During their relationship, AMS and Gagnon entered into a Technical Services Agreement (TSA), scheduled to expire on April 30, 2001. The TSA, printed on Gagnon’s “Mister Computer” letterhead, specified the services Gagnon was to provide, including “specific add-on products to enhance Contractor’s current in-house database application.” The TSA was not renewed in April 2001, but the relationship continued.
After the TSA expired, Gagnon proposed an Outside Vendor Agreement (OVA), which contained a provision that all processes developed by the outside vendor belonged to the vendor and were only licensed to the customer. AMS modified the proposed OVA to state just the opposite property rights, but the parties never signed either version of the OVA.
Gagnon then demanded $1.75 million from AMS for his agreement that AMS could continue to use the programs he developed. AMS responded by terminating Gagnon’s services, and continued to use the programs.
Gagnon sued AMS for copyright infringement of the computer programs, arguing that AMS continued to use and modify the programs without his consent. AMS claimed the right to use the programs, in part claiming that Gagnon signed a Vendor Nondisclosure Agreement (NDA), giving AMS ownership of all intellectual property Gagnon developed for Gagnon. Gagnon replied that the NDA was a forged document.
Without relying on the NDA, the District Court (S.D. Calif.) granted summary judgment in favor of AMS, finding that by the course of dealings Gagnon granted AMS an unlimited, non-exclusive, implied license to use, modify and retain the source code of the programs thereby defeating Gagnon’s claims. The District Court also denied Gagnon’s application for an order denying or continuing summary judgment and to file written objections to evidence.
The Ninth Circuit affirmed, holding that AMS had an implied unlimited, irrevocable license for the computer programs. Although 17 U.S.C. §204 requires that exclusive licenses be in writing, a court will grant an implied license when: (1) the licensee request creation of the work; and (2) the licensor makes that particular work and delivers it to the requesting licensee. Effects Assocs., Inc. v. Cohen, 908 F.2d 555 (9th Cir. 1990). Here, Gagnon conceded that he created the programs specifically for AMS and that AMS paid for the work.
The Court also held that Gagnon delivered the programs when he installed them onto the AMS computers and stored the source code on-site at AMS, and that his intent to deliver was manifested by his conduct, including the executed TSA, the OVA which he submitted, and his ongoing technical support to AMS.
The Court further affirmed denial of Gagnon’s ex parte motion, holding that Gagnon needed no additional evidence to oppose AMS’s summary judgment motion.
Judge(s): Milan D. Smith, Jr., Circuit Judge
Jurisdiction: U.S. Court of Appeals, Ninth Circuit
Related Categories: Contracts
|Appellant Lawyer(s)||Appellant Law Firm(s)|
|Todd A. Moore|
|Appellee Lawyer(s)||Appellee Law Firm(s)|
|John M. Morris||Higgs Fletcher & Mack LLP|
|Philip C. Samouris||Higgs Fletcher & Mack LLP|