Skateboard Maker Loses Suit Against Insurer

(CN) - An insurer for the makers of the two-wheeled "Wave" skateboard need not defend them in a trademark dispute, the 9th Circuit ruled Tuesday.

Street Surfing LLC introduced the distinctive inline skateboard in 2004 and quickly logged about $600,000 in sales. The company later sold accessories for the Wave, such as "Lime Green Street Surfing Wheels for The Wave," and the "New Ultimate Street Surfer Wheel Set."

When the company secured insurance coverage from Great American E&S Insurance Co. in 2005, both its website and the logo on the "Wave" included the term "street surfing."

The trademark Streetsurfer belonged, however, to Rhyn Noll, a maker of surfboards and skateboards whose father is famed surfer Greg Noll. Rhyn had refused for years to sell his mark and sued Street Surfing in 2008 for trademark infringement.

Street Surfing filed a claim with Great American to procure a defense against Noll, but the insurer denied it twice based on exclusions in the company's policy that barred coverage for lawsuits related to intellectual property and trademarks.

After Street Surfing settled with Noll in 2009, it sued Great American in Santa Ana. U.S. District Judge Andrew Guilford ruled for the insurer and a unanimous appeals panel affirmed on Tuesday.

Great American was relieved of its duty to defend the company because of the "prior publication" exclusion in the policy, the three-judge panel found.

"Because the logo advertisement predated coverage and used the term 'Street Surfing,' which the underlying complaint alleged was a wrongful use of Noll's advertising idea, 'Streetsurfer,' the prior publication exclusion applies to any injuries arising from affixing the logo on the Wave during the coverage period," Judge Raymond Fisher wrote for the Pasadena-based court.

He added that, "at its core, this case involves a company that began a wrongful course of conduct, obtained insurance coverage, continued its course of conduct, then sought a defense from its insurer when the injured party sued."

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