Dexon Computer, Inc. v. Travelers Prop. Cas. Co. Am., No. 23-1328 (8th Cir. 2024)

Justia: Dexon Computer, Inc., a reseller of computer networking products, was sued by Cisco Systems, Inc. and Cisco Technologies, Inc. for federal trademark infringement and counterfeiting. The complaint alleged trademark infringements between 2006 and 2010, and thirty-five acts of infringement between 2015 and 2020. Dexon sought defense from Travelers Property Casualty Company of America under a liability policy it had purchased from Travelers. Travelers denied coverage and a duty to defend, arguing that all the alleged acts of trademark infringement were “related acts” under the policy and thus were deemed to have been committed before the policy’s retroactive date.

The District Court of Minnesota denied Travelers’ motion to dismiss Dexon’s claims for a declaratory judgment that Travelers has a duty to defend and indemnify. The court held that the documents submitted by the parties concerning the coverage dispute were not “matters outside the pleadings” and could be considered in ruling on the motion to dismiss. The court concluded that it could not hold, as a matter of law, that every act of trademark infringement alleged in the Cisco complaint was necessarily related to an act of trademark infringement that occurred prior to the retroactive date.

The United States Court of Appeals for the Eighth Circuit affirmed the district court’s decision. The court held that the district court correctly determined that Travelers had a duty to defend Dexon in the entire Cisco Action. The court noted that this did not resolve whether Travelers has a duty to indemnify, and if so, the extent of that duty, which would depend on the ultimate resolution of the Cisco Action.