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A California clothing wholesaler is asking the Ninth Circuit Court to uphold a lower court’s ruling that an insurance company must defend it against a trademark infringement suit filed by Forever 21.
In and Out Fashion, a Los Angeles-based clothing wholesaler, has been accused of selling unauthorized Forever 21 clothing. In and Out Fashion wants Great Lakes Insurance SE to defend the lawsuit. The clothing store’s policies with Great Lakes contain an exclusion for claims stemming from violations of intellectual property rights – but there’s an exception to the exclusion for copyright, trade dress and slogan infringement that occurs during advertisements. A federal judge ruled last year that Great Lakes had a duty to defend In and Out because the underlying lawsuit raised the possibility that the clothing store had infringed Forever 21’s trade dress during advertising.
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Great Lakes appealed the case to the Ninth Circuit, arguing that Forever 21 didn’t specify any actual injury due to In and Out’s ads. The clothing store, however, said that Great Lakes was arguing for an overly stringent standard.
“The Forever 21 complaint includes faces establishing the potential for (In and Out) to be found liable for infringement of trade dress or infringement of slogan,” the clothing store’s lawyer said in a court filing.
Forever 21 sued In and Out, which runs a wholesale clothing store in Los Angeles, in 2014. The national apparel company accused In and Out of violating its trademarks by selling unauthorized or counterfeit Forever 21 clothing. In and Out allegedly blacked out the labels to conceal the items’ true designer.
