Michael Atkins debuts his Seattle Trademark Lawyer blog with a nice post about a ruling denying insurance coverage to a retailer that has to go into its pocket to destroy counterfeit merchandise. (NB to Trademark lawyers and those who play them on TV: Are you advising your clients to check for coverage when they fax you that cease and desist letter they just got?):
The Court concluded that â€œCostcoâ€™s property damage â€” its loss of use of the shampoo â€” arose out of the shampoo. Because the shampoo was counterfeit, Costco was unable to sell it or make any other use of it. When an insured becomes liable for damage to its own tangible product that occurs either by physical injury or loss of use, and such damage arises out of the product, the insured is not covered.â€
Is all lost? Hopefully the IRS doesn’t take a comparable view and permits a writeoff of the loss, so perhaps not. Small solice. But a big welcome to Mike and his new blog!