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When the shoe is on the other foot

When the shoe is on the other foot

December 26
09:34 2018

When the shoe is on the other foot

Between 2009 and 2011 Vibram, a producer of minimalistic shoes that simulate walking and running barefoot, purchased commercial general liability policies from Holyoke Mutual Insurance Company and Maryland Casualty Company. The policies provided coverage for personal and advertising injury liability. With certain enumerated exceptions, the policies stated that the insurers had a duty to defend Vibram from any suit seeking damages for covered losses, particularly for claims seeking damages against Vibram for advertising injury.

The form of advertising injury at issue was the one described in clause (f) of the policies as “[t]he use of another’s advertising idea in your ‘advertisement.’” The policies defined “advertisement” as a “notice that is broadcast or published to the general public or specific market segments about your foods, products or services for the purpose of attracting customers or supporters.” The policies did not define the term “advertising idea.”

The heirs of the late marathon runner Abebe Bikila sued Vibram in federal court for improperly using the name “Bikila” to advertise Vibram’s running shoes. Vibram tendered the defense to the insurers, which denied coverage on the ground that a policy provision that covered improper use of another’s advertising idea did not apply to Vibram’s claims. The insurers, however, agreed to fund Vibram’s defense under a reservation of rights. The insurers then commenced an action in superior court seeking a declaration that they were not obligated to defend Vibram in the underlying action. A judge granted the insurers’ motion. Vibram appealed.

On appeal, Vibram’s principal contention was that the superior court judge erred in concluding that the complaint did not assert a claim that it had used the Bikila family’s advertising idea when it advertised its running shoes. According to Vibram, the advertising idea alleged in the complaint was the Bikila family’s intentional association of their family name with Abebe Bikila’s legacy and desirable qualities and their use of the name “Bikila” to advertise the family’s running-related commercial ventures. Therefore, because use of an “advertising idea” was within the scope of “advertising injur[ies]” covered by the policies, Vibram claimed that the insurers had a duty to defend it in the underlying action.

The appellate court agreed. It noted that the superior court judge’s decision relied at least in part on the conclusion that the Bikila family had not actually used the name “Bikila” as an advertising idea, and thus there was no claim that Vibram used another’s advertising idea. Instead the judge interpreted the complaint as alleging that Vibram had infringed Abebe Bikila’s personality rights, a claim not covered under the policies.

The appellate court concluded that the complaint reasonably could be interpreted as claiming that the Bikila family intentionally created a connection between their family name and Abebe Bikila’s legacy and desirable qualities for purposes of using “Bikila,” and everything it conveyed, to attract customers to their running-related commercial ventures. The Bikila family’s advertising idea was using the name “Bikila,” and the legacy that name conveyed, to attract business to their ventures. Because the allegations in the complaint generally asserted that the Bikila family used the Bikila name to advertise and promote their running-related ventures, the superior court judge erred in concluding that the Bikila family had not actually used the name “Bikila” as an advertising idea. The appellate court reversed the grant of summary judgment in favor of the insurers and remanded the case to the superior court for a judgment declaring that the insurers were obligated to pay Vibram’s defense costs.

Holyoke Mutual Insurance Company in Salem vs. Vibram USA, Inc.-Supreme Judicial Court of Massachusetts-No. SJC-12401-September 12, 2018.


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