3 things that all mean the same thing: a slogan isn’t a TM for ad injury insurance purposes

Travelers Indemnity Co. v. Luna Gourmet Coffee & Tea Co.,
2021 WL 1293314, No. 19-cv-02039-RM-NYW (D. Colo. Apr. 7, 2021)

The underlying litigation involves class actions against
coffee distributors, wholesalers, and retailers arising out of the allegedly
misleading use of the name “Kona.” There was a Kona coffee farmer plaintiff class
and a consumer plaintiff class. They alleged that the underlying defendants
wrongly profited from the goodwill of Kona, which injured Kona farmers by
having excessive supply which drives prices down and by causing consumers to
conclude that Kona coffee is “nothing special.” As to defendant Boyer (the relevant
defendant), the class actions alleged that it falsely designated the  geographic origin of its coffee with the
intent to deceive, when the products actually contained little to no Kona
coffee.

Travelers insured Boyer, which sought coverage.  The personal and advertising injury policy at
issue bars coverage for knowing violation of rights; material published with
knowledge of falsity; failure of goods to conform to quality/performance
statements; infringement of ©/patent/TM/trade name/trade dress/trade secret/ “other
IP rights or laws,” with the standard exception to the last for advertising
injury “arising out of any actual or alleged infringement or violation of
another’s copyright, ‘title’ or ‘slogan’ in your ‘advertisement.’”

There’s also an exclusion for material published prior to
the policy period, which Travelers alleged applied, but Colorado law directs
courts to look at the complaint itself, which doesn’t make that clear. Its
evidence was from websites, and it didn’t request judicial notice.

The policies covered disparagement of people or products in
ads, defined in the Policies as “a notice that is broadcast or published to the
general public or specific market segments about your goods, products or
services for the purpose of attracting customers or supporters.” Travelers
argued that the underlying actions concerned product labels/packages, which
aren’t ads. That seems wrong given the definition, but the court rejected this
argument on the narrower ground that there were underlying allegations that Boyer’s
also used marketing and advertising to tell consumers the packages contain
coffee from Kona.

But did Boyer’s use of “Kona” disparage Kona farmers just
because it allegedly harmed their goodwill? No. Implied disparagement was
insufficient; the theory was “too remote to constitute disparagement within the
meaning of the Policies or the element of the claim under Colorado or
Washington law.” And it definitely didn’t disparage Kona consumers.

What about infringement of “slogan”? “Slogan” is defined in
the Policies as “a phrase that others use for the purpose of attracting
attention in their advertising” that “[d]oes not include a phrase used as, or
in, the name of: (1) Any person or organization, other than you; or (2) Any
business, or any of the premises, goods, products, services or work, of any
person or organization, other than you.”

First, Travelers argued that a slogan can’t be a single
word. “Priceless,” Boyer responded—and also pointed out that it was actually
accused of using “Café Kona” and “Kona Blend.” The court agreed with the former
argument, but not the latter, since those weren’t the accused matter, “Kona”
was.

Second, Travelers argued that “Kona” was used in the name of
the Kona coffee products and, by definition, a slogan does not cover phrases
used in another company’s products. But there were Kona farmers who do not use
“Kona” in their product names, such as “Rancho Aloha.”  

Finally, Travelers argued that “slogans are catchy
stand-alone phrases or mottos, not brand names or product descriptions, relying
on Laney Chiropractic & Sports Therapy, P.A. v. Nationwide Mut. Ins. Co.,
866 F.3d 254 (5th Cir. 2017).” Relatedly, it claimed that neither “Kona” nor
“Kona Coffee” or “Kona Café” are “used to attract attention” in advertising. Although
the court here didn’t rely on Laney, it still agreed with Travelers,
which is… a bit puzzling from a TM theory perspective.

The underlying complaint showed that the Kona farmers used “Kona,”
“Kona Coffee,” and “Café Kona,” to describe the products or brand names used by
Boyer’s, not as “a phrase that others use [here, Kona farmers] for the purpose
of attracting attention to their advertisement.” Instead of use of Kona as a “slogan”
or “advertising tagline,” they were seeking to protect Kona as a “source
identifier.”

CJ Cregg is right

So, no coverage. Comment: A slogan can be a trademark, which is to say a source identifier–and a source identifier is definitely something used for purposes of attracting attention. But the insurance policies distinguish slogans from trademarks. It’s something they certainly can do, but the language of trademark can’t explain it. And in fact this interpretation seems to render coverage a null set: If a slogan is something used to get attention, but that doesn’t work as a source identifier for the plaintiff, then the plaintiff will not be able to assert cognizable rights that could be infringed (setting aside copyright, separately listed in the exclusion to the exclusion). It would be more natural, from a TM perspective, to define a slogan as words distinct from the product name that are prominently used to sell the product. A slogan answers neither “who am I?” nor “what am I?” but provides an indication of “who.”

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