THE HYMAN COMPANIES, INC., d/b/a LANDAU JEWELERS, Plaintiff v. LIBERTY MUTUAL INSURANCE COMPANY, a/k/a LIBERTY MUTUAL GROUP, Defendant-Appellee.
No. 11-4483-cv.
United States Court of Appeals, Second Circuit.
April 18, 2012.
914
Marshall T. Potashner, Jaffe & Asher LLP, New York, NY, for Appellee.
PRESENT: JOHN M. WALKER, JR., GERARD E. LYNCH, and RAYMOND J. LOHIER, JR., Circuit Judges.
SUMMARY ORDER
Plaintiff-appellant Feldman Law Group (“FLG“) brought this action as the assignee of The Hyman Companies (“Hyman“) against its insurer, defendant-appellee Liberty Mutual Insurance Company (“Liberty“). FLG had represented Hyman in the defense of a lawsuit brought by non-party Van Cleef & Arpels Logistics, S.A. (“Van Cleef“), in which Van Cleef alleged that Hyman had violated Van Cleef‘s copyright and trade dress in violation of federal and state law. Liberty rejected Hyman‘s request to provide for Hyman‘s defense, denying that the conduct alleged in Van Cleef‘s complaint was covered under Hyman‘s policy. FLG then initiated this action against Liberty, seeking to recover the costs incurred in Hyman‘s defense. The district court granted Liberty‘s motion to dismiss FLG‘s action for failure to state a claim. For the reasons that follow,
We review a district court‘s decision granting a motion to dismiss de novo, “accepting all factual claims in the complaint as true, and drawing all reasonable inferences in the plaintiff‘s favor.” Famous Horse Inc. v. 5th Ave. Photo Inc., 624 F.3d 106, 108 (2d Cir. 2010). In order to state a claim under
Hyman‘s policy requires Liberty to defend against any suit seeking damages for “personal and advertising injury,” but excludes coverage for “[p]ersonal and advertising injury arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights.” As defined in the policy, “advertising injury” includes “infringing upon another‘s copyright, trade dress, or slogan in [an] ‘advertisement‘.” The policy defines an “advertisement” as a “paid announcement that is broadcast or published in the print, broadcast or electronic media to the general public or specific market segments about your goods, products or services for the purpose of attracting customers or supporters.” Thus, for the Van Cleef complaint to trigger Liberty‘s duty to defend, the complaint, liberally construed, must allege that Hyman potentially placed a “paid announcement ... broadcast or published ... to the general public,” and that the injuries potentially resulting from the publication of that announcement did not arise from the “infringement of copyright, patent, trademark, trade secret or other intellectual property rights” by the item advertised.
The Van Cleef complaint contains no such allegation. The three-count complaint alleges that Hyman “reproduced, copied and imitated” Van Cleef‘s jewelry design, resulting in damages to Van Cleef. The rest of the complaint concerns itself almost exclusively with the description of the infringing activity and underlying intellectual property. At no point does the complaint allege that any advertisement published by Hyman infringed Van Cleef‘s copyright or trade dress; indeed, the complaint does not allege that Hyman placed any advertisements at all.
FLG relies on scattered references in the Van Cleef complaint that it contends could be construed as referring to the kind of advertising injuries that the policy covers. The complaint avers that Hyman “manufactured, sold, offered for sale, and/or distributed copies of the [protected intellectual property],” and that Hyman infringed Van Cleef‘s intellectual property rights “by reproducing such design without authorization and distributing copies thereof by sale and other means...” (emphasis added). Moreover, in its prayer for relief, Van Cleef asks that Hyman “be required to deliver up to [Van Cleef] for
FLG urges us to infer that the references to reproduction and distribution “by sale and other means” could refer to the placement of a “paid announcement” in the public media. Such references, however, are far too general to support the conclusion that Van Cleef‘s complaint encompassed an injury resulting from any paid advertisement by Hyman, when the complaint specifically and repeatedly refers only to Hyman‘s conduct in “designing” jewelry “that is confusingly similar” to Van Cleef‘s design, and “reproducing such design without authorization and distributing copies thereof,” thus infringing its trade dress and copyright. The factual allegations of the complaint thus specifically invoke Hyman‘s design, manufacture and sale of infringing goods, but nowhere discuss, allege or allude to any advertisement of those goods.
Nor does the complaint‘s demand, in the prayer for relief, that Hyman be required to deliver to Van Cleef for destruction any goods that were being “advertised, promoted, [or] offered for sale,” as well as “any and all catalogs, circulars and other printed material in their possession or under their control displaying or promoting the [infringing] goods that were or are being advertising [sic], promoted, [or] offered for sale” alter that conclusion. First, neither the substantive allegations nor the demands for relief suggest that any advertisement itself infringed Van Cleef‘s intellectual property rights. It is well established that “[m]erely advertising a misappropriated product does not cause an advertising injury“; to inflict a covered advertising injury, the advertisement, and not the product being advertised, must itself infringe the underlying plaintiff‘s rights. Frog, Switch & Mfg. Co. v. Travelers Ins. Co., 20 F.Supp.2d 798, 803 (M.D.Pa.1998) (applying Pennsylvania law), aff‘d, 193 F.3d 742 (3d Cir.1999). The destruction of any printed matter promoting infringing products, however, would be appropriate relief for the sale of such products. Second, the prayer for relief in any event lacks any reference to the placement of paid announcements in public media. While “catalogs [and] circulars” produced by Hyman itself may well be deemed advertising in some contexts, the specific definition in the Liberty policy is more limited, requiring payment to a third-party for an announcement placed in a public medium.
Our decision in Century 21, Inc. v. Diamond State Insurance Co., 442 F.3d 79 (2d Cir.2006), on which FLG relies, does not compel a different conclusion. There, the underlying complaint alleged that the insured “marketed, distributed, and sold goods in connection with a colorable imitation and simulation of the ... [t]rademarks with the express intent of causing confusion and mistake....” Id. at 81. The question in Century 21 was whether the allegation of “marketing” triggered a duty to defend under a policy that covered suits based upon infringing advertising, under a policy that did not define advertising as narrowly as the policy here, but which we took to encompass a wide range of “promotional activities.” Id. at 83. In this case, the complaint contained no such reference to “marketing” or any other term that could lead us to conclude that Van Cleef complained of anything other than the production of infringing merchandise, rather than its advertisement.
We have considered FLG‘s other arguments and find them to be without merit.
For the foregoing reasons, the district court‘s decision is AFFIRMED.