The Massachusetts Supreme Judicial Court recently reversed a lower court's decision holding that two insurance firms were not required to pay for the defense of their insured, Vibram USA, Inc. (Vibram), in a civil suit relating to Vibram's use of the name "Bikila" to advertise running shoes.
In the underlying litigation, the heirs of Abebe Bikila, a famous marathon runner, sought damages for Vibram's unauthorized use of the Bikila name. Vibram tendered its defense to its insurers. The insurers argued that the claims in the underlying litigation were not covered by the relevant insurance policies, but agreed to defend Vibram under a reservation of rights. They subsequently sued Vibram, seeking a declaration that they were under no duty to defend.
Under both policies, the insurers would only be required to defend if the court found that the Bikila heirs sought to recover for losses arising from an "advertising injury." Both policies defined "advertising injury" as "the use of another's advertising idea in [the insured's] advertisement," but did not define "advertising idea." The insurers argued that "advertising idea" should be construed narrowly to require a showing that the alleged "advertising idea" was used to market a particular product or service in the manner of a trademark.
The Supreme Judicial Court rejected the insurers' narrow construction, citing to numerous decisions from other jurisdictions giving similar language broader meaning. The court explained that the Bikila heirs' use of "Bikila" to promote historical and educational events, as well as operating a sporting goods store named after Bikila, met this broad standard because it "created a connection between the family name . . . and desirable qualities . . . to attract customers to their running-related commercial ventures." The court remanded for entry of summary judgment declaring that the insurers were obligated to pay Vibram's reasonable costs for defending the underlying action.
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