Case Briefs

In Sport Supply Group, Inc. v. Columbia Cas. Co., 335 F.3d 453 (5th Cir. Tex. July 7, 2003), the U.S. Court of Appeals for the Fifth Circuit (applying Texas law) affirmed a district court's grant of summary judgment in favor of an insurer holding that allegations of trademark infringement were not covered under the provisions of the insurance policy relating to “advertising injury.” The court held that the claim of trademark infringement was excluded by the policy's exclusion for “advertising injury arising out of … breach of contract, other than misappropriation of advertising ideas under an implied contract.”

This suit arose after settlement of an underlying dispute between Sport Supply Inc. (“Sport Supply”) and MacMark Corp. (“MacMark”) over the interpretation of a licensing agreement that allowed Sport Supply to use MacMark's “Macgregor” trademark on certain sporting goods. Sport Supply brought a declaratory action in Texas state court seeking a declaration that it was not in breach of the licensing agreement. MacMark filed a counterclaim alleging breach of the licensing agreement by attempting to sell products bearing the “Macgregor” trademark on the Internet. After the declaratory action was settled, Sport Supply requested its insurer, Columbia Casualty Company, (“Columbia”) to pay a portion of the cost of defending MacMark's counterclaim of trademark infringement. Sport Supply filed suit against Columbia alleging that the insurer was required to reimburse Sport Supply for defense costs. Sport Supply also filed suit against RSKCo., the loss adjusting company, on various state law claims.