## Facts

- Asset Marketing Systems, Inc. (AMS) hired Kevin Gagnon (doing business as Mister Computer) as an at-will independent contractor from 1999 to 2003 to provide information technology services, including developing custom software.
- AMS paid Gagnon over $2 million during the relationship, including substantial payments for custom software development.
- At AMS’s request, Gagnon developed six computer programs for AMS, installed them on AMS’s computers, and trained AMS employees to use them.
- The parties executed a 2000 Technical Services Agreement setting fees and services; it referenced custom programming but did not address licensing and later expired without renewal while work and use continued.
- AMS later asserted Gagnon signed a 2002 nondisclosure agreement assigning ownership of intellectual property to AMS; Gagnon disputed authenticity and claimed forgery.
- In 2003, Gagnon proposed an agreement reserving proprietary rights to himself and granting AMS only a license; AMS proposed edits assigning ownership to AMS, but no agreement was executed.
- After the relationship ended, Gagnon demanded additional payment and asserted AMS could not continue to use or modify the software without his consent; he registered copyrights in the programs.
- AMS sued; Gagnon counterclaimed for copyright infringement and trade secret misappropriation based on AMS’s continued use and modification of the programs and source code.

## Issues

1. Whether Gagnon granted AMS an unlimited, non-exclusive implied license to use, retain, and modify the software, barring his copyright infringement claims.
2. Whether AMS’s continued use and modification of the software and source code could constitute trade secret misappropriation if an implied license existed.
3. Whether the district court abused its discretion by denying Gagnon’s request to continue summary judgment proceedings to obtain further discovery.

## Decision

- The Ninth Circuit affirmed summary judgment for AMS on both the copyright and trade secret counterclaims.
- The court held that AMS had an unlimited, non-exclusive implied license to use, retain, and modify the software and source code, defeating infringement claims.
- The court held that AMS’s authorized use under the license defeated the trade secret misappropriation claim premised on the same conduct.
- The court affirmed the denial of additional discovery because Gagnon failed to show that further discovery would create a genuine dispute of material fact on the existence or scope of the implied license.

## Legal Principles

- An implied non-exclusive copyright license arises when: (1) the licensee requests creation of a work, (2) the creator makes and delivers the requested work, and (3) the creator intends the licensee to copy and distribute (use) the work.
- Intent and license scope may be inferred from the parties’ course of dealing and performance, even absent an express written license.
- An implied license for custom software can include rights necessary for the requester’s continued operation, including use, retention, and modification of source code.
- Conduct authorized by a valid license cannot support a trade secret misappropriation claim based on the licensee’s continued use or modification of the licensed material.
- A continuance for additional discovery in opposition to summary judgment requires a specific showing that further discovery would likely yield facts creating a genuine issue for trial.

## Conclusion

The court concluded that the undisputed course of dealing showed the contractor intended AMS to continue using the custom programs delivered for its business, creating an unlimited implied license that authorized AMS’s post-termination use, retention, and modification and therefore barred both copyright infringement and trade secret misappropriation claims.


Asset Mktg. Sys., Inc. v. Gagnon, 542 F.3d 748 (9th Cir. 2008)