{ "id": 79391, "name": "LEXMARK INTERNATIONAL, INC., Plaintiff-Appellee, v. TRANSPORTATION INSURANCE COMPANY et al., Defendants-Appellants", "name_abbreviation": "Lexmark International, Inc. v. Transportation Insurance", "decision_date": "2001-12-19", "docket_number": "Nos. 1-01-0719, 1-01-0962 cons.", "first_page": "128", "last_page": "142", "citations": [ { "type": "official", "cite": "327 Ill. App. 3d 128" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "540 N.W.2d 843", "category": "reporters:state_regional", "reporter": "N.W.2d", "case_ids": [ 10715990 ], "year": 1995, "pin_cites": [ { "page": "846, 848", "parenthetical": "dermatologist did not infringe on competitor \"Institute of Cosmetic Surgery and Hair Transplants\" by advertising itself as \"Institute of Cosmetic and Laser Surgery\"" } ], "opinion_index": 0, "case_paths": [ "/nw2d/540/0843-01" ] }, { "cite": "735 A.2d 712", "category": "reporters:state_regional", "reporter": "A.2d", "case_ids": [ 11537514 ], "year": 1999, "pin_cites": [ { "page": "714-15", "parenthetical": "candy manufacturer did not infringe on competitor's slogan by advertising its product as \"low calorie,\" \"sugar free,\" \"fat free,\" and \"cholesterol free\"" } ], "opinion_index": 0, "case_paths": [ "/a2d/735/0712-01" ] }, { "cite": "11 F. Supp. 2d 995", "category": "reporters:federal", "reporter": "F. Supp. 2d", "case_ids": [ 11690636 ], "weight": 2, "year": 1998, "pin_cites": [ { "parenthetical": "Winklevoss III" }, { "page": "998" } ], "opinion_index": 0, "case_paths": [ "/f-supp-2d/11/0995-01" ] }, { "cite": "152 F. Supp. 2d 1026", "category": "reporters:federal", "reporter": "F. Supp. 2d", "case_ids": [ 11081383 ], "year": 2001, "pin_cites": [ { "page": "1038-39" } ], "opinion_index": 0, "case_paths": [ "/f-supp-2d/152/1026-01" ] }, { "cite": "882 F. Supp. 930", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 7845719 ], "year": 1994, "pin_cites": [ { "page": "944" } ], "opinion_index": 0, "case_paths": [ "/f-supp/882/0930-01" ] }, { "cite": "663 N.E.2d 1", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1995, "pin_cites": [ { "parenthetical": "disparagement is a \"defamation of the quality of one's goods and services\"" } ], "opinion_index": 0 }, { "cite": "278 Ill. App. 3d 606", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1156771 ], "year": 1995, "pin_cites": [ { "page": "620", "parenthetical": "disparagement is a \"defamation of the quality of one's goods and services\"" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/278/0606-01" ] }, { "cite": "385 N.E.2d 714", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1978, "opinion_index": 0 }, { "cite": "67 Ill. App. 3d 869", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3311035 ], "year": 1978, "pin_cites": [ { "page": "877" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/67/0869-01" ] }, { "cite": "193 F.3d 742", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 11563792 ], "year": 1999, "pin_cites": [ { "page": "749" } ], "opinion_index": 0, "case_paths": [ "/f3d/193/0742-01" ] }, { "cite": "15 U.S.C. \u00a7 1125", "category": "laws:leg_statute", "reporter": "U.S.C.", "year": 1982, "pin_cites": [ { "page": "(a)" } ], "opinion_index": 0 }, { "cite": "505 U.S. 763", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1481077 ], "weight": 3, "year": 1992, "pin_cites": [ { "parenthetical": "Only nonfunctional, distinctive trade dress is protected under section 43(a) of the Lanham Act (15 U.S.C. \u00a7 1125(a) (1982)" }, { "parenthetical": "Only nonfunctional, distinctive trade dress is protected under section 43(a) of the Lanham Act (15 U.S.C. \u00a7 1125(a) (1982)" }, { "parenthetical": "Only nonfunctional, distinctive trade dress is protected under section 43(a) of the Lanham Act (15 U.S.C. \u00a7 1125(a) (1982)" } ], "opinion_index": 0, "case_paths": [ "/us/505/0763-01" ] }, { "cite": "711 F.2d 966", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1870441 ], "year": 1983, "pin_cites": [ { "page": "980" } ], "opinion_index": 0, "case_paths": [ "/f2d/711/0966-01" ] }, { "cite": "864 F.2d 1253", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10536161 ], "year": 1989, "pin_cites": [ { "page": "1256" } ], "opinion_index": 0, "case_paths": [ "/f2d/864/1253-01" ] }, { "cite": "907 F. Supp. 1383", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 7836759 ], "year": 1995, "opinion_index": 0, "case_paths": [ "/f-supp/907/1383-01" ] }, { "cite": "676 N.E.2d 221", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1996, "pin_cites": [ { "parenthetical": "New York law provides trademark infringement claim is covered under the offense of misappropriation of style of doing business" } ], "opinion_index": 0 }, { "cite": "285 Ill. App. 3d 536", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1295638 ], "year": 1996, "pin_cites": [ { "page": "539-40", "parenthetical": "New York law provides trademark infringement claim is covered under the offense of misappropriation of style of doing business" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/285/0536-01" ] }, { "cite": "748 N.E.2d 771", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2001, "opinion_index": 0 }, { "cite": "321 Ill. App. 3d 972", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 132348 ], "year": 2001, "pin_cites": [ { "page": "981" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/321/0972-01" ] }, { "cite": "94 F.3d 1219", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 11341426 ], "year": 1996, "pin_cites": [ { "page": "1222" } ], "opinion_index": 0, "case_paths": [ "/f3d/94/1219-01" ] }, { "cite": "559 N.E.2d 7", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1990, "opinion_index": 0 }, { "cite": "201 Ill. App. 3d 428", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2593368 ], "year": 1990, "pin_cites": [ { "page": "433" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/201/0428-01" ] }, { "cite": "85 F. Supp. 2d 842", "category": "reporters:federal", "reporter": "F. Supp. 2d", "case_ids": [ 11474998 ], "weight": 2, "year": 2000, "pin_cites": [ { "page": "852" }, { "page": "855-56" } ], "opinion_index": 0, "case_paths": [ "/f-supp-2d/85/0842-01" ] }, { "cite": "523 N.E.2d 1043", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1988, "opinion_index": 0 }, { "cite": "169 Ill. App. 3d 678", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3551286 ], "year": 1988, "pin_cites": [ { "page": "681" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/169/0678-01" ] }, { "cite": "750 N.E.2d 1253", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2001, "opinion_index": 0 }, { "cite": "323 Ill. App. 3d 243", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 171569 ], "year": 2001, "pin_cites": [ { "page": "251" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/323/0243-01" ] }, { "cite": "710 N.E.2d 132", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1999, "opinion_index": 0 }, { "cite": "304 Ill. App. 3d 734", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 564607 ], "year": 1999, "pin_cites": [ { "page": "743" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/304/0734-01" ] }, { "cite": "734 N.E.2d 50", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2000, "pin_cites": [ { "parenthetical": "\"[WJhere summary judgment is sought in the context of a declaratory judgment action to determine whether an insurer has a duty to defend, the use of extrinsic evidence is inappropriate\"" } ], "opinion_index": 0 }, { "cite": "315 Ill. App. 3d 552", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 980702 ], "year": 2000, "pin_cites": [ { "page": "567", "parenthetical": "\"[WJhere summary judgment is sought in the context of a declaratory judgment action to determine whether an insurer has a duty to defend, the use of extrinsic evidence is inappropriate\"" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/315/0552-01" ] }, { "cite": "571 N.E.2d 256", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1991, "opinion_index": 0 }, { "cite": "212 Ill. App. 3d 556", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2600531 ], "year": 1991, "pin_cites": [ { "page": "562" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/212/0556-01" ] }, { "cite": "740 N.E.2d 21", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2000, "pin_cites": [ { "parenthetical": "\"For potentiality of coverage to exist, the complaint need present only a possibility of recovery, not a probability of recovery\"" } ], "opinion_index": 0 }, { "cite": "317 Ill. App. 3d 863", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1025915 ], "year": 2000, "pin_cites": [ { "page": "869", "parenthetical": "\"For potentiality of coverage to exist, the complaint need present only a possibility of recovery, not a probability of recovery\"" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/317/0863-01" ] }, { "cite": "578 N.E.2d 926", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1991, "opinion_index": 0 }, { "cite": "144 Ill. 2d 64", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5592135 ], "year": 1991, "pin_cites": [ { "page": "73" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/144/0064-01" ] }, { "cite": "372 N.E.2d 926", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1978, "opinion_index": 0 }, { "cite": "57 Ill. App. 3d 295", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3419602 ], "year": 1978, "pin_cites": [ { "page": "299" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/57/0295-01" ] }, { "cite": "620 N.E.2d 1073", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1993, "opinion_index": 0 }, { "cite": "156 Ill. 2d 384", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 777543 ], "year": 1993, "pin_cites": [ { "page": "390-91" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/156/0384-01" ] }, { "cite": "607 N.E.2d 1204", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1992, "opinion_index": 0 }, { "cite": "154 Ill. 2d 90", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 4820940 ], "weight": 2, "year": 1992, "pin_cites": [ { "page": "102" }, { "page": "108" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/154/0090-01" ] }, { "cite": "689 N.E.2d 259", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1997, "opinion_index": 0 }, { "cite": "293 Ill. App. 3d 1089", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 847596 ], "year": 1997, "pin_cites": [ { "page": "1091" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/293/1089-01" ] } ], "analysis": { "cardinality": 1361, "char_count": 34165, "ocr_confidence": 0.74, "pagerank": { "raw": 3.981448996786185e-07, "percentile": 0.9050516072558671 }, "sha256": "2035796ab0f02961ad831cb07c21dd853800539f7066beee9176d821afdd77a2", "simhash": "1:07ead713297df57d", "word_count": 5320 }, "last_updated": "2023-07-14T20:55:57.852492+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "LEXMARK INTERNATIONAL, INC., Plaintiff-Appellee, v. TRANSPORTATION INSURANCE COMPANY et al., Defendants-Appellants." ], "opinions": [ { "text": "JUSTICE WOLFSON\ndelivered the opinion of the court:\nThe question before us is whether two insurance companies had a contractual duty to defend their insured in underlying causes of action. To answer that question we have to test the tensile strength of factual allegations of the complaints filed against the insured in California and Kentucky courts.\nINTRODUCTION\nIn December 1999, plaintiff Lexmark International, Inc. (Lexmark), filed a second amended complaint for declaratory judgment against defendants Transportation Insurance Company (Transportation) and American Motorists Insurance Company (AMIGO) (collectively, the Insurers) seeking a declaration the Insurers owed a duty to defend Lexmark in lawsuits brought against it by BDT Products, Inc., and Buro-Datentechnik GMBH & Co., KG (collectively BDT). The Insurers had issued general liability insurance policies to Lexmark.\nIn response to Lexmark\u2019s complaint, the Insurers filed, among other things, counterclaims seeking declarations they owed no duty to defend Lexmark because BDT\u2019s complaints against Lexmark did not contain allegations that created a potential for coverage under the Insurers\u2019 policies. That is, BDT\u2019s complaints did not contain allegations of \u201cpersonal injury\u201d or \u201cadvertising injury,\u201d as those terms are defined in the Insurers\u2019 policies.\nLexmark and the Insurers moved for summary judgment on the insurance coverage issue. In January 2001, the trial court granted summary judgment in Lexmark\u2019s favor, finding \u201cthere is a potential for coverage based upon the language contained in this [BDT\u2019s] Complaint.\u201d The trial court held the Insurers had a duty to defend Lexmark against BDT\u2019s lawsuits.\nBoth insurance companies contend the trial court erred in entering summary judgment in Lexmark\u2019s favor and erred in denying summary judgment in their favor. We agree.\nWe reverse the trial court\u2019s decision and remand this cause with directions to enter summary judgment for the insurance companies.\nFACTS\nTHE INSURANCE COMPANIES\u2019 POLICIES\nAMIGO, an Illinois corporation with its principal place of business in Long Grove, Illinois, issued two comprehensive general liability policies to Lexmark, a Kentucky corporation with its principal place of business in Lexington, Kentucky. They were effective from April 3, 1997, to April 3, 1999.\nTransportation, an Illinois corporation with its principal place of business in Chicago, Illinois, issued three commercial general liability policies to Lexmark. They were effective from March 27, 1994, to March 27, 1997.\nThe issues in this case arise out of AMIGO and Transportation policy coverage for personal injury and advertising injury claims brought against Lexmark. The pertinent provisions in the policies are almost identical:\n\u201cCOVERAGE B \u2014 PERSONAL AND ADVERTISING INJURY COVERAGE\n1. Insuring Agreement\na. We will pay those sums that the insured becomes legally obligated to pay as damages because of \u2018personal injury\u2019 or \u2018advertising injury\u2019 to which this insurance applies. We will have the right and the duty to defend any \u2018suit\u2019 seeking those damages ***. *\nb. This insurance applies to:\n1) \u2018Personal injury\u2019 caused by an offense arising out of your business, excluding advertising, publishing, broadcasting or telecasting done by or for you;\n2) \u2018Advertising injury\u2019 caused by an offense committed in\nthe course of advertising your goods, products or services; but only if the offense was committed in the \u2018coverage territory\u2019 during the policy period.\u201d\nThe policies defined the term \u201cpersonal injury\u201d:\n\u201c \u2018Personal injury\u2019 means injury, other than \u2018bodily injury,\u2019 arising out of one or more of the following offenses:\na. False arrest, detention or imprisonment;\nb. Malicious prosecution;\nc. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person or organization occupies, if committed by or on behalf of its owner, landlord or lessor;\nd. Oral or written publication of material that slanders or libels a person or organization or disparages a person\u2019s or organization\u2019s goods, products or services; or\ne. Oral or written publication of material that violates a person\u2019s right of privacy.\u201d\nThe policies defined the term \u201cadvertising injury\u201d:\n\u201c \u2018Advertising injury\u2019 means injury arising out of one or more of the following offenses:\na. Oral or written publication of material that slanders or libels a person or organization or disparages a person\u2019s or organization\u2019s goods, products or services;\nb. Oral or written publication of material that violates a person\u2019s right of privacy;\nc. Misappropriation of advertising ideas or style of doing business; or\nd. Infringement of copyright, title or slogan.\u201d\nHISTORY OF BDT v. LEXMARK\nOn August 13, 1998, BDT filed a lawsuit against Lexmark in the superior court of the State of California, San Diego County (the California State Lawsuit). In BDT\u2019s California State Lawsuit complaint, it alleged Lexmark improperly acquired BDT\u2019s printer paper feed and handling technology and incorporated BDT technology into Lexmark\u2019s line of printers. BDT sought damages and other relief for (1) breach of contract (implied-in-fact), (2) breach of contract (implied-in-law), (3) misappropriation of trade secrets, (4) fraud and deceit, (5) unfair business practices, (6) tortious interference with business relationships, (7) breach of fiduciary duty, and (8) breach of confidence.\nOn September 9, 1998, Lexmark removed the California State Lawsuit to the United States District Court for the Southern District of California (the California Southern District Lawsuit). On September 11, 1998, BDT filed a first amended complaint. The allegations and prayer for relief of the first amended complaint were virtually the same as the California State Lawsuit complaint.\nOn or about September 28, 1998, BDT filed a separate complaint against Lexmark in the United States District Court for the Central District of California (the California Central District Lawsuit). The California Central District Lawsuit complaint was almost identical to the first amended complaint of BDT\u2019s California Southern District Lawsuit. Consequently, BDT dismissed the California Southern District Lawsuit on October 22, 1998.\nOn October 8, 1998, Lexmark filed a lawsuit against BDT seeking a declaratory judgment that, among other things, \u201cLexmark did not misappropriate any trade secrets belonging to the defendants [, BDT,] or engage in any wrongdoing with regard to defendants (or either of them) whatsoever.\u201d Lexmark filed the suit in the United States District Court for the Eastern District of Kentucky, Lexington Division.\nOn February 10, 1999, the California Central District Lawsuit was transferred to the United States District Court for the Eastern District of Kentucky. On August 3, 1999, BDT filed its first amended complaint in the Kentucky District Court (BDT\u2019s Kentucky Complaint).\nBDT\u2019s Kentucky Complaint contained counts for (1) breach of contract (implied-in-fact), (2) breach of contract (implied-in-law), (3) misappropriation of trade secrets, (4) unfair competition, and (5) breach of confidence.\nThe general allegations of the Kentucky complaint tell the story of BDT\u2019s claims against Lexmark.\nBDT alleged it was a design, development, and manufacturing corporation, organized under the laws of the State of California, with its principal place of business in Irvine, California. For over 30 years, BDT has been one of the world leaders in paper singulation and feeding technology. Sometime in 1991, BDT and Lexmark began a joint development program on various projects. BDT worked closely with Lexmark\u2019s design engineers on advanced solutions in printer paper handling technology, that is, \u201csheet feed paper handling\u201d for printers.\nIn 1992, BDT began production of a laser printer with multiple paper input trays and a variety of paper output options. BDT provided its production information and prototype printers to Lexmark for general evaluation and for Lexmark to consider possible custom applications of BDT\u2019s technology into Lexmark products.\nBDT alleged that, for the next few years, it kept Lexmark apprised of its progress in paper singulation and feeding technology. BDT continued to disclose to Lexmark\u2019s engineers its confidential technology, trade secrets, and \u201cgeneral paper handling know-how.\u201d More specifically, BDT disclosed to Lexmark details concerning BDT\u2019s \u201ccritical trade secrets and paper singulation and feeding systems.\u201d BDT alleged it also continued to provide Lexmark with samples of its redesigned laser printer prototypes for in-house evaluation and testing by Lexmark\u2019s engineering staff.\nAfter some time, BDT alleged Lexmark began developing its own new laser printer that would print 16 pages per minute. Lexmark allegedly asked BDT to develop and manufacture an output device and auxiliary trays for its new laser printer, which would later be named the \u201cOptra S.\u201d In February 1995, BDT allegedly agreed to leave prototype products with Lexmark while the parties negotiated a formal development agreement.\nIn September 1995, however, BDT alleged that, after it had already disclosed to Lexmark the essential design aspects of its paper singulation and feeding technology, Lexmark\u2019s general manager of printer operations discontinued negotiations with BDT. Lexmark allegedly advised BDT it was pursuing \u201cother options\u201d with its laser printer program and was performing research and design functions for its laser printers \u201cin-house.\u201d\nAccording to BDT, it first became suspicious of Lexmark misappropriating its technology in January 1997. It was then that representatives of Lexmark tried to market its newest 16-page-per-minute laser printer \u2014 the Optra S \u2014 to BDT. The Lexmark salesman brought a prerelease Optra S printer to BDT\u2019s offices in Irvine, California. While displaying the printer, the Lexmark salesman mistakenly tried to insert one of BDT\u2019s display paper trays into Lexmark\u2019s printer.\nBDT alleged that when the salesman mistakenly put BDT\u2019s display paper trays into Lexmark\u2019s printer, a senior Lexmark representative commented to the effect that Lexmark \u201calways takes BDT\u2019s ideas, and never pays for them.\u201d BDT also alleged its representatives noticed the paper singulation and feeding system utilized in Lexmark\u2019s new laser printer was nearly identical in appearance and function to BDT\u2019s system.\nBDT alleged it was not permitted, however, to examine the internal mechanics of Lexmark\u2019s new laser printer. As such, BDT could not, at that time, confirm the extent to which Lexmark had allegedly stolen its paper singulation and feeding system.\nAccording to BDT, its suspicions that Lexmark was misappropriating its technology were confirmed when BDT visited Lexmark\u2019s offices in February 1997 and again saw Lexmark\u2019s new paper trays for its Optra S printer, and when, several weeks later, BDT obtained from Lexmark a prerelease copy of the User\u2019s Manual for the Optra S and saw a paper tray almost identical to BDT\u2019s prior design.\nWhen Lexmark finally released its \u201cnew-generation\u201d Optra S series of printers in May of 1997, BDT alleged, Lexmark\u2019s product announcements were in a language almost identical to BDT\u2019s promotional literature, in that Lexmark trumpeted its \u201cIndustry Leading Paper Handling,\u201d and its ability to \u201csupport the widest variety of media including challenging labels, signage and card stock.\u201d\nAccording to BDT, months later, when it received an Optra S printer, it was then able to confirm that, indeed, \u201cLexmark had stolen its critical trade secrets and had incorporated BDT\u2019s paper singulation system, technology and know-how into its products.\u201d\nBDT alleged it also was able to confirm Lexmark stole its technology when, in the fall of 1997, during an annual trade show, it visited Lexmark\u2019s display booth and was greeted by a Lexmark booth manager who congratulated BDT on its \u201cexceptional design job,\u201d apparently under the wrong impression Lexmark had compensated BDT for the supply or license of its technology to Lexmark.\nDECISION\nSTANDARD OF REVIEW\nThe parties filed cross-motions for summary judgment. When that happens, \u201cthe court is invited to decide the issues presented as a question of law.\u201d Container Corp. of America v. Wagner, 293 Ill. App. 3d 1089, 1091, 689 N.E.2d 259 (1997).\nWe review de novo the trial court\u2019s order granting summary judgment. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102, 607 N.E.2d 1204 (1992).\nThe construction of these insurance policy provisions and a determination of the rights and obligations under them are questions of law suitable for summary judgment. See Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 390-91, 620 N.E.2d 1073 (1993).\nAPPLICABLE LAW\nAlthough the insurance companies suggest in their briefs that Connecticut law should apply here, no such claim was made in the trial court, where the parties were content with the application of Illinois law. The issue was waived and we will use the law of this state wherever we can. See Commercial Discount Corp. v. Bayer, 57 Ill. App. 3d 295, 299, 372 N.E.2d 926 (1978).\nDUTY TO DEFEND STANDARDS\nThe principles of law that attend an insurance company\u2019s duty to defend are firmly established:\n\u201cTo determine an insurer\u2019s duty to defend its insured, the court must look to the allegations of the underlying complaints. If the underlying complaints allege facts within or potentially within policy coverage, the insurer is obliged to defend its insured even if the allegations are groundless, false, or fraudulent. [Citation.] An insurer may not justifiably refuse to defend an action against its insured unless it is clear from the face of the underlying complaints that the allegations fail to state facts which bring the case within, or potentially within, the policy\u2019s coverage. [Citation.] Moreover, if the underlying complaints allege several theories of recovery against the insured, the duty to defend arises even if only one such theory is within the potential coverage of the policy. [Citation.]\u201d (Emphasis in original.) United States Fidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill. 2d 64, 73, 578 N.E.2d 926 (1991).\nWe need not restate the rules concerning ambiguities in an insurance policy since the parties agree there are no ambiguous terms in the provisions at issue. The key phrases \u2014 \u201cpersonal injury\u201d and \u201cadvertising injury\u201d \u2014 are defined in the policies. The dispute centers on whether those provisions were triggered by the BDT lawsuits.\nWe give the policies\u2019 words their \u201cplain, ordinary, and popular meaning.\u201d (Emphasis omitted.) Outboard Marine Corp., 154 Ill. 2d at 108. We construe the underlying complaints liberally and resolve all doubts in favor of the insured. La Grange Memorial Hospital v. St. Paul Insurance Co., 317 Ill. App. 3d 863, 869, 740 N.E.2d 21 (2000) (\u201cFor potentiality of coverage to exist, the complaint need present only a possibility of recovery, not a probability of recovery\u201d).\nWe give little weight to the legal label that characterizes the underlying allegations. Instead, we determine whether the alleged conduct arguably falls within at least one of the categories of wrongdoing listed in the policy. See La Grange Memorial Hospital, 317 111. App. 3d at 869.\nOUTSIDE EVIDENCE\nLexmark urges us to consider the affidavit of Paul Rahenkamp, a Lexmark sales manager, and the deposition testimony of Glenn Klein, a BDT executive. The documents were submitted by Lexmark in the course of summary judgment proceedings in this case. Lexmark contends they include true but unpleaded facts that support its duty to defend claims.\nThe general rule, recited in case after case, is that \u201cit is only the allegations in the underlying complaint, considered in the context of the relevant policy provisions, which should determine whether an insurer owes a duty to defend an action brought against an insured.\u201d Bituminous Casualty Corp. v. Fulkerson, 212 Ill. App. 3d 556, 562, 571 N.E.2d 256 (1991). Also see Atlantic Mutual Insurance Co. v. American Academy of Orthopaedic Surgeons, 315 Ill. App. 3d 552, 567, 734 N.E.2d 50 (2000) (\u201c[WJhere summary judgment is sought in the context of a declaratory judgment action to determine whether an insurer has a duty to defend, the use of extrinsic evidence is inappropriate\u201d).\nSome courts have found exceptions to the general rule. Extrinsic evidence has been considered when it does not \u201cimpact upon the underlying plaintiffs ability to pursue a theory of liability or resolve any issue critical to the insured\u2019s liability in the underlying litigation.\u201d Fremont Compensation Insurance Co. v. Ace-Chicago Great Dane Corp., 304 Ill. App. 3d 734, 743, 710 N.E.2d 132 (1999). The exception for true but unpleaded facts was not meant to be applied to situations where the only extraneous facts are supplied by the insured. Shriver Insurance Agency v. Utica Mutual Insurance Co., 323 Ill. App. 3d 243, 251, 750 N.E.2d 1253 (2001).\nWe decline to move our analysis beyond the four corners of the California state and Kentucky federal complaints. Taken together, they provide a plethora of facts. Rahenkamp\u2019s affidavit and Klein\u2019s deposition are directed at the issues in the underlying case. To consider them, we would have to determine issues crucial to the BDT lawsuit. The trial judge saw no need to consider extrinsic evidence and neither do we.\nOur inquiry into the merits of this case is confined to the California and Kentucky complaints filed by BDT. We, like the parties in their briefs, consider all the facts alleged in both complaints in a single analysis of the duty to defend question.\nLexmark did not buy insurance that specifically covered claims against it for misappropriation of trade secrets. For Lexmark to succeed here, the factual allegations of the underlying complaints have to contend BDT suffered an injury arising out of one of the enumerated offenses in the policies and the offense was committed during the policy period.\nThe covered offense can be an \u201cadvertising injury\u201d or a \u201cpersonal injury.\u201d Lexmark says the complaints allege both. We consider separately the two categories of covered offenses, although Lexmark\u2019s claims overlap.\nWe note that each prayer for relief in the California and Kentucky complaints speaks to an injury caused by the wrongful obtaining and misusing of BDT\u2019s trade secret. Still, we understand a claim for relief is not essential to establish the duty to defend; \u201conly the allegations in the complaint must fall within the covered provisions.\u201d Sun Electric Corp. v. St. Paul Fire & Marine Insurance Co., No. 94 \u2014 C\u20145846 (N.D. Ill. May 4, 1995). But see Aetna Life & Surety Co. v. Northern Trust Co. of Illinois, 169 Ill. App. 3d 678, 681, 523 N.E.2d 1043 (1988) (for what appears to be a stricter duty to defend test: \u201cMost importantly, Baron\u2019s complaint did not allege in substance all the factual elements necessary to causes of action in malicious prosecution or abuse of process, and Northern has not shown how the complaint could have been amended to state such claims\u201d).\nAt any rate, specific claims aside, we perform a textual exegesis on the complaints to determine whether their factual allegations trigger the insurance companies\u2019 duty to defend.\n1. Advertising Injury\nThe parties agree on how advertising injury coverage can be triggered. There are three elements: (1) Lexmark must have been engaged in advertising activity during the policy period when the injury occurred; (2) BDT\u2019s allegations must raise a potential for liability under one of the offenses listed in the policies; and (3) there must be a causal connection between the alleged injury and the advertising activity. See Zurich Insurance Co. v. Sunclipse, Inc., 85 F. Supp. 2d 842, 852 (N.D. Ill. 2000).\na. Advertising Activity\nTo satisfy the advertising activity requirement, Lexmark points to allegations that it circulated promotional literature, product announcements, and newsletters, and that it displayed, promoted, and sold the Optra S system \u2014 all the time claiming the BDT paper input and output system in its printer had been designed and created by Lexmark.\nLexmark\u2019s first obstacle to success concerns the question of advertising activity. There is no generally accepted definition of \u201cadvertising activity\u201d in the reported decisions, but this court, in a duty to defend context, has said: \u201cThe term \u2018advertising\u2019 has been held to refer to the widespread distribution of promotional material to the public at large.\u201d International Insurance Co. v. Florists\u2019 Mutual Insurance Co., 201 Ill. App. 3d 428, 433, 559 N.E.2d 7 (1990).\nWe recognize, however, \u201cThe appropriate definition of advertising under Illinois law is by no means a settled issue.\u201d Winklevoss Consultants, Inc. v. Federal Insurance Co., 991 E Supp. 1024, 1031 n.9 (N.D. Ill. 1998) (Winklevoss II.) Lexmark contends it was accused of engaging in advertising activity by the allegation that it promoted and marketed its printer to potential customers. Despite our doubts about the soundness of Lexmark\u2019s position, we will, for the purpose of this opinion, assume Lexmark\u2019s promotional and marketing efforts constitute \u201cadvertising.\u201d\nb. Covered Offenses\nWe understand Lexmark to be contending three of the four advertising injury \u201coffenses\u201d listed in the policies are contained in the allegations of the BDT complaints. They are, according to Lexmark, \u201cmisappropriation of advertising ideas or style of doing business,\u201d \u201cdisparagement of BDT\u2019s goods, products, or services,\u201d and \u201cinfringement of slogan.\u201d We discuss each of them, bearing in mind BDT has alleged its paper tray design, which provides a method for moving and stacking paper, was wrongfully taken and incorporated into Lexmark\u2019s desktop laser printer, the printer Lexmark promoted and sold.\nOur analysis of Lexmark\u2019s duty to defend claims begins with the proposition that a complaint charging trade secret misappropriation does not allege advertising injury. Winklevoss II, 991 F. Supp. at 1034-35; see also Simply Fresh Fruit, Inc. v. Continental Insurance Co., 94 F.3d 1219, 1222 (9th Cir. 1996). This proposition from Winklevoss II was cited with approval in McDonald\u2019s Corp. v. American Motorists Insurance Co., 321 Ill. App. 3d 972, 981, 748 N.E.2d 771 (2001), an insurance indemnity case.\nLexmark, to succeed, would have to find in one of the BDT complaints factual allegations of a listed advertising injury other than trade secret misappropriation.\n(1) Misappropriation of advertising ideas or style of doing business\nLexmark\u2019s \u201cmisappropriation\u201d theory centers on its belief there are \u201ctrade dress\u201d infringement references in the BDT complaints. In paragraph 17 of the Kentucky federal action BDT says there was a time when \u201cBDT\u2019s representatives noticed that the paper singulation and feeding system utilized in Lexmark\u2019s new printer was nearly identical in appearance and function of Lexmark\u2019s new product ***.\u201d\nIn paragraph 18 of the Kentucky complaint BDT tells how it became suspicious of Lexmark\u2019s new paper singulation system for the Optra S printer and how those \u201csuspicions were confirmed several weeks later, when it obtained from Lexmark a pre-release copy of the User\u2019s Manual for the Optra S, and observed a paper singulation system virtually identical to BDT\u2019s prior design.\u201d\nLexmark\u2019s trade dress infringement theory rests most heavily on paragraph 34 of the California state court complaint, which alleges, in part:\n\u201c34. Lexmark\u2019s misappropriation of BDT\u2019s trade secrets, and its outright copying of BDT\u2019s \u2018trade dress,\u2019 and its promotional statements that it owns the design to the complete Optra S design has also created profound, actual confusion in the finite marketplace in which BDT competes as to the origination of what is, in fact, a BDT-designed feed-arm and angled wall paper tray ***.\u201d\nAlthough there is no Illinois decision directly on point, as is true of almost all of the issues in this case, there is sufficient other authority for us to agree with Lexmark that \u201cmisappropriation of advertising ideas or style of doing business\u201d encompasses trade dress infringement claims. See B.H. Smith, Inc. v. Zurich Insurance Co., 285 Ill. App. 3d 536, 539-40, 676 N.E.2d 221 (1996) (New York law provides trademark infringement claim is covered under the offense of misappropriation of style of doing business); see also Dogloo v. Northern Insurance Co., 907 F. Supp. 1383 (C.D. Cal. 1995).\nOther than the conclusory phrase \u201coutright copying of BDT\u2019s \u2018trade dress,\u2019 \u201d the complaints contain no factual allegations of trade dress infringement. Actually, the complaints obviate any trade dress infringement claim.\nThe trade dress of a product is essentially \u201cits total image and overall appearance.\u201d Blue-Bell Bio-Medical v. Cin-Bad, Inc., 864 F.2d 1253, 1256 (5th Cir. 1989). The total image of a product \u201cmay include features such as size, shape, color or other combinations; texture, graphics, or even particular sales techniques.\u201d John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 980 (11th Cir. 1983). Blue-Bell Biomedical and John H. Harlan Co. were cited with approval by the United States Supreme Court in Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 764 n.l, 120 L. Ed. 2d 615, 621 n.l, 112 S. Ct. 2753, 2755 n.l (1992) (Only nonfunctional, distinctive trade dress is protected under section 43(a) of the Lanham Act (15 U.S.C. \u00a7 1125(a) (1982)).\nNo \u201cpassing off\u2019 is alleged by BDT. That is, there is no claim Lexmark was trading on the total image or appearance of the BDT paper tray. Decisions relied on by Lexmark \u201cinvolved allegations that an insured was trading on the recognizable name, mark, or product configuration (trade dress) of the underlying plaintiff.\u201d Frog, Switch & Manufacturing Co. v. Travelers Insurance Co., 193 F.3d 742, 749 (3d Cir. 1999).\nIn fact, according to the complaints, the paper tray could not be identified merely by looking at the printer which incorporated the design. Even the BDT people could not do that. They had to wait until the Lexmark manual came out before they concluded their design had been misappropriated. It is the theft of a product design that is alleged by BDT, not the misappropriation of advertising or marketing ideas. See Winklevoss II, 991 F. Supp. at 1038-39.\nIn addition, BDT\u2019s allegations are centered on the function, not the appearance, of the paper tray. Trade dress has nothing to do with function. In fact, they are mutually exclusive.\nOur examination of the California and Kentucky complaints finds no factual allegations of trade dress infringement against Lexmark.\n(2) Disparagement of BDT\u2019s goods, products, or services\nLexmark contends the BDT complaints allege Lexmark promoted and advertised its products in a way that disparaged BDT\u2019s paper tray. They did that, says Lexmark, by accusing Lexmark of belittling BDT\u2019s paper tray and by defaming it, a libel per quod. To support its contention Lexmark points to allegations that half of BDT\u2019s customers held off doing business with BDT because Lexmark falsely advertised that it developed the design of the paper tray.\nDisparagement has been defined as \u201cwords which criticize the quality of one\u2019s goods or services.\u201d Crinkley v. Dow Jones & Co., 67 Ill. App. 3d 869, 877, 385 N.E.2d 714 (1978). See also Soderlund Brothers, Inc. v. Carrier Corp., 278 Ill. App. 3d 606, 620, 663 N.E.2d 1 (1995) (disparagement is a \u201cdefamation of the quality of one\u2019s goods and services\u201d).\nTo qualify as \u201cdisparagement,\u201d there must be \u201c \u2018statement^] about a competitor\u2019s goods which [are] untrue or misleading and [are] made to influence or tend to influence the public not to buy.\u2019 \u201d Zurich Insurance Co. v. Sunclipse, Inc., 85 F. Supp. 2d 842, 855-56 (N.D. Ill. 2000), quoting Sentex Systems, Inc. v. Hartford Accident & Indemnity Co., 882 F. Supp. 930, 944 (N.D. Cal. 1994). Disparagement has been found where there are allegations the insured, in its advertising, criticized the quality of the underlying plaintiffs product as being inferior. Knoll Pharmaceutical Co. v. Automobile Insurance Co. of Hartford, 152 F. Supp. 2d 1026, 1038-39 (N.D. Ill. 2001).\nNowhere in the underlying complaints does BDT claim Lexmark referred to BDT or BDT\u2019s products when advertising or promoting the Lexmark printer. The complaints say BDT\u2019s customers \u201cwere reluctant to engage in new business prospects with BDT\u201d because it \u201ccould lead them into litigation with Lexmark\u201d or \u201ccause them delay in getting their products to the exceedingly time-sensitive computer marketplace.\u201d That is, not because Lexmark criticized the quality of BDT\u2019s paper tray.\nThe line we draw is the same one that separates Winklevoss II from Winklevoss Consultants, Inc. v. Federal Insurance Co., 11 F. Supp. 2d 995 (N.D. Ill. 1998) (Winklevoss III). In Winklevoss II, the court held the underlying plaintiff, Lynchval, had not alleged disparagement of its product: \u201cThere is nothing in the complaint to suggest that Winklevoss said anything at all about Lynchval \u2014 let alone anything negative or misleading \u2014 or did anything other than promote its own product.\u201d Winklevoss II, 991 F. Supp. at 1039-40. It was clear to the district court judge, as it is to us in this case, that the wrongdoing alleged by the underlying plaintiff was that Winklevoss had developed its product by misappropriating trade secrets, not that Winklevoss misled the public with negative statements about the plaintiff\u2019s products.\nFor one reason or another, the underlying plaintiff in the Winklevoss case filed an amended complaint, giving rise to Winklevoss III. This time, Winklevoss was accused of making false statements about the speed of its software, comparing it to Lynchval\u2019s less efficient software. Making false and misleading negative statements about Lynchval\u2019s products in the course of advertising in violation of Lanham Act section 43(a)(2) was enough to trigger the insurance company\u2019s duty to defend. Winklevoss III, 11 F. Supp. 2d at 998.\nTo find allegations of disparagement of BDT or BDT\u2019s product, that is, belittling or libel per quod, not only would we have to stretch the words of the BDT complaints, we would have to rewrite them. We decline to do so.\n(3) Infringement of BDT\u2019s slogans\nThe third and final way Lexmark seeks \u201cadvertising injury\u201d coverage is the contention that BDT alleged Lexmark infringed on its slogans. Lexmark relies on allegations in paragraphs 19 of the Kentucky complaint, where BDT said Lexmark\u2019s product announcements \u201ctrumpeted Lexmark\u2019s \u2018Industry Leading Paper Handling\u2019 \u201d and Lexmark\u2019s \u201cability to support the widest variety of media including challenging labels, signage and card stock,\u201d and on paragraph 21, where Lexmark was accused of marketing its new printers as a \u201cbold new breed\u201d and \u201can entirely new generation,\u201d which offers \u201cversatile paper handling options for the most demanding printing needs.\u201d\nThere are no factual allegations that Lexmark lifted any of BDT\u2019s advertising slogans. The word \u201cslogan\u201d does not appear in the BDT complaints. Nor does BDT allege the words of any of its own advertising ideas. BDT never claimed ownership or exclusive right to the language it accused Lexmark of using. See Sorbee International Ltd. v. Chubb Custom Insurance Co., 735 A.2d 712, 714-15 (Pa. Super. 1999) (candy manufacturer did not infringe on competitor\u2019s slogan by advertising its product as \u201clow calorie,\u201d \u201csugar free,\u201d \u201cfat free,\u201d and \u201ccholesterol free\u201d). See also Ross v. Briggs & Morgan, 540 N.W.2d 843, 846, 848 (Minn. 1995) (dermatologist did not infringe on competitor \u201cInstitute of Cosmetic Surgery and Hair Transplants\u201d by advertising itself as \u201cInstitute of Cosmetic and Laser Surgery\u201d).\nWe have found no Illinois decisions that would guide our consideration of when an infringement of slogan has been alleged. We are persuaded, however, the facts alleged in the BDT complaints do not fall within the \u201cinfringement of slogan\u201d offense covered by the Insurers\u2019 policies. A contrary decision would constitute an unnecessary inhibition on the ability of a company to advertise its wares.\nBecause we find no \u201cadvertising injury\u201d alleged in the underlying complaints, we see no need to determine whether BDT alleged its injuries were caused by the misappropriation of its trade secret, not by Lexmark\u2019s advertising. But see International Insurance Co., 201 111. App. 3d at 433 (\u201cThe fact that the purpose of FTD\u2019s Rule 18(b) was to protect its advertising investment is of no consequence when the injury [antitrust violations] is alleged to have been caused, not by the advertising, but by the rule\u201d).\n2. Personal Injury\nIt appears to us that Lexmark\u2019s \u201cpersonal injury\u201d contentions are a repeat of the claims it made under the \u201cadvertising injury\u201d offenses listed in the policies \u2014 disparagement of BDT\u2019s goods, products, or services by belittlement or libel per quod. Our conclusions are the same. We find no personal injury allegations that trigger the insurance companies\u2019 duty to defend.\nCONCLUSION\nWe find BDT\u2019s allegations against Lexmark in the underlying complaints do not potentially fall within the coverage of the Insurers\u2019 policies. The Insurers have no duty to defend Lexmark. We reverse the trial court\u2019s grant of summary judgment to Lexmark and remand this cause with directions to enter summary judgment for the insurance companies.\nReversed and remanded.\nHALL, EJ., and SOUTH, J., concur.", "type": "majority", "author": "JUSTICE WOLFSON" } ], "attorneys": [ "Patrick E. Maloney, Katherine E. Tammaro, and Daneen D. Fitzpatrick, all of Tressler, Soderstrom, Maloney & Priess, of Chicago, for appellant American Motorists Insurance Company.", "Michael Resis, Ellen L. Green, and Victor J. Piekarski, all of O\u2019Hagan, Smith & Amundsen, L.L.C., of Chicago, for appellant Transportation Insurance Company.", "John S. Vishneski III and Angela Elbert Dietz, both of Neal, Gerber & Eisenberg, of Chicago, and Gauntlett & Associates, of Irvine, California (David A. Gauntlett and Eric R. Little, of counsel), for appellee." ], "corrections": "", "head_matter": "LEXMARK INTERNATIONAL, INC., Plaintiff-Appellee, v. TRANSPORTATION INSURANCE COMPANY et al., Defendants-Appellants.\nFirst District (3rd Division)\nNos. 1-01-0719, 1-01-0962 cons.\nOpinion filed December 19, 2001.\nPatrick E. Maloney, Katherine E. Tammaro, and Daneen D. Fitzpatrick, all of Tressler, Soderstrom, Maloney & Priess, of Chicago, for appellant American Motorists Insurance Company.\nMichael Resis, Ellen L. Green, and Victor J. Piekarski, all of O\u2019Hagan, Smith & Amundsen, L.L.C., of Chicago, for appellant Transportation Insurance Company.\nJohn S. Vishneski III and Angela Elbert Dietz, both of Neal, Gerber & Eisenberg, of Chicago, and Gauntlett & Associates, of Irvine, California (David A. Gauntlett and Eric R. Little, of counsel), for appellee." }, "file_name": "0128-01", "first_page_order": 146, "last_page_order": 160 }