106 N.E.3d 572
Mass.2018Background
- Vibram USA purchased commercial general liability policies (2009–2011) that insured against "personal and advertising injury," including use of "another's advertising idea" in an "advertisement."
- The Bikila family (heirs of runner Abebe Bikila) sued Vibram in federal court alleging Vibram named a shoe model "Bikila" and used the name to associate its barefoot-style shoes with Abebe Bikila's legacy; claims included Washington personality-rights, Washington Consumer Protection Act, Lanham Act unfair competition, and unjust enrichment.
- Insurers (Holyoke Mutual and Maryland Casualty) denied coverage for the suit, funded Vibram's defense under a reservation of rights, and filed a declaratory-judgment action in Superior Court seeking a ruling that they had no duty to defend.
- The Superior Court granted summary judgment for insurers, concluding the complaint alleged only personality/right-of-publicity claims (excluded by policy) and not misuse of an "advertising idea."
- The Supreme Judicial Court reviewed whether the underlying complaint was reasonably susceptible to alleging use of the Bikila family's advertising idea (thereby triggering the duty to defend).
- The court held the complaint could reasonably be read to allege that the Bikila family used the name "Bikila" (and the legacy it conveyed) as an advertising idea for their commercial ventures and that Vibram was alleged to have appropriated that advertising idea; insurers thus had a duty to defend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the underlying complaint sufficiently alleges use of another's "advertising idea" to trigger insurers' duty to defend | Bikila family created an advertising idea by using the name "Bikila" and its legacy to market running-related ventures; Vibram's use appropriated that advertising idea | Insurers: complaint alleges only personality/right-of-publicity claims (intellectual property) excluded by policy; no trademark/secondary-meaning showing that "Bikila" functioned as an advertising idea | The complaint is reasonably susceptible to alleging use of another's advertising idea; duty to defend is triggered |
| Proper interpretation of "advertising idea" in the policy | (Vibram/insured) term should be read broadly to include using a name/legacy to solicit customers | (Insurers) advertising idea requires elements akin to trademark/secondary meaning; complaint lacks that | "Advertising idea" is broad; need not require secondary-meaning or traditional trademark elements |
| How ambiguities in coverage/exclusions are resolved | Ambiguities resolved for insured; duty to defend is broader than duty to indemnify | Insurers urged narrow reading to apply exclusion for intellectual-property claims | Court resolves ambiguities for insured; overlap between covered advertising-idea claim and excluded publicity claim favors duty to defend |
| Standard for insurer's duty to defend on summary judgment | Duty triggered if complaint is reasonably susceptible to a covered claim, even if claim might ultimately fail | Insurers argued complaint did not plead covered claim as a matter of law | Court applies settled Massachusetts standard and finds duty to defend because complaint could be read to state covered claim |
Key Cases Cited
- Metropolitan Prop. & Cas. Ins. Co. v. Morrison, 460 Mass. 352 (2011) (insurer's duty to defend is broader than duty to indemnify)
- Billings v. Commerce Ins. Co., 458 Mass. 194 (2010) (duty to defend triggered when complaint is reasonably susceptible to a covered claim)
- Boston Symphony Orchestra, Inc. v. Commercial Union Ins. Co., 406 Mass. 7 (1989) (coverage focuses on kinds of losses that may be proved, not the pleadings' labels)
- Green Machine Corp. v. Zurich-American Ins. Group, 313 F.3d 837 (3d Cir. 2002) (broad definition of "advertising idea" as solicitation of business)
- American Simmental Ass'n v. Coregis Ins. Co., 282 F.3d 582 (8th Cir. 2002) (terms conveying desirable product qualities may constitute an "advertising idea")