Heyrman Printing tendered the action to its insurance carrier, ACUITY, a Mutual Insurance Company. Coverage litigation ensued, and ACUITY moved for summary judgment that Heyrman Printing's policy did not afford coverage for the allegations in Mr. Boehm's complaint

The ACUITY Policy

The ACUITY policy applied to:

personal and advertising injury caused by an offense arising out of your business, but only if the offense was committed in the coverage territory during the policy period. 

The policy defined:

personal and advertising injury

as:

injury, including consequential bodily injury, arising out of one or more of the following offenses: …. Infringing upon another's copyright, trade dress or slogan in your advertisement. 

The policy defined:

advertisement

as:

[A] notice that is broadcast or published to the general public or specific market segments about your goods, products or services for the purpose of attracting customers or supporters. For the purposes of this definition:

a. Notices that are published include material placed on the Internet or on similar electronic means of communication; and

b. Regarding websites, only that part of a website that is about your goods, products or services for the purposes of attracting customers or supporters is considered an advertisement. 

The policy also provided that it did not cover:

Personal and advertising injury:

(1) Caused by or at the direction of the insured with the knowledge that the act would violate the rights of another and would inflict personal and advertising injury;

….

(12) Arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights.

However, this exclusion does not apply to infringement, in your advertisement, of copyright, trade dress or slogan. 

The policy provided additional coverage for:

printers' errors and omissions 

, excluding from such coverage:

[a]ny claim for damages arising out of … [t]he infringement of copyright 

The district court granted ACUITY's motion.

In its decision, the district court explained that the policy covered advertising injury and printers' errors and omissions, but that “advertising injury” and “printers' errors and omissions” did not include claims for copyright infringement generally. Rather, the district court continued, claims of copyright infringement were covered only if the infringement occurred in the insured's advertisement.

Here, the district court observed, Mr. Boehm had not alleged that Heyrman Printing had infringed his copyright in its own advertisement.

The district court rejected Heyrman Printing's argument that it was entitled to coverage under the ACUITY policy because Mr. Boehm alleged that it was vicariously liable for Event USA's infringing advertisements. That argument, the district court ruled, was “frivolous.”

The district court reasoned that there was no allegation that Heyrman Printing was indirectly liable for any act of infringement that occurred in any advertisement, there was no allegation that Event USA had followed through with its alleged intention to commercially exploit the photos, and there was no reason to assume that “commercially exploit” meant use in an advertisement.

The district court added that even if Mr. Boehm had alleged that Heyrman Printing was indirectly liable for Event USA's infringing advertisement, the ACUITY policy covered only “infringement, in your advertisement, of copyright.” (Emphasis added.) The ACUITY policy did “not provide coverage for infringements that occur[ed] in the advertising of those to whom Heyrman Printing might sell an infringing product,” the district court found.

Accordingly, the district court concluded, ACUITY had no duty to defend or indemnify Heyrman Printing.

The case is Boehm v. Heyrman Printing, LLC, No. 16-cv-305-jdp (W.D. Wisc. March 9, 2017).