The opinion of the court was delivered by: John D. Bates United States District Judge
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 infringement*fn1 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.
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 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 name*fn2 and to continue to use the Tech 7 software. Compl. ¶ 19.
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.
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)).
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)).
Because Vacation Acquisition's motion for summary judgment is based exclusively on 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 ...