781 F.3d 983
8th Cir.2015Background
- Excell Consumer Products sued Smart Candle (2011) alleging trademark/trade-name infringement over the use of the name and domain “Smart Candle,” seeking a permanent injunction.
- Smart Candle had commercial general liability insurance with Selective (10/18/2010–10/18/2012) and requested defense/indemnity; Selective denied coverage citing a policy exclusion for intellectual-property infringement but a coverage grant for infringement of a “slogan” in an “advertisement.”
- Selective argued the policy covered only copyright, trade dress, or slogan infringement in advertisements and expressly excluded trademark infringement; Excell’s complaint alleged trademark/trade-name infringement, not slogan infringement.
- Smart Candle sued Selective for breach (and alleged Selective failed to reasonably investigate), and Selective sought declaratory judgment that it owed no duty to defend/indemnify; both parties moved for summary judgment.
- The district court granted summary judgment for Selective: it held (1) “slogan” uses its plain meaning and Excell’s complaint did not arguably allege slogan infringement, (2) Selective had no duty to look beyond the complaint, and (3) interpreting “trademark” to include “slogan” would render policy language meaningless.
- The Eighth Circuit affirmed, concluding the complaint did not arguably trigger coverage for slogan infringement and thus Selective owed no duty to defend or indemnify.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the policy’s undefined term “slogan” should be read to include the trade name "Smart Candle" | Smart Candle: "Smart Candle" functioned as a slogan (expresses company goal/attention-getting phrase) and thus falls within coverage for slogan infringement | Selective: "slogan" has ordinary meaning distinct from trademark; Excell alleged trademark/trade-name infringement, not slogan infringement | Held: "Slogan" is unambiguous; "Smart Candle" is a trade name/mark, not a slogan, so no coverage triggered |
| Whether Excell’s complaint arguably alleged slogan infringement such that Selective had a duty to defend | Smart Candle: The complaint could be read to encompass slogan infringement; coverage arguable | Selective: Duty to defend is measured by the complaint’s allegations; Excell pleaded only trademark/trade-name claims | Held: Complaint did not arguably raise slogan infringement; no duty to defend |
| Whether Selective was required to investigate beyond the four corners of the complaint | Smart Candle: Selective admitted reviewing Smart Candle’s website and thus should have investigated further for slogan use | Selective: Under Minnesota law insurer need not look beyond pleadings unless complaint arguably raises a covered claim | Held: Under Minnesota law, insurer need not look beyond complaint when pleadings do not arguably raise a covered claim; Selective permissibly relied on the complaint |
| Whether construing "trademark" to include "slogan" is required by the policy or contract interpretation principles | Smart Candle: Terms overlap; ambiguity should be construed for the insured | Selective: Treating trademark and slogan synonymously would nullify distinct policy terms; ordinary meaning applies | Held: Court refused to conflate terms; policy language unambiguous and must be given plain meaning |
Key Cases Cited
- Grinnell Mut. Reinsurance Co. v. Schwieger, 685 F.3d 697 (8th Cir.) (standard of review for summary judgment and insurance contract interpretation)
- Evanston Ins. Co. v. Johns, 530 F.3d 710 (8th Cir.) (standard for reviewing declaratory judgments)
- Interstate Bakeries Corp. v. OneBeacon Ins. Co., 686 F.3d 539 (8th Cir.) (definition and treatment of "slogan" in insurance coverage analysis)
- Brown v. State Auto. & Cas. Underwriters, 293 N.W.2d 822 (Minn.) (insurer's duty to defend when any claim is arguably within coverage)
- Meadowbrook, Inc. v. Tower Ins. Co., 559 N.W.2d 411 (Minn.) (duty to defend broader than duty to indemnify)
- Garvis v. Employers Mut. Cas. Co., 497 N.W.2d 254 (Minn.) (examining complaint to determine duty to defend barring arguably covered claims)
- Cincinnati Ins. Co. v. Zen Design Grp., Ltd., 329 F.3d 546 (6th Cir.) (distinguishing product name from an attention-getting advertising phrase)
- Blau Plumbing, Inc. v. S.O.S. Fix-It, Inc., 781 F.2d 604 (7th Cir.) (trademark can be a slogan but analysis depends on facts)