UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
TECH 7 SYSTEMS, INC.,
Plaintiff,
v. Civil Action No. 08-0436 (JDB)
VACATION ACQUISITION, LLC, d/b/a
VACATION EXPRESS,
Defendant.
MEMORANDUM OPINION
Plaintiff Tech 7 Systems, Inc. ("Tech 7" or "plaintiff") brings this action against
defendant Vacation Acquisition, LLC, d/b/a Vacation Express ("Vacation Acquisition" or
"defendant") asserting claims for injunctive relief, breach of contract, and copyright
infringement1 that stem from defendant's alleged unauthorized use of Tech 7 software. Currently
before the Court is Vacation Acquisition's motion for summary judgment on all claims based on
the affirmative defenses of statute of limitations, laches, waiver, and estoppel. Tech 7 opposes
the motion and asserts that based on the record, Vacation Acquisition has failed to establish the
elements of its affirmative defenses and, in any event, there are genuine issues of material fact
that preclude summary judgment. For the reasons set forth below, the Court will deny the
motion.
1
The complaint labels Count IV as a claim for "Misappropriation of Intellectual
Property." Compl. at 8. However, it is clear from the complaint and plaintiff's opposition to the
motion for summary judgment that Count IV is a claim for copyright infringement arising under
federal copyright law, and the Court will therefore refer to it as such.
BACKGROUND
Tech 7 provides software and related services to the wholesale travel industry. See Tech
7 Systems, Inc. Home Page, http://www.tech7.com. The roots of this dispute trace back to a
software licensing agreement ("SLA") entered into by Tech 7 and Vacation Express, Inc. in
1990. See Compl., Ex. 1. Under the SLA, Vacation Express, Inc. obtained "[a] perpetual, single
system License [for Tech 7's SpeedRes software], revocable on the terms herein stated." Id. at 1.
The SLA prescribed certain limitations on the scope of Vacation Express, Inc.'s rights. It
provided that "[Vacation Express, Inc.] shall have no ownership interest [in the software, its
revisions, modifications, and/or additions provided by Tech 7] other than the aforesaid License
to use the software and equipment." Id. The SLA also specified that Vacation Express, Inc.
"shall not permit any modification to equipment or software furnished by [Tech 7] without the
prior written consent of [Tech 7]." Id. Similarly, the SLA "may not be assigned or transferred
without the express written consent of [Tech 7]." Id. at 2. Beyond the foregoing, the SLA also
addressed, among other things, the protection of Tech 7's copyright interests in the SpeedRes
software, Tech 7's right of access to Vacation Express, Inc.'s system, and hiring restrictions
placed on Vacation Express, Inc. regarding former Tech 7 employees. Id. at 1.
Following the signing of the SLA, Tech 7 provided support services for Vacation
Express, Inc.'s system, which included maintenance and customized modifications. Decl. of
Gantt Cookson ("Cookson Decl.") ¶ 4. Ongoing support services were optional under the SLA.
See Compl., Ex. 1 at 3. In the mid-1990s, the ownership of Vacation Express, Inc. changed and
the entity was renamed Vacation Express, LLC. See Gantt Cookson Dep. ("Cookson Dep.") at
21:12-19. During this time period, Vacation Express, LLC grew dissatisfied with the
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maintenance and support services provided by Tech 7. See Cookson Decl. ¶¶ 5-7.
Consequently, in or about 1997, Vacation Express, LLC began using another company for such
services, see id. ¶ 8, although its use of the Tech 7 SpeedRes software continued.
In 1998, Vacation Express, LLC was acquired by MyTravel, PLC, a United Kingdom-
based company, and became part of a MyTravel subsidiary, North American Leisure Group
("NALG"). Compl. ¶ 4; Def.'s Stmt. of Material Facts as to Which There Is No Genuine Issue
("Def.'s SOMF") ¶ 12. Following the purchase, NALG continued to use both the Vacation
Express name in the marketplace, and Tech 7's SpeedRes system. Compl. ¶ 16. For a time,
NALG considered contracting with Tech 7 for maintenance and support services for several of
its travel companies, including Vacation Express. Id. ¶ 17; Cookson Decl. ¶ 11. Ultimately,
however, NALG selected another vendor. Id. At the time of that decision in 2001, Tech 7
claims that NALG informed it that NALG "would be discontinuing its use of the Tech 7 system."
Compl. ¶ 17.
Two years thereafter, in 2003, NALG sold the assets of Vacation Express to FlightServ,
Inc. Id. ¶ 18. Once again, the new owner continued to use the Vacation Express brand name and
the Tech 7 software system. Id. Most recently, in late 2004, the assets of Vacation Express were
sold by FS Tours, Inc., a wholly-owned subsidiary of FlightServ, Inc., to defendant Vacation
Acquisition, LLC. See Pl.'s Opp'n to Mot. for Summ. J. ("Pl.'s Opp'n"), Ex. 3. Following in the
footsteps of its predecessors, Vacation Acquisition chose to operate the business under the
Vacation Express name2 and to continue to use the Tech 7 software. Compl. ¶ 19.
2
In its opposition, plaintiff asserts that throughout the briefing on its motion, defendant
"routinely confuses Vacation Acquisition with another legal entity Vacation Express, Inc." Pl.'s
Opp'n at 1 n.1. Because Vacation Express, Inc. was a signatory to the SLA, this creates the
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According to Tech 7, it was not until December 2007 that it first learned of Vacation
Acquisition's continued use of its software in operating Vacation Express -- a use that, in Tech
7's belief, had been discontinued by NALG in 2001. Id.; Decl. of Richard M. Dickieson
("Dickieson Decl.") ¶¶ 5(b)-(c); Compl., Ex. 2. In January 2008, Tech 7 sent a letter to Vacation
Acquisition demanding that the company: cease use of Tech 7 software immediately, allow
Tech 7 immediate access to the software system, and pay damages for its alleged illegal use. See
Compl., Ex. 2 at 1. This action was commenced on March 13, 2008, shortly after Vacation
Acquisition informed Tech 7 that it would not accede to its demands.
STANDARD OF REVIEW
Summary judgment is appropriate under Rule 56 when the pleadings and the evidence
demonstrate that "there is no genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The party seeking summary
judgment bears the initial responsibility of demonstrating the absence of a genuine dispute of
material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party may
successfully support its motion by "informing the district court of the basis for its motion, and
identifying those portions of 'the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence
of a genuine issue of material fact." Id. (quoting Fed. R. Civ. P. 56(c)).
impression, plaintiff contends, that Vacation Acquisition -- operating under the brand name
"Vacation Express" -- "has succeeded to any rights that may have been contracted to Vacation
Express, Inc. 18 years ago." Id. For purposes of resolving this motion, the Court need not
grapple with the question whether Vacation Acquisition has succeeded to the contract rights of
Vacation Express, Inc., but nonetheless, and to avoid potential confusion, the Court has adopted
plaintiff's convention of referring to the entities by their full, legal name or an abbreviated
version thereof.
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In determining whether there exists a genuine issue of material fact sufficient to preclude
summary judgment, the court must regard the non-movant's statements as true and accept all
evidence and make all inferences in the non-movant's favor. See Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255 (1986). A non-moving party, however, must establish more than the
"mere existence of a scintilla of evidence" in support of its position. Id. at 252. By pointing to
the absence of evidence proffered by the non-moving party, a moving party may succeed on
summary judgment. Celotex, 477 U.S. at 322. "If the evidence is merely colorable, or is not
significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50
(internal citations omitted). Summary judgment is appropriate if the non-movant fails to offer
"evidence on which the jury could reasonably find for the [non-movant]." Id. at 252.
Where summary judgment is sought based on an affirmative defense, as it is here, the
defendant bears the burden of proof of establishing facts supporting the affirmative defense. See
Hammond v. Chao, 383 F. Supp. 2d 47, 55 (D.D.C. 2005); see also Gull Airborne Instruments,
Inc. v. Weinberger, 694 F.2d 838, 843 (D.C. Cir. 1982) (stating that defendant bears the burden
of proof to establish affirmative defense of laches). Moreover, "on a summary judgment motion,
'[f]acts not conclusively demonstrated, but essential to the movant's claim, are not established
merely by his opponent's silence; rather, the movant must shoulder the burden of showing
affirmatively the absence of any meaningful factual issue.'" Niagara Mohawk Power Corp. v.
U.S. Dept. of Energy, 169 F.3d 16, 18 (D.C. Cir. 1999) (quoting Nat'l Ass'n of Gov't Employees
v. Campbell, 593 F.2d 1023, 1027 (D.C. Cir. 1978)).
DISCUSSION
Because Vacation Acquisition's motion for summary judgment is based exclusively on
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affirmative defenses, it bears the burden of establishing facts supporting those defenses. See
Hammond, 383 F. Supp. 2d at 55. This is a burden -- based on the record evidence currently
before the Court -- that Vacation Acquisition cannot meet. Its motion adopts the position that all
facts alleged by Tech 7 that could possibly give rise to a valid claim occurred prior to 2001. See
Stmt. of P. & A. in Supp. of Def.'s Mot. for Summ. J. ("Def.'s Mot.") at 9, 14. Therefore,
Vacation Acquisition argues, Tech 7's claims are time-barred either by the applicable statute of
limitations or by laches, or are barred by waiver or estoppel. See id. at 2-3. In response, Tech 7
maintains that Vacation Acquisition is relying upon the continued use of the Vacation Express
brand name in an attempt to undercut what are valid claims against Vacation Acquisition, LLC --
an entity that only acquired the assets of Vacation Express at the very end of 2004. See Pl.'s
Opp'n at 1 n.1 & 4-6. Cast in this light, Tech 7 argues that Vacation Acquisition's affirmative
defenses are not persuasive because they are based on the faulty premise that there has been
unreasonable delay in prosecuting these claims -- a premise predicated entirely on the mistaken
notion that conduct undertaken by defendant's predecessors in interest is at the heart of these
claims. Id. at 7-15. Moreover, because the two sides have taken such polar views of the relevant
facts -- and all of defendant's affirmative defenses are fact-intensive -- Tech 7 argues that there
are genuine issues of material fact that preclude summary judgment. See id. at 1-3.
In light of the record evidence before the Court at this time, and drawing all inferences in
Tech 7's favor as the non-movant, as it must, the Court concludes that Vacation Acquisition has
failed to establish the elements of its affirmative defenses and, in any event, that there are
genuine issues of material fact sufficient to preclude summary judgment. Accordingly, the Court
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will deny defendant's motion.3
I. Statute of Limitations
A. Count III - Breach of Contract
Under the SLA, Tech's 7's breach of contract claim is governed by Oregon law. Compl.,
Ex. 1 at 5, ¶ 8. The Oregon statute of limitations for a breach of contract claim is six years. Or.
Rev. Stat. § 12.080 (2008). A contract action accrues, and hence the statute of limitations begins
to run, when the contract is breached. Vega v. Farmers Ins. Co., 895 P.2d 337, 340 (Or. Ct. App.
1995), aff'd, 918 P.2d 95 (Or. 1996). Further, "[i]f independent injuries were caused by
independent acts, each act is a separate breach and the statute of limitations begins to run
separately as to each alleged breach." Ass'n of Unit Owners of Inn at Otter Crest v. Far West
Fed. Bank, 852 P.2d 218, 224 (Or. Ct. App. 1993).
Here, Vacation Acquisition asserts that "Tech 7's claim for breach of contract is based
upon alleged breaches that Tech 7 was aware of from 1997 to 2000," and therefore is time-
barred. See Def.'s Mot. at 14. In support of its argument, Vacation Acquisition relies primarily
upon correspondence from the late 1990s between Tech 7 and Vacation Express, when it was
owned by NALG. See Def.'s Mot. at 14-16; Decl. of Gary L. Cutler ("Cutler Decl."), Exs. 1-10.
Vacation Acquisition contends that this documentary evidence establishes conclusively that Tech
3
Vacation Acquisition has moved for summary judgment on all four counts of the
Complaint, including Counts I and II, which are styled as claims for injunctive relief. See
Compl. ¶¶ 24-31. Vacation Acquisition concedes that these claims "are derivative of the breach
of contract claim." Def.'s Mot. at 9. Tech 7 essentially agrees and adds that they are also
contingent upon resolution of the copyright infringement claim. See Def.'s Opp'n at 17-18.
Because the Court concludes that Vacation Acquisition is not entitled to summary judgment on
the underlying claims of breach of contract or copyright infringement, it follows that summary
judgment is also inappropriate on the derivative claims for injunctive relief.
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7 was aware of each breach alleged in the Complaint, see Compl. ¶¶ 32-35, and failed to take
action within the limitations period. See Def.'s Mot. at 14-16; Def.'s Reply to Pl.'s Opp'n to Mot.
for Summ. J. ("Def.'s Reply") at 22.
If this action, filed in March 2008, had been brought against NALG based on events that
occurred between 1998 and 2001, while NALG still owned Vacation Express, then it would be
the open-and-shut untimely action that Vacation Acquisition envisions. That is not, however, the
case. NALG is, quite obviously, not the party defendant here, and Tech 7 disputes the
contention that all alleged breaches occurred prior to 2001 by acknowledging that its claim
against Vacation Acquisition could only date back to late 2004 when Vacation Acquisition
purchased the assets of Vacation Express from FS Tours, Inc. See Pl.'s Opp'n at 16.4 During
that more recent time frame, Tech 7 alleges that, at the very least, breaches occurred due to an
unauthorized transfer of the Tech 7 software and unauthorized modifications made to it. See
Compl. ¶¶ 19-20; Dickieson Decl. ¶¶ 5(c)-(e).
Vacation Acquisition bears the burden of proof to establish facts supporting its statute of
limitations defense. See Hammond, 383 F. Supp. at 55. In this instance, that requires Vacation
Acquisition to demonstrate that there are no genuine issues of material fact with respect to the
date(s) upon which Tech 7's claim(s) for breach of contract accrued (i.e., that the claims accrued
outside the limitations period). But notwithstanding Vacation Acquisition's effort to focus on
events that occurred prior to 2001, Tech 7 has put more recent conduct at issue here -- conduct
that Vacation Acquisition has largely failed to address. Even if some or all of Tech 7's potential
4
Tech 7 also acknowledges the threshold question whether there is even a contractual
relationship between the parties, but assumes such a relationship exists for purposes of its statute
of limitations argument. See Pl.'s Opp'n at 15-16 & n.10.
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claims against NALG, or any other past owner of Vacation Express, are now time-barred, it does
not follow that the claims against Vacation Acquisition based on subsequent events occurring
within the six-year limitations period would also be time-barred. See Far West Fed. Bank, 852
P.2d at 224 ("If independent injuries were caused by independent acts, each act is a separate
breach and the statute of limitations begins to run separately as to each alleged breach."). And it
is on those post-2004 claims that Tech 7 has now focused, and for which it may be entitled to
relief. The Court concludes that Tech 7's claims against Vacation Acquisition based on events
after it acquired the assets of Vacation Express are timely and may proceed.5 Consequently, the
Court will deny summary judgment in favor of Vacation Acquisition on Count III based on its
statute of limitations defense.
B. Count IV - Copyright Infringement
Vacation Acquisition's argument on Count IV mirrors its argument on the breach of
contract claim, and fails for similar reasons. The federal Copyright Act governs Tech 7's claim
for copyright infringement. See 17 U.S.C. § 501. Under the Copyright Act, a claim for
infringement must be "commenced within three years after the claim accrued." 17 U.S.C. §
507(b). A cause of action for copyright infringement accrues when one has knowledge of the
infringement or is chargeable with such knowledge. Bridgeport Music, Inc. v. Rhyme Syndicate
5
Tech 7 has not argued that the defendant in this action -- Vacation Acquisition -- also
acquired pre-existing liabilities of Vacation Express, Inc. (or others) to Tech 7 and that the
breach of contract claims did not accrue until after March 2002, and therefore are within the six-
year statute of limitations. Of course, had such assertions been made by Tech 7, there would
likely be genuine issues of material fact regarding the accrual of such breach of contract claims,
as well as legal and factual issues regarding Vacation Acquisition's assumption of pre-existing
liabilities, all of which would require rejection of Vacation Acquisition's statute of limitations
defense at this time.
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Music, 376 F.3d 615, 621 (6th Cir. 2004); Roley v. New World Pictures, Ltd., 19 F.3d 479, 481
(9th Cir. 1994). Moreover, "[b]ecause each act of infringement is a distinct harm, the statute of
limitations bars infringement claims that accrued more than three years before suit was filed, but
does not preclude infringement claims that accrued within the statutory period." Bridgeport
Music, 376 F.3d at 621.
Vacation Acquisition again asserts that Tech 7's copyright infringement claim is time-
barred because it "is based on facts that Tech 7 has known since 1997." Def.'s Mot. at 9. In
response, Tech 7 contends that following NALG's representation, in 2001, that it was
discontinuing use of the Tech 7 software, Tech 7 had no knowledge that NALG -- or any entity
that subsequently acquired the assets of Vacation Express, including Vacation Acquisition -- was
using its software until late 2007. See Pl.'s Opp'n at 17; Dickieson Decl. ¶¶ 5(b)-(c), (h); Compl.,
Ex. 2. In its reply, Vacation Acquisition asserts that the deposition testimony of Tech 7's
president Richard Dickieson establishes just the opposite -- that Tech 7 knew of defendant's
alleged infringement for years and took no action. See Def.'s Reply at 18-19. Although the
parties' dispute regarding the date upon which Tech 7's copyright claims accrued and the extent
of Tech 7's knowledge of Vacation Acquisition's continued use of the Tech 7 software appears to
be genuine, it is also, for the most part, immaterial. Because Tech 7 has not alleged that
equitable tolling should apply here, the three-year statute of limitations defines the scope of Tech
7's infringement claims. Hence, any claims accruing, or based on events occurring, after March
2005 are not barred under the applicable three-year limitations period. Tech 7 has alleged facts
that would appear to support such claims, and based on the current record Vacation Acquisition
cannot meet its burden of disproving these allegations. See Hammond, 383 F. Supp. 2d at 55.
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Accordingly, the Court concludes that Vacation Acquisition is not entitled to summary judgment
on Count IV based on its statute of limitations defense.
II. Equitable Affirmative Defenses -- Laches, Waiver, Estoppel
Vacation Acquisition also argues that it is entitled to summary judgment based on the
equitable affirmative defenses of laches, waiver, and estoppel. Here again, Vacation Acquisition
bears the burden of proof of establishing the facts supporting its affirmative defenses. See
Hammond, 383 F. Supp. at 55. For many of the same reasons already set forth above, the Court
concludes that Vacation Acquisition has failed to carry its burden with respect to each of these
affirmative defenses because genuine issues of material fact exist sufficient to preclude summary
judgment.6
A. Laches
Vacation Acquisition first argues that the doctrine of laches applies to bar all of Tech 7's
claims. To establish a valid laches defense under Oregon law, a defendant must demonstrate
that: "(1) plaintiff[ ] delayed asserting [its] claim[ ] for an unreasonable length of time, (2) with
full knowledge of all relevant facts (and laches does not start to run until such knowledge is
shown to exist), (3) resulting in such substantial prejudice to defendant that it would be
inequitable for the court to grant relief." Mattson v. Commercial Credit Bus. Loans, Inc., 723
P.2d 996, 1003 (Or. 1986); see also Patterson v. Amundson, 119 P.3d 264, 272 (Or. Ct. App.
6
In its opposition, Tech 7 raises the equitable doctrine of unclean hands, and argues that
fact issues underlying the application of the doctrine preclude summary judgment on Vacation
Acquisition's equitable affirmative defenses. Pl.'s Opp'n at 13. Because the Court concludes that
there are independent grounds upon which to deny summary judgment with respect to each of
Vacation Acquisition's equitable affirmative defenses, it does not reach the issue of unclean
hands.
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2005). With respect to copyright actions, "circuits are split as to whether laches is available as a
defense under the Copyright Act." Broadcast Music, Inc. v. Roger Miller Music, Inc. 396 F.3d
762, 783 n.13 (6th Cir. 2005).7 Even those courts that do allow for the application of laches in
copyright actions recognize that it will apply only in "unusual circumstances." Chirco v.
Crosswinds Communities, Inc., 474 F.3d 227, 234 (6th Cir. 2007). Although it appears that the
D.C. Circuit has never confronted the specific question whether the doctrine of laches may bar a
claim under the Copyright Act,8 the defense of laches generally "'requires proof of (1) lack of
diligence by the party against whom the defense is asserted, and (2) prejudice to the party
asserting the defense.'" Pro-Football, Inc. v. Harjo, 415 F.3d 44, 47 (D.C. Cir. 2005) (quoting
Nat'l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 121-22 (2002)).
The Court concludes that Vacation Acquisition has failed to establish a valid defense of
laches with regard to either the breach of contract claim or the copyright claim because there are
genuine issues of material fact sufficient to preclude summary judgment. First and foremost,
there are factual issues regarding whether there was unreasonable delay -- or analogously, a
"lack of diligence," Harjo, 415 F.3d at 47 -- in bringing suit here. These issues relate to the
timing of Tech 7's lawsuit in relation to the date when its claims accrued. Vacation Acquisition
rests much of its laches argument on the assertion that Tech 7's case "is based on facts that Tech
7 has known since 1997." Def.'s Mot. at 9. Based on this assertion, Vacation Acquisition argues
7
For example, the Fourth Circuit -- citing separation of powers principles -- has adopted
a rule whereby the doctrine of laches is never applied "to bar a federal statutory claim that has
been timely filed under an express statute of limitations." Lyons Partnership, L.P., v. Morris
Costumes, Inc., 243 F.3d 789, 798 (4th Cir. 2001).
8
The Court will assume, for purposes of this motion only, that the doctrine of laches may
act as a bar to a claim under the Copyright Act.
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that it should be accorded a rebuttable presumption of laches because Tech 7's claims were
brought outside the relevant statute of limitations period. See Fontana v. Steenson, 929 P.2d
336, 338 (Or. Ct. App. 1996) ("If the action is commenced after the expiration of the analogous
statute of limitations, the plaintiff must prove the absence of laches."); Jarrow Formulas, Inc. v.
Nutrition Now, Inc., 304 F.3d 829, 837 (9th Cir. 2002) ("[I]f the claim is filed after the
analogous limitations period has expired, the presumption is that laches is a bar to suit.").
For the reasons set forth in Part I, supra, Vacation Acquisition cannot be accorded such a
presumption because it has failed to establish that there are no genuine issues of material fact
regarding the date(s) upon which Tech 7's claims accrued or the date(s) that the statutes of
limitations began to run. To begin with, claims based on events after Vacation Acquisition
acquired the assets of Vacation Express in late 2004 are, for the most part, within the applicable
statutes of limitations, and hence there is really no laches argument to be made. As before,
Vacation Acquisition seeks to focus attention on events that transpired long before it purchased
the assets of Vacation Express -- events that appear only to provide the basis for causes of action
against its predecessors in interest.9 Tech 7, on the other hand, concentrates its claims on
Vacation Acquisition's more recent conduct, and asserts that it has been diligent in protecting its
rights by filing suit as soon as practicable after discovering Vacation Acquisition's allegedly
unauthorized activities. See Dickieson Decl. ¶¶ 5(b),(h)-(i). Vacation Acquisition has simply
not met its burden of establishing that there was unreasonable delay or a "lack of diligence,"
Harjo, 415 F.3d at 47, by Tech 7 in asserting its claims against Vacation Acquisition, and the
9
The Court need not, and does not, reach any conclusion about the transfer or assignment
of liabilities to Vacation Acquisition from its predecessors in interest.
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Court therefore cannot grant summary judgment to Vacation Acquisition on the basis of laches.
B. Waiver
Vacation Acquisition next contends that Tech 7 has waived its right to assert its claims
here. Under Oregon law, waiver "is the intentional relinquishment of a known right, either in
terms or by such conduct as clearly indicates an intention to renounce a known privilege or
power. It involves both knowledge and intent, and is based on the idea of consent, express or
implied." Day-Towne v. Progressive Halcyon Ins. Co., 164 P.3d 1205, 1211 (Or. Ct. App. 2007)
(quoting Great Amer. Ins. Co. v. Gen. Ins. Co. of Amer., 475 P.2d 415, 420 (Or. 1970)). The
elements of waiver are the same whether considering a breach of contract claim under Oregon
law or a claim of infringement under the Copyright Act. Compare id., with Capitol Records, Inc.
v. Naxos of America, Inc., 262 F. Supp. 2d 204, 211 (S.D.N.Y. 2003) ("A claim of waiver [with
regard to a copyright holder] requires proof of an 'intentional relinquishment of a known right
with both knowledge of its existence and an intention to relinquish it.'").
It is well-established "that it is inappropriate to resolve issues of credibility, motive, and
intent on motions for summary judgment. It is equally clear that where such issues are
presented, the submission of affidavits or depositions is insufficient to support a motion for
summary judgment." Hardin v. Pitney-Bowes, Inc., 451 U.S. 1008, 1008-09 (1981) (Rehnquist,
J., dissenting from denial of petition for writ of certiorari); see also United States v. Philip
Morris USA, Inc., 327 F. Supp. 2d 8, 12 n.5 (D.D.C. 2004) ("Courts have traditionally held that
questions of credibility, motive, and intent . . . are ill-suited for summary judgment ."). In
support of its waiver argument, Vacation Acquisition contends that several pieces of
correspondence produced by Tech 7 during the course of discovery establish that there has been
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an intentional waiver of the company's rights. See Def.'s Mot. at 17; Def.'s Reply at 13-14;
Cutler Decl., Exs. 6-9. Tech 7 responds by asserting that "[t]he alleged evidence of a waiver of
rights cited by Vacation Acquisition does not lead to the conclusion claimed by the Defendant."
Pl.'s Opp'n at 8. Tech 7 emphasizes that Vacation Acquisition's waiver argument hinges on the
factual issue of intent, and argues that in light of the inferences that -- in Tech 7's view -- should
be properly drawn from the evidence, there are genuine issues of material fact concerning intent.
See id. at 7-9.
Given that Vacation Acquisition bears the burden of establishing facts supporting its
waiver defense, see Hammond, 383 F. Supp. 2d at 55, and drawing all inferences in the non-
movant's (i.e., Tech 7's) favor, the Court concludes that the evidence does not establish that there
has been a waiver here because, at a minimum, there are genuine issues of material fact
concerning Tech 7's intent. Therefore, the Court is precluded from granting summary judgment
to Vacation Acquisition on the basis of waiver.
C. Estoppel
Lastly, Vacation Acquisition asserts that Tech 7 should be estopped from asserting its
claims in this action. Under the doctrine of equitable estoppel, "a person may be precluded by
his act or conduct, or silence when it was his duty to speak, from asserting a right which he
otherwise would have had." Marshall v. Wilson, 154 P.2d 547, 551-52 (Or. 1944). To constitute
equitable estoppel under Oregon law "'there must (1) be a false representation; (2) it must be
made with knowledge of the facts; (3) the other party must have been ignorant of the truth; (4) it
must have been made with the intention that it should be acted upon by the other party; (5) the
other party must have been induced to act upon it[.]'" Day v. Advanced M & D Sales, Inc., 86
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P.3d 678, 682 (Or. 2004) (quoting Coos County v. State of Oregon, 734 P.2d 1348, 1354 (Or.
1987)). Similar principles of equitable estoppel also apply to copyright actions. See John G.
Danielson, Inc. v. Winchester-Conant Props., Inc., 322 F.3d 26, 44 (1st Cir. 2003). To establish
equitable estoppel as a defense to a copyright infringement action, the defendant must prove four
conjunctive elements: "(1) the plaintiff must know the facts of the defendant's infringing
conduct; (2) the plaintiff must intend that its conduct shall be acted on or must so act that the
defendant has a right to believe that it is so intended; (3) the defendant must be ignorant of the
true facts; and (4) the defendant must rely on the plaintiff's conduct to its injury." Carson v.
Dynegy, Inc., 344 F.3d 446, 453 (5th Cir. 2003).
Once again, a failure to demonstrate the element of intent precludes summary judgment
on the estoppel defense. Vacation Acquisition asserts that "Tech 7 is estopped from its claims
because it never revealed its intention to assert rights under the SLA that Tech 7 allowed to lie
dormant." Def.'s Mot. at 14. Tech 7 counters by arguing that "Vacation Acquisition fails to tie
the four criteria [for estoppel] to the facts in this case." Pl.'s Opp'n at 9-10. At least as far as
intent is concerned, the Court agrees with Tech 7. After a thorough review of both the briefing
and the record, the Court concludes that there is no evidence in the record that Tech 7 -- whether
by its representations, omissions, or conduct -- intended for Vacation Acquisition to rely upon
Tech 7's representations, omissions, or conduct to its detriment. Because questions of intent are
ill-suited for summary judgment, see Philip Morris, 327 F. Supp. 2d at 12 n.5, Vacation
Acquisition bears the burden of proof, and Tech 7 is entitled to all inferences in its favor as the
non-moving party, summary judgment is inappropriate on the basis of estoppel.
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CONCLUSION
For the foregoing reasons, the Court will deny Vacation Acquisition's motion for
summary judgment. A separate Order accompanies this Memorandum Opinion.
/s/ John D. Bates
JOHN D. BATES
United States District Judge
Dated: February 2, 2009
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