Insurance Does Not Cover $35 Million Lawsuit Judgment

Submitted by patentadmin on Thu, 05/19/2016 - 13:14

Back in 2013, Ashley Reed Trading lost a trademark infringement lawsuit filed by Fendi Adele claiming that Ashley Reed was selling counterfeit handbags that were labeled as genuine Fendi Adele. The judge ordered Ashely Reed to pay Fendi Adele $35 million, three times the company’s sales from 2001 through 2006, the period during which it sold the counterfeit handbags. Ouch! But they had it coming.

Ashley Reed filed a claim with its insurance carrier, U.S. Fidelity & Guaranty, and expected the insurance company to pick up the tab. A three-judge panel just ruled that USF&G does not have to cover Ashley Reed’s $35 million judgement because the damages did not stem from the Ashley Reed’s advertising, but from its selling of counterfeit merchandise. Ashley Reed purchased insurance that covered “advertising injury,” not trademark-infringing injury. Do they sell insurance for that?

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