Court Finds Liability Policy Excludes Claim in Trademark Case

June 12, 2009

The Hartford has no duty to defend or indemnify a policyholder that was accused of using another company’s federally protected trademark, a federal court in Maryland has ruled.

The case pitted The Hartford against its insured, Marvin J. Perry Inc., a company that provides furnishings and furniture to the federal government and hospitality industry. The Hartford had issued a business liability policy to the company when, in 2005, Marvin J. Perry Inc. was sued by a Marvin J. Perry & Associates, a division of Perry & Wilson, Inc.

The suit alleged that, in 1993, Perry & Wilson had acquired the rights to use the name “Marvin J. Perry & Associates” through a purchase agreement with Marvin J. Perry, Inc., and that the company’s use of that name violated Perry & Wilson’s trademark.

The two companies eventually reached a settlement out of court.

However, Marvin J. Perry Inc. also sued The Hartford in an attempt to recover its fees and costs of defending itself.

Once it was originally notified of the potential claim, The Hartford said it had no duty to defend its client, citing the policy’s exclusion of intellectual property rights — specifically, the “violation of any intellectual property rights, such as patent, trademark, trade name, trade secret, service mark or other designation of origin or authenticity.”

The court, in a ruling issued last month, agreed.

“Here, the plain and unambiguous language of the Intellectual Property Rights Exclusion supports a finding that the exclusion applies,” wrote Judge Roger W. Titus of the U.S. District Court for the District of Maryland.

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