FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS [Hon. George A. O'Toole, Jr., U.S. District
T. O'Leary, with whom O'Leary Murphy, LLC was on
brief, for appellant.
K. Scully, with whom Day Pitney LLP was on brief, for
Howard, Chief Judge, Torruella and Selya, Circuit Judges.
appeal gives us an opportunity to sink our teeth into a
sophisticated insurance coverage question: we must construe
the scope of the so-called intellectual property exclusion
(IP exclusion) to the personal and advertising injury
coverage under a standard commercial general liability policy
(the Policy) issued by defendant-appellee HDI Global
Insurance Company (HDI) to plaintiff-appellant Sterngold
Dental, LLC (Sterngold). Concluding, as we do, that
Sterngold's arguments lack bite, we affirm the district
court's dismissal of Sterngold's action for failure
to state a claim upon which relief can be granted.
relevant facts are undisputed. Sterngold manufactures and
sells dental products. To safeguard its business operations,
Sterngold purchased the Policy (which covered Sterngold's
commercial activities during the calendar year 2016).
pertinent part, the Policy obligated HDI to defend and
indemnify Sterngold against claims arising out of
"personal and advertising injury." Withal, coverage
for such injuries was subject to certain exclusions. A
specific exclusion - the IP exclusion - pretermitted coverage
for personal and advertising injury "arising out of the
infringement of copyright, patent, trademark, trade secret or
other intellectual property rights." The case at hand
turns on the applicability vel non of this exclusion.
circumstances that sparked this litigation can be succinctly
summarized. In May of 2016, Intra-Lock International, Inc.
(Intra-Lock), a competitor in the market for dental products,
sued Sterngold in the United States District Court for the
Southern District of Florida. Count 3 of its complaint
alleged, inter alia, that Sterngold infringed
Intra-Lock's registered OSSEAN trademark - a trademark
denoting a component of its osseointegrative dental implant
coating product - by using nearly identical marks, OSSEO and
OSSEOs, for a nearly identical product. Sterngold asked
HDI to defend the suit and provide indemnification pursuant
to the Policy. HDI refused Sterngold's request, denying
coverage under the Policy. When Sterngold reiterated its
demand for defense and indemnification, HDI again demurred.
proceeded to settle the Intra-Lock suit. At that point, it
made a third attempt to engage HDI. This time around,
Sterngold asserted that the Policy required that HDI
reimburse Sterngold for the settlement amount. Once again,
HDI turned a deaf ear to Sterngold's entreaties.
diversity jurisdiction, see 28 U.S.C. §
1332(a), Sterngold repaired to the United States District
Court for the District of Massachusetts. Pertinently, its
complaint against HDI alleged that the latter had breached
its duty to defend and indemnify Sterngold against
Intra-Lock's claim. HDI responded by moving to dismiss
the complaint. See Fed.R.Civ.P. 12(b)(6). Sterngold
objected, but the district court granted HDI's motion,
holding that, under the Policy, HDI had no duty either to
defend or indemnify Sterngold in the Intra-Lock suit. See
Sterngold Dental, LLC v. HDI Global Ins. Co., No.
17-11735, 2018 WL 4696744, at *4 (D. Mass. Sept. 29, 2018).
This timely appeal followed.
review a district court's dismissal for failure to state
a claim de novo. See Artuso v. Vertex Pharm., Inc.,
637 F.3d 1, 5 (1st Cir. 2011). "In conducting that
review, we accept as true all well-pleaded facts set forth in
the complaint and draw all reasonable inferences therefrom in
the pleader's favor." Id. "When . . .
a complaint's factual allegations are expressly linked to
- and admittedly dependent upon - a document (the
authenticity of which is not challenged), that document
effectively merges into the pleadings and the trial court can
review it in deciding a motion to ...