In its recent decision in St. Luke’s Cataract & Laser Institute, P.A. v. Zurich American Insurance Co., 2013 WL 461347 (11th Cir. Feb. 7, 2013) (unpublished), the United States Court of Appeals for the Eleventh Circuit found insurance coverage under the “advertising injury” provisions of commercial general liability (“CGL”) policies for the insured’s infringement of copyrighted web site content. Each of the policies at issue provided coverage for “advertising injury liability,” which was defined to include copyright infringement in the insured’s advertisements. The insurers’ principal defense as to the alleged copyright infringement was the “unauthorized use” exclusion. In a well-reasoned opinion, the court carefully analyzed this exclusion, found it not ambiguous, and held that it could not be read so broadly as to eviscerate the copyright infringement coverage of the policies.
The explosion of intellectual property litigation over the past several years makes the Eleventh Circuit’s confirmation that there is often coverage for such claims of heightened significance for corporate policyholders. The broader lesson to be drawn from this decision is that coverage is often available for internet copyright infringement claims under the “advertising injury” provision of CGL policies.
The Copyright Claim and Pursuit of Coverage
The policyholder in St. Luke’s, Dr. James C. Sanderson, was an oculoplastic surgeon at St. Luke’s Cataract and Laser Institute. St. Luke’s, 2013 WL 461347, at * 1. St. Luke’s webmaster registered domain names, including LASERSPECIALIST.com, and the web site carried copyright notices identifying St. Luke’s as its owner. Id. After Sanderson resigned from St. Luke’s and opened his own practice, he relaunched the LASERSPECIALIST.com web site with content virtually identical to the St. Luke’s web site. Id. The copyright disclaimer on Sanderson’s web site identified him, and not St. Luke’s, as the owner.
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