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Western Star, LLC v. Marketsoup, Inc.

United States District Court, D. Colorado

June 21, 2018



          R. Brooke Jackson, United States District Judge

         This matter is before the Court on plaintiff Western Star, LLC's motion for partial summary judgment and request for expedited declaratory relief (ECF No. 44). The motion has been fully briefed. ECF Nos. 44, 48, 53. For the reasons stated herein, the motion is DENIED.


         A. Factual Background.

         This is a dispute over who owns the intellectual property and code associated with a software application. In 2014 Western Star and its CEO, Bill Bradley, began conceptualizing a desktop and mobile application known as the Starlight Trash Platform to improve the waste hauling industry (the “Starlight Application”). ECF No. 44 at 3. Western Star hired a company called Motocol in 2014 to write the software code for Starlight. Id. Motocol in turn hired defendant Marketsoup in August 2015 as a subcontractor on the project. Id. After several months of this arrangement, Western Star decided to work directly with Marketsoup, so Western Star terminated its contractual arrangement with Motocol and began the process of contracting with Marketsoup. Id. at 5. Around the same time, Western Star's CEO Mr. Bradley and Marketsoup's CEO Dan Weber, also a defendant in this case, began forming a close personal friendship, even going so far as to discuss the possibility of Mr. Bradley's adopting Mr. Weber. Id.

         Marketsoup and Western Star began negotiating the terms of their agreement in August 2016 via a series of emails. See ECF No. 44-1 at 17 (email from Mr. Bradley indicating that he wanted to “get a direct contract in place with Dan [Weber]”). The draft agreement between the parties was comprised of an Independent Contractor Agreement (“ICA”) and a Statement of Work (“SOW”) (collectively, “the agreement”). The parties exchanged six drafts of the agreement between August 29, 2016, and October 16, 2016. See ECF Nos. 44-5-44-7, 44-10- 44-12. The last draft, containing edits in redline, was sent by Marketsoup's attorney. ECF No. 44-12. In his email accompanying that version, Marketsoup's attorney stated that he “look[ed] forward to you[r] thoughts and comments.” Id. at 2. Western Star never responded to the October 2016 draft.

         Nonetheless, the parties continued working together. Marketsoup worked on the Starlight Application and sent Western Star invoices for its work from August 1, 2016 through November 1, 2017. See ECF No. 44-8. Marketsoup's explanation of billing (ECF No. 44-9 at 3-4) matched that set out in the SOW, which was unchanged in the draft agreements sent between August 29 and October 16, 2016. See ECF Nos. 44-9, 44-12 at 14.

         The relationship between the companies apparently soured in October 2017 when Marketsoup asserted that it owned the software code created for the Starlight Application. ECF No. 44-1 at 22. On October 31, 2017 Western Star demanded that Marketsoup return all copies of the source code, cease additional software development on behalf of Western Star, and stop using Western Star's confidential information except as authorized. Id. On December 23, 2017 Western Star notified Marketsoup that it was terminating the parties' agreement due to Marketsoup's breach of the agreement. Id. at 24. In November and December of 2017 Marketsoup allegedly began threatening to shut down the Starlight platform and software application that support Western Star's customers. ECF No. 31 at 2. Marketsoup also began taking steps to patent and/or copyright intellectual property that Western Star claims it owns. Id.

         B. Procedural Background.

         After several specific incidents, including when Marketsoup temporarily locked Western Star out of the platform and began advertising the Starlight Application as its own, Western Star filed a Complaint for Emergency Injunctive Relief and an Emergency Motion for a Temporary Restraining Order before this Court. See ECF Nos. 1, 2. On December 8, 2017 the Court held a hearing on Western Star's Amended Emergency Motion for a Temporary Restraining Order and Preliminary Injunction. See ECF No. 23. Following the hearing, Marketsoup agreed to transfer control over the source code and software to Western Star. ECF No. 31 at 4. Nonetheless, according to Western Star, Marketsoup continues to claim that it owns this intellectual property and has continued pursuing applications to copyright part or all of the intellectual property.[1] Id.

         As a result of Marketsoup's continued attempts to assert its ownership of the intellectual property at issue, Western Star filed an amended complaint. See Id. In this complaint it asserts the following nine claims for relief: (1) a declaratory judgment asserting that Western Star owns all intellectual property rights related to the Starlight Application and that the contract between the parties (as memorialized in the October 2016 draft) is valid and enforceable; (2) a permanent injunction against Marketsoup's disruption of the Starlight Application or its attempt to assert ownership of the related intellectual property; (3) misappropriation of trade secrets under federal law; (4) misappropriation of trade secrets under state law; (5) conversion of Western Star's software, source code, and confidential information; (6) civil theft of Western Star's property; (7) breach of contract; (8) unjust enrichment; and (9) promissory estoppel. Id. at 18-24.

         Western Star now seeks partial summary judgment on its claim for declaratory judgment with respect to the validity of the contract, or in the alternative on its claim for promissory estoppel; and on its claim for conversion. ECF No. 44 at 14.


         The Court may grant summary judgment if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving party has the burden to show that there is an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The nonmoving party must “designate specific facts showing that there is a genuine issue for trial.” Id. at 324. A fact is material “if under the substantive law it is essential to the proper disposition of the claim.” Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). An issue of material fact is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. The ...

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