America's Recommended Mailers Inc. v. Maryland Casualty Co. ( 2009 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
August 4, 2009
No. 08-41106 Charles R. Fulbruge III
Clerk
AMERICA’S RECOMMENDED MAILERS INC
Plaintiff - Appellant
v.
MARYLAND CASUALTY COMPANY
Defendant - Appellee
Appeal from the United States District Court
for the Eastern District of Texas
USDC No. 4:07-CV-348
Before HIGGINBOTHAM, SMITH, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
America’s Recommended Mailers, Inc. (“Mailers”) is appealing the district
court’s grant of summary judgment in favor of Maryland Casualty Company
(“Maryland”). The district court found that Maryland did not have the duty to
defend Mailers in a lawsuit filed against it by the AARP. We AFFIRM.
Maryland issued an insurance policy to Mailers, which contained a duty
to defend Mailers against suits regarding “personal and advertising injury.” The
parties agree that only two parts of the definition of personal and advertising
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
No. 08-41106
injury potentially apply in this case: (1) “misappropriation of advertising ideas
or style of doing business,” and (2) “infringing upon another’s copyright, trade
dress or slogan in your ‘advertisement.’”
In 2004, the AARP sued Mailers, alleging it was engaged in a fraudulent
scheme to sell financial services to older Americans that falsely claimed
endorsement by the AARP. Allegedly, millions of cards were mailed to seniors
across the United States that included the AARP’s trademarked abbreviation.
In June 2007, Mailers filed a declaratory action in Texas state court,
arguing that Maryland had a duty to defend Mailers in the AARP suit.
Maryland removed the case to federal district court. Both sides filed motions for
summary judgment. In September 2008, the district court granted Maryland’s
motion. It found that the AARP’s claims involved only trademark infringement,
which is not included under the policy definition of personal and advertising
injury.
We review the question of whether an insurance company has a duty to
defend as a question of law. Liberty Mut. Ins. Co. v. Graham, 473 F.3d 596, 599
(5th Cir. 2006). Also subject to de novo review is a grant of summary judgment.
We evaluate the motion papers with the same standard as was required of the
district court. Id.Texas law governs this diversity case. The so-called “eight-corners rule”
is used to ascertain if there is a duty to defend. Zurich Am. Ins. Co. v. Nokia,
Inc., 268 S.W.3d 487, 491 (Tex. 2008). The rule requires evaluating only the
“terms of the policy and the pleadings of the third-party claimant. Resort to
evidence outside the four corners of these two documents is generally
prohibited.” GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d
305, 307 (Tex. 2006). Further, the duty to defend is decided without regard to
the truth of the allegations in the complaint. Even groundless or fraudulent
claims can be the basis for a duty to defend. See, e.g., Zurich Am. Ins. Co., 268
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S.W.3d at 491. This rule clearly favors insureds over insurers in some respects,
as the concern is not the merits of claims but only the need of an insured to be
protected in court against them.
The AARP’s complaint against Mailers specifically alleged a number of
trademark infringement claims. Mailers concedes that its policy does not
require defense of such claims, but asserts there are other claims that must be
defended. These additional claims are for misrepresentation and false
advertising.
Mailers contends that these other claims are properly characterized as
trade dress claims. We have defined trade dress as “the design or packaging of
a product which serves to identify the product’s source.” Eppendorf-Netheler-
Hinz GMBH v. Ritter GMBH, 289 F.3d 351, 354-55 (5th Cir. 2002) (citing
TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 28 (2001)). One
treatise writer defines “trade dress” as including “the total look of a product and
its packaging and even includes the design and shape of the product itself.” J.
T HOMAS M CC ARTHY, M CC ARTHY ON T RADEMARKS AND U NFAIR C OMPETITION § 8:4
(4th ed. 2008). We have noted that trade dress can include advertising materials
and marketing techniques used to promote a product’s sale. We reached that
conclusion in the context of disputes over a product’s image, including the
design, layout, and color schemes of product labels and packaging. Falcon Rice
Mill, Inc. v. Cmty. Rice Mill, Inc., 725 F.2d 336, 338-43 (5th Cir. 1984); Chevron
Chem. Co. v. Voluntary Purchasing Groups, Inc., 659 F.2d 695, 697-700 (5th Cir.
Unit A Oct. 1981).
While the AARP has alleged that Mailers inappropriately used the AARP’s
trademark in a deceptive manner, the AARP is not challenging the shape,
design, color scheme, or any other aesthetic aspect of the cards or the similarity
of Mailers’s cards to any other advertisements for financial products. The AARP
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is only challenging the fact that Mailers used the AARP name on its cards. This
is not a trade dress claim.
The AARP’s claims against Mailers are ones of trademark infringement.
Each AARP claim is premised on the fact that “AARP,” which is trademarked,
was used on the mailed cards. Prohibitions on the unauthorized use of
trademarks prevent the creation of “a likelihood of confusion in the minds of
potential consumers as to the source, affiliation, or sponsorship of the
Defendant’s” product. Elvis Presley Enters., Inc. v. Capece, 141 F.3d 188, 193
(5th Cir. 1998). Mailers argues that if it had used the words “American
Association of Retired Persons” instead of the abbreviation AARP, the AARP’s
claims against Mailers would remain the same. We do not decide if that is true.
It is enough to note that under the eight-corners rule, we examine what is in the
actual complaint. We are not permitted to read facts into the pleadings or
imagine factual scenarios that might trigger coverage. Gore Design Completions,
Ltd. v. Hartford Fire Ins. Co., 538 F.3d 365, 369 (5th Cir. 2008).
Because the AARP has only alleged trademark infringement claims in its
complaint against Mailers, the only remaining portion of the definition of
personal and advertising injury that could create a duty for Maryland to defend
is the subpart that includes “misappropriation of advertising ideas or style of
doing business.” A previous decision of this court applying Texas law to similar
issues held that the definition of advertising does not include trademarks;
therefore, trademark infringement claims do not involve misappropriation of
advertising ideas. Sport Supply Group, Inc. v. Columbia Cas. Co., 335 F.3d 453,
464-65 (5th Cir. 2003). Consequently, the AARP’s trademark is not advertising
under Texas law. It has been conceded that Maryland does not have a duty to
defend Mailers in a trademark infringement suit.
The district court’s judgment is AFFIRMED.
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