Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_06-cv-00426/USCOURTS-azd-2_06-cv-00426-0/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:101 Copyright Infringement

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Linderoth Associates, Architects Inc., an

Arizona corporation, 

Plaintiff, 

vs.

Amberwood Development, Inc., an

Arizona corporation; Silverado at

Spectrum Development LLC, an Arizona

limited liability company; Dominionrock

Plancor LLC, an Arizona limited liability

company; Autowind Management LLC, an

Arizona limited liability company; Roll

Tide L.P., an Arizona limited partnership;

Billy G. Johnson; Jane Doe Johnson; The

Ann/Billy Johnson revocable trust; Megan

L. Johnson, 

Defendants. 

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No. CV 06-00426-PHX-NVW

ORDER

Pending before the court is Defendant Amberwood’s Motion for Summary Judgment

Regarding Laches (Doc. # 87).

I. Background

The facts relevant to the motion are not materially disputed. As set forth in previous

orders, Plaintiff Linderoth Associates, Architects, Inc. (“Linderoth”), is an Arizona

corporation that creates residential architectural designs. Defendants consist primarily of a

network of interrelated business entities that design and construct residential dwellings.

Linderoth alleges that Defendants directly infringed its copyrights in various architectural

Case 2:06-cv-00426-NVW Document 121 Filed 09/12/07 Page 1 of 7
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designs and that Defendant Billy G. Johnson, the president of Defendant Amberwood

Development, Inc. (“Amberwood”), and principal executive in each of the remaining

defendant entities, is vicariously liable for that infringement. The designs relevant to this

order have been utilized by Amberwood in a series of “Model 3739” and “Model 2855”

homes in the Silverado at Spectrum housing development in Mesa, Arizona. 

 On January 4, 2005, Linderoth’s counsel hand-delivered a letter to Billy Johnson that

accused Amberwood of copyright infringement in connection with the Model 3739 and

Model 2855 designs. Doc. # 88, Exh. 1 at 2. The letter stated that although there was ample

evidence of willful infringement, Linderoth would likely be willing to forego litigation if

Amberwood agreed to discuss an “amicable resolution in good faith” and “direct [its] people

to provide full and prompt disclosure” of any information necessary to “calculate a

reasonable, fair settlement.” Id. The letter also stated that Linderoth would bring suit in

federal court if Amberwood did not express an interest in settlement by January 24, 2005.

After Amberwood apparently responded by denying liability, counsel for Linderoth

sent another letter on April 12, 2005. Enclosed with this correspondence was a draft of the

complaint that Linderoth intended to file in the event that settlement was not reached.

Linderoth repeated that it had extensive evidence of infringement. The company also

indicated that a resolution of the dispute would require the following: 

(i) an acceptable settlement payment by Amberwood in an

amount to be negotiated (ii) an acknowledgment by Amberwood

of [Linderoth’s] copyright rights in its architectural works, and

(iii) an agreement not to rely on any copied plans for any

construction going forward unless payment has been made as to

use of such plans and (iv) an agreement to cease all further

copying of Linderoth works.

 Doc. # 103, Exh. 2 at 3. The letter closed by indicating that Linderoth expected to hear back

from Amberwood by April 20, 2005. The April 20 deadline was subsequently extended to

May 17 of the same year.

Amberwood responded in an email dated May 17. The company denied liability and

declined to offer money damages, but conceded that it “will no longer use” Model 3739 at

any of its developments in order to assuage Linderoth’s concerns. Doc. # 88, Exh. 2 at 1.

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At the close of the email, Amberwood’s counsel stated, “Let me know how you are going to

proceed.” Id. 

Linderoth did not respond to the May 17 email. By the time it was sent, all of the

contracts for the Model 3739 homes in the Silverado development had been signed for at

least six months, and construction was in most cases complete. Even with regard to the

minority of homes that were not fully constructed by May 17, plumbing and other major

work such as the placement of concrete slabs, walls, roof trusses, and roofs was finished. 

The Complaint was filed on February 10, 2006. Amberwood now moves for summary

judgment on the basis of laches. 

II. Standard of Review

Rule 56(c), Fed. R. Civ. P., provides that summary judgment is proper when “the

pleadings, depositions, answers to interrogatories, and admissions on file, together with

affidavits, if any, show that there is no genuine issue as to any material fact and that the

moving party is entitled to a judgment as a matter of law.” A “genuine issue” of material fact

will be absent if, “viewing the evidence and inferences which may be drawn therefrom in the

light most favorable to the adverse party, the movant is clearly entitled to prevail as a matter

of law.” Jones v. Halekulani Hotel, Inc., 557 F.2d 1308, 1310 (9th Cir. 1977); see also

Baldwin v. Trailer Inns, Inc., 266 F.3d 1104, 1117 (9th Cir. 2001). The evidence presented

by the parties must be admissible. Fed. R. Civ. P. 56(e). Conclusory and speculative

testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and

to defeat summary judgment. Thornhill Publ’g Co., Inc. v. GTE Corp., 594 F.2d 730, 738

(9th Cir. 1979).

The party seeking summary judgment bears the initial burden of informing the 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 any genuine issue of material fact. See Celotex Corp.

v. Catrett, 477 U.S. 317, 323 (1986). The nature of this responsibility varies, however,

depending on whether the movant or the non-movant would bear the burden of persuasion

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at trial with respect to the issue at hand. If the burden of persuasion at trial would be on the

party moving for summary judgment, that party may satisfy its initial burden of production

only by showing that it would be “entitle[d] . . . to a directed verdict if the evidence went

uncontroverted at trial.” Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992); cf. Berry

v. Bunnell, 39 F.3d 1056, 1057 (9th Cir. 1994) (“A directed verdict is proper when the

evidence permits only one reasonable conclusion.”). 

Where the moving party has met its initial burden with a properly supported motion,

the party opposing the motion “may not rest upon the mere allegations or denials of his

pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial.”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1985). Summary judgment is

appropriate against a party who “fails to make a sufficient showing to establish the existence

of an element essential to that party’s case, and on which that party will bear the burden of

proof at trial.” Celotex Corp., 477 U.S. at 322; Matsushita Elec. Indus. Co. v. Zenith Radio

Corp., 475 U.S. 574, 586, (1986) (nonmovant’s showing of “some metaphysical doubt” as

to material facts insufficient); see alsoCitadel Holding Corp. v. Roven, 26 F.3d 960, 964 (9th

Cir. 1994). Summary judgment is not appropriate when the nonmoving party identifies or

produces evidence from which a reasonable juror, drawing all inferences in favor of the

nonmoving party, could return a verdict in the nonmoving party’s favor. United States v.

Shumway, 199 F.3d 1093, 1103-04 (9th Cir. 1999).

III. Analysis

“Laches is an equitable time limitation on a party’s right to bring suit.” Kling v.

Hallmark Cards Inc., 225 F.3d 1030, 1036 (9th Cir. 2000). The defense bars claims for

equitable relief upon proof of “[1] unreasonable delay by the plaintiff and [2] prejudice” to

the defendant. Couveau v. Am. Airlines, Inc., 218 F.3d 1078, 1083 (9th Cir. 2000). In the

context of actions for copyright infringement, “the relevant delay is the period from when

the plaintiff knew (or should have known) of the allegedly infringing conduct, until the

initiation of the lawsuit in which the defendant seeks to counterpose the laches defense.”

Danjaq LLC v. Sony Corp., 263 F.3d 942, 952 (9th Cir. 2001). Whether delay is

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unreasonable is determined in reference to its cause. Id. at 954. Delay is generally

permissible if it was “necessitated by the exhaustion of [administrative] remedies,” “used to

evaluate and prepare a complicated claim,” or used to “determine whether the scope of [a

perceived] infringement will justify the cost of litigation.” Id. By contrast, “delay is

impermissible when its purpose [was] to capitalize on the value of the alleged infringer’s

labor.” Id. 

Amberwood contends that Linderoth’s claim for damages is precluded by the doctrine

of laches because Linderoth waited approximately nine months to file its action for

infringement after receiving the May 17 email. The Motion asserts that it would be

inequitable now to permit Linderoth to seek damages because Linderoth strategically delayed

the filing of the Complaint simply in order to gauge whether Amberwood’s use of the

architectural designs would produce a profit that could be recovered through litigation, and

Amberwood would not have continued to utilize the disputed designs if Linderoth had not

“acquiesced” by ceasing further settlement negotiations. 

The Motion for Summary Judgment is easily denied. First, Plaintiff’s delay was not

unreasonable. The parties agree that Linderoth learned of the infringing conduct as early as

December 2004. Because the Complaint was filed in February 2006, the relevant period of

delay is approximately fourteen months. Although there is no bright-line rule concerning the

specific point at which delay will become impermissibly lengthy, even a delay of two years

is generally viewed as insufficient for laches. Roulo v. Russ Berrie & Co., 886 F.2d 931, 942

(7th Cir. 1989); 3-12 Melville B. Nimmer & David Nimmer, Nimmer on Copyright §

12.06(B)(2), at 12-149 (2006). The cases cited by the parties are consistent with this view.

See Danjaq LLC, 263 F.3d at 952 (involving delay ranging from nineteen to thirty-six years);

Jackson v. Hoyt Axton, 25 F.3d 884, 889 (9th Cir. 1994) (involving delay of approximately

nineteen years). 

Plaintiff’s delay is particularly reasonable when one considers that a significant

portion of it was devoted to settlement negotiations. Linderoth made clear on January 4,

2005, that it would pursue litigation if Amberwood did not express interest in a fair

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settlement, including monetary compensation, by January 24, 2005. The January 24 deadline

was subsequently extended to May 17, 2005, at Amberwood’s request. Amberwood then

conceded on May 17 that it “will no longer use” Model 3739 at any of its developments.

Doc. # 88, Exh. 2 at 1. The lawsuit was filed approximately nine months later, hardly an

excessively lengthy period in which to determine that Amberwood’s concession was

insufficient, carefully consider legal options, and prepare and file a case. Defendant does not

proffer any evidence that the delay was a product of impropriety. 

Even assuming that Plaintiff’s delay was unreasonable, there is no evidence that it

caused prejudice to Amberwood. The last contract for a Model 3739 home was signed in

October 2004. By the time Amberwood sent its May 17 letter, the homes using the disputed

designs were already complete or nearly complete. The notion that Amberwood made

construction outlays in reliance on Linderoth’s “acquiescence” is therefore chronologically

incoherent. Amberwood does not identify any specific prejudice suffered after May 17 as

a result of Linderoth’s delay. 

Even if Amberwood suffered some residual prejudice after May 17, that prejudice

occurred most proximally as a result of Amberwood’s unreasonable view that Linderoth had

acquiesced to the infringing use. The letters from January 4 and April 12, 2005, could hardly

have been clearer in expressing Linderoth’s objection to Amberwood’s use of the

architectural designs. Both of those documents indicated that Linderoth possessed significant

business interests in its intellectual property rights and intended to protect them.

Amberwood’s limited concession to cease using Model 3739 obviously fell far short of

Linderoth’s demands, which concerned multiple models and included monetary

compensation. It is, to put it mildly, unreasonable to think that Linderoth “acquiesced” to

the unauthorized use of its intellectual property by a business competitor simply because

Linderoth failed to respond immediately to that competitor’s unsatisfactory settlement offer.

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IT IS THEREFORE ORDERED that the Motion for Summary Judgment Regarding

Laches (Doc. # 87) is DENIED.

DATED this 12th day of September 2007.

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