Flash Report: Ninth Circuit Kicks Applied Underwriters’ Trademark Infringement Lawsuit

The Ninth Circuit Court of Appeals agreed with Workers’ Comp Executive and rejected allegations by Applied Underwriters that advertising for a Workers’ Comp Executive webcast improperly used its Applied Underwriters’ EquityComp trademark. It was a published decision.

As traditional, or ‘old fashioned’ journalists we know the story should never be about us. In this case, it so clearly is about us that it requires our reportage.

The lawsuit stemmed from a 2015 webcast and subsequent DVD produced by Workers’ Comp Executive’s parent company, Providence Publications, titled “Applied Underwriters’ EquityComp® Program Like it, Leave it, or Let it be?” Our subhead read “Learn the best strategies for selling, competing with, or helping a prospect out of EquityComp mid-term.

The Berkshire Hathaway (NYSE: BRK.A) subsidiary alleged the marketing spread confusion in the marketplace, diluted its trademark and could have been accomplished without using the EquityComp name, but the court rejected all of these claims in upholding a lower court’s dismissal of the case.

Applied’s Unbelievable Argument

Applied tried to tell all the relevant courts that more generic terms would have been effective substitutes to market the program. The 9th’s rejection of the idea summed it up aptly: “We have previously determined that a descriptive alternative—such as Plaintiff’s proposed ‘Risk Sharing Workers’ Comp Program’ or “Captive Workers’ Comp Arrangement Program”—need not be employed where use of a mark is necessary to refer to a specific brand or product.”

“The seminar did not discuss workers’ compensation programs generally, but rather Plaintiff’s specific offering,” the Ninth Circuit noted in its published decision. “Therefore, Defendants ‘needed to communicate’ that they critiqued the EquityComp program, and so using the mark in the title and description of the program ‘accomplished this goal.’”

Marketing for the program was produced under the Workers’ Comp Executive logo and did not include any of Applied Underwriters’ service marks, distinctive lettering or designs, but merely the name of its workers’ comp program that was the sole focus of the webcast. The program was presented by attorney Larry Lichtenegger and hosted by Workers’ Comp Executive publisher J Dale Debber. Both were also named as defendants in the lawsuit.

“It’s scorched earth policy shows in the many lawsuits it has with its own insureds,”  — J Dale Debber, WCE publisher

The Ninth Circuit concluded that Workers’ Comp Executive’s use of the program name met the legal tests for “nominal fair use” of the Applied Underwriters name and the EquityComp trademark – the same conclusion that the San Francisco District Court reached nearly two years ago. It also rejected Applied’s argument that use of these terms would confuse the marketplace about who was sponsoring the event – Applied or Workers’ Comp Executive.

“What we’ve experienced,” Debber says, “is what a lot of Applied Underwriters’ insureds experience a ‘scorched earth’ policy in litigation. It’s scorched earth policy shows in the many lawsuits it has with its own insureds.”

“Here, it was clear from the text of the email [advertising the event] that the seminar was a critique of Plaintiff’s program, and it is simply not plausible that it could have been construed as anything else,” the court wrote. “The complaint contained only scant, conclusory allegations of consumer confusion, which, even when considered in the light most favorable to Plaintiff, were belied by the allegedly infringing email attached to the complaint, which demonstrated nominative fair use [of the trademark].”

Based on Applied’s past history, Debber doubts the litigation is really over. He says he expects Applied to file appeals and to continue to lose, all the way to the Supreme Court.

Copies of the court’s published decision in Applied Underwriters v. Larry Lichtenegger; J Dale Debber; Providence Publications LLC are available in our Resources section or by clicking here.

Applied Underwriters was once but is no longer an affiliate of Berkshire Hathaway. Applied’s management bought it. Berkshire Hathaway bears no responsibility for any of the events which have transpired involving Applied Underwriters’ or its subsidiaries including California Insurance Company.