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Weiland Sliding Doors and Windows, Inc. v. Panda Windows and Doors

October 28, 2010

WEILAND SLIDING DOORS AND WINDOWS, INC., PLAINTIFF,
v.
PANDA WINDOWS AND DOORS, LLC, DEFENDANT.



The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge

ORDER (1) GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO DISMISS PURSUANT TO C.C.P. § 425.16; OR, IN THE ALTERNATIVE, MOTION FOR JUDGMENT ON THE PLEADINGS; (2) DISMISSING DEFENDANT'S EX PARTE MOTION TO SUPPLEMENT; AND (3) DISMISSING MOTION TO APPEAR TELEPHONICALLY (Doc. Nos. 23, 39, & 43.)

Presently before the court is Plaintiff and Counter-Defendant Weiland Sliding Doors and Windows, Inc.'s (Plaintiff or Weiland) motion to dismiss pursuant to California Code of Civil Procedure § 425.16, or in the alternative, motion for judgment on the pleadings. (Doc. No. 23 (Mot.).) Also before the Court is Defendant and Counter-Plaintiff Panda Windows and Doors, LLC's (Defendant or Panda) opposition (Doc. No. ## (Opp'n)) and Plaintiff's reply. (Doc. No. 38 (Reply).)

BACKGROUND

Plaintiff initiated the underlying patent infringement suit on March 30, 2010, (Doc. No. 1) and filed a first amended complaint (FAC) on April 9, 2010. (Doc. No. 6 (FAC).) The suit concerns two patents, 7,007,343 ('343 patent) and 6,792,651 ('651 patent). Defendant answered and counterclaimed for intentional interference with business relationships (IIBR). (Doc. No. 7 (Answer) at 9.)

Defendant's counterclaim centers around a message (the Press Release) Plaintiff sent to "purchasers and potential purchasers" of Defendant's products. (Mot. at 5.) Spanning two pages, the Press Release was allegedly sent to "six thousand recipients" and posted on the internet. (Opp'n at 1.) The Press Release first noted that Plaintiff was suing Defendant for violating the '343 and '651 patents. (Answer, Exhibit C.) Plaintiff then expounded on the innovations that it had bestowed on the door and window industry. (Id.) And finally, Plaintiff propositioned "contractors and dealors who wish to avoid liability for themselves and their customers for selling an infringing product [to] contact [Plaintiff] directly to discuss the possible licensing of non-Weiland patented drainage track." (Id.)

On May 4, 2010, Plaintiff answered Defendant's counterclaims. (Doc. No. 11.) And five months later, Plaintiff filed the present motion to dismiss the counterclaim, or in the alternative, motion for judgment on the pleadings.

ANALYSIS

Plaintiff asserts two bases for defeating Defendant's counterclaim. The first is set forth as a motion to dismiss and relies on California Code of Civil Procedure § 425.16, commonly known as the anti-SLAPP statute. Plaintiff argues that the counterclaim "was brought solely to punish [Plaintiff] for exercising its free speech and petition rights." (Mot. at 1.) As a result, the counterclaim is contrary to the anti-SLAPP statute and should be dismissed.

Alternatively, Plaintiff motions for judgment on the pleadings under three theories. Plaintiff first argues that the Press Release is protected by the litigation privilege because it "was made with some relation to judicial proceedings." (Id. at 6.) Then Plaintiff argues that the Press Release is the result of proper exercise of a patentee's ownership rights. (Id. at 7.) And finally, Plaintiff argues that it cannot be liable for IIBR because of the Noerr-Pennington doctrine. (Id. at 9.)

I. Motion to Dismiss Based on California Code of Civil Procedure § 425.16

Defendant counterclaims for IIBR based on the Press Release sent by Plaintiff. Plaintiff argues that the counterclaim should be dismissed because the counterclaim falls under the purview of California's anti-SLAPP statute. Cal. Civ. Proc. Code § 425.16. If a case is found to be a SLAPP suit-in that it falls under § 425.16-the complaint or counterclaim must be stricken "unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim." Cal. Civ. Proc. Code § 425.16(b)(1). Moreover, the prevailing party in a § 425.16 motion may be entitled to attorney's fees and costs. Id. § 425.16(c).

Section 425.16 applies to four types of lawsuits, two of which are relevant. Plaintiff argues that the counterclaim is a SLAPP suit because it arises from "any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law," or "any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law." Id. § 425.16(e)(1)--(2).

There are exceptions to § 425.16, however, and the exceptions can be found in California Code of Civil Procedure § 425.17. Importantly, even if an action qualifies as a SLAPP suit under § 425.16, it cannot be dismissed if a § 425.17 exception applies. Holbrook v. City of Santa Monica, 144 Cal.App.4th 1242, 1249--50 (Cal. Ct. App. 2006). Defendant argues that the commercial speech exemption found in § 425.17(c) is applicable to its counterclaim. Section 425.17(c) states in relevant part:

Section 425.16 does not apply to any cause of action brought against a person primarily engaged in the business of selling . . . goods or services . . . .arising from any statement or conduct by that person if both of the following conditions exist:

(1) The statement or conduct consists of representations of fact about that person's or a business competitor's business operations, goods, or services, that is made for the purpose of obtaining approval for, promoting, or securing sales . . . of, or commercial transactions in, the person's goods or services, or the statement or conduct was made in the course of delivering the person's goods or services.

(2) The intended audience is an actual or potential buyer or customer, or a person likely to repeat the statement to, or otherwise influence, an ...


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