Phoenix Trading, Inc. v. Loops LLC

Under Washington State law, the complainant in a defamation claim must show a likelihood of satisfying the elements of defamation: a false statement, publication, fault, and damages.

Loops LLC (“Loops”) designed a toothbrush that could not be changed into a weapon, and bid to provide the toothbrush to the New York City Department of Corrections. Another company, Phoenix Trading, Inc. dba Amercare Products, Inc. (“Phoenix”), won the bid with a toothbrush that had a very similar design to Loops’ product. Loops sent three letters to public officials that alleged Phoenix used Loops’ toothbrush design. In a separate action, Loops sued Phoenix for patent infringement. Phoenix simultaneously filed this defamation suit against Loops in Washington State court. Loops’ motion to strike the complaint under Washington’s anti-SLAPP statute was granted by the district court and Phoenix appealed. The Ninth Circuit held that Phoenix defamation claims failed because they did not meet the critical burden of “showing a likelihood of success on the merits”. The letters Loop wrote about Phoenix were addressed to public officials and discussed matters of public concern, the anti-SLAPP statute that grants immunity from civil liability for statements made to a government agency covered them from litigation. Further, the panel made clear that Phoenix did not adequately show that any of Loops other statements could be used to sustain the elements of a defamation claim. AFFIRMED.