Summary
holding that "[t]he product itself is not an advertisement within the meaning of [Hartford's] policy"
Summary of this case from Superformance International v. Hartford Casualty Ins. Co.Opinion
00 Civ. 6957 (LAK).
March 21, 2001.
ORDER
This is an action for copyright infringement in which the defendant has claimed over against its insurer, asserting that the carrier is obliged to defend and indemnify it on the theory that the copyright infringement falls within the advertising liability insuring clause of the policy. Plaintiff moves for partial summary judgment as to liability and injunctive relief. The third party defendant moves for summary judgment on the third party action.
I
The facts concerning the infringement claim, to the extent relevant here, are largely undisputed. Plaintiff owns valid and subsisting copyrights on the subject fabric designs. Defendant concededly infringed those copyrights by having them copied for it by another textile manufacturer, although it claims it did so by accident. Hence, liability is clear unless one of defendant's three affirmative defenses raises a genuine issue of material fact.
The first affirmative defense is that plaintiff, a New Jersey corporation, is doing business in New York without having registered and thus is foreclosed from suing here by Section 1312(a) of the New York Business Corporation Law. As this action rests entirely on the federal statute, however, the defense is without merit.
See Angel v. Bullington, 330 U.S. 183, 192 (1947); 17 WRIGHT, MILLER COOPER, FEDERAL PRACTICE AND PROCEDURE: JURISDICTION 2d § 4211, at 477 (1988).
Defendant argues next that plaintiff is not entitled to statutory damages or attorney's fees because the infringement commenced after first publication and before the effective date of registration, and the works were not registered within three months of first publication. As plaintiff seeks only its damages and defendant's profits, however, this argument too is of no avail.
Finally, defendant argues that it infringed by accident. This, however, is no defense.
E.g., D.C. Comics Inc. v. MiniGift Shop, 912 F.2d 29, 35 (2d Cir. 1990); Fitzgerald Pub. Co. v. Baylor Pub. Co., 807 F.2d 1110, 1113 (2d Cir. 1986).
The only point raised by defendant that has any merit is its contention that plaintiff has not established its right to an injunction. As there has been no showing thus far of a significant likelihood of future infringement, plaintiff's request for summary judgment as to injunctive relief must be denied.
See 4 MELVILLE B. NIMMER DAVID NIMMER, NIMMER ON COPYRIGHT § 14.06[B], at 14-116 (2000).
II
The complaint in this action charges that defendant infringed plaintiff's copyrighted designs "by . . . reproducing, manufacturing, displaying, publishing, vending, distributing, selling, promoting, importing or advertising [the] designs." Seizing on the word "advertising," defendant seeks a declaration that the carrier is obliged to defend and indemnify it in this action.The policy provides in relevant part:
"COVERAGE B. PERSONAL AND ADVERTISING INJURY
1. Insuring Agreement.
a. We will pay those sums that the insured becomes legally obligated to pay as damages because of `personal injury' or `advertising injury' to which this insurance applies. We will have the right and duty to defend any `suit' seeking those damages. However, we will have no duty to defend the insured against any `suit' seeking damages for . . . `advertising injury' to which this insurance does not apply. . . .
b. This insurance applies to:
. . . (2) `Advertising injury' caused by an `advertisement' of your goods, products or services; but only if the offense causing the . . . `advertising injury' was committed in the `coverage territory' and during the policy period.
. . . `Advertising injury' means injury arising out of one or more of the following offenses: . . . d. Infringement of copyright, slogan, or title of any literary or artistic work, in your `advertisement'
. . . `Advertisement' means a dissemination of information of images that has the purpose of inducing the sale of goods, products or services through:
a. (1) Radio; (2) Television; (3) Billboard; (4) Magazine; (5) Newspaper; or
b. Any other publication that is given widespread public distribution. However, `advertisement' does not include the design, printed material, information or images contained in, on or upon the packaging or labeling of any goods or products."
While the existence of a duty to defend usually is determined from the face of the pleadings, a court may look also to admissions in the insured's submissions "to confirm or clarify the nature of the underlying claims." The papers before the Court clearly show that plaintiff does not allege infringement of its copyrights in any "advertisement" in the ordinary sense of that word. Defendant's theory, rather, is that the garments it made with the infringing fabric were their own advertisements.
Northville Indus. Corp. v. National Union Fire Ins. Co. , 89 N.Y.2d 621, 634-35, 657 N.Y.S.2d 564, 569 (1997).
Pl. 56.1 St. ¶ 21 (infringement consisted of manufacturing and selling garments made from infringing fabric).
Zelda's memorandum in reply in support of its cross-motion, etc., at 5.
Although the Court admires counsel's zeal, the argument is without merit, as every case the parties have cited that has dealt with the question has held. The product itself is not an advertisement within the meaning of the policy. Accordingly, the carrier is entitled to summary judgment.
Advance Watch Co. v. Kemper Nat. Ins. Co., 99 F.3d 795, 807 (6th Cir. 1996); Farmington Cas. Co. v Cyberlogic Techs. Inc., 996 F. Supp. 695, 703 (E.D.Mich. 1998); Diversified Ins. Corp., v. Regent Ins. Co., 226 Wis.2d 563, 596 N.W.2d 502 (Ct.App. 1999).
III
For the foregoing reasons, plaintiff's motion for partial summary judgment is granted to the extent that the Court determines that defendant infringed plaintiff's three subject copyrights and that plaintiff is entitled to recover of defendant its actual damages and defendant's profits. It otherwise is denied. The motion of the third party defendant for summary judgment is granted and it is hereby declared that the third party defendant has no obligation to defend or indemnify defendant with respect to the claims asserted in this action.
SO ORDERED.