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Enterprises International, Inc. v. International Knife & Saw, Inc.

United States District Court, W.D. Washington, Tacoma

April 7, 2014

ENTERPRISES INTERNATIONAL, INC., et al., Plaintiffs,
v.
INTERNATIONAL KNIFE & SAW, INC., et al., Defendants.

ORDER DENYING PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT

BENJAMIN H. SETTLE, District Judge.

This matter comes before the Court on the motion of Plaintiffs Enterprises International, Inc. ("Enterprises"), Legacy Automation, Inc. ("Legacy"), and Ovalstrapping International ("Ovalstrapping") (collectively "Plaintiffs") for partial summary judgment on certain copyright claims (Dkt. 104) against Defendants International Knife and Saw, a South Caroline Corporation ("IKS-SC"), International Knife and Saw, Inc., a Quebec corporation ("IKS-Quebec"), and International Knife and Saw De Mexico, S.A. DE C.V., a Mexican variable capital corporation ("IKS-Mexico") (collectively "Defendants"). The Court has considered the pleadings filed in support of and in opposition to the motion and the remainder of the file and hereby denies the motion for the reasons stated herein.

I. PROCEDURAL HISTORY

On July 18, 2012, Plaintiffs Enterprises and Legacy, a wholly-owned subsidiary of Enterprises, both Washington corporations, filed a complaint alleging multiple causes of action against IKS-SC related to misuse of technical drawings for knife blades ("Lamb drawings"). Dkt. 1. On May 23, 2013, IKS-SC filed a motion for summary judgment seeking dismissal as a matter of law for all claims alleged against it. Dkt. 18. On June 10, 2013, Plaintiffs filed a response in opposition to IKS-SC's motion for summary judgment. Dkt. 25. On June 14, 2013, IKS-SC filed a reply. Dkt. 32.

On July 26, 2013, the parties submitted a stipulation and proposed order seeking to enlarge the case schedule and permitting Plaintiffs to amend their complaint. Dkt. 66. On July 26, 2013, the Court entered an order permitting enlargement of the case schedule and amendment of the complaint. Dkt. 67. On July 29, 2013, Plaintiffs filed an amended complaint adding additional parties and claims. Dkt. 70. Plaintiff Ovalstrapping was joined. Id. at 1-2. Additionally, Plaintiffs named IKS-Quebec and IKS-Mexico as Defendants. Id. at 1-3.

Plaintiffs' amended complaint alleges eight causes of action and seeks monetary damages, an order of replevin, injunctive relief, as well as attorney's fees, costs and expenses. See Dkt. 70 at 14-15. Plaintiffs' causes of action are: (1) breach of contract; (2) breach of implied contract in fact: quantum meruit; (3) breach of contract implied in law: unjust enrichment; (4) misappropriation of trade secrets pursuant to RCW 19.108, et seq.;

(5) conversion; (6) unfair competition pursuant to RCW 19.86, et seq.; (7) replevin; and

(8) copyright infringement pursuant to 17 U.S.C. § 106. Id. at 8-14.

On November 26, 2013, the Court issued an order granting in part and denying in part Defendant IKS-SC's summary judgment motion. Dkt. 86. Specifically, the Court granted summary judgment finding Plaintiffs' claims for conversion, replevin, and unfair competition pursuant to RCW 19.86 pre-empted under the Uniform Trade Secrets Act ("UTSA"), RCW 19.108, et seq. See Dkt. 86 at 21. Plaintiffs' contract, trade secret misappropriation, and copyright infringement claims remain.

On December 26, 2013, Plaintiffs filed a motion for partial summary judgment based on alleged copyright infringement of three Lamb drawings (18D22B, 18D47R and 18D48R) and seeking injunctive relief. Dkt. 104. On January 13, 2014, Defendants responded in opposition to Plaintiffs' motion. Dkt. 115. On January 17, 2014, Plaintiffs filed a reply. Dkt. 118.

II. FACTUAL BACKGROUND

Plaintiff Enterprises is a holding corporation. Dkt. 26 at 2 (Declaration of David Lamb ¶ 6). Over several decades it has owned different companies which design, manufacture, and sell products under the brand name "Lamb" in the pulp and paper industry. Id. ¶¶ 1-26. Enterprises maintains that its practice has long been to hold title to all intellectual property, including design and engineering drawings, created by the Lamb family of companies and their employees. Id. ¶¶ 9-10; Declaration of C. James Frush, Exs. 1, 12. Enterprises licenses its wholly owned intellectual property to its subsidiaries. Id.; Frush Decl. Exs. 3, 13.

Haines & Emerson, Inc. was one of Enterprises' subsidiaries. Lamb Decl. ¶¶ 7-15; Frush Decl. Ex. 2. Haines & Emerson owned Lamb Grays Harbor Co. ("LGH"). Id. Enterprises licensed certain intellectual property to Haines & Emerson and LGH, including design drawings for the knives used in Lamb cutter layboys. Id.; Frush Decl., Ex. 3. Until 2001, LGH sold the Lamb cutter layboy knives. Id. ¶ 26.

LGH hired International Knife and Saw ("IKS"), Defendants' alleged predecessor entity, to fabricate knives. Frush Decl., Ex. 4. LGH provided IKS with the necessary design drawings for the knives. Lamb Decl. ¶ 21; Frush Decl., Ex. 4 at EII 342 (referring to "drawings in your (IKS's) possession"). LGH accumulated a trade debt to IKS. In September 2001, Enterprises terminated Haines & Emerson's and LGH's license to the design drawings for the cutter layboy knives. Lamb Decl. ¶ 15; Frush Decl. Ex. 9. On September 24, 2001, Enterprises incorporated a new wholly owned subsidiary, Legacy, which eventually took over the ...


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