Laney Chiropractic & Sports Therapy, P.A. v. Nationwide Mutual Insurance Co.
2017 U.S. App. LEXIS 13748
| 5th Cir. | 2017Background
- Laney Chiropractic provided Active Release Techniques (ART) treatment; ART Companies owned trademarks and patents for ART and had licensed providers.
- ART Companies sued Laney alleging trademark infringement, false advertising, unfair competition, breach of contract, and related claims based on Laney’s use of ART-related terms and website content.
- Laney tendered defense to its commercial general liability policy issued by Nationwide, which covers "personal and advertising injury" including use of another’s "advertising idea" or infringement of "trade dress or slogan" in an "advertisement."
- Nationwide refused to defend; Laney sued for a declaratory judgment that Nationwide had a duty to defend. The district court granted summary judgment for Nationwide; Laney appealed.
- On review under Texas law and the eight-corners rule, the Fifth Circuit evaluated whether the underlying complaint’s factual allegations potentially alleged (1) use of another’s advertising idea, (2) trade dress infringement, or (3) slogan infringement.
Issues
| Issue | Laney’s Argument | Nationwide’s Argument | Held |
|---|---|---|---|
| Duty to defend for use of another’s "advertising idea" | Underlying complaint alleges Laney used ART Companies’ advertising ideas via phrases (e.g., "soft tissue techniques," "500 techniques") and testimonial videos on its website | Complaint does not allege ART Companies had or used those advertising ideas; using another’s product does not equal using its advertising idea | No duty to defend; allegations describe copying a product or product wording, not the use of another’s advertising idea |
| Duty to defend for trade dress infringement | Laney contends website mimicry and use of ART-related phrasing could state a trade dress claim | Complaint lacks allegations that any non‑trademarked elements are distinctive, ornamental, or have secondary meaning; mostly alleges copying the product/function, not its aesthetic "look and feel" | No duty to defend; pleadings do not allege protectable trade dress or discrete aesthetic elements |
| Duty to defend for slogan infringement | Phrases like "ART," "Active Release Techniques," "soft tissue techniques," and "more than 500 techniques" are slogans | Most phrases are product/brand names or descriptive narrative, not catchy, standalone slogans; complaint does not allege ART Companies used the non‑trademarked phrases as slogans | No duty to defend; alleged phrases are not pled as other party’s slogans and brand names are not slogans |
| Application of eight‑corners rule and policy construction | Laney urges a liberal reading in favor of coverage under the policy terms | Nationwide argues plain meaning and eight‑corners analysis show no covered offense alleged | Court applied Texas contract rules and eight‑corners rule; construed terms by ordinary meaning and affirmed no potential coverage |
Key Cases Cited
- Trinity Universal Ins. Co. v. Emp’rs Mut. Cas. Co., 592 F.3d 687 (5th Cir.) (standard of review for summary judgment in insurance coverage actions)
- Mid-Continent Cas. Co. v. JHP Dev., Inc., 557 F.3d 207 (5th Cir.) (policy terms construed by ordinary meaning; when ambiguous, construed for insured)
- Sport Supply Grp., Inc. v. Columbia Cas. Co., 335 F.3d 453 (5th Cir.) (a trademark is not an advertising device for purposes of "advertising idea")
- Test Masters Educ. Servs., Inc. v. State Farm Lloyds, 791 F.3d 561 (5th Cir.) (focus on factual allegations, not legal labels; limits on considering facts outside pleadings)
- Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (U.S. Supreme Court) (requirements for protectable trade dress)