Insurers Refute Defense Obligations in Sports Memorabilia IP Claims
On January 29, 2015, insurers West Bend Mutual Insurance Co. and Grinnell Mutual Reinsurance Co., told a Wisconsin federal court that they are not liable to defend sports memorabilia retailers, Waukesha Sportscards and AW Artworks LLC, in a copyright suit alleging that the retailers sold merchandise featuring unlicensed photographs. The insurers argued that their policies cover copyright in advertisement claims but do not extend to the copyright infringement issues addressed in the action.
The infringement suit against the retailers was initially filed back in June by two photographers — Scott Boehm and David Stulka. The photographers alleged that several retailers were selling items featuring their photographs without permission or a license to do so. The insurers, who intervened in the action brought against the two retailers, filed individual motions for summary judgment asserting that they are not liable to defend the retailers for claims of copyright infringement as the policies only cover copyright in advertising claims.
West Bend supported its motion for summary judgment, stating “[t]his lawsuit alleges Waukesha Sportscards and [owner] Robb Dobratz infringed in the sale of copyrighted product, not in advertisement. It also alleges the defendants knew and expected their acts would violate the rights of another — allegations for relief excluded by the West Bend policies.”
Grinnell Mutual Reinsurance similarly contended that there is no coverage because, “there is no allegation that AW Artworks or [owner Andrew Wredberg] ‘used plaintiffs’ works in advertising and marketing campaigns to promote their business and products.”
Insurers for some of the other retailers named in the suit, including State Farm Fire and Casulaty Co., have also resisted in providing retailers with defense or indemnity, arguing that coverage is limited to personal and advertising injury.