The issue before the Central District Court of California was whether allegations that the policyholder’s displays for knock-off products, and their proximity to the trademarked products and signs, satisfied the policy requirement that the infringement be “in that particular part of your advertisement”. Hybrid Promotions, LLC v. Fed. Ins. Co., No. 8:18-cv-00891-JVS-MRW, 2018 WL 6300459, at *1 (C.D. Cal. Nov. 19, 2018).
Underlying Allegations
Ultimate Brand Management, LLC (UBM) sued Wal-Mart for trademark infringement, false designation of origin, false advertising, unfair business practices, and common law misappropriation. According to the allegations, Wal-Mart sold UBM’s trademarked MMA Elite merchandise in its stores. Also, Wal-Mart sold its own private label of “competing knock-off apparel similar to UBM’s MMA Elite branded products.” Wal-Mart allegedly used signs, banners, and other images of MMA Elite trademarks adjacent to and/or above product displays that included both MMA Elite apparel as well as the knock-off apparel and its signage in an effort to promote and market its own brand of apparel. Specifically, UBM alleged that the use of the MMA Elite trademark in connection with the displays of Wal‑Mart’s knock-off apparel products created the false and misleading perception to consumers that the knock-off products were affiliated with the MMA Elite brand.