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Holyoke Mutual Insurance Co. v. Vibram USA, Inc.

Superior Court of Massachusetts, Suffolk, Business Litigation Session

August 17, 2016

Holyoke Mutual Insurance Company in Salem et al.
v.
Vibram USA, Inc No. 134657

         Filed August 18, 2016

          MEMORANDUM OF DECISION AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT AND PARTIAL SUMMARY JUDGMENT

          Mitchell H. Kaplan, Justice

         INTRODUCTION

         This action arises out of a coverage dispute between the plaintiff insurance companies, Holyoke Mutual Insurance Company in Salem (Holyoke) and Maryland Casualty Company (Maryland) (individually, an Insurer and collectively, the Insurers) and the defendant, Vibram USA, Inc.[1] Each of the Insurers issued commercial general liability policies (the Policies) to Vibram during the relevant period that provided, among other things, coverage for losses from " advertising injury liability." Each of the Policies also provided that the Insurer has the duty to defend an insured from any suit seeking damages for losses covered by the policy, but not for losses to which the insurance does not apply. Vibram is a defendant in an action pending in the United States District Court for the Western District of Washington at Tacoma captioned: Tefere Abebe Bikila, and others v. Vibram, case no. 3:15-cv-05082-RBL (the Underlying Action). Vibram tendered the defense of the Underlying Action to the Insurers. They denied coverage and brought this declaratory judgment action seeking a declaration that the claims asserted against Vibram in the Underlying Action are not covered under the Policies; Vibram counterclaimed for a declaration that they are. The case is now before the court on the Insurers' motion for summary judgment declaring that the claims are not covered, and Vibram's cross motion for partial summary judgment declaring that the Insurers have a duty to defend Vibram in the Underlying Action. For the reasons that follow, the Insurers' motion is ALLOWED and Vibram's motion is DENIED.

         BACKGROUND

         The parties agree that the court need not address the Policy periods of the six policies at issue, or any issues of primary and secondary coverage between the Insurers, to resolve the pending motions; nor are the monetary limits of coverage for indemnity or defense costs at issue. They also agree that the interpretation of the Policies is governed by Massachusetts law. Finally, the Insurers have filed a joint motion for summary judgment and the relevant language of the Policies may be considered identical for the purposes of these motions.

         The Policies

         Each of the Policies provides coverage for " sums that the insured becomes legally obligated to pay as damages because of 'personal and advertising injury.' " They also provide that the Insurers " have the right and duty to defend the insured against any 'suit' seeking those damages. However, [they] . . . have no duty to defend the insured against any 'suit' seeking damages for 'personal and advertising injury' to which this insurance does not apply."

         As relevant to this case, " personal and advertising injury" [2] means:

e. Oral or written publication, in any manner, of material that violates a person's right of privacy,
f. The use of another's advertising idea in your " advertisement, " or
g. Infringing upon another's copyright, trade dress or slogan in your " advertisement."

         The Policies also include the following exclusion:

         This insurance does not apply to:

" Personal and advertising injury" arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights. Under this exclusion, such other intellectual property rights do not include the use of another's advertising idea in your " advertisement." However, this exclusion does not apply to infringement, in your " advertisement, " of copyright, trade dress or slogan.

         The Underlying Action

         The Second Amended Complaint in the Underlying Action, which is presently the operative complaint (the complaint), alleges that the plaintiffs are, generally stated, the living heirs of Abebe Bikila. It goes on to allege how Abebe Bikila came to win the 1960 Olympic marathon running barefoot, then won the race again in the 1964 Olympics, and died in 1973 as the result of an automobile accident. The Complaint alleges that Vibram applied for and received a registered trademark for Bikila Footwear and has used this trademark to sell shoes and running wear; in particular, its " minimalist FiveFingers . . . line of running shoes."

         According to the complaint, the plaintiff heirs of Abebe Bikila, referred to as the Bikila Family, own the " intellectual property" associated with the Bikila name and, since Abebe's death, have " sought to protect Abebe Bikila's personality rights and intellectual property from any unauthorized use for commercial purposes. Additionally, by their commercial uses, sponsorship and promotion of historical and educational events, and multimedia events emphasizing the cultural and athletic legacy of Abebe Bikila, the Bikila ...


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