After an insurance company entered into a software license and maintenance agreement with a software company, the software company posted on its website and in other marketing materials “endorsements” attributed to the insurance company’s chief executive officer and another employee, both of whom contended that the endorsements were false and unauthorized.
When the software company refused to remove its references to the insurance company and the “endorsements” from these materials, the insurance company and the two executives brought suit for use of the company’s trademark without permission in violation of the Lanham Act and the Uniform Deceptive Trade Practices Act and for common law misappropriation of identity claims.
The software company moved to dismiss the lawsuit, arguing that the agreements required arbitration of all claims arising out of or relating to the agreements. Because “arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit,” the Court determined that the CEO, who signed the agreement only on behalf of the company, and the employee, a non-signatory, could not be compelled to arbitrate.
However, the Court rejected the insurance company’s argument that its “false endorsement” claims fell outside the intended scope of the applicable arbitration clauses and, thus, were not subject to arbitration. After noting that the clause in question expressly provided that whether a dispute is subject to arbitration is to be resolved by the arbitrator, the Court stayed the lawsuit pending the result of arbitration of the claims asserted against the insurance company. (Midwest Fin. Holdings, LLC v. P & C Ins. Sys., Inc., 2007 WL 4302436 (C.D. Ill. Dec. 7, 2007))