"misappropriation of advertising ideas or style of doing business" (subsection (c)) or "infringement of . . . title or slogan" (subsection (d)). Both of these subsections will be addressed in turn.
A. Misappropriation of Advertising Ideas or Style of Doing Business
Addressing subsection (c) first, the policy does not define "advertising ideas" or "style of doing business." Nor do these terms have clear definitions in the common law. However, in the ordinary sense of these terms, misappropriation of an "advertising idea" would mean the wrongful taking of the manner by which another advertises its goods or services. This would include the misuse of another's trademark or trade name.
A trademark is defined under the federal statute as "any word, name, symbol or device or any combination thereof, adopted and used by manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others." 18 U.S.C. § 1127. A servicemark is defined as "a mark used in the sale or advertising of services to identify the services of one person and distinguish them from the services of another." Id. Similarly, one's mark and name is an integral part of an entity's "style of doing business." Such misappropriation of "style of doing business" would include trademark, trade name or servicemark infringement.
Defendant argues that the New York courts strictly construe the advertising injury liability coverage provided by a general liability policy, citing A. Meyers & Sons Corp. v. Zurich American Insurance Group, 74 N.Y.2d 298, 546 N.Y.S.2d 818, 545 N.E.2d 1206 (1989), and Jerry Madison Enterprises, Inc. v. Grasant Manufacturing Co., No. 89- CV-2345 (MBM), 1990 U.S. Dist. LEXIS 1649, 1990 WL 13290 (S.D.N.Y. 1990). In both of these cases, the courts denied coverage under the "advertising injury" clauses in the contracts at issue.
In A. Meyers & Sons, the insured sued for a declaratory judgment requiring the insurer to defend a patent infringement claim pending before the International Trade Commission. The plaintiff in the underlying action had alleged that the insured infringed its patents by importing and selling infringing plastic fasteners. In affirming the grant of summary judgment to the insurer, the court held that the infringement did not occur in the course of the insured's advertising activities. The fact that the insured had circulated a price list for the infringing fasteners and that the plaintiff had complained of it in the underlying case did not mean that the claim arose in the course of the insured's advertising activities because there was no claim that the price list made false or deceptive claims or that it harmed the plaintiff.
In Jerry Madison Enterprises, Inc. v. Grasant Manufacturing Co., supra, the insured sought a declaratory judgment to require its insurer to defend a copyright infringement claim. Citing A. Meyers & Sons, the court held that the underlying complaint alleged no advertising injury, and therefore there was no coverage under the policy. Jerry Madison appeared to expand upon A. Meyers & Sons because the underlying plaintiff in Jerry Madison actually made allegations concerning the insured's advertising activity. The complaint alleged that the insured had "placed on the market" jewelry which infringed plaintiff's designs and that the insured sold the infringing jewelry through advertising, and requested the court enjoin the insured from marketing the infringing jewelry. According to the court, these allegations did not bring the claim within the policy coverage because the insured's advertising was not alleged to have infringed the copyright. As analyzed by the court, "the phrase 'occurring in the course of the insured's advertising activities' does not encompass the sale and manufacture of copyrighted [products]." 1990 WL 13290 at *4.
These cases clearly require a causal connection between "advertising injury" and "advertising activities" -- i.e., the injury must occur as a result of advertising. Since advertising was not a necessary ingredient in either the copyright infringement case or the patent infringement case, coverage was denied.
This case, in contrast to Jerry Madison and Meyers, does allege "advertising injury" arising out of advertising activities. Accordingly, contrary to Defendants' arguments, these cases do not preclude a finding of coverage here.
For example, Count I of the complaint alleges that "the use by Defendants of the name and mark ROTO-ROOTER in connection with the advertising and sale of sewer, drain and pipe cleaning services, constitutes an infringement of Roto-Rooter's federally registered marks . . ." (P 25)(emphasis added). Thus, the complaint alleges that the use of the mark in connection with advertising caused injury to the Plaintiff. The count supplies the essential ingredient found missing in Madison and Meyers -- i.e., injury arising out of advertising. Defendant's argument otherwise ignores the relevant language in the claim quoted above.
The second claim in the complaint alleges that "the use by Defendants of the designation ROTO-ROOTER in connection with the business of offering sewer and drain cleaning services, tends falsely to represent or designate that the Defendants are licensed, sponsored by or otherwise affiliated with Roto-Rooter . . . which has damaged and is likely to continue to damage Roto-Rooter" (P 28). This claim, liberally construed, also alleges advertising injury arising out of advertising activities.
"Advertising" is defined by Black's Law Dictionary as:
To advise, announce, apprise, command, give notice of, inform, make known, publish. To call a matter to public attention by any means whatsoever. Any oral, written, or graphic statement made by the seller in any manner in connection with the solicitation of business and includes . . . statements and representations . . . contained in any notice, handbill, sign, catalog, or letter or printed on or contained in any tag or label attached to or accompanying any merchandise.
Black's Law Dictionary 54 (6th ed. 1990). The use of the tradename "ROTO-ROOTER" in connection with offering sewer and drain cleaning necessarily implies advertising in the ordinary meaning of that term.
Count III alleges that Defendants' use of the name ROTO-ROOTER "in connection with the sale, offering for sale, and/or advertisement of sewer, drain and pipe cleaning services in the State of New York" is likely to cause infringement of Roto-Rooter's state servicemark, in violation of the General Business Law. Again, as with Count I, this count alleges advertising injury arising out of advertising activity.
Count V alleges that Defendants' "continued advertisement and sale of sewer and drain cleaning services in New York under the ROTO-ROOTER designation constitutes a misappropriation of plaintiff's good will . . ." to the damage of Roto-Rooter. Again, this claim alleges advertising injury arising out of advertising activity.
Accordingly, four claims of the complaint are sufficient to generate coverage under the policy.
In Madison and Meyers, the courts found that one could allege a claim for copyright or patent infringement without advertising ever occurring. Trademark or tradename infringement, in contrast, necessarily involves advertising, or use, of the mark or name to identify the merchants's goods or services. Thus, where it is possible to state a claim for patent infringement or copyright infringement without necessarily alleging that such activities occurred in advertising one's goods, it is not possible to allege a claim for trademark, servicemark or trade name infringement without the infringing mark being used to identify the goods or services to the public. This use qualifies as advertising under the definition above.
But even if a more narrow definition of advertising were used -- so that "advertising" is not equivalent to "use" of the mark -- the complaint in this case alleges that the injury here occurred as a result of advertising activity. Accordingly, coverage exists under the policy.
B. Title or Slogan Infringement
Subsection (d) covers advertising injury arising out of "infringement of copyright, title or slogan." Plaintiff concedes that the underlying complaint does not allege a claim for copyright infringement. The question is whether it alleges a claim for "title or slogan infringement." Defendant would lump title or slogan infringement into the same category as copyright infringement, reading them interchangeably.
"Title" and "slogan" are not defined in the policy. Accordingly, it is necessary to look to the meaning of these terms in the common law and in ordinary language. Ruder & Finn, Inc. v. Seaboard Surety Co., supra, 52 N.Y.2d at 671. "Title" is defined as: "A mark, style or designation; a distinctive appellation; the name by which anything is known." Black's Law Dictionary 1485 (6th ed. 1990). As to trademarks,
A title may become a subject of property; as one who has adopted a particular title for a newspaper, or other business enterprise, may, by long and prior usage, or by compliance with statutory provisions as to registration and notice, acquire a right to be protected in the exclusive use of it.
Id. Clearly, then, infringement of "title" can include trademark or tradename infringement.
Similarly, infringement of slogan can also include trademark or tradename infringement. "Slogan" is defined as follows:
Section 7:5 Slogans as Marks.