The following facts are either stipulated, supported by affidavit or deposition testimony, uncontroverted or viewed in the light most favorable to Mr. Gagnon, the nonmoving party. The Court excludes factual assertions that are immaterial or that are conclusions of law rather than statements of fact.

AMS, a California corporation with its principal place of business in San Diego, California, is a sales technology company that provides field marketing services related to insurance and annuity products. (See Gagnon's Counterclaim at 2; see also AMS' UMF at ¶ 1.) Since its inception in January of 1996, AMS alleges that it has developed a unique and proprietary system whereby it identifies, selects, trains, and assigns territories to sales persons, who then sell insurance products to defined markets using the assistance and methods of AMS. (SeeAMS' UMF at ¶ 1.)

In May 1999, AMS hired Kevin Gagnon, a software architect and systems analyst who operates under the business name of “Mister Computer,” as an outside vendor and independent contractor to analyze, design, and provide software solutions for AMS. (See Gagnon's Opp'n at 2.) Mr. Gagnon's service to AMS was terminable at-will by both sides. (See AMS' UMF at ¶ 3.) Between 1999 and April 2003, AMS' demand for Mr. Gagnon's services grew rapidly because of its growth in business. (See Gagnon's Opp'n at 2.) Mr. Gagnon helped to automate AMS' business by designing computer software to assist AMS in accomplishing its business goals, strategies, and/or objectives. (See id.) AMS paid Mr. Gagnon over $2,000,000 since 1999, of which $250,000 was specifically used for software development. (See AMS' UMF at ¶ 9.)

Mr. Gagnon's involvement with AMS was extensive enough that he hired about twelve employees to help with the services he provided AMS. (See AMS' UMF at ¶ 24.) Mr. Gagnon had each of his employees sign an “Employee's Work Agreement” with the following confidentiality term and engagement term:

(Gagnon's Lodgm't in Opp'n, Ex. E.) Mister Computer's employees were all at-will because none of the Employee's Work Agreements included a clause stating that the employee would have to work for a specified time period. (See id.)

During the course of Mister Computer's relationship with AMS, Mr. Gagnon and his work force designed about six software programs to automate AMS' operations (collectively “support programs”): (1) Document Retrieval System Identification and Design (“DRS”), (2) Telephone Monitoring System (“TMS”), (3) Territorial Administration System (“TAS”), (4) Territory Identification and Design (“Territory ID”), (5) Telelogix; (6) Production Entry. (See Gagnon's Opp'n at 2.) All of the programs displayed a splash screen stating that they were copyrighted by Mister Computer. (See id.; see also Decl. of Kevin Gagnon at 4.) The support programs had a custom application for AMS and automated AMS' confidential information concerning its agents, their territories, and the criteria used by AMS to qualify agents and create sale territories. (See Gagnon's Opp'n to UMF at ¶ 5; AMS' UMF at ¶ 7; Decl. of Allen Feld at ¶ 5.) Mr. Gagnon and his staff installed the support programs on AMS' computers; and AMS used the programs to carry out its business operations. (See Gagnon's Opp'n at 2.) Mr. Gagnon and his staff stored the source code for all six programs on AMS' computers in the development room at AMS's office. (See AMS' Lodgm't in Supp. of Mot. for Summ. J., Ex. 1 at 135: 9 - 136: 6.)

Mr. Gagnon proposed a one-year Technical Service Agreement, dated May 1, 2000, to govern the relationship between Mr. Gagnon and AMS. (See AMS' Lodgm't in Supp. Mot. for Summ. J., Ex. 5.) The Agreement does not contain language stating that Mr. Gagnon was not granting a license to AMS to use the programs or that AMS would be required to pay a continuing licensing fee. (See generally id.)

AMS claims that Mr. Gagnon signed a “Vendor Non-Disclosure Agreement” (“Agreement”) on June 12, 2002, confirming that all “copyrightable works” shall be the “exclusive property” of AMS, and that Mr. Gagnon has “no right or title thereto.” (AMS' UMF at ¶ 7). In response, Mr. Gagnon asserts that the Agreement is a forgery and that the alleged signature of Mr. Gagnon cannot be authenticated. (SeeGagnon's Opp'n to UMF at ¶ 13.)

In June 2003, AMS sought to establish a more formal employment relationship, but Mr. Gagnon rejected the offer. (See Gagnon's Opp'n at 2.) That same month, Mr. Gagnon proposed an Outside Vendor Agreement, which was not signed by AMS, that states “Contractor [Mr. Gagnon] will allow Company [AMS] non-exclusive unlimited licensing of software developed for the Company.” (AMS' Lodgm't in Supp. of Mot. for Summ. J., Ex. 4 at 11.)

In a letter, dated August 5, 2003, Mr. Gagnon told Jay Akerstein, Chief Operation Officer of AMS, that his employees had contractual obligations which prevented his employees from being “employed by a client of Mister Computer for a period of 24 months after cancellation of the [employee work] agreement.” (Gagnon's Lodgm't in Opp'n, Ex. H at 1.) Mr. Gagnon also stated in the letter that his “position has always been that Asset Marketing Systems shall be entitled to unlimited software licensing as long as [his] company had a business relationship with Asset Marketing Systems.” (See id.) No evidence has been presented that prior to the August 5, 2003, letter, Mr. Gagnon had conveyed in writing or orally that AMS was entitled to unlimited software licensing only so long as AMS had a business relationship with Mister Computer.

*3 On September 16, 2003, Mr. Gagnon registered copyrights for each of the six programs with the U.S. Copyright Office. (See Gagnon Countercl. at ¶ 10; AMS' Lodgm't in Supp. of Mot. for Summ. J., Ex. 15.)

On September 23, 2003, AMS terminated its relationship with Mister Computer. (See Gagnon's Opp'n at 4.) At that time, AMS was Mr. Gagnon's only client, accounting for about 98% of his business. (See AMS' Lodgm't in Supp. of Mot. for Summ. J., Ex. 1 at 144:21-146:8.) AMS hired away seven of Mister Computer's employees; and these employees started working with AMS shortly after Mr. Gagnon's termination. (See Gagnon's Opp'n at 4.)

In or around September 2003, Mr. Gagnon sent a letter to AMS asking for about $1.5 million to allow AMS to continue using the support programs and to hire away his employees. (See AMS' Lodgm't in Supp. of Mot. for Summ. J., Ex. 1 at 308:5-15.) Mr. Gagnon also offered to not compete with AMS if AMS paid him $500,000 in addition to the $1.5 million. (See id. at 308:5-24.) AMS refused both of Mr. Gagnon's offers. (See AMS' Mem. Supp. Mot. for Summ. J. at 1.)

On October 10, 2003, AMS filed a Complaint in the Superior Court of the State of California for the County of San Diego, Case No. GIC 819228, against Mr. Gagnon, Mister Computer, two of his employees, and a new company allegedly created by Mr. Gagnon named National Marketing Technologies, Inc. [Doc. No. 1.] AMS in the Complaint included the following causes of action: (1) misappropriation of trade secrets; (2) unfair business practices; (3) breach of fiduciary duty; (4) negligence; and (5) conversion. (See AMS's Compl. at 1.)

On November 13, 2003, Mr. Gagnon subsequently removed the matter to federal court. [Doc. No. 1.] The next day, Mr. Gagnon filed Counterclaims against AMS for: (1) copyright infringement, (2) unfair competition, (3) misappropriation of trade secrets, (4) intentional interference with contract, (5) intentional interference with prospective business advantage, (6) negligent interference with prospective business advantage, (7) declaratory relief, and (8) accounting. [Doc. No. 6.]

In an order, dated January 14, 2004, the Court remanded all of AMS' claims except for a portion of AMS' conversion claim concerning the software code, which the Court dismissed for lack of subject matter jurisdiction because it was preempted by the Copyright Act. [Doc. No. 14.] Moreover, the Court denied AMS' motion to dismiss Mr. Gagnon's copyright infringement claim for failure to state a claim. [Id.] To avoid having to simultaneously litigate the matter in both federal and state court, AMS filed its remanded state law claims as counter-counterclaims in the federal court action. [Doc. No. 18.]

In February 2, 2004, AMS sought preliminary injunctive relief against Mr. Gagnon et al. seeking to enjoin them from “destroying, copying, disclosing, publishing, and/or disseminating ... the information contained in ... confidential databases, files, Agent Lists and proprietary software application versions.” (AMS' Proposed Order on Mot. for Prelim. Inj. at 2.) On March 25, 2004, this Court denied AMS' motion for preliminary injunction because AMS did not present sufficient evidence of irreparable injury. [Doc. No. 48.]

*4 Before the Court is AMS' Motion for Summary Judgment as to all of Mr. Gagnon's counterclaims. [Doc. No. 77.] Mr. Gagnon filed an Opposition, and AMS filed a Reply. [Doc. Nos. 89, 98.] Both parties also filed Objections to Evidence as to declarations and other evidence submitted by the opposing party. [Doc. Nos. 124, 137.] After briefing concluded on AMS' Motion for Summary Judgment, Mr. Gagnon also filed an Ex Parte Application for order denying or, in the alternative continuing summary judgment. [Doc. Nos. 100.] Magistrate Judge Cathy A. Bencivengo filed a Report and Recommendation recommending that Mr. Gagnon's Ex parte Application be denied. [Doc. No. 128.]

Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil Procedure on “all or any part” of a claim where there is an absence of a genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a) & (c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). One of the principal purposes of Rule 56 is to dispose of factually unsupported claims or defenses. See Celetox, 477 U.S. at 323-24. A fact is material when, under the governing substantive law, the fact might affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute about a material fact is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. When making its determination, the Court must view all inferences drawn from the underlying facts in the light most favorable to the party opposing the motion. See Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

The party seeking summary judgment bears the initial burden of establishing the absence of a genuine issue of material fact. See Celotex, 477 U.S. at 323. The moving party can satisfy this burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element of his or her claim on which that party will bear the burden of proof at trial. See id. at 322-23. If the moving party fails to discharge this initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. See Adickes v. S. H. Kress & Co., 398 U.S. 144, 159-60 (1970).

If the moving party meets the initial burden, the burden shifts to the nonmoving party to “set forth specific facts showing there is a genuine issue for trial.” Anderson, 477 U.S. at 256. “The mere existence of a scintilla of evidence in support of the nonmoving party's position is not sufficient.” Triton Energy Corp. v. Square D. Co., 68 F.3d 1216, 1221 (9th Cir. 1995) (citing Anderson, 477 U.S. at 252); see also Matsushita, 475 U.S. at 586 (if the moving party meets this initial burden, the nonmoving party cannot defeat summary judgment by merely demonstrating “that there is some metaphysical doubt as to the material facts”). It is insufficient for the party opposing summary judgment to “rest upon the mere allegations or denials of [his or her] pleading” Fed. R. Civ. P. 56(3). Rather, the party opposing summary judgment must “by [his or her] own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’ designate ‘specific facts showing that there is a genuine issue for trial.’ ” Celotex, 477 U.S. at 324 (quoting Fed. R. Civ. P 56(e)). “Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment.” See T. W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). In addition, the Court is not obligated “to scour the records in search of a genuine issue of triable fact.” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (citing Richards v. Combined Ins. Co., 55 F.3d 247, 251 (7th Cir. 1995)). “[T]he district court may limit its review to the documents submitted for purposes of summary judgment and those parts of the record specifically referenced therein.” Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026, 1030 (9th Cir. 2001).

*5 “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’ ” Matsushita, 475 U.S. at 587 (citing First Nat'l Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289 (1968)). Moreover, “[a] district court must enter summary judgment against a party who fails to make a showing sufficient to establish an essential element of a claim, even if genuine factual disputes exist regarding other elements of the claim.” Cunningham v. City of Wenatchee, 214 F. Supp. 2d 1103, 1110 (E.D. Wash. 2002) (citing Celotex, 477 U.S. at 323-24.)

I. Copyright Claim

AMS moves for summary judgment on Mr. Gagnon's claim that AMS' use of the support programs infringes on his copyrights thereto. (SeeAMS's Mem. Supp. Mot. For Summ. J. at 4-5.) “To establish infringement, two elements must be proven: (1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.” See Feist Publications, Inc. v. Rural Telephone Service Co., Inc., 499 U.S. 340, 361 (1991) (citation omitted). In this case, AMS argues that Mr. Gagnon cannot make a showing sufficient to establish ownership of a valid copyright, which is the first element required for a copyright infringement claim, because Mr. Gagnon transferred any copyrights he may have had in the computer programs to AMS by signing a Vendor Nondisclosure Agreement. (See AMS's Mem. Supp. Mot. for Summ. J. at 7.) In the alternative, AMS argues that even if Mr. Gagnon owned the copyrights and did not transfer his rights to AMS, Mr. Gagnon's claim still fails because Mr. Gagnon granted AMS an implied license to continue to possess, use, and modify the source code based upon the undisputed facts of the case. (See id.) For the reasons set forth below, the Court FINDS that Mr. Gagnon cannot maintain his copyright claim against AMS because AMS has an implied nonexclusive license to use the support programs to operate its business.

AMS asserts that it “has an implied license to continue to possess, use and modify the source code to carry out its operations” because it paid Mr. Gagnon to create the programs for its business. (AMS' Mem. Supp. Mot. for Summ. J. at 12.) For the reasons set forth below, the Court FINDS that Mr. Gagnon cannot maintain a copyright infringement claim against AMS because AMS has an implied license to possess, use, and modify the software programs for its business.

Possession of a license to use a copyright creates an affirmative defense to a claim of copyright infringement. See Worldwide Church of God v. Philadelphia Church of God, 227 F.3d 1110, 1114 (9th Cir. 2000). Rather than transfer ownership of the copyright to the licensee, an implied nonexclusive license simply permits the use of a copyrighted work in a particular manner. See I.A.E., Inc. v. Shaver, 74 F.3d 768, 775 (7th Cir. 1996). A nonexclusive license can be granted without a writing[1] because “ ‘a nonexclusive license may be granted orally, or may even be implied from conduct.’ ” Effects Associates, Inc., 908 F.2d at 558 (citing M. Nimmer & D. Nimmer, Nimmer on Copyright § 10.03[A], at 1036 (1989)).[2] An implied nonexclusive license has been granted when (1) a person (the licensee) requests the creation of a work, (2) the creator (the licensor) makes that particular work and delivers it to the licensee who requested it, and (3) the licensor intends that the licensee-requestor copy and distribute his work. See I.A.E., 74 F.3d at 776 (citing Effects Associates, 908 F.2d at 558-59). Once an implied license is granted, it becomes irrevocable if the license is supported by consideration. See I.A.E., 74 F.3d at 772.

*6 In Effects Associates, Inc. v. Cohen, 908 F.2d 555, 556 (9th Cir. 1990), the Court of Appeals for the Ninth Circuit denied a special effects studio's copyright infringement claim after finding that the studio had granted the defendant movie producer a nonexclusive implied license to use the special effects footage at issue. The Ninth Circuit held that the special effects studio had conveyed a license to the producer when the studio handed over the footage to the producer who had commissioned it for $56,000. See id. at 558. The court reasoned that the transaction had to be understood as contemplating a license to use the footage for the purpose for which it was created, as footage in the film; otherwise, the producer's payment of a large sum of money would have been senseless. See id. at 559.

In Foad Consulting Group, Inc. v. Musil Govan Azzalino, 270 F.3d 821, 825 (9th Cir. 2001), the Ninth Circuit also held that an engineering firm impliedly granted defendant developer a copyright license to use plot plans because the developer had hired the firm to create the plans for a shopping center development project that was to be submitted in an application to the city. The court found that defendants had a license to use the plot plans because defendants paid plaintiff Foad a fee of $175,000 to create multiple maps, drawings, and plans for the project and to process these documents with the city, and that this was the central purpose of the agreement. See id. at 828. The court reasoned that “[g]iven the amount of money GenCom paid for Foad's services and because part of the agreement was for Foad to help GenCom with its application to the city, it would be surprising if the parties had intended for GenCom to seek Foad's permission before using the plans to build the project.” Id. at 828-29. The court also expressed disapproval of the engineering firm demanding payments for use of the plot plan even though the firm had already been paid to create the plan:

Id. at 829 n.12. Thus, to limit a contractor's ability to hold a project hostage, the Foad court stated that the burden was the contractor/copyright owner to make it clear when he or she intends to retain control over a project at all times.

The Seventh Circuit in I.A.E., Inc. v. Shaver, 74 F.3d 768, 772 (7th Cir. 1996), held that an architect granted a nonexclusive license to a construction company when the architect created a design for an airport cargo hanger building and delivered the design to the defendant, a construction company, involved in a joint venture to construct the building. The court reasoned that “[j]ust as the plaintiff in Effects ‘created a work at defendant's request and handed it over, intending that defendant copy and distribute it,’ in exchange for $56,000, Mr. Shaver [in I.A.E.] created, for a fee of $10,000, designs for the Airport's air cargo building and handed them over to Joint Venture and the Airport.” Id.The court also held that consent for a nonexclusive license can be given in the “form of mere permission or lack of objection ... and is not required to be in writing.” Id. at 775.

1. AMS Requested Creation of the Computer Programs

In this case, AMS has provided evidence to establish the first element required for a nonexclusive license – that there is no genuine issue of material fact that AMS requested that Mr. Gagnon create all six of the programs at issue “to automate AMS' ability to recruit sales persons, to facilitate licensing of agents with insurance companies, to assign territories and license AMS' systems and to track production.” (AMS' Mem. Supp. Mot. for Summ. J. at 12.) In particular, AMS has submitted deposition testimony from Mr. Gagnon demonstrating that, like the plaintiffs in Effects, Foad, and I.A.E., Mr. Gagnon had a relationship of independent contractor with AMS for the purpose of creating programs to automate AMS' information. See I.A.E., 74 F.3d at 776. Mr. Gagnon admits in his deposition that AMS asked him to create the support programs to automate its information:

(AMS' Lodgm't, Ext. 1 at 79:23-80:5.) Moreover, Mr. Gagnon also admits that he was particularly responsive to Mr. Akerstein's request that he create and modify software programs for AMS:

(Id. at 86:7-87:6.) Moreover, Mr. Akerstein went beyond generally requesting that Mr. Gagnon create software programs for tracking AMS' information; rather, Mr. Gagnon states that it became a practice for Mr. Akerstein to describe to Mr. Gagnon the information AMS wanted automated. Mr. Gagnon explains:

(Id. at 80:14-19.) In response to AMS, Mr. Gagnon has offered no evidence to challenge AMS' showing that it requested creation of the software. Thus, the Court FINDS that there is no genuine dispute that AMS asked Mr. Gagnon to create the programs at issue to automate AMS' tracking of information. (Id. at 79:23-25, 80:1-19).

2. Mr. Gagnon Created the Programs and Delivered Them to AMS

In addition, AMS has met the second requirement for an implied license because AMS has presented evidence sufficient to show that Mr. Gagnon created the requested software programs and delivered them to AMS. Mr. Gagnon admits in a deposition that he created the six programs at issue specially for AMS:

(AMS' Lodgm't, Ext. 1 at 101:6-11.) Also, as in Effects, Foad, and I.A.E., it is undisputed that Mr. Gagnon created the programs in exchange for payment from AMS. See I.A.E., 74 F.3d at 772. AMS asserts that it “has paid Mr. Gagnon over $2,000,000 since 1999, of which over $250,000 was for software development.” (AMS's UMF at ¶ 9.) Although Mr. Gagnon inexplicably asserts that he “is without sufficient information at this time to respond to [the] alleged fact” that he received over $250,000 from AMS for software development (see Gagnon's Opp'n to UMF at ¶ 9), he admits in his deposition that AMS paid him well for the software:

(AMS's Lodgm't, Ex. 1 at 257:13-22); see also id. at 295:24-25 (Mr. Gagnon states “[AMS] trusted me, and they paid me well.”) In addition to paying Mr. Gagnon for the programs, AMS also covered the cost of computer program training to enable Mr. Gagnon to develop the requested software programs. (See AMS's Lodgm't, Ex. 1 at 85:3-19.) Similar to Effects, given the fact that AMS paid Mr. Gagnon a significant sum to develop the programs, it would be unreasonable to conclude that Mr. Gagnon did not also convey a license to AMS to use the programs. See Effects, 908 F.2d at 559.

In addition to creating the programs at AMS' request, Mr. Gagnon also delivered the programs to AMS because he installed the requested programs on AMS' computers and stored the source code at AMS. “[A] computer program exists, technologically, in two possible forms: ‘source code,’ in which the instructions that constitute the program are prepared in a language comprehensible to both humans and computers, and ‘object code’ (sometimes called ‘binary’ or ‘executable’ code), a computer-generated translation of those same instructions that is intended to be comprehensible primarily to a computer, which a given computer actually uses when it runs that program.” Michael J. Madison, Reconstructing the Software License, 35 Loy. U. Chi. L.J. 275, 280 (2003). “Conventional distribution of computer software has been based on distribution of copies of this ‘object code’ and retention of the source code by the developer.” Id. at 280-81. Here, Mr. Gagnon distributed the software by installing the programs on AMS' computers. (See AMS' UMF at ¶ 7.) In addition, Mr. Gagnon also delivered the source code to AMS by storing the code on AMS' computers. Allen Feld, who was employed by Mr. Gagnon as a software developer on an exclusive assignment with AMS, states in a declaration that “[t]he open, unprotected source code for these programs (the ‘AMS Support Programs’) was installed on several of AMS' computers which were located at AMS' facilities (the ‘AMS Development Computers’) ... [t]he open source code was also stored on AMS' public server.” (Decl. of Allen Feld in Supp. of Mot. for Summ. J. at 2.) Mr. Gagnon, in his deposition testimony, also admits that “the source code was stored ... in a development room or the server room” at AMS. (AMS' Lodgm't, Ex. 1 at 135:13-14.) Despite this admission, Mr. Gagnon attempts to argue that delivery was not effectuated because only those with a security card could get into the development room at AMS. (See Gagnon's Opp'n at 19.) However, his argument fails because he concedes that Mr. Ackerstein and two other employees of AMS had access to the rooms and that these AMS employees never made any promises of confidentiality to him. (See id. at 135:18-136:6; see also Gagnon's Opp'n at 19 (“[t]he programs were located on computers in the development room at AMS ... [t]he only persons with access to this room were my employees and a select group of AMS' upper management.”) (emphasis added).) Thus, the Court FINDS that there is no genuine issue of material fact that Mr. Gagnon both created the programs for AMS and delivered them to AMS.

3. Mr. Gagnon Intended that AMS Be Allowed to Retain and Modify the Delivered Programs

*9 AMS also has demonstrated that Mr. Gagnon intended that AMS be allowed to retain and modify the programs that he delivered. In Johnson v. Jones, 149 F.3d 494, 498-500 (6th Cir. 1998), the court held that the defendant had notice that plaintiff architect was not granting an implied license because plaintiff had twice presented defendant with a contract, which was never signed, that expressly provided that plaintiff retained control over his housing designs, and therefore did not intend to grant a license.

In contrast to the plaintiff's intention in Johnson to not grant a license, Mr. Gagnon in his proposed agreements conveyed his intention to grant AMS a license as to the support programs he created for AMS. Mr. Gagnon expressly states his intention to grant a license to AMS in an Outside Vendor Agreement, dated June 2003, which he proposed to AMS. (See AMS' Lodgm't in Supp. of Mot. for Summ. J., Ex. 4 at 11.) Article 7 of Mr. Gagnon's proposed Outside Vendor Agreement, entitled “Proprietary Rights” provides:

(AMS' Lodgm't in Supp. of Mot. for Summ. J., Ex. 4 at 11) (emphasis added). Thus, Mr. Gagnon in his proposed Outside Vendor Agreement makes it clear that he intended to grant a “non-exclusive, unlimited” license to programs produced by him. In fact, in reference to the June 2003, proposed Outside Vendor Agreement, Mr. Gagnon states in a declaration that “Article VII ... of this proposed agreement sets forth what [his] understanding of the relationship between the parties was at the time.” (AMS' Lodgm't in Supp. of Mot. for Summ. J., Ex. 4 at 3.) Mr. Gagnon's intention to grant the license also is evidenced by his allowing the source code for the programs to be kept on AMS' computers. (See AMS' Lodgm't, Ex. 1 at 135: 13-14.) It also is worth noting that Mr. Gagnon's proposed Technical Service Agreement, which is dated May 1, 2000, and is on Mister Computer's letterhead, does not mention that Mr. Gagnon is not granting a license to AMS to use the programs or that he requires a continuing licensing fee. (See generally AMS' Lodgm't in Supp. of Summ. J., Ex. 5.) Accordingly, AMS has shown that there is no dispute that Mr. Gagnon intended for AMS to have a non-exclusive license to use the programs.

Further, Mr. Gagnon fails in his attempt to show that he gave AMS notice of his intention to not grant an implied license through the initial splash screens that appear when the programs at issue are booted up. (See Gagnon's Opp'n at 17.) While there are variations of the splash screens for different programs, most of the programs Mr. Gagnon created for AMS have a splash screen that provides, “Copyright 2003 Mister Computer All Rights Reserved.” (See Gagnon's Lodgm't, Ex. A.) In considering a notice of copyright that appeared on architectural plans that were lengthier[3] than the splash screens in this case, the Ninth Circuit in Foad held that the notice did not invalidate defendants' implied license. 270 F.3d at 829. The Foad court reasoned that the warning was created after the agreement was made and presumably was written by plaintiff or its agents. See id. at 829, 837. Similarly, here, Mr. Gagnon unilaterally authored and included the splash screens in the programs after Mr. Gagnon agreed to create and deliver programs to AMS. Moreover, Mr. Gagnon does not assert that he received consent or that he even warned AMS that he was going to include a splash screen in the programs. Also, as in Foad, the splashscreens are not sufficient to negate Mr. Gagnon's agreement to accept payment from AMS in exchange for creating programs to automate AMS' information. See id. at 829. Mr. Gagnon's argument that AMS should have objected to the splash screen is undercut by the court's note in Foad that the burden is on the copyright owner to clearly specify when he or she intends to retain control over a project. See id. at 829 n.12(“one would expect that a firm that intended to exercise such ongoing control over a project would clearly specify this in a contract”). Thus, this Court declines to find that the splash screens defeat AMS' implied license to use the programs for which AMS paid Mr. Gagnon to create.

*10 Moreover, Mr. Gagnon's attempt to distinguish Foad by arguing that there were written contracts between the parties in that case is unavailing. (See Gagnon's Opp'n at 18.) While it is true that in Foad, the engineering firm created the plot plans pursuant to contracts between the parties, the court in that case also found that nothing in either the contracts or any other writings purported to transfer copyrights in the plans at issue. 270 F.3d at 824-25. Thus, the Foad court's holding that there was a granting of a license was not based on any term in the written contracts. More importantly, the court in Foad held that the granting of a nonexclusive license need not be in writing:

Id. at 828; see also I.A.E., 74 F.3d at 775. Thus, the Court FINDS that there is no genuine dispute that Mr. Gagnon intended that AMS be allowed to retain and modify the programs that he created for AMS.

4. The Nonexclusive Licenses Are Irrevocable

In addition, as AMS correctly argues, Mr. Gagnon cannot revoke the license he granted because it was supported by consideration. (SeeAMS' Mem. Supp. Mot. for Summ. J. at 14.) “A nonexclusive license may be irrevocable if supported by consideration” because with consideration, the license becomes like an implied contract. Lulirama Ltd. v. Axcess Broadcast Servs., 128 F.3d 872, 882 (5th Cir. 1997)(citation omitted); see also I.A.E., 74 F.3d at 776 (“Implied licenses are like implied contracts....”); Effects, 908 F.2d at 559 n.7 (noting that an implied license is “a creature of law much like any other implied-in-fact contract”); Avtec Sys., Inc. v. Peiffer, 21 F.3d 568, 574 n.12 (4th Cir. 1994). Here, as stated earlier, it is undisputed that AMS provided consideration because it paid Mr. Gagnon significant sums to create and maintain the support programs.

For the reasons set forth above, the Court FINDS AMS had an implied nonexclusive license to use the programs for its business, and GRANTS AMS' Motion for Summary Judgment as to Mr. Gagnon's copyright claim.

In the alternative, AMS also contends that Mr. Gagnon transferred ownership of the copyright work to AMS by signing a Vendor Nondisclosure Agreement (“the Agreement”) on June 12, 2002.[4] (See AMS' Mem. Supp. Mot. for Summ. J. at 7-8; see also AMS' Lodgm't, Ex. 7.) In response, Mr. Gagnon contests the authenticity of the agreement and asserts that the signature contained therein was not signed by him. (See Gagnon's Opp'n at 8.) Because the Court grants AMS' Motion for Summary Judgment with respect to Mr. Gagnon's copyright infringement claim based on AMS' implied nonexclusive license to use the support programs, the Court need not decide AMS' alternative argument that there was a valid transfer of ownership of the copyright.

*11 AMS has filed Objections to Evidence with respect to the Declaration of David Kesner, Declaration of Kevin Gagnon, and Declaration of Sandra Homewood. [Doc. No. 124.] AMS' objections to the Declaration of Sandra Homewood, Mr. Gagnon's handwriting expert, challenge the form of her declaration and her analysis of the signatures in the Vendor Nondisclosure Agreement. (See AMS' Obj. to Evid. at 1-5, 7-8.) AMS' arguments with respect to Mr. Gagnon's Declaration pertain to Mr. Gagnon's assertion that he had exclusive control of the source code for the programs, his omission of the Vendor Nondisclosure Agreement when discussing his agreements with AMS, and his statement that he regularly tasked his employees with non-AMS work. (See id. at 5-7.) Further, AMS objects to the Declaration of David Kesner, arguing that Mr. Kesner lacked personal knowledge to speak about the location of the source code because his responsibilities as controller for AMS were only to handle the company's financial matters, not its computer programs. (See id. at 1-5.)

On October 28, 2005, Mr. Gagnon submitted an Ex Parte Application and Proposed Order to File Written Objection Evidence with respect to the Declaration of Wayne Talleur and the Vendor Nondisclosure Agreement. [Doc. No. 137.] Mr. Gagnon, in his Ex Parte Application, directs all of his objections at challenging the authenticity of the Vendor Nondisclosure Agreement to counter AMS' assertion that the copyrights for the programs were transferred to AMS. (See generally Gagnon's Ex Parte Appl. to File Written Obj. to Evid.)

Because the Court has found that AMS has an implied license to use the programs irrespective of whether the Vendor Nondisclosure Agreement transferred ownership of the copyrights, the Court DENIES Mr. Gagnon's Ex Parte Application and Proposed Order to File Written Objection to Evidence. Likewise, the Court also DENIES in part AMS' Objection to Evidence as to the Declaration of Sandra Homewood and the Declaration of Kevin Gagnon in so far as they concern the Vendor Nondisclosure Agreement. However, the Court GRANTS in part AMS' Objections to Evidence as to the Declarations of David Kesner and Mr. Gagnon in so far as they pertain to the nonexclusive license and the work Mr. Gagnon tasked to his employees. Mr. Kesner lacks personal knowledge to attest to the location of the source code because his duties as a “controller” for AMS did not include installing or modifying the software programs; rather, Mr. Kesner states he “handl[ed] all accounts receivable, bank deposits, accounts payable, agent commissions, and payroll financial splits.” (Decl of David Kesner at 1.) See Fed. R. Civ. P. 56 (e) (“Supporting and opposing affidavits shall be made on personal knowledge”). In addition, the Court rejects Mr. Gagnon's statements in his declaration that he had exclusive control of the source code and that his employees were regularly tasked with work for clients other than AMS because these statements are unsupported and are controverted by his deposition testimony. (See AMS' Lodgm't, Ex. 1 at 77:15-17, 135:18-136:6.)

II. Trade Secrets Claims

A. Misappropriation of Trade Secrets Contained in Support Programs

AMS also moves for summary judgment on Mr. Gagnon's claim that AMS misappropriated trade secrets contained within the support programs. (See AMS' Mem. Supp. Mot. for Summ. J. at 15; see also Gagnon's Counterclaims at 9-10.) “[C]omputer software can qualify for trade secret protection under the UTSA.” MAI Sys. Corp. v. Peak Computer, 991 F.2d 511, 522 (9th Cir. 1993); see also S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1089-90 (9th Cir. 1989). Here, AMS contends that “AMS owns those programs and any alleged trade secrets therein pursuant to the Vendor Nondisclosure Agreement” or in the alternative, “AMS has an implied license to continue to possess, use, and modify the source code for these programs to carry on AMS' business operations[.]” (Id.) Because the Court above found that AMS has an implied license to use the programs, Mr. Gagnon cannot establish that AMS misappropriated a protected trade secret contained in the programs. Thus, the Court also GRANTS summary judgment to AMS on Mr. Gagnon's claim that AMS misappropriated trade secrets contained in the support programs.

B. Misappropriation of Trades Secrets by Hiring Mr. Gagnon's Employees

*12 AMS also seeks summary judgment on Mr. Gagnon's claim that AMS misappropriated trade secrets contained in his programs by hiring his former employees. (See AMS' Mem. Supp. Mot. for Summ. J. at 15; see also Gagnon's Counterclaims at 910.) Because AMS has an implied nonexclusive license to use the programs, AMS' hiring of Mr. Gagnon's former employees cannot result in misappropriation of trade secrets contained in his programs. Accordingly, the Court also GRANTS AMS' Motion for Summary Judgment with respect to Mr. Gagnon's claim that AMS misappropriated trade secrets in the programs by hiring his employees.

III. Request for Accounting

Mr. Gagnon also has asserted a claim for “accounting for the income, expenses, assets, and liabilities of AMS derived as the result of its use or license of Mr. Gagnon's copyright for software.” (Gagnon's Counterclaim at 16.) “The right to an accounting is derivative and depends on the validity of a plaintiff's underlying claims.” Duggal v. G.E. Capital Communications Services, Inc., 81 Cal. App. 4th 81, 95 (Cal. Ct. App. 2000). Because the Court is holding that AMS has an implied license to use the software at issue and therefore has not violated a copyright or misappropriated a trade secret, the Court GRANTS AMS' Motion for Summary Judgment as to Mr. Gagnon's request for accounting.

IV. Intentional Interference with Contract Relations

AMS moves for summary judgment on Mr. Gagnon's claim of intentional interference with contract relations. (See AMS' Mot. for Summ. J. at 2.) “The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” Pacific Gas & Electric Co. v. Bear Steams & Co., 50 Cal. 3d 1118, 1126 (Cal. 1990).

AMS has shown that Mr. Gagnon has not met the first element for intentional interference with contract because the noncompete clauses that Mr. Gagnon alleges AMS interfered with are not valid contracts. (See AMS' Mem. Supp. Mot. for Summ. J. at 20 n.4.) California Business and Professions Code “Section 16600 has specifically been held to invalidate employment contracts which prohibit an employee from working for a competitor when the employment has terminated, unless necessary to protect the employer's trade secrets.” Application Group, Inc. v. Hunter Group, Inc., 61 Cal. App. 4th 881, 900 (Cal. Ct. App. 1998); see also Cal Bus & Prof Code § 16600 (“Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”); Metro Traffic Control v. Shadow Traffic Network, 27 Cal. Rptr. 2d 573, 577 (Cal. Ct. App. 1994) (same).

Here, Mr. Gagnon claims that AMS interfered with “Employee's Work Agreements” that he entered into with each of his employees in January 2003. (Gagnon's Counterclaim at 11.) In relevant part, Mr. Gagnon alleges that AMS interfered with the following “engagement” term in the Employee's Work Agreement:

*13 (Gagnon's Lodgm't in Opp'n, Ex. E.) Thus, the engagement term is invalid because it seeks to prohibit Mr. Gagnon's employees from working for AMS for at least two years after their employment with Mister Computer. Moreover, the engagement term is not saved by the exception for protecting an employer's trade secret. (See AMS' Mem. Supp. Mot. for Summ. J. at 20 n.4.) The exception does not apply here because, as this Court has concluded, the support programs do not contain trade secrets protected from AMS in light of its implied nonexclusive license to use the programs. Thus, the Court GRANTS AMS summary judgment as to Mr. Gagnon's claim for intentional interference with contract relations because AMS has shown that the Employee's Work Agreements were not valid.

V. Intentional and Negligent Interference with Prospective Business Advantage

Mr. Gagnon also has asserted a claim for intentional and negligent interference with prospective business advantage based on AMS' hiring of his employees. (See Gagnon's Counterclaims at 13-16.) AMS argues that Mr. Gagnon's claim does not have merit because Mr. Gagnon cannot plead or prove that AMS engaged in any independently wrongful act to support such a claim. (See AMS' Mem. Supp. Mot. for Summ. J. at 22.)

In Reeves v. Hanlon, 33 Cal. 4th 1140, 1152 (Cal. 2004), the California Supreme Court held that interference with at-will employees is treated as interference with prospective business advantage because employees are free to leave at anytime. Moreover, the court also held that “to recover for a defendant's interference with an at-will employment relation, a plaintiff must plead and prove that the defendant engaged in an independently wrongful act--i.e., an act ‘proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard’--that induced the at-will employee to leave the plaintiff,” Id. at 1145 (citation omitted) (emphasis added). The court reasoned that an independent wrongful act is required because “[n]ot only will it guard against unlawful methods of competition in the job market, but it will promote the public policies supporting the right of at-will employees to pursue opportunities for economic betterment and the right of employers to compete for talented workers.” “Under this standard, a defendant is not subject to liability for intentional interference if the interference consists merely of extending a job offer that induces an employee to terminate his or her at-will employment.” Id. at 1153. In contrast, a defendant is subject to liability if he/she “misappropriated confidential information, improperly solicited plaintiffs' clients, and cultivated employee discontent.” Id. at 1155; see also Buxbom v. Smith, 23 Cal. 2d 535, 548 (Cal. 1944) (holding defendant interfered with plaintiff's relationship with employee when defendant breached a contract he had with plaintiff as a means of facilitating defendant's hiring of plaintiffs employees).

In this case, Mr. Gagnon cannot maintain an interference with prospective business advantage claim because he has not alleged or shown that AMS engaged in an independently wrongful act in hiring his former employees. Mr. Gagnon merely alleged that AMS offered his employees jobs and told them that they were free to quit Mr. Gagnon's employ; he has not alleged that AMS engaged in acts to cultivate employee discontent. (See Gagnon's Counterclaims at 13-14.) Also, as the Court found above, AMS did not interfere with a valid contract between Mr. Gagnon and his former employees because the noncompete agreement is not enforceable. AMS also did not breach a contractual agreement with Mr. Gagnon when it terminated its independent contractor relationship with Mr. Gagnon and hired his employees because it is undisputed that “AMS was free to terminate Mr. Gagnon at any time—the work relationship was at-will.” (Gagnon's Opp'n to UMF at ¶ 3.) See Buxbom, 23 Cal. 2d at 548. Moreover, in hiring Mr. Gagnon's former employees, AMS did not infringe on a copyright, misappropriate trade secrets in the programs, or misappropriate other confidential information because AMS has an irrevocable, nonexclusive license to use the software programs. Thus, because Mr. Gagnon has not alleged or shown that AMS engaged in an independently wrongful act, the Court GRANTS AMS summary judgment as to Mr. Gagnon's interference with prospective business advantage claim.

VI. Unfair Competition

*14 AMS also moves for summary judgment on Mr. Gagnon's unfair competition claim. (See AMS' Mem. Supp. Mot. for Summ. J. at 18.) Mr. Gagnon alleges unfair competition claim based on three grounds: (1) AMS infringed on his copyrights in the programs, (2) AMS misappropriated his trade secrets, and (3) AMS solicited and hired his employees in violation of the Employee's Work Agreements that he had with his employees. (See Gagnon's Counterclaims at 11-12.)

The Unfair Competition Act in California, which is codified in Business & Professions Code Section § 17200, prohibits unfair competition. Unfair competition “include[s] any unlawful, unfair, or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof. Code § 17200. A practice cannot be deemed “unfair” for purposes of Section 17200 if the Legislature has permitted the conduct or “considered a situation and concluded that no action should lie.” Cel-Tech Communications v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 182 (1998).

None of Mr. Gagnon's grounds for unfair business practice constitute unlawful, unfair, or fraudulent business acts. Mr. Gagnon cannot sustain an unfair competition claim based on alleged copyright violation or trademark misappropriation because, as stated above, AMS had an implied license to use the programs. Mr. Gagnon also cannot base his claim on AMS' hiring of his former employees because AMS did not interfere with a valid agreement between Mr. Gagnon and his employees. Moreover, it was not an unlawful, unfair, or fraudulent practice for AMS to solicit and hire Mr. Gagnon's at-will employees. See Reeves v. Hanlon, 33 Cal. 4th 1140, 1145 (2004). Accordingly, the Court GRANTS AMS summary judgment with respect to Mr. Gagnon's unfair competition claim.

VII. Declaratory Relief

AMS also moves for summary judgement on Mr. Gagnon's claim for declaratory relief as to which party owns the copyrights to the support programs. (See AMS' Mem. Supp. Mot. for Summ. J. at 23.) Above, the Court has already found that Mr. Gagnon cannot maintain a copyright infringement claim against AMS in light of AMS' nonexclusive license to use the programs. Thus, it is unnecessary for the Court to decide the question of ownership of the copyrights at this time. Accordingly, the Court GRANTS AMS summary judgment as to Mr. Gagnon's declaratory relief.

VIII. Mr. Gagnon's Ex Parte Application to Stay Motion for Summary Judgment

After AMS' Motion for Summary Judgment was fully briefed by both parties, Mr. Gagnon's counsel filed an “Ex Parte Application for Order Denying Or, in the Alternative Continuing Summary Judgment Pursuant to Fed. Rules of Civ. Proc. Rule 56(f)” (hereinafter “Ex Parte Application”). [Doc. No. 100.] AMS filed an Opposition to the Ex Parte Application; and Mr. Gagnon filed a Reply. [Doc. Nos. 104, 112.] Magistrate Judge Cathy A. Bencivengo, who was transferred the case from Magistrate Judge Jan M. Adler, held a telephonic hearing to determine the status of the discovery disputes. Thereafter, Judge Bencivengo issued a Report and Recommendation (“R&R”) recommending that Mr. Gagnon's Ex Parte Application be denied, and that this Court proceed with determination of AMS' Motion for Summary Judgment. [Doc. No. 128, 115.] Mr. Gagnon then filed an Objection to the R&R; and AMS filed a Response. [Doc. Nos. 129, 130.] For the reasons set forth below, the Court ADOPTS the R&R, and DENIES Mr. Gagnon's Ex Parte Application.

*15 As the Magistrate Judge concludes in the R&R, Mr. Gagnon's contention that AMS' Motion for Summary Judgment should be stayed because “[he] has raised discovery issues with Magistrate Judge Adler and they are still pending” is immaterial to deciding AMS' Motion. (Gagnon's Ex Parte Appl. at 1; R&R at 4.) Mr. Gagnon seeks discovery for two reasons: (1) to obtain e-mail communications between AMS and Mr. Gagnon's former employees in order to show that AMS interfered with Mr. Gagnon's employment contract with his employees; (2) to obtain production of AMS' computer back up tapes to “conclusively establish the location of Mr. Gagnon's programming source code at all relevant times”. (See Decl. of Todd Moore in Supp. of Gagnon's Ex Parte Appl. at 3-4; see also Gagnon's Ex Parte Reply at 4.) First, irrespective of AMS' solicitation of Mr. Gagnon's employees, Mr. Gagnon fails in claiming that AMS interfered with his contracts with the employees because the contracts have unenforceable noncompete clauses and also do not protect a trade secret. Thus, contrary to Mr. Gagnon's assertion, AMS was free to offer employment to Mr. Gagnon's employees while they were still working for Mr. Gagnon because Mr. Gagnon's employees were at-will. Second, production of AMS' computer back up tapes to determine the location of the source code is unnecessary because Mr. Gagnon has already admitted that the source code was on AMS' computer. (See Joint Statement Regarding Discovery at 9:11-20) (Mr. Gagnon's counsel states that he “demanded the production of all back up tapes from AMS' server” because the “back up tapes requested, contain all source code and programs currently used by AMS as well as those previously used.”)

Even if Mr. Gagnon's claims have merit, which they do not, Mr. Gagnon's request to continue discovery also should be denied because it is untimely. (See R&R at 4.) As the Magistrate Judge notes, Mr. Gagnon did not request continuance of discovery until after the Motion for Summary Judgement was fully briefed even though he had an opportunity to do so in his Opposition. (See id.) Thus, the Court ADOPTS the R&R, and DENIES Mr. Gagnon's Ex Parte Application because Mr. Gagnon has not provided good cause as to why the Court should stay its decision on AMS' Motion for Summary Judgment.

IX. Pretrial Conference

Currently scheduled on this Court's calendar for August 28, 2006, is the Pretrial Conference. [See Doc. No. 133.] In light of this Court's Order granting AMS summary judgement as to all of Mr. Gagnon's counterclaims, the Pretrial Conference on AMS' claims against Mr. Gagnon is hereby continued to October 30, 2006. In accordance with the modified Pretrial Conference date:

1. Counsel for each party shall fully comply with the pretrial disclosure requirements of Federal Rule of Civil Procedure 26(a)(3) by October 6, 2006.

2. The meet and confer between counsel regarding trial will be on October 16, 2006.

3. Counsel shall submit the pretrial conference order by October 23, 2006.

For the reasons set forth above, the Court GRANTS AMS' Motion for Summary Judgment as to all of Mr. Gagnon's counterclaims, and MODIFIES the dates for pretrial procedures. [Doc. Nos. 77, 133.] The Court also ADOPTS the R&R denying Mr. Gagnon's Ex Parte Application for order denying or, in the alternative, continuing summary judgment. [Doc. No. 128.] The Court DENIES Mr. Gagnon's Ex Parte Application and Proposed Order to File Written Objection to Evidence, [Doc. Nos. 128, 100]; and DENIES in part and GRANTS in partAMS's Objection to Evidence. [Doc. No. 124.]

IT IS SO ORDERED.