On Wisconson! Supreme Court Broadens AI Coverage
"Badgered" by the courts? New song, same "title"? Trust Wisconsin to add a layer of confusion to an area of AI law that seemed to be settling down.
Since the deletion of the explicit exclusion for trademark infringement in the earlier Broad Form endorsements, insurers and the ISO have struggled to set the right balance for covering some IP torts but not others. Thus, current forms typically limit coverage to disputes involving the infringement of a copyright, title or slgan. While most courts had ruled that these are related terms and have limited the meaning of "title" to a non-copyrighted title to an artistic work (e. Diplomatic Triumphs of the Bush Administration), the Wisconsin Supreme Court has now mixed and matched dictionary definitions to contrive coverage for trademark infringement claims.
In Acuity, A Mutual Ins. Co. v. Bagadia, 2008 WI 62 (Wis. June 18, 2008), Symantec sued the insured software company for infringing various copyrights and trademarks by selling knock off copies of Symantec’s security software through advertisements that featured the copyrights and trademarks. The court held that this was not only "advertisiing" but that the trademark infringement were covered as involving the infringement of a “title. The Supreme Court reached this conclusion by comparing the dictionary definitions of "title" and "trademark" and noting that both involve descriptiions concluded that they must have the same meaning (yes, and "mud" and :"paint" both involve elements in a liquid solution, so your 3 year old daughters' class project must be a Rembrandt).
Although we have learned to expect surprising things from the Wisconsin Supreme Court of late, this new AI opinion is disappointing, as the meaning of "title" has seemed relatively settled for the last 10 years or so or at least since the California Supreme Court ruled in Palmer v. Truck Ins. Exch., 21 Cal.4th 1109, 988 P.2d 568 (1999) that coverage for “infringement of copyright or of title or of slogan” only extends to claims for infringement of the names of literary or artistic works or names that are “slogans,” not to other names. In rejecting the insured’s contention that coverage extend to unfair competition claims that the insured had wrongfully utilized colored flags, signs and slogans that the plaintiff was using for a competing real estate development. The court held that the term “title,” read in the broader context of the policy, can only mean the name of a literary or artistic work, and did not extend to any claim based on “formal right of ownership of property.” Further, although the underlying suit alleged that the insured had used a slogan in its own marketing, the Supreme Court declared that there was no indemnity obligation as the jury’s award had been based upon the insured’s infringing use of a trademark. “The infringing use of a trademark that is merely a word and a phrase used as a slogan is not the same as the infringing use of a slogan which would give rise to coverage under the policy.”
As an interesting footnote for those of you waiting for the Supreme Court to rule on allocation issues, the court ducked the issue of set-offs here. Despite the fact that the insured had earlier settled similar claims against Continental Casualty for a payment of $165,964, the court refused to order that Acuity receive an off-set for this payment due to factual questions with respect to what CNA had paid for and why.
