Chicago IP Attorney & Lawyer : R. David Donoghue : Chicago IP Litigation Blog

Capitol Indemnity Corp. v. Elston Self Serv. Wholesale Grocs., Inc., No. 04 C 6536, 2008 WL 696919 (N.D. Ill. Mar. 13, 2008) (Pallmeyer, J.).

Judge Pallmeyer held that the advertising injury claim in plaintiff Capitol Indemnity's ("CI") insurance policy required that it defend defendants the "Elston Grocery" defendants in the underlying trademark infringement, unfair competition and Illinois Deceptive Trade Practices Act ("IDTPA") claims. In the underlying litigation, Lorillard Tobacco accused Elston Grocery of selling counterfeit Newport cigarettes using Newport cigarette advertisements.

The advertising injury clause covered infringement of "copyright, title, or slogan" and "[m]isappropriation of advertising ideas." The Court held that "title" does not mean just the title of a work, but also encompasses, among other things, trademarks and names. CI, therefore, had a duty to defend Elston Grocery against Lorillard's trademark infringement claims. A duty to defend was also created by the trademark infringement claims because they accused Elston Grocery of misappropriating Lorillard's advertising ideas – its trademarks and advertisements.

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Discover Financial Servs. LLC v. National Union Fire Insur. Co. of Pittsburgh, PA, No. 06 C 4359, 2007 WL 2893624 (N.D. Ill. Sep. 26, 2007) (Pallmeyer, J.).

Judge Pallmeyer granted summary judgment that defendant National Union Fire Insurance Co. (“National Union”) did not have a duty to defend plaintiff Discover Financial Services (“Discover”) pursuant to Discover’s insurance policy (the “Policy”). Discover argued that its alleged infringement of a telephone call processing system patent was advertising injury covered by the Policy because Discover advertised various services when its customers used Discover’s phone system. But the Court held that the alleged infringement did not arise solely from advertising activities, as is required by the Policy. While Discover advertised services to callers, the main purpose of its system was conducting financial business and the underlying patent complaint against Discover alleged infringement without identifying any Discover advertising as infringing. The advertising, therefore, could not be considered the sole cause of the alleged injury.\

Practice tip: When responding to Local Rule 56.1 statements, make sure to support denials with admissible evidence. The parties in this case each made arguments that the Court disregarded because the opposing Rule 56.1 statements had not been refuted with evidence.

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Global Computing, Inc. v. Hartford Cas. Ins. Co., No. 05 C 6753, 2007 WL 844618 (N.D. Ill. Mar. 14, 2007) (Hibbler, J.).

Judge Hibbler granted defendant-insurer summary judgment that it had no duty to indemnify or defend plaintiff-insured.  Microsoft brought suit against plaintiff alleging that plaintiff distrbuted counterfeit Microsoft software and used Microsoft logos in its advertising for the software, thus infirning Microsoft's copyrights and trademarks.  Plaintiff tendered the claim to defendant, its insurer, but defendant refused to defend plaintiff stating that its policy did not cover Microsoft's allegations.  After settling with Microsoft, plaintiff brought the instant suit alleging defendant breached its duty to defend and indemnify.  The Court noted that by refusing to defend, defendant estopped itself from denying coverage for policy reasons if it breached its duty to defend.  But because Microsoft's alleged infringement of its copyrights and trademarks (which were exempted from coverage), instead of the use of Microsoft's advertising ideas, the suit was not covered by the insurance policy.

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Allied Ins. Co. v. Bach, No. 05 C 5945, 2007 WL 627635 (N.D. Ill. Feb. 27, 2007) (Leinenweber, J.).

Judge Leinenweber granted declaratory judgment defendants/counter-plaintiffs (collectively "defendants") summary judgment DJ plaintiff/counter-defendant's ("plaintiff") duty to defend defendants against Lanham Act and related state law claims.  Defendants were sued by third party Acushnet which accused defendants of willful and intentional violation of Acushnet's marks related to its Titlest Pro VI golf ball based upon defendants' alleged marketing of counterfeit golf balls.  Defendants sought defense and indemnification from plaintiff, their insurer.  Defendants' insurance policy covered, among other things, defendants' infringement of third party marks or copyrights in defendants' advertising so long as the infringement was not done with knowledge or intent of the infringement.  Although the Complaint charges defendants' with willful and intentional violations of the marks, the Lanham Act provides claims without regard to intent.  Because not all of Acushnet's claims require intent, plaintiff has a duty to defend defendants' against the suit.  The Court did note, however, that should Acushnet prove that defendants' acts were willful and intentional, plaintiff would have no duty to indemnify.

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