Jinni Tech Ltd et al v. Red.com Inc et al

Filing 93

AMENDED ORDER granting in part and denying in part Defendants' 79 MOTION for Summary Judgment. Signed by Judge James L. Robart. (PM)

Case 2:17-cv-00217-JLR Document 93 Filed 04/20/20 Page 1 of 27

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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JINNI TECH, LTD., et al.,

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CASE NO. C17-0217JLR

Plaintiffs,

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v.
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RED.COM, INC., et al.,

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AMENDED ORDER GRANTING
IN PART AND DENYING IN
PART DEFENDANTS’ MOTION
FOR SUMMARY JUDGMENT

Defendants.

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I.

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INTRODUCTION

Before the court is Red.com, Inc. and Red.com, LLC’s (collectively, “Defendants”

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or “RED”) motion for summary judgment. (MSJ (Dkt. # 79).) Plaintiffs Jinni Tech, Ltd.

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(“Jinni Tech”) and Bruce Royce (collectively, “Plaintiffs”) oppose the motion. (Resp.

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(Dkt. # 85).) The court has considered the motion, the parties’ submissions in support of

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and in opposition to the motion, the relevant portions of the record, and the applicable

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//

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//

ORDER - 1

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law. Being fully advised, 1 the court GRANTS in part and DENIES in part Defendants’

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motion for summary judgment as set forth below.

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II.
A.

BACKGROUND

Factual Background

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1. The Mini-Mag and JinniMag

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RED manufactures high-end digital cameras used to create motion pictures. (See

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2d Land Decl. (Dkt. # 80) ¶ 2.) RED claims to produce an “ecosystem comprised of

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everything from the image capture at the sensors through the camera and its processes to

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generate and output compressed RAW image files to storage media.” (See id.) As part of

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this “ecosystem,” RED produces solid-state drives (“SSDs”) that RED markets as

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“Mini-Mag.” (Id.) The Mini-Mags store the camera’s digitally compressed RAW

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recordings until they can be downloaded onto computers for movie post-production. (See

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id.; Rankin Decl. (Dkt. # 81) ¶ 2, Ex. 1 (“RED Dep.”) at 103:8-104:1.) RED claims that

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its cameras are designed such that without RED firmware in a connected SSD (such as a

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Mini-Mag), the RED camera’s operating software system cannot properly communicate

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with a memory card and thus the system will not function. (See RED Dep. At

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42:16-44:8; 2nd Land Decl. ¶ 3.)

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In 2016, Mr. Royce’s company, Jinni Tech launched for sale an SSD designed for

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use with RED’s cameras that it called the “JinniMag.” (See MSJ at 6; Royce Decl. (Dkt.

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# 86) ¶ 2.) Jinni Tech identified the JinniMags on the “RED Scarlet-W Facebook group”

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Neither party requests oral argument (see MSJ at 1; Resp. at 1), and the court finds oral
argument unhelpful to its disposition of the motion, see Local Rules LCR 7(b)(4).

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as “Affordable, Fully Compatible Red Mags.” (See MSJ at 6; FAC (Dkt. # 10) ¶ 67.)

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Jinni Tech claims that the JinniMag was an attempt to “break R[ED]’s monopoly on

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memory storage devices for RED cameras.” (See Resp. at 2.) According to Jinni Tech,

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RED-branded storage devices “have the same standard features of a generic SSD memory

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device.” (Royce Decl. ¶ 3.) By designing its system to work only with RED-branded

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SSDs, Jinni Tech asserts that RED forces its users to buy RED’s storage devices

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containing generic SSD cards at premium prices, “allowing R[ED] to price gauge their

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customers in the process.” (See id.)

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2. Online Statements

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Soon after Jinni Tech announced the JinniMag, it became a topic of conversation

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in the online forums on Reduser.net, a “social media platform” on which RED users

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discuss RED equipment. (See 1st Land Decl. (Dkt. # 17) ¶ 4.) Landmine Media, Inc.

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(“Landmine”), a Colorado corporation of which Jarred Land is a part owner, operates

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Reduser.net. (See id.) A Reduser.net user created a thread titled “Cheap third party Red

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MiniMag replacement – JinniMag?” on in which several users made the following

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comments, among others:

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To offer licensing out to 3rd parties seemed unlikely, and yet, these new
JinniMags ads have the Red logo right on them . . . Has Red endorsed this,
or is this a lawsuit in the making? . . . EDIT: Thanks Phil for the info.
Apparently this is a scam.

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Doesn’t RED use a proprietary interface?
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Buying any electronic non-authorized 3rd party product for a RED camera is
a VERY bad idea . . . Do NOT waste your money – you will be sorry.

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//

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What I read there doesn’t sound like the best way to introduce yourself as the
producer of a product that probably violates patents, copyrights and what not.
Copying things is not making things, everyone knows and see’s [sic] that.

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(Rankin Decl. ¶ 7, Ex. 6 (“Forum Posts”) at JT001350-53.) On July 31, 2016,

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Jarred Land, the president of Red.com, Inc., made the following post:

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Guys… I can’t tell you how much this pisses me off. Not from a business
perspective, but as a patent holder and creator. Like all of you, we spend a
lot of time money and effort creating what we do. For our media, we
developed our own IP and Firmware and spent millions of dollars testing,
certifying and [running quality control (“QC”) on] every media card that we
ship. Its [sic] why we have significantly less card errors than other
companies using generic media… even reputable generic media. Media is
one of the most critical components of the entire system and the way we write
to a card is very different than a normal SSD is programmed for. For some
random company to hack and duplicate our IP and our firmware (which is
the only way they could do this) is exactly like someone stealing your films
and calling them their own and selling them to others. It goes against
everything I stand for. I don’t know where this company is from. I assume
the UK cover is just bullshit. Someone said China but I really hope this is
not the case as China has made such significant improvements over the last
decade turning around their attitude towards Copyright infringement,
Trademark violations, and IP theft (which it appears this company has broken
all three in one swoop)[.] I am shocked some of you are here are [sic] actually
endorsing this. I will shut RED completely down… I am not kidding… [i]f
stealing each other[’]s shit suddenly is deemed acceptable. It’s not a world I
want to work or create or live in.

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(Forum Posts at JT001357-58.) Several posts supportive of Mr. Land followed, including

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the following:

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These cheap knock off SSDs are clearly engaging in criminal behavior. Not
OK.

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Disappointing and not cool.
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Saw this on [Facebook] and thought maybe it was a third-party licensing
deal. Definitely won’t be looking into it anymore since, according to Jarred,
they just ripped the RED Mag off completely. Idiots.

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(Forum Posts at JT001360-63.) Mr. Land then made a second post on August 1, 2016,

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that included in part the following: “Lawyers will deal with these guys doing this…. But

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it is you guys that think that this is OK that have me way way way more pissed off[.]”

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(Forum Posts at JT001364-65.)

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A similar thread on Facebook also started on July 31, 2016, started by Facebook

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user Behrooz Modirrousta. (Rankin Decl. ¶ 8, Ex. 7 (“Facebook Posts”).) Mr. Land also

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posted on this Facebook thread as follows:

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This is not legit . . . not certified … not endorsed and will never be because
its [sic] bullshit. Even if this was real there are too many inaccuracies and
violations going on here to list but I figure you all are smart enough to see
through this.

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(Facebook Posts at JT001453.)
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Mr. Land’s above statements on Reduser.net and on Facebook form the basis
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of several of Jinni Tech’s claims in this lawsuit. According to Jinni Tech, Mr. Land
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“never took any steps to discourage RED users from making these vicious, personal
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attacks against Mr. Royce,” Jinni Tech’s owner. (See FAC ¶ 95.) Jinni Tech alleges
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that these statements “caused serious damage to Mr. Royce’s professional
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reputation” and caused Mr. Royce and his family “serious emotional distress,
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anxiety, and stress, resulting in harm to Mr. Royce’s emotional and physical health,
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including severe physical pain and a sleep disorder.” (Id. ¶¶ 97-98.) 2
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Plaintiffs allege in their first amended complaint that “[w]ith Defendants’ knowledge
and encouragement, RED’s users posted Mr. Royce’s personal information on Facebook for
hundreds of thousands of users to view.” (FAC ¶ 161.) However, in response to Defendants’
motion for summary judgment, Plaintiffs submit no evidence of these Facebook posts and no
evidence of any ill effects of such posts on Mr. Royce. (See generally Resp.; Royce Decl.)

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B.

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Procedural Background
Prior to this lawsuit, RED sued Jinni Tech for patent and trademark infringement,

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false advertising, unfair competition, unjust enrichment, and breach of contract in the

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United States District Court for the Central District of California. (See Rankin Decl. ¶ 9,

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Ex. 8.) Jinni Tech subsequently filed suit against RED on February 10, 2017, in this

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court. (See Compl. (Dkt. # 1).) RED subsequently learned through discovery that Jinni

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Tech “would likely be unable to pay any meaningful damages award should RED

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prevail” and voluntarily dismissed its lawsuit without prejudice. (See Rankin Decl. ¶ 6,

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Ex. 5.)

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Plaintiffs’ first amended complaint in this case asserts 11 claims: (1) false

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advertising under 15 U.S.C. § 1125(a) (Lanham Act); (2) Unfair competition under 15

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U.S.C. § 1125(a) (Lanham Act); (3) “Product Disparagement/Trade Libel”; (4) tortious

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interference; (5) unfair competition under the Washington Consumer Protection Act

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(“CPA”); (6) privacy violations under the CPA; (7) intentional infliction of emotional

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distress (“IIED”) or negligent infliction of emotional distress (“NIED”); (8) defamation;

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(9) false light; (10) declaratory judgment of patent noninfringement; and (11) declaratory

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judgment of patent invalidity. (Compl. ¶¶ 107-88.) The court has already dismissed

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Plaintiffs’ patent claims, Counts 10 and 11. (See 10/20/17 Order (Dkt. # 32) at 37.)

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Defendants now move for summary judgment on all of Plaintiffs’ remaining claims.

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III.
A.

ANALYSIS

Summary Judgment Standard
Summary judgment is appropriate if the evidence shows “that there is no genuine

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dispute as to any material fact and the movant is entitled to judgment as a matter of law.”

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Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Galen v.

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Cty. of L.A., 477 F.3d 652, 658 (9th Cir. 2007). A fact is “material” if it might affect the

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outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A

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factual dispute is “‘genuine’ only if there is sufficient evidence for a reasonable fact

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finder to find for the non-moving party.” Far Out Prods., Inc. v. Oskar, 247 F.3d 986,

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992 (9th Cir. 2001) (citing Anderson, 477 U.S. at 248-49).
The moving party bears the initial burden of showing there is no genuine dispute

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of material fact and that it is entitled to prevail as a matter of law. Celotex, 477 U.S. at

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323. If the moving party does not bear the ultimate burden of persuasion at trial, it can

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show the absence of such a dispute in two ways: (1) by producing evidence negating an

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essential element of the nonmoving party’s case, or (2) by showing that the nonmoving

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party lacks evidence of an essential element of its claim or defense. Nissan Fire &

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Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1106 (9th Cir. 2000). If the moving party

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meets its burden of production, the burden then shifts to the nonmoving party to identify

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specific facts from which a fact finder could reasonably find in the nonmoving party’s

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favor. Celotex, 477 U.S. at 324; Anderson, 477 U.S. at 250.

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The court is “required to view the facts and draw reasonable inferences in the light
most favorable to the [nonmoving] party.” Scott v. Harris, 550 U.S. 372, 378 (2007)

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(internal quotation marks and citation omitted). The court may not weigh evidence or

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make credibility determinations in analyzing a motion for summary judgment because

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those are “jury functions, not those of a judge.” Anderson, 477 U.S. at 255. However,

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the nonmoving party “must do more than simply show that there is some metaphysical

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doubt as to the material facts . . . . Where the record taken as a whole could not lead a

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rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.”

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Scott, 550 U.S. at 380 (internal quotation marks omitted) (quoting Matsushita Elec.

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Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)).

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B.

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Motion to Strike Mr. Royce’s Declaration
RED moves to strike Mr. Royce’s declaration “because it fails to establish that

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[Mr.] Royce had any first-hand knowledge of the matters he attests to as ‘facts’ and

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cannot create a genuine dispute of material facts on such topics.” (See Reply at 2 (citing

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Fed. R. Evid. 602).) RED contends that Mr. Royce’s declaration makes statements

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regarding RED’s “internal engineering, development, and financial matters, as well as its

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motivations, strategies, and knowledge,” about all of which Mr. Royce lacks personal

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knowledge.” (See id.) RED also moves to strike Exhibits 1 and 3 to Mr. Royce’s

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declaration under Federal Rules of Evidence 403, 106, 801, 802, and 901. (See Reply at

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3-4.)

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“A witness may testify to a matter only if evidence is introduced sufficient to

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support a finding that the witness has personal knowledge of the matter.” Fed. R. Evid.

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602. “Evidence to prove personal knowledge may consist of the witness’s own

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testimony.” Id. The majority of Mr. Royce’s declaration consists of statements made

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with personal knowledge. For example, Mr. Royce testifies to his knowledge of the fact

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of the internet postings that underlie Plaintiffs’ claims and portions of RED’s website

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(see, e.g., Royce Decl. ¶¶ 23-24) and submits photographic evidence of the internal

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components and storage capacity of the Mini-Mag (see id. ¶¶ 32, 35, Exs. 3-4). Because

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the statements in Mr. Royce’s declaration are largely made with personal knowledge, the

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court DENIES Defendants’ motion to strike Mr. Royce’s declaration. However, should

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any specific statement in Mr. Royce’s declaration be unsupported by personal

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knowledge, the court will disregard such statements in the discussion to follow.

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C.

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Defendants’ Summary Judgment Motion
Defendants move for summary judgment on all of Plaintiffs’ remaining claims.

The court GRANTS in part and DENIES in part the motion as set forth below.

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1.

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Defendants argue, in the span of three paragraphs, Mr. Land’s statements on

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Reduser.net or Facebook are not attributable to RED and therefore cannot be the basis of

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claims against RED. (See MSJ at 11.) Defendants cite only one case for the proposition

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that RED does not have a duty to monitor and remove offensive posts from Reduser.net.

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(See id. (citing Barnes v. Yahoo!, Inc., 570 F.3d 1096 (9th Cir. 2009)).) That is beside

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the point, however, because Mr. Land’s posts on Reduser.net are made in his capacity as

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the president, shareholder, and most senior employee of RED. Mr. Land’s posts give

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updates on RED’s litigation against Jinni Tech, discuss RED product manufacturing,

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sourcing, and testing, discusses RED’s costs, and refers to RED as “our” and “we.” (See,

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e.g., Royce Decl. ¶ 3, Ex. 2; Forum Posts at JT001357-58.) Defendants cite no authority

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Attribution of Mr. Land’s Statements to RED

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to support the contention that RED’s president and sole shareholder was not acting on

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behalf of RED when he made these statements. Accordingly, the court does not consider

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Defendants’ argument on this point any further.

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2. Lanham Act Claims

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Jinni Tech’s unfair competition and false advertising claims are both based on the

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Lanham Act, 15 U.S.C. § 1125(a). 3 (See FAC ¶¶ 107-15.) 15 U.S.C. § 1125 “allows one

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competitor to sue another if it alleges unfair competition arising from false or misleading

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product descriptions.” See Pom Wonderful LLC v. The Coca-Cola Co., 573 U.S. 102,

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106 (2014). The cause of action the Act creates imposes civil liability on any person who

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“uses in commerce any word, term, name, symbol, or device, or any combination thereof,

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or any false designation of origin, false or misleading description of fact, or false or

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misleading representation of fact, which . . . misrepresents the nature, characteristics,

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qualities, or geographic origin of his or her or another person’s goods, services, or

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commercial activities.” 15 U. S. C. §1125(a)(1). The elements of this claim are (1) a

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false statement of fact by the defendant in a commercial advertisement about its own or

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another’s product; (2) the statement actually deceived or has the tendency to deceive a

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substantial segment of its audience; (3) the deception is material, in that it is likely to

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15 U.S.C. § 1125(a) codifies Section 43(a) of the Lanham Act. Southland Sod Farms v.
Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir. 1997). Plaintiffs categorize their unfair
competition and false advertising claims as two distinct claims. (See FAC ¶¶ 107-15.) However,
both claims fall under the same legal standard and the court analyzes them together. See 5
McCarthy on Trademarks and Unfair Competition § 27:53 (5th ed.) (noting that courts apply the
same test to determine whether the claim is based on the defendant’s goods and services or the
plaintiff’s goods and services).

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influence the purchasing decision; (4) the defendant caused its false statement to enter

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interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of

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the false statement, either by direct diversion of sales from itself to defendant or by a

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lessening of the goodwill associated with its products.” Skydive Ariz., Inc. v.

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Quattrocchi, 673 F.3d 1105, 1110 (9th Cir. 2012); see also Southland Sod Farms v.

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Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir. 1997) (citing Cook, Perkiss and Liehe,

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Inc. v. Northern Cal. Collection Serv., Inc., 911 F.2d 242, 244 (9th Cir. 1990)).

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“Statements of opinion,” as opposed to statements of fact, “are not generally
actionable under the Lanham Act.” Coastal Abstract Serv., Inc. v. First Am. Title Ins.

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Co., 173 F.3d 725, 731 (9th Cir. 1999). “Whether an allegedly defamatory statement is

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one of opinion or fact is a question of law.” Gardner v. Martino, 563 F.3d 981, 986 (9th

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Cir. 2009). Courts in this circuit apply a three part test to make this determination, and

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analyze: “(1) whether the general tenor of the entire work negates the impression that the

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defendant was asserting an objective fact, (2) whether the defendant used figurative or

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hyperbolic language that negates the impression, and (3) whether the statement in

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question is susceptible of being proved true or false.” Id. at 987.

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“To demonstrate falsity within the meaning of the Lanham Act, a plaintiff may

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show that the statement was literally false, either on its face or by necessary implication,

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or that the statement was literally true but likely to mislead or confuse consumers.” See

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id. “Only an unambiguous message can be literally false.” See Nutrition Distribution

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LLC v. PEP Research, LLC, No. 16CV2328-WQH-BLM, 2019 WL 652391, at *4 (S.D.

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Cal. Feb. 15, 2019) (quoting Novartis Consumer Health v. Johnson & Johnson, 290 F.3d

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578, 588 (3d Cir. 2002)). If a statement is literally false, courts presume there is

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deception and the plaintiff need not prove how buyers perceive it. See Time Warner

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Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144, 153 (2d Cir. 2007). If a statement is true,

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the plaintiff must provide additional evidence that the statement “is nevertheless likely to

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mislead or confuse consumers.” Id. Reactions of the public to determine whether a

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literally true statement misleads customers are typically tested through the use of

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consumer surveys. Southland Sod Farms, 108 F.3d at 1139. To survive summary

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judgment, a plaintiff must provide admissible evidence of literal falsity or customer

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confusion beyond self-serving conclusory statements. See Schering–Plough Healthcare

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Prods. v. Schwarz Pharma, 586 F.3d 500, 513 (7th Cir. 2009) (“[The plaintiff] cannot

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just intone ‘literal falsity’ and by doing so prove a violation of the Lanham Act.”).

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Defendants argue they are entitled to summary judgment on Jinni Tech’s Lanham

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Act claims because the statements at issue were either literally true, substantially true, or

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not actionable assertions of fact. (See MSJ at 10.)

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a. “We developed our own IP and Firmware”
Mr. Land made this statement in a forum post on Reduser.net on July 31, 2016. 4

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(See FAC ¶ 50; Forum Posts at JT001358.) RED asserts that statements that RED

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develops customized hardware and software for its RED SSD media accessories are

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Plaintiffs’ first amended complaint also alleges that in a subsequent post dated August
4, 2020, Mr. Land states that “we make custom firmware specific to the cards and we have a
pretty extensive QC and our development on media is pretty insane and go[es] through many,
many, many years of testing with a lot of engineers to pass all our media . . .” (FAC ¶ 51.)
However, this August 4, 2020, post does not appear in the record. (See generally Dkt.)

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literally true. (See MSJ at 13 (citing RED Dep. at 58:2-16, 97:14-99:23) (“Q: Wait, now.

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Are you saying that you tell Micron to put custom firmware on these cards before they

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supply them to you? A: Yes.”)).) RED further asserts that the fact that Mr. Royce could

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not source all of the hardware and firmware for the Jinni Mag off-the-shelf “proves that

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RED’s Mini-Mag uses customized hardware and firmware.” (See MSJ at 13.) For

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example, although Mr. Royce used some off-the-shelf components to create the Jinni

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Mag, he also testified that he “made [his] own pass-through adaptor . . . And I 3D-printed

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a casing for them.” (See id. (quoting Rankin Decl. ¶ 5, Ex. 4 (“Royce Dep.”) at

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72:23-73:1).) Mr. Royce also had to “copy” some “random characters” in the

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Mini-Mag’s software code because “without them the camera cripples itself.” (See

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Royce Dep. at 76:20-78:7.)

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In response, Plaintiffs assert that the “primary component” of the Mini-Mag is the

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SSD, that Mini-Mag uses generic SSDs RED purchases, that tests and verifications on

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RED-branded SSDs are done by the original SSD manufacturer, and that RED “added

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nothing of material value to this commonly used SSD storage device.” (See Resp. at 6.)

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Further, Jinni Tech asserts that RED “cannot even define the imaginary ‘custom’

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firmware and was not able to indicate what this firmware is, where in the SSD this

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firmware resides or how this ‘customized’ firmware processes the information differently

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from other generic SSDs.” (See id.)

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Plaintiffs also rely on a Reduser.net forum post by Mr. Land, which states that

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RED is not trying to pretend that the SSDs are “magic fairy tales,” but states that their

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higher cost “is because the R&D expense of the development of custom firmware (and

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yes I mean camera firmware to write to the cards), the testing, and the support all that

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gets amortized into them. And yes, Micron gives us cards with special code on them.

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From Micron. You need to copy that code from our Mini Mags onto whatever else to

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spoof it.” (See id.)

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Statements that RED “developed [its] own IP and firmware” are ambiguous—and,

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as such, cannot be literally false—given the evidence before the court. See Nutrition

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Distribution LLC, 2019 WL 652391, at *4. Although Plaintiffs provide evidence that

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RED’s SSDs are standard-issue, Mr. Royce’s testimony about the steps he had to take to

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create the JinniMag, including “copying” some “random characters,” suggests that RED’s

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Mini-Mag product as a whole may include hardware and/or software created specifically

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by RED. Moreover, neither party submits expert testimony that might clarify the issue.

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See 5 McCarthy on Trademarks and Unfair Competition § 27:56 (5th ed.) (“If the

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advertising involves medical, scientific, or technical matters, expert witnesses will be

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necessary to unravel truth from falsity.”)

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Because these statements are ambiguous, Plaintiffs are required to prove either

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that Defendants intended to mislead customers or that the statements “actually deceived

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or ha[ve] the tendency to deceive a substantial segment of [their] audience.” Southland

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Sod Farms, 108 F.3d at 1139. Plaintiffs submit no evidence of intent or of a customer

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confusion survey. (See generally Resp.; Dkt.) Moreover, there is no evidence in the

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record from any consumer that relied on this statement in making its purchasing decision.

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(See generally Dkt.)

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Therefore, Plaintiffs fail to submit evidence that creates a genuine dispute of

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material fact regarding the falsity of the statements that RED developed its own IP and

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firmware. Accordingly, Defendants are entitled to summary judgment on Plaintiffs’

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Lanham Act claims as they relate to Mr. Land’s statements that RED developed its own

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IP and firmware. 5

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b. RED “spent millions of dollars testing, certifying and QC every media card
that we ship. It’s why we have significantly less card errors than other
companies using generic media . . . even reputable generic media.”

7

Mr. Land made this statement in a Reduser.net forum post on July 31, 2016. (See

8
9

FAC ¶ 50; Forum Posts at JT001358.) This statement is not ambiguous and can be tested

10

by direct comparison to evidence regarding the amount of money RED spent and data on

11

card errors. RED contends the statement is “literally true.” (See MSJ at 14 (citing 2d

12

Land Decl. (“Research and Development and Quality Control costs easily exceed a

13

million dollars.”).) Neither party submits documentary evidence of RED’s expenditures

14

or the Mini-Mag’s card error rates. (See generally MSJ; Resp.) Nevertheless, Plaintiffs

15

contend that RED could not have spent millions of dollars testing and certifying its media

16

cards because “[t]he SSD inside the R[ED-]branded memory storage device is nothing

17

//

18
19
20
21
22

5

Defendants also move for summary judgment on an apparent allegation from Plaintiffs
that “RED owns patents in the technology used in its RED SSD media that is infringed by other
companies who make RED-compatible SSD media.” (See MSJ at 14.) Plaintiffs oppose
Defendants’ motion based on the same apparent allegation. (See Resp. at 4 (“R[ED]’s allegation
that Jinni [Tech] stole R[ED]’s IP and infringed Red’s patent is false.”).) However, neither party
presents evidence of the specific statement or statements to which they refer. (See generally
MSJ.; Resp.) Mr. Land’s Reduser.net posts reference RED’s “IP,” but do not specifically
mention RED’s patents. (See Forum Posts at JT001360-63.) The court cannot adjudicate an
argument in favor of summary judgment based on the veracity of a statement without evidence
of that statement.

ORDER - 15

Case 2:17-cv-00217-JLR Document 93 Filed 04/20/20 Page 16 of 27

1

more than an off-the-shelf generic SSD with standard manufacturer firmware.” (Royce

2

Decl. ¶ 6.) In response to that argument, Defendants contend that “[t]he mSATA SSD is

3

one component that goes into the RED Mini-Mag, along with several other commercially

4

available and custom-made components.” (See Reply at 6 (citing 2d Land Decl. ¶ 2).)

5

Further, Mr. Land testifies that RED’s research and development and quality control

6

costs “easily exceed a million dollars.” (See 2d Land Decl. ¶ 5.)

7

RED’s expenditures should have been provable through document discovery.

8

Nevertheless, Mr. Royce’s and Mr. Land’s testimony combine to create a genuine dispute

9

of material fact regarding whether RED did (or even could have) spent “spent millions of

10

dollars testing, certifying and QC every media card.” Accordingly, Defendants are not

11

entitled to summary judgment on Plaintiffs’ Lanham Act claims as they pertain to RED’s

12

expenditures on testing and certifying its media cards.

13

c. Allegedly False Marketing of RED SSD media as made in the United States

14

Plaintiffs submit an image of a RED Mini-Mag that states “MADE IN USA,” and

15

an SSD card (presumably retrieved from inside the Mini Mag) that states “Product of

16

SINGAPORE.” (See Royce Decl. ¶ 4, Ex. 3.) Plaintiffs contend, based on this image,

17

that Defendants misrepresent the geographic origin of their products. (See MSJ Resp. at

18

14.) A plaintiff bringing a Lanham Act unfair competition claim based on a “Made in the

19

USA” designation must show the designation is literally false or misleading to the public.

20

See Honeywell Int’l Inc. v. ICM Controls Corp., 45 F. Supp. 3d 969, 987 (D. Minn.

21

2014).

22

//

ORDER - 16

Case 2:17-cv-00217-JLR Document 93 Filed 04/20/20 Page 17 of 27

1

In support of its summary judgment motion, RED does not appear to dispute the

2

veracity of the image but presents declaration testimony from Mr. Land that “[a]lthough

3

the Mini-Mag does contain some foreign components, RED products are primarily

4

manufactured in California.” (See MSJ at 15 (citing Land Decl. ¶¶ 5, 8).) Therefore, the

5

court concludes that truth or falsity of the “Made in USA” label is ambiguous in that it is

6

unclear as to whether the statement refers to the entire Mini-Mag product or simply the

7

component on which it is printed. Plaintiffs bear the burden to submit evidence that the

8

ambiguous label “actually deceived or has the tendency to deceive a substantial segment

9

of its audience.” Southland Sod Farms, 108 F.3d at 1139. As Plaintiffs provide no such

10

evidence, Plaintiffs have failed to create a genuine dispute of material fact, and

11

Defendants are entitled to summary judgment on Plaintiffs’ Lanham Act claim as it

12

relates to the Mini-Mag’s “MADE IN USA” label.

13

d. Allegedly false marketing of RED’s 480GB SSD media as 512GB SSD
media.

14
RED admits that it markets its 512 gigabyte SSD media as having a capacity of
15
512 gigabytes of storage space. (See MSJ at 15.) Defendants contend that the dichotomy
16
between actual storage capacity and useable storage capacity is “widely known
17
throughout the industry and RED’s marketing is consistent with industry standards and
18
consumer expectations for digital storage media.” See id. Defendants, however, cite to
19
no evidence in support of industry standards or consumer expectations. At most,
20
Defendants submit the result of a Google search for “512gb ssd [sic] actual capacity” that
21
//
22

ORDER - 17

Case 2:17-cv-00217-JLR Document 93 Filed 04/20/20 Page 18 of 27

1

returns primarily results that explain that a 512 gigabyte SSD “will contain between 476

2

and 490 [gigabytes] of useable storage space.” (See id. (citing Rankin Decl. ¶ 10, Ex. 9).)

3

Plaintiffs respond that RED’s “512GB” SSD cards are misleading beyond the

4

actual storage-useable storage distinction, because the cards in fact only contain 447

5

gigabytes of useable storage capacity, and they were in fact simply relabeled 480

6

gigabyte SSD cards obtained from Micron. (See Resp. at 15 (citing Royce Decl. ¶ 35,

7

Ex. 4 (screenshot showing the “Size” and “Size Available” as “447.1 GB”)).)

8

In contrast to the other statements at issue in Plaintiffs’ Lanham Act claims,

9

neither party submits evidence showing the specific statements RED makes when it

10

markets its SSD cards as having a capacity of 512 gigabytes of storage space. (See

11

generally MSJ.; Resp.; Reply.) Without that evidence, the court is unable to determine

12

whether any specific statement is ambiguous or not, and therefore whether Plaintiffs are

13

required to submit evidence of customer confusion. Given this lack of evidence,

14

Defendants have not met their burden to produce evidence negating an element of

15

Plaintiffs’ claim and are not entitled to summary judgment on Plaintiffs’ claim as it

16

pertains to RED’s marketing of the storage capacity of its SSD cards.

17

e. Statements identifying Jinni Tech and the JinniMag as a “scam” and Jinni
Tech as a “criminal,” “hacker” and “pirate.”

18
The statements made referring to the JinniMag as a “scam” and asserting that Jinni
19
Tech was engaging in “criminal behavior” were not made by Mr. Land, but rather by
20
other Reduser.net users. See Forum Posts at JT001350-53. No evidence in the record
21
suggests these users are employed by or affiliated with RED, other than the fact that they
22

ORDER - 18

Case 2:17-cv-00217-JLR Document 93 Filed 04/20/20 Page 19 of 27

1

use RED products. See id. As these statements cannot be attributed to Defendants,

2

Defendants are entitled to summary judgment on Plaintiffs’ Lanham Act claims as they

3

pertain to statements that the JinniMag is a “scam” or that Jinni Tech is a “criminal,”

4

“hacker,” or “pirate.”

5

3. Defamation and Product Disparagement / Trade Libel

6

Jinni Tech’s trade libel claim and Mr. Royce’s defamation claim against

7

Defendants are based on substantially the same allegations that form the basis of

8

Plaintiffs’ Lanham Act claims against defendants; namely, Mr. Land’s allegedly false or

9

misleading statements in internet forums about Jinni Tech and Mr. Royce. (See FAC

10
11

¶¶ 166-73.)
Under Washington law, to avoid summary judgment on a defamation claim, a

12

plaintiff must make a prima facie showing of facts that would raise a genuine issue of

13

material fact as to each of the following elements: (1) falsity, (2) an unprivileged

14

communication, (3) fault, and (4) that the communication proximately caused

15

damages. Mark v. Seattle Times, 635 P.2d 1081, 1089 (Wash. 1981); see also Mohr v.

16

Grant, 108 P.3d 768, 776 (Wash. 2005). A plaintiff must establish each element “by

17

evidence of convincing clarity.” Mark, 635 P.2d at 1089.

18

To establish the first element of defamation, “the plaintiff must show the statement

19

is provably false, either in a false statement or because it leaves a false

20

impression.” Mohr, 108 P.3d at 775. Washington courts do “not require a defamation

21

defendant to prove the literal truth of every claimed defamatory statement.” Id. at

22

775. Rather, “[a] defendant need only show that the statement is substantially true or that

ORDER - 19

Case 2:17-cv-00217-JLR Document 93 Filed 04/20/20 Page 20 of 27

1

the gist of the story, the portion that carries the ‘sting,’ is true.” Id. (quoting Mark, 635

2

P.2d at 1092). “The ‘sting’ of a report is defined as the gist or substance of a report when

3

considered as a whole.” Id. (quoting Herron v. King Broadcasting, 776 P.2d 98, 102

4

(Wash. 1989). “Where a report contains a mixture of true and false statements, a false

5

statement (or statements) affects the ‘sting’ of a report only when ‘significantly greater

6

opprobrium’ results from the report containing the falsehood than would result from the

7

report without the falsehood.” Herron, 776 P.2d at 102.

8
9

The tort of trade libel is “substantively similar to defamation.” Auvil v. CBS 60
Minutes, 67 F.3d 816, 820 (9th Cir. 1995). “To establish a claim of product

10

disparagement, also known as trade libel, a plaintiff must allege that the defendant

11

published a knowingly false statement harmful to the interests of another and intended

12

such publication to harm the plaintiff’s pecuniary interests.” Id. (citing Restatement

13

(Second) of Torts § 623A (Am. Law Inst. 1977)).

14

The court has already determined that Defendants are not entitled to summary

15

judgment on Plaintiffs’ Lanham Act claims with respect to Mr. Land’s statements

16

regarding RED’s expenditures on testing and the storage capacity of RED’s SSD media

17

cards. (See supra § III.C.2.) However, those statements do not reference Mr. Royce or

18

Jinni Tech, and are therefore not actionable as a defamation or trade libel claim.

19

Moreover, the allegedly defamatory statements made referring to the JinniMag as a

20

“scam” and asserting that Jinni Tech was engaging in “criminal behavior” were not made

21

by Mr. Land, but rather by other Reduser.net users for whom no evidence suggests they

22

are employed by or affiliated with RED, other than the fact that they use RED products.

ORDER - 20

Case 2:17-cv-00217-JLR Document 93 Filed 04/20/20 Page 21 of 27

1

See Forum Posts at JT001350-53. Therefore, Jinni Tech has not pointed the court to any

2

of Defendants’ statements about Jinni Tech for which there is a genuine dispute of

3

material fact that can sustain a defamation or trade libel claim. Accordingly, Defendants

4

are entitled to summary judgment on Plaintiffs’ defamation and trade libel claims.

5

4. Tortious Interference

6

Plaintiffs allege that Defendants are liable for tortious interference based on the

7

same statements Defendants made about Plaintiffs discussed above. (See FAC ¶ 138.) In

8

their complaint, Plaintiffs allege that “[c]ustomers who preordered the JinniMag canceled

9

their orders after reading RED’s and Mr. Land’s messages on Facebook and

10

[R]eduser.net. Other interested customers were deterred from placing orders.” (See id.

11

¶ 140.)

12

“To prove tortious interference, the plaintiff must produce evidence sufficient to

13

support all the following findings: (1) the existence of a valid contractual relationship or

14

business expectancy; (2) the defendant’s knowledge of and intentional interference with

15

that relationship or expectancy; (3) a breach or termination of that relationship or

16

expectancy induced or caused by the interference; (4) an improper purpose or the use of

17

improper means by the defendant that caused the interference; and (5) resultant

18

damage.” Tamosaitis v. Bechtel Nat’l, Inc., 327 P.3d 1309, 1313 (Wash. Ct. App. 2014)

19

(quoting Eugster v. City of Spokane, 91 P.3d 117, 123 (Wash. Ct. App. 2004)). Although

20

differences exist, the legal standards for tortious interference with contract and tortious

21

interference with a business expectancy or relationship largely overlap. Compare Wash.

22

ORDER - 21

Case 2:17-cv-00217-JLR Document 93 Filed 04/20/20 Page 22 of 27

1

Pattern Jury Instr. Civ. WPI 352.01 (7th ed. July 2019) with Wash. Pattern Jury Instr.

2

Civ. WPI 352.02 (7th ed. July 2019).

3

Exercising one’s legal interest in good faith is not improper interference. Elcon

4

Const., Inc. v. E. Washington Univ., 273 P.3d 965, 971 (Wash. 2012). However, unlike

5

defamation, a plaintiff need not prove falsity to prevail on a tortious interference claim.

6

Defendants do not discuss Plaintiffs’ tortious interference claim aside from asserting that

7

Defendants are entitled to summary judgment on that claim for the same reason that they

8

are entitled to summary judgment on Plaintiffs’ Lanham Act and defamation claims—

9

namely, that Mr. Land’s alleged statements about Jinni Tech are not false. (See generally

10
11

MSJ.)
However, because falsity is not a required element of tortious interference,

12

Defendants have not carried their burden to 1) produce evidence negating an essential

13

element of the nonmoving party’s case, or 2) show that the nonmoving party lacks

14

evidence of an essential element of its claim or defense, see Nissan Fire & Marine Ins.

15

Co., 210 F.3d at 1106, and are not entitled to summary judgment on Plaintiffs’ tortious

16

interference claim.

17

5. False Light

18

“False light differs from defamation in that it focuses on compensation for mental

19

suffering, rather than reputation.” Corey v. Pierce Cty., 225 P.3d 367, 373 (Wash. Ct.

20

App. 2010). “[L]ike defamation, false light claims require a showing of falsity and

21

knowledge of, or reckless disregard for that falsity.” Id. As discussed above, Plaintiffs

22

do not submit evidence capable of creating a genuine dispute of material fact that

ORDER - 22

Case 2:17-cv-00217-JLR Document 93 Filed 04/20/20 Page 23 of 27

1

Defendants made false statements about Plaintiffs. See supra § III.C.2. Moreover,

2

Plaintiffs submit no evidence of Mr. Royce’s mental suffering. See infra § III.C.6.

3

Therefore, Defendants are entitled to summary judgment on Plaintiffs’ claim for false

4

light.

5

6. IIED and NIED

6

Plaintiffs’ claims for IIED and NIED are brought on behalf of Mr. Royce

7
8
9

individually. (See FAC ¶¶ 158-64.)
a. IIED
The burden of proof on an IIED claim is stringent. See Lyons v. U.S. Bank Nat.

10

Ass’n, 336 P.3d 1142, 1151 (Wash. 2014). To prevail on an IIED claim, “a plaintiff must

11

prove (1) outrageous and extreme conduct by the defendant, (2) the defendant’s

12

intentional or reckless disregard of the probability of causing emotional distress, and (3)

13

actual result to the plaintiff of severe emotional distress.” Steinbock v. Ferry Cty. Pub.

14

Util. Dist. No. 1, 269 P.3d 275, 282 (Wash. Ct. App. 2011).

15

“The first element requires proof that the conduct was ‘so outrageous in character,

16

and so extreme in degree, as to go beyond all possible bounds of decency, and to be

17

regarded as atrocious, and utterly intolerable in a civilized community.’” Lyons, 336

18

P.3d at 1151 (quoting Robel v. Roundup Corp., 59 P.3d 611, 619 (Wash. 2002); Dicomes

19

v. State, 782 P.2d 1002, 1012 (Wash. 1989)). “The question of whether certain conduct

20

is sufficiently outrageous is ordinarily for the jury, but it is initially for the court to

21

determine if reasonable minds could differ on whether the conduct was sufficiently

22

extreme to result in liability.” Id. (quoting Dicomes, 782 P.2d at 1013.) Similarly, “[i]t is

ORDER - 23

Case 2:17-cv-00217-JLR Document 93 Filed 04/20/20 Page 24 of 27

1

for the court to determine whether on the evidence severe emotional distress can be

2

found; it is for the jury to determine whether, on the evidence, it has in fact

3

existed.” Id. (quoting Restatement (Second) of Torts § 46 (Am. Law Inst. 1965)).

4

Plaintiffs point to no “outrageous and extreme conduct” that goes beyond mere

5

insults and reaches the level of “utterly intolerable in a civilized community.” (See

6

generally Resp.); Lyons, 336 P.3d at 1151 (quoting Robel, 59 P.3d at 619). Moreover,

7

Plaintiffs submit no evidence of emotional distress. (See generally id.; Royce Decl.)

8

Therefore, Defendants are entitled to summary judgment on Plaintiffs’ IIED claim.

9
10

b. NIED
Negligent infliction of emotional distress is a narrowly construed tort under which

11

a plaintiff must prove (1) that he or she suffered emotional distress that is within the

12

scope of foreseeable harm of the negligent conduct, (2) the plaintiff reasonably reacted

13

given the circumstances, and (3) objective symptomatology confirms the distress.” Repin

14

v. State, 392 P.3d 1174, 1184 (Wash. Ct. App. 2017) (citing Bylsma, 293 P.3d at

15

1170-71)). “[T]o satisfy the objective symptomology requirement . . . a plaintiff’s

16

emotional distress must be susceptible to medical diagnosis and proved through medical

17

evidence.” Hegel v. McMahon, 960 P.2d 424, 431 (Wash. 1998). The plaintiff must

18

provide “objective evidence regarding the severity of the distress, and the causal link

19

between the observation at the scene and the subsequent emotional reaction.” Id.

20

Mr. Royce fails provides no objective medical evidence regarding the severity of

21

his distress or a causal link between his distress and Defendants’ actions. Accordingly,

22

Defendants are entitled to summary judgment on Mr. Royce’s NIED claim.

ORDER - 24

Case 2:17-cv-00217-JLR Document 93 Filed 04/20/20 Page 25 of 27

1

7. Unfair Competition under the CPA

2

Plaintiffs’ claim under the CPA is based on the same alleged facts that underlie

3

Plaintiffs’ Lanham Act unfair competition claims. (See FAC ¶ 144 (asserting that “the

4

acts described above” violate the CPA).) The elements of a CPA action are “(1) unfair or

5

deceptive act or practice; (2) occurring in trade or commerce; (3) public interest impact;

6

(4) injury to plaintiff in his or her business or property; [and] (5) causation.” Bain v.

7

Metro. Mortg. Grp., Inc., 285 P.3d 34 (Wash. 2012). Courts considering CPA claims

8

must take guidance from “final decisions of the federal courts . . . interpreting the various

9

federal statutes dealing with the same or similar matters.” RCW 19.86.920. The CPA

10

“shall be liberally construed that its beneficial purposes may be served.” RCW

11

19.86.920. Id.

12

“[T]here is no question that false advertising within the scope of the Lanham Act

13

(except perhaps for its interstate commerce requirement) is an unfair or deceptive practice

14

within the scope of the CPA.” CertainTeed Corp. v. Seattle Roof Brokers, No. C 09-563

15

RAJ, 2010 WL 2640083, at *6 (W.D. Wash. June 28, 2010). Accordingly, Defendants

16

are not entitled to summary judgment on Plaintiffs’ CPA claims as they pertain to RED’s

17

expenditures on testing and certifying its media cards or statements about the storage

18

capacity of RED’s products. However, for the reasons stated above, Defendants are

19

entitled to summary judgment on the remainder of Plaintiffs’ CPA claim. See supra

20

§ III.C.2 (discussing Defendants’ entitlement to summary judgment on the same grounds

21

on Plaintiffs’ analogous Lanham Act claim).

22

//

ORDER - 25

Case 2:17-cv-00217-JLR Document 93 Filed 04/20/20 Page 26 of 27

1

8. Privacy Violations under RCW 9.73.060

2

Defendants move for summary judgment on Plaintiffs’ claim under RCW

3

9.73.060. RCW 9.73.060 provides a private right of action for violations of the

4

provisions of RCW Chapter 9.73. See RCW 9.73.060. Defendants contend that

5

Plaintiffs’ sole privacy claim is based on posts by Reduser.net users that revealed Mr.

6

Royce’s personal address and phone number, and that such a claim is not actionable

7

under RCW 9.73.060. (See MSJ at 26; see also FAC ¶¶ 151-152.) Plaintiffs did not

8

respond to Defendants’ arguments on this claim, and Plaintiffs’ response does not even

9

mention the words “privacy,” “address,” or any variation of “telephone number.” (See

10

generally Resp.)

11

By its plain language, RCW 9.73.060 does not provide a cause of action for

12

alleged privacy violations beyond those expressly set forth in RCW Chapter 9.73. See

13

RCW 9.73.060. Those provisions address the interception of communications. See, e.g.,

14

RCW 9.73.030 (addressing “[i]ntercepting, recording, or divulging private

15

communication”); RCW 9.73.040 (providing an exception by court order under certain

16

circumstances); see also State v. Gunwall, 720 P.2d 808, 817 (Wash. 1986) (“We further

17

note that pursuant to RCW 9.73.060, a party may sue for damages because of an unlawful

18

intercept.”).

19

Putting aside that the alleged postings were not made by Defendants, the court

20

finds no evidence in the record that creates a genuine dispute of fact that any posts were

21

the result of an intercepted, recorded, or divulged communication. (See generally Dkt.)

22

//

ORDER - 26

Case 2:17-cv-00217-JLR Document 93 Filed 04/20/20 Page 27 of 27

1

Accordingly, Defendants are entitled to summary judgment on Plaintiffs’ privacy claim

2

under RCW 9.73.060.

3
4
5
6

IV.

CONCLUSION

For the foregoing reasons, the court GRANTS in part and DENIES in part
Defendants’ motion for summary judgment (Dkt. # 79) as follows:
• The court DENIES Defendants’ summary judgment motion with respect to

7

Plaintiffs’ Lanham Act and Washington Consumer Protection Act claims based on

8

statements related to RED’s expenditures on testing and certifying its media cards

9

and the storage capacity of RED’s SSD media cards;

10
11
12
13

• The court DENIES Defendants’ summary judgment motion with respect to
Plaintiffs’ claim for tortious interference; and
• The court GRANTS Defendants’ summary judgment motion in all other respects.
Dated this 20th day of April, 2020.

14

A

15

JAMES L. ROBART
United States District Judge

16
17
18
19
20
21
22

ORDER - 27