Asset Marketing Systems, Inc. v. Gagnon was a case heard by the United States Court of Appeals for the Ninth Circuit regarding implied licenses to use, modify and retain the source code of computer programs, and the enforceability of non-competition agreements.

The court affirmed the ruling from the United States District Court for the Southern District of California that Kevin Gagnon, a software contractor doing business as "Mr. Computer", had implicitly granted Asset Marketing Systems (AMS) an unlimited license to use, modify and retain the source code of the programs that Gagnon created.

From May 1999 to September 2003, AMS hired Gagnon, an at-will, independent contractor, to develop custom software to assist with its information technology needs.

AMS declined to execute the OVA, but instead countered with a redlined version to read that all information produced by the contractor would be the sole property of the client.

[1] The case began when AMS filed a complaint in California state court against Kevin Gagnon, doing business as Mister Computer, two of his employees, and Gagnon’s new company, National Marketing Technologies, alleging, among other things, misappropriation of trade secrets and conversion.

Gagnon removed the case to federal court and then filed counterclaims, alleging copyright infringement, unfair competition under California law, misappropriation of trade secrets, interference with contractual relations, intentional interference with prospective business advantage, and negligent interference with prospective business advantage, and seeking accounting and declaratory relief declaring Gagnon the copyright owner of the programs.

The district court subsequently granted AMS's motion for summary judgment as to Gagnon's counterclaims.

The court found that Gagnon had granted AMS an implied, nonexclusive license to use, modify, and retain the source code of the programs.

[1] Gagnon also filed an ex parte application requesting a continuance to obtain the backup tapes of AMS's computers because they might contain email evidence establishing AMS's allegedly unlawful solicitation of Gagnon’s employees, and would help establish the location of the source code at all relevant times.

First, the district court had already determined that the non-competition clause in Gagnon's employment agreements was unenforceable under California law, any evidence showing solicitation was irrelevant.

[2] The Ninth Circuit thus affirmed the district court, holding that AMS had an implied unlimited, irrevocable license for the computer programs.