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Insurance — duty to defend — advertising injury

Wisconsin Court of Appeals


Insurance — duty to defend — advertising injury

An insurer has a duty to defend a trade dress infringement suit that does not allege intentional misconduct.

“Acuity’s policy excludes coverage for advertising injury if it was ‘caused by or at the direction of the insured with the knowledge that the act would violate the rights of another and would inflict personal and advertising injury.’ In support of its motion for declaratory judgment, Acuity points to paragraph 36, in which Seirus alleges that Ross Glove’s trade dress infringements were willful and done with the intent to cause harm, and seeks to recover treble damages under 15 U.S.C.A. § 1117(b). However, Acuity overlooks paragraph 35, in which Seirus alleges entitlement to damages, including lost profits, as a result of the nonintentional infringement under 15 U.S.C.A. § 1117(a).1[14] Seirus does not allege any knowing violation as to either liability under the Lanham Act claims in paragraphs 31 through 34, or in seeking damages under § 1117(a). Indeed, intent is not a required element of trade dress infringement, but rather is required only to justify a request for enhanced damages or attorney fees. See Hard Rock Cafe Licensing Corp. v. Concession Servs., Inc., 955 F.2d 1143, 1152 n.6 (7th Cir. 1992) (the Lanham Act is a strict liability statute—there need not be an allegation of willfulness in order to succeed on the issue of liability). If even one covered offense is alleged in the underlying complaint, the insurance company has a duty to defend. Here, Seirus seeks to hold Ross Glove liable for trade dress infringement without any allegation, much less any required showing, of a knowing violation. Thus, the exclusion does not preclude Acuity’s duty to defend. See Doyle v. Engelke, 219 Wis. 2d 277, 290-92, 580 N.W.2d 245 (1998) (intentional act exclusion did not apply to negligent conduct).”

Reversed and Remanded.

Recommended for publication in the official reports.

2011AP1464 Acuity v. Ross Glove Co.

Dist. II, Sheboygan County, Bolgert, J., Neubauer, J.

Attorneys: For Appellant: Waldon, Stephanie Erin, Sheboygan; For Respondent: Rice, Christine Marie, Milwaukee

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