United States District Court, W.D. Washington, Seattle
S. ZILLY, UNITED STATES DISTRICT JUDGE
MATTER comes before the Court on a motion for summary
judgment, docket no. 176, brought by Brian Wright
(“Wright”), Sound Product Sales L.L.C.
(“Sound Product”), Hydro-Blok USA LLC
(“Hydro-Blok”), and Hydroblok International, Ltd.
(“H-International”). Having reviewed all papers
filed in support of, and in opposition to, the motion,
including supplemental briefing permitted by a Minute Order
issued on February 6, 2019, docket no. 240, the Court enters
the following Order.
Corp. (“wedi”) is an Illinois corporation that
distributes construction materials and sealants for use in
bathroom systems, including showers. See Am. Compl. at ¶
1 (docket no. 17). From June 2008 until September 2014,
Wright and/or Sound Product, in which Wright is the sole
member, served as a sales agent for wedi within certain
states, including Washington. See Order at 2-3 (No. C18-636
TSZ, docket no. 72). H-International is a Canadian company of
which Ken Koch is the sole proprietor. Id. at 3. In
2014, H-International and Hydro-Blok, in which Wright is the
sole member, Id. at 2-3, began distributing products
that compete with the materials sold by wedi.
December 2014, wedi accused Hydro-Blok of infringing United
States Patent No. 5, 961, 900 (the “'900
Patent”), which discloses a method of manufacturing
composite board. See Ex. B to Compl. (No. C15-615 TSZ, docket
no. 1-6). After an exchange of further correspondence on the
subject, Hydro-Blok and H-International commenced action
against wedi and its parent company, wedi GmbH, a German
corporation, seeking a declaratory judgment of
non-infringement as to the '900 Patent. See Compl. &
Am. Compl. (No. C15-615 TSZ, docket nos. 1 & 7). After
wedi GmbH filed a declaration indicating that it has no
ownership interest in and is not a licensee under the
'900 Patent, Hydro-Blok and H-International dismissed
their claims against wedi GmbH. See Lohmann Decl. (No.
C15-615 TSZ, docket no. 31-1); Notice of Voluntary Dismissal
(No. C15-615 TSZ, docket no. 32). Similarly, after wedi
represented in a declaration that it likewise does not own
and is not a licensee under the '900 Patent, Hydro-Blok
and H-International indicated that they did not oppose
wedi's motion to dismiss the declaratory judgment action,
see Plas.' Resp. (No. C15-615 TSZ, docket no. 50), and
the Court dismissed Hydro-Blok's and
H-International's complaint without prejudice. Order (No.
C15-615 TSZ, docket no. 54).
in April 2015, wedi had initiated this suit against Wright,
Sound Product, and Hydro-Blok, asserting breach of contract
and a variety of other claims. See Compl. (docket no. 1).
wedi made related allegations against H-International in
counterclaims filed in the declaratory judgment action. See
Answer & Counterclaims (No. C15-615 TSZ, docket no. 19).
In December 2015, the Court consolidated the declaratory
judgment action into this matter. See Order (docket no. 37).
Wright, Sound Product, and Hydro-Blok eventually brought
counterclaims against wedi for tortious interference with
prospective economic advantage and abuse of process. Answer
& Counterclaims (docket no. 50). wedi's motion for
summary judgment, seeking to dismiss those counterclaims, was
previously denied. Minute Order at ¶ 1 (docket no. 240).
to agreements between wedi, Wright, and Sound Product, the
parties were directed to arbitrate wedi's breach of
contract, breach of fiduciary duty, civil conspiracy, and
unjust enrichment claims against Wright and/or Sound Product.
See Order (docket no. 26). The parties also arbitrated
wedi's allegation that Wright violated Washington's
Uniform Trade Secrets Act (“WUTSA”), which had
been pleaded as a counterclaim, but only against
H-International. See Am. Counterclaims at Count VII (docket
no. 64). The arbitrator found against wedi and in favor of
Wright and Sound Product on all claims other than breach of
contract; on the contract claim, the arbitrator awarded to
wedi $1.00 in nominal damages. See Order at 2 (docket no.
128); Order at 2 (docket no. 111); Award (docket no. 101-3).
The Court confirmed the arbitral award, as modified by the
Court, entered partial judgment in favor of wedi and against
Wright on the breach of contract claim in the amount of
$1.00, and dismissed with prejudice wedi's claims against
Wright and/or Sound Product for breach of fiduciary duty,
civil conspiracy, unjust enrichment, and violation of WUTSA.
Orders (docket nos. 111 & 128); Judgment (docket no.
129). No. party timely filed a notice of appeal.
Sound Product, Hydro-Blok, and H-International subsequently
sought partial summary judgment, and the Court further
narrowed the claims remaining for trial. In May 2018,
wedi's counterclaims against H-International for aiding
and abetting Wright in breaching a fiduciary duty, civil
conspiracy, and violation of WUTSA were dismissed with
prejudice. See Order (docket no. 152). The claims and
counterclaims asserted by wedi that are currently pending in
this matter and that are the subject of the current motion
for summary judgment, docket no. 176, are as follows:
Claim or Counterclaim
Tortious Interference with Contract
Wright, Hydro-Blok, and H-International
Consumer Protection Act
Wright, Hydro-Blok, and H-International
Tortious Interference with Prospective Advantage
Wright, Hydro-Blok, and H-International
Abuse of Process
Wright, Hydro-Blok, and Sound Product
Sound Product, Hydro-Blok, and H-International now seek
summary judgment with regard to the balance of wedi's
claims and counterclaims. Their earlier motion for partial
summary judgment also challenged wedi's tortious
interference and abuse of process claims, but on different
grounds than are raised in the motion now before the Court.
See Order at 6-7 (docket no. 152). The Court denied those
portions of the previous motion because Wright, Hydro-Blok,
and H-International had not shown how the arbitrator's
decision preempted wedi's tortious interference claims,
and because Wright, Sound Product, and Hydro-Blok had not
established that the fact wedi's abuse of process claim
was asserted in a “counter-counterclaim, ” which
is not among the types of pleadings enumerated in Federal
Rule of Civil Procedure 7(a), formed an appropriate basis for
summary judgment. Id. In the instant motion, the
movants contend they are entitled to summary judgment on the
ground that wedi cannot, with respect to each of its
remaining claims, prove one or more elements on which it will
bear the burden of proof at trial. The Court agrees as to the
abuse of process and false advertising claims, but not with
regard to the tortious inference claims.
Summary Judgment Standard
Court may grant summary judgment if no genuine dispute of
material fact exists and the moving party is entitled to
judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving
party bears the initial burden of demonstrating the absence
of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). A fact is material if
it might affect the outcome of the suit under the governing
law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986). To survive a motion for summary judgment, the
adverse party must present affirmative evidence, which
“is to be believed” and from which all
“justifiable inferences” are to be favorably
drawn, Id. at 255, 257, showing that a rational
trier of fact could find for such party on matters as to
which such party will bear the burden of proof at trial, see
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S 574, 587 (1986); see also Celotex, 477 U.S. at 322.
Abuse of Process
Washington, the elements of the tort known as “abuse of
process” are as follows: (i) the existence of an
ulterior purpose to accomplish an object not within the
proper scope of the process, (ii) an act in the use of legal
process not proper in the regular prosecution of the
proceedings, and (iii) harm proximately caused by the abuse
of process. Bellevue Farm Owners Ass'n v.
Stevens, 198 Wn.App. 464, 477, 394 P.3d 1018 (2017). The
crucial inquiry is whether the judicial system's process,
after having been made available to secure the presence of
the opposing party, has been misused to achieve another,
inappropriate end. See Mark v. Williams, 45 Wn.App.
182, 192, 724 P.2d 428 (1986). The mere institution of a
legal proceeding, even with a malicious motive, does not
constitute an abuse of process. Vargas Ramirez v. United
States, 93 F.Supp.3d 1207, 1232 (W.D. Wash. 2015). Even
the filing of a baseless or vexatious lawsuit is not misusing
the process, and no liability attaches if nothing is done
with the litigation “other than carrying it to its
regular conclusion.” Batten v. Abrams, 28
Wn.App. 737, 749, 626 P.2d 984 (1981).
prove its abuse of process claim, wedi must establish that
each entity against which it asserts such claim engaged in an
act, after using legal process, “to accomplish an end
not within the purview of the suit.” Vargas Ramirez, 93
F.Supp.3d at 1232; see also Batten, 28 Wn.App. at 748 (the
tort “goes to use of the process once it has been
issued for an end for which it was not designed”). The
acts about which wedi complains fall into two categories: (i)
conduct related to the declaratory judgment action; and (ii)
the assertion of an abuse of process counterclaim against
wedi. With regard to the first basis, wedi attempts to lump
“defendants” together, but the only entity
against which wedi asserts its abuse of process claim that
participated in the declaratory judgment action was
Hydro-Blok. As to Hydro-Blok, wedi offers four reasons for
alleging abuse of process: (i) Hydro-Blok brought the
declaratory judgment action without knowing whether wedi or
wedi GmbH owned the '900 Patent; (ii) Hydro-Blok failed
to ask in discovery whether wedi or wedi GmbH owned the
'900 Patent, instead requesting that they identify who
has rights in the '900 Patent; (iii) Hydro-Blok declined
to dismiss the suit in advance of motion practice in the
absence of a covenant from wedi not to sue; and (iv) as a
result, wedi had to engage in motion practice, including the
filing of a reply brief. See Pla.'s Resp. at 20 (docket
undisputedly received a letter dated December 16, 2014, from
wedi's counsel that read:
wedi has been given reason to believe that . . . Hydro-Blok
USA has begun offering for sale in the United States a
composite board product made by a process that infringes
wedi's United States Patent no. 5, 961, 900 . . . in
violation of 35 U.S.C. § 271(g).
to Compl. (No. C15-615 TSZ, docket no. 1-6) (emphasis added).
About a month later, on January 14, 2015, wedi's attorney
told Hydro-Blok's lawyer:
If your clients contend that they are not liable for
infringing wedi's '900 patent, please respond by
Friday of this week identifying (and explaining) the claim
limitations of the '900 patent they contend are not
satisfied. Please beware that wedi is prepared to take all
steps necessary to protect its patent rights (e.g., file suit
in federal court) if Hydro-Blok USA and Mr. Wright cannot
show that the product at issue was made by a non-infringing
to Compl. (No. C15-615 TSZ, docket no. 1-8) (emphasis added).
On April 3, 2015, wedi's counsel indicated:
This firm has been retained by wedi Corporation . . . to
institute litigation, if necessary, against Bright Wright,
Hydro-Blok USA LLC . . ., Hydroblok International, Ltd. . .
., and possibly others, relating to the importation of, use,
and offer to sell a composite wall board product . . . that
is believed to infringe on wedi's United States Patent
No. 5, 961, 900 . . . in violation of 35 U.S.C. §
to Compl. (No. C15-615 TSZ, docket no. 1-9) (emphasis added).
Given wedi's attorneys' repeated representations that
wedi owned the '900 Patent and intended to take legal
action to protect “its patent rights, ”
Hydro-Blok was not, as a matter of law, required to
independently investigate whether wedi owned or was a
licensee under the '900 Patent before initiating the
declaratory judgment action. Moreover, in asking wedi and
wedi GmbH to identify the owners or licensees of the '900
Patent, refusing to dismiss the declaratory judgment action
in the absence of a covenant not to sue, and waiting until
after wedi and wedi GmbH declared under oath that they did
not own and were not licensees under the '900 Patent to
forego the litigation, Hydro-Blok did not, as a matter of
law, engage in acts “to accomplish an end not within
the purview of the suit.” Rather, Hydro-Blok merely
carried the litigation to “its regular conclusion,
” securing for itself some protection against wedi
suing it in the future for infringement of the '900
regard to its second basis for asserting abuse of process,
namely that Wright, Sound Product, and Hydro-Blok have
themselves alleged abuse of process, wedi has not described
any act beyond the filing of a counterclaim that these
parties have taken. Even if their abuse of process
counterclaim is groundless, and even if they had a malicious
motive for pursuing such counterclaim, wedi cannot, without
proof of some form of extortive conduct on the part of
Wright, Sound Product, and/or Hydro-Blok, respectively,
establish an abuse of process claim. See Batten, 28 Wn.App.
at 746 (indicating that the requisite “improper
purpose” for an abuse of process claim “usually
takes the form of coercion to obtain a collateral advantage,
not properly involved in the proceeding itself”). wedi
has not presented the type of affirmative evidence necessary
to withstand summary judgment, and wedi's abuse of
process counter-counterclaim is DISMISSED with prejudice.
False Advertising (Lanham Act and CPA)
of false advertising falls within the broader concept of
unfair competition. See 44 Am. Jur. Proof of Facts
3d 1 at § I.A.1. (1997). wedi asserts its false
advertising claim against Wright, Hydro-Blok, and
H-International under both federal and state law, i.e., the
Lanham Act and ...