BlueRadios, Inc. v. Kopin Corporation, Inc

BRIEF in Opposition to 140 MOTION for Partial Summary Judgment regarding BlueRadios' Claim for Breach of Section IV of the Contract

D. Colo.March 12, 2019

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 16-cv-02052-JLK BLUERADIOS, INC., a Colorado corporation, Plaintiff, v. KOPIN CORPORATION, INC., a Delaware corporation, Defendant. PLAINTIFF BLUERADIOS, INC.'S RESPONSE TO DEFENDANT KOPIN CORPORATION, INC.'S MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING BLUERADIOS' CLAIM FOR BREACH OF SECTION IV OF THE CONTRACT (ECF NO. 140) Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 1 of 31 i TABLE OF CONTENTS TABLE OF AUTHORITIES ....................................................................................................... ii I. BACKGROUND ............................................................................................................... 1 II. RESPONSE TO KOPIN'S STATEMENT OF UNDISPUTED MATERIAL FACTS ........................................................................................................ 2 A. The Majority of Kopin's "Undisputed Material Facts" are Not Material to the Issues Presented in Kopin's Motion................................... 2 B. Contested Statements of Undisputed Material Facts ........................................ 2 i. Kopin's Undisputed Material Fact #8 ..................................................... 2 ii. Kopin's Undisputed Fact #9 ..................................................................... 3 iii. Kopin's Undisputed Material Fact #10 ................................................... 3 iv. Kopin's Undisputed Fact #12 ................................................................... 4 v. Kopin's Undisputed Fact #13 ................................................................... 4 III. BLUERADIOS' STATEMENT OF ADDITIONAL FACTS ("SAF") ....................... 4 IV. LEGAL STANDARD ....................................................................................................... 8 A. Statute of Limitation and Corresponding Claim Accrual Statute ................... 8 V. ARGUMENT ................................................................................................................... 10 A. Kopin's Assertion that BlueRadios' Claim for Payment of the $35,000 Monthly Retainer Is Not a Claim for Money Due is Nonsensical................... 10 B. The Monthly Retainer Payment Obligations are Separate, and Therefore Failure to Pay Each Month Presents is Its Own Cause of Action with Its Own Accrual Date. .................................................... 13 C. Kopin's Equitable Estoppel Defense Fails. ....................................................... 17 i. Kopin cannot rely upon the equitable estoppel doctrine because it has failed to raise any ambiguity in the Contract. ............. 18 ii. Kopin Knew the Contract was in Effect and Did Not Detrimentally Rely on BlueRadios. ......................................... 21 iii. Kopin Cannot Use Equitable Estoppel Against BlueRadios Because Kopin has Unclean Hands. .................................. 22 VI. CONCLUSION ............................................................................................................... 25 Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 2 of 31 ii TABLE OF AUTHORITIES Cases Arenberg v. Cent. United Life Ins. Co., 18 F. Supp. 2d 1167 (D. Colo. 1998) ........................................................................................ 21 Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co., 116 Cal. App. 4th 1375 (2004) .................................................................................................. 17 Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Ferbar Corp. of Cal., 522 U.S. 192 (1997) .................................................................................................................. 16 Bell Atlantic v. Twombly, 550 U.S. 544 (2007) .................................................................................................................... 3 BP America Prod. Co. v. Patterson, 185 P.3d 811 (Colo. 2008) ........................................................................................................ 10 Davis v. King, 560 F. App'x 756 (10th Cir. 2014) ............................................................................................ 13 Extreme Const. Co. v. RCG Glenwood, LLC, 310 P.3d 246 (Colo. App. 2012) ............................................................................................... 20 Fishburn v. City of Colorado Springs, 919 P.2d 847 (Colo. App. 1995) ............................................................................................... 13 Five Oaks Homeowners Assoc. v. Efirds Pest Control Co., 75 N.C. App. 635 (1985) ..................................................................................................... 21, 22 Golden Press, Inc. v. Rylands, 235 P.2d 592 (Colo. 1951) ........................................................................................................ 24 Grizzell v. Hartman Enterprises, Inc., 68 P.3d 551(Colo. App. 2003) .................................................................................................... 3 Grombone v. Krekel, 754 P.2d 777 (Colo. App. 1988) ............................................................................................... 27 Hassler v. Account Brokers of Larimer Cty, Inc., 274 P.3d 547 (Colo. 2012) .................................................................................................... 9, 10 In re Church, 833 P.2d 813 (Colo. App. 1992) ......................................................................................... 10, 16 In re Marriage of Dennin, 811 P.2d 449 (Colo. App. 1991) ............................................................................................... 21 Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 3 of 31 iii In re Marriage of Lodeski, 107 P.3d 1097 (Colo. App. 2004) ............................................................................................. 25 Interbank Invs., L.L.C. v. Vail Valley Consol. Water Dist., 12 P.3d 1224 (Colo. App. 2000) ................................................................................... 10, 12, 14 Magna Assocs. v. Torgrove, 585 F. Supp. 585 (D. Colo. 1984) ............................................................................................. 11 Neuromonitoring Assocs. v. Centura Health Corp., 351 P.3d 486 (Colo. App. 2012) ................................................................................... 10, 15, 17 Paul Holt Drilling, Inc. v. Liberty Mut. Ins. Co., 664 F.2d 252 (10th Cir. 1981) ............................................................................................. 15, 17 Portercare Adventist Health Sys. v. Lego, 286 P.3d 525 (Colo. 2012) .......................................................................................................... 9 Rodgers v. United Air Lines, Inc., No. 13-cv-00218-CMA-MEH, 2013 U.S. Dist. LEXIS 67262 (D. Colo. May 9, 2013) .............................................................. 3 Rotenberg v. Richards, 899 P.2d 365 (Colo. App. 1995) ............................................................................................... 13 St. Paul Fire & Marine Ins. Co. v. N. River Ins. Co., Civil Action No. 10-cv-02936-MSK-CBS, 2012 U.S. Dist. LEXIS 139248 (D. Colo. Sep. 26, 2012) ........................................................ 11 Xenophon Strategies, Inc. v. Jernigan Copeland & Anderson, PLLC, 268 F. Supp. 3d 61 (D.D.C. 2017), ff'd, 719 Fed. Appx. 10 (D.C. Cir. Apr. 2, 2018) ................................................................ 18, 19 Yeda Research & Dev. Co. v. Imclone Sys. Inc., 443 F. Supp. 2d 570 (S.D.N.Y. 2006) ....................................................................................... 26 Statutes C.R.S. § 13-80-101 ..................................................................................................................... 1, 9 C.R.S. § 13-80-103 ..................................................................................................................... 1, 9 C.R.S. § 13-80-108 ......................................................................................................................... 9 Treatises 10 Arthur L. Corbin, Corbin on Contracts § 956 (interim ed. 2007 ............................................. 15 31 Richard A. Lord, Williston on Contracts § 79:17 (4th ed. updated 2011) ............................... 16 Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 4 of 31 1 Plaintiff BlueRadios, Inc. ("BlueRadios"), by and through its undersigned attorneys, submits this Response to Defendant Kopin Corporation, Inc.'s ("Kopin") Motion for Partial Summary Judgment Regarding BlueRadios' Claim for Breach of Section IV of the Contract. (ECF. No. 140, the "Motion.") I. BACKGROUND Kopin seeks summary judgment of BlueRadios' claim for breach of Kopin's contractual obligation to make monthly payments of $35,000 to BlueRadios as long as the Contract1 remains in effect. As set forth below, Kopin's Motion applies the wrong statute of limitations and is based on a misinterpretation of Colorado law. Kopin argues that the general three-year statute of limitations under C.R.S. § 13-80-101(1)(a) for actions based on contract applies. It does not. Rather, the six-year statute of limitations set forth in C.R.S. § 13-80-103.5 applies when, as here, the claim is for a debt or money due. See C.R.S. § 13-80-103.5(1)(a). Kopin also misguidedly argues that a claim pursuant to C.R.S. § 13-80-103.5(1)(a) must be brought within six years of when the first payment was not made. Kopin's argument is incorrect. Pursuant to well- established Colorado precedent, each monthly obligation to pay is a separate and distinct obligation with its own accrual date. Kopin further argues that it is entitled to an equitable defense. Kopin contends, without factual support, that had it known BlueRadios expected Kopin to make its contractually required monthly payments, Kopin would have terminated the Contract rather than permitting the unpaid retainer payments to accumulate. As detailed below, neither the facts nor the law support 1 For purposes of brevity, the Contract and Addendum to Contract are sometimes collectively referred to as the "Contract." Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 5 of 31 2 Kopin's defense. To the contrary, Kopin has intentionally kept the Contract in effect to maintain the benefits it receives pursuant to it, with the knowledge that Kopin also has corresponding contractual obligations. II. RESPONSE TO KOPIN'S STATEMENT OF UNDISPUTED MATERIAL FACTS A. The Majority of Kopin's "Undisputed Material Facts" are Not Material to the Issues Presented in Kopin's Motion. While the materiality of Kopin's asserted undisputed facts is not something the parties agree upon, for purposes of this Motion, BlueRadios does not dispute the following "undisputed facts" set forth in Kopin's Motion: 1, 2, 3, 4, 5, 6, 7 and 11. B. Contested Statements of Undisputed Material Facts i. Kopin's Undisputed Material Fact #8 8. Plaintiff first asserted that it sought "its current $35,000 monthly fixed retainer under the Contract going back to six (6) years prior to the date of the Complaint" in its First Supplemental Initial Disclosures dated February 22, 2018. See Ex. 3, at 2. BlueRadios asserts damages for Kopin's breach of contract. As discussed below, the Contract and Addendum require Kopin to make payments to BlueRadios each and every month. The Complaint was filed on August 12, 2016. (ECF No. 1.) Paragraph 44 of the Complaint expressly alleges breach of the Contract and the failure of Kopin to pay amounts due under the Contract. (Id., ¶ 44.) Paragraph 44 states that Kopin has breached the Contract, by failing to pay BlueRadios amounts to which it is entitled, including royalties owed for sales of Golden-i products. Paragraph 47 states that as a direct and proximate result of Kopin's breaches, BlueRadios has sustained damages in an amount to be proven at trial. Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 6 of 31 3 BlueRadios was not required to set forth in the Complaint the specific damages, including the monthly payments that it is seeking, in the breach of contract claim. "A complaint need not express all facts that support the claim, but need only serve notice of the claim asserted." Rodgers v. United Air Lines, Inc., No. 13-cv-00218-CMA-MEH, 2013 U.S. Dist. LEXIS 67262, at *10 (D. Colo. May 9, 2013) (quoting Grizzell v. Hartman Enterprises, Inc., 68 P.3d 551, 553 (Colo. App. 2003)). Bell Atlantic v. Twombly, 550 U.S. 544 (2007) did not change that requirement. Here, the Complaint provided notice to Kopin that BlueRadios is seeking damages for breach of the Contract. BlueRadios specified the damages sought in its Supplemental Rule 26(a)(1) disclosure. ii. Kopin's Undisputed Fact #9 9. BlueRadios had not communicated to Kopin by 2010 that it believed that any ongoing payment of a $35,000 monthly fee was owed to Kopin at that time. BlueRadios agrees that it did not send an invoice for the $35,000 payments from the time the Addendum was executed through the end of 2009. However, the obligation to make each monthly payment is set forth in the written agreements entered by Kopin, which contain no requirement for BlueRadios to send invoices. iii. Kopin's Undisputed Material Fact #10 10. As of March 2009, BlueRadios was aware of the facts underlying its belief that Kopin owed a $35,000 monthly retainer to BlueRadios that was reflected in the invoice sent in January 2018. See Ex. 6, at 209:19-22 ("Q: So the facts under which you believe you were entitled to that [January 2018 invoiced] payment . . . you knew as of March of 2009; right? A: Correct."). BlueRadios does not contest the accuracy of the quote. However, BlueRadios contests the interpretation and effect of the testimony. The Contract and Addendum require retainer Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 7 of 31 4 payments that are due on the first of each month. BlueRadios seeks damages for payments that Kopin failed to make after March 2009. Therefore, it was impossible for BlueRadios to know in March 2009 that Kopin would fail to make payments due in the future. iv. Kopin's Undisputed Fact #12 12. BlueRadios did not resume sending invoices until it sent the January 26, 2018 invoice demanding $3,710,000.00. As set forth in the response to Kopin's Undisputed Fact #9, there is no requirement in the Contract for BlueRadios to invoice Kopin. v. Kopin's Undisputed Fact #13 13. Mr. Kramer has conceded that Kopin had a 90-day termination right under the contract, and could have terminated, had BlueRadios attempted to assert in 2009 or 2010 that any obligation to pay $35,000 per month was accruing under Article IV of the Contract. BlueRadios agrees with the first clause that Kopin has a 90-day termination right under the Contract. The right to terminate is unrestricted. The Statement of Fact #13 contains a dependent condition that creates a misimpression of Kopin's unfettered right to terminate that Kopin has never exercised since the Addendum. Consequently, both Kopin and BlueRadios remain bound by the Contract and Addendum. III. BLUERADIOS' STATEMENT OF ADDITIONAL FACTS ("SAF")2 1. BlueRadios and Kopin entered a written contract entitled "Golden-i Wireless Video Design Solution" (the "Contract"). The Contract is dated May 31, 2007 by Kopin and June 5, 2007 by BlueRadios. (SUF ¶ 2; Exhibit 1 to Decl. of Sarah Paige (ECF No. 143-1).) 2 Many of these facts are consistent with Kopin's Statement of Facts, and those are noted with reference to Kopin's Statement of Undisputed Facts ("SUF"). Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 8 of 31 5 2. The Contract term is for 12 months, with automatic month-to-month renewal, and called for Kopin to pay BlueRadios a "monthly fixed NRE retainer of $35,000 per month payable at the start of each calendar month." (SUF ¶ 3; Contract, at IV, ¶ 1 (emphasis added).) 3. As to Kopin's right to terminate the Contract and its duty to pay the $35,000 monthly retainer, the Contract requires the notice of termination be in writing: "Kopin retains the right to cancel the agreement and the monthly retainer at any time with a 90-day written notice." (Contract, at IV, ¶ 1 (emphasis added).)3 4. By letter dated June 25, 2008 to BlueRadios, Kopin terminated the Contract calling for its end 97 days later on September 30, 2008. ("[W]e will continue the current Contract with BlueRadios and terminate it on September 30, 2008."). (Declaration of Joseph Kovarik, ("Kovarik Decl."), Exh. A, 6/25/2008 Letter.)4 5. Kopin and BlueRadios entered into an addendum to the Contract on October 22, 2008 (the "Addendum"). (SUF ¶ 2; Paige Decl. (ECF No. 143-2), Exh. 2.) 6. The Addendum reinstated the Contract in full force and effect, subject to changes made in the Addendum. ("Kopin and BlueRadios are Parties to a Contract … executed on May 31, 2007 (the Agreement). Kopin and BlueRadios agree pursuant to this Contract Addendum that the Agreement is hereby reinstated, subject to the following…. Except as expressly modified by this Addendum, the Agreement continues in full force and effect.") (SUF ¶ 6; Addendum, at Introduction & ¶ f.) 7. The Addendum called for BlueRadios to "deliver ten (10) fully functional, stable, consistently operating TI OMAP35XX Golden-i functional hardware printed circuit board assemblies to Kopin as soon as possible." (Addendum, ¶ a (emphasis in original).) 8. Under the Addendum, BlueRadios waived "the existing $35k monthly engineering services retainer under Article IV of the [Contract]," but only 3 Shockingly, Kopin represents to this Court that the termination provision was "without any requirement that that notice be in writing . . . ." (Motion, fn. 2.) This is a blatant misrepresentation of a highly material term. 4 Pertinent parts of the exhibits attached to Mr. Kovarik's Declaration are highlighted for the Court's reference. Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 9 of 31 6 "[d]uring the period commencing as of [the date of this Addendum] until the delivery of said Golden-i printed circuit board assemblies." (SUF ¶ 5; Addendum, ¶ a (emphasis added).) 9. Neither the Contract nor Addendum includes an obligation for BlueRadios to invoice Kopin or to provide engineering services to Kopin to be entitled to the monthly retainer payments. (See Contract and Addendum, generally.) Rather, the payments are due automatically at the beginning of each month. (Contract, at IV, ¶ 1 ("monthly fixed NRE retainer of $35,000 per month payable at the start of each calendar month." (emphasis added.).) The Contract has an "Entire Agreement" provision, mandating that it may not be amended or modified except by written agreement. (Contract, X.1.) 10. Neither the Contract nor Addendum includes an obligation for BlueRadios to inform Kopin of Kopin's obligations under those agreements. (See Contract, Addendum, generally.) 11. BlueRadios has made and continues to make its staff available as needed to perform requested services under the Contract and Addendum, which would be compensated by the $35,000 monthly retainer. (Kovarik Decl., Exh. B, Kramer Depo. Excerpts, 125:14-128:25; 211:5-214:11.) 12. BlueRadios delivered ten (10) "Gen-2" Golden-i printed circuit board assemblies to Kopin on March 25, 2009 that BlueRadios had tested to be fully functional. (Kovarik Decl., Exh. C, 3/18/2009 Email; Exh. D, 3/26/2009 Email; Motion, p. 4 ("BlueRadios delivered Kopin ten printed circuit board assemblies in March 2009.").) 13. In April 2009, Kopin attended the Fiatech annual technology conference to demonstrate the BlueRadios PCBs. While Kopin was at Fiatech, it was reported that the PCBs were working well and being well-received. (Kovarik Decl., Exh. E, 4/8/2009 Emails.) 14. Right after Fiatech, Kopin purposefully kept BlueRadios in the dark on Golden-i issues and surreptitiously began making plans to "move control of the PCB[s] away from BlueRadios." (Kovarik Decl., Exh. F, 4/17/2009 Email; Exhibit G, Fiatech 2009 slide deck, "What We Learned about Golden-I," p. 20.) Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 10 of 31 7 15. BlueRadios made consistent and repeated efforts to obtain Kopin's "acceptance" of the ten (10) PCBs under Addendum section (b) in order for BlueRadios to "be entitled to receive" royalty payments (which were separate and apart from the $35,000 retainer payments set forth in Addendum (a)), with BlueRadios demanding that Kopin either report fixes needed to the PCBs so they could be remedied, confirm they were accepted, or return the boards. Kopin did none of these. (Kovarik Decl., Exh. H, 6/22/09 Email; see Addendum, ¶ b.) 16. While Kopin was withholding its official acceptance of the 10 PCBs (nor providing a "punch list" of fixes), Kopin was internally praising the boards. (Kovarik Decl., Exh. I, 6/02/09 Email ("Gen-2 PCBs have been tested now for 75 days and are considered sufficiently functional.") 17. After Kopin refused to respond to BlueRadios' multiple requests, BlueRadios notified Kopin on July 21, 2009 again that it had delivered the 10 boards, which had been tested to be fully functional, and therefore BlueRadios' had performed delivery under the Contract and Addendum. (Kovarik Decl., Exh. J, 7/21/09 Letter ("Based on Kopin's continual public demonstrations and usage of these 10 systems coupled with no open item requests, it can only be concluded they are acceptable to Kopin.") 18. Instead of returning the boards, Kopin continued to demonstrate them to the public and potential partners, and secretly hired different companies (Ittiam and Mistral) to replace BlueRadios to continue Golden-i development. (Kovarik Decl., Exh. K, 6/17/09 Email; Exh. L, 8/26/09 Email; Exh. M, Excerpt from Parkinson Depo., 91:10-21 ("Q. In your mind, did Mistral replace BlueRadios' functionality with respect to Golden-i. A. Yes, I believe, in my mind, they took on the role.") 19. Even in November 2009, Kopin was still using and demonstrating BlueRadios Gen-2 PCBs, but had never given BlueRadios acceptance of them under the Contract and Addendum. (Kovarik Decl., Exh. N, Kopin internal 11/19/09 Email ("The new Gen 2.5 units are an absolute dream to demo. . . . The Gen 2.5 units are almost 'Monkey Proof.' . . . The Gen 2.5 units are still using the original 10 Gen 2 BlueRadios PCBs.") 20. On March 26, 2010, the one-year anniversary of delivery of the 10 PCBs, BlueRadios sent Kopin another letter informing Kopin it believed the PCBs to be Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 11 of 31 8 accepted under the Contract and Addendum. (Kovarik Decl., Exh. O, 3/26/09 Letter.) 21. One year after BlueRadios delivered the 10 PCBs, Kopin engaged legal counsel to draft a never-delivered written notice of termination of the Golden-i Contract and Addendum. (Kovarik Decl., Exh. P, Kopin's Privilege Log, p. 5 (showing withheld communication between Kopin and legal counsel regarding "Kopin/BlueRadios: Termination Notice" and withheld "Bingham Draft Document" regarding "Termination of Golden-i Agreement" with Mr. Kramer as recipient). 22. After the Addendum, Kopin has never terminated the Contract and Addendum, nor made retainer payments post-PCB delivery. (Kovarik Decl., Exh. B, at 189:1- 15; Motion, fn. 2; SUF ¶ 12.) 23. Under the Contract, Kopin is responsible for seeking patent protection for the Golden-i technology and filing for, procuring, and maintaining patents at Kopin's expense. (Contract, at VII.) After properly including BlueRadios on patent applications, Kopin later worked with patent counsel, Hamilton Brook Smith Reynolds, P.C. ("HBSR"), to remove BlueRadios inventors from applications, with Kopin believing that by doing so, BlueRadios would not be a co-owner of the inventions included in such applications. (See, e.g., Kovarik Decl., Exh. Q, Emails between Kopin and HBSR.) IV. LEGAL STANDARD A. Statute of Limitation and Corresponding Claim Accrual Statute C.R.S. § 13-80-101(1)(a) provides: The following civil actions . . . shall be commenced within three years after the cause of action accrues, and not thereafter: (a) All contract actions, including personal contracts and actions under the 'Uniform Commercial Code', except as otherwise provided in section 13-80-103.5." See C.R.S. § 13-80-101(1)(a) (emphasis added). C.R.S. § 13-80-103.5 provides for a six-year statute of limitations for: Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 12 of 31 9 All actions to recover a liquidated debt or an unliquidated, determinable amount of money due to the person bringing the action …. See C.R.S. § 13-80-103.5(1)(a) (emphasis added). Under Colorado law, a debt is liquidated or determinable under C.R.S. § 13-80-103.5 when the amount "is ascertainable either by reference to the agreement, or by simple computation using extrinsic evidence if necessary." Portercare Adventist Health Sys. v. Lego, 286 P.3d 525, 529 (Colo. 2012). The statute of limitations for a debt owed begins to run when the cause of action accrues, which occurs on the date that the debt "becomes due." C.R.S. § 13-80-108(4); Hassler v. Account Brokers of Larimer Cty, Inc., 274 P.3d 547, 552 (Colo. 2012). Separately, C.R.S. § 13- 80-108(8) provides that a cause of action for losses or damages, not otherwise enumerated, shall be deemed to accrue when the injury, loss, damage, or conduct giving rise to the cause of action is discovered or should have been discovered by the exercise of reasonable diligence. The Colorado Supreme Court has reconciled the potential for these statutes to yield disparate accrual dates and limitations periods by noting that the more specific provisions -- the six-year statute of § 103.5 and the accrual date of § 108(4) -- trump more general provisions when the cause of action falls within the language of the more specific provision. BP America Prod. Co. v. Patterson, 185 P.3d 811, 814 (Colo. 2008). "[C]onstruing sections 13-80- 103.5(1)(a) and 13-80-108(4) together, the statute of limitations for a debt owed . . . begins to run when the action accrues, which occurs on the date that the debt becomes due." Hassler, 274 P.3d at 552 (emphasis added). Flowing from the fact that claims for money owed accrue on the date that the debt becomes due (as opposed to when the fact of loss is discovered), the general rule for contracts Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 13 of 31 10 that are severable is that "a separate cause of action arises on each installment and the statute of limitations begins to run against each installment when it becomes due." Interbank Invs., L.L.C. v. Vail Valley Consol. Water Dist., 12 P.3d 1224, 1230 (Colo. App. 2000) (citing In re Church, 833 P.2d 813, 814 (Colo. App. 1992)). Thus, a separate cause of action arises – each with its own statute of limitations – when each monthly payment is due under the Contract. See also Neuromonitoring Assocs. v. Centura Health Corp., 351 P.3d 486, 492 (Colo. App. 2012); St. Paul Fire & Marine Ins. Co. v. N. River Ins. Co., Civil Action No. 10-cv-02936-MSK-CBS, 2012 U.S. Dist. LEXIS 139248, at *15 (D. Colo. Sep. 26, 2012) ("Cases like Paul Holt and Neuromonitoring establish that each breach of a contract requiring continuous performance is separately actionable; each has its own accrual date and limitations period, and a plaintiff can only sue on those breaches that occurred within the relevant limitation period."); Magna Assocs. v. Torgrove, 585 F. Supp. 585, 589 (D. Colo. 1984) ("[W]here a debt is payable in installments, the statute of limitations runs against each installment from the day it becomes due."). V. ARGUMENT A. Kopin's Assertion that BlueRadios' Claim for Payment of the $35,000 Monthly Retainer Is Not a Claim for Money Due is Nonsensical. Kopin argues that the three-year statute of limitations under C.R.S. § 13-80-101(a)5 applies, not only in an attempt to lessen the amount owed, but also to benefit presumably from an accrual provision triggered on the date when a plaintiff "discover[s], or should have discovered by the exercise of reasonable diligence, the fact of that loss or injury." (Motion, p. 5.) 5 There is no C.R.S. § 13-80-101(a). It is presumed that Kopin intended to refer to § 13-80- 101(1)(a). Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 14 of 31 11 Kopin's contention that the three-year statute of limitations under C.R.S. § 13-80- 101(1)(a) is applicable, however, is simply wrong. This is because BlueRadios' claim is for "money due." Under Colorado law, the applicable limitations period that applies depends on the nature of BlueRadios' claim for relief and the underlying agreement. The pertinent question is simple and straightforward: Is BlueRadios' claim based on one for a debt or money due by Kopin? A six-year debt limitations applies if the $35,000 monthly retainer payments constitute "a liquidated debt or unliquidated, determinable amount of money due" under §13-80- 103.5(1)(a). Interbank Inves., L.L.C., 12 P.3d at 1230 ("The nature of the defendants' obligation is money owed, and the terms of each agreement contain the provisions for determining the amount owed."). Kopin, however, argues that: (1) § 13-80-103.5(1)(a) is inapplicable because "Kopin owed BlueRadios no debt at the time BlueRadios alleges that Kopin's obligation to pay $35,000 monthly resumed;" and (2) "there was no agreed-upon total amount owed." (Motion, p. 8 (emphasis in original).) These arguments fail for the following reasons. The Addendum is clear: Kopin's obligation to pay the monthly retainers resumed once BlueRadios delivered the ten PCBs on March 25, 2009. Thereafter, as long as the Contract remains in effect, a new $35,000 monthly payment obligation arises and Kopin's total obligation owed increases by $35,000 each month so long as it fails to pay.6 6 Kopin's assertion that it had the option to (but did not) terminate the Contract by giving BlueRadios 90-days' notice of termination is not at all material to Kopin's claim. It is, however, an admission that is material to BlueRadios' motion for partial summary judgment on the same payment obligation, which will be separately filed. Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 15 of 31 12 Kopin asserts that the debt statute under C.R.S. §13-80-103.5(1)(a) is inapplicable because the Parties never agreed on a "total amount owed." But no such requirement is found under Colorado law. To the contrary, this argument has been soundly rejected by Colorado courts and the Tenth Circuit Court of Appeals. In Rotenberg v. Richards, 899 P.2d 365, 367 (Colo. App. 1995), the Colorado Court of Appeals addressed whether C.R.S. § 13-80-103.5(1)(a) applied to an action to enforce a retainer agreement between an attorney and her client that expressly provided for payment of $100 per hour for legal services. The retainer agreement did not address how many total hours would be spent, and thus did not delineate a "total amount owed." Id. at 368. The Rotenberg court found that an amount is either liquidated or determinable for purposes of § 13-80- 103.5(1)(a) if the agreement sets forth a method for determining the amount due or is ascertainable through simple computation. Id. The Rotenberg court held that the statute applied even though the total number of hours worked was necessary to determine the debt. Id. Similarly, in Fishburn v. City of Colorado Springs, 919 P.2d 847, 850 (Colo. App. 1995), a claim under an employment contract was held to be "determinable" where, despite a dispute over the number of hours worked by an individual, the amount due was easily calculable. Id. at 849-50. The Tenth Circuit came to the same conclusion in Davis v. King, 560 F. App'x 756 (10th Cir. 2014). A claim is "liquidated" under § 13-80-103.5(1)(a) "if the amount due can be determined by computation." Id. at 760 (holding that the debt was liquidated because the parties agreed to a set hourly rate, enabling the debt to be determined by simple calculation). In Interbank Investments, the method for determining the amount due to the plaintiff was set forth in two agreements. Interbank Inves., 12 P.3d at 1230. The court found that the nature Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 16 of 31 13 of the defendant's obligation was money owed, that the terms of each agreement contained the provisions for determining the amount owed, and concluded that the agreements provided the amount of debt owed to the plaintiff. Id. The court held that this made the debt sufficiently "determinable" for purposes of invoking § 13-80-103.5(1)(a). Id. The same is true here. The Contract calls for the monthly payments of $35,000 to resume once BlueRadios delivered the ten PCBs to Kopin and further requires the monthly payments to continue until the Contract is terminated. (See SAF, ¶¶ 3, 8.) As Kopin admits, BlueRadios delivered the PCBs in March 2009, thus satisfying the condition precedent. (Motion, p. 4; SAF, ¶ 12.) The Contract has not been terminated. (SAF, ¶ 22.) The only necessary calculation to determine the total amount due (not including interest) is to (a) count the number of months between, and including, August 2010 (six years before the lawsuit was filed) and the date the Court rules in favor of BlueRadios on the claim and (b) multiply that number by $35,000. B. The Monthly Retainer Payment Obligations are Separate, and Therefore Failure to Pay Each Month Presents is Its Own Cause of Action with Its Own Accrual Date. Colorado courts have adopted what may be termed the "continuing duty" or "continuing accrual" rule. As the Colorado Court of Appeals held in interpreting a professional services contract in Neuromonitoring Assocs., where the contract "require[s] a series of performances over a period of time and [is] capable of a series of breaches for which a series of actions can be maintained . . . generally a new claim accrues for each separate breach and the plaintiff may assert a claim for damages from the date of the first breach within the period of limitation." Neuromonitoring Assocs., 351 P.3d at 492 (citations and internal quotations omitted). The Colorado Court of Appeals, in citing with approval to a Tenth Circuit Court decision and a Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 17 of 31 14 number of other cases, also held that the applicability of this rule is not determined based on the type of contract, but rather whether it is "capable of being breached on multiple successive occasions." Id. (citing Paul Holt Drilling, Inc. v. Liberty Mut. Ins. Co., 664 F.2d 252, 255 (10th Cir. 1981)). Types of contracts to which this rule has been applied include insurance contracts, contracts for payments to be calculated and paid on a periodic basis, contracts providing for a right to share a divisible surplus to be determined annually and credited as a dividend, and covenants not to compete. Id. Neuromonitoring Assocs. also cites to Corbin on Contracts for the proposition that "there is no essential difference between a 'continuing' contract and an 'installment' contract because both require a series of performances over a period of time and both are capable of a series of breaches for which a series of actions can be maintained." Id. (citing 10 Arthur L. Corbin, Corbin on Contracts § 956 (interim ed. 2007) (internal quotations omitted)). In re Church, 833 P.2d 813, 814-15 (Colo. App. 1992), is yet another Colorado decision in which the court held that not filing an action within six years of when an initial installment payment was due did not prevent suing to collect payments owed within the six years prior to the date the lawsuit was commenced. Again, the general rule provides that "[a] separate cause of action arises on each installment and the statute of limitations begins to run against each installment when it becomes due." Id., 833 P.2d at 814; see also 31 Richard A. Lord, Williston on Contracts § 79:17 (4th ed. updated 2011); Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Ferbar Corp. of Cal., 522 U.S. 192, 208-09 (1997) ("Petitioner brought this suit more than six years after respondents missed their first scheduled payment, but within six years of Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 18 of 31 15 each subsequent missed payment. Respondents contend that petitioner's failure to sue within six years of the first missed payment bars suit for all missed payments. We disagree."). Kopin appears to try to distinguish In re Church from the present facts by noting that there is no limit on the Contract's monthly retainer payment obligations, and thus, there is no fixed figure to arrive at a total amount owed. That distinction is not relevant, much less material. Kopin appears to contend that the money obligations at issue must allegedly set forth "exactly when payments should start or stop" and must provide a "total amount owed." (Motion, p. 8 (emphasis in original).)7 Kopin fails to cite any legal authority for its position in this regard. The governing law provides that a contract need only be capable of being breached on multiple successive occasions for there to be separate breaches with independent accrual dates. See, Paul Holt Drilling, 664 F.2d at 255. For example, the professional services contract in Neuromonitoring Assocs. did not have a "total amount owed" but was nonetheless found to be continuously breached. Neuromonitoring Assocs., 351 P.3d at 492; see also, e.g., Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co., 116 Cal. App. 4th 1375, 1389 (2004) (applying rule to oil and gas operating agreement that required monthly calculations and payments for revenue sharing).8 7 Oddly, Kopin cites to In Re Church in the section of its Motion addressing which statute of limitations applies (which was not the issue addressed in In Re Church) as opposed to when claims accrue (which was the issue considered). 8 See also Armstrong Petroleum Corp., 116 Cal. App. 4th at 1388 ("[W]here performance of contractual obligations is severed into intervals, as in installment contracts, … an action attacking the performance for any particular interval must be brought within the period of limitations after the particular performance was due. The situations in which this rule has been applied include not only installment contracts [citation], but also such diverse contractual arrangements as leases with periodic rental payments [citation], and contracts calling for periodic, pension-like payments on an obligation with no fixed and final amount [citation]." (emphasis added)). Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 19 of 31 16 There can be no dispute that each monthly retainer payment is a divisible obligation pursuant to the Contract. (SAF, ¶ 2.) Each month while the Contract is still in effect and until termination, Kopin has a new contractual obligation to pay the $35,000 monthly retainer. Each failure to pay therefore creates a new cause of action with an independent accrual date. In its brief, Kopin tries to create the impression that BlueRadios had an obligation to invoice Kopin each month. There is no such requirement under the Contract.9 (SAF, ¶ 9.) Kopin could have, but did not, terminate its obligation to pay "the monthly retainer at any time with a 90-day written notice." (SAF, ¶¶ 3, 22.)10 Consequently, Kopin's monthly obligation continues. Kopin contends that "no reasonable reading of the Contract would permit such an obligation to be incurred indefinitely, especially during a time period in which BlueRadios was not providing any services to Kopin." (Motion, fn. 2.) As the court held in Xenophon Strategies, Inc. v. Jernigan Copeland & Anderson, PLLC, 268 F. Supp. 3d 61, 70 (D.D.C. 2017), aff'd, 719 Fed. Appx. 10 (D.C. Cir. Apr. 2, 2018), the requirement to make monthly retainer payments is only stopped if the Contract is terminated. In Xenophon, the court affirmed the trial court's grant of summary judgment entitling Xenophon to a monthly retainer payment of $30,000 under a 9 Kopin, without any support, attempts to argue that it is somehow BlueRadios' fault for not alerting Kopin of its explicit contractual obligations accruing under the Contract ("[H]ad BlueRadios alerted Kopin that it believed obligations were accruing . . ."). (Motion, p. 10.) Not only is there an absence of any responsibility on BlueRadios' part to alert Kopin of its contractually required payments under the Contract (SAF, ¶ 10), it is simply disingenuous for Kopin to contend that its obligations for the monthly retainer under the Contract are not clear and unambiguously stated in the documents. 10 In its Response to the Motion for Patent Prosecution Bar Kopin argued to the Court that the Contract is still in effect: "According to the Contract, which was executed over 10 years ago, it was and still is, Kopin who has the 'sole right and responsibility to decide whether or not to seek patent protection with respect to any intellectual property rights.'" (ECF No. 74, p. 3 (emphasis added.) In footnote 2 of Kopin's Motion, Kopin again concedes that the Contract is in effect. Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 20 of 31 17 contract having a 60-day notice of termination provision that was never exercised. Id. at 70-72. This was despite the fact that no services were requested or performed. Id. at 68-70. The court in Xenophon noted that even if Xenophon was not called on to perform any services, even if only temporarily, Xenophon would "remain[] contractually required to make its staff available as needed to perform the services defined in the contract" and the contract would remain viable absent the required termination notification. Id. at 70. Likewise, here, BlueRadios was always required to make its staff available as needed to perform requested services under the Contract, with part of the bargained-for consideration under the Contract being the $35,000 monthly retainer payments. (SAF, ¶ 11.) The Contract does not include an obligation for BlueRadios to provide engineering services to Kopin to be entitled to the monthly retainer payments. (SAF, ¶ 9.) Rather, the payments were automatically due at the beginning of each month. (SAF, ¶ 9.) Moreover, Mr. Kramer testified at his deposition that BlueRadios in fact continued to provide services to Kopin well after the delivery of the 10 PCBs in March 2009. (SAF, ¶ 11.) The Xenophon court expressly noted that the defendant was perfectly able to terminate the contract at any time, thus ending the contractual obligation to pay the monthly retainer, but opted not to do so. Similarly, Kopin, even after seeking the advice of counsel in 2010 regarding terminating the Contract and the filing of this suit, has chosen to keep the Contract in effect and not terminate the Contract. (SAF, ¶¶ 21, 22.) C. Kopin's Equitable Estoppel Defense Fails. Kopin's attempt to argue that equitable estoppel bars BlueRadios' claim is misguided for at least three reasons. First, an equitable estoppel defense to enforcement of a contract term first requires that the provision be found ambiguous. Kopin has not argued, let alone shown, that any Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 21 of 31 18 pertinent provision in the Contract is ambiguous. Second, there is no supported assertion, much less a disputed fact, that Kopin detrimentally relied upon BlueRadios' alleged failure to "alert" Kopin to its contractual obligation. Third, Kopin is not entitled to assert such an equitable defense because Kopin comes with "unclean hands." i. Kopin cannot rely upon the equitable estoppel doctrine because it has failed to raise any ambiguity in the Contract. The very case upon which Kopin relies for the law on equitable estoppel precludes granting it summary judgment. In Extreme Const. Co. v. RCG Glenwood, LLC, 310 P.3d 246 (Colo. App. 2012), the court adopted the rules on equitable estoppel from other states, and held that prior to determining whether equitable estoppel applies, a determination that a contract term is ambiguous is required: We are persuaded by the cases cited above and thus conclude . . . that, at least in cases involving the construction of an ambiguous contractual provision . . . the equitable estoppel doctrine can preclude a party from contesting a particular interpretation of that provision, if all of the elements of the equitable estoppel doctrine have been satisfied. B. Ambiguity. Having thus concluded, we must determine whether the provision at issue, paragraph 4, was ambiguous. We agree with the trial court's conclusion that it was. Id. at 251-52. Kopin acknowledges as much in its Motion, but does not identify any ambiguity in the Contract. (Motion, p. 11.) Kopin does not even assert generally that any provision is indeed ambiguous. The likely reason for that is the obvious clarity of the contractual terms: BlueRadios waived the monthly retainer until it delivered the 10 boards (SAF, ¶ 8); once those boards were delivered, Kopin's obligation to pay the retainer was reinstated until Contract termination (SAF, ¶¶ 3, 8); and the Contract has never been terminated (SAF, ¶ 22). The purpose for applying equitable estoppel only to ambiguous contract terms goes together with the requirement that the party to be estopped must have had full knowledge of the Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 22 of 31 19 facts.11 When there is a disparity of information, it would be inequitable to allow a party to enforce a provision based on facts it knew but did not inform the other party of, and the unavailing party relied on this to its detriment. When unambiguous contract terms are at issue, however, there is no disparity in information and no place for estoppel. This is succinctly described in the analogous case of Five Oaks Homeowners Assoc. v. Efirds Pest Control Co., 75 N.C. App. 635 (1985), which was one of the cases relied upon by the Colorado court in Extreme Const. Co. In Five Oaks, a termite inspection contract for services from defendant required annual payments but allowed for automatic termination if the plaintiff failed to make them. Id. at 636. Defendant invoiced the plaintiff after the first year, but not thereafter. Id. Plaintiff went two years without paying, then attempted to pay the prior years' dues. Id. Defendant refused and considered the contract automatically terminated. Id. Plaintiff attempted to establish that defendant was equitably estopped from asserting termination because it had invoiced before, and plaintiff detrimentally relied on not receiving subsequent invoices. Id. However, the "contract did not specify that defendant would invoice plaintiff each year." Id. The court held: When the language of a written contract is plain and unambiguous, the contract must be interpreted as written and the parties are bound by its terms [citation]; neither party can deny knowledge of its contents. Since plaintiff knew from the contract that the reinspection fee was due annually, it cannot claim that defendant was estopped from cancelling the contract because it had not sent plaintiff an invoice for the reinspection fee. Absent fraud, estoppel is not available to protect a party from the consequences of its own negligence. 11 Colorado courts address the same issue applied in other contexts outside of contract by requiring that the party seeking equitable estoppel has the affirmative duty to show "he reasonably relied to his detriment upon the acts or representations of the other person and that he had no knowledge or convenient means of knowing the facts." In re Marriage of Dennin, 811 P.2d 449, 450 (Colo. App. 1991); Arenberg v. Cent. United Life Ins. Co., 18 F. Supp. 2d 1167, 1181 (D. Colo. 1998). Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 23 of 31 20 Id. at 637 (emphasis added). Here, BlueRadios delivered the 10 circuit boards and informed Kopin that it had satisfied its obligations under the Contract. (SAF, ¶¶ 12, 15, 17, 20.) There is no requirement for BlueRadios to invoice Kopin under the Contract. (SAF, ¶ 9.) There was nothing BlueRadios had to do other than deliver the 10 boards for Kopin's obligation to pay the monthly retainers to resume. And importantly, there is no fixed term on the Contract, but rather, it extends until one of the parties provides the 90-day written notice as called for under the Contract. (SAF, ¶ 3.) Kopin now argues that it "does not believe that any reasonable reading of the Contract would have anticipated Kopin accruing [the sought damages] . . . ." (Motion, at 11.) The Contract is clear and unambiguous, and Kopin cannot be protected from estoppel for what appears to be its own negligent understanding of the written Contract. Five Oaks, 75 N.C. App. at 637. Moreover, BlueRadios never "secretly disagreed with" Kopin as to whether the Contract called for a monthly $35,000 retainer during the entire term of the Contract. Kopin audaciously contends that its failure to pay BlueRadios under the Contract (whether it be royalties or retainer payments), despite BlueRadios' repeated demands that Kopin comply with the Contract, purportedly demonstrates that BlueRadios must have had a secret interpretation of the Contract contrary to that of Kopin. This is absurd. Breaching a contract and then blaming the non- breaching party for not "alerting" the breaching party of its outrageous conduct is not a viable defense. Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 24 of 31 21 ii. Kopin Knew the Contract was in Effect and Did Not Detrimentally Rely on BlueRadios. Kopin acknowledges that it could have easily ended its obligation to pay the monthly retainer by terminating the Contract. Kopin was certainly aware of the 90-day written notice termination provision, and not just because it is clear and unambiguous in the Contract. Of note, prior to the Addendum, Kopin sent BlueRadios a written 90-day termination notice and availed itself of that very provision. (SAF, ¶ 4.) After the Addendum revived the Contract, Kopin again contemplated termination as evidenced by the draft notice of termination letter Kopin had its attorneys draft in March 2010. (SAF, ¶ 21.) Kopin instead decided to not give notice of termination to BlueRadios and keep the Contract in effect. The fact remains that Kopin could have, but has not, terminated the Contract. Kopin disingenuously, and without any factual support, argues that if it had it known that BlueRadios believed it was owed the contractually required monthly retainer, it would have exercised its right to provide the 90-day notice and terminate the Contract. (Motion, p. 12 ("Kopin had a 90-day termination right under the contract, and could have simply terminated, had BlueRadios attempted to assert in 2009 or 2010 that any obligation to pay was accruing under the Contract.").) This argument is belied by Kopin's actions during the present lawsuit. The present litigation has been going on for over three years, with over a year passing since BlueRadios served its supplemental Rule 26(a)(1) disclosures. Yet, Kopin has chosen to keep BlueRadios bound by the restrictions in the Contract and has not terminated the Contract. Kopin apparently wants the rights provided to it under the Contract, but does not want to abide by its corresponding contractual obligations. With the Contract in effect, BlueRadios is precluded from making or selling Golden-i products. Terminating the Contract would allow Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 25 of 31 22 BlueRadios to be a competitor in the Golden-i marketplace, armed with the same co-owned patent rights enjoyed presently by Kopin. To Kopin, this would be a fate far worse than simply maintaining the Contract and taking the risk that BlueRadios might prevail in this lawsuit, which seeks both the ownership of patents and significant damages, including long overdue retainer payments. Kopin would no more have terminated the Contract if it were "alerted" by BlueRadios of its ongoing obligations under the Contract than it would now, faced with the prospect of losing tens of millions of dollars and effectively the "sole" rights to the expanding patent portfolio that protects the Golden-i project. Kopin's conscious decision to keep the Contract in effect, while at the same time, denying that Kopin must abide by the terms and conditions of the Contract to pay the monthly retainer payments to BlueRadios, is untenable, is not supported by the law, and conflicts with the explicit unambiguous provisions of the Contract. iii. Kopin Cannot Use Equitable Estoppel Against BlueRadios Because Kopin has Unclean Hands. The doctrine of unclean hands has long been part of U.S. jurisprudence and requires that "he who seeks equity should do equity and come with clean hands." Golden Press, Inc. v. Rylands, 235 P.2d 592, 595 (Colo. 1951). The clean hands maxim dictates that one who has engaged in improper conduct regarding the subject matter of the cause of action may, as a result, lose entitlement to an equitable remedy. Id.; In re Marriage of Lodeski, 107 P.3d 1097, 1103 (Colo. App. 2004) (denying husband's equitable defense because "one seeking application of [laches defense] has an obligation to 'do equity.'"). Here, the facts demonstrate that Kopin's hands are dirty. Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 26 of 31 23 BlueRadios consistently requested Kopin to either report what possible issues Kopin had with the PCBs so they could be fixed, officially accept the boards, or to return them to BlueRadios, but Kopin never did. (SAF, ¶ 15.) Instead of returning the 10 boards, Kopin integrated them into Golden-i headsets, successfully used them for months in hundreds of demonstrations, and was internally praising their functionality. (SAF, ¶¶ 16-19.) Despite this, Kopin has denied BlueRadios has performed. Moreover, after BlueRadios delivered the 10 boards, Kopin schemed to "move control of the PCB[s] away from BlueRadios." (SAF, ¶ 14.) Kopin then effectively broke off the relationship and hired a different company called Mistral (a subcontractor to BlueRadios) to allegedly create the "next" generation of Golden-i. (SAF, ¶ 18.) In sum, the evidence shows that Kopin took the boards created by BlueRadios, used them to sell the Golden-i concept to potential partners and customers, and never returned the boards. Kopin did this with the intent to never contractually "accept" the boards, which would have indisputably shown BlueRadios' satisfaction of its contractual duties and entitlement to royalties. Kopin also worked with patent counsel, HBSR, to secretly and improperly remove BlueRadios inventors from patent applications naming BlueRadios, solely to contend that BlueRadios would have no co-ownership of such technology. (SAF, ¶ 23.) Only recently did Kopin finally concede that at least two issued patents actually contained the sole inventive contributions of BlueRadios, a decade after such inventions where first disclosed to Kopin by BlueRadios. (See Joint Motion and Court Order correcting inventorship of the '340 and '231 patents, ECF Nos. 124 & 125.) The present litigation has revealed the extent to which Kopin has gone to delete not only BlueRadios inventors from pending applications, but the deletion of the priority dates sought Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 27 of 31 24 from BlueRadios previously filed patent applications, thus ensuring that even if BlueRadios would someday discover such actions, it would no longer have the ability to attempt to "fix" the damage Kopin had done. It is well established that defendants that have "unclean hands" cannot assert equitable defenses. And particularly in situations where the defendant was responsible for plaintiff not finding out about their patent applications. Yeda Research & Dev. Co. v. Imclone Sys. Inc., 443 F. Supp. 2d 570, 629-30 (S.D.N.Y. 2006). Applying equitable principles here, the Court should appreciate that Kopin is attempting in its Motion to deprive BlueRadios of essentially all of the contractually negotiated benefits it negotiated for in the Contract. Kopin has not paid a penny to BlueRadios, whether in royalties or monthly retainers, since the Addendum was executed. Kopin has actively sought to delete BlueRadios' inventors from patent applications, despite the presence of BlueRadios' developments in such applications, thereby depriving BlueRadios of the contractual benefits of being a co-owner of such patented technology. Kopin included BlueRadios' trade secrets in pending applications listing only Kopin employees, improperly asserting ownership thereof. Kopin took the inventive contributions of BlueRadios and provided them to other entities (e.g., Mistral) so that Kopin could commercially exploit the Golden-I technology without paying anything to BlueRadios. Now Kopin wants to have the Court preclude BlueRadios from seeking to obtain the explicit monthly retainers that Kopin has long deprived BlueRadios. Under Colorado law, "equity abhors [a] forfeiture." Grombone v. Krekel, 754 P.2d 777, 779 (Colo. App. 1988). To grant Kopin's present Motion would result in a virtual forfeiture of BlueRadios' interests. Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 28 of 31 25 Under the present circumstances, it would be unjust for Kopin, coming to this Court with "unclean hands," to be permitted to assert equitable defenses that would deprive BlueRadios of its contractually negotiated retainer payments. VI. CONCLUSION WHEREFORE, for the foregoing reasons, BlueRadios requests that this Court deny Kopin's Motion for Summary Judgment Regarding BlueRadios' Claim for Breach of Section IV of the Contract and award BlueRadios such other and further relief as the Court deems just and proper. DATED this 12th day of March, 2019. Respectfully submitted, By: s/ Joseph E. Kovarik Joseph E. Kovarik jkovarik@sheridanross.com Patricia Y. Ho pho@sheridanross.com John C. Heuton jheuton@sheridanross.com SHERIDAN ROSS P.C. 1560 Broadway, Suite 1200 Denver, Colorado 80202-5141 Telephone: 303-863-9700 E-mail: litigation@sheridanross.com Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 29 of 31 26 David B. Seserman SESERMAN LAW LLC 3900 E. Mexico Ave., Suite 300 Denver, CO 80210 303.900.2406 303.670.0990 – fax dseserman@seserman.law ATTORNEYS FOR PLAINTIFF BLUERADIOS, INC. Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 30 of 31 27 CERTIFICATE OF SERVICE I hereby certify that on March 12, 2019, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to all counsel of record in the above-referenced matter. Joshua M. Dalton Sarah K. Paige MORGAN, LEWIS & BOCKIUS LLP One Federal Street Boston, MA 02110 Email: josh.dalton@morganlewis.com sarah.paige@morganlewis.com David D. Powell, Jr. Stephen B. Rotter OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. 2000 South Colorado Boulevard Tower Three, Suite 900 Denver, CO 80222 Email: david.powell@ogletree.com stephen.rotter@ogletree.com Thomas D. Leland Maxwell N. Shaffer Elizabeth A. Austin HOLLAND & KNIGHT LLP 1801 California Street, Suite 5000 Denver, Colorado 80202 Email: thomas.leland@hklaw.com maxwell.shaffer@hklaw.com elizabeth.austin@hklaw.com Mark S. Peloquin PELOQUIN, PLLC 800 Fifth Ave., Suite 4100 Seattle, WA 98104 Email: mark@peloquinlaw.com Carolyn Fairless David Schaller WHEELER TRIGG O'DONNELL LLP 370 Seventeenth Street, Suite 4500 Denver, Colorado 80202 Email: fairless@wtotrial.com schaller@wtotrial.com s/ Lori R. Brown Lori R. Brown Paralegal to Todd P. Blakely/Robert R. Brunelli SHERIDAN ROSS P.C. 1560 Broadway, Suite 1200 Denver, CO 80202-5141 Telephone: (303) 863-9700 Facsimile: (303) 863-0223 E-mail: lbrown@sheridanross.com litigation@sheridanross.com Case 1:16-cv-02052-JLK Document 156 Filed 03/12/19 USDC Colorado Page 31 of 31