No. 1-14-2508 Fifth Division May 8, 2015

______________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ______________________________________________________________________________

) ERIE INSURANCE EXCHANGE, ) Appeal from the Circuit Court ) of Cook County. Plaintiff-Appellee, ) ) No. 13 CH 23607 v. ) ) The Honorable COMPEVE CORPORATION and SLAVA ) Kathleen G. Kennedy, PACKOVSKIS, ) Judge Presiding. ) Defendants-Appellants. ) ) ______________________________________________________________________________

JUSTICE GORDON delivered the judgment of the court, with opinion. Presiding Justice Palmer and Justice McBride concurred in the judgment and opinion.

OPINION

¶1 Defendants, Compeve Corporation (Compeve) and Slava Packovskis, appeal from the

trial court’s entry of summary judgment in favor of plaintiff Erie Insurance Exchange (Erie).

The trial court found that Erie had no duty to defend defendants in a lawsuit filed against

them by Microsoft Corporation (Microsoft), which alleged that defendants violated

Microsoft’s intellectual property rights by selling computers loaded with unauthorized copies

of Microsoft’s software. For the reasons that follow, we affirm. No. 1-14-2508

¶2 BACKGROUND

¶3 On October 18, 2013, Erie filed a complaint for declaratory judgment, alleging that

Compeve was the named insured on an insurance policy issued by Erie. Compeve and

Packovskis, Compeve’s owner, had been named in a lawsuit initiated by Microsoft in the

United States District Court for the Northern District of Illinois, in which Microsoft alleged

that Compeve installed counterfeit Microsoft software in the computers that it sells and that

by selling the counterfeit software, Compeve infringed upon Microsoft’s copyrights and

trademarks. Erie sought a declaratory judgment that under the terms and conditions of the

insurance policy, Erie had no obligation to defend or indemnify Compeve or Packovskis

against any of the allegations in the Microsoft litigation. 1

¶4 The Microsoft complaint, filed on September 16, 2013, alleged that Compeve and

Packovskis “engaged in copyright and trademark infringement; false designation of origin[;]

false description and representation; and unfair competition.” Microsoft’s complaint alleged

that Compeve was engaged in the business of advertising, marketing, installing, offering, and

distributing computer hardware and software, “including purported Microsoft software.”

¶5 Paragraph 10 of Microsoft’s complaint alleged that “[d]efendants advertised, marketed,

installed, offered and distributed unauthorized copies of Microsoft software, infringing

Microsoft’s copyrights, trademarks and/or service mark.” Paragraph 11 alleged that “On

information and belief, Defendants advertise that the computers they sell come installed with

Microsoft software, and in their advertisements, Defendants misappropriate and/or infringe

Microsoft’s copyrights, advertising ideas, style of doing business, slogans, trademarks and/or

service mark.”

1 The record indicates that the lawsuit between Microsoft and defendants was resolved through an out-of- court settlement agreement in December 2013.

2 No. 1-14-2508

¶6 Microsoft’s complaint alleged that in March 2013, defendants sold a Microsoft

investigator several computers with unauthorized copies of Windows XP installed. In June

2013, Microsoft asked defendants to cease and desist from making and distributing infringing

copies of Microsoft software on computers. Nevertheless, in July 2013, defendants again sold

a Microsoft investigator several computers with unauthorized copies of Windows XP

installed. The complaint alleged that “[o]n information and belief, these are not isolated

incidents. Rather, Defendants have been and continue to be involved in advertising,

marketing, installing, offering, and/or distributing counterfeit and infringing copies of

Microsoft’s software and/or related components to unidentified persons or entities.”

Microsoft alleged that it “ha[d] been harmed by Defendants’ activities, including their

advertising activities and unauthorized use of Microsoft’s copyright protected material.”

¶7 The first count of Microsoft’s complaint, which is the only count relevant to the instant

appeal, was for copyright infringement. The count incorporated the allegations as set forth

above and alleged that “Defendants have infringed the copyrights in Microsoft’s software,

including but not limited to Microsoft Windows XP, by advertising, marketing, installing,

offering, and/or distributing infringing materials in the United States of America without

approval or authorization from Microsoft.” 2

¶8 The insurance policy at issue in the instant case was an “Ultrapack Plus” policy with a

policy period of January 18, 2013, to January 18, 2014. The policy provided coverage for

“personal and advertising injury,” which was defined as:

“ ‘Personal and advertising injury’ means injury, including consequential ‘bodily

injury’, arising out of one or more of the following offenses:

2 Microsoft had a separate count concerning alleged trademark infringement of its name “Microsoft” and logo. However, that count is not at issue in the instant appeal, as defendants focus only on the copyright count.

3 No. 1-14-2508

***

g. Infringing upon another’s copyright, trade dress or slogan in your

‘advertisement’.”

“Advertisement” was further defined 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.”

¶9 The policy excluded coverage for, inter alia:

“i. Infringement Of Copyright, Patent, Trademark Or Trade Secret

‘Personal and advertising injury’ arising out of the infringement of copyright,

patent, trademark, trade secret or other intellectual property rights. Under this

exclusion, such other intellectual property rights do not include the use of another’s

advertising idea in your ‘advertisement’.

However, this exclusion does not apply to infringement, in your ‘advertisement’,

of copyright, trade dress or slogan.”

¶ 10 On March 4, 2014, Erie filed a motion for summary judgment, claiming that it had no

duty to defend defendants because the underlying complaint did not allege a covered

“personal and advertising injury” claim. With respect to Microsoft’s claim of copyright

infringement, which is the only claim at issue in the instant appeal, Erie argued that the

allegations in the complaint were not sufficient to trigger coverage for “personal and

advertising injury” because there were only conclusory allegations that Compeve violated

Microsoft’s copyright in advertising and there were no allegations of a causal connection

between Compeve’s alleged advertisement and Microsoft’s damages.

4 No. 1-14-2508

¶ 11 On March 12, 2014, defendants also filed a motion for summary judgment. Defendants

pointed to several paragraphs in Microsoft’s complaint alleging copyright infringement

through advertising, including those quoted above. They claimed that the insurance policy

provided coverage for such advertising injury and that Erie had breached its duty to defend.

¶ 12 On July 23, 2014, the parties came before the trial court for a hearing on their cross-

motions for summary judgment. After hearing argument, the court found that the allegations

of the Microsoft complaint did not bring any of its claims within or potentially within the

insurance policy’s coverage. With respect to the claim for copyright infringement, the court

found that “there must be a causal connection between the Defendants’ alleged advertising

activity and Microsoft’s alleged advertising injury and the allegations of the underlying

complaint are insufficient to make that connection directly or potentially.” Therefore, the

court found that Erie had no duty to defend or indemnify defendants in the Microsoft action.

Accordingly, the trial court granted Erie’s motion for summary judgment and denied

defendants’ motion for summary judgment. This appeal follows.

¶ 13 ANALYSIS

¶ 14 On appeal, defendants argue that the trial court erred in granting summary judgment in

Erie’s favor because Erie had a duty to defend defendants in the Microsoft litigation. A trial

court is permitted to grant summary judgment only “if the pleadings, depositions, and

admissions on file, together with the affidavits, if any, show that there is no genuine issue as

to any material fact and that the moving party is entitled to a judgment as a matter of law.”

735 ILCS 5/2-1005(c) (West 2008). The trial court must view these documents and exhibits

in the light most favorable to the nonmoving party. Home Insurance Co. v. Cincinnati

Insurance Co.,

(2004). We review a trial court’s decision to grant a

5 No. 1-14-2508

motion for summary judgment de novo. Outboard Marine Corp. v. Liberty Mutual Insurance

Co.,

(1992). De novo consideration means we perform the same analysis

that a trial judge would perform. Khan v. BDO Seidman, LLP,

(2011). “ ‘The construction of an insurance policy and a determination of the rights and

obligations thereunder are questions of law for the court which are appropriate subjects for

disposition by way of summary judgment.’ ” Steadfast Insurance Co. v. Caremark Rx, Inc.,

(2005) (quoting Crum & Forster Managers Corp. v. Resolution

Trust Corp.,

(1993)).

¶ 15 “Summary judgment is a drastic measure and should only be granted if the movant’s right

to judgment is clear and free from doubt.” Outboard Marine Corp.,

.

However, “[m]ere speculation, conjecture, or guess is insufficient to withstand summary

judgment.” Sorce v. Naperville Jeep Eagle, Inc.,

(1999). A

defendant moving for summary judgment bears the initial burden of proof. Nedzvekas v.

Fung,

(2007). The defendant may meet his burden of proof either

by affirmatively showing that some element of the case must be resolved in his favor or by

establishing “ ‘that there is an absence of evidence to support the nonmoving party’s case.’ ”

Nedzvekas,

(quoting Celotex Corp. v. Catrett,

(1986)). In other words, there is no evidence to support the plaintiff’s complaint.

¶ 16 “ ‘The purpose of summary judgment is not to try an issue of fact but *** to determine

whether a triable issue of fact exists.’ ” Schrager v. North Community Bank,

(2002) (quoting Luu v. Kim,

(2001)). However, “[w]hen,

as in this case, parties file cross-motions for summary judgment, they concede the absence of

a genuine issue of material fact and invite the court to decide the questions presented as a

6 No. 1-14-2508

matter of law.” Steadfast Insurance,

(citing Continental Casualty Co.

v. Law Offices of Melvin James Kaplan,

(2003)). We may affirm

on any basis appearing in the record, whether or not the trial court relied on that basis or its

reasoning was correct. Ray Dancer, Inc. v. DMC Corp.,

(1992).

¶ 17 In Illinois, the duties to defend and to indemnify are not coextensive, with the obligation

to defend being broader than the obligation to pay. International Minerals & Chemical Corp.

v. Liberty Mutual Insurance Co.,

(1988). In determining whether an

insurer has a duty to defend its insured, a court looks to the allegations in the underlying

complaint and compares them to the relevant provisions of the insurance policy. Outboard

Marine Corp.,

. “If the facts alleged in the underlying complaint fall

within, or potentially within, the policy’s coverage, the insurer’s duty to defend arises.”

Outboard Marine Corp.,

. However, if it is clear from the face of the

complaint that the allegations fail to state facts that bring the case within, or potentially

within, the policy’s coverage, an insurer may properly refuse to defend. United States

Fidelity & Guaranty Co. v. Wilkin Insulation Co.,

(1991) (quoting State

Farm Fire & Casualty Co. v. Hatherley,

(1993)). “[W]here an

exclusionary clause is relied upon to deny coverage, its applicability must be clear and free

from doubt because any doubts as to coverage will be resolved in favor of the insured.”

International Minerals & Chemical Corp.,

. “[W]here the language of

an insurance policy is clear and unambiguous, it will be applied as written.” Hatherley,

. The construction of an insurance policy presents a question of law that is

reviewed de novo. Outboard Marine,

. As noted, de novo consideration

7 No. 1-14-2508

means we perform the same analysis that a trial judge would perform. Khan,

.

¶ 18 As an initial matter, the parties disagree as to which party has the burden of proving

whether Erie had a duty to defend defendants. Our supreme court has “long established that

the burden is on the insured to prove that its claim falls within the coverage of an insurance

policy.” Addison Insurance Co. v. Fay,

(2009). “Once the insured has

demonstrated coverage, the burden then shifts to the insurer to prove that a limitation or

exclusion applies.” Addison,

. Thus, defendants would bear the initial

burden of proving coverage, but Erie would bear the burden of proving that the exclusion for

“Infringement Of Copyright, Patent, Trademark Or Trade Secret” applies. In the case at bar,

however, there was an exception to the exclusion, which operated to restore coverage, and it

is this exception that is at issue. The question, then, is which party has the burden of proving

whether or not this exception applies. Unsurprisingly, Erie argues that defendants have the

burden of proving that the exception applies and coverage should be restored, while

defendants argue that Erie has the burden of proving that the exception does not apply and

the exclusion controls.

¶ 19 Neither the parties nor our research has revealed an Illinois court that has answered this

question. However, the Seventh Circuit, applying Illinois law, has stated that while insurers

have the burden of proving that an exclusion applies, “[i]nsureds, in turn, have the burden to

prove that an exception to an exclusion restores coverage.” Santa’s Best Craft, LLC v. St.

Paul Fire & Marine Insurance Co.,

(7th Cir. 2010). In making its

statement, the Seventh Circuit relied on a treatise indicating that “[t]here is some uncertainty

concerning the proper allocation of the burden of proof as to the applicability of an exception

8 No. 1-14-2508

which, in effect, restores the coverage taken away by the exclusion. The trend clearly

appears, however, to place the burden on insureds to prove that an exception to an exclusion

applies to restore coverage.” 17A Steven Plitt et al., Couch on Insurance § 254:13 (3d ed.

2014).

¶ 20 In the case at bar, however, we have no need to resolve this question. Regardless of

which party bears the burden, we are required to examine the allegations of the Microsoft

complaint in order to determine whether the facts alleged fall within, or potentially within,

the policy’s coverage. See Outboard Marine Corp.,

. As noted, this is a

question of law that is reviewed de novo. Outboard Marine,

. Furthermore,

even when the insurer bears the burden of proving that an exclusion applies, “where an

exclusionary clause is relied upon to deny coverage, its applicability must be clear and free

from doubt because any doubts as to coverage will be resolved in favor of the insured.”

International Minerals & Chemical Corp.,

. Thus, it makes no

difference to our analysis whether Erie or defendants bear the burden of proof in the instant

case. As such, we turn to the merits of the parties’ arguments.

¶ 21 In the case at bar, the trial court granted Erie’s motion for summary judgment, finding

that “there must be a causal connection between the Defendants’ alleged advertising activity

and Microsoft’s alleged advertising injury and the allegations of the underlying complaint are

insufficient to make that connection directly or potentially.” On appeal, defendants argue that

Illinois law imposes a causal connection requirement only in patent cases, not in copyright

cases as in the instant case. We do not find this argument persuasive.

¶ 22 Under Illinois law, there are three elements required to trigger advertising injury

coverage: (1) Compeve “must have been engaged in advertising activity during the policy

9 No. 1-14-2508

period when the injury occurred”; (2) Microsoft’s allegations “must raise a potential for

liability under one of the offenses listed in the policies”; and (3) “there must be a causal

connection between the alleged injury and the advertising activity.” Lexmark International,

Inc. v. Transportation Insurance Co.,

(2001); Greenwich Insurance

Co. v. RPS Products, Inc.,

(2008). It is only this last element that

defendants challenge in the instant case.

¶ 23 Contrary to defendants’ assertion, these elements are not found solely in patent

infringement cases but have been applied to other intellectual property claims as well. For

instance, the Lexmark court applied these elements in considering whether advertising injury

coverage had been triggered for claims of “ ‘misappropriation of advertising ideas or style of

doing business,’ ‘disparagement of [the underlying plaintiff’s] goods, products, or services,’

and ‘infringement of slogan.’ ” Lexmark,

. Likewise, in Greenwich, we

applied the elements to claims of unfair competition and trademark infringement in addition

to considering the patent infringement claim. Greenwich,

. Thus, the

trial court correctly found that there must be a causal connection between Microsoft’s alleged

injury and defendants’ advertising activity.

¶ 24 Furthermore, we do not find persuasive defendants’ argument that the policy language at

issue does not require a causal connection, as was the case in other cases that imposed a

causal connection requirement. The Erie policy defined “personal and advertising injury” as:

“injury, including consequential ‘bodily injury’, arising out of one or more of the

following offenses:

***

10 No. 1-14-2508

g. Infringing upon another’s copyright, trade dress or slogan in your

‘advertisement’.”

Defendants acknowledge in their brief that “[t]he policy states that there has to be an

infringement of the copyright in the advertisement” (emphasis omitted), but nevertheless

argue that “there is nothing in the policy that requires a causal connection.” They reach this

result by parsing the language of cases in which a causal connection has been required.

Specifically, defendants quote the language of the insurance policy at issue in International

Insurance Co. v. Florists’ Mutual Insurance Co.,

(1990), which

provided that an advertising injury included “ ‘libel, slander, defamation; infringement of

copyright, title or slogan; piracy, unfair competition, idea misappropriation or invasion of

rights of privacy; which arise out of YOUR advertising activities.’ ” Defendants claim that

“[a]s the policy is written in that case, the copyright infringement would have to arise out of

the advertising activity and therefore, that [led] the court to interpret the policy as requiring a

causal connection.”

¶ 25 Defendants’ citation of International Insurance Co. does nothing to explain why the

policy language in that case leads to a different result than in this case. In both cases, the

injury needs to be tied to the advertisement. Under the Erie policy, a “personal or advertising

injury” is an injury arising out of infringing upon another’s copyright “in your

‘advertisement’.” (Emphasis added.) The express language of the policy requires that the

injury must arise from copyright infringement that is contained in the advertisement in order

for there to be an advertising injury. Thus, the policy’s language requires a connection

between the injury and the advertisement. The same connection between the injury and the

advertisement is again set forth in the language of the exception that operates to restore

11 No. 1-14-2508

coverage: “this exclusion does not apply to infringement, in your ‘advertisement’, of

copyright, trade dress or slogan.”

¶ 26 Moreover, International Insurance Co. is the only case defendants cite in their argument

that the Erie policy uses language different than that interpreted by courts imposing a causal

connection requirement. However, the Erie policy contains identical language to the

insurance policy at issue in Greenwich, which, as noted, imposed a requirement of a causal

connection between the alleged injury and the advertising activity. See Greenwich,

(“ ‘Personal and advertising injury’ means injury, including consequential

‘bodily injury’, arising out of one or more of the following offenses *** c. Infringing upon

another’s copyright, trade dress or slogan in your ‘advertisement’.”). Thus, the trial court

properly found that a causal connection between Microsoft’s injury and Compeve’s

advertisement was required.

¶ 27 Defendants next argue that if we find that a causal connection was required, we should

also find that such a connection was alleged in the Microsoft complaint. We do not find this

argument persuasive. While Microsoft included allegations involving defendants’

advertising, those allegations were conclusory. For instance, paragraph 10 of Microsoft’s

complaint alleged that “[d]efendants advertised, marketed, installed, offered and distributed

unauthorized copies of Microsoft software, infringing Microsoft’s copyrights, trademarks

and/or service mark.” Paragraph 11 alleged that “On information and belief, Defendants

advertise that the computers they sell come installed with Microsoft software, and in their

advertisements, Defendants misappropriate and/or infringe Microsoft’s copyrights,

advertising ideas, style of doing business, slogans, trademarks and/or service mark.” In the

count specifically concerning copyright infringement, Microsoft alleged that “Defendants

12 No. 1-14-2508

have infringed the copyrights in Microsoft’s software, including but not limited to Microsoft

Windows XP, by advertising, marketing, installing, offering, and/or distributing infringing

materials in the United States of America without approval or authorization from Microsoft.”

Microsoft also alleged that it “ha[d] been harmed by Defendants’ activities, including their

advertising activities and unauthorized use of Microsoft’s copyright protected material.”

¶ 28 The facts as alleged in the complaint do not establish any sort of connection between

copyright infringement in the advertisement and Microsoft’s alleged injury. They merely

allege, in a conclusory fashion, that Microsoft was harmed by defendants’ advertising

activities. Indeed, as Erie points out, the complaint does not even allege any facts that a

Compeve advertisement itself infringed on Microsoft’s copyright, as is required for coverage

under the insurance policy. Such allegations are not sufficient to demonstrate an advertising

injury, and our state and federal courts have reached this conclusion several times.

¶ 29 For instance, in Greenwich, we considered whether an allegation of patent infringement

fell within the insurance policy’s definition of advertising injury which, as noted, is identical

to that in the case at bar. We noted that “something more than the mere advertisement of an

infringing product is required to bring such action within the scope of coverage. [Citations.]

The advertisement must instruct or explain to the purchaser exactly how to recreate or

reassemble the product into one that infringes a patent.” Greenwich,

.

We found that “[c]ount I of [the underlying] amended complaint (that RPS manufactured and

sold allegedly infringing products) does not allege that RPS provided any detailed

instructions to its customer on how to infringe the patent.” Greenwich,

.

Accordingly, we found the argument that the “act of advertising infringing products” fell

within the definition of advertising injury to be unpersuasive. Greenwich,

No. 1-14-2508

86. See also Konami (America) Inc. v. Hartford Insurance Co. of Illinois,

(2002) (in the context of patent infringement claims, “something more is required

for this type of infringement than the mere advertising of a product”).

¶ 30 While defendants correctly point out that patent and copyright are different concepts,

Greenwich is nevertheless instructive to our analysis in the instant case because it stands for

the proposition that in order for there to be an advertising injury, “something more than the

mere advertisement of an infringing product is required to bring such action within the scope

of coverage.” Greenwich,

. Furthermore, the Seventh Circuit has

reached the same conclusion with respect to a claim of copyright infringement. In Skylink

Technologies, Inc. v. Assurance Co. of America,

(7th Cir. 2005),

Chamberlain, the maker of a garage door opener with “rolling code” technology, claimed that

Skylink infringed Chamberlain’s copyright by selling a transmitter and keypad that were

“designed to get around” Chamberlain’s technology. Specifically, Chamberlain alleged that

Skylink “ ‘has made, imported, offered to the public, provided and otherwise trafficked in a

Model 39 universal transmitter and a Model 89 keypad that *** (c) are marketed by Skylink

for use in circumventing [Chamberlain’s] technological measure’ ” in violation of section

1201(a) of the Copyright Act of 1976 (

(a) (2000)). Skylink,

.

The Seventh Circuit found that the copyright infringement claim did not constitute an

advertising injury under the insurance policy, noting:

“[T]he real harm Chamberlain alleges results from the fact that the Skylink

transmitter and keypad circumvent the rolling code technology, not from the way the

products are packaged. Again, Chamberlain does not object to Skylink’s marketing of

its products except to the extent that they claim to use the rolling code technology. It

14 No. 1-14-2508

is that failure to use the technology, not the advertisement, that caused the alleged

injury.” Skylink,

.

¶ 31 The district court for the northern district of Illinois has also recently considered this

issue and has reached the same conclusion. In Lemko Corp. v. Federal Insurance Co., No. 12

C 03283,

(N.D. Ill. Sept. 30, 2014), the district court considered

whether the underlying complaint by Motorola alleged an advertising injury based on

copyright infringement. Interpreting the identical policy language as that present in the case

at bar, the district court found that the underlying complaint did not allege that Lemko

infringed Motorola’s copyrights in any Lemko advertisement. Lemko,

. The court noted:

“It is true that the Motorola complaint asserts in general terms that Lemko used

proprietary information it repurposed from Motorola in products that it marketed but

that does not equate to ‘advertising’ within the meaning of the policy. Motorola’s

allegations pertain to the theft and use of the technology in Lemko products, not in

any ‘advertisement.’ Advertising a product that, in turn, incorporates misappropriated

or infringing content, is not the same as an advertisement that itself infringes a

copyright by disclosing the copyrighted content.” (Emphases in original.) Lemko,

.

While both Lemko and Skylink are federal cases and, therefore, are not binding upon this

court, we find their reasoning persuasive to the issues present in the instant case.

¶ 32 In the case at bar, Microsoft’s complaint is aimed at the installation of unauthorized

Microsoft products in Compeve’s computers. The complaint does not allege that any

copyrighted information was contained in a Compeve advertisement, nor does it allege, in

15 No. 1-14-2508

more than conclusory fashion, that the contents of Compeve’s advertisement harmed

Microsoft. To establish copyright infringement, there must be copying. See, e.g., Incredible

Technologies, Inc. v. Virtual Technologies, Inc.,

(7th Cir. 2005) (“To

establish copyright infringement, a plaintiff must prove ‘(1) ownership of a valid copyright,

and (2) copying of constituent elements of the work that are original.’ ” (quoting Feist

Publications, Inc. v. Rural Telephone Service Co.,

(1991))). There is no

allegation of any copying within the advertisement itself, only that Compeve advertised that

it was selling Microsoft’s products. As noted, “[a]dvertising a product that, in turn,

incorporates misappropriated or infringing content, is not the same as an advertisement that

itself infringes a copyright by disclosing the copyrighted content.” (Emphasis in original.)

Lemko,

. Microsoft’s complaint does not allege that Microsoft’s

copyright was infringed in Compeve’s advertisement, nor does it allege any connection

between Microsoft’s injury and the copyright infringement in the advertisement.

Accordingly, we cannot find that the trial court erred in granting summary judgment in Erie’s

favor.

¶ 33 As a final matter, we note that Erie raised a number of issues before the trial court as to

other exclusions that it argued applied to the copyright infringement count, as well as to the

other counts of the Microsoft complaint. However, defendants only argue the issues

concerning the count for copyright infringement in their brief on appeal, noting that “if a duty

to defend the copyright infringement allegation exists, Erie was under a duty to defend the

entire complaint.” While defendants claim in their reply brief that they “did not waive [their]

right to contest additional grounds on which the Policy excludes coverage,” it is well settled

that points not argued on appeal are waived. Lebron v. Gottlieb Memorial Hospital,

No. 1-14-2508

2d 217, 253 (2010); Ill. S. Ct. R. 341(h)(7) (eff. Feb. 6, 2013) (“Points not argued [in the

appellant’s brief] are waived and shall not be raised in the reply brief, in oral argument, or on

petition for rehearing.”). Accordingly, we do not consider any other bases for finding or

excluding coverage.

¶ 34 CONCLUSION

¶ 35 The trial court properly entered summary judgment in Erie’s favor where the Microsoft

complaint did not allege an “advertising injury” under the terms of the insurance policy.

¶ 36 Affirmed.

17