Liability Insurer May Have To Cover Knockoff Jewelry Site For Allegedly Violating Reese Witherspoon’s Right Of Publicity

Have you always wanted to own "The One Ring to Rule Them All" of Lord of the Rings fame? Do you dream of an engagement ring just like Kate Middleton's?

Your dreams can come true with a visit to Emitations.com, a website that sells costume jewelry, including imitations of celebrity baubles. There you can search for "Middleton" and find several versions of the famous royal sapphire-and-diamond band, next to pictures of the Duchess herself wearing the real thing. But... if you long for your very own copy of Reese Witherspoon's engagement ring, you're too late.

Emitations has apparently removed its replica of Witherspoon's ring, or at least stopped referring to it by her name, since the celebrity sued the website's parent company, Marketing Advantages International, in June 2013. Witherspoon's suit, pending in California state court, asserts claims of violation of right of publicity, violation of common law right of privacy, common law trademark/trade name infringement, common law trade dress infringement, and common law slogan infringement, arising from Emitations's unauthorized use of her name and image to sell jewelry, in particular a knockoff of her engagement ring.

The Insurance Battle

In response to the lawsuit, Marketing Advantages notified Maryland Casualty Company. Maryland had issued Marketing Advantages a Commercial General Liability insurance policy covering, among other things, "advertising injury" that Marketing Advantages might inflict on third parties. Maryland agreed to pay Marketing Advantages' defense costs in the Witherspoon suit, but reserved its right to dispute coverage. It then filed a declaratory judgment action against Marketing Advantages and Witherspoon, asserting that it had no duty under the policy to defend or indemnify Marketing Advantages. Witherspoon and Marketing Advantages moved to dismiss or stay the insurer's case on the ground that a federal court should abstain from deciding issues that are raised in a prior pending state action. In an order issued in January, the federal court agreed, but decided to stay the action pending resolution of the underlying litigation, rather than dismiss it outright and subject the insurer to the risk of a potential time bar.

Exceptions and Exclusions

In arguing that its policy does not cover the Witherspoon suit, Maryland pointed to the policy's intellectual property exclusion, which bars coverage for advertising injury "arising out of the infringement of copyright, patent...