Industrial Indemnity Co. v. Apple Computer, Inc.

Two insurers and the insured appeal from a judgment entered after a jury trial on whether the insurers breached their duty to defend against an English lawsuit, and if so whether they acted in bad faith. The jury returned a substantial verdict in favor of the insured. The litigation was complex and produced an extraordinarily voluminous record. We conclude the policy terms at issue, given their ordinary meaning and considered in the contexts of the policies and the underlying circumstances, clearly exclude coverage. Accordingly, we reverse the judgment.

Background

Apple Corps, Ltd., and Apple Corps, S.A. (collectively, Apple Corps), the business arms of the English band The Beatles, sued Apple Computer, Inc. (Apple) in London in 1989, alleging breach of a written trademark coexistence agreement that Apple Corps and Apple had negotiated in 1981. The agreement recognized the “similarity between their respective Trade Marks” and the parties’ desire “to avoid confusion between their respective business activities and to preserve their respective Trade Mark rights.” Apple agreed not to use its name and logo in connection with computer products “specifically adapted for use…