Michigan Supreme Court Lansing, Michigan
Chief Justice: Justices: Clifford W. Taylor Michael F. Cavanagh Elizabeth A. Weaver Marilyn Kelly 

# Opinion

Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman

FILED APRIL 25, 2007 CITIZENS INSURANCE COMPANY, Plaintiff/Counter-D efendant-Appellant,

v No. 130099 PRO-SEAL SERVICE GROUP, INC, d/b/a PRO-SEAL, INC, Defendant/Counter-Plaintiff-Appellee, and SETH SHORT, RANDY QUINCY, FLOWSERVE CORP ORATION, and FLOWSERVE MANAGEMENT COMPANY, Defendants.

________________ _______________ BEFORE THE ENTIRE BENCH PER CURIAM.

At issue in this insura nce coverage dispute is wh ether defendant Pro-Seal Service Group, Inc.’s, act of shipping a product in a competito r’s packaging with Pro-Seal’s labeling affixed to it constitutes an “advertisement” for purposes of an insurance policy. The Cour t of Appeals determined that plaintiff (Citizens Insurance Company) was re quired to defend defendant under the terms of acommercial general liability policy (CGL policy) because the underlying complaint alleged a violation of trade dress 1 and such a violation inherently involves advertising activity . Because we conclude that the act of shipping a product in a competitor’s packaging with one's own name affixed to it is insufficient to satisfy th e CGL policy’s definition of an “advertisement,” we reverse the judgment of the Court of App eals that held to the contrary and remand this case to the trial cour t for further proceed ings not inconsistent with this opinion.

I. F ACTS AND P ROCEDURAL H ISTORY
Defendant Pro-Seal Servi ce Group, Inc., is a Mich igan corpo ration that sells and repairs mechanical seals used in oil production facilitie s in Alaska. ProSeal has a CGL policy and an umbrella insurance polic y with plaintiff Citizens Insurance. Pro-Seal’s majo r competitor for mechanical seal sales in the Alaskan market is defendant Flow serve Corporation, a New York corporation that manufactures, sells, and refurbishes mech anical seals. The dispute between Flowserve and Pro-Seal be gan in June 2003, when a Flowserve employee discovered that two Flows erve mechanical seals that had been repaired by Pro

1 “The trade dress of a product is essentially its tota l image and overall appearance. It involves th e total image of a product and may include features such as size, shape, color or co lor combinations, texture, gr aphics, or even particular sales techniques.” Two Pesos, Inc v Taco Cabana, Inc , 505 US 763, 764 n1; 112 S Ct 2753; 120 L Ed 2d 615 (1992) (int ernal quotation marks and citations omitted).

2Seal were being shipped to a customer in the original Flowserv e container, with the name “Pro-Seal” affixed to the outside of the container. Flowserve brought a suit against Pro-Seal in the United States District Court for the District of Alaska, claiming that Pro-Seal created confusion in the marketplace by imitating or infringing trademarks or product marks, and by using trade secrets, blueprints, engineering drawings, packag ing materials, and sales p ractices that misrepresented Pro-Seal seals as being Flowserve seals. 2 Pro-Seal requested that plaintiff defend it in the Flowserve action pur suant to both insu rance policies. Pl aintiff concluded that the nature of the a llegations in the Flowserv e complaint were beyond the scope of either policy and, therefore, refused to defend Pro-Seal. Plaintiff filed the instant action seeking a decl aration that plaintiff was not required to defend ProSeal under either policy. The trial court granted plaintiff’s motion for summary disposition, introducing its analysis by noting that if a contract is plain and unambiguous, it must be enforced according to its terms. Burkhardt v Bailey , 260 Mich App 636, 656; 680 NW2d 453 (2004). According to the terms of the instant insurance contract, coverage is excluded for advertising injuries that are “knowingly made.” The trial court concluded that coverage did not exist for the con duct asserted in the

2 After a facilitation session, the Fl owserve comp laint was dismissed by stipulation. Defe ndant admitted two inadvertent trademark infringements and settled the case for $1,800.

3Flowserve lawsuit because it “alleges an intentional co urse of conduct involving fraud, deceit, and counterfeit part s being sold as genuine.” On appeal, the Court of Appeals vacated the judgment of the trial court in a published opinion, holding that plaintiff was required to represent defendant ProSeal because Flowserve’s allegations fell within the definition of an “advertising injury” under the CGL policy. 268 Mich Ap p 542; 710 NW2d 547 (2005). The Court of Appeals undertook its analysis by noting that the protection of trade dress is intended to “‘“secure to th e owner of the mark the goodwill of his business and to protect the ability of consumers to di stinguish among competing producers.”’” Id. at 550-551, quoting Two Pesos, supra at 774, quoting Park 'N Fly, Inc v Dollar Park & Fly, Inc , 469 US 189, 198; 105 S Ct 658; 83 L Ed 2d 582 (1985). Because the underlying complaint alleged that Pr o-Seal’s conduct co nfused and misled customers into believing th at Pro-Seal seals were Flow serve seals, the ability of customers to “distinguish between competing producers” wa s implicated. On that basis, the Court of Appeals held that Fl owserve’s complaint a lleged a trade dress infringement. The Court of Appeals also held that the alleged trade dress infringement occurred in an “advertisemen t” because “‘allegations of trademark and trade dress infringement inherently involve adver tising activity. In other words, there can be no t rademark/trade dress infringeme nt without advertising having occurred.’” Id. at 551-552, quoting Poof Toy Products, Inc v United States Fidelity & Guaranty Co , 891 F Supp 1228 , 1235-1236 (ED Mi ch, 1995).

4Leave to appeal was sought in this Court and, after directing the parties to address certain issues, 3 we heard oral argument on whet her to grant the plaintiff’s application for leave to a ppeal or take other perempt ory action permitted by MCR 7.302(G)(1). 474 Mich 1112 (2006).

II. S TANDARD OF R EVIEW We review de novo the grant or denial of a motion for summary disposition. Kreiner v Fischer , 471 Mich 109, 129; 683 NW2d 611 (2004 ). This case requires that we consider whether d efendant’s alleged conduct took place in an “advertisement” as that term in defined in the insu rance policy. The construction and interpretation of the la nguage in an insurance contract is a question of law that this Court reviews de novo. Klapp v United Ins Group Agency, Inc, 468 Mich 459, 463; 663 NW2d 447 (2003).

III. A NALYSIS The terms of the CGL po licy provide that plaintiff “will pay those sums that the insured becomes lega lly obligated to pay as da mages because of ‘personal and advertising injury’ to which this insurance applies. ” The CGL policy defines a “personal and advertising injury” as follows:

3 These issues were as follows: “(1) whether Flowserve's complaint alleged an advertising injury with in the meaning of the comme rcial general liability policy that Citizens Insurance Comp any issued to Pro-Seal, In c., and (2) if so, whether Citizens was relieved of its duty to d efend Pro-Seal by operat ion of the policy exclusion for actions taken with knowle dge that an advertising injury would result.”

514. “Personal and advertising injury” means in jury, including consequential “bodily injury”, ar ising out of one or more of the following offenses: * * * (f) The use of another’s advertising idea in your “advertisement”; or (g) Infringing upon another’s co pyright, trade dress or slogan in your “advertisement.” The umbrella policy defines an “advertising injury” as follows:
A. Advertising Injury means in jury caused by one or more of the following offenses co mmitted during the po licy period in the course of advertising your goods, products or services:
1. Oral or written p ublication of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services.
2. Oral or written publication of material that violates a person’s right or [sic] privacy.
3. Misappropriation of advertis ing ideas or style of doing business; or
4. Infringement of copyright, title or slogan. The term “advertisement” is defined in the CGL policy as 4

4 The umbrella policy does not define the word “advertising.” However, the umbrella insurance policy does state: The definitions, terms, condi tions and exclusions of underlying insurance in effect at the inception of this policy apply to [the umbrella] coverage unless:
A. They conflict with any of th e provisions of this policy; or (continued...)

6a notice that is broadcast or pub lished to the general public or specific market segments about your goods, products or services for the purpose of attracting customers or supporters. “[I]n reviewing an insurance policy dispute we must lo ok to the language of the insurance policy and interpret the term s therein in accordance with Michigan’s well-established principles of contract construction.” Henderson v State Farm
Fire & Cas Co , 460 Mich 348, 353-354; 596 NW2d 190 (1999). In Henderson , this Court described thos e principles as follows: First, an insurance contract mu st be enforced in accordance with its terms. A court must not hold an insurance company liable for a risk that it did not assume. Second, a court should not create ambiguity in an insurance policy where the terms of the contract are clear and precise. Thus, the terms of a contract must be enforced as written where there is no ambiguity. While we construe the contract in favor of the insured if an ambiguity is found, this does not mean that the plain meaning of a word or phrase should be perverted, or that a word or phrase, the meaning of which is specific and well recognized, should be given some alien construction merely fo r the purpose of benefiting an insured. The fact that a policy does not define a relevant term does not render the policy ambiguous. Rather, reviewing courts must interpret the terms of the cont ract in accordance with their (...continued) B. There is a provision in this policy for which a similar provision is not contained in underlying insurance. As it relates to an “advertising injury,” there is no conflict between the terms of the CGL policy and the umbre lla policy. Furthermore, the “advertising injury” section of the umbrella policy is substan tially similar to the “advertising injury” provisions in the CGL policy. The dictionary defines the term “advertising” as “paid announcements; advertisements.” Random House Webster’s College Dictionary (1997) at 20. Therefore, pursuant to the terms of the umbrella policy, the definition of the term “advertisement” in the CGL policy applies to the umbrella policy as well.

7commonly used meanings. Indeed, we do not ascribe ambiguity to words simply because dictionary publishers are obliged to define words differently to avoid possible plagiarism. [ Id. at 354 (citations omitted).] The Court of Appeals erred in this case by failing to enforce the terms of the CGL policy as written. 5 While the Court of Appeal s noted that the CGL policy defined the term “advertisemen t,” it ultimately rejected that definition in favor of a different definition articulated by the United States District Court in Poof Toy,

supra at 1235-1236

. In Poof Toy , the United States District Court held that allegations of trademark and trad e dress infringement inherently involve advertising ac tivity. In other word s, there can be no trademark/trade dress infringement without advertising having occurred. This conclusi on results from a requi red element in every trademark/trade dress case, that the mark or dress is likely to cause confusion to the consumer or deceive the consumer as to the origin or manufacturer of the goods. See 15 U.S.C. § 1125(a). To have (or potentially cause) this effect, one mu st clearly advertise (announce to the intended customers ) the mark or dress. However, the Court of Appeals failed to recognize that Poof Toys is readily distinguishable because the in surance contract at issue in that case did not define the term “advertisement.” B ecause the term was left u ndefined, the United States

5 Justice Cavanagh argues that Flowserve allege d in its complaint that ProSeal used the Flowserve trad emark to identify its products as Flowserve products and, on that basis, “it can be deduced that Pro-Seal was accused of taking actions that inherently in volved notice broadcast or publis hed to the general public or specific market segments abou t its goods, products, or s ervices for the purpose of attracting customers or supporters.” Post at 4. However, the only portion of the Flowserve complaint relied upon by the Court of App eals in this case is the allegation that Pro-Seal “s hipped the counterfeit [seals] to the customer in a shipping crate prominently labeled w ith the Flowserve label.” Flowserve complaint at paragraph 22. We should not resolve th is case on the basis of allegations that were not addressed by the Court of Appeals.

8District Court consulted a di ctionary to define the term and concluded on the basis of that definition th at there was coverage under that policy. Because the term “advertisement” is defined in the inst ant CGL policy, and that definition is incorporated into th e umbrella policy as well, the Court of Appeals’ reliance on Poof Toy was inappropriate inasmuch as it pote ntially subjects plaintiff to a risk that it did not assume. See, e.g., Westfield Companies v OKL CAN Line , 155 Ohio App 3d 747, 755; 804 NE2d 45 (2003) (holding that Poof Toy did not apply to an insurance policy that speci fically defined the term “advertisement”). Thus, in order to determ ine whether plaintiff had a duty to defend in this case, we must ascertain whether defendant’s conduct falls within the scope of the term “advertisement” as written in the CGL policy. This Court interprets the words used in a contract “in accordance with their co mmonly used meanings.” Henderson, supra at 354

. Further, when defining a phra se used in a contract, this Court “read[s] the phrase as a whole, giving the phrase its commonly used meaning.” Id. at 356. Under the instant polic y, an “advertisement” takes place when there is: (1) a notice; (2) that is broadcast or pu blished; (3) to the general public or specific market segments; (4) ab out [the company’s] goods, products, or services; and (5) for the purpose of attracting customers. “When considering a word or phrase that has not been given prior legal meaning, resort to a lay dictionary such as Webster’s is appropriate.” Greene v A P Products, Ltd , 475 Mich 502, 510; 717 NW2d 855 (2006). The dictionary defines “notice,” in relevant part, as “a written or printed statem ent conveying . . . in formation . . . .”

9Random House Webster’s College Dictionary (1997) at 895. The dictionary defines “broadcast,” in relevant part, as “t o speak, perform, or present on a radio or television program” or “to spread widely; disseminate.” Id. at 166. “Publish” is defined, in relevant part, as “to a nnounce formally or o fficially; proclaim; promulgate” or “to make publicly or generally known.” Id. at 1054. These definitions are consistent with the comm on understanding of the term “broadcast or publish” in the advertising realm as the public dissemination of information intended to inform potential customers of a company’s ava ilability to do business. Thus, for example, a business such as Pro-Seal may utilize television, radio, newspapers, or billboards in order to inform potential customers about the goods and services they provide and to att ract the patronage of such customers. The Court of Appeals conc luded that when defenda nt shipped one of its seals to a customer in a Flowserve contai ner, that was an act that “constitute[ed] notice that is published to the specific market segment in which Pro-Seal and Flowserve compete about the seals for the purpose of attracting customers or supporters.” 268 Mich App at 552. Pro-Seal seizes on this argument, claiming that when it shipped the seal at issue to a distribution cen ter to be forw arded to its customer, it could be observed by members of the general public visiting that distribution center. Therefo re, according to defendant, the use of the Flowserve packaging constituted an “advertisement.” However, both the Court of Appeals and defendant overlo ok that, under the terms of the CGL policy, defendant must publicly disseminate information about

10its goods and services for the purpose of attracting the patr onage of potential customers. Here, defenda nt sent a seal to a specific customer in a Flowserve container for the purpose of completing a single transacti on. At best, Pro-Seal’s argument that it expected th at other customers might view the package at the distribution center and, as a result, woul d be encouraged in doing business with defendant was an incidental and remote be nefit that does not fundamentally alter the fact that this was a single transaction with a specific customer. We conclude that the purpose for placing a Pro-Seal label on the Flow serve container in this instance was to identify for that specific customer the source of the seal to allow that specific customer to contact defendant with any questions or complaints about that product. 6 Accordingly, we conclude that the harm alleged to have been

6 We do not, as Justice Kelly asserts, hold that a company must engage in “wide-scale dissemination of information, such as by television or radio, for there to be an advertisement.” Post at 10. In fact, we agree w ith Justice Kelly that, in a limited market such as the Alaskan oil m arket, a notice broadcas t to even a single customer might constitute “advertising,” as long as that notice was designed to “attract[] customers or suppor ters.” However, Justice Ke lly overlooks the fact that the conduct complained of in this case, namely Pro-Se al’s act of shipping the seal in question to its customer in the original Flowserve container affixed with a ProSeal label, was not undertaken to “attract[] customers or supporters.” Rather, ProSeal shipped the seal in question in order to comp lete an already agreed-upon transaction. In other wo rds, Pro-Seal had already “attracted” its customer by the time the seal in question was shipped in the container provided to Pro-Seal by that customer. While the compla int alleges that customer was confused about the origin of the seal at issue in this app eal, there is nothing in the compla int that could reasonably be construed as an allegation that the Pr o-Seal labeling was designed to “attract” that customer to purchase another seal from Pro-Seal. Rather, looking at the context of the t ransaction, the Pro-S eal labeling simply served to identify the s ource of the repaired seal and to provide contact information if the customer had any questions or concer ns. Likewise, contrary to (continued...)

11caused by Pro-Seal’s act of shipping a seal in a Flowserve container did not “arise out of an advertisement” and, therefore, plaintiff was not obligated to tender a defense based on this allegation under the terms of the CGL policy. 7
IV. C ONCLUSION In order to constitute an advertisem ent under the CGL policy, defendant must publicly disseminate information abou t its goods and servi ces for the purpose of attracting the patronage of potential customers. We conclude that when defendant shipped the seal in question to its customer in a Flowserve container affixed with a Pro-Seal label, there wa s no "advertising injury" under the CGL policy. Accordingly, we rev erse the judgment of the C ourt of Appeals and remand this case to the trial cour t for further proceed ings not inconsistent with this opinion. 8

(...continued) Justice Kelly’s contention, nothing in the Fl owserve complaint alleged that ProSeal utilized the contain er in question in order to “attract[] customers or supporters.” Rather, Flowserve alleged th at the shipping container was used as part of an attempt by Pro-Seal to lead customers to believe that its seals were actually Flowserve seals. Accordingly, Pr o-Seal’s act of shipping a seal to its customer in the original Flowserve contain er is simply not an “advertisement” as the term is defined by the policy.

7 Because we conclude that no adver tising occurred, we find it unnecessary to decide whether th e underlying complaint alleged a “trade dress” or “trademark” violation, or whether C itizens Insurance was relieved of its duty to defend ProSeal by operation of the polic y exclusion for actions take n with knowledge that an advertising injury would result.

8 Justice Cavanagh argues that a remand to the trial court is inappropriate because when the trial cour t held that the policy did not apply to advertising (continued...)

12Clifford W. Taylor Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman

(...continued) injuries that are knowingly made, “it is cl ear that it found [an advertising injury] because it determined that the advertising injury was made knowingly.” Post at 4. We disagree. In granting summary dis position to plaintiff, the trial court concluded that the Flowserve complaint “a lleges an intentional course of conduct involving fraud, deceit, an d counterfeit parts being sold as genuine. Clearly, this conduct does not fall within the scope of the limited coverage for advertising injury provided by the polic y.” Because the trial c ourt relied wholly on the intentional nature of Pro-Seal’s conduct, it did not address whether the Flowserve complaint actually set forth an “advertising injury” as defined by the policy. Because the trial court never addressed the i ssue left unresolved in this opinion, it should do so on remand.

13v S T A T E O F M I C H I G A N SUPREME COURT

CITIZENS INSURANCE COMPANY,Plaintiff/Counter-DefendantAppellant,
No. 130099 PRO-SEAL SERVICE GROUP INC., doing business as PRO-SEAL INC., Defendant/Counter

Plaintiff-Appellee,

and SETH SHORT, RANDY QUINCY, FLOWSERVE CORP ORATION, and FLOWSERVE MANAGEMENT COMPANY, Defendants.

CAVANAGH, J. ( dissenting ). I agree with dissenting Justice Kelly th at in the underlying complaint in this action, Flowserve’s allegations amounted to allegations of a violation of its trade dress. I also agree with her analysis of the terms “advertisement” and “notice.” However, I would resolve this case simply by rev iewing the specific allegations Flowserve made in its complain t against Pro-Seal Service Group, Inc., because as Justice Kelly not es, and as the majority ig nores, the question whetheran insurer has the duty to defend must be answered by examini ng the allegations in the underlying complaint, rather than by looking at the insured’s specific actions. In fact, “[i]f the allegations of a third party against the policyholder even arguably come within the policy coverage , the insurer must pr ovide a defense.” American Bumper & Mfg Co v Hartford Fire Ins Co , 452 Mich 4 40, 450-451; 550 NW2d 475 (1996), citing Polkow v Citizens Ins Co , 438 Mich 174, 178, 180; 476 NW2d 382 (1991); Allstate Ins Co v Freeman , 432 Mich 656, 662; 443 NW2d 734 (1989). “This is true even where the claim may be groundless or frivolous.” Id. Here, Flowserve accused Pro-Seal’s individual employees of misrepresenting to the public that they were asso ciated with Flows erve, that they were capable of performing certified repairs on Flowserve produc ts, and that ProSeal seals were Flowserve seals. Flowserve further alleged that defendant “improperly appropriated a nd used Flowserve’s “P-50” trademark to identify their inferior seal” to “capitalize on Flow serve’s goodwill and to further confuse the process industry into believing that [Pro-Seal’s] competitive seals are Flowserve seals.” Further, Flowserv e accused Pro-Seal of using three of Flowserve’s trademarks and attached se veral purchase orders allegedly showing that customers were ordering Flowserve seals from Pro- Seal and were being sent Pro-Seal seals. Flowserve attached a photograph of a Flow serve product bearing Flowserve trademarks and alle ged that Pro-Seal had replaced internal parts with Pro-Seal parts. Flowserve explained that it discovered these internal parts while

2fixing a pump in which the seal had been installed and that it also discovered another seal it accused Pro-Seal of alteri ng before it was in stalled. Another allegation involved an a llegedly improperly labele d crate, which contained another allegedly altered Flowserve produ ct, and an assembly drawing bearing the Flowserve name and trademark in th e box in which the seal was shipped. Specific guiding principl es governing the determin ation of an insurer’s duty to defend were aptly set forth in American Bumper , supra , and bear repeating here: “‘An insurer has a duty to defend, despite theories of liability asserted against any insured whic h are not covered under the policy, if there are any theories of recovery that fall within the policy. Dochod v Central Mutual Ins Co , 81 Mich App 63; 264 NW2d 122 (1978). The duty to defend cannot be limited by the precise language of the pleadings. The insurer has the duty to look behind the third party’s allegations to anal yze whether coverag e is possible. Shepard Marine Construction Co v Maryland Casualty Co , 73 Mich App 62; 250 NW2d 541 (1976). In a case of doubt as to whether or not the complaint against the insured alleges a liability of the insurer under the policy, the do ubt must be resolved in the insured’s favor 14 Couch, Insurance, 2d (rev ed), § 51:45, p 538 (now § 51:49, p 489).’” [ American Bumper , supra at 451-452, quoting Protective Nat’l Ins Co v C ity of Woodhaven , 438 Mich 154, 159; 476 NW2d 374 (1991), quoting Detroit Edison Co v Michigan Mut Ins Co , 102 Mich App 136, 142; 301 NW2d 832 (1980).] While the complaint in th e present case certainly could have been crafted more specifically with respect to describing precisely how defendant accomplished these violations, i.e., how it “advertised,” Flowserve’s allegations were sufficient to trigger a du ty to defend. Flowserve a lleged that Pro-Seal used Flowserve’s trademarks to identify Pro-Seal products and through its actions

3caused customer confusion reg arding the origin or ma nufacturer of the goods. From these allegations alone, it can be deduced that Pro-Seal was accused of taking actions that inherently involved notice broadcast or published to the general public or specific ma rket segments about its go ods, products, or services for the purpose of attracting customers or supporters. Thus, the Court of Appeals correctly determined that plainti ff had a duty to defend Pro-Seal. On that basis, I would affirm the Cour t of Appeals. But even if I agreed with the majority’s substan tive analysis, I would not rema nd this case to the trial court to allow it to determine anew whet her plaintiff was required to defend ProSeal. The trial court was presented with this and other issues in the proceedings on this declaratory judgment action, and it made its ruling accordingly. In its written opinion and order granting summary disposition for plaintiff, the trial court described the nature of the clai ms being made, summarized the various complaint allegations, and ruled that plaint iff had no duty to defend. In fact, it ruled that “coverage is ex cluded for advertising inju ries that are ‘knowingly made.’” See ante at 3. While the trial court di d not provide a detailed analysis with regard to the alleged “advertising injury,” it is clear that it found one because it determined that the advertising injury was made knowingly. And it did not use conditional langua ge, such as stating that if there were an advertising injury, it was knowingly made . Presumably, the trial co urt is unlikely to change its mind on remand, making the prelimin ary “victory” in th is case hollow for

4defendant. Quite simply, th e majority’s remand unfairly gives plaintiff a second opportunity to co nvince the trial court to again rule in its favor. Michael F. Cavanagh Elizabeth A. Weaver

5v S T A T E O F M I C H I G A N SUPREME COURT

CITIZENS INSURANCE COMPANY,Plaintiff/Counter-DefendantAppellant,
No. 130099 PRO-SEAL SERVICE GROUP, INC., doing business as PRO-SEAL, INC., Defendant/Counter

Plaintiff-Appellee. and SETH SHORT, RANDY QUINCY, FLOWSERVE CORP ORATION, and FLOWSERVE MANAGEMENT COMPANY, Defendants.

KELLY, J. ( dissenting ). The majority has decided that plaintiff Citizens Insurance Company had no duty to defend defendant Pro-Seal Serv ice Group, Inc., in the underlying trademark infringement action. It assert s that the complaint did not allege an advertising injury as that term is d efined by the parties’ commercial general liability policy (CGL policy). I believe that the complaint alleges one of the advertising injury offenses covered by the policy and the injury complained ofdoes not fall within an enum erated exception to coverage. As a consequence, I respectfully dissent. I would affirm the judgment of the Court of Appeals.
T HE U NDERLYING F ACTS Defendant Pro-Seal is in the busine ss of selling and repairing mechanical seals used in high-temperature and extrem e-pressure environments. It is not a manufacturer of these seals but a distributor that sells mechanical seal products manufactured by others and performs repairs on seals, us ing its own employees. In the underlying action, a customer of Pro-Seal requested that Pro-Seal make repairs and modifications to m echanical seals that the customer had purchased from defendants Flowserve Co rporation and Flowserve Management Company (Flowserve). Flowserve is a larg e manufacturer of mechanical seals that also operates a repair business for its seals. Flowserve and Pro-Seal are competitors in the Alaskan m arket in both the sale of ne w seals and in the repair of worn seals. Pro-Seal repaired two Flowserve mech anical seals and shipped them to Alaska Roteq Corporation, an Alaska n distribution center engaged in the distribution and sale of mechanical seals, for delivery to Pro-Seal’s client. The seals were shipped in a distin ctive Flowserve reusable cont ainer. Pro-Seal’s name appeared on the outside with a prominent red label that displayed the location of and contact information for Pro-Seal, a product description, and testing information. The exterior packaging also displayed the Flowserve trademark.

2An employee of Flowserve observed th e packaging while it sat in the open on the premises of Roteq. The Flowserve employee knew that the product inside had been repaired by Pro-S eal because the affixed labe l displayed Pro-Seal’s name. Flowserve intercepted the repaired seal and the box in which it was contained. Four months after the incident, Flow serve filed a complaint against ProSeal in the United States District Court in Alaska. It alleged, among other things, that Pro-Seal created conf usion in the marketplace by (1) imitating or infringing trademarks and product marks, (2) by using trade secrets, blueprints, engineering drawings, and packaging materials, and (3 ) by engaging in sales-related conduct, all of which misrepresented Pro-Seal’s products as being Flowserve products in violation of Flowserve product trademarks, trade names, and the Lanham Act. 15 USC 1125(a). The complain t asserted that Pro-Seal unfairly competed with Flowserve through these devices and mis represented to partic ular customers and the public that Pro-Seal’s products and services w ere Flowserve products and services. Pro-Seal notified its insu rer, Citizens Insurance Co mpany, of the lawsuit and requested that it provide a defense. Citizens Insu rance declined and filed this lawsuit seeking a declaration that it had neither a duty to defend nor an obligation to indemnify. Both parties moved for su mmary disposition. The trial court went directly to an exclusion in th e CGL policy. It pertains to injuries caused by acts of the insured done with knowledge that an in jury to another will occur. It decided

3that the exclusion applied and, as a resu lt, that Citizens Insu rance had no duty to defend. Pro-Seal appealed to the Court of Ap peals, which, in a published opinion, vacated the trial court’s order. The appella te court determined that the advertising injury coverage under the CGL policy required Citizen s Insurance to defend the underlying action. It reasoned that the substance of the complaint relied on the doctrine of “trade dress,” a theory on which recovery could be ba sed. The claimed injury, the app eals court held, arguably fell within the definition of an advertising injury. It ruled that the CGL policy exclusio n did not appl y because the complaint alleged both intentional and nonintentiona l acts. Flowserve, it held, could have recovered without prov ing that any relevant act wa s committed intentionally.
S TANDARD O F R EVIEW This Court reviews de no vo the interpretation gi ven to language in an insurance contract. Klapp v United Ins Group Agency, Inc , 468 Mich 459, 463; 663 NW2d 447 (2003). An insurance company’s duty to defend its insured depends on the allegations the third p arty makes in the underlying complaint against the insured. Illinois Employers Ins of Wausau v Dragovich , 139 Mich App 502, 506; 362 NW2d 767 (1984). If the al legations fall even arguably within the coverage of the policy, the insurer has a duty to defend. American Bumper & Mfg Co v Hartford Fire Ins Co, 452 Mich 440, 450-451; 550 NW2d 475 (1996). Where there is doubt about whether the comp laint alleges a liability of the insurer

4under the policy, the doubt must be resolved in favor of the insured. Polkow v Citizens Ins Co , 438 Mich 174, 180; 476 NW2d 382 (1991).
A DVERTISING I NJURY The issue in this case is whether Citizens Insurance ha d a duty to defend under the CGL policy. In res olving this issue, the Cour t must construe the terms of the policy. A court will not hold an insurance company liable for a risk that it did not assume. Henderson v State Farm Fire & Cas Co , 460 Mich 348, 354; 596 NW2d 190 (1999). The policy provides in section 1(a) that Citizens Insu rance “will pay those sums that the insured beco mes legally obligated to pa y as damages because of personal and advertising injury .” In relevant part, “adv ertising injury” is defined in Section V, paragraph 14: “Personal and advertising injury ” means injury, . . . arising out of one or more of the following offenses: * * * (g) Infringing upon another’s copy right, trade dress, or slogan in your “advertisement.” In order to qualify as an advertisi ng injury under this subsection, two requirements must be satisfied: Pro- Seal must have infringed Flowserve’s copyright, trade dress, or slogan, and th e infringement must ha ve occurred in Pro

Seal’s “advertisement.” Flowserve alleged that Pro-Seal used Flowserve’s trademark and represented Flowserve products to be its own, and sent a s eal that it had repaired to

5a customer in distinctive Fl owserve packaging. The “t rade dress” of a product refers to the product’s overall image and ma y include features such as a particular sales technique. Two Pesos, Inc v Taco Cabana, Inc , 505 US 763, 764; 112 S Ct 2753; 120 L Ed 2d 6 15 (1992). It is a broad term that is expansive enough to include Flowserve’s allegations, even th ough Flowserve never used the term “trade dress.” Thus, consid ering the substance of the claim, contrasted with the language of the complaint, as this Cour t must do, the complaint alleged that ProSeal infringed Flowserv e’s trade dress. See American Bumper , 452 Mich 451

- 452. The injury must also arise out of an “advertis ement” in order to qualify as an advertising injury. As defined by the CGL policy, an “advertisement” takes place when the following fo ur elements are satisfied : (1) a notice about the company’s goods, products, or services, (2) is broadcast or published, (3) to the general public or specific market segm ents, (4) for the pu rpose of attracting

customers. 1 The first requirement is that there be notice about the company’s goods, products or services. The majority op inion defines “notice” as including “‘a written or printed statement conv eying . . . in formation.’” Ante at 9 (citation omitted.) In this case, Pro-Seal shipped a package containing a label displaying its

1 “Advertisement” is defined in th e CGL policy as “[n ]otice that is broadcast or published to the general pu blic or specific market segments about your goods, products or services for the purpose of attracting customers or supporters.”

6name as well as product information. This satisfied the no tice requirement under the majority’s definition. The next inquiry concerns whether the notice was broa dcast or published. As defined by the majority , “publish” is “‘to make publicly . . . known.’” Ante at 10 (citation omitted). The act of provi ding a member of the public with information, without more, makes the information p ublic. Since Pro-Seal placed the label on a package, then sent that pack age to a customer, there was publication. The next requirement is that the notice be conveyed to the general public or to specific market segments. There is no definition in the CGL policy of “specific market segments.” However, given that “segment” is a synonym for “piece” or “section,” it can be presumed that “m arket segments” refers to particular customers or vendors in the marketplace. Rogets II: The New Thesaurus (3d ed). Here, as the parties agree, the geographic area where Pro-Seal and Flowserve competed, th e North Slope of Alaska, contains few customers. Because the market is so restricted, communicatio n with one customer or vendor would be communication with a market segment. Ac cordingly, I conclude that, the sending of the package to Roteq for delivery to a specific customer constituted giving notice to a specific market segment. The final requirement is that the no tice be for the purpose of attracting customers. Flowserve’s compla int alleges that Pro-Seal unfairly competed because its communications in the marketplace aboutits products and services caused ProSeal products and services to be confused with those of Flowserve. The essence

7of Flowserve’s claim is that, by shipping a seal in a Flows erve package with a label containing Pro-Seal’s contact information, Pro-Seal unfairly sought to attract customers. This allegation satis fies the final requirement. Since the allegation is that Pro-Seal infringed Flowserve’s trade dress in Pro-Seal’s “advertisement,” I believe that the complaint asserted an advertising injury, as the policy defines that term. 2 Accordingly, C itizens Insurance had a duty to defend unless a specific po licy exclusion excused it. The majority disagrees and holds th at Citizens Insura nce had no duty to defend. It claims that th e purpose of the notice must be to attract “potential”

customers. Ante at 10. According to the major ity, since the packag e was sent to a specific customer, the purpose of its labe l was to “allow that specific customer to contact defendant with any questions or complaints about the product,” not to attract potential customers. Ante at 11

. The majority claims that I disregard th e fact that the con duct complained of “was not undertaken to ‘attract[] customers or supporters.’” Ante at 11 n 6. disagree. Actually, it is the majority that errs by impr operly ignoring the complaint in deciding that there is no duty to defend. See Protective Nat'l Ins Co of Omaha v Woodhaven , 438 Mich 154, 159; 476 NW2d 374 (1991).

2 Subsection f provides another means by which there could be an advertising injury. That subsection indicates that there is an advertising injury when the injury arises out of “[t]he us e of another’s advertising idea in your ‘advertisement.’” However, because coverage is available for an advertising injury as defined in subsection g, it is unnecessary to determine if an advertising injury was alleged as defi ned by subsection f.

8 IA closer look illustrates that the major ity’s decision is contrary to crucial allegations in the complaint. Paragraph 22 of the complaint alle ges that Pro-Seal’s actions have led to customer confusion and lists specific examples of such acts. Subpart e of that paragraph discusses the particular act at issue in this case. Paragraphs 34 through 37 assert the un fair competition claim. Paragraph 34 repeats and realleges the allegations of th e prior 33 paragraphs . Paragraphs 35 through 37 contain the subs tance of the unfair competition claim, which is that Pro-Seal created confusion in the m arketplace and this confusion caused Flowserve to lose business. Though the comp laint never explicitly states th at the particular act at issue was done to “attract[] customers or su pporters,” the duty to defend cannot be limited by the precise langua ge in the pleadings. American Bumper , 452 Mich 450-451. Rather, the insurer has a duty to look beyond the allegations to analyze whether coverage is required. Id. at 452 By asserting th at the particular act at issue was done to cause c onfusion in the marketplace at Flowserve’s expense, Flowserve alleged that the particular act was done to attract customers. The majority appears to agree that the act at i ssue was done to cause confusion in the marketplace but still concludes that it wa s not performed to attract customers. This conclusion ignores reality . The only reason for Pro-Seal to cause confusion in the marketplace would be to draw customers to itself and away from Flowserve. Flowserve’s complaint allege s as much by asser ting that Flowserve has lost business as a result of this confus ion. The majority errs by failing to look

9beyond the precise language used in the pl eading to determine whether there is a duty to defend The majority also errs by relying on the fact that the container was sent to an existing customer in order to conclude that the noti ce was not sent to attract customers. This fact is irrelevant. Th e policy says nothing about “potential” customers. As long as the complaint alle ges that the notice wa s meant to attract customers, be they existing or potential, the requiremen t is satisfied. Here, the complaint alleges that the container was sent to an existing customer. It further alleges that this act was done to cause confusion. Flowserv e claims that this marketplace confusion made it lose business. We should consider the substance of this claim: Flowserve accuse d Pro-Seal of conf using this customer so that in the future the customer would c onduct business with Pro- Seal under the mistaken belief that he was conducting business with Flowserve. By making this allegation, Flowserve clearly accused Pro- Seal of acting with the intent to attract future business from this p articular customer. By deciding as it does , the majority would seem to require wide-scale dissemination of information, such as by television or radio, for there to be an advertisement. I believe that it is error to impose such a requirement. There is nothing in the policy that precludes a fi nding that giving no tice to a specific customer can qualify as an advertisement. 3 If the notice is published to the general

3 The policy does require that the notice be sent to the ge neral public or specific market segments. However, this language does not preclude situations, (continued...) 10public or to a specific market segmen t for the purpose of attracting customers, there is no requirement that it be wide ly disseminated. Rather, any such requirement is one of this Court’s own making. It is improper to read a nonexistent limitation on coverage into an insurance policy. This is especially true where, as here, the party benefiting from the limitation drafted the policy. If Citizens In surance had inte nded to require dissemination through the public airwaves or communication with a large number of people, it easily could have imposed such a requirement. It di d not do so. It is the insurance company’s obliga tion to define the coverage to be provided. The courts should not save an insurance company fro m the plain meaning of terms that it used in its policy or artif icially limit the scope of cov erage, as the majority does here.
E XCLUSIONS As discussed above, I believe that th e complaint alleged an advertising injury as that term is d efined by the policy. Accord ingly, Citizens Insurance has a duty to defend Pro-Seal unless a specific ex clusion excuses it from this duty. See Protective Nat’l Ins Co , 438 Mich at 159. The CGL policy’s “personal and advertis ing injury” coverage is subject to the following exclusion:

(...continued) like this one, where the market is so restr icted that one custom er would c onstitute a specific market segment.

112. Exclusions This insurance does not apply to: (a) “Personal and advertising injury”: (1) Caused by or at the direc tion of the insu red with the knowledge that the act would violate the rights of another and would inflict “personal and advertising injury[.]” By requiring knowledge that the acts w ould violate the rights of another, this exclusion applies only to claims of intentional wrongdoing. Here, several of the allegations in Flowserv e’s complaint contain no reference to intent and seek recovery for conduct that was innocent, inadvertent, neg ligent, or reckless. As a result, even though Citizens Insurance correctly points out that the complaint also alleged intentional wrongdoing, the exclus ion does not excuse it from its duty to defend Pro-Seal. An insurer must defend its insured even if theories of liability asserted are not covered und er the policy, if any asserted theories of recovery fall within the policy coverage. American Bumper & Mfg Co , 452 Mich at 451.
C ONCLUSION Since the complaint allege d that Pro-Seal infringed Flowserve’s trade dress in its “advertisement,” and no specifi c policy exclusion excused Citizens Insurance from its duty to defend, I must dissent. I w ould affirm the judgment of the Court of Appeals. Marilyn Kelly Elizabeth A. Weaver

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