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Inc. v. Mainstreet America Assurance Co.

United States District Court, N.D. New York

February 21, 2018

360HEROS, INC., a Delaware Corporation, Plaintiff,

          GAUNTLETT & ASSOCIATES Attorneys for Plaintiff.

          HANCOCK & ESTABROOK, LLP Attorneys for Plaintiff.

          KENNEY SHELTON LIPTAK NOWAK LLP Attorneys for Defendant.





         Plaintiff 360Heros, Inc. ("360Heros") commenced this action on May 18, 2017, seeking declaratory relief and damages for Defendant Mainstreet America Assurance Company's ("MSA") alleged breach of contract based on its "failure and refusal to pay policy benefits and to defendant 360Heros in an underlying copyright[, ] trademark and patent . . . lawsuit venued in the United States District Court for the Northern District of California, styled as GoPro, Inc. v. 360Heros, No. 16-cv-01944 (the 'GoPro Action')." That same day, 360Heros moved for preliminary injunctive relief. See Dkt. No. 2.

         After the motion was fully briefed, the parties indicated that they were working towards a settlement of this matter. Magistrate Judge Peebles held a settlement conference on August 21, 2017 and indicated that, while the matter did not settle, the parties were close to resolving this case. Thereafter, the parties requested several adjournments to continue negotiating towards settlement. See Dkt. No. 36. In a joint status report dated December 1, 2017, the parties indicated that they "have reached an agreement, being circulated to principals, providing for a stipulated dismissal of this lawsuit without further Court conferences. The parties expect to file such a stipulation no later than December 18, 2017." Dkt. No. 38. However, during a December 11, 2017 telephone conference, Magistrate Judge Peebles noted it is clear that, despite representations made by counsel, this case is not settled and is headed to District Judge Mae A. D'Agostino to proceed with this litigation." As a result of the December 11, 2017 telephone conference, the Court instructed the parties to supplement the pending motion for injunctive relief and the response thereto.

         Currently before the Court is 360Hero's motion for a preliminary injunction. See Dkt. No. 2.


         A. The Parties

         Plaintiff 360Heros, Inc. manufactures, sells, and distributes photographic harness products in the United States and worldwide, including New York. See Dkt. No. 18 at ¶ 1. 360Heros is a Delaware corporation with its principal place of business in Olean, New York. See Id. at ¶ 2. Defendant MSA is in the business of selling contracts of insurance. See Id. at ¶ 4. MSA is a Florida corporation with its principal place of business in Jacksonville, Florida. See Id. at ¶ 5.

         B. The MSA Policy

         CNERD, Inc. was the named insured on MSA Policy No. BP25610B effective 07-01-2013 to 07-01-2014 (the "Policy"). See Dkt. No. 18 at ¶ 14. By endorsement, 360Heros was added as a named insured effective 07-01-2013 to 07-01-2016. See Id. CNERD and 360Heros were also insureds on the MSA policy effective 07-01-2014 to 07-01-2015, and on the policy effective 07-01-2015 to 07-01-2016. See id.

         Pursuant to the Policy, MSA had limits of insurance of $1, 000, 000 per occurrence, $1, 000, 000 personal and advertising injury limit, and $2, 000, 000 in the aggregate. See Id. at ¶ 15. The Policy provides coverage for "personal and advertising injury" caused by an offense committed during the policy period. See Id. at ¶ 16. The Policy provides for a defense of suits that potentially seek damages caused by "personal and advertising injury." Id. at ¶ 17. Specifically, the Policy provides, in pertinent part, that MSA "will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury', 'property damage' or 'personal and advertising injury' to which this insurance applies. We will have the right and duty to defend the insured against any 'suit' seeking those damages[.]" Dkt. No. 18 at ¶ 18. The Policy defines "advertisement" as "a notice that is … published to the general public or specific market segments about your goods, products or services for the purpose of attracting customers or supporters. For the purposes of this definition: a. Notices that are published include material placed on the Internet or on similar electronic means of communication; and b. Regarding web-sites, only that part of a web-site that is about your goods, products or services for the purposes of attracting customers or supporters is considered an advertisement." Id.; see also Dkt. No. 1-1 at 64. Further, the Policy provides that "'[p]ersonal and advertising injury' means injury ... arising out of one or more of the following offenses: . . . Infringing upon another's copyright, trade dress or slogan in your 'advertisement.'" Id.; see also Dkt. No. 1-1 at 66.

         C. The Underlying GoPro Action and Notice to MSA

         On April 13, 2016, GoPro filed a complaint in the Norther District of California, alleging that 360Heros infringed on certain of GoPro's copyrighted images in its advertising, infringed on its HERO and ABYSS trademarks, and otherwise engaged in unfair competition. See Dkt. No. 18 at ¶ 19. GoPro's complaint further sought a declaratory judgment of non-infringement of 350Heros' U.S. Patent No. 9, 152, 019 (the "019 patent"). See Id. at ¶ 20. GoPro further alleges that it acquired a French company, Kolor SARL, that had been selling the ABYSS rig in the United States previously in 2014. See Id. at ¶ 22.

         By a letter dated April 22, 2016, counsel for 360Heros provided notice of the lawsuit and a copy of the complaint to MSA. See Id. at ¶ 24. 360Heros' counsel gave further notices of the suit's pendency through May and June 2016. See Id. at ¶ 25. In an August 2, 2016 letter, MSA agreed to defend 360 Heros in the GoPro Action. See Id. at ΒΆ 26. MSA subsequently confirmed that its reservation of rights letter created a conflict of ...

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