Tuesday, August 26, 2003
Supreme Court Rules:
Injunction Against Posting DVD Decryption Program Was Proper
From Staff and Wire Service Reports
A Web site operator can be enjoined from posting source code for a DVD decryption program on his site if he has reason to know the code includes improperly obtained trade secrets, the state Supreme Court ruled yesterday.
The decision reverses a November 2001 decision by the Sixth District Court of Appeal, which had overturned an injunction issued by Santa Clara Superior Court Judge William J. Elfving. The appeals court ruled that even if the injunction was proper under trade secret law, it was an unconstitutional prior restraint on free speech.
Writing for herself and four colleagues, Justice Janice Rogers Brown disagreed.
Brown said the order directed toward San Francisco computer programmer Andrew Bunner was based on the fact he disclosed proprietary information about the technology used to protect DVD movies from unauthorized duplication, not any expressive purpose.
“Because the injunction is content neutral and was issued because of Bunner’s prior unlawful conduct, we conclude it is not a prior restraint and therefore does not violate the First Amendment,” the justice wrote.
In 1999 Bunner posted the code to crack the encryption technology and, according to the movie industry, helped users replicate thousands of copyright movies per day.
The DVD Copy Control Association, an arm of Hollywood studios, said it controls the encryption system, which scrambles data to prevent unauthorized copying of a movie sold in the DVD format. The association sued Bunner and others under the Uniform Trade Secrets Act.
Elfving ordered Bunner to remove the encryption-cracking code from the Internet. But the Court of Appeal lifted that injunction, a move the DVD Copy Control Association said was akin to giving crooks the technology to reproduce protected material such as movies on a large scale.
The Supreme Court agreed that Bunner was free to post his own opinions on the Internet—but ruled neither he nor others could post protected secrets as protected free speech. The case is not fully resolved, however, because the Supreme Court also ordered the San Jose-based appeals court to analyze whether the code is still a protected trade secret given its widespread exposure.
Chief Justice Ronald George, Justice Marvin Baxter, and Justice Marie P. Rivera of the First District Court of Appeal, Div. Four, and Justice Ronald Robie of the Third District Court of Appeal, sitting on assignment in place of Justices Ming Chin and Joyce L. Kennard, concurred in the opinion written by Brown.
Justices Carlos Moreno and Kathryn M. Werdegar concurred but wrote separately. Moreno said he believed it would be impossible for the industry to show that the code remained a trade secret at the time Bunner posted it, since it had already been widely disseminated.
“Courts that have considered the matter have agreed that, generally speaking, a party not involved in the initial misappropriation of a trade secret cannot be prosecuted under trade secret law for downloading and republishing proprietary information posted on the Internet, primarily because the information is in the public domain and is no longer secret,” Moreno wrote.
At that point only those involved in unlawfully obtaining the information can be held liable for disseminating it, Moreno said.
The DVD association hailed Monday’s decision.
“This opinion has wide applications to trade secret law,” said association attorney Robert G. Sugerman. “Owners of trade secrets can now protect those trade secrets through injunctive relief, which is clearly now available.”
California Attorney General Bill Lockyer joined the group in arguing that industry secrets would be plundered if computer users could post them without court intervention.
“The ruling makes it clear that the First Amendment may not be used as a shield for the blatant piracy and theft of trade secrets,” Lockyer said Monday.
Companies including Boeing Co., Ford Motor Co. and AOL-Time Warner urged the justices to side with the DVD association, arguing that trade secret protections trump First Amendment speech protections.
Bunner did not devise the decryption code, but instead posted it on one of his Web sites. The Norwegian teen who cracked the code, Jon Johansen, was acquitted in Norway in January of charges he stole trade secrets.
Bunner, 26, said he has removed any reference to it from his Web sites and is fighting the case to stand up for free speech rights. He is one of dozens of people throughout the United States that the association is suing for posting the code.
He said Monday he believed his actions were lawful, and said he posted the code to let others play digital versatile discs on their computers.
“The idea was to get it out there for an open-source DVD player,” Bunner said.
His attorney, David A. Greene, said the appeals court could still ultimately support Bunner’s actions because the code’s global dissemination may not grant it trade-secret status anymore.
“The question is, is this restriction on speech necessary to advance an important government interest— trade secret protection,” Greene said.
In a related legal front, a federal judge in San Francisco is considering a case in which the movie industry is seeking to block 321 Studios Inc. of the St. Louis suburb of Chesterfield from selling DVD copying software. A decision in that case is expected soon.
The case is DVD Copy Control Association, Inc. v. Bunner, 03 S.O.S. 4654.
Copyright 2003, Metropolitan News Company