Virginia Lawyers Weekly VA Lawyers Weekly
A Richmond U.S. District Court says an insurance carrier has no duty under its “Web Xtend Liability” policy to defend plaintiff manufacturer on intellectual property claims from the manufacture and sale of dog training collars that allegedly use another company’s trademark claims to discourage barking; the competitor’s complaint does not allege the manufacturer’s conduct occurred during
advertising, or caused harm from advertisements.
The plaintiff in the underlying suit alleges the manufacturer used its trademark “GENTLE SPRAY,” and sued for trademark infringement, false designation and common law unfair competition.
The carrier, Travelers, owed plaintiff Premier a duty to defend in the underlying Multi-Vet Ltd. litigation if: 1) Premier’s conduct, as alleged in the Multi-Vet suit, constituted one of the offenses enumerated by the policy giving rise to advertising injury; 2) Premier’s conduct occurred in the course of advertising its goods, products or services; and 3) the advertising activities caused Multi-Vet’s alleged harm. Because this court finds that the Multi-Vet Initial Complaint fails to satisfy the requirement that it allege conduct in the course of advertising, or that, even if it does allege such conduct, it fails to allege any resulting harm, the court finds the Multi-Vet initial complaint did not invoke Travelers’ duty to defend Premier.
Premier’s alleged activities did not occur in the course of advertising or, in the alternative, cause harm. Premier contends that advertising, an undefined term in the policy, should be construed broadly for coverage.
In the absence of Virginia or 4th Circuit precedent, Solers Inc. v. Hartford Cas. Ins. Co., 146 F. Supp. 2d 785 (E.D. Va. 2001), cited with approval the majority of cases that had found the term “advertising” to refer unambiguously to the widespread distribution of promotional material to the public at large, or at least to widely disseminated solicitation or promotion.
Here, the Multi-Vet complaint alleges improper sale of items and misuse of Multi-Vet’s trademarks. The initial complaint seeks an injunction against advertising in its prayer for relief, but it fails to allege any facts as to advertising at all, much less harm from advertising, in the allegations placed before the New York federal court. In Solers, the court found that solicitation did not constitute advertising.
Given this precedent, this court finds that “sale” and “use,” which the Multi-Vet initial complaint alleges without any further context, could not constitute advertising or “widespread promotion” (as opposed to sale) of goods.
Even if this court construed the allegations broadly toward a duty to defend, the Multi-Vet complaint fails to allege clearly that Premier’s advertising activities caused injury. None of the claims directly alleges harm due to Premier’s advertising of its goods, products or services. Cases finding that the use of trademark implies advertising and advertising injury does not persuade. None of the cases construes Virginia law; the one case construing Virginia law as to the meaning of “advertising” appears to place the allegations outside the duty to defend.
Premier Pet Products LLC v. Travelers Property Cas. Co. (Lauck, J.) No. 3:09cv293, Jan. 5, 2010; USDC at Richmond, Va. VLW 010-3-019, 20 pp.
