Acuity v. Ross Glove Co.
817 N.W.2d 455
Wis. Ct. App.2012Background
- Ross Glove manufactures cold-weather neck and face protectors and had a relationship with Cabela's; Seirus sued Ross Glove and Cabela's in SD Cal for patent and trade dress infringement and unfair competition; Acuity issued a CGL policy providing defense for advertising injury and initially denied coverage; Acuity filed a declaratory judgment suit claiming no duty to defend/indemnify because claims lacked advertising activity and involved knowing violations; the circuit court granted declaratory judgment for Acuity; Ross Glove appeals, arguing the complaint includes advertising injury in Ross Glove’s advertisement and that coverage is triggered; the Wisconsin Supreme Court reviews de novo interpretation of the policy and the duty to defend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Seirus complaint state an advertising injury? | Glove argues complaint alleges trade dress in ads, triggering coverage. | Acuity argues no advertising injury was alleged. | Yes, the complaint states an advertising injury. |
| Does the complaint allege Ross Glove engaged in advertising activity? | Seirus alleges packaging and publication of Ross Glove’s notice to attract customers. | Acuity contends no advertising activity by Ross Glove. | Yes, the complaint alleges advertising activity by Ross Glove. |
| Is there a causal link between Ross Glove’s advertising and Seirus’s injury? | The packaging/advertising caused consumer confusion and lost sales. | Not explicitly required to prove causation at this stage. | Yes, a causal connection is alleged. |
| Does the Knowing Violation exclusion bar coverage for trade dress claims? | Seirus seeks damages for non-intentional infringement; exclusion for knowing violation should not apply. | Exclusion applies to knowing violations; intent not required for trade dress liability. | No, exclusion does not preclude defense; coverage is triggered. |
Key Cases Cited
- Fireman's Fund Ins. Co. v. Bradley Corp., 261 Wis. 2d 4 (Wis. 2003) (duty to defend assessed by comparing allegations to policy terms; liberal construction in insured's favor)
- Doyle v. Engelke, 580 N.W.2d 245 (Wis. 1998) (intent exclusion not applied to negligent conduct; ambiguity construed against insurer)
- R.C. Bigelow, Inc. v. Liberty Mut. Ins. Co., 287 F.3d 242 (2d Cir. 2002) (advertising injury coverage scope broad; insured need only one covered claim to trigger defense)
- TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23 (Sup. Ct. 2001) (design/packaging may acquire distinctiveness identifying the manufacturer/source)
- Gross v. Hoffman, 227 Wis. 296 (Wis. 1938) (precedent on appellate disposition where one issue disposes of appeal)