American Employ. Ins. Co. v. DeLorme Pub. Co., Civ. 98-179-P-C.
| Decision Date | 29 January 1999 |
| Docket Number | No. Civ. 98-179-P-C.,Civ. 98-179-P-C. |
| Citation | 39 F.Supp.2d 64 |
| Parties | AMERICAN EMPLOYERS' INSURANCE CO., et al., Plaintiffs Cross-claim Defendants, v. DeLORME PUBLISHING CO., INC., Defendant Third-Party Plaintiff, v. Acadia Insurance Co., Third-Party Defendant Cross-claim Plaintiff. |
| Court | U.S. District Court — District of Maine |
John S. Whitman, Richardson, Whitman, Large & Badger, Portland, Maine, for plaintiff.
Gordon Scott, Eaton Peabody, Augusta, Maine, for defendant.
James M. Bowie, Thompson & Bowie, Portland, Maine, for third-party defendant.
This declaratory judgment action was brought by a counterclaim defendant's liability insurer seeking a declaration that it had no duty to defend against the trademark infringement counterclaim brought by one of the counterclaim defendant's competitors. The central issue is whether the facts alleged in the underlying trademark infringement counterclaim constitute an "advertising injury" which would trigger a duty to defend under a commercial general liability policy. More specifically, presently before the Court are three motions for summary judgment that require the Court to determine which liability insurer of the counterclaim defendant, DeLorme Publishing Company, Inc. ("DeLorme"), if any, had a duty to defend in the underlying trademark infringement action. DeLorme contends that American Employers Insurance Co. ("American"), Commercial Union Insurance Co. ("Commercial"), and Acadia Insurance Co., ("Acadia") were obligated, pursuant to their General Commercial Liability and Umbrella insurance policies executed by the companies with DeLorme, to defend it in the underlying litigation.
This insurance coverage action arises out of an underlying trademark dispute between Rand McNally Company ("Rand McNally") and DeLorme.1 Rand McNally manufactures, distributes, promotes, and sells a wide variety of cartographic products and services. Rand McNally Counterclaim, Complaint (Docket No. 1), Exhibit C ("Rand McNally Counterclaim") ¶ 5. DeLorme is a company that "principally engages in the design, printing, and sale of atlases and maps, in the development and sale of computer mapping software and databases, and, recently, in the design and sale of hardware that can be used in conjunction with its computer mapping software." Affidavit of Thomas Jensen, Vice President, Contracts and Legal, (Docket No. 15) ¶ 2; Plaintiffs' Statement of Undisputed Material Facts In Support of Motion for Summary Judgment ("Plaintiffs' Statement of Facts") (Docket No. 19) ¶ 1. The companies are direct competitors of each other, Rand McNally Counterclaim ¶ 2, and in recent years both companies developed and marketed electronic cartographic products to be used in conjunction with mapping software. Rand McNally Counterclaim ¶¶ 5, 6, 8. The innovative cartographic device can be plugged into a portable computer, placed on the dashboard of a vehicle, and used in conjunction with mapping software to enable travelers to navigate. Plaintiffs' Statement of Facts ¶ 2; Memorandum of DeLorme Publishing Co., Inc. In Support of Motion for Summary Judgment ("DeLorme's Motion for Summary Judgment") (Docket No. 13) at 4. According to the allegations in its counterclaim, Rand McNally's best selling electronic cartographic product is its "TRIPMAKER®" electronic cartographic product, introduced in August 1994. Rand McNally's Counterclaim ¶ 9. At some point in 1996, DeLorme also developed and marketed an electronic cartographic product to be packaged and sold in conjunction with its mapping software, "STREET ATLAS USA®." DeLorme named its product "TRIPMATE." See id; Statement of Undisputed Material Facts of DeLorme Publishing Co., Inc. ("DeLorme's Statement of Facts") (Docket No. 14) ¶¶ 8, 9; Plaintiffs' Statement of Facts ¶ 2; Rand McNally Counterclaim ¶¶ 20, 21.
Determination of the duty to defend under Maine law is based exclusively on the facts as alleged, rather than as they actually are. See Travelers Indem. Co v. Dingwell, 414 A.2d 220, 224 (Me.1980) (citing Lee v. Aetna Cas. & Sur. Co., 178 F.2d 750 (2d Cir.1949). Accordingly, the allegations in Rand McNally's counterclaim as to the acts upon which the trademark infringement claim was based include the following:
19. DeLorme, on information and belief, has sold electronic cartographic products under many names, including AAA Map'N'GO®, GLOBAL EXPLORER®, MAPEXPERT®, and STREET ATLAS USA®. For more than a year, DeLorme has marketed an electronic product called STREET ATLAS USA® that features, inter alia, street maps of most areas of the United States and competes directly with Rand McNally's electronic cartographic products. Like Rand McNally's electronic cartographic products, DeLorme's STREET ATLAS USA® product works on the "Windows" operating system that is installed on most of the personal computers and laptops owned by consumers in the United States.
20. On information and belief, in or before December 1996, DeLorme began marketing its "STREET ATLAS USA®" electronic cartographic product together with a Global Positioning System ("GPS") receiver. The receiver is of a size and shape similar to a computer mouse, and is intended to be plugged into a personal computer or laptop computer.
21. DeLorme markets the "bundled products — the STREET ATLAS USA® product and the GPS receiver — together in packaging that prominently features the TRIPMATE trademark, and only in much smaller letters and less prominent type indicates the STREET ATLAS USA® trademark...." In or before December 1996, DeLorme began selling TRIPMATE electronic cartographic products in interstate commerce in such packaging.
22. On account of Rand McNally's extensive advertising, promotion and sales of the TRIPMAKER® electronic cartographic product, and Rand McNally's status as the number one product in the "Windows" trip-planning category, DeLorme was well aware in or before December 1996, when it began marketing TRIPMATE electronic cartographic products, of Rand McNally's prior use of the TRIPMAKER® mark. Indeed, in view of the competitive relationship between DeLorme and Rand McNally — and particularly the direct competition between their electronic cartographic products — DeLorme was almost certainly aware of the popularity, consumer goodwill, and name recognition enjoyed by Rand McNally's TRIPMAKER® electronic cartographic product.
23. On information and belief, DeLorme intentionally chose to bundle STREET ATLAS USA® with its GPS receiver in packaging prominently featuring the TRIPMATE trademark in order to (i) trade off Rand McNally's goodwill in the TRIPMAKER® trademark; (ii) cause consumers to associate the TRIPMATE mark, STREET ATLAS USA® and/or DeLorme's GPS receiver with the mark TRIPMAKER® (iii) cause consumers to believe that DeLorme's TRIPMATE electronic cartographic products are a brand extension of Rand McNally's TRIPMAKER® electronic cartographic product or are otherwise related to Rand McNally's TRIPMAKER® electronic cartographic product; and (iv) commercially benefit from the widespread name recognition and fame of the TRIPMAKER® trademark.
24. As shown below, the TRIPMATE package evidenced DeLorme's intent to benefit from Rand McNally's goodwill. The trademark of the product in direct competition with Rand McNally's electronic cartographic products — the STREET ATLAS USA® — is minimized and located in a corner of the package, whereas the TRIPMATE mark is featured prominently on the front and other panels of the package in a type style extremely similar to that of Rand McNally's TRIPMAKER® trademark.
27. DeLorme's unlawful and unauthorized use of the TRIPMATE trademark in connection with electronic cartographic products has already caused actual confusion. A Best Buy store promotional insert in the January 26, 1997, Sunday editions of many newspapers across the United States — print advertisements that were circulated to millions of consumers —promoted DeLorme's TRIPMATE electronic cartographic products, but misidentified them as the "DeLorme Tripmaker CD" ....
30. DeLorme has heightened this likelihood of confusion by selecting such a similar trademark, applying it to such similar goods, targeting its TRIPMATE electronic cartographic products at the same consumers, marketing such products in the same channels of trade, and advertising them in the same media. Indeed, retail store advertisements, mail order catalogs, and magazines often promote the TRIPMAKER® and TRIPMATE electronic cartographic products on the same page, sometimes in close proximity to each other, and/or classify the products in the same category.
On January 15, 1997, DeLorme received a letter from a representative of Rand McNally asserting a claim that DeLorme's trademark "TRIPMATE" for its Global Positioning Satellite navigation product would infringe Rand McNally's mark "TRIPMAKER®." Plaintiffs' Statement of Facts ¶ 3.
Fearing that Rand McNally would choose to sue in the Northern District of Illinois, where its principal place of business is located, DeLorme commenced an action on February 12, 1997, against Rand McNally seeking a declaration that DeLorme was not infringing Rand McNally's "TRIPMAKER®" trademark. Plaintiffs' Statement of Facts ¶ 5. On May 12, 1997, Rand McNally filed an answer and counterclaim and alleged, among other claims, that DeLorme had violated sections 32(a) and 43(a) of the Lanham Act, 15 U.S.C. §§ 1114, 1125(a). DeLorme's Statement of Facts ¶ 6; Acadia's Statement of Material Facts As To Which There is No Dispute ("Acadia's Statement of Facts") (Docket No. 17) ¶¶ 6-9; Rand McNally Counterclaim ¶¶ 35, 38. The claims were set forth by Rand McNally in the counterclaim as follows:
COUNT I
TRADEMARK INFRINGEMENT UNDER LANHAM ACT SECTION 32
...
34. The foregoing acts of DeLorme constitute unlawful infringement of Rand McNally's registered TRIPMAKER® trademark in violation of Section 32...
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