Professional Documents
Culture Documents
H021153
11"tqr
,g,uprrmrQ!ourtof Q!alifomia
IssuesPresented 1
Statementof Appealability and Standardof Review 1
Statementof the Case 2
Statementof Facts 3
A. BackgroundofDVD Technologyand CSS 3
B. Theft of the CSSTechnology 5
C. Proceedingsin the SuperiorCourt 6
D. Decision of the Court of Appeal 9
Summaryof Argument 9
Argument 11
I. Neither History Nor Policy ConsiderationsCan Justify
the Court of Appeal's Prohibition on Injunctions
Protecting Trade Secrets from Destruction by
Dissemination. 12
A. Historically, the Dissemination of Stolen Trade
Secrets Has Not Been Protected by the First
Amendment. 12
B. Policy Considerations Dictate that the State
Interest in Promoting Innovation Requires
Protectionof Trade Secrets. 15
II. The Superior Court's Injunction Prohibiting the
Distribution of DeCSS Is Subject to No More Than
IntermediateScrutiny Under the First Amendment. 20
A. The Injunction Under the California UTSA Is
Subject to Intermediate Scrutiny Because the
StatuteIs ContentNeutral. 20
B. The Distribution of DeCSS by Internet Posting Is
Conductwith Limited ExpressiveCapacitySubject
at Most to IntermediateScrutiny Under 0 'Brien. 22
1. Neither DeCSS Nor Bunner's Posting of It
on the Internet Is Pure Speech. 26
- .
1
.,.
fc
IntermediateScrutiny. 31 ~
1. The Injunction Is Within the Constitutional " !"
Powerof theGovernment. 32 -
2. The Injunction Serves a Substantial
GovernmentInterest. 32 ."
"
,~
III. The Superior Court's Narrowly Tailored Injunction Is
Not an ImpermissiblePrior Restraint. 34 ~
A. Not Every Injunction Alleged to Restrict
ExpressionIs an ImpermissiblePrior Restraint. 34 ~ I
B. The First AmendmentPrior Restraint Doctrine ~ I
~
.
f ii --
...
4
"~
TABLE OF AUTHORITIES
STATE CASES
Hilb, Rogal & Hamilton Ins. Servs. of Orange County, Inc. v. Robb
(1995) 33 Cal.App.4th 1812 1
Peabodyv. Norfolk
(1868) 98 Mass.452 13, 16
III
Peopleexrei. Gallov.Acuna(1997) -
4 Cal.4th 1090 1,41,43 #';
r
People v. Ramos
(1997) 15 Cal.4th 1122 2 ~
Peoplev. Toledo '"
(2001) 26 Cal.4th 221 22 ,-. r:'!~
PlannedParenthoodShasta-Diablo,Inc. v. Williams
(1994) 7 Cal.4th 860, judgment vacatedand remanded
in light ofMadsenv. Women'sHealth Care Center(1994)
512 U.S. 573, (1994) 513 U.S. 956, and aff'd on remand,
(1995) 10 Cal.4th 1009 36,37
FEDERAL CASES
Bartnicki v. Vopper
(2001) 532 U.S. 514 37
Bernsteinv. United StatesDep't of Justice
(1999) 176F.3d 1132,reh 'ggranted and opinion withdrawn, (9th
Cir. 1999) 192F.3d 1308 29
Bernsteinv. United StatesDep't of State
(N.D. Cal. 1996)922 F.Supp.1426 30
IV
City of Erie v. Pap's A.M.
(2000) 529 U.S. 277 24
In re PhoenixDental Sys.,Inc.
(Bankr. W.D. Pa. 1992) 144B.R. 22 14
v
,!,
~
~
Junger v. Daley -
(6th Cir. 2000) 209 F.3d 481 30 f!
~
Karn v. United StatesDepartmentof State ,..'
(D.D.C. 1996)925 F.Supp. 1 30 ~
KewanneeOil Co. v. Bicron Corp. -
(1974) 416 U.S. 470 16, 32 II':
..
Kingsley Books,Inc. v. Brown -
(1957) 354 U.S. 436 42 '" i
i
~!
Near v. Minnesota
(1931) 283 U.S. 697 42 ... I
,iJ
~~I
Ig,
,,!'~ i
vi 'OM
ii!ii,~
Paris Adult Theatre I v. Slaton
(1973) 413 U.S. 49 42
RichmondNewspapers,Inc. v. Virginia
(1980) 448 U.S. 555 15
SoutheasternPromotions,Ltd. v. Conrad
(1975) 420 U.S. 546 36
Te.xasv. Johnson,
(1989) 491 U.S. 397 24, 33
VII
""~
"
.
~
~
United
States
v.O'Brien -
(1968) 391 U.S. 367 10,23, 32 ~
r
UniversalCity Studios,Inc. v. Reimerdes ,-
(S.D.N. Y. 2000) III F .Supp.2d 294 26,29, 35 ~
Universal
CityStudios,
Inc.,v. Corley -
(2ndCir. 2001)273F.3d429 passim ,.
,.
Wardv. RockAgainst Racism A
(1989) 491 U.S. 781 21 ~
WinterlandConcessions
Co.v. Sileo ~
(N.D. Ill. 1981)528 F.Supp. 1201 38
.-0'
Zenith Radio Corp. v. MatsushitaElec. Indus. Co. '=:
:
CAL. Cw. CODE § 3426.2(a) 13 "'4
OTHER AUTHORITIES
1 MELVINF. JAGER,TRADESECRETS
LAW (1997) 12, 17
.
G
,-
",
'",,'"
3 ROGER
M. MILGRIM,
MILGRIM
ONTRADE
SECRETS .
(2ded.2000) 14,40 .
Agreement
('nTrade-RelatedAspects
of Intellectual
Property
Rights, .
Apr.15,1994,art.41,33I.L.M.1191 19 .
..
AMEDEEE. TURNER,THE LAW OFTRADESECRETS
427-59 (1 st ed. ~
1962) 18 '""
:8
viii ~ --
~i
A
Andrew Beckerman-Rodau,
Prior Restraintsand Intellectual Property: The Clash between
IntellectualPropertyand the First Amendmentfrom an Economic
Perspective(2001)12 FORDHAM INTEL.PROP.,
MED.& ENTERT. L.J. 1 12,41
JOHNC.JANKA,
Federal Disclosure Statutesand the Fifth Amendment:
TheNew Statusof TradeSecrets(1987) 54 U. CHI.L. REv. 334...12
Morison v. Moat
(Ch. 1851)9 Hare 241,68 Eng. Rep. 492 13
Orin S. Kerr,
Are WeOverprotectingCode?Thoughtson First-Generation
Internet Law (2000) 57 WASH.& LEEL. REv. 1287 28
IX
ISSUES PRESENTED j
!
1
.'
For more than two centuries, the courts' strong and active
protection of trade secrets has peacefully coexisted with the First
Amendment. In this case,however, the Court of Appeal improperly
and needlesslydeclaredthat long-acceptedcommon-lawand statutory
tradesecretprotectionsmust be cast asidein favor of an inflexible and
erroneousapplication of the First Amendment. In addition to the
completeabsenceof any reasonedprecedentfor the Court of Appeal's
radical departurefrom establishedprior-restraint law, thereis not even
a glimmer of a policy rationale for expansively applying the prior
restraintdoctrine to prohibit an injunction againstthe disseminationof
stolen trade secrets that only minimally affects speech. Both the
United States Supreme Court and this Court have long upheld
legislative and judicial action that serve important governmental
interests unrelated to the suppression of speech and that only
incidentally affect speech.
The superior court's injunction was just such an action. It was
not aimed at restricting speech,but was intended solely to protect
against the evisceration of trade secretsthat are the motion picture
industry's critical meansof defenseagainstwidespreaddigital pirating
of its valuable copyrighted works. Statutory and common-law trade
-
[n-""-
secretprotectionsexist to preventprecisely that kind of harm. In this
case,the injunction was directed solely to preservethe functionally
protectivenatureof the encryption system,i.e., to preventDVDs from
being illegally copied. Indeed, the SecondCircuit recently affirmed
the issuance of an injunction on exactly the same grounds in
Universal City Studios,Inc., v. Corley (2nd Cir. 2001) 273 F.3d 429,
452, a factually identical casebrought under the Digital Millennium
Copyright Act.
Because the Court of Appeal improperly expanded prior
restraint principles to prohibit an injunction not directed at curtailing
speech, leaving no effective means to counteract the malicious
destruction of trade secrets, DVD Copy Control Association, Inc.
(DVD CCA) asksthe Court to reversethe Court of Appeal's decision
and reinstatethe superior court's preliminary injunction. If the Court
of Appeal's ruling is left standing, the value of trade secrets in
California will be eviscerated,causing serious harm to the State, its
"...
.-
.~
will not lose quality in the copying process-oCai1 be easily made and -.:
~
then distributed throughout the world on DVDs or over the internet. ~
In the early 1 990s, the movie industry started to consider ':"
could use, copy, and distribute DVDs without paying for the ':~: '
1
i
of it in foreign countries where it would be virtually impossible to c'" I
catch and prosecute the perpetrators. Unless the movie studios could ,."'" .'
r::I;
find a way to protect the copyrighted materials on DVDs, there would ,-'"
be no viable market not only for the DVDs themselves, but also for c"
31-32. Because the risk was so great, the movie studios decided not ':l
~
AA 9, ~ 31; AA 63 ~ 6.
The technology they chose was the Content Scramble System ",:",
keys are digital values that detennine how the algorithm encrypts and .
'#11,
decrypts the file. To playa CSS-encrypted DVD, one needs both the
~I
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4 ..i
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,,~
compliant DVD players and disk drives. Without both-the master
keys and the algorithm-a DVD player cannot accessthe contentsof
a DVD. Once the DVD file is decrypted,a DVD player can display
the movie on a television or a computerscreen,but a DVD and player
that are properly encrypted with CSS cannot be used to copy the
movie or to manipulatethe digital contentof the DVD.
In order to facilitate the distribution of movies on DVD, a
licensing mechanismwas created for the use of CSS's proprietary
trade secrettechnology. Manufacturersinterestedin making a DVD,
a DVD player, or DVD software obtain accessto the technology by
obtaining a license for a fee. In order to guard against theft of the
technology,the licensing agreementrequireslicenseesto maintain the
confidentiality of the CSS technology and imposes a strict set of
requirements on licensees to ensure that the CSS technology is
protected.
Eventually, the companies involved in the DVD business
decidedthat the licensing of CSS ought to be jointly administeredby
representativesof the motion picture, computer, and consumer
electronicsindustry. In mid-1998 they formed the DVD CCA, which
was assignedthe licensing interests of its predecessor. DVD CCA
was also given full rights to enforcethe CSSlicensing agreement.
B. Theft of the CSS Technology
In October 1999, the sourcecode of a program called DeCSS
was postedto a website operatedby Jon Johansen,a fifteen-year-old
Norwegian citizen. DeCSSunlocks the encryption of CSS, allowing a
CSS-protectedDVD to be played on a non-licensedplayer or disk
drive. DeCSSalso allows the user to copy a CSS-protectedDVD in
'""
,.,
"15'
P
~
an un-encrypted
fofll1at. DeCSSwascreatedby eitherhackingor -
8;
reverse engineering software created by Xing Technology ~
Corporation (Xing), a CSS licensee, in violation of Xing's license to C
end-usersthat specifically prohibited reverseengineering. AA 479-81 ~
,.,
~~ 3-5. -
Soon after DeCSS was posted to Johansen'swebsite, news of 611
WhenDVDCCAlearned
aboutDeCSS,
it quicklysought
to
..
enjoin distribution of the program to protect its trade secrets. On ~
December
27, 1999,DVD CCA commenced
this actionin the .
~
Superior Court of Santa Clara County and sought temporary and
preliminary relief enjoining Bunner and other defendantswho had
posted DeCSS,or linked to sites that postedDeCSS,from posting or .
~
.
knowingly linking to any websites that post the trade secretsor their
"'~
derivatives. The superiorcourt deniedthe application for a temporary
restraining order and set an expeditedschedulefor considerationof
the motion for preliminary injunction. On January 17, 2000, the
motion was submitted on a significant (almost one :housandpages)
record and after argumentsof the parties. On January21, 2000, the
superior court issued a preliminary injunction enjoining defendants
from "[p ]osting or otherwise disclosing or distributing, on their
websites or elsewhere, the DeCSS program, the master keys or
algorithms of the Content Scrambling system (CSS), or any other
infonnation derived from this proprietary infonnation." AA 712.
Being careful to tailor its order narrowly, the court declined to enjoin
the linking to other websitesposting DeCSSand statedthat "[n]othing
in this Order shall prohibit discussion,commentor criticism, so long
as the proprietary infonnation identified above is not disclosed or
distributed." AA 716.
The superiorcourt made severalfactual findings supportingthe
order. The court found that "[t]he Plaintiff has shown that the CSS is
a piece of proprietary infolmation which derived its independent
economicvalue from not being generallyknown to the public and that
Plaintiff madereasonableefforts under the circumstancesto maintain
its secrecy." AA 713. The court also found that "the evidenceis
fairly clear that the trade secret was obtained through reverse
engineering." AA 713. The court further found that the evidencewas
"quite compelling" both that JohansenreverseengineeredDeCSS in
violation of his agreementwith Xing and that defendantsknew or
should have known the trade secretsmisappropriatedby DeCSSwere
obtainedthrough improper means. AA 713-14. The court concluded
7
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~f!
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that DVD
secret issues.
CCA had shown a "likelihooJ of prevailing" on the trade
.
~ '0
,~
9
motivation behind the injunction was to protect DVD CCA's trade
secretsfrom destructionby the defendants'conductin distributing the
functional capabilities of the DeCSS software over the internet and,
consequently,the court should have applied intermediate scrutiny
under O'Brien.
Instead,the Court of Appeal acknowledgedneither any form of
intermediate scrutiny nor any conduct inherent in defendants'
misappropriationand misuseof DVD CCA ' s trade secrets.I I Because
II The Court of Appeal's sta~ment that "DVDCCA has not alleged that
Bunner engagedin any expressive'conduct' by posting DeCSSon his web
site," 113 Cal.Rptr.2d at 347, is mistaken. DVD CCA's position has
always been that Bunner violated the UTSA by his improper conduct in
distributing the DeCSSsoftwarethrough his web site.
25
holding the preliminary injunction obtained under the California
UTSA unconstitutional,the Court of Appeal effectively repealedthe
statutory protections afforded to trade secretsunder California law,
leaving DVD CCA and other trade secretowners with no real remedy
to address the misappropriation and dissemination of their
technologies. The destructionof trade secretprotection in California
will haveadverseeconomiceffectsnot only on the electronics,motion
picture, and computerindustriesthat sell DVDs and DVD players,but ~
on all California businessesthat rely on trade secretsfor protection of C;
their
intellectual
property. .
In reversing the injunction, the Court of Appeal fundamentally
.
.
erred in concluding that DeCSS is "pure speech" absolutely protected .
against prior restraint by the First Amendment and in ignoring the .
."',
273 F.3d at 452, which held both that DeCSS is mixed speechand
conduct for purposesof the First Amendment a,ndthat the Digital
Millennium Copyright Act's prohibition of encryption-busting .'
11
I. NEITHER HISTORY NOR POLICY CONSffiERADONS CAN
JUSTIFY THE COURT OF APPEAL'S PRolDBmoN ON
INJUNCTIONS PROTECTING TRADE SECRETS FROM
DESTRUCTION BY DISSEMINADON.
A. Historically,the Dissemination
of StolenTrade .
Secrets Has Not Been Protected by the First
Amendment. .
LongbeforetheFirstAmendment
wasadopted
in 1791,the
..
Englishcommonlaw recognizedthe valueof commercialsecrecyand .
the protectionof tradesecrets.3That Englishcommonlaw became ;
.~
part of our own common law tradition, and the Framerswere well «
awarethat the commonlaw protectedtradesecretswhenthe First -
Amendmentwas enacted. There is no historical evidenceto suggest :
that the Framersintended or had even the slightest reasonto believe (:j
that the First Amendment would prevent courts from issuing ~,
...
grantinjunctive
reliefto prohibittradesecret
disclosure
in appropriate .
4
cases.
..-
.
3 "Tradesecretsweresurelyan acceptedpart of Englishbusinesspractice,
andthereforealmost certainly part of its practical, unrecordedlegal practice
.,~
as well, long before the adoption of the fifth amendmentin this country." <;
JOHNC. JANKA,Federal Disclosure Statutesand the Fifth Amendment:The .
New Statusof Trade Secrets(1987) 54 ~. CHI. L. R:EV'334, 353 n.89; see .
also Andrew Beckerman-Rodau, Prior Restramts and Intellectual
Property: The Clash between Intellectual Property and the First ..
Amendment from an Economic Perspective (2001) 12 FORDHAMINTEL.
PROP.,MED. & ENTERT.L.J. 1, 57 (stating that trade secret law is "the
oldest
typeofintellectual
property
protection").
.
.
4 See 1 MELVINF. JAGER,TRADESECRETS LAW (1997) § 2.01 (citing :.
Yovettv. Winyard(Ch. 1820)1 Jac.& W. 394,37 Eng.Rep.425 (enjoining
disclosureof secretmedicalformulas)andMorison v. Moat (Ch. 1851)9 Y
.
12 .
.
.
""I:i
Since then, courts in California an~ elsewhere have consistently
upheld injunctions prohibiting the use and disclosure of trade secrets.s
Indeed, such injunctions have been issued in California for almost a
centLlry. See Empire Steam Laundry v. Lozier (1913) 165 Cal. 95
(affirming injunction prohibiting the defendant from using plaintiffs
customer lists). The fundamental tenets of common-law trade secret
protections have subsequently been incorporated both into the
common law of the various states and, eventually, in the legislative
enactment of the UTSA by 43 states, including California, and the
District of Columbia.6 California's version of the Uniform Trade
Secrets Act specifically provide~ that "actual or threatened
misappropriation [of trade secrets] may be enjoined," CAL. Cw ""CODE
§ 3426.2(a), and it is no surprise that courts traditionally have been
diligent in issuing injunctions to prevent the destruction of trade
secretsthrough improper use and disclosure.
13
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i',~
14
..
, "'
"
:5
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copyrighted or patentedif trade secret law does not fill the gap to
enable them to profit from their labors. That innovation provides a
substantialpublic benefit and has beenfound to be deservingof legal
protection not just in California, but throughout the United States.
Tradesecretlawsalsopromotebusiness
moralityandprotectthe
.
.
fundamentalrights of the trade secretowner by punishing those who .
.
engage in unethical or improper means to acquire another's trade
8
secret.
..
California's economyis fueled by businessesthat rely on their C
ability to protect intellectual property. This lawsuit alone affects
":""
law is well suitedto protect innovation in that field: C
1 JAGER,§ 1.02, at 1-3 to 1-4; see also Computer Assocs. Int'l, Inc. v.
Altai, Inc. (2d Cir. 1992) 982 F.2d 693, 717 ("Precisely becausetrade
secret doctrine protects the discovery of ideas, processes,and systems
which are explicitly precluded from coverage under copyright law,
courts and commentators alike consider it a necessary and integral
part of the intellectual property protection extended to computer
programs.").
Trade secret law is also well suited to protect computer
technology because preliminary injunctive relief, common in trade
secret cases, is the only effective tool to protect against widespread
dissemination of misappropriated trade secrets, and particularly stolen
trade secrets that can be distributed in computer files, as is true of
DeCSS. There is universal agreement that permanent injunctive relief
is simply inadequate to protect trade secretsbecause of the reality that
the secret will lose its value before permanent relief can be obtained.
There is likewise general agreement that damages are an inadequate
remedy becauseit is difficult or impossible to detennine the value of a
destroyed trade secret. See AMEDEEE. TuRNER,THE LA W OFTRADE
17
SECRETS
427-59 (1st ed. 1962). Only if these remedies are joined
with the availability o~preliminary injunctive relief can a trade secret
owner have the full protection of the law.
This caseis a paradigmaticinstancein which in~unctive relief is
the only effectiveremedy. This fact wasnotedby the superiorcourt
..
andtheothercourtsthathaveconsideredwhetherthedissemination
of .
DeCSS canbeenjoined.9 In thewordsof thesuperior
court: .
If the Court does not immediately enjoin the posting of :
this proprietary information, the Plaintiff's right to :
protect this information as secret will surely be lost, (~
given the current power of the Internet to disseminate
information
andtheDefendants'
do so. . ..
stated
determination
to
In that event, the protection afforded by the
.
.
C;
encryptionsystemlicensedby the Plaintiff, whetherto .,-
C
material in suits for damageswould be extremely difficult both #'~.
.
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f
"-
,
10 The decision of the Court of Appeal also threatensto put the United
Statesin breachof one of its internationaltrade agreements,the Agreement
on Trade-RelatedAspectsof Intellectual Property Rights. That agreement
requires treaty signatories to afford owners of trade secrets legal
protections, including "provisional relief," to prevent the theft of such
intellectual property. Agreementon Trade-RelatedAspectsof Intellectual
PropertyRights, Apr. 15, 1994,art. 41, 33 I.L.M. 1191,1213-14.
19
",!""',""ii;;;,..i.;'~'""'4ill'~~~~_"",";,",,,""--
-
..
ll. THE SUPERIOR
COURT'S
INJUNCnON
PROHIBITING
THE .
DISTRIBUnON OF DECSS Is SUBJECTTO No MORE THAN -
INTERMEDIATESCRUnNY UNDERTHE FIRsT AMENDMENT. e
r
The Court of Appealerredmost significantlyin its failure to ~ '-0
I
Content Neutral. Q
.
By equating the act of posting DeCSS on the internet with
"purespeech," theCourtof Appealwronglyleapfrogged to themost .
.
restrictive
levelof FirstAmendment scrutiny,whenit shouldhave .
carefullyevaluated the natureof the CaliforniaUTSAprovision .
authorizingthe superiorcourt's injunctionand its relationto the .
~
21
;!
"
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California UTSA is content neutral. Bunner's claim to First -
Amendmentprotectionis subjectat mostto intermediatescrutiny. -
a
TheCourtof Appeal'sanalysisfailedto recognizethatthe First C
Amendment,
insteadof runningroughshod
overgovernment
interests, .
..
must sometimes be reconciled with them. In recent years this Court .
22
'C"'ilC""",,,l_~._'"'t!i_-
'" UnitedStatesv. O'Brien (1968) 391 U.S. 367, the SupremeCourt
upheld the criminal prosecutionof a man who burnedhis draft card in
political protest. Although the expressivenessof O'Brien's actions
constitutedprotectedpolitical speechof the highest d ~gree,the Court
permitted the application of a statuteprohibiting the destructionof a
draft card becausethe statutehad a legitimate nonspeechpurposeand
was directedat conductrather than the speechitself. "This Court has
held that when 'speech' and 'nonspeech'elementsare combined in
the same course of conduct, a sufficiently important governmental
interest in regulating the nonspeechelement can justify incidental
limitations on First Amendmentfreedoms." [d. at 376.
The most glaring error in the Court of Appeal's analysisis its
failure to even consider the nature of the speech at issue and the
governmentalinterest in preventing the theft and destructionof trade
secrets. While the court expresslyacknowledgedthat the California
UTSA is intended to "protect trade secrets" and is not directed at
speech,it wrongly assumedthat suchstatutoryprovisionsmust "bow"
to free speechconcernswith no further analysis. 113 Cal. Rptr. 2d at
349.
0 'Brien and its progeny teach otherwise. The SupremeCourt
has been careful to uphold statutory and common-lawrestrictions on
speechwhen the prohibition is directed at conduct rather than the
speech itself. Thus, the Supreme Court has upheld not only a
prohibition on the destructionof draft cards in 0 'Brien, but also, for
instance,the regulation of the placementof tobaccoproductsfor sale,
Lorillard Tobacco Co. v. Reilly (2001) 121 S.Ct. 2404, 2429, and
prohibitions on public nudity, City of Erie v. Pap's A.M. (2000) 529
23
u.s. 277, 289, against claims that t~ose provisions improperly
restrictedspeech. Importantly, the analysisis driven not by the nature
of the speech,but by the nature of the governmentrestriction. See
Cla'k v. Communityof Creative Non-Violence(1984) 468 U.S. 288,
298.Thus,thefactthatO'Brieninvolved
corespeech
in thenature
of
.
.
political protest did not, for example, require a higher level of .
scrutiny,becausethe statuteitself was directedat conduct,not speech. .
Bunner cannot rationally argue that the California UTSA is :
directed at speechof any kind. As stated above, even the Court of ~
.
Appeal acknowledgedthat its purpose is to "protect trade secrets,"
andcourtsandcommentators
havelung agreedthat common-lawand
..
statutory trade secretprotections are intended to promote substantial .
governmentinterestsin innovation and businessmorality. See,supra, ~
pp. 18-19. Any impact on speech is purely incidental to the ::
application in a particular case, as was Mr. O'Brien's ill-chosen 9
In hIS motIon to modIfy the decIsIon of the Court of Appeal, DeCSS also
exists,and was widely disseminated,
as "object code." AA, pp. 479-80.
This misunderstandingby the Court of Appeal apparently affected its
..
decision,sinceit foundthat"objectcode"is not "expressive
speech"and .
thusis notsubjectto FirstAmendmentprotection.113Cal.Rptr.2d at 348 .
("If the sourcecode were 'compiled' to createobject code, we would agree .~
that the resulting compositionof zeroesand ones would not convey .,'~.:
ideas."). ~
.
26 .
..
..
infonnation.14 See 273 F.3d at 451. Once installed on a computer,
DeCSSallows the operatorto decrypt and then illegally copy a DVD.
As the court explained:
DeCSS is computer code that can decrypt CSS. In its
basic function, it is like a skeletonkey that can open a
locked door, a combination that can open a safe, or a
device that can neutralizethe security device attachedto
a store'sproducts. DeCSSenablesanyoneto gain access
to a DVD movie without using a DVD player.
[d. at 453. Corley's analogizing of DeCSS to a key explains why
posting DeCSScannotbe an act of pure speech. Posting DeCSS for
othersto downloadand useis like making a million copiesof a key to
someone'shouse and handing them out at the mall. While the act
might have some expressivecontent, the First Amendment will not
prohibit the courts from enforcing private intellectual property rights
againstclearly violative conduct.
The Court of Appeal's erroneousconclusion that the source
code is more like a book than a key becauseof its communicative
potential also ignores the fact that the First Amendment does not
protect illegal behavior simply becauseit involves a technology with
communicativepotential; it protects only actual communication.IS
27
"
-
TheFirstAmendment
doesnotshieldthesaleof a stolenbooksimply .
If!
because someone may later read the book. Courts must examine the ~
software
sothatotherscouldusethefunctionalcapability
of busting . :
..
courtsmustlook to how codeis usedin orderto determine
its degreeof .
protection);Orin S. Kerr, Are WeOverprotectingCode?Thoughtson First- ..
Generation Internet Law (2000) 57 WASH. & LEE L. REv. 1287, 1287 "~
(arguing that code should be governedbasedon what it "does," not what it
".IS" ) . ;,";1
~
.
28 .
..
.
,J
29
"..~-
\
.~
Likewise,
theCourtof Appeal's
heavy
reliance
onJunger
v.
..
41
Daley (6th Cir. 2000) 209 F.3d 481, is misplaced. The Court of :
Appeal correctly noted that Junger held that computer source code t;
.
can be expressiveand therefore protected by the First Am~ndment.
113Cal.Rptr.2d at 348. But in finding that DeCSSis pure speech,the
.
.
Court of Appeal completely disregarde~the Sixth Circuit's ultimate .
holdinginJungerthatthefunctional
capabilities
of thecomputer
code .
subjectedthe regulation only to intermediatescrutiny under the First :
Amendment. Junger, 209 F.3d at 485 ("The functional capabilitiesof C
sourcecode, particularly those of encryption source code, should be ,.
~
consideredwhen analyzingthe governmentalinterestin regulating the :::
"'"
:1
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,
--.
"
31
.
It
the furtherance of that interest. See O'Brien, 391 U.S. at 377. The -
-
fundamentalrights of the trade secretowner by punishing those who
engage in unethical or improper means to acquire another's trade .
secret. For these reasons,courts have long recognized that trade ~
secretlaws further substantialgovernmentinterests.I7 (!;:~
Expression.
California's interest in protecting trade secretsis to encourage
economicgrowth and ethical businessbehavior and has nothing to do *'~
..
with thesuppression
of freeexpression.
Theinquiryis whether
the .
government'sinterestis in suppressingthe "expressive" aspectsof the ~'"
conduct, or instead is addressed to some other goal. See Texas v. :
""\
,
v
"
!
32 a'
@
..
Johnson(1989) 491 U.S. 397, 406. "Where 'speech'and 'nonspeech'
elementsare combined in the samecourse of conduct, a sufficiently
important governmentalinterest in regulating the nonspeechelement
canjustify incidental limitations on First Amendmentfreedoms." See
id.
The nonspeechfunction of DeCSSallows a user to decrypt and
copy DVDs. See,supra, Section II(B). And while the DeCSScode
may comn1unicateideas about encryption technology to those few
who can and careto read it, that is not the focus of the injunction, and
Bunner doesnot contendthat the governmentwould have any interest
in suppressingthe improper distribution of the encryption technology
contained in DeCSS or CSS if that were not the technology that
protectsDVDs. The injunction enteredin this casewas for the sole
and limited purposeof protectingDVD CCA's tradesecrets.
4. The Injunction Does Not Burden Substantially
More SpeechThan Is Necessaryto Further the
Government's Interest in Protecting Trade
Secrets.
The trial court's injunction was narrowly tailored to burden no
more speechthan absolutelynecessaryto protect DVD CCA's trade
secrets. The preliminary injunction expresslyavoidedprohibiting any
pure speech by defendants: "Nothing in this Order shall prohibit
discussion, comment or criticism, so long as the proprietary
information identified above is not disclosedor distributed." AA, p.
716. The injunction does not prohibit any speech beyond DVD
CCA's trade secrets. Bunner may still protest the existenceof CSS,
33
I
~
'8
-
DVD CCA, the movie industry in general, or the Trilateral ..
Commission. Nothin~ preventshim from discussingthe theories or .
techniquesof encryption usedin DeCSS,so long as thosediscussions t;
.
do not disclose trade secrets. The preliminary inju.lction does not
restrictBunner
fromdiscussing
or publishing
opinions
and ..
information
aboutCSSor DeCSS.It doesnot enjoinhim from .
developing
hisownencryption
or decryption
technology.
Heis free .
to studyandexperimentwith cryptography.But he maynot "express"
.
~
"
his desire or ability to decrypt DVDs by distributing a computer C
program containing or substantially derived from misappropriated ..
proprietary CSS algorithms and keys. Thus the injunction does not
4~
burden"substantially"morespeechthanis necessary
to protecttrade -
secrets.
'1
III. THE SUPERIOR COURT'S NARROWLY TAILORED INJUNCTION ,.
Is NOT AN IMPERMISSIBLE PRIOR RESTRAINT. c-
:~
A. Not Every Injunction Alleged to Restrict Expression .
Is an Impermissible Prior Restraint. .
Thepreliminary
injunction
entered
by thesuperior
courtis a .
routineorderpreserving
privateintellectual
propertyrights,andthe
..
.
Court of Appeal was wrong to suggestthat injunctionsthat restrict ..
,,~
speechare only grantedin the rarestoccasions.As the district court in C
theDMCA
case
noted: .
The classic prior restraint cases were dramatically
different from this one. Near v. Minnesota involved a
..
stateprocedure
newspapers
for abating
scandalous
anddefamatory
aspublic nuisances.New York TimesCo. v.
United Statesdealt with an attemptto enjoin a newspaper
.
..
,--
..-f"
34
.
--
4C"!~~~
j
"
,
35
.-
~
the Government's
requestfor an injunctionagainstpublishing .
information
abouttheaffairsof government."
Id. .
4
B. The First Amendment Prior Restraint Doctrine Does ~
Not Prohibit Injunctions to Protect Intellectual ..
Property. .
Courtshavefrequently
enjoined
thedissemination
of stolen .
intellectual property, noting that such injunctions are not -, ,
~
I
impermissible
prior restraints.Whena "privateplaintiffI]" attempts .
"to protect its property rights," a preliminary injunction does not 4
"constitutean unconstitutional
'prior restraint.'" DallasCowboys
v. :
PussycatCinema,Ltd. (2d Cir. 1979)604 F.2d 200, 206. Because <i
~
enforcementof intellectual property rights is content neutral, there is =:
no questionof governmentcensorshipand henceno needto engagein ~:
the prior restraintanalysis. Seeid. .'
.
"
.-
~
added);see a/so Madsen, 512 u.S. at 763-64 (holding that a content
neutralrestrictionon politicalspeechis subjected
to intermediate . !
expression.
. . are'priorrestraints'
in thesense
thatthattermwas ..
.
used in New York Times Co."); cf SoutheasternPromotions, Ltd. v. 48
,,",
Conrad (1975) 420 U.S. 546, 558-59. Indeed, this Court upheld a ""c.,o
(;:i;
. 36 .
18:
.:
[
..
~.~ ,
! l
~.d
w~~~
,J
"'
.,.;
"
C'
18See Brach Van Houten Holding, Inc. v. Save Brach's Coalition For
Chicago (N.D. 111. 1994) 856 F.Supp. 472 (granting a preliminary
injunction to prevent the defendant from using plaintiff s logo).
"Trademarksare property rights and as such,neednot 'yield to the exercise
of First Amendmentrights under circumstanceswhere adequatealternative
avenuesof communicationexist.'" Id. at 476. Seealso Goto.Com,Inc. v.
Walt Disney Co. (9th Cir. 2000) 202 F.3d 1199 (affirming preliminary
injunction in trademarkinfringement suit); Dallas CowboysCheerleaders,
Inc. v. ScoreboardPosters,Inc. (5th Cir. 1979) 600 F.2d 1184 (affirming
preliminary injunction and rejecting prior restraint argumentin a case of
alleged copyright and service mark infringement); Ty, Inc. v. West
Highland Pub., Inc. (N.D. Ill. Oct. 5, 1998) 1998 WL 698922, at *19;
Playboy Enterprises,Inc. v. Calvin Designer Label (N.D. Cal. 1997) 985
F.Supp. 1220(granting preliminary injunction to preventallegedtrademark
infringement); Hasbro v. Internet EntertainmentGroup, Ltd. (W.D. Wash.
37
,~
~
.'.
.
1996) 1996 WL 84853 (granting preliminary injunction in trademark ~;
infringement
19 Seealso case).
Michaels v. Internet EntertainmentGroup, Inc. (C.D. Cal. -I !
1998) 5 F.Supp.2d 823 (granting a preliminary injunction against the ..
disseminationof a videotape of the plaintiff basedon a right-of-publicity ,,"'"
claim).
20See,supra,footnotes5-7andaccompanying
text. ..~
.
38 .
.
..
Cal.Rptr.2d at 349. In truth, however, most injunctions against the
use or disclosureof tr~de secretsenjoin expressionas much or more
than the preliminary injunction in this case. In caseslike Pepsico,
Inc., v. Redmond(6th Cir. 1995) 54 F.3d 1262, in Nhich the court
enjoined a former employeeof a companyfrom going to work for a
competitor, the concernis nearly always that the departingemployee
will communicatetrade secretsto the new employer. Seeid. at 1272.
No one worries that a former employeein possessionof proprietary
information-say, the designof an unpatentedcomputerchip21-will
go to a rival and start working on the factory floor. Instead,the harm
is causedwhen the new employeecommunicatesthat trade secretto
her employer, who then uses it to build a competing chip, much as
Bunner has distributed DeCSS to allow users to decrypt and copy
DVDs. When a trade secretis involved, it is the transferof the secret
and its subsequentuse that ultimately results in the harm-and that
transfer always occurs in some expressiveform. Indeed, the order
upheld in Pepsico explicitly enjoins the former employer "from
forever disclosing [the former employer's] trade secrets," whether
employedby the rival or not. Seeid.
So common is it for courts to directly or indirectly enjoin the
communication of a trade secret that it is difficult to find casesin
which a First Amendment defense prevents an injunction against
disclosing trade secrets. Instead,Bunner has relied on Procter and
Gamble Co. v. Bankers Trust Co. (6th Cir. 1996) 78 F.3d 219, a case
39
-
~
fi,,#
f?!
f/!
that has little to do with trade secret&,22and Bridge C.A.7: Scan .,
Associates v. Technicare Corp. (2d Cir. 1983) 710 F.2d 940, in which :
the court reachedthe oppositeconclusionfrom the one for which ~
BunJ.lercites it. Id. at 946 (noting that an injunction on publication ..
may be available "where a party has obtained [trade secrets] :
innocently
buthasthereafter learned of theirmisappropriation,"
but . i
disapproving
of an injunctionin the absenceof evidence
thatany .
tradesecretsweremisappropriated). :
Bunner also relies on Ford Motor Co. v. Lane (E.D. Mich. C
1999) 67 F.Supp. 745,747, which does conclude, erroneously, that the .
First Amendment protects publication of misappropriated trade :
secrets. This novel holding stands in stark relief to two centuries of r:[;
41
-"
27
showing 26
so 25
at
furtherance
speech
speech
on
these violation broadcasting
Brown Minnesota
Court
previous
restraint
See
may
and
(1999)
Paris
Pittsburgh
See
preventing
long
pure
id.
unlawful
be
cases
Kingsley,
The
In
.
at
(1957)
Adult
as
has
21
are
may
speech.
at
said
jurisprudence,
restraint
recent
issue
of
a
Court
Cal.4th
147.
manager
of is
(1931)
not
movie
Press be
approved
to
anti-discrimination
of
Theatre
them that
unlawful
354 speech.
has
enjoined.).
354
be
booklets,25
cases
prohibited
concluded
After
Co.
they is
directed
U.S.
is
already
U.S. 121,
283
from
restraint' is not a . ..
not
judged
I
at
such
v.
approve
a
conduct
To
at of 436,451).
the
this
U.S.
413
absolutely
Slaton
continuing
long
445.
been
against
movies,26 the
as
by Court
that injunctions
U.S.
Court
obscene
697,
I
Aguilar
review
extent
the
(1973)
injunctions
or
injunctions
published
beenajudicialdetennination
at
laws.27
42
noted,
talismanic
is
has
391.
speech
716,
Indeed,
unlimited,"
First
under
publication;
itself
and
that
413
of
v.
upheld
and
against
"[T]he
Avis
Amendment
the
advertisements
What
and at
unlawful;
U.S.
the
the
the
fromusingraciallyderogatory
sought
on
all,
Kingsley
Supreme
Rent
injunctions
appropriate
the
the
United
trial
49, and
protection
is
it
(2)
the
injunction
publication
by
clearly
69-70
noteworthy
a
"the
court's
and
language
the
Car
the
States
publication
when:
BookY,
Court's
phrase
(3)
speech
(holding
that
government
standard,
on
System
falls
even
injunction
there
Supreme
is
repeated
were
(1) of
Inc.
aimed
within
test."Seeid. at 145(quoting
about prior-
'prior
as
is
pure
that
to thateffectpriorto theissuance
Inc.
has
the
its
in
or
in
to
v.
Nearv.
thiscategory.In Aguilar,theCourtheldthatanorderenjoininga
of the
wasconstitutional.
c~
.
.
.
..
.
.
~ ~
.
.
. . .. .
.
. ~ G ~ ~ .-:
«
C ~
"...~ ~ ~ - <: «
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.
.
.
.
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~
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i
,
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Gallo, stating that a specific injunction does not impose the same
14 Cal.4th at 1114.
The superior court's injunction restricts less speech than the one
the parties to the case and does not have the same chilling effect as a
statutory prohibition. It also enjoins only speech that has already been
and conduct. More importantly, unlike the injunction in Aguilar ,28 the
trial court's order is content neutral and was issued solely to protect
Bunner's posting violated trade secret law. The Second Circuit has
28 See Aguilar, 121 Cal.4th at 135 n.4 (holding that the injunction was not
43
,d
e""
does copynght comp~nen~
copyrighted widespread motion
infringe 29
focus the
or
doctrine is
voluminous
argument after
address not Aguilar-that
been First,
can
Studios,
injunction be part
"Even Near,
content
enjoined
to
not
Government
be
of
closely
the
a
of Unlike
Although
issue
pictures
a
plaintiffs'
alter
adjudged
Bunner's
is
Inc.
lengthy
Infringement.
assuming
course
there
question
those
not
from
issued
o~ neutral,
works.
copying
documentary
that
a
concluded
(S.D.
on
examined
the
a
a
implicated
temporary
is
promoting which
prohibition
of
reality."
that
course
this
both
copyrights,
classic
no hearing
after
in
arguments.
will
of
that
The
N.Y.
conduct
the
rational whether an
and
basis
case
That
they some
sides a
dissemination
preempt
by
primary
2000)
of
prior
adversarial
jury
Id.
thatbecause
in restraining
evidence.
in
dissemination
DeCSS the
whose
differs
the
on
conduct,
alone.
lawfully
the
this
would
posting
concern
and
restraint determination,
which
82
speech
The
dissemination
record trial
case.
rationale
the
F.Supp.2d
purpose
arguably
use
had
from
preliminary
See
judge.
44
proceeding-is
Moreover,
possessed,
the
of
order
DeCSS
the
clearly
will
courts'
in
DeCSS
cases
DeCSS
the
Reimerdes
Aguilar
p~ncipal
the
of
superior
be
is
IS
behind before
The
211,
such
opportunity
demonstrates
to
the
expressIve
trade-secret
is
of
unauthorized
issued
only
power
because
break
therefore
and enjoinable
injunction
concern
DeCSS
superior
223.29
as
in
it
o~ject
to
the
v.
court
thus
Pentagon
not before
could
that
view
the
to
Universal
to prior
the
present
is
is
law
arguably expressed
that
of
context
to
some
make the
court
has
copyrighted
heard
was
adequately
the
its
restriction
copies
to
which
consider
the and
restraint
Aguilar
legality
Papers
already
critical
degree
permit
issued
chose
here.
chief
First
may
that oral City
not
of
in
is
DeCSSallowscopyingof DVDs,its postingis
..,~
.
.
..
.
~
~
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. . . .
. . 41 ~ ",
. . ""'" ~
y " ~ .
.
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"",
.
.
-'
"
f!j
'.
"
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Amendment determinationsbecauseit '-:!islikesthe speechat issue.
For all these reasons, the superior court's injunction is not an
impermissibleprior restraint.
CONCLUSION
JaredBobrow
ChristopherJ. Cox
WElL, GOTSHAL & MANGES LLP
20I RedwoodShoresParkway
RedwoodShores,CA 94065
Telephone: (650) 802-3000
Jeffrey L. Kessler
RobertG. Sugarman
GregoryS. Coleman
EdwardJ. Burke
JohnF. Greenman
WElL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8000
, -
By: a-1'~~ ~
<';7
-- c~Jo;h':;f~ox ~ A'~~~-
1IJI~~-j:
+~~"O'(
45
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PROOF OF SERVICE
.
.
First Amendment Project
1736Franklin Ave., 9th Floor
Oakland
CA94612
.. i
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46 8;
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"
EdwardJ. Black
Computer& CommunicationsIndustry Association
666 EleventhStreet,NW
Washington,DC 20001
47
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David E. Kendall "'j;;,
Thomas G. Hentoff .
Suzanne H. Woods (Bar No. 177853) .
Julia B. Shelton
Williams & Connolly LLP .
C
725TwelfthStreet,NW
Washington,
D.C.20005 .
.
C
22,2002.
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ChristopfierJ. Cox
49
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