Most insureds aren't sure of the differences between trademarks and slogans, and what is covered in an infringement claim. (Photo: Shutterstock/filmfoto)

Auto Mobility Sales, the insured, sells and rents handicap-enabled vehicles. Florida Van Rentals, d/b/a Discount Mobility USA and Medical Travel, filed a lawsuit against Auto Mobility alleging claims of unfair competition and trademark infringement for using the terms “discount mobility” and “medical travel” in advertisements.

Auto Mobility was insured under a general liability policy issued by Praetorian. This policy applied to damages because of personal and advertising injury but excluded coverage for infringement of copyright, patent, trademark, or secret. An exception to the exclusion allowed coverage for infringement in the named insured’s advertisement, of copyright, trade dress, or slogan. When the insured was sued, it sent the complaint to Praetorian, but the insurer declined coverage, asserting that the policy excludes the trademark infringement claims made by Florida Van Rentals.

Related: Court rules that coverage for advertising injury can’t be used for trademark infringement

Auto Mobility initiated this action seeking a summary judgment that Praetorian is obligated to defend and indemnify Auto Mobility. Praetorian moved for summary judgment, claiming there was no duty to defend or indemnify because the complaint against the insured did not allege slogan infringement. The U.S. District Court for the Southern District of Florida, said the central issue here was whether the underlying claims alleged slogan infringement, triggering Praetorian’s duty to defend and indemnify.

Complaint failed to allege slogan infringement

The court noted that under the terms of the policy, the insurer only has a duty to defend and indemnify the insured against trademark infringement when the infringement is based on an advertisement of copyright, trade dress, or slogan. Because neither party argues that the underlying litigation is based on advertisement of copyright or trade dress, the only determination to be made, said the court, was whether the infringement claim is based on the infringement of a slogan.

The court found that the policy wording was not ambiguous. There was coverage for the infringement of a slogan. Using judicial precedent, the district court said that a slogan must be different from the company name or product. In this instance, the court declared that the terms “discount mobility” and “medical travel” and the name of the insured (Discount Mobility USA and Medical Travel) are the same and so, the disputed words are not slogans. Moreover, the court noted that none of the claims in the underlying lawsuit specifically alleged slogan infringement.

Therefore, the court ruled that because the underlying complaint did not explicitly or implicitly allege slogan infringement, Praetorian did not have a duty to defend or indemnify Auto Mobility. The insurer’s motion for summary judgment was granted.

Author’s Note: The U.S. District Court for the Southern District of Florida used guidance from the U.S. Court of Appeals for the Second Circuit and a court of the Southern District of Florida to determine that a slogan must be different from the company name. In this instance, the terms used by the insured in its advertisements were the same as its company name, and so, the policy offered no coverage for the infringement claims made against the insured.

This case is Auto Mobility Sales v. Praetorian Insurance Company, 2015 WL 3970578.