A trailer manufacturer is not entitled to coverage from a Chubb Ltd. unit for trade dress infringement because the underlying litigation against it never makes that claim, said a federal appeals court Monday, in affirming a lower court ruling.
In October 2014, Nappanee, Indiana-based The Aluminum Trailer Co. contracted with Phoenix-based Sidi Spaces LLC, which does business as BizBox, to manufacture trailers using BizBox’s design, according to the ruling by the 7th U.S. Circuit Court of Appeals in Chicago in The Aluminum Trailer Co., d/b/a/ ATC Trailers v. Westchester Fire Insurance Co.
In January 2019, BizBox discovered ATC had manufactured a knock-off trailer using BizBox’s design and sold the trailer directly to a BizBox customer for a lower price, the ruling said. The knock-off trailer was virtually identical to a BizBox Trailer, except ATC had replaced BizBox’s name and logo with its own.
BizBox filed suit in Arizona state court claiming breach of contract and tortious interference with existing and prospective contract relations. “Notably, the term ‘trade dress’ never appears in BizBox’s complaint,” the ruling said.
After Chubb unit Westchester denied coverage, ATC filed suit seeking defense and liability coverage in the BizBox litigation under its commercial liability policy, which provided coverage for advertising injury, including trade dress infringement.
The U.S. District Court in South Bend, Indiana, ruled in the insurer’s favor and was affirmed by a three-judge appeals court panel.
“Remember, BizBox sued ATC for breach of contract and tortious interference with contract,” the appeals court ruling said. “The policy’s coverage extends to ATC only if BizBox claimed that ATC infringed on its trade dress in ATC’s ‘advertisement,’” it said.
“BizBox therefore must have alleged an advertising injury, or at the very least, alleged facts that plausibly show one occurred. BizBox did not. Simply, the Policy does not cover any of the claims BizBox raised,” the panel said, in affirming the lower court ruling.
Attorneys in the case did not respond to requests for comment.
