Harbor’s stunted constructions,

coverage would still lie.         “Where the language permits more than one rational

interpretation, that most favorable to the insured is to be taken.”78                    Indeed,

Massachusetts courts routinely reject narrow, insurer-preferred interpretations of

75
     Vibram, 106 N.E.3d at 577.
76
     Id. (internal quotation marks omitted); see Morrison, 951 N.E.2d at 668.
77
     Indian Harbor Ans. Br. at 19-33 (D.I. 37).
78
    Bos. Symphony, 545 N.E.2d at 1159 (internal quotation marks omitted); see Makrigiannis v.
Nintendo of Am., Inc., 815 N.E.2d 1066, 1071 (Mass. 2004) (“[W]here there are two rational
interpretations of policy language, the insured is entitled to the benefit of the one that is more
favorable to it.” (internal quotation marks omitted)).
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C.A. No. N20C-02-014 PRW CCLD
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undefined policy terms that would winnow broad defense coverage.79 Moreover,

iRobot’s failure to evoke more precise theories of relief or to draft more specific

allegations is of little concern.80 As long as there are “general allegations” raising a

“possibility that the [personal and advertising injury] claim falls within insurance

coverage,” any “uncertainty as to whether the pleadings . . . are reasonably susceptible”

to coverage is “resolved in favor of the insured.”81 Personal and advertising injury

coverage has been so resolved and Indian Harbor must defend SharkNinja unless these

specific types of personal and advertising injury are clearly excluded.82

79
    See, e.g., Vibram, 106 N.E.3d at 580-81; Golchin, 993 N.E.2d at 690-91; Makrigiannis, 815
N.E.2d at 1071-72; Bos. Symphony, 545 N.E.2d at 1159-60; Siebe, Inc. v. Louis M. Gerson Co.,
908 N.E.2d 819, 829 (Mass. App. Ct. 2009); see also Indian Harbor Ans. Br. at 26-28 (imputing a
common law tort requirement to terms that are rationally interpreted either to have no tort meaning
at all, or at least both a tort and non-tort meaning).
80
    Vibram, 106 N.E.3d at 577 (“There is no requirement that the facts alleged in the complaint
specifically and unequivocally make out a claim within the coverage. Accordingly, a duty to
defend does not turn on the specific cause of action enunciated by the pleader or require that the
complaint mirror the policy’s coverage language.” (internal quotation marks and citations
omitted)); see Billings, 936 N.E.2d at 414 (citing Sterilite Corp. v. Cont’l Cas. Co., 458 N.E.2d
338, 341 (Mass. App. Ct. 1983)) (same).
81
     Vibram, 106 N.E.3d at 577 (internal quotation marks omitted).
82
    Because the Court has determined either “disparagement,” “use of another’s advertising idea,”
or both, mark the iRobot Action, consideration of the parties’ arguments about “libel,” “slander”
or “slogans” is unnecessary. See Definitions §§ 5.14(d), (g).
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
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        2. The Failure to Conform Exclusion Does Not Apply to
           iRobot’s False Advertising Claim.

        Indian Harbor focuses almost exclusively on the Failure to Conform Exclusion.

That Exclusion relieves Indian Harbor of its defense duties when “personal and

advertising injury aris[es] out of the failure of goods, products or services to conform

with     any    statement    of   quality    or   performance        made   in   [SharkNinja’s]

‘advertisement.’”83 Indian Harbor insists this Exclusion applies to the false advertising

claim because, in its view: (1) the iRobot Action really is about SharkNinja’s own

products, not iRobot’s products; and (2) the Exclusion bars a defense when the insured

advertises falsely about its own products.84 Indian Harbor hasn’t carried its burden of

demonstrating this Exclusion applies here.

        First, Indian Harbor’s exclusion arguments rest on the same faulty premise as its

definitional arguments, i.e., that the iRobot Action’s general allegations of SharkNinja’s

wrongdoing are dispositive of defense coverage. As explained earlier, in Massachusetts

even barebones accusations that might well be meritless trigger the broad duty to defend

as long as there is a “possibility” of defense coverage “roughly sketche[d].”85

83
     Exclusions § 2(g).
84
     Indian Harbor Op. Br. at 13-24 (D.I. 31).
85
     Vibram, 106 N.E.3d at 577 (internal quotation marks omitted).
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
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        Second, Indian Harbor’s reading of the iRobot Action’s complaint is too

selective. For example, iRobot alleges SharkNinja made “false statements about its—

and iRobot’s—vacuums [to] deceive consumers about the performance and capabilities

of these products.”86 These acts, among others, allegedly have harmed iRobot’s

reputation.87 The natural read of iRobot’s complaint is that SharkNinja crafted its

advertising to inflate perception of the Shark IQ not only by extolling its own qualities,

but also by discrediting iRobot’s products and pricing. So, while some allegations do

concern representations of SharkNinja’s products, some others do concern iRobot’s

products. And any “uncertainty as to whether the pleadings” in the iRobot Action “are

reasonably susceptible” to coverage for the iRobot-products aspects must be “resolved

in favor of” SharkNinja consistent with the broad duty to defend.88

        Finally, a strict construction of the Exclusion, when conducted in context of the

whole contract,89 simply does not support Indian Harbor’s strained interpretation. Even

if the Exclusion were construed strictly to bar a defense whenever SharkNinja makes

86
    iRobot SAC ¶ 21. Indian Harbor dismisses this allegation’s importance. See, e.g., Indian
Harbor Op. Br. at 19-21. But there it is—an express accusation in iRobot’s complaint that is also
incorporated elsewhere in iRobot’s federal false advertising count. See iRobot SAC ¶ 115.
87
     iRobot SAC ¶ 21.
88
     Vibram, 106 N.E.3d at 576-77 (internal quotation marks omitted).
89
     See id.; Visionaid, Inc., 76 N.E.3d at 208; Golchin, 993 N.E.2d at 687.
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
C.A. No. N20C-02-014 PRW CCLD
November 19, 2020
Page 21 of 22

non-conforming “statements” in “advertisements” about its own products, the language

cannot be fairly read also to bar coverage whenever SharkNinja couples those with

misleading or disparaging statements about a competitor’s products. Otherwise, much

of the personal and advertising injury coverage would be nullified—a result clearly

contrary to SharkNinja’s reasonable expectations.90 To push its read, Indian Harbor

resorts to non-Massachusetts case law glossing similar exclusions.91 But this Court can

neither ignore binding Massachusetts authority nor insert barriers the Policies omit.92

        3. The IP Infringement Exclusion Does Not Bar a Defense
           Against the Entire iRobot Action.

        In a last attempt to resist its duty to defend, Indian Harbor points to the IP

Infringement Exclusion. It contends that provision plainly excludes any defense against

the patent infringement claims.93 Perhaps—but no matter. “[T]he general rule in

Massachusetts in the general liability insurance context is that the insurer must defend

90
    See Vibram, 106 N.E.3d at 577 (noting contract interpretation should mind the insured’s
“objectively reasonable” expectations); see also Definitions § 5.1(d) (covering “slander” and
“libel” of an organization’s “products”).
91
   See, e.g., Indian Harbor Ans. Br. at 8-10 (citing cases from California, Georgia, New York,
Virginia and North Carolina).
92
    Gamache, 675 N.E.2d at 444 (requiring strict construction of exclusions), aff’d, 686 N.E.2d
989; see Makrigiannis, 815 N.E.2d at 1070 (noting that insurer “could have expressly stated . . .
an exclusion” that matched its preferred reading, but ostensibly chose not to (citing Trustees of
Tufts Univ. v. Commercial Union Ins. Co., 616 N.E.2d 68, 71 (Mass. 1993))).
93
     See Exclusions § 2(i).
Indian Harbor Ins. Co. v. SharkNinja Operating LLC, et al.
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the entire lawsuit if it has a duty to defend any of the underlying counts in the

complaint.”94    In other words, Indian Harbor must defend against the patent

infringement counts—even if it normally wouldn’t—because it must defend against the

false advertising count. Accordingly, neither this Exclusion nor the other excuses

Indian Harbor from defending against the entire iRobot Action.95

                                   V. CONCLUSION

       For the foregoing reasons, Indian Harbor’s motion is DENIED and SharkNinja’s

motion is GRANTED.

       IT IS SO ORDERED.
                                                         /s/ Paul R. Wallace

                                                         Paul R. Wallace, Judge

cc: All Counsel via File and Serve

94
   GMAC Mortgage, LLC v. First Am. Title Ins. Co., 985 N.E.2d 823, 828 (Mass. 2013) (internal
quotation marks omitted).
95
   See Simplex Techs., Inc. v. Liberty Mut. Ins. Co., 706 N.E.2d 1135, 1137 (Mass. 1999)
(expounding the “in for one, in for all” principle guiding defense duties).