[Seth-Trips] [robin@eff.org: [E-IP] bunner injunction reversed]
Seth David Schoen
schoen at loyalty.org
Thu Nov 1 11:02:19 PST 2001
I would like to have a Bunner injunction reversal party. How is
Saturday the 10th?
----- Forwarded message from Robin Gross <robin at eff.org> -----
Date: Thu, 01 Nov 2001 10:25:15 -0800
To: eff-ip at eff.org
From: Robin Gross <robin at eff.org>
Subject: [E-IP] bunner injunction reversed
Filed 11/1/01
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT
DVD COPY CONTROL ASSOCIATION,
Plaintiff and Respondent,
v.
ANDREW BUNNER,
Defendant and Appellant.
H021153
(Santa Clara County
Super. Ct. No. CV786804)
This appeal arises from an action for injunctive relief brought
under the Uniform Trade Secrets Act, Civil Code section 3426.1, et.
seq. After learning that its trade secret had been revealed in DVD
decryption software published on the Internet, plaintiff DVD Copy Control
Association (DVDCCA) sought an injunction against defendant Andrew Bunner
and numerous other Internet website operators to prevent future disclosure
or use of the secret. The trial court granted a preliminary injunction,
which required the defendants to refrain from republishing the program or
any information derived from it. Bunner appeals from that order,
contending that the First Amendment to the United States Constitution
protects his publication of the information as an exercise of free speech.
FACTUAL BACKGROUND
A DVD is a thin disk five inches in diameter which can store a
large amount of digital data. Each DVD can hold the data necessary to
display a fulllength motion picture. Motion pictures stored on DVDs are
protected from unauthorized use by means of encryption using a ?content
scramble system? (CSS). CSS is designed to restrict the playback of an
encrypted (scrambled) DVD to a CSSequipped DVD player or DVD drive, which
is capable of decrypting (unscrambling) the DVD. CSS is primarily composed
of algorithms and 400 ?master keys.? Every CSSencrypted DVD contains all
400 master keys, one of which is the trade secret at issue in this case.
DVDCCA, a trade association of businesses in the movie industry,
controls the rights to CSS. DVDCCA licenses the CSS decryption technology
to manufacturers of hardware and software for playing DVDs. Each licensee
is assigned one or more master keys unique to that licensee.
In October 1999, a computer program entitled ?DeCSS? was posted on
the Internet allegedly by Jon Johansen, a 15yearold resident of
Norway. DeCSS consists of computer source code which describes a method
for playing an encrypted DVD on a nonCSSequipped DVD player or drive. Soon
after its initial publication on the Internet, DeCSS appeared on numerous
web sites throughout the world, including the web site of defendant Andrew
Bunner. In addition, many individuals provided on their web sites ?links?
to copies of DeCSS on other web sites without republishing DeCSS themselves.
PROCEDURAL BACKGROUND
1. DVDCCA?s Complaint for Injunctive Relief
On December 27, 1999, DVDCCA initiated an action under the Uniform
Trade Secrets Act (UTSA or ?Act?) against Bunner and numerous other named
and unnamed individuals who had allegedly republished or ?linked? to
DeCSS. DVDCCA alleged that DeCSS ?embodies, uses, and/or is a substantial
derivation of [DVDCCA?s] confidential proprietary information.? DVDCCA had
protected this proprietary information by limiting its disclosure to those
who had signed licensing agreements prohibiting disclosure to
others. DVDCCA alleged that the proprietary information contained in DeCSS
had been ?obtained by willfully ?hacking? and/or improperly reverse
engineering? CSS software created by plaintiff?s licensee Xing Technology
Corporation (Xing). Xing had allegedly licensed its software to users
exclusively under a license agreement that prohibited reverse
engineering. According to DVDCCA, defendants ?knew or should have known?
that by posting DeCSS or providing ?links? to the program, they were
?misusing proprietary confidential information gained through improper
means.?
In the complaint DVDCCA sought an injunction to prevent any future
disclosures of DeCSS. The specific relief requested by DVDCCA was an order
?restraining Defendants...from making any further use or otherwise
disclosing or distributing...or ?linking? to other web sites which
disclose, distribute or ?link? to any proprietary property or trade secrets
relating to the CSS technology and specifically enjoining Defendants...from
copying...distributing, publishing... or otherwise marketing the DeCSS
computer program and all other products containing, using, and/or
substantially derived from CSS proprietary property or trade secrets.?
DVDCCA also requested a temporary restraining order (TRO). On
December 27, 1999, DVDCCA sent to defendants by electronic mail a copy of
the complaint and a notice of its application for a TRO. DVDCCA?s attorney
submitted a declaration stating that Bunner immediately responded by
telephone and ?indicated...that he would take his web site down.? On
December 29, 1999, the trial court denied DVDCCA?s request for a TRO but
issued an order to show cause on DVDCCA?s request for a preliminary
injunction. A hearing was set for January 14, 2000. On January 12, 2000,
one of DVDCCA?s attorneys submitted a declaration in support of the request
for a preliminary injunction in which he stated, ?Defendants Bunner [and
some of his codefendants]...appear to have removed DeCSS from its original
location. It is not known whether these files were deleted or just posted
elsewhere.?
2. DVDCCA?s Evidence and Arguments
DVDCCA submitted a declaration of its president, John Hoy. Hoy
explained that DeCSS ?embodies, uses, and/or is a substantial derivation of
[DVDCCA?s] confidential proprietary information.? Hoy stated that he had
tested DeCSS and determined that it contained a ?master key? which DVDCCA
had licensed to Xing. Hoy further asserted that ?[t]o my knowledge,? all
of the end user licenses from DVDCCA?s licensees prohibited reverse
engineering. The agreement between DVDCCA and its CSS licensees prohibited
those licensees from reverseengineering CSS.
A former Xing employee declared that ?Xing employed technical
means to prevent the reading of its software program in clear text in order
to deny unauthorized access to the underlying CSS keys and
algorithms.? Xing?s ?EndUser License Agreement,? which would appear on the
screen during installation of Xing?s software DVD player, stated that the
?Product in source code form? was a ?confidential? ?trade secret? and the
user ?may not attempt to reverse engineer...any portion of the
Product.? Thus, the user?s assent to the agreement was obtained only
through the installment process and was therefore a ?click wrap? license
agreement.
DVDCCA argued that it had a minimal evidentiary burden. DVDCCA
suggested that it had no burden to show that [Johansen?s conduct was]
unlawful under Norwegian law; instead, it needed only to show that
?improper means? under California law had been used. It argued that it
could prevail even if it could not demonstrate that Johansen?s conduct was
unlawful or that defendants knew or had reason to know of the allegedly
wrongful origin of DeCSS. It also asserted that ?under California law, if
a trade secret violation is established, irreparable harm is presumed? and
?need not be shown.?
DVDCCA conceded that ?computer code is speech,? but it argued it
was entitled to a preliminary injunction because it had shown ?a reasonable
possibility? that it would prevail at trial and because the harm it would
suffer would be ?severe and irreparable.? DVDCCA maintained that, even if
defendants had not initially known that DeCSS contained a trade secret that
had been acquired by improper means, they clearly were aware of that once
DVDCCA initiated the action and therefore were required to refrain from
disclosing the trade secret.
3. Bunner?s Evidence and Arguments
Bunner argued that injunctive relief would violate his First
Amendment rights. He also asserted that there was no evidence that he knew
or should have known that DeCSS had been created by improper use of any
proprietary information.
Bunner asked the court to take judicial notice of a Norwegian law
that permitted reverse engineering of computer software for the purpose of
achieving ?interoperability? and prohibited any agreement to the
contrary. According to Bunner, Johansen had reverse-engineered Xing?s
software to create DeCSS so that CSS-encrypted DVDs could be played on
computers that run under a computer operating system known as Linux. Even
if Johansen had agreed not to reverse-engineer Xing?s software, the
Norwegian law invalidated that term of the license agreement. Hence,
Johansen?s reverse engineering was not ?improper means? within the meaning
of the UTSA.
In support of his position Bunner submitted a declaration from an
expert on Norwegian intellectual property law stating that no Norwegian
criminal law or other legal precedent prohibited reverse engineering of
computer software. DVDCCA, however, objected to Bunner?s request for
judicial notice of Norwegian law. Aided by the declaration of its own
expert in Norwegian law, it maintained that reverse engineering of a
decryption program was in fact unlawful in Norway.
Bunner also produced a declaration from Frank Stevenson, a
computer programmer in Norway who was an expert in cryptography. Stevenson
declared that the ?master keys? on a CSSencrypted DVD could be
independently derived solely from a CSSencrypted DVD itself without any
unauthorized use of CSS decryption technology.
In addition, Bunner submitted a declaration by David Wagner, a
University of California cryptography researcher. Wagner believed that the
publication of information about ?flaws in supposedly secure systems serves
a vital public interest? by notifying the public of these flaws. In
Wagner?s view, the DeCSS ?highlevel? source code ?made it possible to
analyze the security of the DVD security system without undertaking any
tedious reverse engineering work.?
Bunner also submitted a declaration by John Gilmore, an expert on
computer security and encryption. Gilmore explained that widespread
copying of DVDs was not currently feasible because the removable media
commonly available today lacked the capacity for the ?enormous file size?
necessary to hold a complete movie.
Finally, Bunner submitted his own declaration. He admitted that
he had become aware of DeCSS by ?reading and participating in discussions
held on a news web site entitled ?slashdot.org.? ? He stated that he had
republished the DeCSS source code on his web site so that other programmers
could modify and improve DeCSS and so that Linux users could use DeCSS to
play DVDs. Bunner asserted that, at the time he republished DeCSS, he ?had
no information suggesting? that DeCSS ?contained any trade secrets? or
?involved any misappropriation of trade secrets,? and he continued to
believe that DeCSS had been either ?properly reverse engineered or
independently created without [the] appropriation of any trade
secrets.? Consequently, Bunner maintained that there was no evidence that
he had reason to know that Johansen had used ?improper means? to obtain the
trade secret that had allegedly been incorporated into DeCSS.
Bunner objected to DVDCCA?s failure to define precisely what it
was that had been ?substantially derived from proprietary information
property or trade secrets of the CSS.? He also asserted that the
disclosure of the alleged trade secret throughout the world over the
Internet had caused it to ?become a matter of public knowledge? which had
lost any trade secret status.
4. The Trial Court?s Order
The trial court heard DVDCCA?s request for a preliminary
injunction on January17, 2000. No evidence was introduced at the
hearing. Instead, the matter was submitted on the written declarations and
the arguments of the parties.
On January 21, 2000, the trial court issued a preliminary
injunction. The order enjoined defendants from ?[p]osting or otherwise
disclosing or distributing, on their web sites or elsewhere, the DeCSS
program, the master keys or algorithms of the Content Scrambling system
(?CSS?), or any other information derived from this proprietary
information.? The court expressly refused to enjoin the defendants from
linking to other web sites that contained protected information, because
the links were indispensable to Internet access and a website owner could
not be held responsible for the content of other web sites. The court
further stated that ?[n]othing in this Order shall prohibit discussion,
comment or criticism, so long as the proprietary information identified
above is not disclosed or distributed.?
In reaching its decision the court made the following
findings. First, DVDCCA had established that CSS was its trade secret, and
DVDCCA had exerted reasonable efforts to maintain the secrecy of the
program. Second, the evidence was ?fairly clear that the trade secret was
obtained through reverse engineering.? The trial court acknowledged that
the UTSA recognized reverse engineering as ?proper means.? Thus,?[t]he
only way in which the reverse engineering would be considered ?improper
means? herein would be if whoever did the reverse engineering was subject
to the click licence [sic] agreement which preconditioned installation of
DVD software or hardware, and prohibited reverse engineering.?
On this point the court observed that ?[p]laintiff?s case is
problematic at this prediscovery stage. Clearly they have no direct
evidence at this point that Mr. Jon Johansen did the reverse engineering,
and that he did so after clicking on any licence [sic]
agreement.? Nevertheless, the court concluded that ?[t]he circumstantial
evidence, available mostly due to the various defendants? inclination to
boast about their disrespect for the law, is quite compelling on both the
issue of Mr. Johansen?s improper means [and] th[e] Defendants? knowledge of
impropriety.?
The trial court declined to decide whether Norwegian law
prohibited Johansen?s alleged reverse engineering. ?This Court is not well
positioned to interpret Norwegian Law, and Defendant?s own expert, even if
this Court could consider expert testimony ona question of legal
interpretation, states that the issue has not been conclusively decided in
Norway. Defendants have not sufficiently supported their argument that the
licence [sic] agreement, like the one at issue here, would be disallowed by
Norwegian Law, although they may at some point be able to do so.?
The court further determined that the balance of hardships favored
DVDCCA. ?Most compelling in this matter is the relative harm to the
parties. At this point in the proceeding, the harm to the Defendants is
truly minimal. They will simply have to remove the trade secret
information from their web sites. They may still continue to discuss and
debate the subject as they have in the past in both [sic] an educational,
scientific, philosophical and political context. Defendants have not
provided evidence of any economic harm which an injunction could currently
cause, although if such an injunction were not granted it is quite possible
that this could change which could potentially shift the burden of harm in
Defendants? favor. [?] On the other hand, the current and prospective
harm to the Plaintiff, if the Court does not enjoin the display of their
trade secret, will be irreparable.?
The trial court recognized that continued exposure of DVDCCA?s
trade secret on the Internet would result in the loss of the secret, but it
was not convinced that the posting that had already occurred had destroyed
the secret. The court acknowledged the ?many potential enforcement
problems,? but it concluded that these problems did not preclude relief so
long as DVDCCA was otherwise entitled to relief.
Discussion
1. Standard of Review
Preliminary injunctions are ordinarily reviewed under the
deferential abuseofdiscretion standard. We consider only whether the trial
court abused its discretion in evaluating two interrelated factors. ? ?
?The first is the likelihood that the plaintiff will prevail on the merits
at trial. The second is the interim harm that the plaintiff is likely to
sustain if the injunction [is] denied as compared [with] the harm the
defendant is likely to suffer if the preliminary injunction [is] issued.? ?
? (People ex rel. Gallo v. Acuna (1997) 14 Cal.4th 1090, 1109.)
However, not all restraining preliminary injunctions are entitled
to such deferential review. ?[A]ny prior restraint on expression bears a
heavy presumption against its constitutional validity.? (Wilson v.
Superior Court (1975) 13 Cal.3d 652, 657, italics added.) ?[T]he reviewing
court in free speech cases must make an independent examination of the
whole record.? (L. A. Teachers Union v. L. A. City Bd. of Ed. (1969) 71
Cal.2d 551, 557, italics added.) ?[I]n cases raising First Amendment
issues we have repeatedly held that an appellate court has an obligation to
?make an independent examination of the whole record? in order to make sure
that ?the judgment does not constitute a forbidden intrusion on the field
of free expression.? ? (Bose Corp. v. Consumers Union of U.S., Inc. (1984)
466 U.S. 485, 499.)
Thus, in order to determine the appropriate standard of review, we
must first decide whether the restraint imposed by the trial court?s
preliminary injunction implicated Bunner?s First Amendment right to free
expression. If so, we exercise independent review.
2. The Uniform Trade Secrets Act
California has enacted a version of the UTSA that is designed to
protect economically valuable trade secrets from misappropriation. (Civ.
Code, ? 3426.1 et.seq.) Under this statute, a trade secret is
misappropriated if a person (1) acquires a trade secret knowing or having
reason to know that the trade secret has been acquired by ?improper means,?
(2) discloses or uses a trade secret the person has acquired by ?improper
means? or in violation of a nondisclosure obligation, (3) discloses or uses
a trade secret the person knew or should have known was derived from
another who had acquired it by improper means or who had a nondisclosure
obligation or (4) discloses or uses a trade secret after learning that it
is a trade secret but before a material change of position. (Civ. Code, ?
3426.1, subd. (b).)
?Improper means? is defined by the Act to include ?theft, bribery,
misrepresentation, breach or inducement of a breach of a duty to maintain
secrecy, or espionage through electronic or other means.? (Civ. Code,
?3426.1 subd. (a).) The Act expressly states that ?[r]everse engineering
or independent derivation alone shall not be considered improper
means.? (Civ. Code, ? 3426.1, subd. (a).) The Act allows for injunctive
relief against ?[a]ctual or threatened misappropriation? of a trade
secret. (Civ. Code, ? 3426.2.)
Computer software can constitute a trade secret. ?[C]omputer
software can qualify for trade secret protection under the
UTSA. [Citation.] However, a plaintiff who seeks relief for
misappropriation of trade secrets must identify the trade secrets and carry
the burden of showing that they exist.? (MAI Systems Corp. v. Peak
Computer, Inc. (9th Cir. 1993) 991 F.2d 511, 522.)
DVDCCA argues that ?this case is (and always has been) about theft
of intellectual property.? Yet DVDCCA?s complaint did not allege that
Bunner was involved in any ?theft? or other improper acquisition of
intellectual property. Instead, DVDCCA alleged that Bunner's republication
of DeCSS violated the Act because (1) DeCSS disclosed one of DVDCCA?s trade
secret ?master keys,? (2) the master key had been obtained by improper
means, and (3) Bunner had reason to know both that DeCSS contained the
master key and that the master key had been obtained by improper
means. Thus, while Bunner did not use improper means to acquire DVDCCA?s
proprietary information, he disclosed DeCSS when he knew or should have
known that DeCSS had been ?created through the unauthorized use of
proprietary CSS information, which was illegally ?hacked.?? The allegation
that Bunner had actual or constructive knowledge that DeCSS had been
created by improper means was premised on Bunner?s alleged knowledge of
postings on the Internet which indicated that DeCSS was illicit.
We will assume for purposes of our discussion that the trial court
correctly concluded that DVDCCA had established a ?reasonable probability?
that it could prove these allegations and had shown that the relative
burden of harms favored issuance of injunctive relief. While the trial
court?s conclusions, if correct, would justify preliminary injunctive
relief in the absence of any freespeech concerns, we must first consider
whether the order can withstand scrutiny under the First Amendment.
3. Applicability of the First Amendment
Bunner contends that the injunction violates his First Amendment
rights because it constitutes a prior restraint on his freedom of
speech. DVDCCA responds that Bunner had no First Amendment right to
disclose a trade secret in violation of the UTSA.
The first question we consider is whether DeCSS is ?speech? that
is within the scope of the First Amendment. The application of the First
Amendment does not depend on whether the publication occurred on the
Internet or by traditional means. (Reno v. American Civil Liberties Union
(1997) 521 U.S. 844, 870.) Likewise, it makes no difference that Bunner is
a republisher rather than the original author of DeCSS. ?It would be
anomalous if the mere fact of publication and distribution were somehow
deemed to constitute ?conduct? which in turn destroyed the right to freely
publish.? (Wilson v. Superior Court, supra, 13 Cal.3d at p. 660.) ?[A]
naked prohibition against disclosures is fairly characterized as a
regulation of pure speech.? (Bartnicki v. Vopper (2001) 532 U.S. 514, __,
121 S.Ct. 1753, 1761 (Bartnicki).) Nor does it matter that the disclosure
was made by an individual on his web site rather than a media publication
in a newspaper. The right to freedom of speech ?does not restrict itself
?depend[ing] upon the identity? or legal character of the speaker, ?whether
corporation, association, union, or individual.? ? (Gerawan Farming, Inc.
v. Lyons (2000) 24 Cal.4th 468, 485; Bartnicki v. Vopper, supra, 532 U.S.
at p. __ [121 S.Ct. at p. 1760], fn. 8.)
DVDCCA has not alleged that Bunner engaged in any expressive
?conduct? by posting DeCSS on his web site. Nor is there any indication in
the record that Bunner engaged in conduct mixed with speech. DVDCCA does
suggest, however, that DeCSS is insufficiently expressive because it is
composed of source code and has a functional aspect. ?The issue of whether
or not the First Amendment protects encryption source code is a difficult
one because source code has both an expressive feature and a functional
feature. The United States does not dispute that it is possible to use
encryption source code to represent and convey information and ideas about
cryptography and that encryption source code can be used by programmers and
scholars for such informational purposes. Much like a mathematical or
scientific formula, one can describe the function and design of encryption
software by a prose explanation; however, for individuals fluent in a
computer programming language, source code is the most efficient and
precise means by which to communicate ideas about cryptography. [?]...The
fact that a medium of expression has a functional capacity should not
preclude constitutional protection. [?]...[?] ...[C]omputer source code,
though unintelligible to many, is the preferred method of communication
among computer programmers. [?] Because computer source code is an
expressive means for the exchange of information and ideas about computer
programming, we hold that it is protected by the First Amendment.? (Junger
v. Daley (6th Cir. 2000) 209 F.3d 481, 484485.)
Like the CSS decryption software, DeCSS is a writing composed of
computer source code which describes an alternative method of decrypting
CSSencrypted DVDs. Regardless of who authored the program, DeCSS is a
written expression of the author?s ideas and information about decryption
of DVDs without CSS. If the source code were ?compiled? to create object
code, we would agree that the resulting composition of zeroes and ones
would not convey ideas. (See generally Junger v. Daley, supra, 209 F.3d at
pp.482483.) That the source code is capable of such compilation, however,
does not destroy the expressive nature of the source code itself. Thus, we
conclude that the trial court?s preliminary injunction barring Bunner from
disclosing DeCSS can fairly be characterized as a prohibition of ?pure?
speech.
4. Protection of Source Code Containing a Trade Secret
The First Amendment protects a ?wide range of expression? from
pure entertainment to political speech. (Schad v. Mount Ephraim (1981) 452
U.S. 61, 65.) ?All ideas having even the slightest redeeming social
importance unorthodox ideas, controversial ideas, even ideas hateful to the
prevailing climate of opinionhave the full protection of the guaranties,
unless excludable because they encroach upon the limited area of more
important interests.? (Roth v. United States (1957) 354 U.S. 476, 484.)
The parties recognize that First Amendment protection is not
without limits. Obscenity, libel, and ?fighting words? have long been
recognized as falling outside the scope of the First Amendment because they
lack any social value. (Roth v. United States, supra, 354 U.S. at pp.
484485.) ?[I]t is well understood that the right of free speech is not
absolute at all times and under all circumstances. There are certain
welldefined and narrowly limited classes of speech, the prevention and
punishment of which have never been thought to raise any Constitutional
problem. These include the lewd and obscene, the profane, the libelous,
and the insulting or ?fighting? words...It has been well observed that such
utterances are no essential part of any exposition of ideas, and are of
such slight social value as a step to truth that any benefit that may be
derived from them is clearly outweighed by the social interest in order and
morality.? (Chaplinsky v. New Hampshire (1942) 315 U.S. 568, 571572, fns.
omitted.)
DeCSS does not fall into any of these established exceptions: it
is not lewd, profane, obscene, or libelous, nor did it involve any fighting
words. DVDCCA does not ask this court to create a new judicial exception
for software containing a misappropriated trade secret, and we decline to
do so here. Although the social value of DeCSS may be questionable, it is
nonetheless pure speech.
DVDCCA maintains, however, that courts ?routinely enjoin trade
secret misappropriation,? even over a First Amendment defense. The cases
on which it relies, however, are not comparable to the situation presented
here, as they involved the actual use of a secret or the breach of a
contractual obligation. In both Courtesy Temporary Service, Inc. v.
Camacho (1990) 222 Cal.App.3d 1278, 1291 and American Credit Indemnity Co.
v. Sacks (1989) 213 Cal.App.3d 622, 638, for example, the orders enjoined
the use of confidential information to solicit customers. In Garth v.
Staktek Corp. (Tex.App. 1994) 876 S.W.2d 545 the injunction was necessary
to preclude the improper sale and use of trade secret technology. And in
Cherne Indus., Inc. v. Grounds & Associates (Minn. 1979) 278 N.W.2d 81 the
defendants were enjoined from using confidential customer information
obtained from their former employer in violation of their contractual duty
not to use or disclose the information or take it with them when they left
the company. The enforcement of a contractual nondisclosure obligation
does not offend the First Amendment. A voluntary agreement not to disclose
a trade secret ordinarily waives any First Amendment protection for an
ensuing disclosure.
California?s Trade Secrets Act, like the laws enacted in many
other states to protect trade secrets, does not merely enhance the
enforcement of contractual nondisclosure obligations but sweeps far more
broadly. It is within this broad sweep that DVDCCA seeks to place
Bunner. Yet the scope of protection for trade secrets does not override
the protection offered by the First Amendment. The First Amendment
prohibits the enactment of any law ?abridging the freedom of
speech....? The California Legislature is free to enact laws to protect
trade secrets, but these provisions must bow to the protections offered by
the First Amendment. None of the trade secret cases cited by DVDCCA holds
to the contrary.
DVDCCA also relies heavily on cases that upheld injunctions in
copyright infringement cases. Protections for trade secrets, however, are
not comparable to protections for copyrights with respect to the First
Amendment. First, since both the First Amendment and the constitutional
authority underlying the Copyright Act are contained in the United States
Constitution, the resolution of a conflict between free speech and
copyright involves a delicate balancing of two federal constitutional
protections. ArticleI of the United States Constitution explicitly grants
Congress the power ?To promote the progress of science and useful arts, by
securing for limited times to authors and inventors the exclusive right to
their respective writings and discoveries.? (U.S. Const., art. I, ?
8.) The UTSA, on the other hand, lacks any constitutional
foundation. Consequently, a clash between the trade secrets law and the
First Amendment does not involve a balancing between two constitutional
interests.
Second, injunctions in copyright infringement cases have been
upheld ?on the ground that First Amendment concerns are protected by and
coextensive with the [Copyright Act?s] fair use doctrine.? (Nihon Keizai
Shimbun, Inc. v. Comline Business Data (2nd Cir. 1999) 166 F.3d 65,
74.) The ?fair use? exception permits copying and use of a copyrighted
work ?for purposes such as criticism, comment, news reporting, teaching...,
scholarship, or research? under certain circumstances. (17 U.S.C., ?
107.) It ?offers a means of balancing the exclusive rights of a copyright
holder with the public?s interest in dissemination of information affecting
areas of universal concern, such as art, science and industry. Put more
graphically, the doctrine distinguishes between ?a true scholar and a
chiseler who infringes a work for personal profit.? ? (Wainwright Sec. v.
Wall Street Transcript Corp. (1977) 558 F.2d 91, 94.) In contrast, the
UTSA contains no exception for ?fair use? or any other vehicle for
safeguarding First Amendment concerns. The Act prohibits even speech that
is scholarly, addresses legitimate concerns, and seeks no profit for the
speaker, while the Copyright Act?s fairuse doctrine would permit copyright
infringement in those circumstances. Consequently, one of the primary
justifications for issuing injunctions in these copyright infringement
cases is not present in trade secret cases.
Third, the statutory prohibition on disclosures of trade secrets
is of infinite duration rather than ?for limited Times.? While the limited
period of copyright protection authorized by the United States Constitution
ensures that copyrighted material will eventually pass into the public
domain, thereby serving the public interest by increasing its availability
to the general public, the UTSA bars disclosure of a trade secret for a
potentially infinite period of time, thereby ensuring that the trade secret
will never be disclosed to the general public.
Thus, the availability of injunctive relief against copyright
infringement is supported by justifications that are inapplicable to trade
secrets. Both the First Amendment and the Copyright Act are rooted in the
United States Constitution, but the UTSA lacks any constitutional
basis. The prohibition on disclosure of a trade secret is of infinite
duration while the copyright protection is strictly limited in time, and
there is no ?fair use? exception as there is for copyrighted
material. These significant distinctions between copyright and trade
secret protections explain why courts have concluded that the First
Amendment is not a barrier to injunctive relief in copyright infringement
cases.
We must conclude that Bunner?s republication of DeCSS was ?pure
speech? within the ambit of the First Amendment. It is therefore necessary
for us to apply independent review to the trial court?s issuance of a
preliminary injunction.
5. Prior Restraint
The trial court?s prohibition of future disclosures of DeCSS was a
prior restraint on Bunner?s First Amendment right to publish the DeCSS
program. A prior restraint is generally defined as an administrative or
judicial order ?forbidding certain communications when issued in advance of
the time that such communications are to occur.? (Alexander v. United
States (1993) 509 U.S. 544, 550, italics omitted.) The ?special vice? of a
prior restraint is that it suppresses expression not only directly, but
also by ?inducing excessive caution in the speaker.? (Pittsburgh Press Co.
v. Human Rel. Comm?n (1973) 413 U.S. 376, 390.)
Prior restraints on pure speech are highly disfavored and
presumptively unconstitutional. (Hurvitz v. Hoefflin (2000) 84 Cal.App.4th
1232, 1241.) ?In the case of a prior restraint on pure speech, the hurdle
is substantially higher [than for an ordinary preliminary
injunction]: publication must threaten an interest more fundamental than
the First Amendment itself. Indeed, the Supreme Court has never upheld a
prior restraint, even faced with the competing interest of national
security or the Sixth Amendment right to a fair trial.? (Proctor & Gamble
Co. v. Bankers Trust Co. (6th Cir. 1996) 78 F.3d 219, 226227; cf. Nebraska
Press Assn. v. Stuart (1976) 427 U.S. 539, 563 [the Sixth Amendment right
of a criminal defendant to a fair trial does not outrank the First
Amendment right of the press to publish information]; New York Times Co. v.
United States (1971) 403 U.S. 713, 718726 [?national security? interest in
suppressing classified information in the Pentagon Papers did not outrank
First Amendment right of press to publish classified information].) ?[I]t
is clear that few things, save grave national security concerns, are
sufficient to override First Amendment interests.? (United States v.
Progressive, Inc. (1979) 467 F.Supp. 990, 992 [court issued prior restraint
on publication of technical information about hydrogen bomb only because it
found that such information was analogous to information about troop
movements which posed a grave threat to national security].) ?If a threat
to national security was insufficient to warrant a prior restraint in New
York Times Co. v. United States, the threat to plaintiff?s copyrights and
trade secrets is woefully inadequate.? (Religious Technology Center v.
Lerma (E.D.Va. 1995) 897 F.Supp. 260, 263.)
DVDCCA?s statutory right to protect its economically valuable
trade secret is not an interest that is ?more fundamental? than the First
Amendment right to freedom of speech or even on equal footing with the
national security interests and other vital governmental interests that
have previously been found insufficient to justify a prior restraint. Our
respect for the Legislature and its enactment of the UTSA cannot displace
our duty to safeguard the rights guaranteed by the First
Amendment. Accordingly, we are compelled to reverse the preliminary
injunction.
We express no opinion as to whether permanent injunctive relief
may be obtained after a full trial on the complaint, as that issue is not
before us. We further have no occasion to decide whether damages for
Bunner?s disclosure would be appropriate in these circumstances. DVDCCA
may, of course, bring an action for damages or even injunctive relief
against anyone who violates the Act by conduct rather than speech. In
addition, a person who exposes the trade secret may be liable for damages
if he or she was bound by a contractual obligation to safeguard the
secret. And anyone who infringes a copyright held by DVDCCA or by any DVD
content provider may be subject to an action under the Copyright Act. We
hold only that a preliminary injunction cannot be used to restrict Bunner
from disclosing DeCSS.
Disposition
The order granting a preliminary injunction is
reversed. Defendant Andrew Bunner shall recover his appellate costs.
_________________________
Premo, Acting P.J.
WE CONCUR:
_____________________________________
Elia, J.
________________________________
Mihara, J.
Trial Court:
Santa Clara County Superior Court
Superior Court No. CV 786804
Trial Judge:
Hon. William J. Elfving
Attorneys for Plaintiffs-Respondents:
Weil, Gotshal & Manges
Jared Ben Bobrow
Christopher J. Cox
Sondra Roberto
Robert G. Sugarman
Jeffrey L. Kessler
Counsel for Amicus Curiae on behalf of Plaintiffs-Respondents:Computer &
Communications Industry Association
Edward J. Black
American Committee for Interoperable Systems
Howard M. Freedland
Williams & Connolly
Suzanne H. Woods
Attorneys for Defendant-Appellant:
Huber & Samuelson
Allonn E. Levy
First Amendment Project
James Wheaton
David Greene
Tomlinson Zisko Morosoli & Maser
Thomas E. Moore
Electronic Frontier Foundation
Robin Dora Gross
Counsel for Amicus Curiae on behalf of Defendant-Appellant:Howard, Rice,
Nemerovski
Annette L. Hurst
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Robin D. Gross - Cyberspace Attorney @ Law
Director - Campaign for Audiovisual Free Expression (CAFE)
Electronic Frontier Foundation
454 Shotwell Street, San Francisco, CA 94110
e: robin at eff.org w: http://www.eff.org
p: 415.863.5459 f: 415.436.9993
http://www.eff.org/cafe
http://www.eff.org/Intellectual_property/
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
----- End forwarded message -----
--
Seth David Schoen <schoen at loyalty.org> | Its really terrible when FBI arrested
Temp. http://www.loyalty.org/~schoen/ | hacker, who visited USA with peacefull
down: http://www.loyalty.org/ (CAF) | mission -- to share his knowledge with
http://www.freesklyarov.org/ | american nation. (Ilya V. Vasilyev)
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