Aspen not obligated to defend trademark infringement suit

An insurer is not obligated to defend a Florida condominium association in a trademark infringement case filed by a similarly named Alaska hotel operator because of an exclusion in its coverage, said a federal appeals court in affirming a lower court ruling.

In September 2015, Homer, Alaska-based Land’s End Acquisition Corp., which operates hotels and resorts in Alaska, sent a cease-and-desist order accusing Treasure Island, Florida-based Land’s End at Sunset Beach Community Association Inc. of improperly using its “Land’s End” trademark, according to Thursday’s ruling by the 11th U.S. Circuit Court of Appeals in Atlanta in Land’s End At Sunset Beach Community Association Inc. v. Aspen Specialty Insurance Co.

The Florida company filed suit in U.S. District Court in Tampa, seeking a declaratory judgment action against the Alaska company, and the Alaska company countersued, charging trademark infringement under the federal Lanham Act and state law, and unfair competition under Florida law. The case was settled in March 2016 for an undisclosed amount, according to court papers filed in that case.

Rocky Hill, Connecticut-based Aspen Specialty, a unit of Aspen Insurance Holdings Inc., which had issued a commercial general liability policy to the Florida company, denied its request for defense benefits, maintaining its policy excluded trademark infringement suits, according to the ruling.

The Florida company filed suit against Aspen in U.S. District Court in
Tampa, seeking a declaration the insurer was obligated to defend it in the underlying lawsuit.

The District Court ruled the intellectual property trademark exclusion in Aspen’s policy applied, which was unanimously affirmed by a three-judge appeals court panel.

The Alaska company’s “false designation of origin and unfair competition counterclaims did not give rise to a duty to defend,” said the ruling.

These counterclaims “fall within the intellectual property exclusion because they both arise out of Plaintiff’s alleged infringement of the Land’s End trademark,” the ruling said, in affirming the lower court’s decision.

A federal appeals court overturned a lower court ruling last month and held that the phrase “Honey Badger Don’t Care” may have trademark protection.