CK&E Establishes Insurer Duty to Defend Patent Infringement Claims

Conkle, Kremer & Engel represented Jordache Enterprises, Inc., a prominent manufacturer of jeans and other denim garments. In the early 1990’s, Jordache and other garment manufacturers, including Levi’s, Lee Jeans, Bugle Boy, Gitano and others, were sued for infringement of a patent. The patent claimed exclusive rights to the “acid wash” look, and processes to achieve the look. Jordache had Commercial General Liability (“CGL”) policies with National Casualty Co., and made claims on its policies. CGL policies are the type typically held by most businesses. National Casualty originally agreed to defend Jordache, but subsequently stopped funding the defense.

Jordache sued National Casualty, and the matter came to hearing before Retired U.S. Magistrate Judge Kathleen A. Roberts. Conkle, Kremer & Engel established that the patent infringement claims were potentially covered by Jordache’s CGL policy, which meant that National Casualty was under a duty to defend Jordache. National Casualty breached its duty to defend Jordache, and was held liable for the resulting damage, in the total amount of $1,580,000.

The decision has particular significance because several courts have suggested that patent infringement claims are not generally within the potential coverage of CGL policies. Conkle, Kremer & Engel proved otherwise — some patent infringement claims may be covered by CGL insurance policies, and the insurers must pay for the defense of such claims.

 

Full Text of Jordache Enterprises, Inc. adv. National Casualty