in DVDCCA v. Bunner (Nov. 1, 2001)
CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT
DVD COPY CONTROL ASSOCIATION,
Plaintiff and Respondent,
H021153 (Santa Clara County Super. Ct. No. CV786804)
Defendant and Appellant.
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.
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 full-length 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 CSS-equipped DVD player or DVD drive, which is capable of decrypting (unscrambling) the DVD. CSS is primarily composed of algorithms and 400 “master keys.” Every CSS-encrypted 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 15-year-old resident of Norway. DeCSS consists of computer source code which describes a method for playing an encrypted DVD on a non-CSS-equipped 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.
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 proprietaryinformation.” 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 myknowledge,” all of the end user licenses from DVDCCA’s licensees prohibited reverseengineering. The agreement between DVDCCA and its CSS licensees prohibited thoselicensees from reverseengineering CSS. A former Xing employee declared that “Xing employed technical means to prevent thereading of its software program in clear text in order to deny unauthorized access to theunderlying CSS keys and algorithms.” Xing’s “End-User License Agreement,” which wouldappear 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 notattempt to reverse engineer…any portion of the Product.” Thus, the user’s assent to theagreement was obtained only through the installment process and was therefore a “clickwrap” license agreement. DVDCCA argued that it had a minimal evidentiary burden. DVDCCA suggested that it hadno 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. Itargued that it could prevail even if it could not demonstrate that Johansen’s conduct wasunlawful or that defendants knew or had reason to know of the allegedly wrongful origin ofDeCSS. It also asserted that “under California law, if a trade secret violation isestablished, irreparable harm is presumed” and “need not be shown.” DVDCCA conceded that “computer code is speech,” but it argued it was entitled to apreliminary injunction because it had shown “a reasonable possibility” that it would prevailat trial and because the harm it would suffer would be “severe and irreparable.” DVDCCAmaintained that, even if defendants had not initially known that DeCSS contained a tradesecret that had been acquired by improper means, they clearly were aware of that onceDVDCCA initiated the action and therefore were required to refrain from disclosing thetrade secret. 3. Bunner’s Evidence and ArgumentsBunner argued that injunctive relief would violate his First Amendment rights. He alsoasserted that there was no evidence that he knew or should have known that DeCSS hadbeen created by improper use of any proprietary information. Bunner asked the court to take judicial notice of a Norwegian law that permitted reverseengineering of computer software for the purpose of achieving “interoperability” andprohibited any agreement to the contrary. According to Bunner, Johansen hadreverse-engineered Xing’s software to create DeCSS so that CSS-encrypted DVDs couldbe 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 lawinvalidated that term of the license agreement. Hence, Johansen’s reverse engineeringwas not “improper means” within the meaning of the UTSA. In support of his position Bunner submitted a declaration from an expert on Norwegianintellectual property law stating that no Norwegian criminal law or other legal precedentprohibited reverse engineering of computer software. DVDCCA, however, objected toBunner’s request for judicial notice of Norwegian law. Aided by the declaration of its ownexpert in Norwegian law, it maintained that reverse engineering of a decryption programwas in fact unlawful in Norway. Bunner also produced a declaration from Frank Stevenson, a computer programmer inNorway who was an expert in cryptography. Stevenson declared that the “master keys” ona CSS-encrypted DVD could be independently derived solely from a CSS-encrypted DVDitself without any unauthorized use of CSS decryption technology. In addition, Bunner submitted a declaration by David Wagner, a University of Californiacryptography researcher. Wagner believed that the publication of information about “flawsin supposedly secure systems serves a vital public interest” by notifying the public ofthese flaws. In Wagner’s view, the DeCSS “high-level” source code “made it possible toanalyze the security of the DVD security system without undertaking any tedious reverseengineering work.”
Bunner also submitted a declaration by John Gilmore, an expert on computer security andencryption. Gilmore explained that widespread copying of DVDs was not currently feasiblebecause 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 ofDeCSS 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 siteso that other programmers could modify and improve DeCSS and so that Linux userscould use DeCSS to play DVDs. Bunner asserted that, at the time he republishedDeCSS, he “had no information suggesting” that DeCSS “contained any trade secrets” or”involved any misappropriation of trade secrets,” and he continued to believe that DeCSShad been either “properly reverse engineered or independently created without [the]appropriation of any trade secrets.” Consequently, Bunner maintained that there was noevidence that he had reason to know that Johansen had used “improper means” to obtainthe 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 overthe Internet had caused it to “become a matter of public knowledge” which had lost anytrade secret status.
4. The Trial Court’s Order
The trial court heard DVDCCA’s request for a preliminary injunction on January 17, 2000.No evidence was introduced at the hearing. Instead, the matter was submitted on thewritten declarations and the arguments of the parties.
On January 21, 2000, the trial court issued a preliminary injunction. The order enjoineddefendants from “[p]osting or otherwise disclosing or distributing, on their web sites orelsewhere, the DeCSS program, the master keys or algorithms of the ContentScrambling system (‘CSS’), or any other information derived from this proprietaryinformation.” The court expressly refused to enjoin the defendants from linking to otherweb sites that contained protected information, because the links were indispensable toInternet access and a website owner could not be held responsible for the content of otherweb 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 notdisclosed or distributed.”
In reaching its decision the court made the following findings. First, DVDCCA hadestablished that CSS was its trade secret, and DVDCCA had exerted reasonable effortsto maintain the secrecy of the program. Second, the evidence was “fairly clear that thetrade secret was obtained through reverse engineering.” The trial court acknowledged thatthe UTSA recognized reverse engineering as “proper means.” Thus, “[t]he only way inwhich the reverse engineering would be considered ‘improper means’ herein would be ifwhoever did the reverse engineering was subject to the click licence [sic] agreementwhich preconditioned installation of DVD software or hardware, and prohibited reverseengineering.”
On this point the court observed that “[p]laintiff’s case is problematic at this prediscoverystage. Clearly they have no direct evidence at this point that Mr. Jon Johansen did thereverse engineering, and that he did so after clicking on any licence [sic] agreement.”Nevertheless, the court concluded that “[t]he circumstantial evidence, available mostlydue to the various defendants’ inclination to boast about their disrespect for the law, isquite 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 allegedreverse engineering. “This Court is not well positioned to interpret Norwegian Law, andDefendant’s own expert, even if this Court could consider expert testimony on a questionof 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, althoughthey may at some point be able to do so.”
The court further determined that the balance of hardships favored DVDCCA. “Mostcompelling 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 tradesecret information from their web sites. They may still continue to discuss and debate thesubject as they have in the past in both [sic] an educational, scientific, philosophical andpolitical context. Defendants have not provided evidence of any economic harm which aninjunction could currently cause, although if such an injunction were not granted it is quitepossible that this could change which could potentially shift the burden of harm inDefendants’ 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 theInternet would result in the loss of the secret, but it was not convinced that the posting thathad already occurred had destroyed the secret. The court acknowledged the “manypotential enforcement problems,” but it concluded that these problems did not precluderelief so long as DVDCCA was otherwise entitled to relief.
1. Standard of Review
Preliminary injunctions are ordinarily reviewed under the deferential abuse-of-discretionstandard. We consider only whether the trial court abused its discretion in evaluating twointerrelated factors. “The first is the likelihood that the plaintiff will prevail on the merits attrial. 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 preliminaryinjunction [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 constitutionalvalidity.” (Wilson v. Superior Court (1975) 13 Cal.3d 652, 657, italics added.) “[T]hereviewing court in free speech cases must make an independent examination of thewhole 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 anappellate court has an obligation to ‘make an independent examination of the wholerecord’ in order to make sure that ‘the judgment does not constitute a forbidden intrusionon the field of free expression.'” (Bose Corp. v. Consumers Union of U.S., Inc. (1984) 466U.S. 485, 499.)
Thus, in order to determine the appropriate standard of review, we must first decidewhether the restraint imposed by the trial court’s preliminary injunction implicatedBunner’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 economicallyvaluable trade secrets from misappropriation. (Civ. Code, § 3426.1 et.seq.) Under thisstatute, a trade secret is misappropriated if a person (1) acquires a trade secret knowingor 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 inviolation of a nondisclosure obligation, (3) discloses or uses a trade secret the personknew or should have known was derived from another who had acquired it by impropermeans or who had a nondisclosure obligation or (4) discloses or uses a trade secret afterlearning 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 throughelectronic 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 impropermeans.” (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 fortrade secret protection under the UTSA. [Citation.] However, a plaintiff who seeks relief formisappropriation of trade secrets must identify the trade secrets and carry the burden ofshowing that they exist.” (MAI Systems Corp. v. Peak Computer, Inc. (9th Cir. 1993) 991F.2d 511, 522.)
DVDCCA argues that “this case is (and always has been) about theft of intellectualproperty.” Yet DVDCCA’s complaint did not allege that Bunner was involved in any “theft”or other improper acquisition of intellectual property. Instead, DVDCCA alleged thatBunner’s republication of DeCSS violated the Act because (1) DeCSS disclosed one ofDVDCCA’s trade secret “master keys,” (2) the master key had been obtained by impropermeans, and (3) Bunner had reason to know both that DeCSS contained the master keyand that the master key had been obtained by improper means. Thus, while Bunner didnot use improper means to acquire DVDCCA’s proprietary information, he disclosedDeCSS when he knew or should have known that DeCSS had been “created through theunauthorized use of proprietary CSS information, which was illegally ‘hacked.'” Theallegation that Bunner had actual or constructive knowledge that DeCSS had beencreated by improper means was premised on Bunner’s alleged knowledge of postings onthe Internet which indicated that DeCSS was illicit.
We will assume for purposes of our discussion that the trial court correctly concluded thatDVDCCA had established a “reasonable probability” that it could prove these allegationsand 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 inthe absence of any freespeech concerns, we must first consider whether the order canwithstand scrutiny under the First Amendment.
3. Applicability of the First Amendment
Bunner contends that the injunction violates his First Amendment rights because itconstitutes a prior restraint on his freedom of speech. DVDCCA responds that Bunnerhad 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 ofthe First Amendment. The application of the First Amendment does not depend onwhether 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 nodifference that Bunner is a republisher rather than the original author of DeCSS. “It wouldbe anomalous if the mere fact of publication and distribution were somehow deemed toconstitute ‘conduct’ which in turn destroyed the right to freely publish.” (Wilson v. SuperiorCourt, supra, 13 Cal.3d at p. 660.) “[A] naked prohibition against disclosures is fairlycharacterized 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 byan individual on his web site rather than a media publication in a newspaper. The right tofreedom of speech “does not restrict itself ‘depend[ing] upon the identity’ or legal characterof the speaker, ‘whether corporation, association, union, or individual.'” (GerawanFarming, Inc. v. Lyons (2000) 24 Cal.4th 468, 485; Bartnicki v. Vopper, supra, 532 U.S. atp. __ [121 S.Ct. at p. 1760], fn. 8.)
DVDCCA has not alleged that Bunner engaged in any expressive “conduct” by postingDeCSS on his web site. Nor is there any indication in the record that Bunner engaged inconduct mixed with speech. DVDCCA does suggest, however, that DeCSS isinsufficiently expressive because it is composed of source code and has a functionalaspect. “The issue of whether or not the First Amendment protects encryption sourcecode is a difficult one because source code has both an expressive feature and afunctional feature. The United States does not dispute that it is possible to use encryptionsource code to represent and convey information and ideas about cryptography and thatencryption source code can be used by programmers and scholars for such informationalpurposes. Much like a mathematical or scientific formula, one can describe the functionand design of encryption software by a prose explanation; however, for individuals fluent ina computer programming language, source code is the most efficient and precise meansby which to communicate ideas about cryptography. …The fact that a medium ofexpression has a functional capacity should not preclude constitutional protection. ……[C]omputer source code, though unintelligible to many, is the preferred method ofcommunication among computer programmers.  Because computer source code is anexpressive means for the exchange of information and ideas about computerprogramming, we hold that it is protected by the First Amendment.” (Junger v. Daley (6thCir. 2000) 209 F.3d 481, 484485.)
Like the CSS decryption software, DeCSS is a writing composed of computer sourcecode which describes an alternative method of decrypting CSSencrypted DVDs.Regardless of who authored the program, DeCSS is a written expression of the author’sideas 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 zeroesand ones would not convey ideas. (See generally Junger v. Daley, supra, 209 F.3d atpp.482483.) That the source code is capable of such compilation, however, does notdestroy the expressive nature of the source code itself. Thus, we conclude that the trialcourt’s preliminary injunction barring Bunner from disclosing DeCSS can fairly becharacterized 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 topolitical speech. (Schad v. Mount Ephraim (1981) 452 U.S. 61, 65.) “All ideas having eventhe slightest redeeming social importance unorthodox ideas, controversial ideas, evenideas hateful to the prevailing climate of opinionhave the full protection of the guaranties,unless excludable because they encroach upon the limited area of more importantinterests.” (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 theFirst Amendment because they lack any social value. (Roth v. United States, supra, 354U.S. at pp. 484485.) “[I]t is well understood that the right of free speech is not absolute atall times and under all circumstances. There are certain welldefined and narrowly limitedclasses of speech, the prevention and punishment of which have never been thought toraise any Constitutional problem. These include the lewd and obscene, the profane, thelibelous, and the insulting or ‘fighting’ words…It has been well observed that suchutterances are no essential part of any exposition of ideas, and are of such slight socialvalue as a step to truth that any benefit that may be derived from them is clearlyoutweighed 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 thiscourt to create a new judicial exception for software containing a misappropriated tradesecret, and we decline to do so here. Although the social value of DeCSS may bequestionable, 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 notcomparable to the situation presented here, as they involved the actual use of a secret orthe 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 ofconfidential 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 oftrade secret technology. And in Cherne Indus., Inc. v. Grounds & Associates (Minn. 1979)278 N.W.2d 81 the defendants were enjoined from using confidential customerinformation obtained from their former employer in violation of their contractual duty not touse or disclose the information or take it with them when they left the company. Theenforcement of a contractual nondisclosure obligation does not offend the FirstAmendment. A voluntary agreement not to disclose a trade secret ordinarily waives anyFirst Amendment protection for an ensuing disclosure.
California’s Trade Secrets Act, like the laws enacted in many other states to protect tradesecrets, does not merely enhance the enforcement of contractual nondisclosureobligations but sweeps far more broadly. It is within this broad sweep that DVDCCA seeksto place Bunner. Yet the scope of protection for trade secrets does not override theprotection offered by the First Amendment. The First Amendment prohibits the enactmentof any law “abridging the freedom of speech….” The California Legislature is free to enactlaws to protect trade secrets, but these provisions must bow to the protections offered bythe First Amendment. None of the trade secret cases cited by DVDCCA holds to thecontrary.
DVDCCA also relies heavily on cases that upheld injunctions in copyright infringementcases. Protections for trade secrets, however, are not comparable to protections forcopyrights with respect to the First Amendment. First, since both the First Amendmentand the constitutional authority underlying the Copyright Act are contained in the UnitedStates Constitution, the resolution of a conflict between free speech and copyrightinvolves a delicate balancing of two federal constitutional protections. Article I of the UnitedStates Constitution explicitly grants Congress the power “To promote the progress ofscience and useful arts, by securing for limited times to authors and inventors theexclusive right to their respective writings and discoveries.” (U.S. Const., Art. I, § 8.) TheUTSA, on the other hand, lacks any constitutional foundation. Consequently, a clashbetween the trade secrets law and the First Amendment does not involve a balancingbetween two constitutional interests.
Second, injunctions in copyright infringement cases have been upheld “on the ground thatFirst 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, orresearch” under certain circumstances. (17 U.S.C., § 107.) It “offers a means ofbalancing the exclusive rights of a copyright holder with the public’s interest indissemination of information affecting areas of universal concern, such as art, scienceand industry. Put more graphically, the doctrine distinguishes between ‘a true scholar anda chiseler who infringes a work for personal profit.'” (Wainwright Sec. v. Wall StreetTranscript 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 Actprohibits even speech that is scholarly, addresses legitimate concerns, and seeks noprofit for the speaker, while the Copyright Act’s fair use doctrine would permit copyrightinfringement in those circumstances. Consequently, one of the primary justifications forissuing injunctions in these copyright infringement cases is not present in trade secretcases.
Third, the statutory prohibition on disclosures of trade secrets is of infinite duration ratherthan “for limited Times.” While the limited period of copyright protection authorized by theUnited States Constitution ensures that copyrighted material will eventually pass into thepublic domain, thereby serving the public interest by increasing its availability to thegeneral public, the UTSA bars disclosure of a trade secret for a potentially infinite period oftime, 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 byjustifications that are inapplicable to trade secrets. Both the First Amendment and theCopyright Act are rooted in the United States Constitution, but the UTSA lacks anyconstitutional basis. The prohibition on disclosure of a trade secret is of infinite durationwhile the copyright protection is strictly limited in time, and there is no “fair use” exceptionas there is for copyrighted material. These significant distinctions between copyright andtrade secret protections explain why courts have concluded that the First Amendment isnot a barrier to injunctive relief in copyright infringement cases.
We must conclude that Bunner’s republication of DeCSS was “pure speech” within theambit of the First Amendment. It is therefore necessary for us to apply independent reviewto 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 onBunner’s First Amendment right to publish the DeCSS program. A prior restraint isgenerally defined as an administrative or judicial order “forbidding certain communicationswhen issued in advance of the time that such communications are to occur.” (Alexanderv. United States (1993) 509 U.S. 544, 550, italics omitted.) The “special vice” of a priorrestraint is that it suppresses expression not only directly, but also by “inducing excessivecaution 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 onpure 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 thecompeting 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 acriminal defendant to a fair trial does not outrank the First Amendment right of the press topublish information]; New York Times Co. v. United States (1971) 403 U.S. 713, 718726[“national security” interest in suppressing classified information in the Pentagon Papersdid not outrank First Amendment right of press to publish classified information].) “[I]t isclear that few things, save grave national security concerns, are sufficient to override FirstAmendment interests.” (United States v. Progressive, Inc. (1979) 467 F.Supp. 990, 992[court issued prior restraint on publication of technical information about hydrogen bombonly because it found that such information was analogous to information about troopmovements which posed a grave threat to national security].) “If a threat to nationalsecurity was insufficient to warrant a prior restraint in New York Times Co. v. UnitedStates, 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 aninterest that is “more fundamental” than the First Amendment right to freedom of speechor even on equal footing with the national security interests and other vital governmentalinterests that have previously been found insufficient to justify a prior restraint. Ourrespect for the Legislature and its enactment of the UTSA cannot displace our duty tosafeguard the rights guaranteed by the First Amendment. Accordingly, we are compelledto reverse the preliminary injunction.
We express no opinion as to whether permanent injunctive relief may be obtained after afull trial on the complaint, as that issue is not before us. We further have no occasion todecide whether damages for Bunner’s disclosure would be appropriate in thesecircumstances. DVDCCA may, of course, bring an action for damages or even injunctiverelief against anyone who violates the Act by conduct rather than speech. In addition, aperson who exposes the trade secret may be liable for damages if he or she was boundby a contractual obligation to safeguard the secret. And anyone who infringes a copyrightheld by DVDCCA or by any DVD content provider may be subject to an action under theCopyright Act. We hold only that a preliminary injunction cannot be used to restrict Bunnerfrom disclosing DeCSS.
The order granting a preliminary injunction is reversed. Defendant Andrew Bunner shallrecover his appellate costs.
[signature] Premo, Acting P.J.
[signature]Elia, J. [signature]Mihara, J.
Trial Court:Santa Clara County Superior CourtSuperior 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. BlackAmerican Committee for Interoperable Systems Howard M. FreedlandWilliams & Connolly Suzanne H. Woods
Attorneys for Defendant-Appellant:Huber & Samuelson Allonn E. LevyFirst Amendment Project James Wheaton David GreeneTomlinson Zisko Morosoli & Maser Thomas E. MooreElectronic Frontier Foundation Robin Dora Gross
Counsel for Amicus Curiae on behalf of Defendant-Appellant:Howard, Rice, Nemerovski Annette L. Hurst