Eyeblaster, Inc. v. Fed. Ins. Co.

Eyeblaster, Inc. v. Fed. Ins. Co.

Opinion

 [*799]  JOHN R. GIBSON, Circuit Judge.

Eyeblaster, Inc. ("Eyeblaster") appeals from an adverse entry of summary judgment in its action against Federal Insurance Company ("Federal") arising out of Federal's denial of coverage under two insurance policies. A computer user sued Eyeblaster, alleging that Eyeblaster injured his computer, software, and data after he visited an Eyeblaster website. Eyeblaster tendered the defense of the lawsuit to Federal, seeking coverage under a General Liability policy and an Information and Network Technology Errors or Omissions Liability policy. Federal denied that it had a duty to defend Eyeblaster, and Eyeblaster brought this action seeking a declaration that Federal owed such a duty. The district court entered summary judgment in favor  [**2] of Federal, and Eyeblaster appeals. We reverse.

Eyeblaster is a worldwide online marketing campaign management company that advertisers, advertising agencies, and publishers use to run campaigns across the Internet and other digital channels. Its primary product assists in the creation, delivery, and management of on-line interactive advertising. The company was established in 1999 and has fourteen offices worldwide, with six employees located in North America. In 2007, Eyeblaster delivered online marketing campaigns for nearly 7000 brand advertisers and served ads across more than 2700 global web publishers.

The industry in which Eyeblaster provides services is known as rich media advertising. Rich media allows customers to create interactive ads in a wide range of formats, and to track and manage the performance of the advertising campaigns. Eyeblaster has the capacity to deliver ads simultaneously to billions of users globally and to constantly monitor its systems with network and system technicians and engineers. Its service uses cookies, which are typically used in the advertising industry to measure and enhance the effectiveness of an advertising campaign. It also uses JavaScript  [**3] and Flash technology, which enliven web pages and increase the Internet's utility. Eyeblaster does not use spyware or introduce malicious contact such as spam, viruses, or malware.

Eyeblaster purchased General Liability and Information and Network Technology Errors or Omissions insurance policies from Federal for the period from December 5, 2005 to December 5, 2007. Subject to the policies' terms, Federal had a duty to defend Eyeblaster against lawsuits, even if such suits were false, fraudulent, or groundless.

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