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AIG unit must cover McGraw-Hill in copyright suit

Posted On: Dec. 18, 2019 4:10 PM CST


A New York State appeals court overturned a lower court ruling Tuesday and held an American International Group Inc. unit must insure a McGraw-Hill Education Inc. in underlying copyright litigation.

Over the last few years, New York-based McGraw-Hill has faced, and continues to face, a series of actions alleging copyright infringement, which AIG-affiliated insurers have refused to defend and indemnify, according to court papers in McGraw-Hill Education Inc. v. Illinois National Insurance Co. et al.

In rulings issued in January 2019, the New York Supreme Court held AIG unit Illinois National was obligated to provide coverage in the underlying litigation.

That ruling was unanimously overturned by the New York-based appeals court. Policy exclusions “which preclude coverage for claims arising out of a contract, do not apply here,” said the brief decision.

An exclusion “which precludes coverage for claims arising, as relevant here, out of intentional violation of law, or gaining profit or advantage to which the insured is not legally entitled, does not apply.

“The relevant policy provision with regard to infringement of copyright is in the definition of damages, which bars coverage only were it is ‘judicially determined’ that the violation was intentional and was carried out by a senior vice president, or someone more senior, of plaintiff…Further, there has been no such judicial determination in the underlying actions,” said the ruling, in overturning the lower court’s decision.

McGraw-Hill said in a statement, “We are delighted with the Court’s decision. It was clear that under our policies there was coverage.” AIG’s attorney did not respond to a request for comment.

The U.S. Supreme Court has agreed to hear Google’s bid to escape Oracle Corp.’s multibillion-dollar lawsuit accusing Google of infringing software copyrights to build the Android operating system that runs most of the world’s smartphones.