A Great American Insurance Group Inc. unit was not obligated to defend a skateboard company in a trademark infringement lawsuit under a prior publication exclusion in its policy, says an appeals court.
Newport Beach, California-based Street Surfing L.L.C. began selling a two-wheeled inline skateboard called the “Wave” to retail stores around December 2004 and had earned about $600,000 from sales less than a year later, according to Tuesday’s ruling by the 9th U.S. Circuit Court of Appeals in San Francisco in Street Surfing L.L.C. v. Great American E&S Insurance Co..
Great American E&S, a unit of Cincinnati-based Great American Insurance Group, provided the company with general liability insurance from August 2005 to September 2007, according to the ruling.
Exclusions in the policy included one for prior publication, which disclaimed coverage for “personal and advertising injury” arising out of oral or written publication of material whose first publication took place before the beginning of the policy period, according to the ruling.
Rhyn Noll, who owned the registered trademark “Streetsurfer,” sued Street Surfing in June 2008 claiming trademark infringement, unfair competition and unfair trade practices under federal and California law. The lawsuit was settled in December 2009, for an amount not disclosed in the ruling.
Street Surfing filed suit against the insurer in July 2011 seeking a declaration that it was obligated to defend and settle the action, said the ruling. The U.S. District Court in Santa Ana, California, concluded Great American was not obligated to defend Street Surfing under the prior publication exclusion, and granted the insurer’s motion for summary judgment dismissing the case.
A three-judge panel of the 9th Circuit agreed.
The “prior publication exclusion relieves Great American of its duty to defend Street Surfing in the Noll action because the extrinsic evidence available to Great American at the time of tender conclusively establishes” both that Street Surfing had published at least one advertisement using Mr. Noll’s advertising idea before coverage began and that new ads published during the coverage period “were substantially similar to that pre-coverage advisement,” said the appeals court, in affirming the District Court ruling.