No advertising injury coverage for copyright infringement claims under Hartford liability policy.

PetroNet LLC v. Hartford Casualty Insurance Co.,
Case No. 0:10-cv-03675

United States District Court, District of Minnesota

Type of Case: Insurance Coverage

Practice Area(s): Insurance Insurance Coverage Insurance – Bad Faith Insurance – Reinsurance

Lawyer(s): Charles E. Spevacek Michael P. McNamee

Office(s): Minneapolis

Date: Jul 21 2011

A Minnesota federal judge granted summary judgment in favor of Hartford Casualty Insurance Company (represented by Meagher & Geer), against a technology company seeking defense and indemnification for copyright infringement claims under the Hartford liability policy’s “personal and advertising injury” coverage.

Although the original and amended underlying complaints against the insured alleged that the insured infringed the plaintiff’s computer code, U.S. District Judge Donovan W. Frank ruled there were no allegations that the insured infringed that code in its “advertisement.” Judge Frank also concluded that coverage did not apply because the plaintiff’s injuries were caused only by the insured’s alleged theft and sale of the copyrighted code, and not from the presence of isolated portions of the code present on the insured’s website.

Judge Frank also ruled that even if the plaintiff’s allegations had otherwise fallen within the Hartford policy’s insuring grant, coverage would be excluded by the Hartford policy’s “breach of contract” exclusion. Although the complaints did not state any claims labeled “breach of contract,” the court concluded that all of the plaintiff’s claims were plainly based on the insured’s officers’ alleged breach of confidentiality provisions contained in a prior technology consulting contract between the officers and the plaintiff. He dismissed the coverage claims against Hartford with prejudice.

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