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No Hanover indemnification of Urban Outfitters in Navajo trademark suit


Hanover Insurance Co. is not obligated to indemnify Urban Outfitters in a trademark infringement lawsuit filed against the retailer by the Navajo Nation because the alleged infringement began 16 months before the policy period began, an appeals court has ruled.

The Window Rock, Arizona-based Navajo Nation sued Philadelphia-based Urban Outfitters in February 2012, alleging that it was guilty of trademark infringement because it sold goods online and at retail under the “Navaho” and “Navajo” names and trademarks since at least March 2009, the 3rd U.S. Circuit Court of Appeals ruled last week in Hanover Insurance Co. v. Urban Outfitters et al. v. OneBeacon America Insurance Co.

Hamilton, Bermuda-based OneBeacon provided commercial general liability and umbrella liability coverage to Urban Outfitters prior to July 2010, according to the ruling.

Beginning in July 2010, OneBeacon issued a fronting policy to Urban Outfitters providing identical coverage, for which Hanover served as the responsible insurer. Hanover subsequently issued separate CGL and umbrella liability policies to Urban Outfitters that were effective from July 2011 to July 2012.

The Hanover policies excluded coverage for liability arising when “first publication” took place before the beginning of the policy period.

In July 2012, Hanover sought a judicial declaration from a Pennsylvania federal judge that it was not responsible for Urban Outfitters' defense or indemnification in the trademark case.

The federal judge ruled in Hanover's favor, and a three-judge appeals court panel unanimously upheld the lower court.

“Because Hanover was not responsible for Urban Outfitters' liability insurance coverage until 16 months thereafter, the exclusions apply, unless there were allegations of “fresh wrongs,” the appeals court panel ruled in determining that was not the case. “It is apparent from Navaho Nation's complaint that Urban Outfitters' advertisements, which predated Hanover's coverage period, share a common objective with those that followed.”

In another trademark infringement case in March, an appeals court held that Selective Insurance Co. of America was not required to defend a trademark infringement suit filed by a lighting company because its policy covered only slogan infringement.