Zango Inc v. PC Tools Pty Ltd, No. 2:2007cv00797 - Document 42 (W.D. Wash. 2007)
Court Description: MOTION to Dismiss by Defendant PC Tools Pty Ltd. (Attachments: # 1 Westlaw# 2 Westlaw# 3 Westlaw# 4 Proposed Order Granting Defendant's Motion to Dismiss)Noting Date 9/7/2007.(Norton, Maren)
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Zango Inc v. PC Tools Pty Ltd Doc. 42 Case 2:07-cv-00797-JCC 1 Document 42 Filed 08/14/2007 Page 1 of 14 THE HONORABLE JOHN C. COUGHENOUR 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 10 11 12 13 ZANGO, INC. , Case No. 07-CV-00797 JCC Plaintiff, PC TOOLS’ MOTION TO DISMISS v. PC TOOLS PTY LTD, NOTE FOR MOTION CALENDAR: September 7, 2007 Defendant. 14 15 This Court previously denied Zango’s motion for temporary restraining order, in part 16 17 because the Court found that Zango was unlikely to prevail on the merits of its claims. See 18 June 5, 2007 Order (“Order”) at 6-8. The Court recently found that personal jurisdiction over PC 19 Tools exists; PC Tools now requests dismissal of Zango’s claims as a matter of law. Zango asserts claims for tortious interference with contract, violation of the Washington 20 21 Consumer Protection Act, trade libel, and unjust enrichment. Each of these claims should be 22 dismissed under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim because 23 even if Zango’s allegations are accepted as true, PC Tools is not liable on Zango’s claims as a 1 24 matter of law. PC Tools’ identification and classification of Zango’s software is: (a) immune 25 1 For purposes of a Rule 12(b)(6) motion, the Court must accept the allegations made in the Complaint as 26 true. PC Tools does not waive its right to contest Zango’s allegations if necessary. PC Tools’ Motion to Dismiss - 1 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900 Dockets.Justia.com Case 2:07-cv-00797-JCC Document 42 Filed 08/14/2007 Page 2 of 14 1 from liability under the Communications Decency Act, see 47 U.S.C. § 230(c)(2); and (b) 2 protected free speech under the First Amendment, including the common interest privilege. 3 4 ZANGO’S ALLEGATIONS AND RELEVANT EARLIER FINDINGS Zango alleges that it makes software providing consumers with free access to a large 5 catalog of online videos, games, music, tools and utilities. Complaint at ¶ 5. Zango says its 6 software displays advertisements to users while they are browsing or searching the Internet 7 online. Complaint at ¶ 6. (These are commonly referred to as “pop-up ads.”) Zango says its 8 software reads keywords from users’ Internet browsing, allegedly to decide what pop-up ads to 9 display to users while they are on the Internet. Complaint at ¶ 6. 10 PC Tools develops and sells various computer protection and security software programs, 11 including an anti-spyware program called Spyware Doctor that protects against privacy and 12 tracking threats. Complaint at ¶ 8. Certain of Zango’s software is listed in Spyware Doctor’s 13 detection database. Complaint at ¶ 13. Spyware Doctor identified certain of Zango’s software as 14 an “infection” engaged in a “malicious action” that represents an “elevated risk.” Complaint at 15 ¶ 12. Spyware Doctor publishes these statements to its users. Complaint at ¶ 27. 16 The TRO proceedings earlier in this case showed that Spyware Doctor detects, and at 17 user request deletes, potentially harmful software. Order at 1-2. Spyware Doctor classifies 18 potentially dangerous or annoying software into various categories ranging from potentially 19 unwanted applications to low, medium, elevated, and high risk software. Order at 2. Spyware 20 Doctor Starter Edition can be downloaded and installed from Google’s website. Court’s Order at 21 2. Users knowingly download Spyware Doctor to avoid potential malware, relying on PC Tools’ 22 expertise in identifying and blocking malware. Order at 7. 23 Earlier this year, Zango settled a formal FTC complaint alleging, among other things: (a) 24 that Zango’s software exploited security vulnerabilities in Web browsers to install adware on 25 users’ computers via “drive-by” downloads; and (b) that millions of consumers received pop-up 26 ads without knowing why, and had their Internet usage monitored without their knowledge. PC Tools’ Motion to Dismiss - 2 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900 Case 2:07-cv-00797-JCC Document 42 Filed 08/14/2007 Page 3 of 14 1 Order at 3. Many companies similarly situated to PC Tools block Zango’s software. Order at 7. 2 Allowing companies like PC Tools to exercise judgment to avoid the well-documented harm of 3 malware is decidedly in the public interest. Order at 7. ARGUMENT 4 Zango asserts claims for tortious interference with contract, violation of the Washington 5 6 Consumer Protection Act, trade libel, and unjust enrichment. Each of these claims should be 7 dismissed because, even accepting Zango’s allegations as true, PC Tools is not liable on Zango’s 8 claims as a matter of law. PC Tools’ detection and classification of Zango’s software is immune 9 from liability under the Communications Decency Act, 47 U.S.C. § 230(c)(2), and is protected 10 free speech under the First Amendment. Zango’s complaint also should be dismissed because, accepting its allegations as true, it 11 12 fails to state a claim upon which relief may be granted. Huynh v. Chase Manhattan Bank, 465 13 F.3d 992, 997 (9th Cir. 2006). The Court may reject allegations that are conclusory, 14 contradictory or that are based on unwarranted deductions of fact or unreasonable inferences. 15 Cholla Ready Mix, Inc. v. Civish, 382 F.3d 969, 973 (9th Cir. 2004). And the Court is not 16 required to accept legal conclusions cast in the form of factual allegations if those conclusions 17 cannot reasonably be drawn from the facts alleged. Id. 18 I. PC TOOLS’ DETECTION AND IDENTIFICATION OF ZANGO’S SOFTWARE IS IMMUNE FROM LIABILITY U NDER THE COMMUNICATIONS DECENCY ACT , 47 U.S.C. § 230(C)(2). 19 The Communications Decency Act (CDA), 47 U.S.C. § 230(c)(2), shields PC Tools from 20 liability for providing an interactive software product that identifies potential malware, notifies 21 computer users of the malware, and enables them to allow or disallow content associated with 22 the malware. CDA Section 230 is entitled “Protection for Private Blocking and Screening of 23 Offensive Material.” PC Tools’ Spyware Doctor is security software directed to that very 24 function: allowing computer users to privately block and screen offensive material. Computer 25 users demand such products to protect themselves against the omnipresent, and mostly 26 PC Tools’ Motion to Dismiss - 3 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900 Case 2:07-cv-00797-JCC Document 42 Filed 08/14/2007 Page 4 of 14 1 surreptitious, software threats circulating on the Internet. Because software threats are ever2 changing, consumers demand an interactive product that enables them to connect to databases 3 over the Internet and receive the latest lists of identified threats. After users install Spyware 4 Doctor, Spyware Doctor accesses and communicates with PC Tools’ servers, which house the 5 detection databases. As frequently as daily and sometimes more frequently, PC Tools loads 6 “signatures” (codes identifying new threats or reclassifying previously known threats) into its 7 detection databases, which signatures are then downloaded from PC Tools’ servers to Spyware 8 Doctor on users’ computers. See Berretta Declaration filed in Support of Zango’s Motion for 9 Temporary Restraining Order at ¶¶ 14-15. 10 In reaction to software threats distributed via the Internet, Congress promulgated the 11 CDA, which states that it is the policy of the United States: 12 to promote the continued development of the Internet and other interactive computer services and other interactive media; 13 14 to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation; 15 16 17 18 19 to encourage the development of technologies which maximize user control over what information is received by individuals, families, and schools who use the Internet and other interactive computer services; and to remove disincentives for the development and utilization of blocking and filtering technologies that empower parents to restrict their children’s access to objectionable or inappropriate online material. 20 21 47 U.S.C. 230(b)(1)-(4). 22 In furtherance of this public policy, subsection (c)(2) provides a safe harbor from civil 23 liability for software providers like PC Tools: 24 No provider or user of an interactive computer service shall be held liable on account of -- 25 26 (A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to PC Tools’ Motion to Dismiss - 4 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900 Case 2:07-cv-00797-JCC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Document 42 Filed 08/14/2007 Page 5 of 14 be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or (B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1). 47 U.S.C. § 230(c)(2). An “interactive computer service” is any “information service, system, or access software provider that provides or enables computer access by multiple users to a computer server.” 47 U.S.C. § 230(f)(2). The term “access software provider,” in turn, is a provider of software or enabling tools that, among other things, “filter, screen, allow, or disallow content.” Id. at § 230 (f)(4)(A). PC Tools is an access software provider because Spyware Doctor is software (or a tool) that enables users to “filter, screen, allow, or disallow content” at their discretion. PC Tools is an interactive computer service because PC Tools “provides or enables computer access by multiple users to a computer server.” 47 U.S.C. § 230(f)(2). After users install Spyware Doctor on their computers, the software provides or enables computer access by each user to PC Tools’ detection databases on computer servers over the Internet, which then downloads the latest updates (“signatures”) to the users’ computers. See Berretta Declaration filed in Support of Zango’s Motion for Temporary Restraining Order at ¶¶ 14-15. PC Tools updates its detection databases regularly (as frequently as daily and sometimes more frequently). See Berretta Declaration filed in Support of Zango’s Motion for Temporary Restraining Order at ¶¶ 14-15. The Spyware Doctor software residing on users’ computers then accesses and connects with the detection databases on PC Tools’ servers and downloads the updates. See Berretta Declaration filed in Support of Zango’s Motion for Temporary Restraining Order at ¶¶ 14-15. Users automatically receive updates, and at any time may actively request information from PC Tools’ servers to update their listing of malware “signatures” from PC Tools’ detection databases. The ability of Spyware Doctor to effectively identify, categorize, and remove malware would be eliminated if 26 PC Tools’ Motion to Dismiss - 5 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900 Case 2:07-cv-00797-JCC Document 42 Filed 08/14/2007 Page 6 of 14 1 Spyware Doctor did not regularly access the detection databases on PC Tools’ computer servers 2 over the Internet to download the latest updates. PC Tools’ identification and classification of software such as Zango’s software falls 3 4 directly within the scope of immunity stated in both 47 U.S.C. § 230(c)(2)(A) and (B). As an 5 interactive computer service, PC Tools in good faith restricts access to or availability of material 6 that PC Tools or its users consider to be obscene, lewd, lascivious, filthy, excessively violent, 7 harassing, or otherwise objectionable. 47 U.S.C. § 230(c)(2)(A). And PC Tools enables or 8 makes available to others the technical means to restrict access to such objectionable material. 9 47 U.S.C. § 230(c)(2)(B). There is no dispute that Zango’s software is, or provides access to, 10 material that is “obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise 11 objectionable.” Zango cannot, and has not, disputed (1) the content or scope of the FTC consent 12 order; or (2) that its software provides access to pornographic websites and content. See Dreiling 13 v. American Exp. Co., 458 F.3d 942, 946 n.2 (9th Cir. 2006) (holding that on a Rule 12(b)(6) 14 motion, court may consider any matter subject to judicial notice). Given the important public policy served by the CDA and the broad language used to 15 16 define its coverage, the Ninth Circuit considers the scope of immunity under § 230(c) to be th 17 “quite robust.” Carafano v. Metrosplash.com, Inc., 339 F.3d 1119, 1123 (9 Cir. 2003). The 18 term “interactive computer service” is not limited to traditional Internet service providers, like th 19 America Online. Batzel v. Smith, 333 F.3d 1018, 1030 and n.15 (9 Cir. 2003) (safe harbor 20 provision is applied to cover a broad range of “cyberspace services” and is not limited to services 21 that provide access to the Internet as a whole). Earlier this year, a court determined that 22 § 230(c)(2) immunizes a provider of anti-malware software. See Pallorium, Inc. v. Jared, No. 2 23 G036124, 2007 WL 80955 (Cal. Ct. App. Jan. 11, 2007). 24 2 Pallorium is unpublished and thus not citable precedent in California tribunals. Given that there are few cases interpreting § 230(c)(2), however, and given its factual similarity to this case, PC Tools respectfully 26 requests that the Court consider Pallorium as instructive or illustrative. A copy is attached hereto. 25 PC Tools’ Motion to Dismiss - 6 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900 Case 2:07-cv-00797-JCC Document 42 Filed 08/14/2007 Page 7 of 14 In sum, PC Tools distributes security software that in good faith allows users to restrict 1 2 access to and availability of objectionable material, such as malicious, harmful, unwanted or 3 unsolicited software programs. These programs may include damaging items such as Trojans, 4 keyloggers, browser hijackers, cookies, and other potentially unwanted or objectionable 3 5 material. Spyware Doctor scans the user’s computer and compares its contents with the lists of 6 signatures interactively downloaded from the databases housed on PC Tools’ servers. Under the 7 plain language of the CDA, PC Tools is immune from the claims asserted by Zango in this case. 8 II. 9 PC TOOLS’ DETECTION AND CLASSIFICATION OF SOFTWARE PROGRAMS, INCLUDING ZANGO ’S, ARE PROTECTED BY THE COMMON INTEREST PRIVILEGE AND THE FIRST AMENDMENT . Zango’s claims challenge PC Tools’ opinions of certain Zango software as potentially 10 11 harmful or risky software, as such communications are made between PC Tools and users of its 12 anti-malware program Spyware Doctor. PC Tools’ opinions regarding Zango’s software is 13 speech protected under the common interest privilege stemming from the First Amendment. 14 Zango’s claims must be dismissed. Under the common interest doctrine, statements are conditionally privileged when the 15 16 speaker and recipient have a common interest in the subject of the communication and need to 17 speak freely about it. See, e.g., Ward v. Painters Local Union No. 300, 41 Wash2d 859, 865-66, 18 252 P.2d 253 (1953) (recognizing common interest privilege); Nichols v. J.J. Newberry Co., 150 th 19 F.2d 15, 17 (9 Cir. 1945) (store’s posting of alleged check forger’s photo was privileged and 20 not libelous); Restatement (First) of Torts, § 596. In this case, PC Tools and its customers have a 21 common interest in communicating about potential malware threats and in protecting the security 22 3 Zango’s adware need not display pornographic pop-ups for it to be considered objectionable under the statute. In Langdon v. Google, Inc., 474 F. Supp.2d 622, 631 (D. Del. 2007), the court held that Google 24 and other defendants were immune under the CDA for blocking website ads. Even though the ads were not obscene, they were, under § 230(c)(2)(A), “otherwise objectionable.” Accordingly, even if Zango’s 25 software did not display pornographic pop-ups (although it certainly does), its adware still can be deemed “otherwise objectionable.” Without dispute, the adware causes “pop-up” ads to appear while a user is 26 surfing the Internet. 23 PC Tools’ Motion to Dismiss - 7 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900 Case 2:07-cv-00797-JCC Document 42 Filed 08/14/2007 Page 8 of 14 1 of their computers. PC Tools’ business is premised on the goal of keeping its customers fully 2 informed. Such communications are privileged and cannot form the basis for legal claims. See, 3 e.g., KinderStart.com, LLC v. Google, Inc., No. C 06-2057 JF, 2007 WL 831806 at *19-21 (N.D. 4 Cal., March 16, 2007) (dismissing libel claims under Rule 12(b)(6) because, inter alia, the 5 common interest privilege immunized Google’s unfavorable ranking of the plaintiff’s website; 6 subscribers to Google’s ranking service were entitled to Google’s opinion on websites). 7 Users of PC Tools’ software are like the Google subscribers in the KinderStart.com case. 8 When users purchase or install Spyware Doctor, they are buying and asking for PC Tools’ 9 opinion on potential threats. Spyware Doctor gives that opinion. Spyware Doctor evaluates 10 software residing on a user’s computer, detects any malware, and quarantines, removes or 11 restores it based on the user’s choice. As statements of opinion, not fact, the statements are 12 privileged and are not tortious, whether the asserted claim be (as Zango asserts): tortious 13 interference, violation of a consumer protection act, trade libel, or unjust enrichment. Such 14 protection has been found in cases involving statements by competitors. See, e.g., Potomac th 15 Valve & Fitting Inc. v. Crawford Fitting Co., 829 F.2d 1280, 1285-1290 (4 Cir. 1987) 16 (statement by plaintiff’s competitor to distributors that plaintiff’s tests misrepresented the quality 17 of the plaintiff’s products was opinion, especially considering the statement’s wording and 18 context). Here, there is even more reason to protect PC Tools’ opinions – PC Tools does not 19 compete with Zango or have any pecuniary interest in the rating it assigns to Zango’s software. 20 Zango may attempt to argue that PC Tools’ conduct is not privileged based on the March 21 28, 2007 email referenced in Zango’s Complaint. The email chain including the March 28, 2007 22 email is attached hereto as Exhibit 1. See In re Stac Electronics Securities Litigation, 89 F.3d 23 1399, 1405 (9th Cir. 1996) (“[D]ocuments whose contents are alleged in a complaint and whose 24 authenticity no party questions, but which are not physically attached to the pleading, may be 25 considered in ruling on a Rule 12(b)(6) motion to dismiss.”) (citation omitted). The very email 26 cited by Zango reveals that upon reaching its conclusion concerning the particular Zango PC Tools’ Motion to Dismiss - 8 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900 Case 2:07-cv-00797-JCC Document 42 Filed 08/14/2007 Page 9 of 14 1 software addressed in the email – www.seekmo.com (“Seekmo”) – PC Tools reclassified 2 Seekmo in PC Tools’ detection database. Zango’s response indicates that it was very thankful 3 and took no issue with this particular decision. Ex. 1 at 49. Plainly, Zango’s claims cannot be 4 based on PC Tools’ treatment of Seekmo. Beyond the Seekmo software, a simple review of the entire chain of emails before the 5 6 statement, after the statement, and within the very email from which Zango isolates and extracts 7 the statement, plainly shows there were many qualifiers to Meem’s statement and that in no way 8 was Meem’s statement a proclamation that all of Zango’s programs were without risk. Meem’s 9 statements in no way abrogated PC Tools’ privilege. The First Amendment’s common interest 10 privilege applies to PC Tools’ opinions concerning Zango’s software, and Zango’s Complaint 11 must be dismissed. 12 III. 13 ZANGO ’S TORTIOUS INTERFERENCE CLAIM MUST BE DISMISSED BECAUSE ZANGO HAS NOT PLED THAT PC TOOLS INTERFERED WITH ZANGO’S CONTRACTUAL RIGHTS OR BUSINESS EXPECTANCY OR THAT PC TOOLS HAD AN I MPROPER M OTIVE. 14 Under Washington law, a claim for tortious interference with contractual rights or 15 business expectancy requires proof of five elements: (1) the existence of a valid contractual 16 relationship or business expectancy; (2) that defendant had knowledge of that relationship; (3) an 17 intentional interference inducing or causing a breach or termination of the relationship or 18 expectancy; (4) that defendant interfered for an improper purpose or used improper means; and 19 (5) resultant damage. Leingang v. Pierce County Med.Bureau, Inc., 131 Wn.2d 133, 157, 930 20 P.2d 288, 300 (1997). Intentional interference means purposeful improper interference. See also 21 Hairston v. Pacific-10 Conference, 893 F.Supp. 1485, 1494 (W.D. Wash. 1994) (“the alleged 22 interference must be intentional, not merely an incidental, indirect result of another act”). And 23 the interference must be improper – meaning interference with an improper objective or the use 24 of wrongful means. Id. 25 Assuming, arguendo, that Zango has properly pled that it had a contractual relationship 26 or business expectancy with its customers and that PC Tools had knowledge of this relationship, PC Tools’ Motion to Dismiss - 9 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900 Case 2:07-cv-00797-JCC Document 42 Filed 08/14/2007 Page 10 of 14 1 Zango has not alleged – nor can it – that PC Tools intentionally interfered with Zango’s 2 contractual or prospective relationships and that such alleged interference by PC Tools was 3 improper. As alleged in the Complaint, PC Tools provides computer protection and security 4 software that is designed to ensure that its users’ computers are secure from malware. PC Tools 5 is neither taking specific aim at Zango’s software, nor attempting to target Zango’s operations. It 6 has no reason to. The companies are not competitors. Instead, PC Tools makes a classification 7 decision with respect to Zango’s software that is just one out of tens of thousands of 8 classification decisions made by PC Tools with respect to software programs it has analyzed and 9 continues to analyze. Restatement (Second) of Torts § 767 cmt c (indicating that courts are 10 concerned with unlawful or fraudulent behavior that targets the plaintiff and only the plaintiff). 11 Because it is merely incidental that PC Tools’ classification decisions impact Zango, Zango 12 cannot establish that PC Tools is intentionally interfering with Zango’s contractual relationships 13 or business expectancy. Further, PC Tools’ classification decisions with respect to Zango’s software are not in 14 15 any way improper. Instead, PC Tools has made its decision in response to overwhelming 16 evidence that Zango’s software has attributes of malware. Given Zango’s long history of abuses 17 and the elaborate steps PC Tools has taken to analyze and evaluate Zango’s current software, it is 18 beyond cavil that PC Tools’ objective is not improper. Zango has not alleged facts supporting these essential elements of its tortious interference 19 20 claim because it cannot. The claim must be dismissed. 21 IV. ZANGO ’S CONSUMER PROTECTION ACT CLAIM MUST BE DISMISSED . 22 Under the Washington Consumer Protection Act, a plaintiff must prove five elements: 23 (1) unfair or deceptive act or practice; (2) occurring in trade or commerce; (3) public interest 24 impact; (4) injury to plaintiff in his or her business or property; (5) causation. Hangman Ridge 25 Training Stables v. Safeco Title Ins. Co., 105 Wn.2d 778, 780, 719 P.2d 531 (1986). As to the 26 first element, the Act does not define the term “deceptive,” but implicit in that term is “the PC Tools’ Motion to Dismiss - 10 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900 Case 2:07-cv-00797-JCC Document 42 Filed 08/14/2007 Page 11 of 14 1 understanding that the actor misrepresented something of material importance.” Hiner v. 2 Bridgestone/Firestone, Inc., 91 Wn. App. 722, 730, 959 P.2d 1158 (1998) (emphasis removed), 3 rev'd on other grounds, 138 Wn.2d 248, 978 P.2d 505 (1999). A plaintiff must show at a 4 minimum that the act in question had the capacity to deceive a substantial portion of the public. 5 See Hangman Ridge Training Stables., 105 Wn.2d at 785-86, 719 P.2d at 531. Zango has not pled – nor can it – that PC Tools’ classification of Zango’s software is 6 7 deceptive or that it causes an adverse public impact. On the contrary, public policy favors 8 dismissal of the Consumer Protection Act claim. Because typical users have great difficulty 9 removing malware from their computers, anti-malware software like PC Tools’ Spyware Doctor 10 provides crucial assistance to keeping users’ computers operational and reliable. Anti-spyware 11 software therefore serves an important public function. Just as public policy is served by 12 deferring to the editorial opinions, recommendations and ratings issued by publications like 13 Consumer Reports, public policy is served in this case by allowing PC Tools to continue its 14 practice of independently analyzing and rating software programs like those distributed by 15 Zango. The public is not being deceived by PC Tools; to the contrary, PC Tools gives the public 16 solid opinions based on extensive research conducted by PC Tools. The users ultimately may 17 choose to accept or reject PC Tools’ opinions. Zango’s WCPA claim fails on its face. 18 V. ZANGO H AS NOT PROPERLY PLED F ACTS SUPPORTING ITS TRADE LIBEL CLAIM. 19 To establish a claim of product disparagement, also known as trade libel, a plaintiff must 20 establish that the defendant (1) published a knowingly false statement harmful to the interests of 21 another; and (2) intended the publication to harm the plaintiff’s pecuniary interests. Auvil v. CBS 22 60 Minutes, 67 F.3d 816, 820 (9th Cir. 1995). 23 As an initial matter, no Washington court ever has recognized the claim of trade libel. 24 Instead, the Ninth Circuit merely has assumed that the Washington Supreme Court would 25 recognize the claim based on a citation in a Washington Court of Appeals decision to Section 26 623A of the Restatement (Second) of Torts. See Auvil, 67 F.3d at 820. PC Tools’ Motion to Dismiss - 11 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900 Case 2:07-cv-00797-JCC Document 42 Filed 08/14/2007 Page 12 of 14 In any event, Zango has not properly pled its trade libel claim. For example, Zango has 1 2 not pled that PC Tools’ classification of Zango’s software is a statement of fact, not non3 actionable opinion. Similarly, Zango has not alleged that PC Tools made its classification 4 decision with the intent to harm Zango’s pecuniary interest. Nor can it. PC Tools’ revenue does 5 not depend on how it rates Zango’s software, and PC Tools and Zango do not compete in the 6 same market. The trade libel claim must be dismissed. 7 VI. ZANGO H AS NOT PROPERLY PLED F ACTS SUPPORTING ITS UNJUST ENRICHMENT CLAIM. 8 To establish a claim for unjust enrichment, a plaintiff must establish must plead and 9 prove: (1) a benefit conferred upon the defendant by the plaintiff; (2) an appreciation or 10 knowledge by the defendant of the benefit; and (3) the acceptance or retention by the defendant 11 of the benefit under such circumstances as to make it inequitable for the defendant to retain the 12 benefit. Orser v. Select Portfolio Servicing, Inc., 2005 WL 3478126, *4 (W.D. Wash. 2005); 13 Bailie Commc'ns, Ltd. v. Trend Bus. Sys., Inc., 61 Wn. App. 151, 810 P.2d 12, 18 (1991). 14 Here, Zango has not alleged – nor can it – that it conferred any benefit on PC Tools or 15 that PC Tools has appreciated or has knowledge of any such benefit. Zango has conferred no 16 benefit on PC Tools. Indeed, the version of Spyware Doctor that Zango puts at issue is a free 17 version downloaded as part of the Google Pack. On the contrary, Zango’s unwarranted demands 18 and pursuit of this lawsuit have been to the great detriment of PC Tools in terms of legal fees 19 incurred and time lost investigating and responding to Zango’s allegations. The unjust 20 enrichment claim must be dismissed. 21 WHEREFORE, PC Tools requests that the Court grant this Motion to Dismiss, dismiss 22 PC Tools from this case, award PC Tools its fees and costs, and grant PC Tools all other relief to 23 which it may be entitled. 24 25 26 PC Tools’ Motion to Dismiss - 12 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900 Case 2:07-cv-00797-JCC 1 Document 42 Filed 08/14/2007 Page 13 of 14 Dated August 14, 2007. 2 /s/ Maren R. Norton J. Ronald Sim, WSBA No. 4888 Maren R. Norton, WSBA No. 35435 STOEL RIVES LLP 600 University Street, Suite 3600 Seattle, WA 98101-3197 Telephone: 206-624-0900 Fax: 206-386-7500 jrsim@stoel.com mnorton@stoel.com 3 4 5 6 7 8 12 Tarek F.M. Saad, Colo.Atty. Reg. #26242 Conor F. Farley, Colo. Atty. Reg. #31622 HOLLAND & HART LLP 555 Seventeenth Street, Suite 3200 Denver, Colorado 80202 Telephone: 303-295-8000 Fax: 303-295-8261 tfsaad@hollandhart.com cfarley@hollandhart.com 13 ATTORNEYS FOR DEFENDANT PC T OOLS 9 10 11 14 15 16 17 18 19 20 21 22 23 24 25 26 PC Tools’ Motion to Dismiss - 13 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900 Case 2:07-cv-00797-JCC Document 42 Filed 08/14/2007 Page 14 of 14 1 CERTIFICATE OF SERVICE 2 I hereby certify that on August 14, 2007, I caused to be served a true copy of the foregoing document on the following via U.S. Mail: 3 • Michael Rosenberger mrosenberger@gordontilden.com,chudson@gordontilden.com, jbukowski@gordontilden.com • Jeffrey I Tilden jtilden@gordontilden.com,eevans@gordontilden.com, jbukowski@gordontilden.com • Conor F Farley cfarley@hollandhart.com • Tarek F M Saad tfsaad@hollandhart.com 4 5 6 7 8 9 10 DATED: August 14, 2007 at Seattle, Washington. 11 12 17 /s/ Maren R. Norton J. Ronald Sim, WSBA No. 4888 Maren R. Norton, WSBA No. 35435 STOEL RIVES LLP 600 University Street, Suite 3600 Seattle, WA 98101-3197 Telephone: 206-624-0900 Fax: 206-386-7500 jrsim@stoel.com mnorton@stoel.com 18 ATTORNEYS FOR DEFENDANT PC T OOLS 13 14 15 16 19 20 21 22 23 24 25 26 PC Tools’ Motion to Dismiss - 14 Case No. 07-CV-00797 JCC Seattle-3381149.1 0074975-00001 STOEL RIVES LLP ATTORNEYS 600 University Street, Suite 3600, Seattle, WA 98101 Telephone (206) 624-0900
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