Partial Payment for Trade Dress, Patent Lawsuit is Bad Faith

Concept Enterprises, Inc. v. Hartford Ins. Co. of the Midwest, No. CV 00-7267 NM (JWJx), 2001 WL 34050685, 2001 U.S. Dist. LEXIS 6901 (C.D. Cal. May 21, 2001) (Judge Manella found that there was a duty to defend the trade dress claims where they were asserted in conjunction with causes of action for patent infringement, therefore implicating defense duties for the entire lawsuit. Hartford attempted to pay only 15% of the bills, based on its calculation of relative liability exposure for the covered trade dress re uncovered patent infringement claims. This approach was rejected by the court as inconsistent with the California Supreme Court's Buss decision requiring an "immediate and complete defense" of all claims subject to right to reimbursement after performance. It also found that any attempt to lessen the rate payable was unavailing under Civil Code § 2860 where less than all fees due were paid. The conduct constituted bad faith as a matter of law, entitling the insured to fees it incurred in its coverage dispute under Brandt.)