Vibram – seller of the “FiveFinger” shoes – took an intellectual property insurance coverage dispute to the highest court of Massachusetts, and won. The Supreme Judicial Court of Massachusetts held that the insurers must pay Vibram’s cost of defending a lawsuit brought by the family of the late marathoner, Abebe Bikila. Bikila earned his fame by winning the 1960 Olympic marathon barefoot. The underlying lawsuit stemmed from Vibram’s use of the Bikila name for some models of its “toed” shoes. According to the court, Vibram’s use of the Bikila name constituted use of another’s “advertising idea,” covered by the policies.
The heirs of Abebe Bikila’s estate brought the underlying action against Vibram in the United States District Court for the Western District of Washington. The family alleged a number of claims all stemming from Vibram’s use of Bikila’s name, including violation of the Washington Personality Rights and the Washington Consumer Protection Acts, false designation of origin and unfair competition under the Lanham Act, and unjust enrichment. Vibram tendered defense of the case to its insurers.
The insurers denied coverage, but funded Vibram’s cost of defense under a reservation of rights. The Western District of Washington dismissed the action as barred by laches and the applicable statutes of limitations, and Bikila’s family appealed. During the pendency of the appeal, the parties settled.
Separately, the insurers brought an action in Massachusetts Superior Court seeking a declaration that they were not obligated to defend Vibram in the underlying action. The Superior Court sided with the insurers and denied coverage. Vibram applied to the Supreme Judicial Court for a direct appeal. The court granted the application, allowing Vibram to bypass the Appeals Court.
The Supreme Judicial Court reversed the decision of the Superior Court. According to the Supreme Judicial Court, Vibram’s use of the Bikila name was use of another’s “advertising idea,” covered by the policies. The relevant portions of the policies contained the following exclusion:
[claims arising out of] infringement of copyright, patent, trademark, trade secret or other intellectual property rights. Under this exclusion, such other intellectual property rights do not include the use of another’s advertising idea in your “advertisement.” However, this exclusion does not apply to infringement, in your “advertisement,” of copyright, trade dress or slogan.
The court found that the family’s use of the Bikila name was an “advertising idea” because they had used the name in a number of ways, including as the name of a sporting goods store, publishing a book, authorizing use of the name in a Japanese commercial, authorizing a feature film, operating a website about Abebe Bikila, and conducting an annual marathon in his name.
The court examined numerous cases from state and federal courts across the country as support for broad interpretation of the term “advertising idea.” According to the court, it was irrelevant that the name was not used to market a particular product or service and did not develop a “secondary meaning” or association with a particular product or service.
The Supreme Court remanded the case to the Superior Court with a directive to enter judgment that the insurers pay Vibram’s reasonable cost of defending the underlying action.
This case serves as a reminder to accused infringers to check their insurance policies and timely notify their insurance carriers if there is any possibility of coverage. Oftentimes the standard for triggering a duty to defend is fairly modest, requiring only that the complaint show a possibility that the allegations are covered by the insurance policy and questions concerning coverage are resolved in favor of the insured.