The opinion of the court was delivered by: Jones, J.
Before the Court are the parties' cross-motions for summary judgment and the various responses and replies thereto. For the following reasons, Hartford Insurance Company's ("Hartford") Motion for Summary Judgment will be granted in part and denied in part and Toffler Associates, Inc.'s ("Toffler") Cross-Motion for Summary Judgment will be granted in part and denied in part.
A. The Parties and Their Insurance Policy
Toffler is a strategic consulting and advisory firm that provides consulting services to corporations, the United States intelligence community, and United States military services. (Hartford Mot. for Summ. J., Ex. 1, Jeffery Barnett Dep. ("Barnett Dep.") at 17; Hartford Mot. for Summ. J., Ex. 4, Scott McLauthlin Dep. at 12; Toffler Mot. for Summ. J., Ex. 1, Thomas H. Johnson Dep. at 19-20.) In 2006, Toffler purchased an insurance policy ("Policy") from Hartford. (See Hartford Mot. for Summ. J., Ex. 33, Business Liability Coverage Form, Policy No. 08 SBA PR0042 ("Policy").) The Policy was effective from August 10, 2006, through August 10, 2007, and included Business Liability Coverage against damages because of "personal or advertising injury." (Policy ¶ A(1)(a).) According to the Policy, advertising injury includes "[i]infringement of copyright, slogan, or title of any literary or artistic work, in your 'advertisement.' " (Policy ¶ G(17)(g).) The Policy defines advertisement as the following:
"Advertisement" means the widespread public dissemination of information or images that has the purpose of inducing the sale of goods, products or services through:
b. The Internet, but only that part of a web site that is about goods, products or services for the purposes of inducing the sale of goods, products or services; or
c. Any other publication that is given widespread public distribution.
However, "advertisement" does not include:
a. The design, printed material, information or images contained in, on or upon the packaging or labeling of any goods or products; or
b. An interactive conversation between or among persons through a computer network.
B. The Underlying Copyright Action
In May 2007, Inside Washington Publishers, LLC ("IWP") informed Toffler of its belief that Toffler had violated certain of IWP's copyrights by reproducing IWP's articles in a Publication titled Toffler Associates' Morning Brew ("the Publication"). (See Hartford Mot. for Summ. J., Ex. 13, Letter from Gregory to Westphal, May 7, 2007.) IWP demanded that Toffler immediately cease and desist from any further reproduction of IWP's articles. (Id.) Toffler immediately ceased including any IWP publications in the Publication. (See Hartford Mot. for Summ. J., Ex. 14, Letter from McLauthlin to Gregory, May 15, 2007.) On August 16, 2007, IWP initiated a copyright infringement action against Toffler and Jeffrey R. Barnett, senior consultant at Toffler, in the United States District Court for the Eastern District of Virginia. (Hartford Mot. for Summ. J., Ex. 7, IWP Compl.) In its Complaint, IWP alleged that that "Toffler and/or Barnett selected and reproduced articles from [IWP's] Copyrighted Works and distributed the articles to many recipients in issues of a series entitled Morning Brew." (IWP Compl. ¶ 12.) IWP alleged that the May 2, May 7, and May 14, 2007, and "many other issues" of the Publicationcontained copyrighted articles. (IWP Compl. ¶¶ 13-14.) IWP alleged that Barnett prepared and distributed the infringing issues of the Publicationwithin the scope of his employment by Toffler and that the infringing issues were distributed through a Toffler e-mail server. (IWP Compl. ¶¶ 15-16.) IWP also alleged that Barnett's toffler.com e-mail address appeared at the footer of the infringing issues of the Publication, and that recipients of those issues were instructed to contact Barnett via his toffler.com e-mail address. (IWP Compl. ¶ 16.) IWP sought injunctive relief and damages from Toffler. (IWP Compl. 5.)
The Publication at issue in IWP's lawsuit was a twenty-page "compilation of newspaper journal articles, plus transcripts of hearings and maybe a television news show that was related to the defense industry, the intelligence industry and corporations." (Barnett Dep. at 25.) It was a free service, compiled and distributed by Barnett via e-mail every weekday morning. (Barnett Dep. at 24-26, 34.) Barnett started the Publication, then titled Booz News, in 1999, when he worked as a consultant for Booz Allen, and distributed it while working for Booz Allen through early 2003. (Barnett Dep. at 10, 14, 75-76, 79; Hartford Mot. for Summ. J., Ex. 6, E-mail from McLauthlin to Serritella, May 31, 2007 ("McLauthlin 5/31/07 E-mail").) Barnett left Booz Allen and began working for Toffler in February 2003, and he re-commenced distribution of the Publicationshortly thereafter. (Barnett Dep. at 10, 24-25.) Distribution of the Publication ceased in May 2007. (Barnett Dep. at 22.)
When Barnett first joined Toffler, the Publicationcontained no reference to Toffler other than Barnett's Toffler email address in the footnote. (McLauthlin 5/31/07 E-mail.) At that time, the Publication was called Morning News. (McLauthlin 5/31/07 E-mail; Barnett Dep. at 34.) About eighteen months before Barnett stopped distributing the Publication, the name changed from Morning News to Morning Brew because someone thought the new name would be catchier. (Barnett Dep. at 34.)
Toffler has only been associated with the Publicationsince May 24, 2006, when Barnett added the byline "Compiled by Jeff Barnett, Toffler Associates." (McLauthlin 5/31/07 E-mail; Barnett Dep. at 35; Hartford Mot. for Summ. J., Ex. 10, McLauthlin E-mail to Serritella, June 22, 2007 ("McLauthlin 6/22/07 E-mail") at 1-2 (quoting a June 22, 2007, e-mail from Serritella to Gregory).) Since the summer of 2006, the Publicationalso contained a "Toffler Associates" watermark on every page. (Barnett Dep. 46; Toffler Cross-Mot. for Summ. J., Ex. 2, Jeffrey Barnett Dep. ("Barnett Dep. II") at 41.) Beginning on November 7, 2006, Barnett added "Toffler Associates' Morning Brew" to the e-mail subject line when he sent out the Publication. (McLauthlin 5/31/07 E-mail.) On January 26, 2007, Barnett changed the title of the Publication from Morning Brew to Toffler Associates' Morning Brew. (McLauthlin 5/31/07 E-mail; Barnett Dep. at 34-35. But see McLauthlin 6/22/07 E-mail at 2 (quoting a June 22, 2007, e-mail from Serritella to Gregory which states that this name change occurred in November 2006).) From that point forward, the full title Toffler Associates Morning Brew appeared on the banner at the top of the first page. (Barnett Dep. at 35.) This change was intended to promote brand recognition for the firm and to indicate that the Publication was not something that Barnett was doing on his own. (Barnett Dep. at 35; Johnson Dep. at 45.) Barnett made the title and banner changes after consulting with Toffler's managing partner, Dick Szfranski, and Toffler's attorney, Scott McLauthlin. (Barnett Dep. at 35; Johnson Dep. at 47.) These changes were intended to link the Toffler name with articles the news. (Johnson Dep. at 47-48.)
Beginning at some point prior to April 2007, the following text appeared in small print at the bottom of each page of the Publication:
Published daily, the Morning Brew is a free service presenting open source articles of interest to leaders in national security and related fields. All articles are subject to the copyright protections associated with the original sources. Please provide questions and comments to Jeff Barnett at email@example.com (Barnett Dep. at 43-44; Toffler Cross-Mot. for Summ. J., Ex. 5, Morning Brew, April 13, 2007.)
Articles in the Publication were organized according to titles of books written by Alvin Toffler, co-founder of Toffler Associates. (Barnett Dep. II. at 80-81; Toffler Cross-Mot. for Summ. J., Ex. 3, Toffler Associates Web Site printout, "Our Founders."; Johnson Dep. at 44.) This method of organization was intended to promote the Toffler brand and to promote Toffler's business by indicating to readers of the Publication that Toffler has been "ahead of the game." (Johnson Dep. at 44-47.)
By May 2007, Barnett was sending the Publication to the e-mail addresses of 38 other Toffler employees and about 300 persons in the defense industry, the intelligence community, and corporate America. (Barnett Dep. at 26; Barnett Dep. II at 31; McLauthlin 6/22/07 E-mail at 2 (quoting a June 22, 2007, e-mail from Serritella to Gregory).) The e-mail list consisted current and former Toffler clients, including former clients "who could circle back into government jobs or into any jobs that could become clients." (Barnett Dep. at 52-53; Barnett Dep. II at 69.) When Barnett joined Toffler in February 2003, he kept some recipients of the Booz News on the Publication's email list, but he removed some recipients from whom he was never going to get any business. (Barnett Dep. at 77-78; McLauthlin 6/22/07 E-mail at 2 (quoting a June 22, 2007, e-mail from Serritella to Gregory).) Partners at Toffler would ask Barnett to add certain names to the Publication distribution list. (McLauthlin Dep. at 18-19.) In Barnett's words, someone could also get on the Publication distribution list in one of the following ways:
[E]ither myself or a colleague would do an office call on a client or potential client and during the terms of the conversation an offer to put them -- to include them on the distribution list of the Morning Brew. I would get e-mails from people in the industry or, you know, on target group asking to be added. I would meet people at a networking event and in order to stay in contact with them and to kind of regularly pulse them I would offer to put them on distribution.... I believe those were the main ways. So, it was a push and a pull. Sometimes a request would come out of nowhere.
People would be in an office where Joe is in an office, Joe was transferred somewhere else, Jen comes in and takes that job and Joe would tell Jen about the Morning Brew and Jen would ask to be put on the distribution. So there's a hand-off mechanism also. Not a mechanism, per se. (Barnett Dep. II at 27-28.)
The Publication did not alert the reader that Toffler was a consulting firm or tell the reader what services Toffler offered. (Johnson Dep. at 48-49; McLauthlin Dep. at 29.) The Publication did provide Barnett's contact information and included the Toffler name, which could cause the reader to an internet search and find the Toffler website. (McLauthlin Dep. at 29.) Alternatively, the reader was already familiar with other Toffler publications and could link Toffler's services with the news. (Johnson Dep. at 49.) According to Thomas H. Johnson, one of Toffler's co-founders,
[I]n our business you -- consulting is bought not sold. It's an embarrassment to put selling literature into these kinds of things. That's -- that's crass and it's what a hardware salesman -- if you're selling soap, you might list the soap in here. As consultants you list -- for senior executives you list the idea that you had and you put the other stuff behind it and you let other -- let you get the credit because of what others are saying. And that's the whole idea.... There's nothing that we say. It's all about what the others say. And what we're doing is saying we're smart, we know what is going on in this world, we're very familiar and understand the world and here is an example of -- of people who are articulating these ideas. (Johnson Dep. at 15, 49-50.)
Toffler did not enter any contracts with clients as a direct result of the Publication, but the Publication gave Toffler an entree to clients and persons with whom they did not have prior contracts. (Barnett Dep. II at 64-65.) According to Barnett,"[Toffler] got into people in my opinion because of the existing link given us by [the Publication] and then when people had a problem where they needed help, we were the first people that came to mind." (Barnett Dep. II at 65.) Two recipients of the Publication contacted Barnett in response to receiving the Publication by e-mail, met with Barnett and other Toffler staff, and later signed a contracts with Toffler. (Barnett Dep. II at 65-67; Toffler Cross-Mot. for Summ. J., Ex. 6, Jeffrey Barnett Decl., March 27, 2009, ¶¶ 2-3.) Other recipients of the Publication contacted Barnett through the Publication, got proposals from Barnett, but did not ultimately sign contracts. (Barnett Dep. II at 69; Barnett Dep. at 54.)
Barnett described the purpose of the Publication as the following:
It had many purposes. One purpose was to increase the exposure of our firm's name and of my name to current and potential clients.
It was to increase brand recognition of me and our firm to the larger community so that we could have relationships with people, so we could have discourse when needed. It was to convey to all these constituencies that both myself in particular and our firm in general was concerned on areas of concern to these constituencies that I talked about was that we were ...