Nichols

This appeal presents questions of the scope of coverage of business and personal liability insurance policies for conduct of the insured parties who are alleged to have sold devices designed to intercept pay television signals, or as more commonly designated, airwave piracy. The trial court found the insurance companies were not obligated to defend or indemnify the underlying lawsuit. We conclude this finding was correct and shall affirm.

Facts

The instant litigation commenced with the filing of a complaint by California Satellite Systems (Calsat). Named as defendants, among others, were Ralph Nichols (doing business as Phil’s Antenna), Nichols’ employee Stan Darrow, and Adolph Gower (doing business as Cordova TV) (hereafter referred to collectively as appellants). Calsat alleged the following: It holds the exclusive license for distribution of the signal of “Home Box Office” (HBO) in the Sacramento area; HBO is a video home entertainment service, which is transmitted by microwave signals. Calsat supplies paid subscribers with an antenna and electronic downconverter to permit reception of the HBO signal on the subscriber’s television set; appellants are engaged in…