The insured, Smart Candle, sells light-emitting diode (LED) flameless candles and commercial lighting systems internationally. Excell sued Smart Candle under the Lanham Act alleging that, among other things, Smart Candle’s use of the trade name and trademark “Smart Candle” infringed rights that Excell had over use of that name and trademark. Excell sought a permanent injunction against Smart Candle’s use of the name, trademark, and domain name “smartcandle.com.”
Selective Insurance Company insured Smart Candle. Smart Candle requested a defense from Selective Insurance but Selective said the claim wasn’t covered and there was no duty to defend. While the policy had “personal and advertising injury” coverage, which covered infringement “upon another’s copyright, trade dress or slogan in your ‘advertisement,’” the policy excluded coverage for any injury “arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights.”
Because the policy required Selective to defend only suits claiming infringement of “copyright, trade dress[,] or slogan,” Selective insisted, Selective had no duty to defend Smart Candle against Excell’s suit for infringement of the “Smart Candle” trademark. Because Excell did not claim infringement of a “slogan” or “copyright,” Selective explained, it had no duty to defend or indemnify Smart Candle. Selective brought a declaratory judgment action on the coverage issues. Selective won on cross motions for summary judgment and the 8th Circuit affirmed, finding the claim was for the use of the name “Smart Candle” and that the name “Smart Candle” was not a slogan. Since there was no claim of slogan infringement, there was no duty to defend.