Menu
Blog Banner Image

The Franchise Memorandum

Insurer's Duty to Defend Franchisee Triggered in Trademark Infingement Case
Posted in Insurance

A federal court in California denied a commercial general liability insurance carrier’s motion for summary judgment seeking a declaration that it had no duty to defend a former franchisee sued for trademark violations by the franchisor. Tower Ins. Co. of New York v. Capurro Ent., Inc., 2011 U.S. Dist. LEXIS 144436 (N.D. Cal. Dec. 15, 2011). Certa Pro, a national franchisor of painting and decorating services franchises, had entered into a franchise agreement with defendant Capurro. After termination, Capurro began marketing a new business using Certa Pro’s marks, including referring to itself as a former Certa Pro franchise and advertising its technicians as being trained by Certa Pro. Certa Pro sued Capurro for infringement and Capurro tendered defense to Tower under the Personal & Advertising Injury Liability coverage in its policy. Tower denied coverage and filed a declaratory judgment action. Tower argued that the underlying lawsuit complained of Capurro’s use of Certa Pro’s name and that simply using the name Certa Pro did not constitute use of Certa Pro’s “advertising idea, trade dress, or slogan” under the policy.

The court rejected Tower’s argument, relying on the allegations of the complaint asserting that Capurro wrongfully used Certa Pro’s proprietary marks and trade dress. The court found the allegations in that complaint sufficient to allege an advertising injury under the policy, triggering Tower’s duty to defend.

Email LinkedIn Twitter Facebook

The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.

About this Publication

The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

To subscribe to monthly emails for The Franchise Memorandum, please click here

Topics

Archives

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

Blog Authors