Los Angeles Business Law Blog

Businesses in California may want to pay close attention to their insurance coverage, especially if they will be dealing with intellectual property issues. This is illustrated in one case where a company sought coverage from their insurer for a lawsuit that accused the firm of infringing a trademark. However, the insurance company said that its policy did not provide coverage for intellectual property disputes, disclaiming its responsibility to defend the case. The company's case was dismissed after the insurance company demonstrated exclusions in its business liability and technology policies that addressed trademark infringement cases.

The company claimed that it was entitled to receive coverage for its legal defense under its coverage for personal and advertising injury. The description of this listed eight different situations, including alleged copying of an advertisement. However, an endorsement on the company's policy excluded nearly all of the eight different allegations, including copying in advertising and associated trademark infringement. In addition, the company also sought to use its technology policy to obtain coverage. However, the court accepted the insurer's argument that this policy covered technology services provided to others and excluded all intellectual property claims.

California-based band Guns N' Roses is suing a brewery in Colorado over a menu item that bears the name "Guns N' Rosé" ale. The band claims the name the establishment is using for its ale creates the false impression that they are somehow associated with it. The brewery at the center of the matter attempted to trademark the name for its product in 2018, which is what ultimately attracted the band's attention.

The trademark infringement litigation related to this matter was initiated after the brewery was contacted by the band's manager. The business subsequently withdrew their trademark application. However, they continued to sell the rosé ale. The brewery also sells merchandise with the name that's similar to the one that's been used by the band for more than 30 years.

The past decade has seen a growing trend of companies in California and elsewhere buying up patents that were sitting on the shelf because they were not worth commercializing. In some cases, companies purchased such patents en masse for the sole purpose of litigating patent infringement cases against businesses that produced goods or services resembling a feature in one of the patents. In many cases, the lawsuits were directed at tech companies who began to buy up such patents themselves as defense mechanisms.

Acquiring these so-called troll patents has proven to be a gold mine for many of the patent purchasers. However, the frivolous patent lawsuits are erasing as much as $60 billion in firm wealth each year, according to a study by Harvard Business Review. The Obama Administration attempted to fix the problem by working with Congress to pass legislation aimed at reducing such patent lawsuits. However, the patent trolls simply changed their business model to go after trade secrets.

California brand owners may be interested in learning about a case involving car manufacturer BMW and a telecommunications company that registered with the same initials in its company name. This is something that is of particular interest to those with brands that are well-known around across the nation and around the world.

BMW issued the High Court in order to seek injunctions and declarations against the owner of the telecommunications company. The car manufacturer took this action even though the telecommunications company changed its name. Manufacturer executives felt that including these initials would misrepresent them. The auto manufacturer uses its trademark name for services and goods, including telecommunications. BMW used this to support their claim of trademark infringement.