IP Law Daily, PATENT—E.D. Mich.: Auto parts seller stated tortious interference and abuse of process claims against General Motors in infringement suit, (Oct 2, 2024)
By Kevin M. Finson
However, the seller’s claim for wrongful seizure was dismissed because General Motors was the applicant for the seizure.
A seller of third-party aftermarket automobile parts accused of infringing General Motors’ design patents stated counterclaims for tortious interference and abuse of process against General Motors, the U.S. District Court in Detroit has held. A claim for wrongful seizure of allegedly counterfeit goods under the Lanham Act failed because it was not alleged that General Motors was the applicant for the seizure (GM Global Technology Operations, LLC v. Quality Collision Parts, Inc., No. 2:23-cv-13026-DPH-CI (E.D. Mich. Oct. 1, 2024)).
GM Global Technology Operations, LLC, a subsidiary of General Motors Company, Inc. (collectively, GM), an automobile manufacturer, was the owner of ten design patents related to automotive parts. GM Global brought suit against Quality Collision Parts, Inc. (Quality), a seller of third-party aftermarket parts, alleging infringement of each of the ten design patents. Quality counterclaimed against GM Global Technology Operations, LLC and several other GM entities (collectively, GM) alleging tortious interference with business expectancy, wrongful seizure under the Lanham Act, and abuse of process centered around claims that GM had made false statements to the Department of Homeland Security to induce the Department to raid Quality’s warehouse and confiscate or destroy non-infringing products. GM moved to dismiss the counterclaims.
Pleading standard. First, GM argued that Quality did not meet the heightened Rule 9 pleading standard for fraud claims. Quality argued that while the claims involved false statements made to the Department of Homeland Security, a non-party, it was not alleged that a false statement was made to Quality to support a fraud or misrepresentation claim. The court held that none of the counterclaims sounded in fraud so the Rule 9 standard was not applicable.
Tortious interference. The court found that Quality had plausibly alleged the existence of a business relationship or expectancy with its customers and that GM had allegedly given false information to the Department of Homeland Security causing violent interference with those relationships, and that Quality had suffered actual damages. The court denied the motion to dismiss this counterclaim.
Wrongful seizure. The court found that the Lanham Act only allowed liability for wrongful seizure against the applicant for the seizure, and there was no allegation that GM had made an application for seizure under the Lanham Act. Accordingly, this counterclaim was dismissed.
Abuse of process. GM argued that Quality failed to allege a use of process beyond the issuance of the search warrant applied for by the Department of Homeland Security. The court found that Quality had sufficiently pleaded that GM was able to investigate Quality’s business records and inventory in a way that went beyond the initiation of process. The court denied the motion to dismiss this counterclaim.
The court dismissed the wrongful seizure counterclaim and allowed the other two to remain in the case.
The Case is No. 2:23-cv-13026-DPH-CI.
Judge: Hood, D.
Attorneys: Dennis Abdelnour (Honigman LLP) for GM Global Technology Operations, LLC and General Motors Company, Inc. Andrew M. Grove (Howard and Howard Attorneys PLLC) for Quality Collision Parts, Inc.
Companies: GM Global Technology Operations, LLC; General Motors Company, Inc.; Quality Collision Parts, Inc.
Cases: Patent MichiganNews