Although it is well known that an insurer can protect its intellectual property rights in an insurance policy by obtaining copyrights, the question of how widespread, if any, such protection is has long been open. Copyright in the form of an insurance policy does not prevent other insurers from using the insurance plan. Similarly, an insurer may include provisions similar to those of a copyrighted policy until the original expression is copied in the main. So, is there a real benefit in protecting an insurance policy?
The prevailing opinion is that “[T] constitute copyright infringement … proof of attribution in an exact or substantial form of copyrighted materials should be required””
1 historically, courts don’t want to see copyright infringement in insurance policies unless there are striking similarities between the two policies. The courts justify this by saying that “all words and phrases are commonplace in the insurance industry” and, consequently, “what could be called paraphrasing and plagiarism in another book is significantly different for the purposes of comparing two insurance policies.” 2 However, the U.S. District Court for the Northern District of Georgia recently issued a summary judgment and preliminary injunction in the case of American Family Life Insurance Co. Columbus (AFLAC) v. Insurance, Inc., no. 1:05-CV-1462-BBM, which could forever change the way insurers view their policies from a copyright perspective.
In AFLAC, the AFLAC applicant prepared four additional insurance policies written in a “narrative” style, believing that it would be easier for non-professionals to digest than the traditional legalistic style used by most insurance companies. The evidence showed that it took AFLAC eight to nine months to turn the style of the existing policy into a narrative style, which was then registered with the US Copyright Office.
The defendant apparently began seeking to develop its own line of supplemental insurance policies in December 2003. The first projects were created in early January 2004 and presented in April 2004. The evidence showed that, among other things, the defendant hired a former senior vice president and AFLAC Risk manager to develop additional policies, unsuccessfully tried to enter the supplementary insurance market in 2002 and verbatim copied some of the original versions of the plaintiff’s temporary policies.
Since copyright law protects the author’s original works, the defendant argued that AFLAC had not identified the original expression that could be copyrighted in its supplemental policy. The court rejected this argument, concluding that AFLAC had made many discretionary choices in developing its supplemental policy. According to the court, AFLAC changed its old policies through devices such as editorial edits, annotations and developments, creating a copyrighted interest in new narrative-style policies. The court went even further, finding that while AFLAC relied solely on discretionary decisions regarding the benefits that could be offered for the purposes of its copyright infringement complaint, this was also copyrighted. In short, the court concluded that AFLAC’s supplementary and derivative work policy meets the originality threshold.
The court then rejected the defendant’s argument that AFLAC could not enforce copyright in the new supplemental policies because AFLAC had placed its policy wording in the public domain without suing other insurance companies that had previously copied the earlier AFLAC policy wording, believing that although the old policies were part of the public domain, AFLAC had a new interest in copyright in the new policies. The differences between the old policy and the new policy were enough to establish that the new policy was protected as a derivative work.
Finally, the defendant argued that the wording of the AFLAC supplemental policies was necessary to express the idea behind the wording and therefore could not be copyrighted. According to the “fusion doctrine”, when there are so few ways to express an idea that an idea and its expression are combined, copyright does not provide any protection for expression, since protection will be based on the idea itself.3 The Court concluded that AFLAC uses the language commonly used in insurance policies in sections covering definitions, limitations and exclusions, given that these sections of the policies are not copyrighted. In contrast, the sections devoted to the advantages of narrative language in the new AFLAC policy did not reflect the language commonly used in the industry, and therefore AFLAC could assert its rights to these parts of the policy.
Ultimately, the court ruled that the defendant had carefully copied the narrative benefits section of the two policies and issued a summary judgment and a preliminary injunction in favor of AFLAC.
Although it is too early to say whether this decision is the beginning of a reversal of the ten-year trend towards a general refusal to detect copyright infringement in an insurance policy, this case provides an opportunity for insurance companies’ insurance policy writing departments to review their policy writing procedures and related copyright practices.