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Have you tried to get your auto-insurance to foot the bill for damages arising from an incident that happened before you bought their policy? Sounds ridiculous, right? Well that's essentially what Urban Outfitters tried doing.
The Third Circuit ruled that Urban Outfitters can't crash into someone's mailbox, then buy insurance and have the insurance pay for the mailbox. Hanover Insurance will not be indemnifying Urban Outfitters' trademark violations of the Navajo Nation's trademark on goods that evoke the Navajo, or alleged market confusion. Reuters reports that a case of this type is one of first impression for the Third Circuit. If that's true, that's astounding. But for some reason, there's lot of this sort of IP "first impression" business going on in the Third Circuit.
The original controversy began when a member of the Santee Sioux Nation penned a letter addressed to Urban Outfitters expressing her offense at seeing certain distasteful "Navajo" objects being sold. Perspicaciously, she posted a copy of the letter online on Columbus Day (in anticipation of increased searching of Native American tag words) and the letter went viral.
Bill Donavan of Navajo Times previously described the objects sold in Urban Outfitters as being "tacky" -- and this description isn't outrageous. One of the more controversial sale items were the "Navajo Hipster Panties" (don't worry, link is SFW -- mostly) that feature a pattern that is evocative of the Nation's culture. Other offending objects include a Navajo-themed flask. The Navajo Nation has alleged that these goods compete directly with originally crafted Navajo goods and cause market confusion. Sales of the objects were traced back to 2009.
Indian Arts and Crafts Act
The Navajo Nation brought the suit based on the Indian Arts and Crafts act which stipulated that producing and selling an object and marketing it as Indian made when it isn't is illegal. The main point of the suit was that Urban Outfitters allegedly holding Navajo hands played some part in the production of these objects. That's a little bit of a stretch for elastic"Navajo Hipster Panties," but I digress.
Meanwhile, Urban Outfitters has sought to withdraw a motion it filed for partial summary judgment on at least one of disputes counts in the case. The points of law are too complicated to discuss here, but in practical terms, a favorable ruling for the Navajo Nation will mean that Urban Outfitters will be on the hook for damages.
The Court found "remarkably consistent" infringement on the part of Urban Outfitters from 2009 onward and seemed to be unpersuaded by Urban Outfitters argument that there was fair use, or alternatively market confusion as to the origins of the goods because the Urban Outfitter branding clearly overshadowed any Navajo-ness of the goods.
When Urban Outfitters began their policy with Hanover in 2010, not only did the policy conceivably begin sixteen months later, but the terms of the policy specifically excluded exactly the types of injuries envisioned by Urban Outfitters' Navajo gaffe.
If you think this panties business is outrageous, we invite you educate yourself on previous Urban Outfitters related lawsuits. The controversial nature of this company's goods is unsurprising given its target audience of youthful, rebel types and its penchant for ruffling feathers.