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What Do Ice Cream and Pornography Have in Common?

11 Oct

 

A pint of Ben & Jerry's ice cream

 

For the answer, it is only necessary to refer to the recent lawsuit filed by Ben & Jerry’s against the creator and distributor of X-rated “Ben & Cherry’s” DVDs, Caballero Video (Video Company). (http://www.bloomberg.com/news/2012-09-05/ben-jerry-s-sues-porn-seller-over-flavor-tied-titles.html)

In the case, Ben & Jerry’s claims that the “hardcore, pornographic” films infringe and dilute the famous trademarks and trade dress of the ice cream maker, additionally claiming unfair competition and deceptive trade practices. The lawsuit, filed in the U.S. District Court, in Manhattan, complained that the design and sale of the pornographic DVDs tarnished and damaged the reputation of Vermont-based Ben & Jerry’s. The complaint alleged the defendants’ “exploitative, hardcore pornographic films” used titles and themes based on “well-known and iconic” Ben & Jerry’s ice cream flavors. The DVDs also used packaging that directly copied elements of the ice cream containers, including a grazing cow, green grass and large white puffy clouds.

Ben & Jerry’s complained that the films would likely cause “confusion, mistake or deception” by use of such X-rated names as “Boston Cream Thigh,” “New York Fat & Chunky” and “Peanut Butter D-Cup.” Ben & Jerry’s ice cream flavors include “Boston Cream Pie,” “New York Super Fudge Chunk” and “Peanut Butter Cup.” The lawsuit requested temporary and permanent injunctions, plus unspecified damages. Companies, such as the Video Company, referred to as “grasshoppers,” may look harmless enough, but in the world of intellectual property (IP) they are becoming a dreaded plague. They find a successful company, jump in, in this instance, copy or modify the slogan or image, and ride the coat tails of Ben & Jerry’s fame and goodwill and notoriety.

Where is the insurance coverage for this lawsuit? 
There are actually two questions: 1) Does the Video Company have any insurance coverage to defend the lawsuit and, 2) does Ben and Jerry’s have any insurance coverage to sue the X-rated Video Company for trademark or trade dress infringement? The policy many would automatically turn to is  the Commercial General Liability (CGL) policy, where there would be extremely limited coverage, if any, for intellectual property (IP) risks. Undoubtedly, there would be a “NO COVERAGE” answer for both companies.

The Video Company would have looked to the Personal and Advertising Injury section under the CGL policy and, in an edition dated prior to the 1998 CGL, some defense coverage for trademark infringement could have been found. Since the Personal and Advertising section of the CGL policy greatly transformed in 1998 by providing coverage only for “infringing upon another’s copyright, trade dress or slogan in your advertisement,” the Video Company would have a tough time finding any coverage, because the inclusion of the word “advertisement” would preclude such coverage. Likewise, the CGL policy would only provide defensive coverage, on a limited basis. Accordingly, there would have been no coverage for Ben & Jerry’s litigation expenses as a plaintiff to enforce their IP rights.

The Insurance Solution:
Both parties could have benefited by holding specialized IP insurance policies for their IP risks. According to Intellectual Property Insurance Services Corp. (IPISC), the industry leader in providing insurance products for IP risks, an IP Defense Insurance policy would cover allegations of infringement by the names of products, including catalogs of media offerings. The underwriters would consider the scope of use and proximity to other marks of products to be insured. When a business, such as the Video Company, employs parodies of existing trademarks, the likelihood of conflict increases. If found insurable, this type of business would have a higher business risk, and probably an increased self- insured retention.

To enforce its IP rights, Ben & Jerry’s could obtain an IP Abatement insurance policy, a unique plaintiff’s policy, to help cover the costs of enforcing its trademarks and trade dress against alleged infringers. Abatement policyholders are put in the stronger position to make cease and desist demands because they can tell an infringer that insurance proceeds support the case.

Fortunately for Ben & Jerry’s, the court quickly granted a preliminary injunction order forbidding the Video Company from further distributing the offending titles. If the case had been more arguable, either side would have been at an advantage with specialized IP insurance. Many times, dedicated IP insurance policies can be a critical piece of a company’s risk management plan. Ensuring minimal protection is in place for a potentially devastating IP litigation exposure is essential to protecting companies’ overall financial strength.

 

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