Skylink Technologies, Inc. sued its insurer, Assurance Company of America, claiming that Assurance was contractually obligated to defend Skylink in a pair of suits filed by Skylink’s cоmpetitor, The Chamberlain Group, Inc. The district court (Magistrate Judge Michael T. Mason sitting by consent), applying Illinois law,
1
denied Skylink’s motion for summary judgment and granted Assurance’s. Skylink appealed. We review
de novo, see Allstate Ins. Co. v. Keca,
Skylink sells universal transmitters and keypads that operate several brands of garage door openers, including those made by Chamberlain. Most garage door openers send a single code frоm the transmitter to the receiver. But Chamberlain’s openers use a “rolling code” technology that changes the transmitted code every time the door is opened in an attempt to thwart would-be burglars and other miscreants who can steal a single code in order to gain unauthorized access to thе garage. Chamberlain secured a copyright for the computer software it developed in creating that protection.
Skylink sells a transmitter and keypad that can be used to open garage doors outfitted with Chamberlain’s rolling code technology, but the code does not change when the dоor is opened with Skylink’s products, thus negating Chamberlain’s security feature. As a result, Chamberlain sued Skylink in both American and Canadian courts, claiming that Skylink’s advertisements аre false or misleading because Skylink’s transmitters are not actually “compatible” with Chamberlain’s rolling code technology, as claimed on the packaging of the Skylink products. Chamberlain also claimed Skylink infringed on Chamberlain’s copyright by selling a product designed to get around the rolling code technology.
Skylink contends those suits triggered Assurance’s obligation to defend Skylink set out in policies it bought from 1999 to 2002. Those policies included commercial generаl liability and commercial umbrella coverage that obligated Assurance to defend Skylink against any suit seeking damages for “advertising injury,” defined as an injury arising out of one or more of the following offenses:
A) Oral or written publication of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services;
B) Oral or written publication of material that violates a person’s right of privacy;
C) Misappropriation of advertising ideas or style of doing business; or
D) Infringement of copyright, title or slogan.
The definition included in the commercial umbrella coverage also covers use оf “another’s advertising idea in your ‘advertisement.’ ” Significantly, however, both the commercial umbrella and general liability provisions explicitly exclude cоverage for “ ‘[advertising injury’ ... [ajrising out of the failure of goods, products, or services to conform with any statement of quality or performance made in yоur ‘advertisement.’ ”
Skylink first claims that Chamberlain’s suit alleges disparagement through Skylink’s promotion of its products as “compatible” with Chamberlain’s rolling code technology. Although a Skylink transmitter could be used to open a door that has the rolling code technology, Chamberlain argued that Skylink’s transmitters were not actually compatible with the rolling code technology because the Skylink transmitter disables the rolling code feature, instead using the same code every timе to open the garage door. Thus, as framed by Skylink, Chamberlain claims that customers who thought the Skylink transmitter to be fully “compatible” would unknowingly disable the rolling cоde technology and would blame Chamberlain for any product failure that occurred, thus diminishing Chamberlain’s reputation. What Skylink is really saying, however, is *985 that Chamberlain is complaining that Skyl-ink’s products do not live up to the promise of compatibility or, put differently, that Skylink’s products fail to conform with the statement of performance on its package— an injury explicitly excluded under the Skylink-Assuranee contract.
Noting that .Webster’s defines “disparage” as both “to lower in esteem or reputation” and “to discredit or bring reproach upon by comparing with something inferi- or,” Skylink also contends that Chamberlain complained that Skylink’s packaging amounted to a “false comparison” between Chamberlain and Skylink.
Skylink notes that some courts have found disparagement resulting from false comparisons,
see, e.g., McNeilab, Inc. v. Am. Home Prods. Corp.,
Skylink next argues that Chamberlain’s suits fall under the misappropriation clause of the insurance policy because the Skylink packaging mentions Chamberlain’s “rolling code” technology and “SECURITY +.” Skylink cites
American Simmental Ass’n v. Coregis Ins. Co.,
which defined “advertising idea” as “an idea for calling public attention to a product or business, especiаlly by proclaiming desirable qualities so as to increase sales or patronage.”
Lastly, Skylink contends that Chamberlain’s copyright infringement claim constitutes an advertising injury. Skylink notes that Chamberlain alleged that Skylink violated 17 U.S.C. § 1201(a)(2), complaining 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 (a) are designed or produced for the purpose of circumventing the technological measure; (b) have no commercially significant purpose or use other than to circumvent the technological mеasure; and (c) are marketed by Skylink for use in circumventing the technological measure, in violation of 17 U.S.C. § 1201(a).
*986 As with the disparagement and misappropriаtion provisions, the real harm Chamberlain alleges results from the fact that the Skylink transmitter and keypad circumvent the rolling code technology, not from thе 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 is that failure to use the technology, not the advertisement, that caused the alleged injury. Assurance thus has no duty to defend Skyl-ink in the underlying actions, and the judgment of the district court is AffiRMEd.
Notes
. Although Assurance makes an argument in favor of California law, it also admits that there might not be a conflict between Illinois and California law. Thus, we agree with the district court's application of Illinois law.
See Massachusetts Bay Ins. Co. v. Vic Koenig Leasing, Inc.,