America's Recommended Mailers, Inc. v. Maryland Cas. Co., ___ F. Supp. 2d ___, 2008 WL 4346287 (E.D. Tex. 2008) (Schell)
The court found an applicable intellectual property exclusion which expressly eliminated coverage for trademark infringement barred coverage for a suit which alleged consumer confusion as to whether the AARP had sent cards that were in fact sent by a Mail House. A high-pressure sales pitch about financial services and living trusts, promoted to senior citizens by various Financial Services Defendants, was forwarded to them by the Mail House Defendants. The recipients could not determine that the pitch did not come from the AARP.
Thus, the AARP mark was used in an “improper way”.
Despite the fact that distinct claims for both trademark infringement and unfair competition in violation of 15 U.S.C. § 1125 were asserted, the court did not analyze – nor, apparently, did the parties raise – the potential argument that a defense could arise from the unfair competition claims in the event the trademark infringement claims were not held to be viable.
Applying Texas law, the court appeared to view each of the potential claims as so interrelated that the potentiality for a nonexistent trademark claim was not in play.
Judge Hilton, in Corporate Risk Int’l, Inc. v. Assicurazioni Generali, S.p.A., No. 95-1440-A, 1996 U.S. Dist. LEXIS 19720, at *8-9 (E.D. Va. Mar. 15, 1996), rejected an insurer argument that a broader exclusion than that in force here applied to false advertising and unfair competition claims because the underlying plaintiff’s claims went beyond the express terms of the exclusion.
After a reading of the underlying complaint, it is clear that the complained of conduct goes beyond trade or service mark infringement. . . . Each of the Lanham Act counts . . . complains of CRI’s conduct in the promotion, sale, and offering for sale of its corporate security services in conjunction with the allegedly infringing marks. Further, at paragraph thirty, the complaint asserted that CRI’s advertising activity was “in direct contravention of Plaintiffs’ CONTROL RISKS MARKS and other proprietary rights.” That reference to other proprietary rights is again made at paragraph sixty-five. Finally, . . . the Prayer for Relief asks that the underlying defendants be enjoined from “engaging in any conduct that tends falsely to represent that, or is likely to confuse, mislead, or deceive Defendants’ customers” into believing that CRI’s services were sponsored by Control Risks Group. The prayer also asks for damages resulting from CRI’s “unfair activities.”
