Eleventh Circuit Finds Exclusion Insufficient for Insurance Companies to Avoid “Advertising Injury” Coverage for Copyright Infringement
Introduction and “Exclusion 13”
Although federal appellate courts issue “unpublished” opinions relegated to the status of merely persuasive precedent and not binding precedent, occasionally even an “unpublished” opinion may strike upon an issue of first impression or otherwise set forth judicial reasoning that still makes it noteworthy. On February 7, 2013, the Eleventh Circuit issued such an opinion in an IP claim insurance coverage case.
In St. Luke’s Cataract and Laser Institute, P.A. v. Zurich Am. Ins. Co., et al., the Eleventh Circuit reversed a grant of summary judgment in favor of insurance companies who sought to avoid “advertising injury” coverage for a copyright claim under a policy exclusion. The policies issued by the insurance companies each defined “advertising injury liability” as injury “‘arising out of’ any one or more listed offenses, including ‘[i]nfringing upon another’s copyright, trade dress or slogan in your advertisement.’” That coverage was subject to several exclusions, one of which (“Exclusion 13”) denied coverage for copyright infringement claims when they:
Aris[e] out of the unauthorized use of another’s name or product in your e-mail address, domain name or metatag, or any other similar tactics to mislead another’s potential customers.
Underlying Litigation and District Court Judgment
Dr. James C. Sanderson and St. Luke’s, his former employer, had been involved in litigation in which St. Luke’s asserted copyright infringement claims, among others, against Dr. Sanderson. St. Luke’s alleged that after Dr. Sanderson had left its employ, he launched a website for his practice having content that was substantially similar to content that had been used in St. Luke’s website. Dr. Sanderson had launched his website using the same domain names that had been registered for St. Luke’s website while Dr. Sanderson was employed there.
The claims against Dr. Sanderson also included one under the Digital Millennium Copyright Act (“DMCA”), specifically 17 U.S.C. § 1202(b), based on the allegation that Dr. Sanderson had removed a previous copyright notice from the website that had read “Copyright © [Year] St. Luke’s Cosmetic Laser Center, All Rights Reserved.”
In that lawsuit, Assurance Company of America, one of Dr. Sanderson’s insurers, “assigned counsel to defend Sanderson” but under a reservation of rights.
The jury found for St. Luke’s on all of its claims except for the copyright infringement claim, finding that St. Luke’s copyright registrations (which it had obtained for June 2000 and February 2003 versions of its website) were invalid. St. Luke’s then obtained a revised copyright registration and brought a second action against Dr. Sanderson for copyright infringement only.
In August 2009, St. Luke’s and Dr. Sanderson settled all claims from both lawsuits for a $2.4 million judgment against Dr. Sanderson. That same month, both parties joined forces in a breach of contract action filed in the U.S. District Court for the Middle District of Florida against the insurance companies “for wrongful denial of coverage and failure to indemnify Sanderson,” among other asserted grounds. The insurance companies moved for summary judgment on the ground that Exclusion 13 eliminated Dr. Sanderson’s coverage for the copyright claims. The district court granted that motion, and the plaintiffs appealed to the Eleventh Circuit.
The Eleventh Circuit’s Analysis
The Eleventh Circuit began its analysis by acknowledging that both a grant of summary judgment and interpretation of insurance contract provisions are reviewed de novo, and that Florida law governed contract interpretation in this case. Against that backdrop, the court proceeded with its interpretation of Exclusion 13.
First, the court ruled, Dr. Sanderson’s copyright infringement did not itself amount to “unauthorized use of another’s name or product in your e-mail address, domain name, or metatag.” It reasoned:
St. Luke’s copyright claim is based on Sanderson’s wrongful use of the contents, layout, and design of St. Luke’s LASERSPECIALIST.com website. This use of the website’s content, however, is not the same thing as the use of “another’s name or product.” Furthermore, Sanderson used the content for display on his own website, rather than in an “e-mail address, domain name or metatag.” Therefore, the copyright infringement claim against Sanderson does not itself allege “the unauthorized use of another’s name or product in your e-mail address, domain name or metatag.”
Nor was copyright infringement a “similar tactic” under Exclusion 13, ruled the Eleventh Circuit:
The exclusion enumerates three specific places in which a name or product might be used without authorization: an email address, a domain name, or a metatag. The three enumerated locations are very specific; a website is not included among them. Furthermore, if the exclusion were meant to include websites generally, it would be odd to enumerate two constituent elements of a website (its domain name and metatags) but neglect to mention the website itself. To conclude otherwise would allow the “similar tactics” language to swallow the narrow language used in the exclusion and turn it into a catch-all exclusion for the use on the internet in any way of material belonging to another.
We will not read the “similar tactics” language as sweeping into the exclusion a broad range of conduct that does not implicate the same concerns as the tactics specifically mentioned.
The Insurance Companies drafted the exclusion using restrictive language directed at a particular set of concerns that are not implicated by the use of another’s copyrighted content on a website. If they had intended the exclusion to apply to any unauthorized use on the internet, they could have drafted the exclusion to say so. 
Second, the Eleventh Circuit acknowledged that the copyright claims could still be excluded if they “arise out of” “unauthorized use of St. Luke’s name or product in an e-mail address, domain name or metatag or other similar tactic to mislead.” Here, concluded the court, the “arise out of” text in Exclusion 13 did not result in avoidance of coverage, either. It acknowledged: “No Florida court has construed ‘arising out of’ in the context of this particular exclusion,” thus suggesting that this case raised a legal question of first impression, at least with respect to Florida law. However, the Eleventh Circuit took guidance from Florida precedent holding that the phrase “arising out of” in insurance policies, generally, requires that there be “some causal connection” between the conduct and the injury. That standard was not met here, ruled the court:
There is no causal connection between Sanderson’s use of St. Luke’s domain name and his posting of its website content on his website.
That the domain name directed internet traffic to Sanderson’s pilfered web site does not mean that the infringing web site content was “caused” by clicking on the domain name, only that the website was located in this way. The content, placed on the website prior to such clicking, constituted a copyright violation upon the posting, not the clicking.
Finally, as to St. Luke’s DMCA claim, the Eleventh Circuit applied similar reasoning, finding that the removal of St. Luke’s copyright notice: (i) did not itself amount to “unauthorized use of another’s name or product in an e-mail address, domain name, or metatag,” or any “similar tactic to mislead another’s customers”; and (ii) was not causally related to use of St. Luke’s domain name; rather, “[t]he two acts are coincidentally, not causally, related.”
Consequently, the Eleventh Circuit reversed the Middle District of Florida’s grant of summary judgment to the insurance companies, and remanded the case back to that district court.
The decision is St. Luke’s Cataract and Laser Institute, P.A. v. Zurich Am. Ins. Co., Nos. 11-11050, 11-11051, 2013 WL 461347 (11th Cir. Feb. 7, 2013) (unpub.).
 See 11th Cir. R. 36-2
“Unpublished” means that the opinion will not be selected for publication in the Federal Reporter, though of course it may be accessible elsewhere.
 St. Luke’s Cataract and Laser Institute, P.A. v. Zurich Am. Ins. Co., Nos. 11-11050, 11-11051, 2013 WL 461347, at *2 n.6 (11th Cir. Feb. 7, 2013) (unpub.)
 St. Luke’s, 2013 WL 461347, at *2 & n.6.
 Id. That statute provides, in part:
No person shall, without the authority of the copyright owner or the law-
(1) intentionally remove or alter any copyright management information,
* * *
knowing, or, … having reasonable grounds to know, that it will induce, enable, facilitate,
or conceal an infringement of any right under this title.
17 U.S.C. § 1202(b). “Copyright management information (‘CMI’) includes, inter alia, the title or identifying information of the work, author or copyright owner, the terms and conditions of use of the work, and identifying numbers or symbols referring to such information.” BanxCorp v. Costco Wholesale Corp., 723 F.Supp.2d 596, 609 (S.D.N.Y. 2010).
 St. Luke’s, 2013 WL 461347, at *1.
 Id. at *1 n.3 & at *2.
 “Metatags are words and phrases that describe a website’s content. The metatags do not show up on the website itself, only in the source code. The web designer can include whatever metatags he desires. Many search engines use metatags as one way to determine the content of a website.” Id. at *4 n.9.
 Id. at *3 (emphasis added).
 Id. at *4 (emphasis added).
 Id. (italics in original).