Lebas Fashion Imports of USA, Inc. v. ITT Hartford Ins. Group

In Lebas Fashion Imports of USA, Inc. v. ITT Hartford Ins. Group (1996) 50 Cal. App. 4th 548, the Court concluded that the advertising offense "misappropriation of an advertising idea or style of doing business" was indeed ambiguous and, in the context of the facts of that case, the insured could have objectively reasonable expectations of coverage. However, the scope of our conclusion was necessarily confined by the specific circumstances in which it was reached. In Lebas, the Court was dealing with an insured that allegedly had appropriated the proprietary mark and name of an international distributor of high fashion perfume and cosmetics, and that was utilizing such mark and name in the labeling, marketing and advertising of its own line of clothing. The Court noted that, contrary to the fundamental purposes of a patent, one of the three fundamental purposes of a trademark was to advertise the products of the trademark holder and that an infringement of the trademark frequently occurred in the course of advertising. ( Id. at pp. 557.) Moreover, a trademark often represented the manner and means of such advertising, or at the least was an integral part thereof, and as such could easily and reasonably be considered to fall within the definition of an "advertising idea" and be considered a part of the trademark holder's "style of doing business." ( Id. at pp. 557, 564-565.) Thus, an insurer's promise to provide coverage for the insured's misappropriation of either an "advertising idea" or a "style of doing business" could reasonably be construed by a layperson insured to include a trademark infringement. ( Id. at p. 565.) This was particularly true in light of the fact that, in Lebas, the record reflected that these new policy definitions of advertising injury offenses (which had replaced prior offenses described as "piracy" and "unfair competition") were accompanied by the deletion of an exclusion for trademark infringement that had been a part of the prior policy. ( Id. at pp. 565-566.)