General Casualty Co. of Wisconsin v. Wozniak Travel, Inc., 762 N.W. 2d 572 (Minn. 2009)
Analyzing the ”use of another’s advertising idea in your ‘advertisement’ ” question, the court determined whether in trademark infringement claim for wrongful use of the word “hobbit” by Hobbit Travel triggered a defense on the issue certified by the District Court.
The court found that it did, questioning the contrary line of authority including Callas Enterprises, Inc. v. Travelers Indem. Co., 193 F.3d 952, 956-57 (8th Cir. 1999).
“Misappropriation of advertising ideas” or “style of doing business” offense was implicated by the trademark infringement claim as the certified question queried.
We conclude that the absence of the word “trademark” in the CGL policy does not foreclose the possibility that trademark infringement falls within the scope of the advertising-injury definitions in General Casualty's policy. First, the policy provides coverage for injuries “arising out of” the advertising-injury definitions, which expands the scope of the policy language since this court has defined “arising out of” broadly as “originating from,” “growing out of,” or “flowing from.” Dougherty v. State Farm Mut. Ins. Co., 699 N.W.2d 741, 744 (Minn.2005). Second, the Minnesota rules of insurance policy interpretation require policies to be read in favor of finding coverage, and require courts to look past the legal nomenclature to the underlying allegations. Finally, the duty to defend applies to claims that “arguably” fall within the policy, and if insurance policy language is susceptible of more than one meaning, it must be given the meaning that favors coverage.
Id. at *3.
Noting that the only other supreme court that reached a similar view, it found Acuity v. Bagadia, 750 N.W.2d 817, 827 (Wis. 2008) persuasive. Adopting the broader definition of advertising in accord with the Acuity court’s reasoning, it stated:
[W]e interpret the term “advertising” . . . as: “any oral, written, or graphic statement made by the seller in any manner in connection with the solicitation of business.”
Id. at *6.
This opinion reflects a modern trend broadly construing the term “advertising.” It circumvents misstatements in earlier cases that improperly asserted that the majority of courts (Id. at 26) had narrowly interpreted “advertising” as “widespread promotional activities usually directed to the public at large”. Hameid v. National Fire Ins. Co. of Hartford, 31 Cal. 4th 16, 24 (2003). See The Proper Definition of “Advertising” in an “Advertising Injury” Coverage Case - a Critique of the California Supreme Court’s Decision in Hameid v. National Fire Ins. Of Hartford, 31 Cal. 4th 16, 1 Cal. Rptr. 3d 401, 71 P.3d 761 (2003) [Published in Mealey’s Litigation Report: Intellectual Property Vol. 12, Iss. #1 also published in Mealey’s Emerging Insurance Disputes Vol. 8, Iss. # 20; Mealey’s Litigation Report: California Insurance Vol. 3, Iss. # 5].
The “use of another’s advertising idea in your ‘advertisement’ ” offense was implicated, thus the court found it unnecessary to decide whether there was an infringement of copyright, trade dress or slogan at issue. It reasoned,
Tolkien also alleged that Hobbit Travel used the word “hobbit” in its domain name and on its website to attract the national public's attention to its travel agency, and capitalize on the goodwill surrounding the Tolkien works. These uses of the word “hobbit” by Hobbit Travel were made in connection with the solicitation of travel business within our broad reading of “advertisement”; thus, Tolkien's damages arose out of Hobbit Travel's “use of another's advertising idea in [its] ‘advertisement.’ ”
Id. at *7.
A vigorous dissent by Chief Justice Magnuson found that the court had too broadly stretched the meaning of “arguably” bring into question the previous views expressed in Franklin v. W. National Mut. Ins. Co., 574 N.W. 2d 405, 407 (Minn. 1998) (citing Ross v. Briggs and Morgan, 540 N.W. 2d 843, 847 (Minn. 1995)). Id. at *9.
