DVD Copy Control Ass'n, Inc. v. Bunner

75 P.3d 1, 4 Cal. Rptr. 3d 69, 31 Cal. 4th 864
CourtCalifornia Supreme Court
DecidedOctober 15, 2003
DocketS102588
StatusPublished
Cited by86 cases

This text of 75 P.3d 1 (DVD Copy Control Ass'n, Inc. v. Bunner) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DVD Copy Control Ass'n, Inc. v. Bunner, 75 P.3d 1, 4 Cal. Rptr. 3d 69, 31 Cal. 4th 864 (Cal. 2003).

Opinions

Opinion

BROWN, J.

Today we resolve an apparent conflict between California’s trade secret law (Civ. Code, § 3426 et seq.)1 and the free speech clauses of the United States and California Constitutions. In this case, a Web site operator posted trade secrets owned by another on his Internet Web site despite knowing or having reason to know that the secrets were acquired by improper means. The trial court found that the operator misappropriated these trade secrets in violation of section 3426.1 and issued a preliminary injunction pursuant to section 3426.2, subdivision (a), prohibiting the operator from disclosing these secrets. Accepting as true the trial court’s findings, we now consider whether this preliminary injunction violates the First Amendment of the United States Constitution and article I, section 2, subdivision (a) of the California Constitution. We conclude it does not.

I.

A.

Digital versatile discs (DVD’s) “are five-inch wide disks capable of storing more than 4.7 [Gigabytes] of data. In the application relevant here, they are used to hold full-length motion pictures in digital form. They are the latest technology for private home viewing of recorded motion pictures and result in drastically improved audio and visual clarity and quality of motion pictures shown on televisions or computer screens.” (Universal City Studios, Inc. v. Reimerdes (S.D.N.Y. 2000) 111 F.Supp.2d 294, 307, fn. omitted (Reimerdes).)

“[T]he improved quality of a movie in a digital format brings with it the risk that a virtually perfect copy, i.e., one that will not lose perceptible quality in the copying process, can be readily made at the click of a computer control and instantly distributed to countless recipients throughout the world over the Internet.” (Universal City Studios, Inc. v. Corley (2d Cir. 2001) 273 F.3d 429, 436 (Corley).) Recognizing this risk of widespread piracy, the motion picture industry insisted that a viable protection system be made available to prevent users from making copies of motion pictures in digital form. Without such protection, it would not have agreed to release movies on DVD’s.

[871]*871To provide this protection, two companies, Toshiba and Matsushita Electric Industrial Co., Ltd., developed the Content Scrambling System (CSS). “CSS is an encryption scheme that employs an algorithm configured by a set of ‘keys’ to encrypt a DVD’s contents. The algorithm is a type of mathematical formula for transforming the contents of the movie file into gibberish; the ‘keys’ are in actuality strings of 0’s and l’s that serve as values for the mathematical formula. Decryption in the case of CSS requires a set of ‘[master] keys’ contained in compliant DVD players, as well as an understanding of the CSS encryption algorithm. Without the [master] keys and the algorithm, a DVD player cannot access the contents of a DVD. With the [master] keys and the algorithm, a DVD player can display the movie on a television or a computer screen, but does not give a viewer the ability to use the copy function of the computer to copy the movie or to manipulate the digital content of the DVD.” (Corley, supra, 273 F.3d at pp. 436-437.)

The motion picture, computer, and consumer electronics industries decided to use the CSS technology to encrypt copyrighted content on DVD’s and agreed that this content should not be subject to unauthorized (i) copying or (ii) transmission, including making the content available over the Internet. To this end, they began licensing the technology in October 1996. Under the terms of the licensing agreement, licensees had to maintain the confidentiality of proprietary information embodied in the CSS technology, including the “master keys” and algorithms. The agreement also contained other terms and conditions designed to ensure the confidentiality of this proprietary information. These industries later established the DVD Copy Control Association, Inc. (DVD CCA), as the entity charged with granting and administering the licenses to the CSS technology.

Despite these efforts to safeguard the CSS technology, Jon Johansen, a Norwegian resident, acquired the proprietary information embodied in the technology—including the master keys and algorithms—by reverse engineering software created by a licensee, Xing Technology Corporation (Xing). Xing’s software is licensed to users under a license agreement, which specifically prohibits reverse engineering. Using the proprietary information culled from this software, Johansen wrote a program called DeCSS that decrypts movies stored on DVD’s and enables users to copy and distribute these movies. According to DVD CCA, DeCSS “embodies, uses, and/or is a substantial derivation of confidential proprietary information” found in the [872]*872CSS technology. Johansen posted the source code2 of DeCSS on an Internet Web site3 in October 1999.

Soon thereafter, DeCSS appeared on other Web sites, including a Web site maintained by Andrew Bunner. Bunner posted DeCSS on his Web site allegedly because “it would enable ‘Linux’ users to use and enjoy ‘DVDs’ available for purchase or rental in video stores” and “make ‘Linux’ more attractive and viable to consumers.” Bunner also claimed he wanted “to ensure [that] programmers would have access to the information needed to add new features, fix existing defects and, in general, improve the ‘[D]eCSS’ program.”

B.

Upon discovering the posting of DeCSS on the Internet, DVD CCA and the Motion Picture Association (MPA) made extensive efforts to identify those Web sites disclosing proprietary CSS technology or linking to sites posting this information. The MPA then sent notices to these Web sites and their Internet service providers demanding that they remove this information from the sites. Despite receiving these notices, many of these Web sites refused to remove the information. DVD CCA then filed this action against Bunner and numerous other named and unnamed individuals who had published or linked to Web sites publishing DeCSS (collectively defendants), alleging trade secret misappropriation.4

In the complaint, DVD CCA did not seek damages. Instead, it only sought an order “enjoining and restraining [defendants . . . from making any further use or otherwise disclosing or distributing, on their web sites or elsewhere, or [873]*873‘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, duplicating, licensing, selling, distributing, publishing, leasing, renting or otherwise marketing the DeCSS computer program and all other products containing, using and/or substantially derived from CSS proprietary property or trade secrets . . . .”

Soon after filing the complaint, DVD CCA filed an ex parte application for a temporary restraining order (TRO). The trial court denied the request for a TRO but issued an order to show cause “why the injunction and restraints sought in [DVD CCA’s] proposed preliminary injunction should not be entered against defendants . . . .”

Following a hearing and after considering written declarations submitted by the parties, the trial court issued a preliminary injunction.

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75 P.3d 1, 4 Cal. Rptr. 3d 69, 31 Cal. 4th 864, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dvd-copy-control-assn-inc-v-bunner-cal-2003.