Intellectual Property

Duty to Defend Trademark Suit Not Included within Insurance Proviso Covering Title/Slogan Infringement

The Eighth Circuit recently determined that an infringement lawsuit involving the trademark, "Nature's Own," did not invoke an insurer's duty to defend under an "Advertiser Advantage" insurance policy. The policy excluded claims "for or arising from infringement or dilution of trademark, trade name, trade dress, service mark or service name or unfair competition arising therefrom," with the explicit proviso that "this exclusion shall not apply to claims for infringement of title or slogan."

"Nature's Own:" A Slogan or Title?

Flowers Bakeries Brands, which produces breads under the Nature's Own trademark, sued Interstate Bakeries Corporation (IBC), accusing IBC of using the infringing Nature's Pride and Nature's Choice trademarks in connection with packaged breads. IBC maintained an "Advertiser Advantage" insurance policy with OneBeacon that provided coverage for loss resulting from "claims arising from an occurrence committed by the insured during the policy term in or for scheduled advertising." However, OneBeacon refused to defend pursuant to the policy's trademark exclusion.

IBC demanded a defense, asserting that "Nature's Own" was a "slogan" and a "title" under the proviso. In Interstate Bakeries Corp. v. Onebeacon Ins. Co., 2012 U.S. App. LEXIS 15200 (8th Cir. Mo. July 24, 2012) [enhanced version available to lexis.com subscribers], the Eighth Circuit rejected IBC's assertions.

Infringement of a Title

IBC argued that the phrase "Nature's Own" was the title of the wrappers in which Flowers packaged its bread products. The Flowers complaint, which alleged infringement of the "Nature's Own" trademark, therefore alleged infringement of a title for which the policy provided coverage. In response to IBC's argument, OneBeacon argued that there was no "Nature's Own" bread wrapper in the record and, therefore, there were no facts to support IBC's argument. The court held:

The mere appearance of the trademarked phrase on the packaging does not allow us to assume that it is being used as the "heading" or "distinctive designation" of the wrapper. Again, without information in the record about Flowers's bread wrappers, which were arguably reasonably ascertainable to OneBeacon, we cannot determine whether the content of the wrapper showed that the trademark "Nature's Own" potentially qualifies as a title. As to the Flowers Complaint,  we conclude that Flowers's claim that it markets its bread products under the mark "Nature's Own" does not sufficiently allege that "Nature's Own" is the title of the packaging. Thus, it does not give rise to a claim potentially within the policy's coverage for title infringement.

(citations omitted)

Infringement of a Slogan

IBC also contended that the facts alleged in the Flowers complaint, in conjunction with the facts that OneBeacon knew or reasonably could have discovered, gave rise to a claim potentially within the policy's coverage for claims arising from infringement of a slogan. The court rejected this contention, holding:

Although IBC surmises that the word "nature" in "Nature's Own" shows that Flowers intends to tout that its breads "contain[] 'natural' rather than artificial ingredients," there are no allegations in the Flowers Complaint that Flowers actually has "a characteristic position or stand or a goal to be achieved" that is expressed by the term "Nature's Own." Moreover, there is nothing to indicate the extent to which Flowers produces or claims to produce "natural" bread  products, however that might be defined. Similarly, IBC fails to identify anything in the record indicating that Flowers claims to use or actually uses "Nature's Own" as "a brief attention-getting phrase used in advertising or promotion," rather than as a simple product identifier. Once again, while it is conceivable that "Nature's Own" could serve as a slogan in Flowers's marketing efforts for a line of natural bread products, the lack of any specific allegation relating to such a use, along with IBC's failure to identify any instance of such a use that would have been readily ascertainable by OneBeacon at the time the claim was filed, defeats IBC's claim for a defense under the policy.

(footnotes omitted) 

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