Vitamin Energy, LLC v. Evanston Ins. Co.

Vitamin Energy, LLC v. Evanston Ins. Co.

Opinion

OPINION OF THE COURT

JORDAN, Circuit Judge.

] Pennsylvania law imposes on insurers a broad duty to defend lawsuits brought against those they insure. Vitamin Energy, LLC, obtained a policy from Evanston Insurance Company and was subsequently sued by a competitor, the owners of the 5-hour Energy brand, for publishing certain comparative claims and infringing the 5-hour Energy mark in advertising and packaging. The District Court decided Evanston had no duty to defend. We think otherwise. An insured's burden to establish its insurer's duty to defend is light, and Vitamin Energy has carried it. Read liberally in favor of coverage, as is required, the 5-hour Energy complaint and the insurance policy impose on Evanston a duty to defend Vitamin Energy in the underlying suit, [*2]  at least until there is no possibility that 5-hour Energy could prevail against Vitamin Energy on a claim covered by the policy. Likewise, the coverage exclusions raised by Evanston are construed in favor of coverage, and we cannot say, at this point, that they eliminate the duty to defend. Accordingly, we will vacate and remand.

I. BACKGROUND

A. The Underlying 5-hour Energy Lawsuit Against Vitamin Energy

This case stems from a separate lawsuit in which Vitamin Energy, the plaintiff-appellant here, is the defendant. In June 2019, Vitamin Energy was sued in the United States District Court for the Eastern District of Michigan by International IP Holdings, LLC, and Innovation Ventures, LLC, the owners of trademarks for 5-hour Energy liquid energy shots.¹ In that lawsuit, 5-hour Energy asserts claims against Vitamin Energy under the Lanham Act for trademark infringement, false designation of origin, false advertising, and trademark dilution. It also makes claims under Michigan law for trademark infringement, indirect trademark infringement, and unfair competition.

Among the wrongs Vitamin Energy has allegedly committed is "false and misleading comparative advertising" about the benefits of Vitamin Energy's [*3]  products relative to competing products, including 5-hour Energy's, as shown in the following chart from paragraph 40 of 5-hour Energy's complaint:

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