General Casualty Co. of Wisconsin v. Wozniak Travel, Inc.

MAGNUSON, Chief Justice

(dissent-

ing).

I respectfully dissent. Neither the CGL policy nor the CUL policy at issue in this litigation use the term “trademark” in the grant of coverage. The CGL policy provides coverage for advertising injury, defined as “[mjisappropriation of advertising ideas or style of doing business” or “[i]n-fringement of copyright, title or slogan.” Prior to 2003, the CUL policy also provided coverage for advertising injury in the same terms. 1 A majority of courts broadly read similar policy provisions to provide coverage for trademark infringement. 2 However, in reaching that conclusion, the majority courts, in my opinion, reach too far.

“Trademark” is a term with a clear meaning in commercial law. As the Sixth Circuit Court of Appeals held in Advance Watch Co. v. Kemper National Insurance Co., trademark infringement is a “distinct category of actionable conduct” and, therefore, the “only reasonable assumption” is that if the policy was meant to cover trademark infringement, the policy would have said so. 99 F.3d 795, 803 (6th Cir.1996).

The underlying litigation in this case does not seek to enjoin or otherwise prohibit advertising in general. Instead, it is directed narrowly and specifically at claimed trademark infringement. Although *582 the majority concludes that trademark” is included in the grant of coverage under the “infringement of title” provision, the Sixth Circuit has, correctly in my view, held that “the word ‘title’ generally refers to the non-copyrightable title of a book, film, or other literary or artistic work.” ShoLodge, Inc. v. Travelers Indem. Co., 168 F.3d 256, 259 (6th Cir.1999) (citation omitted). The Eighth Circuit Court of Appeals followed the Sixth Circuit’s interpretation of the policy language, stating that it was “natural, reasonable, and unforced,” and accordingly held that the term “infringement of title” did not include trademark actions. Callas Enters. Inc. v. Travelers Indem. Co., 193 F.3d 952, 957 (8th Cir.1999). The Callas court also embraced the rest of the ShoLodge holding. “The [Sixth Circuit] found that trademarks and service marks were not ‘copyrightable,’ that they were not ‘slogan[s],’ and that they could not be considered ‘title[s],’ as that term was not ambiguous.” Id. at 956 . The term “Hobbit” is not a slogan or title, and while it may be a trademark, is not copyrightable, leaving a claim of trademark infringement outside of the scope of coverage. And the Fifth Circuit has held that, under Texas law, “advertising” is soliciting business, and trademarks, which only protect the identity of the product, are not solicitations of business. Sport Supply Group, Inc. v. Columbia Cas. Co., 335 F.3d 453, 462-63 (5th Cir.2003).

The majority relies, in part, on the Wisconsin Supreme Court decision in Acuity v. Bagadia, 310 Wis.2d 197 , 750 N.W.2d 817, 824-27 (2008), where the court held that a grant of coverage for “infringement of title” includes trademark actions, basing its decision on dictionary definitions and other case law. I am more persuaded by the Sixth and Eighth Circuit opinions. Although there may be similarities between the definition of “title” and the definition of “trademark,” trademark infringement is a commonly litigated distinct theory of law with a clearly established meaning. It cannot be said that a trademark infringement lawsuit arguably 3 falls under the “infringement of title” language in the policy.

My disagreement here is more fundamental than simply a rejection of one line of authority in favor of another contrary line. I disagree with the logic of the majority line of cases. It amounts to saying that “because X is covered, and Y is like X, and Z is like Y, then X and Z are the same, and both are covered.” Insurance policies grant coverage with fair precision. It is not the role of the courts to stretch that grant of coverage by linking analogies.

Here, the policies’ grants of coverage did not include trademark infringement. Accordingly, I would hold that there was no duty to defend under Minnesota law.

. After 2003, the umbrella policy was modified in several respects. First, under Section 1(1), Coverage B, the policy continued to provide coverage for advertising injury to which the insurance applied. However, the policy defined "advertising injury” as injury arising out of "[t]he use of another’s advertising idea in your 'advertisement',” or “[ijnfringing upon another’s copyright, trade dress or slogan in your ‘advertisement.’ ” Commercial Umbrella Liability Coverage Form, Section V(15)(f) and (g). The insurer also added an exclusion in the policy at Section I(3)(i)(8) for infringement of copyright, patent, trademark or trade secrets. This exclusion, in turn, had an exception making it inapplicable to infringement "in your ‘advertisement’, of copyright, trade dress or slogan.”

Whether these changes were significant enough to require some additional action by the insurer to notify the insured before they become effective is not before us. See Canadian Universal Inc. Co. v. Fire Watch, Inc., 258 N.W.2d 570, 575 (when an insurer by renewal of a policy or by an endorsement to an existing policy substantially reduces the prior insurance coverage provided the insured, the insurer has an affirmative duty to notify the insured in writing of the change in coverage). The certified questions in this case ask only about the grant of coverage.

. The majority notes at footnote 3 that, in 1986, the Insurance Service Office altered its standard policy language by removing a specific provision that excluded coverage for trademark infringement. That exclusion was returned to the CUL policy in 2003. See, supra, n. 1. The majority concludes that change "implies that trademark claims are now included under these policies.” The revised standard policy, however, also changed the coverage grant from covering "unfair competition” to covering "misappropriation of advertising ideas and style of doing business.” Acuity v. Bagadia, 310 Wis.2d 197 , 750 N.W.2d 817, 826 (2008) (citation omitted). Given the change in the grant of coverage, the removal of the trademark exclusion is far from convincing evidence of intent to cover trademark claims. Moreover, while it is true, as the majority notes, that it would have been an easy matter to exclude coverage for trademark claims, it is wrong to assume something that is not excluded is, by that fact, included in coverage. Grants of coverage must flow from the insuring agreement, not from the absence of an exclusion.

. I also disagree with the majority's analysis of when claims "arguably” fall within coverage. In order to determine whether the claim "arguably” falls within coverage, we should compare “the wording of the policy to the allegations of the underlying complaint.” Franklin v. W. Nat'l. Mut. Ins. Co., 574 N.W.2d 405, 407 (Minn. 1998) (citing Ross v. Briggs and Morgan, 540 N.W.2d 843, 847 (Minn. 1995)). The analysis is not a consideration of what the policy language "arguably” means — the language is either clear and unambiguous or the language is ambiguous and construable. The analysis of whether the coverage is “arguable” is aimed at whether the allegations in the underlying litigation can be said to "arguably” fall within the prescribed scope of coverage without requiring that any factual uncertainties be resolved before a duty to defend is found. Here, an underlying trademark infringement claim does not "arguably” fall within a policy that clearly does not cover trademark claims.