MEMORANDUM

EDUARDO C. ROBRENO, District Judge.

Plaintiff ICD Industries ("ICD") was insured under a policy issued by Federal Insurance Company ("Federal") which, inter alia, afforded coverage resulting from an advertising injury. ICD has brought this declaratory judgment action claiming that it is entitled to recover attorney fees and costs it incurred in defending against a patent infringement action. Currently before the Court are the parties' cross motions for summary judgment. Presented for resolution are two issues: (1) whether the patent infringement lawsuit brought against ICD can be fairly said to have stated an advertising injury claim, and (2) the extent to which Federal was obligated to consider evidence outside of the allegations made in the underlying complaint when determining whether it had a duty under the policy to afford ICD a defense. For the following reasons, the Court will deny ICD's motion for summary judgment and grant Federal's motion.

I.

On or about November 30, 1988, ICD purchased a commercial excess umbrella insurance policy from Federal (the "Federal policy") to protect it from professional liability up to the policy's limit of $25,000,000. As a condition for the issuance of the Federal policy, ICD agreed to maintain underlying insurance with Cigna Insurance Company ("Cigna"). Both the Federal policy and the Cigna policy were in effect at all relevant times.

On March 16, 1990, ICD was named as a co-defendant along with the Confab Corporation ("Confab") in a patent infringement suit filed by the Procter Gamble Company in the Eastern District of Pennsylvania (the "Procter Gamble action"). See Procter Gamble Co. v. ICD Indus., Civil Action No. 90-1862 (E.D.Pa. March 16, 1990). In that action, Procter Gamble sought a declaration by the Court that a patent it held for a certain sanitary napkin design was valid and had been infringed by the defendants, a permanent injunction against the defendants forbidding them from any further alleged infringement of the patent, and an award of treble damages for the defendants' willful and deliberate violation of the patent.

Fourteen months after the filing of the complaint, and after having conducted discovery concerning ICD's and Confab's promotional and marketing activities, Procter Gamble was granted leave to file an amended complaint to assert, in addition to its claim of patent infringement, a claim for unfair competition. The claim of unfair competition allegedly stemmed from false advertising by the defendants that tended to deceive the public and place Procter Gamble's products in a negative light. Based on this newly stated unfair competition claim, Cigna agreed to defend ICD in the Procter Gamble action and to pay for all defense costs incurred by ICD from the time of the filing of the amended complaint forward. Cigna, however, refused to reimburse ICD for the costs of defending the Procter Gamble action prior to the filing of the amended complaint.

In light of Cigna's position, ICD sought recompense from Federal for defense costs it had incurred for the time period from the filing of the initial complaint to the filing of the amended complaint. According to Coverage B of the Federal policy, ICD's coverage extended to any loss arising out of, inter alia, an "advertising injury." Federal rejected ICD's claim.

On March 10, 1992, the parties to the Procter Gamble action settled their differences and the case was dismissed. ICD thereafter initiated the present case seeking a declaration from the Court that it is entitled to coverage from Federal for defense costs it shouldered prior to the filing of the amended complaint, when Cigna agreed to assume the costs of defense.

II.

The standards by which a court decides a summary judgment motion do not change when the parties file cross motions. Southeastern Pa. Transit Auth. v. Pennsylvania Pub. Util. Comm'n, 826 F. Supp. 1506 (E.D.Pa. 1993), aff'd, 27 F.3d 558 (3d Cir.), cert. denied, ___ U.S. ___, 115 S.Ct. 318, 130 L.Ed.2d 279 (1994). Summary judgment may thus be granted only if "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). When ruling on cross motions for summary judgment, a ruling court must consider the motions independently. Williams v. Philadelphia Hous. Auth., 834 F. Supp. 794 (E.D.Pa. 1993), aff'd, 27 F.3d 560 (3d Cir. 1994). Accordingly, the evidence in each motion is viewed in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). The moving party bears the initial burden of pointing out the absence of genuine issues of material fact, Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986), but once it has done so, the party opposing the motion cannot rest on its pleadings, Fed.R.Civ.P. 56(e). Rather, the opposing party must come forward with facts showing that a genuine issue exists. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513-14, 91 L.Ed.2d 202 (1986).

The present matter is before the Court based on the Court's diversity jurisdiction. The parties have relied principally on Pennsylvania law in their pleadings. To the extent that the law of a state other than Pennsylvania could control the resolution of these motions, the Court concludes that the issue has been waived by the parties, see Mellon Bank, N.A. v. Aetna Business Credit, Inc., 619 F.2d 1001, 1005 n. 1 (3d Cir. 1980), and that Pennsylvania law shall apply.

In applying Pennsylvania law and in the absence of controlling authority by the Supreme Court of Pennsylvania, this Court is compelled to predict how the Supreme Court of Pennsylvania would resolve the questions posed in this case. McGowan v. University of Scranton, 759 F.2d 287, 291 (3d Cir. 1985). Though not controlling, decisions from Pennsylvania's lower appellate courts are considered predictive, and in the absence of an indication otherwise, shall be accorded significant weight. Kiewit Eastern Co. v. L R Constr. Co., 44 F.3d 1194, 1201 n. 16 (3d Cir. 1995) (citing Wisniewski v. Johns-Manville Corp., 759 F.2d 271, 273-74 (3d Cir. 1985)).

III.

ICD asserts that Federal's denial of ICD's claim for reimbursement of defense costs incurred prior to the filing of the amended complaint was improper because the allegations in the Procter Gamble original complaint resulted from an alleged "advertising injury," a type of claim that was afforded coverage under the Federal policy. "Advertising injury" in the Federal policy is defined as:

a. libel, slander or defamation;

b. any infringement of copyright, title or slogan;

c. piracy, unfair competition or idea misappropriation under an implied contract;

d. any invasion of right of privacy; committed or alleged to have been committed during the policy period in any advertisement, publicity article, broadcast or telecast and arising out of the insured's activities.

ICD posits that the patent infringement allegation set forth in Procter Gamble's initial complaint falls within the term "piracy" included in the Federal policy's definition of "advertising injury." Federal, however, counters that it is not required to provide coverage under the policy because an advertising injury cannot arise out of a patent infringement action as a matter of law.

As an alternative argument, ICD avers that it is entitled to coverage because Procter Gamble had also sought damages from ICD for "unfair competition," a term included within the Federal policy's definition of an advertising injury. Although Procter Gamble's claim for unfair competition was not included in the initial complaint, ICD insists that the initial complaint, when read in conjunction with 1) the allegations in the amended complaint, 2) certain document requests propounded by Procter Gamble during discovery, and 3) Procter Gamble counsel's line of questioning at a deposition taken prior to the filing of the amended complaint, potentially asserts a claim for unfair competition within the meaning of the Federal policy. The Court will address the parties' asseverations seriatim.

A.

The course of the parties' arguments requires the Court to first consider whether the term "advertising injury," as used in the Federal policy includes a claim for patent infringement. Federal chooses to state its argument in absolute terms, claiming that "advertising injury" as defined in the Federal policy cannot, as a matter of law encompass a patent infringement action. In support, Federal cites to a myriad of cases emanating from outside this jurisdiction which purportedly makes this a foregone legal conclusion. See, e.g., Iolab Corp. v. Seaboard Sur. Co., 15 F.3d 1500 (9th Cir. 1994); St. Paul Fire Marine Ins. Co. v. Advanced Interventional Sys., Inc., 824 F. Supp. 583 (E.D.Va. 1993), aff'd, 21 F.3d 424 (4th Cir. 1994); National Union Fire Ins. Co. v. Siliconix, Inc., 729 F. Supp. 77 (N.D.Cal. 1989); Bank of the West v. Superior Court, 2 Cal.4th 1254, 833 P.2d 545, 10 Cal.Rptr.2d 538 (Cal. 1992) (en banc); Aetna Casualty Sur. Co. v. Superior Court, 19 Cal.App.4th 320, 23 Cal.Rptr.2d 442 (Cal.Ct.App. 1993); A. Meyers Sons Corp. v. Zurich Am. Ins. Group, 74 N.Y.2d 298, 545 N.E.2d 1206, 546 N.Y.S.2d 818 (N.Y. 1989). To the contrary, ICD points out that none of these cases spring from familiar soil, all the while contending that the cases concerned a duty to indemnify on the part of an insurer rather than the far broader duty to defend, which ICD asserts is the duty implicated in this litigation. There appears to be no Pennsylvania appellate decision on point which supports either side's argument.

Since the filing of these motions, however, Judge Waldman of this Court has opportunely taken up the issue of whether an advertising injury is alleged in a patent infringement action. In Atlantic Mutual Ins. v. Brotech Corp., 857 F. Supp. 423 (E.D.Pa. 1994), an insured corporation filed a declaratory judgment action against its insurer seeking indemnification and reimbursement for the defense costs it had assumed in defending a patent infringement suit. The insured contended, on the basis of policy language nearly identical to that here, that the patent infringement claim made against it was in essence a charge of "piracy" that accordingly fell within the scope of the policy's coverage for an "advertising injury." The term "piracy" in Brotech, just as here, was undefined in the insurance policy. The Court agreed with the insured that, in the abstract, and according to the insurance policy's common usage the term "piracy" could possibly refer to patent infringement. The Court specified however, that this argument missed the point. Because the insurance policy used the term "piracy" within its definition of "advertising injury," the "issue [was] not what the isolated term `piracy' could mean, but what `piracy' occurring in the course of advertising activity could reasonably mean." Id. at 428. Thus considering "piracy" in the context of the specific insurance policy involved, the Brotech court concluded that "piracy" as used by the policy at issue did not describe patent infringement or other theft concerning the product, but instead referred to "`misappropriation or plagiarism found in the elements of the advertisement itself — in its text form, logo, or pictures.'" Id. (quoting Iolab, 15 F.3d at 1506). Because the claim in Brotech involved the product itself and not the advertisement of the product, coverage was unavailable to the plaintiff. Id.

The Court concurs with Brotech's rationale and shall apply it here with analogous results. In this case, where the allegations of "piracy" in the initial complaint are limited to infringement of the product itself and do not relate to the advertisement of the product, the protection afforded by the Federal policy against "piracy" does not extend to the patent infringement claim against ICD.

B.

ICD's second argument is that Procter Gamble's initial complaint could be construed as seeking damages for ICD's alleged unfair competition, and that since coverage for "unfair competition" is included within the Federal policy's definition of "advertising injury," Federal is required to provide coverage from the filing of the initial complaint to the time the amended complaint was filed. Prior to amending its complaint, Procter Gamble had made no allegations of unfair competition against ICD. While ICD agrees that the initial complaint contains no allegations of unfair competition against ICD on its face, ICD contends that this elision is not fatal to its position because the claim for unfair competition can be fairly discerned from a retrospective review of the amended complaint, certain discovery requests from Procter Gamble, and from a line of questioning employed by Procter Gamble's counsel at the deposition of Confab's president of sales and marketing. Given the nature of the parties' arguments, the issue this Court must thus resolve is whether Federal was obligated to look beyond the four corners of the complaint when deciding whether an allegation was covered under the Federal policy. For this answer we turn, in the first instance, to the teachings of the Supreme Court of Pennsylvania.

In Gene's Restaurant, Inc. v. Nationwide Ins. Co., 519 Pa. 306, 548 A.2d 246 (Pa. 1988), the last time the Supreme Court of Pennsylvania considered this issue, the insured, Gene's Restaurant, Inc., had been sued for willful and malicious assault by one of the restaurant's patrons, who claimed that he had been attacked by certain employees of the restaurant. The restaurant sought coverage from its liability insurer, but because the complaint alleged intentional assault and the insurance policy covered only those bodily injury claims that arose as a result of an accident, the insurer refused to pay for the restaurant's costs of defending the suit. In the ensuing declaratory judgment action filed by the restaurant, the Supreme Court of Pennsylvania held that the insurer was not required to provide coverage because torts based on intentional conduct, the type of conduct alleged in the complaint, were not covered under the insurance policy. Id. at 309, 247, 548 A.2d 246; see also Wilson v. Maryland Casualty Co., 377 Pa. 588, 594, 105 A.2d 304, 307 (Pa. 1959) ("[T]he rule everywhere is that the obligation of a casualty insurance company to defend an action brought against the insured is to be determined solely by the allegations of the complaint in the action. . . .").

Intermediate Pennsylvania appellate courts have steadfastly applied this rule. See Aetna Casualty Sur. Co. v. Roe, 437 Pa. Super. 414, 650 A.2d 94, 98 (Pa.Super. 1994) ("The insurer's obligation is fixed solely by the allegations in the underlying complaints.") (citing Stidham v. Millvale Sportsmen's Club, 421 Pa. Super. 548, 564, 618 A.2d 945, 953, appeal denied, 536 Pa. 630, 637 A.2d 290 (Pa. 1993); Germantown Ins. Co. v. Martin, 407 Pa. Super. 326, 331, 595 A.2d 1172, 1174 (Pa.Super. 1991), appeal denied, 531 Pa. 646, 612 A.2d 985 (Pa. 1992); Hartford Mutual Ins. Co. v. Moorhead, 396 Pa. Super. 234, 238-39, 578 A.2d 492, 494-95 (Pa.Super. 1990), appeal denied, 527 Pa. 617, 590 A.2d 757 (Pa. 1991); United Servs. Auto Ass'n v. Elitzky, 358 Pa. Super. 362, 368, 517 A.2d 982, 985 (Pa.Super. 1986), appeal denied, 515 Pa. 600, 528 A.2d 957 (Pa. 1987)); Humphreys v. Niagara Fire Ins. Co., 404 Pa. Super. 347, 590 A.2d 1267 (Pa.Super.) ("[T]he critical consideration is that the obligation of an insurer to defend an action is fixed solely by the allegations in the underlying complaint."), appeal denied, 528 Pa. 637, 598 A.2d 994 (Pa. 1991); D'Auria v. Zurich Ins. Co., 352 Pa. Super. 231, 235, 507 A.2d 857, 859 (Pa.Super. 1986) (" It is the face of the complaint and not the truth of the facts alleged therein which determines whether there is a duty to defend." (emphasis added)). It is apparent that under Pennsylvania law the allegations contained in the complaint are the sole points of reference for determining whether a claim comes within the scope of the coverage under an insurance policy. Consequently, extrinsic evidence, such as discovery requests or questions asked by counsel at a deposition, need not be considered when determining whether a particular claim falls within the scope of the policy. Because in this case it is undisputed that the initial complaint is devoid of any allegation of conduct constituting unfair competition or indication that it was ICD's advertising activities that served as the basis for Procter Gamble's patent infringement, ICD's request for coverage necessarily fails.

Despite what appears to be the clear mandate of Pennsylvania authority, ICD submits that the Court should follow the approach to this issue taken in Safeguard Scientifics v. Liberty Mutual Ins. Co., 766 F. Supp. 324 (E.D.Pa. 1991), rev'd in part on other grounds, 961 F.2d 209 (3d Cir. 1992). In Safeguard Scientifics, a case applying Pennsylvania law, the plaintiffs sought reimbursement from their insurer for the defense costs they incurred when a former president of one of the plaintiffs filed suit alleging that the plaintiffs had made knowingly false and defamatory statements about him. Though the policy at issue afforded the insured plaintiff coverage for negligent or reckless slander, the insurer refused to pay for the defense costs based on an exclusion in the policy for knowingly false defamation. Judge Katz first observed the apparent tension between two basic principles guiding an insurer's duty to defend:

The law is of two minds in determining the extent to which an insurance company owes an obligation to defend. On the one hand, the law looks to the four corners of the complaint to define the claim. See, e.g., United Servs. Auto Ass'n v. Elitzky, 358 Pa. Super. 362, 368, 517 A.2d 982, 985 (1986). On the other hand, `where a claim potentially may become one which is within the scope of the policy, the insurance company's refusal to defend at the outset of the controversy is a decision it makes at its own peril.' Cadwallader, 396 Pa. at 589, 152 A.2d at 488 (emphasis added).

While the Supreme Court of Pennsylvania has not had occasion to consider the validity of the Safeguard Scientifics approach, all intermediate Pennsylvania appellate courts that have considered this issue since Safeguard Scientifics was decided have not followed it and have, instead, continued unabatedly to apply the rule that it is the allegations within the four corners of the complaint that govern. See Roe, 650 A.2d at 94; Britamco Underwriters, Inc. v. Grzeskiewicz, 433 Pa. Super. 55, 639 A.2d 1208 (Pa.Super.), appeal discontinued, ___ Pa. ___, 647 A.2d 895 (Pa. 1994); Britamco Underwriters, Inc. v. Weiner, 431 Pa. Super. 276, 636 A.2d 649 (Pa.Super. 1994); American States Ins. Co. v. Maryland Casualty Co., 427 Pa. Super. 170, 628 A.2d 880 (Pa.Super. 1993); Stidham, 421 Pa.Super. at 548, 618 A.2d at 945; Heffernan Co. v. Hartford Ins. Co. of Am., 418 Pa. Super. 326, 614 A.2d 295 (Pa.Super. 1992); Biborosch v. Transamerica Ins. Co., 412 Pa. Super. 505, 603 A.2d 1050 (Pa.Super.), appeal denied, 532 Pa. 653, 615 A.2d 1310 (Pa. 1992); see also Air Prods. Chems., Inc. v. Hartford Accident Indem. Co., 25 F.3d 177, 179 (3d Cir. 1994) ("It is apparent that in seeking summary judgment Aetna was asking the district court to look beyond the face of the underlying complaint to decide Aetna's initial duty to defend. This the district court was not free to do unless this case triggered cases outside the general Pennsylvania rule."). This Court, too, concludes that the "four corners of the complaint" rule is the correct statement of Pennsylvania law and respectfully declines to follow the Safeguard Scientifics approach. In doing so, the Court notes that Pennsylvania intermediate appellate courts have reconciled the apparently contradictory coverage principles addressed in Safeguard Scientifics by allowing coverage for claims that "potentially fall" within the scope of coverage, but only insofar as those "potential" claims are grounded in the complaint itself. See Roe, 650 A.2d at 99 ("The insurer is obligated to defend if the factual allegations of the complaint on its face comprehend an injury which is actually or potentially within the scope of the policy"); Humphreys, 404 Pa.Super. at 354, 590 A.2d at 1271 ("The obligation to defend arises whenever the underlying complaint . . . potentially may come within the coverage of the policy."); see also American States, 427 Pa.Super. at 183, 628 A.2d at 880 (same) (citing, inter alia, Cadwallader v. New Amsterdam Casualty Co., 396 Pa. 582, 152 A.2d 484 (Pa. 1959)).

Even assuming that the approach taken in Safeguard Scientifics presages a future decision by the Pennsylvania Supreme Court, ICD's argument falters nonetheless. In concluding that coverage should have been afforded to the insured in Safeguard Scientifics, Judge Katz rested his decision on the following observation:

To make [the complaint] determinative would be to turn the issue of coverage over to the vagaries of an opponent's pleading. The overstatement of a claim or the hyperbole of the pleader should not control whether an insured is entitled to a defense. "This is particularly so because the drafter of the pleading may be unaware of the true underlying facts or the nuances that may affect the defendant's coverage and it might not be in the insured's (or the insurer's) interest to reveal them."

IV.

Federal has amply demonstrated that it is not liable to ICD for the defense costs incurred prior to Procter Gamble filing its amended complaint. Accordingly, Federal's motion is granted and judgment will be entered in favor of Federal and against ICD.

An order consistent with the rulings in this memorandum follows.