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Alterra Excess And Surplus Insurance Co. v. Estate Of Buckminster Fuller

(Intellectual Property Exclusion Applies to Bar Coverage of Underlying Lawsuit Based on Misappropriation of Name and Likeness)

In Alterra Excess and Surplus Ins. Co. v. Estate of Buckminster Fuller, ____ Cal.App.4th ___ (March 9, 2015), the California First District Court of Appeal affirmed the trial court’s entry of summary judgment in favor of Alterra Excess and Surplus Insurance Company (“Alterra”) in connection with the tender of defense and indemnity of an underlying lawsuit filed by the Estate of Buckminster Fuller (“Estate”) against Maxfield & Overton Holdings, LLC (“Maxfield”). The Estate lawsuit alleged that Maxfield had misappropriated Buckminster Fuller’s name and likeness in connection with the sale of various products. As a result, the Estate filed a complaint alleging causes of action for (1) unfair competition in violation of 15 United States Code section 1125(a) – Lanham Act, (2) invasion of privacy (appropriation of name and likeness); (3) unauthorized use of name and likeness in violation of California Civil Code section 3344.1 and (4) violation of California Business and Professions Code section 17200. Maxfield tendered the defense of the Estate lawsuit to Alterra under a policy issued to Maxfield for the period of June 4, 2010, to July 25, 2011. The policy afforded coverage for personal and advertising injury liability and included the following exclusion:

i. Infringement Of Copyright, Patent, Trademark Or Trade Secret


“‘Personal and advertising injury’ arising out of the 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.”

Thereafter, Alterra filed a complaint for declaratory relief arguing, among other things, that the “intellectual property exclusion” i.e., exclusion (i) in its policy applied to bar coverage of the underlying Estate lawsuit. The trial court agreed with Alterra and entered summary judgment in its favor, finding that it was not obligated to defend and indemnify Maxfield for the Estate lawsuit. The Estate argued that the intellectual property exclusion was not conspicuous, plain and clear. The Court of Appeal rejected the Estate’s arguments and found that such exclusion was conspicuous, plain and clear. The Court of Appeal followed the reasoning set forth in Aroa Marketing, Inc. v. Hartford Ins. Co. of the Midwest, 198 Cal.App.4th 781, 788 (2011) in connection with holding that the intellectual property exclusion in the Alterra policy applied to bar coverage of the Estate lawsuit. The Court of Appeal commented on the Aroa decision as follows:

The Estate makes five subarguments here—arguments, we note, that are far broader than its position below, which argued only that the intellectual property exclusion must be construed against Alterra because it is “ambiguous and does not address Lanham Act/unfair competition claims.” Those subarguments are (1) Aroa failed to apply the holding that exclusions must be conspicuous, plain, and clear; (2) Aroa is distinguishable on its facts; (3) the specific exclusion in Aroa directly encompassed the right of publicity; (4) Aroa is an outlier; and (5) Aroa should not be applied retroactively.



To begin with, the “conspicuous, plain and clear” argument was apparently not even advanced in Aroa. Regardless, we have addressed the “plain and clear” argument above, and found it wanting.


As to “distinguishable on its facts,” the Estate asserts that the exclusion there was different from the exclusion here. Whatever the variation in the wording, the exclusion there did not expressly state that it applied to invasion of privacy or right of publicity claims. But, as Aroa holds, such claims fall within its nonexclusive listing, which there included “‘any violation of any intellectual property rights.’” (Aroa, supra, 198 Cal.App.4th at p. 788.) Similarly here. (Comedy III Productions, Inc. v. Gary Saderup, Inc., supra, 25 Cal.4th at p. 391; Aroa, supra, 198 Cal.App.4th at pp. 787–788 [explaining that a “right of publicity” claim, defined as “‘appropriation, for the defendant's advantage, of the plaintiff's name or likeness,’” is one of four types of “right of privacy claims”]; see generally 5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 676, pp. 993—994.)


The Estate asserts that to apply the intellectual property exclusion Alterra must specify each type of excluded intellectual property claim. But the Estate cites no authority supporting this proposition. Again, Aroa is apt, where it relied on the phrase “‘any intellectual property rights, such as … ,’” virtually identical to the Alterra policy's language “or other intellectual property rights,” to exclude invasion of privacy and right of publicity claims. The use of “or” in the Alterra policy, like the words “such as” in Aroa, indicates there are “‘“matters of the same kind which are not specifically enumerated.”’” (Aroa, supra, 198 Cal.App.4th at p. 789.) Or, as the court earlier put it, “The exclusion applies when the injury arises out of ‘any violation of any intellectual property rights.’ Even if this language is interpreted narrowly against the insurer, it clearly applies to bar claims based on the right of publicity, as that right has been held to be an intellectual property right.” (Id. at p. 788 … the list is expressly nonexclusive”].)



The Estate argues its right to publicity claims are not within “other intellectual property rights” by contrasting them with “copyrights, patents and trademarks,” claims expressly listed in the intellectual property exclusion. No court has ever made such a distinction, and again the Estate cites no supporting authority. Its simplistic premise is that copyrights, patents and trademarks “may be registered with an agency of the federal government” which “gives third parties an opportunity to check public federal documents to see whether or not someone claims a protectable right to such property.” And, the argument runs, Fuller's name is not such a “creation,” and it cannot be registered or “bought and sold.”

Such argument is less than candid. The Estate's rights, which derive from the Estate's position as successor to the rights of Fuller, are in fact registered, at least according to the Estate's own allegations: “in 1985, registered its claim as the successor-in-interest to the rights of Buckminster Fuller pursuant to Civil Code § 3344.1(f).” Indeed, it not only registered, but also according to the Estate, it has “licensed those rights on many occasions. The licensees include Apple Computer, which used Bucky's image (along with those of John Lennon, Pablo Picasso, Albert Einstein, Mahatma Gandhi, Frank Lloyd Wright and others) in its ‘Think Different’ advertising campaign.”

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