Implied License to Use Custom Created Software Defeats Copyright and Trade Secret Claims

Case: Asset Marketing v. Gagnon, 9th Cir. No. 07-55217 (9/9/08)

The One Sentence Summary: An implied license to use and modify software arose between a contractor who created customized software for a customer and the customer.



Ninth Circuit Holdings:

• Implied, unlimited license arose under copyright law from relationship where plaintiff created customized software for defendant where the contract was silent regarding a license, the contractor was paid on an hourly basis, and software was delivered without indication that there were any limits on use by the defendant.
• Trade secrets alleged to be in the software were not misappropriated where defendant had an implied license to use and modify the software.
• A non-compete agreement for plaintiff's fomer employees was unenforceable absent any trade secrets due to California Business & Professions Code section 16600.