MEMORANDUM OPINION AND ORDER Plaintiff Automated Irrigation Controls (“AIC”) sues for breach of contract, claiming that Defendant Watt Stopper, Inc. (“Watt Stopper”) has failed to pay royalties to which Plaintiff contends it is contractually entitled. The governing contract, however, contains a self-executing clause that, absent waiver or other modification, terminated Watt Stopper’s royalty obligations. The contractual language at issue is clear and unambiguous, and consistent with the law of New York, is to be enforced according to its terms. However, as material issues of fact persist as to whether the contractual framework was modified by waiver, the Court cannot conclude on the record before it that Watt Stopper’s royalty obligations have terminated. As a result, for the reasons that follow, Watt Stopper’s motion for summary judgment is GRANTED IN PART and DENIED IN PART and AIC’s motion for summary judgment is DENIED. I. BACKGROUD A. Undisputed Facts Watt Stopper markets and sells lighting control products. AIC developed certain wireless outdoor lighting control products.1 At or around November 12, 2013 Watt Stopper and AIC entered into the technology licensing agreement (the “TLA”) that is the subject of this dispute. Counterclaim Statement of Undisputed Facts (“CC 56.1″), Dkt. No. 130 1; TLA, Dkt. No. 95-1 at 1 (noting Nov. 11, 2013 as the effective date). Legrand North America, LLC. (“Legrand”) is the guarantor of Watt Stopper’s obligations under the TLA.2 TLA §2(K). Bryan Pike, as Vice-President of AIC, executed the TLA on AIC’s behalf. TLA at 11. The TLA granted Watt Stopper an exclusive license to exploit certain patents, patent applications, and technologies developed by AIC in exchange for the payment of royalties to AIC on the sale of “Royalty Bearing Products,” as defined in the TLA. TLA 1-4. “Royalty Bearing Products” were defined as: …the products set forth in Exhibit A and functional [sic] equivalent successor products. As used in the preceding sentence “functionally equivalent successor products” means (i) products on Exhibit A that are re-named or re-branded without material change to their features or functionality, (ii) products that are re-configurations of the same technology (same feature/functionality) as products on Exhibit A but not (iii) battery operated single digital or analog input or “single point” products. TLA §2(D). Because Watt Stopper “desire[d] to employ certain individuals previously employed by AIC,” TLA, Recitals at 1, the TLA anticipated that certain persons who were employed by AIC at the time the TLA was executed would be offered employment at Watt Stopper. That Watt Stopper anticipated hiring those employees, and the implications of any violations of those employees’ employment agreements with Watt Stopper, were embodied in the text of the TLA. …because the know-how associated with the Licensed Technology is anticipated to be shared hereunder by certain key persons currently employed by AIC but anticipated hereunder to be offered employment by [Watt Stopper], it shall be a condition hereunder that AIC hereby acknowledge and agree, notwithstanding the Royalty Period (defined below) and any other conflicting or potentially conflicting provision herein, that if any of Bryan Pike, Joe Dylinski, or Zane Brown resigns from their employment with Wattstopper without Wattstopper’s consent prior to the third anniversary of the Effective Date, or breach their employment obligations, including without limitation their respective “no conflict of interest” and “non-compete” terms and conditions, then as of that date sales by [Watt Stopper] of Royalty Bearing Products will be royalty free and all licenses granted by AIC hereunder will be fully paid. TLA at 3 (the “Conditions on Royalties Clause”); TLA §3 (“In connection with [the TLA], Wattstopper shall extend offers of employment to current AIC employees Bryan Pike, Joe Dylinski, Zane Brown, and Nathan Wood.”) Joe Dylinski and Bryan Pike both executed employment agreements with Watt Stopper on November 12, 2013. Dylinski Agreement, Dkt. No. 95-8 ; Pike Agreement, Dkt. No. 95-7, (collectively, the “Employment Agreements”). Section 3.3 in both Employment Agreements are identical, and both state that: ….Employee further agrees to divest any and all ownership interest in Digital Contracting Solutions (DCS) and provide [Watt Stopper] with satisfactory evidence of the divestiture within six months of this Agreement’s effective date. Employee further agrees to cease his participation in the operations of AIC, DCS, or any company with which [Watt Stopper] or its Affiliates is expected to do business in performance of obligations under either the technology license agreement or OEM agreement. If employee fails to fulfill the obligations set forth in this [section], his employment will be terminated immediately for “Cause,” and Employee shall be entitled to no further payments and benefits under any provision of this Agreement (other than for accrued unused vacation). Employment Agreements §3.3 (the “Conflict of Interest Clauses”). Neither Pike nor Dylinski ever divested their interests in DCS; nor, consequentially, did they provide proof of such divestiture. Statement of Undisputed Facts (“56.1″), Dkt. No. 121
17, 18 (neither man “divest[ed] his ownership interest in DCS because [they] could not.”). Peter Horton was the primary representative of Watt Stopper in negotiating the TLA. 56.1 2. On June 11, 2013, Pike wrote an email to Horton, copying Dylinski, in which he stated that: “Per the license agreement, AIC needed to show full divestiture of DCS by now. What do we need to do if anything to comply?” 56.1 19. Horton subsequently forwarded the email to Jim Young, a Watt Stopper executive. Id. Young informed Horton that he “should ask Pike and Dylinski for an executed copy of the DCS sale agreement.” Id. Horton “forwarded [that] email to Pike, advising him to ‘see below’ for Young’s request.” Id. As described above, however, neither Dylinski nor Pike divested their DCS holdings, nor provided proof of divesture. 56.1
