Milkshake-Cherry Photo: ivanmateev/iStockphoto.com

A federal judge has ruled that Liberty Mutual Insurance Co. has to defend and indemnify the Harrisburg-based Hershey Creamery Co.—which is not affiliated with nearby candymaker The Hershey Co.—in a trademark infringement case over milkshake kiosks.

U.S. District Chief Judge Christopher C. Conner of the Middle District of Pennsylvania denied Liberty Mutual’s motion for summary judgment on Hershey Creamery’s claims that the insurer owes a duty to defend and indemnify the company in trademark litigation based in Delaware federal court.

In the underlying action, plaintiff f’real foods sued Hershey Creamery for allegedly copying its self-serve milkshake machines and related marketing designs, display and verbiage, according to Conner’s opinion.

F’real claimed that its trademark, “real milkshakes are real better,” was ripped off by Hershey Creamery, whose slogan is “real ice cream, real milkshakes, real fast,” according to Conner.

Liberty argued that since the verbiage on Hershey’s kiosks are not “a paid announcement that is broadcast or published in the print, broadcast or electronic media,” it had no duty to indemnify or defend the trademark suit.

“Hershey counters that the phrase ‘published in the print … media’ is broad enough to include slogans published on in-store advertising signage, or, at the very least, is ambiguous and should be construed in Hershey’s favor,” Conner said.

The judge continued, “We need not determine the meaning of ‘published in the print … media’ or decide whether in-store advertising signage qualifies as an advertisement under that meaning. We find that, when f’real’s allegations are read together and construed liberally in Hershey’s favor, the complaint implicates Liberty Mutual’s duty to defend because the trademark infringement claims ‘might or might not fall within the policy’s coverage.’”

Conner said that broad phrasing can encompass all types of infringement, not just those mentioned in the complaint, as Liberty Mutual had argued.

“The complaint makes clear that f’real believes Hershey infringed on f’real’s advertising ideas and slogans, and specifically did so in the context of advertising for ‘competing blending machines and milkshakes,’” Conner said. “This is a sufficient nexus between advertising and injury to trigger a duty to defend—it is at least possible that a covered ‘advertising injury’ may be part of f’real’s recovery against Hershey. We conclude that, in light of the broad nature of the allegations, and when liberally construing the complaint in Hershey’s favor, f’real’s remaining claims ‘may potentially come within the coverage of the policy.’”

Hershey Creamery is represented by Thomas French of Barley Snyder, who did not respond to a request for comment. John Sullivan of Post & Schell represents Liberty Mutual and declined to comment.