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DVD Industry Wins in Digital Copying Case

BY Admin  August 26, 2003 at 12:00 PM EDT

The state’s high court ruled that First Amendment rights did not protect Internet publishers from posting information that enables others to unlawfully download and copy DVD movies.

In a 7-0 decision, the justices said that disseminating trade secrets over the Internet is not permissible, overruling an appellate court that had said the publication of corporate trade secrets was protected under the First Amendment.

The case stems from a lawsuit filed against a 26-year-old San Francisco computer programmer, Andrew Bunner, who in 1999 posted the code to crack the DVD encryption technology, thereby allowing others to replicate thousands of copyrighted movies per day, according to the movie industry.

The DVD Copy Control Association — a consortium of the major movie studios and consumer electronics manufacturers that licenses the encryption technology — initially sued Bunner and others under California’s Uniform Trade Secrets Act in December 1999, about three months after Bunner posted the code on one of his Web sites.

The DVD association first informed Bunner that he was breaking the law and asked him to remove the code from the Web site. Though Bunner maintains he immediately took it off his Web site, the DVD industry says Bunner did not remove it until he was ordered by a judge.

That injunction was lifted by an appeals court in San Jose, Calif., a decision overturned by the state Supreme Court Monday.

In reversing the appeals court, Justice Janice Rogers Brown on Monday said an order to remove the code “does not violate the free speech clauses of the United States and California constitutions.”

Brown wrote that the court injunction did not involve government censorship and burdened “no more speech than necessary to serve the government’s interest in encouraging innovation and development.”

The high court said that the content of the trade secret in this case “neither involves a matter of public concern nor implicates the core purpose of the First Amendment. … He did not post them to comment on any public issue or to participate in any public debate.”

The motion picture and DVD industries hailed Monday’s decision, since the industries have vigorously sought to prevent the illegal copying and distribution of movies over the Internet.

The Motion Picture Association of America (MPAA) contends that movie studios lose more than $3 billion in annual sales to the illegal copying of DVDs and other forms of piracy. Much of the DVD losses come from the Internet publication of the decryption code, the MPAA says.

The DVD association had argued that the appeals court decision was equivalent to giving thieves the tools to replicate and distribute protected materials, such as movies, on a massive scale.

Robert Sugarman, an attorney representing the DVD industry, said Monday’s ruling “gives trade secret holders the capability to resort to the courts to prevent and indeed deter individuals from improperly posting trade secrets.”

“Owners of trade secrets can now protect those trade secrets through injunctive relief, which is clearly now available,” Sugarman added.

However, the state’s Supreme Court did not resolve whether the decryption code itself could still be protected as a trade secret, and ordered an appeals court to make a decision on the matter.

“Our decision today is quite limited,” the court concluded.

“We merely hold that the preliminary injunction does not violate the free speech clauses of the United States and California Constitutions, assuming the trial court properly issued the injunction [against Bunner] under the California’s trade secrets law,” Brown wrote in the opinion.

David Greene, who represents Bunner, said his client may still win when the case returns to the Court of Appeals, noting that the worldwide dissemination of the descrambling code may prevent it from being recognized as a legitimate trade secret.

Bunner maintains his actions were lawful and said he posted the information on the Internet so that others could watch DVDs on their computers.

“I still don’t think it is a trade secret. The idea was to get it out there for an open-source DVD player,” Bunner said Monday.

Bunner himself did not develop the decryption code, known as DeCSS. Instead, a Norwegian teenager, Jon Johansen, originally cracked the industry’s technological locks in 1999 and published the code-cracking information on the Internet, making DeCSS widely available to computer users throughout the world. Johansen said he created DeCSS so he could download movies to watch on his computer. So-called “DVD Jon” was cleared of piracy charges by a court in Norway in January.

The case now returns to the 6th District Court of Appeals in San Jose; a court date has not yet been scheduled.