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