Court of Appeal No.

H021153

11"tqr ,g,uprrmr Q!ourt Q!alifomia of
DVD COpy CONTROL
ASSOCIATION, INC.,

Supreme Court No. S 102588

Plaintiff/Respondent, v. ANDREW BUNNER, Defendant/Appellant. Trial Judge: Hon. William J. Elfving Santa Clara County Superior Court Trial Court Case No. CV 786804

OPENING BRIEF ON THE MERITS

JaredBobrow (Bar No. 133712) ChristopherJ. Cox (Bar No. 151650) WElL, GOTSHAL & MANGES LLP 201 RedwoodShoresParkway RedwoodShores,CA 94065 (650) 802-3000

Jeffrey L. Kessler Robert G. Sugarman Gregory S. Coleman Edward J. Burke John F. Greenman WElL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153 (212) 310-8000

ATTORNEYSFORDVD COpy CONTROLASSOCIATION,INC.

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TABLE OF CONTENTS

IssuesPresented Statement Appealability and Standard Review of of Statement the Case of Statement Facts of A. B. C. D. Argument I. Neither History Nor Policy ConsiderationsCan Justify the Court of Appeal's Prohibition on Injunctions Protecting Trade Secrets from Destruction by Dissemination. A. Historically, the Dissemination of Stolen Trade Secrets Has Not Been Protected by the First Amendment. Policy Considerations Dictate that the State Interest in Promoting Innovation Requires Protectionof Trade Secrets. BackgroundofDVD Technologyand CSS Theft of the CSSTechnology Proceedings the SuperiorCourt in Decision of the Court of Appeal

1 1 2 3 3 5 6 9 9 11

Summaryof Argument

12

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B.

15

II.

The Superior Court's Injunction Prohibiting the Distribution of DeCSS Is Subject to No More Than IntermediateScrutiny Under the First Amendment. A. The Injunction Under the California UTSA Is Subject to Intermediate Scrutiny Because the StatuteIs ContentNeutral. The Distribution of DeCSS by Internet Posting Is Conductwith Limited ExpressiveCapacitySubject at Most to IntermediateScrutiny Under 0 'Brien. 1. Neither DeCSS Nor Bunner's Posting of It on the Internet Is Pure Speech.
. 1

20

20

B.

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2. . The Courts Have Uniformly

Treated

Computer as Nonspeech Mixed Code or
C. p The S eechand ConductInjunction Withstands 29 Superior Court's
IntermediateScrutiny. 1. The Injunction Is Within the Constitutional 31

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2.
3.

Power theGovernment. of 32 The Injunction Serves a Substantial
Government Interest.
California's Interest in Protecting Trade SecretsIs Unrelated to the Suppressionof FreeExpression The Injunction Does Not Burden Substantially Further the Government's Necessary to More Speech Than Is InterestIn ProtectIngTrade Secrets. . .

32

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34 34

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III.

The Superior Court's Narrowly Tailored Injunction Is Not an ImpermissiblePrior Restraint. A. Not Every Injunction Alleged to Restrict ExpressionIs an ImpermissiblePrior Restraint.

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B.

The First AmendmentPrior Restraint Doctrine Does Not Prohibit Injunctions to Protect
Intellectual Property. 36 Preliminary Injunctions Are Available to Protect

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C.

Stolen Secrets Trade

38
41 45 46 49

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D.

The Superior Court's Injunction Enjoined
Repeated Unlawful Conduct and Was Not an ImpennissiblePrior Restraint.

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Conclusion Proof of Service fC C .fi
ertI lcate 0

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TABLE OF AUTHORITIES

STATE CASES

Aguilar v. Avis Rent a Car SystemInc. (1999) 21 Cal.4th 121 American Credit Indemnity Co. v. Sacks (1989) 213 Cal.App.3d 622 Cherne Indus., Inc. v. Grounds & Assocs., Inc. (Minn. 1979) 278 N. W .2d 81 Comedy III Productions, Inc. v. Gary Saderup (2001) 25 Cal.4th 387 Courtesy Temp. Serv., Inc. v. Camacho (1990) 222 Cal.App.3d 1278"'.".'.".."'."'.""""".""""""""""" DVD Copy ControlAss'n v. Bunner (2001) 113 Cal.Rptr.2d 338 Empire SteamLaundry v. Lozier (1913) 165 Cal. 95 Garth v. Staktek Corp. (Tex. App.-Austin 1994, writ dism'd w.o.j.) 876 S.W .2d 545

42,43 13 14 22 13 passim 13

14, 39

Hilb, Rogal & Hamilton Ins. Servs. of Orange County, Inc. v. Robb (1995) 33 Cal.App.4th 1812 1

Masonite Corp. v. Countyof MendocinoAir Quality Management Dist.,.~1996) Cal.App.4th436 42 Peabodyv. Norfolk (1868) 98 Mass.452

13 13, 16

III

People rei. Gallov.Acuna ex (1997)
4 Cal.4th 1090 People v. Ramos (1997) 15 Cal.4th 1122 1,41,43

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2

Peoplev. Toledo (2001) 26 Cal.4th 221 PlannedParenthoodShasta-Diablo, Inc. v. Williams (1994) 7 Cal.4th 860, judgment vacatedand remanded in light ofMadsenv. Women's Health Care Center(1994) 512 U.S. 573, (1994) 513 U.S. 956, and aff'd on remand, (1995) 10 Cal.4th 1009 Shoemaker Countyof Los Angeles v. (1995) 37 Cal.App.4th618 Smith v. Fair Employmentand Housing Commission (1996) 12 Cal.4th 1143 Thompson Dept. of Corrections v. (2001) 25 Cal.4th 117
FEDERAL CASES

22

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36,37 1 22 22

Bartnicki v. Vopper (2001) 532 U.S. 514

37

Bernsteinv. United StatesDep't of Justice (1999) 176F.3d 1132,reh 'ggranted and opinion withdrawn, (9th Cir. 1999) 192F.3d 1308 29 Bernsteinv. United StatesDep't of State (N.D. Cal. 1996)922 F.Supp.1426 Brach VanHouten Holding, Inc. v. SaveBrach's Coalition For Chicago (N.D. Ill. 1994)856 F.Supp.472 Bridge C.A.7: ScanAssociates TechnicareCorp. v. (2d Cir. 1983)710 F.2d 940 30 37 40

IV

City of Erie v. Pap's A.M. (2000) 529 U.S. 277 Clark v. Communityof CreativeNon-Violence (1984) 468 U.S. 288 CommodityFutures Trading Comm'n v. Vartuli (2d Cir. 2000) 228 F.3d 94 ComputerAssocs. Int'l, Inc. v. Altai, Inc. (2d Cir. 1992)982 F.2d 693 Dallas CowboysCheerleaders, v. ScoreboardPosters,Inc. Inc. (5th Cir. 1979)600 F.2d 1184 Dallas Cowboysv. PussycatCinema,Ltd. (2d Cir. 1979)604 F.2d 200 Ford Motor Co. v. Lane (E.D. Mich. 1999)67 F.Supp.745 Giboneyv. Empire Storage& Ice Co. (1949) 336 U.S. 490 Goto.Com, Inc. v. WaltDisney Co. (9th Cir. 2000) 202 F.3d 1199 Hasbro v. Internet EntertainmentGroup,Ltd. (W.D. Wash. 1996) 1996WL 84853 Hughesv. Superior Court (1950) 339 U.S. 460 In re PhoenixDental Sys.,Inc. (Bankr. W.D. Pa. 1992) 144B.R. 22 In re the Iowa Freedomof Info. Council (8th Cir. 1983)724 F.2d 658 Intellectual Reserve, Inc. v. Utah LighthouseMinistry, Inc. (D. Utah 1999)75 F.Supp.2d1290

24 24 26,27,29 17 37 36 40 41 37 38 41 14 14 38

v

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Junger v. Daley (6th Cir. 2000) 209 F.3d 481 Karn v. United StatesDepartmentof State (D.D.C. 1996)925 F.Supp. 1 KewanneeOil Co. v. Bicron Corp. (1974) 416 U.S. 470 Kingsley Books,Inc. v. Brown (1957) 354 U.S. 436 Lorillard TobaccoCo. v. Reilly
(2001) 121 S.Ct. 2404 Care Center

30 f!
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30 16, 32

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23

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Madsen v. Women's Health

.:
36,41
13 Vincent' 21
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(1994) 512 U.S. 573, (1994) 513 U.S. 956 MAISys. Corp. v. Peak Computer,Inc.,
(9th Cir. 1993) 991 F .2d 511 Members of City Council (1984) 466 U.S. 789 Michaels v. Internet v. Taxpayers for

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Entertainment

Group, Inc.

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(C.D. Cal. 1998) 5 F.Supp.2d 823

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N.L.R.B. v. Local No.3, Inter. Broth. of Elec. Workers,AFL-CIO (2d Cir. 1987)828 F.2d 936
National Society of Professional Engineers v. United States (1978) 435 U.S. 679

41

,. 41
,c'"

Near v. Minnesota (1931) 283 U.S. 697
New York Times Co. v. United States (1971) 403 U.S. 713

42
35, 36

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Northeast Women'sCenter,Inc. v. McMonagle
(3rd Cir. 1991) 939 F .2d 57 36

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vi Ig, ,,!'~ i 'OM ~ ii!ii,~

Paris Adult Theatre I v. Slaton (1973) 413 U.S. 49 Pepsico, Inc., v. Redmond (6th Cir. 1995) 54 F .3d 1262 Pittsburgh Press Co. v. Pittsburgh Comm 'n

42

39

on HumanRelations (1973)413U.S.376
Playboy Enterprises,Inc. v. Calvin DesignerLabel (N.D. Cal. 1997)985 F.Supp.1220 Procter and GambleCo. v. BankersTrust Co. (6th Cir. 1996)78 F.3d 219 Reimerdes Universal City Studios,Inc. v. (S.D. N.Y. 2000) 82 F.Supp.2d211 Religious Tech.Ctr. v. NetcomOn-Line Communication Servs.,Inc., No. C-95-20091(N.D. Cal. Jan.3, 1997) 1997U.S. Dist. LEXIS 23572 RichmondNewspapers, Inc. v. Virginia (1980) 448 U.S. 555 Southeastern Promotions,Ltd. v. Conrad (1975) 420 U.S. 546 Standard& Poor's Corp. Inc. v. Commodity Exch.,Inc. (S.D.N.Y. 1982)541 F.Supp.1273 Te.xas Johnson, v. (1989) 491 U.S. 397 Turner BroadcastingSystem, Inc. v. F.C.C. (1994) 512 U.S. 622 Ty,Inc. v. DublicationsInternational, Ltd. (N.D. Ill. 2000) 81 F.Supp.2d899 Ty,Inc. v. WestHighland Pub., Inc. (N.D. Ill. Oct. 5, 1998) 1998WL 698922

41,42
37 39 44

13 15 36 14 24, 33 20 35 37

VII

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United v.O'Brien States
(1968) 391 U.S. 367 10,23, 32

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Universal City Studios, v. Reimerdes Inc.
(S.D.N. Y. 2000) III F .Supp.2d 294 26,29, 35

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Universal Studios, v. Corley City Inc.,
(2ndCir. 2001)273F.3d429
Wardv. RockAgainst Racism (1989) 491 U.S. 781

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passim
21 38 14

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Winterland Concessions v. Sileo Co.
(N.D. Ill. 1981)528 F.Supp. 1201 Zenith Radio Corp. v. MatsushitaElec. Indus. Co. (E.D. Fa. 1981)529 F.Supp.866
STATUTESAND RULES

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CAL. Cw. CODE § 3426

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CAL. Cw. CODE § 3426.2(a)

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CAL.Cw. CODE 3426.8(West 1984) §

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FED. Cw. P. 26(c) R.

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OTHER AUTHORITIES

1 MELVINF. JAGER, TRADESECRETS LAW (1997)

12, 17

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3 ROGER MILGRIM, M. MILGRIM TRADE ON SECRETS

(2d 2000) ed.

14,40

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Agreement Trade-Related ('n Aspects Intellectual of Property Rights, Apr.15,1994, 41,33I.L.M.1191 art. 19
AMEDEE TURNER, E. THE LAW OFTRADESECRETS 427-59 (1 st ed.

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1962)

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Andrew BeckermanRodau, Prior Restraintsand Intellectual Property: The Clash between IntellectualPropertyand the First Amendment from an Economic Perspective(2001)12 FORDHAM INTEL. PROP., MED.& ENTERT. 1 L.J. 12,41 JOHNC. JANKA, Federal Disclosure Statutesand the Fifth Amendment: TheNew Statusof TradeSecrets(1987) 54 U. CHI.L. REv. 334...12 Morison v. Moat (Ch. 1851)9 Hare 241,68 Eng. Rep. 492 Orin S. Kerr, Are WeOverprotectingCode?Thoughts First-Generation on Internet Law (2000) 57 WASH. LEEL. REv. 1287 &
RESTATEMENT (THIRD) OF UNFAIR COMPETITION

13

28 16

(1995) § 39 Ryan ChristopherFox, New Law and Old Technology: TheProblem of ComputerCodeand the First Amendment (2002) 49 UCLA L. REv. 871 Yovettv. Winyard (Ch. 1820) 1 Jac.& W. 394, 37 Eng. Rep.425

28 12

IX

ISSUES PRESENTED

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1.

Whetherthe injunctive relief provisions of the California

Uniform Trade SecretsAct (Civ. Code § 3426, et seq. (1984» (the "California UTSA"), areunconstitutionalas appliedto the facts of this case. 2. Whether the issuanceof a preliminary injunction to stop

the dissemination on the internet of a computer program that knowingly containsstolentradesecrets violatesthe First Amendment.
STATEMENT OF APPEALABILITY AND STANDARDOF REVIEW

The appeal is from a decision of the Court of Appeal, Sixth District. DVD Copy Control Ass'n v. Bunner (2001) 113 Cal.Rptr.2d 338. Review was granted by this Court by order of February 20, 2002. Courts review an order granting a preliminary injunction under an abuse-of-discretion standard. People ex rei. Gallo v. Acuna (1997) 14 Cal.4th 1090, 1109. A trial court abuses discretiononly when it its "exceed( the bounds of reasonor contravenes] the uncontradicted s] ( evidence." Shoemaker v. County of Los Angeles (1995) 37

Cal.App.4th 618, 624. The reviewing court does not reweigh the evidenceor determine the credibility of witnesseson appeal. Id. at 625; Hilb, Rogal & Hamilton Ins. Servs.of Orange County, Inc. v. Robb (1995) 33 Cal.App.4th 1812, 1820. If the evidence on the application for preliminary injunction is in conflict, the reviewing court must interpret the facts in the light most favorable to the prevailing party and indulge in all reasonable inferencesin supportof the trial court's order. Shoemaker, 37 Cal.App.4th at 625.

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Accordingly, the trial court's factual findings may not be disturbed absenta showing that it hasabused discretion. its The Court of Appeal's detenninationthat DeCSSis pure speech

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entitled to absoluteprotectionis an applicationof a constitutional standard is reviewedde novo. SeePeoplev. Ramos(1997) 15 that
Cal.4th 1122, 1158.
STATEMENT OF TIlE CASE

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For more than two centuries, the courts' strong and active protection of trade secrets has peacefully coexisted with the First Amendment. In this case,however, the Court of Appeal improperly and needlessly declaredthat long-accepted common-lawand statutory tradesecretprotectionsmust be cast asidein favor of an inflexible and erroneousapplication of the First Amendment. In addition to the completeabsence any reasoned of precedentfor the Court of Appeal's radical departurefrom established prior-restraint law, thereis not even a glimmer of a policy rationale for expansively applying the prior restraintdoctrine to prohibit an injunction againstthe disseminationof stolen trade secrets that only minimally affects speech. Both the United States Supreme Court and this Court have long upheld legislative and judicial action that serve important governmental interests unrelated to the suppression of speech and that only incidentally affect speech. The superior court's injunction was just such an action. It was not aimed at restricting speech,but was intended solely to protect against the evisceration of trade secretsthat are the motion picture industry's critical meansof defenseagainstwidespreaddigital pirating of its valuable copyrighted works. Statutory and common-law trade
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secretprotectionsexist to preventprecisely that kind of harm. In this case,the injunction was directed solely to preservethe functionally protectivenatureof the encryption system,i.e., to preventDVDs from being illegally copied. Indeed, the SecondCircuit recently affirmed the issuance of an injunction on exactly the same grounds in Universal City Studios,Inc., v. Corley (2nd Cir. 2001) 273 F.3d 429, 452, a factually identical casebrought under the Digital Millennium Copyright Act. Because the Court of Appeal improperly expanded prior restraint principles to prohibit an injunction not directed at curtailing speech, leaving no effective means to counteract the malicious destruction of trade secrets, DVD Copy Control Association, Inc. (DVD CCA) asksthe Court to reversethe Court of Appeal's decision and reinstatethe superior court's preliminary injunction. If the Court of Appeal's ruling is left standing, the value of trade secrets in California will be eviscerated,causing serious harm to the State, its industries,and its citizens.
STATEMENT OF FACTS

A.

Background of DVD Technology and CSS

DVDs are the next generationin motion picture technology. A DVD is a five-inch disk that is encodedwith enoughdata to store a feature-lengthmovie. DVDs offer significant advantages over analog technologieslike VCR tapes, including improved visual and audio quality, larger data capacity, and greaterdurability. Most relevant to this case is that the digital nature of DVD technology means that, unlike analog products, an unlimited number of perfect copies-that

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will

not

lose

quality

in

the

copying

process-oCai1

be

easily

made

and

then

distributed In the

throughout early 1 990s,

the the

world movie

on

DVDs industry

or

over started

the

internet. to consider

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distributing dangers Potentially, borrowed,
black-market could copyrighted use,

movies posed by

in a digital the could ease

format, with

but was concerned DVDs could

about be

the

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which from could copied. or as

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copies

be made copies
the

any DVD then
If that

that was rented either
individuals for was

and the pirated
DVDs copy, material or and they on

be distributed
happened, paying menacing

internet. DVDs

distribute contained.

without more

the the

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possibility of it in and

of foreign

large-scale countries the

distribution where perpetrators. it

of

pirated be

copies virtually the movie

for

profit, impossible studios

some to could

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would Unless

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catch

prosecute

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find be the

a way no viable

to

protect market

the not

copyrighted only for the

materials DVDs drives, ~~ 5-6; RA,

on

DVDs,

there but

would also for

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themselves, and 3-4 other ~~

c"

stand-alone

players,

computer

equipment 6-8; AA 9, ~~

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necessary

to play

DVDs.

AA

62-63,

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31-32.
to distribute

Because
DVDs

the

risk
without

was
a

so

great,

the

movie
that

studios
could

decided

not
piracy.

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technology

prevent

AA

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AA

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they chose was the Content Scramble System ",:",

The

technology

(CSS),

an encryption
to encrypt it cannot

system
a D~'s be viewed

that

uses an algorithm
contents. The without

configured
protects and

by a
the the

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set of "keys" data so that

algorithm

or copied

decryption,

keys
decrypts

are digital
the file.

values
To

that detennine
playa and CSS-encrypted a set of

how

the algorithm
DVD, one keys"

encrypts
needs both

and
the in

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decryption

algorithm

"master

contained

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compliant DVD players and disk drives. Without both-the master keys and the algorithm-a DVD player cannot accessthe contentsof a DVD. Once the DVD file is decrypted,a DVD player can display the movie on a television or a computerscreen, a DVD and player but that are properly encrypted with CSS cannot be used to copy the movie or to manipulatethe digital contentof the DVD. In order to facilitate the distribution of movies on DVD, a licensing mechanismwas created for the use of CSS's proprietary trade secrettechnology. Manufacturersinterestedin making a DVD, a DVD player, or DVD software obtain accessto the technology by obtaining a license for a fee. In order to guard against theft of the technology,the licensing agreement requireslicensees maintain the to confidentiality of the CSS technology and imposes a strict set of requirements on licensees to ensure that the CSS technology is protected. Eventually, the companies involved in the DVD business decidedthat the licensing of CSS ought to be jointly administeredby representativesof the motion picture, computer, and consumer electronicsindustry. In mid-1998 they formed the DVD CCA, which was assignedthe licensing interests of its predecessor. DVD CCA was also given full rights to enforcethe CSSlicensing agreement. B. Theft of the CSS Technology

In October 1999, the sourcecode of a program called DeCSS was postedto a website operatedby Jon Johansen, fifteen-year-old a Norwegian citizen. DeCSSunlocks the encryption of CSS, allowing a CSS-protectedDVD to be played on a non-licensedplayer or disk drive. DeCSSalso allows the user to copy a CSS-protected DVD in 5

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an un-encrypted fofll1at. DeCSS created eitherhacking was by or
reverse engineering software created by Xing Technology

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Corporation (Xing), a CSS licensee, in violation of Xing's license to

end-users that specifically prohibited reverseengineering. AA 479-81
~~ 3-5.

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611

Soon after DeCSS was posted to Johansen'swebsite, news of

the program spread the internet. In October on 1999,DeCSS was
posted on the internet with the stolen CSS trade secrets in both "source code" and "object code" fofll1s.) AA, pp. 479-80. RespondentBunner was one of those who made DeCSS available,

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"mirroring" it on his website,so that anyonebrowsinghis website could download install DeCSS their own computer useit and on and
to break the CSS encryption. Bunner stated that he posted DeCSS to

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"provid[e] otherswith access the 'deCSS'program,and thereby to
enabl[e]Linux usersto play 'DVDs'." AA, p. 287.

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C.

Proceedings the SuperiorCourt in

When DVDCCAlearned DeCSS, quickly about it sought to
enjoin distribution of the program to protect its trade secrets. On

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December 1999,DVD CCA commenced actionin the 27, this
Superior Court of Santa Clara County and sought temporary and preliminary relief enjoining Bunner and other defendantswho had posted DeCSS,or linked to sites that postedDeCSS,from posting or knowingly linking to any websites that post the trade secretsor their

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) "Source code"consists a setof computer of instructions a particular in
format used by programmers, like C or FORTRAN. Compilers in computers translate source code into "object code," a series of ones and zeroes that can be understood and executed by a computer. AA, pp. 47980. 6

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derivatives. The superiorcourt deniedthe application for a temporary restraining order and set an expeditedschedulefor considerationof the motion for preliminary injunction. On January 17, 2000, the motion was submitted on a significant (almost one :housandpages) record and after argumentsof the parties. On January21, 2000, the superior court issued a preliminary injunction enjoining defendants from "[p ]osting or otherwise disclosing or distributing, on their websites or elsewhere, the DeCSS program, the master keys or algorithms of the Content Scrambling system (CSS), or any other infonnation derived from this proprietary infonnation." AA 712.

Being careful to tailor its order narrowly, the court declined to enjoin the linking to other websitesposting DeCSSand statedthat "[n]othing in this Order shall prohibit discussion,commentor criticism, so long as the proprietary infonnation identified above is not disclosed or distributed." AA 716. The superiorcourt made severalfactual findings supportingthe order. The court found that "[t]he Plaintiff has shown that the CSS is a piece of proprietary infolmation which derived its independent economicvalue from not being generallyknown to the public and that Plaintiff madereasonable efforts under the circumstances maintain to its secrecy." AA 713. The court also found that "the evidenceis fairly clear that the trade secret was obtained through reverse engineering." AA 713. The court further found that the evidencewas "quite compelling" both that Johansen reverseengineeredDeCSS in violation of his agreementwith Xing and that defendantsknew or should have known the trade secretsmisappropriated DeCSSwere by obtainedthrough improper means. AA 713-14. The court concluded 7

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that

DVD

CCA

had

shown

a "likelihooJ

of

prevailing"

on

the

trade

secret issues.
In emi"'hasized considering the gross the balance of between harm the to the parties, to the the plaintiff court and

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disparity

harm

.

defendants:
[T]he is truly
trade

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harm

to the Defendants They
discuss
past

[of entering simply
their

the injunction] to remove
sites. They

minimal.
to
the

will
from

have
web

the
may

secret

information

still
have

continue
in

and
in both

debate

the

subject

as they
scientific,

philoso,hical

and

political

context.

educational,

Defendants

have

not

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provided any evidence of any economic hann which an
injunction could currently cause.

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On

the

other

hand,

the

current

and

prospective

::.:

harm
display Court

to the

Plaintiff,

if

the

Court

does

not

enjoin

the

~~

of their trade secret, does not immediately
information, the

will be irreparable. . . . If the enjoin the posting of this
Plaintiff s right to protect

..,..-'

proprietary

t;f~

this
and that

information power
the the Defendants' event,

as secret
stated protection

will

surely

be lost,

given

the
In

..
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ff;I!f

current

of the Internet

to disseminate
afforded by the

information
encryption

determination

to do so. . ..

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system

licenced

[sic]

by

the

Plaintiff,

whether

to limit
control content
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DVD hardware copying and unauthorized
will become completely

software suppliers of or to and distribution DVD
meaningless. The

'

encryption

'cc.i

system changed everyone
millions

which like

the Plaintiff a secret
own

licences code
current

[sic] by

cannot a military

simply

be

.. . .

used

where because
viewing

involved
of people

simply

changes
DVDs

to new
and

code
DVD

..

systems.
AA 714-15.

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D.

Decision of the Court of Appeal

Bunner was the only defendantto appeal the superior court's order. The Court of Appeal for the Sixth District acceptedthe findings of the superior court that Petitioner had met its burden for obtaining a preliminary injunction underthe UTSA "in the absence of any free-speech concerns." 113 Cal.Rptr.2dat 347. Specifically, the Court of Appeal did not disturb the superior court's findings that DeCSSwas a misappropriationof DVD CCA's trade secretsand that the DVD CCA had madean initial showingthat defendants knew that thesetrade secretshad been obtainedthrough improper means. The Court of Appeal also acceptedthe superior court's analysis of the balanceof harm-that the injunction causedalmost no harm to the defendants, that a failure to enjoin was ruinousto DVD CCA. but Nonetheless, appellatecourt reversedthe order granting the the preliminary injunction, holding that DeCSS, as "source code," was "pure speech"that could not be subjectto any prior restraintunder the First Amendment. Id. at 348. The Court of Appeal did not consider the predominantly functional nature of DeCSS-which, at best, renderedit mixed conduct and speechsubject to intermediateFirst Amendmentscrutiny-and failed even to consider,let alone balance, the important interestsof California in protecting againstthe theft and dissemination trade secrets. of
SUMMARY OF ARGUMENT ,"'.

For the first time, a California appellatecourt has held that an injunction protecting against the distribution of stolen trade secrets violates the First Amendment prohibition on prior restraints. In

9

motivation behind the injunction was to protect DVD CCA's trade secretsfrom destructionby the defendants'conductin distributing the functional capabilities of the DeCSS software over the internet and, consequently,the court should have applied intermediate scrutiny under O'Brien. Instead,the Court of Appeal acknowledged neither any form of intermediate scrutiny nor any conduct inherent in defendants' misappropriationand misuseof DVD CCA ' s trade secrets.I Because I it hasnot been,and cannotbe, suggested that the UTSA is directedat speech, the Court of Appeal's decision implicitly hinges on its unsupportableconclusion that Bunner's distribution of DeCSS over the internetis pure speech with no conductelement. Bunner's posting of DeCSSwas intendednot to communicate ideas embeddedin the code but instead to allow others to decrypt, play, and copy DVDs.12 But even assuming that there is some communicative componentto his posting, at a minimum the Court shouldrecognizethat there is a substantialnonspeech elementas well: the transmissionof a tool for illegally copying DVDs. "The computer code at issue in this case. . . does more than express the

programmers'concepts.. . . DeCSS,like any other computerprogram, is a series of instructions that causes a computer to perform a particular sequenceof tasks which, in the aggregate,decrypt CSSII The Court of Appeal's sta~ment that "DVDCCA has not alleged that Bunner engagedin any expressive'conduct' by posting DeCSSon his web site," 113 Cal.Rptr.2d at 347, is mistaken. DVD CCA's position has always been that Bunner violated the UTSA by his improper conduct in distributing the DeCSSsoftwarethrough his web site.

25

holding the preliminary injunction obtained under the California UTSA unconstitutional,the Court of Appeal effectively repealedthe statutory protections afforded to trade secretsunder California law, leaving DVD CCA and other trade secretowners with no real remedy to address the misappropriation and dissemination of their

technologies. The destructionof trade secretprotection in California will haveadverseeconomiceffectsnot only on the electronics,motion picture, and computerindustriesthat sell DVDs and DVD players,but on all California businesses rely on trade secretsfor protection of that ~ C;

their intellectual property.
In reversing the injunction, the Court of Appeal fundamentally erred in concluding that DeCSS is "pure speech" absolutely protected against prior restraint by the First Amendment and in ignoring the
content-neutral application of .the injunction. The decision is directly

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at odds with the Second Circuit's well-reasonedopinion in Corley, 273 F.3d at 452, which held both that DeCSS is mixed speechand conduct for purposesof the First Amendment a,ndthat the Digital Millennium Copyright Act's prohibition of encryption-busting programslike DeCSSis contentneutral. The California UTSA, too, is
content neutral. Because DeCSS's main purpose is not to

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communicate,but to perform the functional task of decrypting DVDs so the user can copy protectedintellectual property, it is mixed speech
and conduct subject to an intermediate level of scrutiny in which the court must balance the government interest sought to be furthered

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with the effect of the speech.SeeUnited Statesv. O'Brien (1968) 391 U.S. 367, 376. The governmentinterest in protecting trade secretsis more than substantial, and the restriction on First Amendment
10

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freedoms imposed by the preliminary injunction is minimal. The injunction doesnot violate the First Amendment.
ARGUMENT

The Court of Appeal flatly held that the First Amendmentbars the granting of a preliminary injunction under the California UTSA to prevent the disseminationof stolen trade secrets.2 That decision is unsupported by history, is insupportable by trade secret or First Amendmentprinciples, and is inconsistentwith both the generalcase law addressing content-neutral restrictions on mixed speech and conduct and the specific case law addressingthe application of the First Amendment to computer programs. Courts have long

recognized that the government's interests in promoting economic growth and innovation will permit injunctions enforcing contentneutral laws that enjoin mixed speechand conduct. The effect of the Court of Appeal's ruling-if it is permittedto stand-is that the value

of trade secretsin California will be virtually destroyed. No stolen trade secret can survive if the courts are powerless to enjoin its widespreaddisclosure.

2 In the words of the Court of Appeal: "California's Trade Secrets Act, like the laws enacted in many other statesto protect trade secrets,does not merely enhancethe enforcementof contractual nondisclosureobligations but sweepsfar more broadly. It is within this broad sweepthat DVD CCA seeksto place Bunner. Yet the scopeof protection for trade secretsdoes not override the protection offered by the First Amendment. The First Amendmentprohibits the enactmentof any law 'abridging the freedom of speech. . . .' The California Legislature is free to enact laws to protect trade secrets,but theseprovisions must bow to the protectionsoffered by the First Amendment." 113Cal. Rptr.2d at 349. 11

I.

NEITHER HISTORY NOR POLICY CONSffiERADONS CAN JUSTIFY THE COURT OF APPEAL'S PRolDBmoN ON INJUNCTIONS PROTECTING TRADE SECRETS FROM DESTRUCTION BY DISSEMINADON.

A.

Historically, the Dissemination StolenTrade of
Secrets Has Not Been Protected by the First

.

Amendment.

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Longbefore FirstAmendment adopted 1791, the was in the
Englishcommon recognized valueof commercial law the secrecy and the protectionof tradesecrets.3That Englishcommonlaw became
part of our own common law tradition, and the Framerswere well

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aware that the common protected law tradesecrets whenthe First
Amendmentwas enacted. There is no historical evidenceto suggest that the Framersintended or had even the slightest reasonto believe that the First Amendment would prevent courts from issuing injunctions to protect againstthe disseminationof stolentrade secrets. To the contrary, early casesconfirmed the power of equity courts to

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grant injunctive to prohibit relief trade secret disclosureappropriate in

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4 cases.
3 "Tradesecrets weresurelyan accepted of Englishbusiness part practice,
andthereforealmost certainly part of its practical, unrecordedlegal practice as well, long before the adoption of the fifth amendmentin this country." JOHN JANKA, C. Federal Disclosure Statutesand the Fifth Amendment:The New Statusof Trade Secrets(1987) 54 ~. CHI. L. R:EV'334, 353 n.89; see also Andrew Beckerman-Rodau, Prior Restramts and Intellectual Property: The Clash between Intellectual Property and the First
Amendment from an Economic Perspective (2001) 12 FORDHAMINTEL.

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PROP., MED. & ENTERT. L.J. 1, 57 (stating that trade secret law is "the

4 See 1 MELVINF. JAGER, TRADE SECRETS (1997) § 2.01 (citing LAW Yovett Winyard v. (Ch. 1820)1 Jac.& W. 394,37 Eng.Rep.425 (enjoining disclosure secretmedicalformulas)andMorison v. Moat (Ch. 1851)9 of

oldest ofintellectual type property protection").

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Since then, courts in California an~ elsewhere have consistently upheld injunctions prohibiting the use and disclosure of trade secrets.s Indeed, such injunctions have been issued in California for almost a centLlry. See Empire Steam Laundry v. Lozier (1913) 165 Cal. 95 (affirming injunction prohibiting the defendant from using plaintiffs customer lists). The fundamental tenets of common-law trade secret protections have subsequently been incorporated both into the common law of the various states and, eventually, in the legislative enactment of the UTSA by 43 states, including California, and the District of Columbia.6 California's version of the Uniform Trade Secrets Act specifically provide~ that "actual or threatened

misappropriation [of trade secrets] may be enjoined," CAL. Cw ""CODE § 3426.2(a), and it is no surprise that courts traditionally have been diligent in issuing injunctions to prevent the destruction of trade secretsthrough improper use and disclosure.

Hare 241, 68 Eng. Rep. 492 (same));Peabodyv. Noifolk (1868) 98 Mass. 452, 457 (noting that the power of equity courts to enjoin disclosurewas "well established authority"). by 5 See, e.g., Masonite Corp. v. County of Mendocino Air Quality Management Dist. (1996) 42 Cal.App.4th 436 (affirming injunction prohibiting the defendant from disclosing emission records); see also CourtesyTemp.Serv.,Inc. v. Camacho(1990) 222 Cal.App.3d 1278, 1291; American Credit Indemnity Co. v. Sacks(1989) 213 Cal.App.3d 622, 638; MAl Sys. Corp. v. Peak Computer, Inc., (9th Cir. 1993) 991 F.2d 511; Religious Tech.Ctr. v. NetcomOn-Line Communication Servs.,Inc., No. C95-20091(N.D. Cal. Jan. 3, 1997) 1997 U.S. Dist. LEXIS 23572, at *3147. 6 By adopting the UTSA, California acknowledged the importance of harmonizing the law of trade secretsamongthe various states. "This title shall be applied and construedto effectuate its general purpose to make uniform the law with respect to the subject of this title among states enactingit." CAL. CIV. CODE§ 3426.8(West 1984). 13
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Not only have courtsroutinely enjoinedthe misappropriationof trade secrets,but they have historically done so over assertedFirst Amendment defenses. See, e.g., Cherne Indus., Inc. v. Grounds & Assocs., Inc. (Minn. 1979) 278 N.W.2d 81, 94 (rejecting First Amendment defense and affinning permanent injunction against

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former employees restraining misappropriationtrade their of secrets);
Garth v. StaktekCorp. (Tex. App.-Austin 1994, writ dism'd w.o.j.) 876 S.W.2d 545, 549-50 (rejecting a prior restraint analysis and affirming lower court's injunction prohibiting use of plaintiffs trade secrets);In re Phoenix Dental Sys.,Inc. (Bankr. W.D. Pa. 1992) 144

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B.R. 22, 24 (holding the FirstAmendment not allowa that does doctor use former to his employer's secret trade customer even lists,
when the former employer is in bankruptcy); see generally 3 ROGER
M. MILGRIM, MILGRIM ON TRADE SECRETS (2d ed. 2000)

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§14.01[2][a], at 14-26 n.15 (stating that "there is a long line of authority upholding content-neutralinjunctions to protect intellectual

propertyand that suchinjunctiverelief is not an impennissible prior
restraint,,).7
7 In other contexts, many courts have recognized that a corporation's

interest in protecting its trade secrets overrides an asserted First Amendment interest. See Standard & Poor's Corp. Inc. v. Commodity Exch., Inc. (S.D.N.Y. 1982) 541 F.Supp. 1273 (stating that "[i]nterference with access businessconfidencesand trade secretsis not an abridgement to of the freedom of speech and of the press protected by the First

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Amendment"); Radio Zenith Corp. Matsushita Indus. (E.D. v. Elec. Co. Pa.
1981) 529 F.Supp. 866, 912 (rejecting the argument that the First Amendmentrequiresthat the court's decisionnot to declassifytrade secrets

carries "'heavy a presumption' unconstitutionality"); theIowa of In re
Freedomof Info. Council (8th Cir. 1983)724 F.2d 658,664 (denying news media's petition to overturn the district court's refusal to releasesealed court transcripts containing a private litigant's trade secretsand rejecting
14

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There is no historical basis for applying the First Amendment to bar injunctions against the destruction of trade secrets by disclosure and use. The hann DVD CCA seeks to avoid is the widespread reproduction and illegal distribution of copyrighted works on DVDs. It is the act of distributing the means of decrypting and copying DVDs, not speechabout DeCSS, that DVD CCA has sought to enjoin. Courts have not historically interposed First Amendment obstacles to injunctions protecting trade secrets because they have contemplated those injunctions as restrictions on conduct, not speech, and, even in the face of First Amendment defenses, the courts have continued to view trade secret injunctions as conduct-based restrictions that, at worst, are content-neutral restrictions on the functional aspects of mixed speechand conduct. See Corley, 273 F.3d at 452. B. Policy Considerations Dictate that the State Interest in Promoting Innovation Requires Protection of Trade Secrets.

In holding the preliminary injunctive relief obtained under the California UTSA unconstitutional in this case, the Court of Appeal failed to consider the paramount public policies that underlie the California UTSA and the critical role that preliminary injunctive relief plays in effectuating those policies. Trade secret law is founded on the core principle that businesses will not invest money, labor, or equipment in an effort to create innovations that cannot be

the argument that First Amendment rights can be overridden only by a "compelling governmentalinterest"); see also RichmondNewspapers, Inc. v. Virginia (1980) 448 U.S. 555, 600 (Stewart, J., concurring) (while the First Amendmentgives the pressand public a right of access civil trials, to "[t]he preservationof trade secrets... might justify the exclusion of the
public from at least some segments of a civil trial").

:5

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copyrighted or patentedif trade secret law does not fill the gap to enable them to profit from their labors. That innovation provides a substantialpublic benefit and has beenfound to be deservingof legal protection not just in California, but throughout the United States.

Trade secret lawsalsopromote business morality protect and the
fundamentalrights of the trade secretowner by punishing those who engage in unethical or improper means to acquire another's trade secret. California's economyis fueled by businesses that rely on their ability to protect intellectual property. This lawsuit alone affects hundredsof companiesthat license CSS (at least 73 of which are based in California) in three industries that have a substantial and prominent presence in this State-the entertainment industry, the
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computer industry,andthe consumer electronics industry. Scores of California companies have made enormous investments DVDs, in DVD players, and DVD software based on the existenceand

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enforceability CSS secrets. ofthe trade
Protection of trade secretsis particularly necessary an in
economy that is increasingly fueled by technological innovationnotably, In the field of computer technology-because trade secret law is well suitedto protect innovation in that field:
8 See,e.g.,KewanneeOil Co. v. Bicron Corp. (1974) 416 U.S. 470, 481-82 (discussingthe important principles underlying trade secretlaw); Peabody

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v. Norfolk(1868)98 Mass. 452,457("It is thepolicyof thelaw, for the
advantage the public, to encourage protect invention and commercial of and
enterprise."); RESTATEMENT (THIRD) OFUNFAIRCOMPETITION (1995) § 39

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cmt. a and § 43. Indeed,trade secretlaws played a critical role in fostering the developmentof the computer and other high technology industries in

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16

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Throughout this uncertainty as to whether patents and copyrights granted any protection to the computer field, the common law of trade secretsstood, by comparison, as a solid legal fortress. Any confidential computer technology, be it hardware or software, copyrightable or not, patentable or unpatentable, could be protected by the trade secret law. . . . The common law of trade secrets plays a major part in affording timely legal protection for our rapidly expanding technology. 1 JAGER, 1.02, at 1-3 to 1-4; see also Computer Assocs. Int'l, Inc. v. § Altai, Inc. (2d Cir. 1992) 982 F.2d 693, 717 ("Precisely becausetrade secret doctrine protects the discovery of ideas, processes,and systems which are explicitly precluded from coverage under copyright law, courts and commentators alike consider it a necessary and integral part of the intellectual property protection extended to computer programs."). Trade secret law is also well suited to protect computer technology because preliminary injunctive relief, common in trade secret cases, is the only effective tool to protect against widespread dissemination of misappropriated trade secrets, and particularly stolen trade secrets that can be distributed in computer files, as is true of DeCSS. There is universal agreement that permanent injunctive relief is simply inadequate to protect trade secretsbecause of the reality that the secret will lose its value before permanent relief can be obtained. There is likewise general agreement that damages are an inadequate remedy becauseit is difficult or impossible to detennine the value of a destroyed trade secret. See AMEDEEE. TuRNER,THE LA W OFTRADE

this country. 1 JAGER, supra, §1.02,at 1-2 to 1-4; seea/so §§1.04,at 1-10 to 1-13; 1.05,at 1-14to 1-15. 17

SECRETS 427-59 (1st ed. 1962). Only if these remedies are joined with the availability o~preliminary injunctive relief can a trade secret owner have the full protection of the law. This caseis a paradigmaticinstancein which in~ unctive relief is

the only effectiveremedy. This fact wasnotedby the superiorcourt

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and other the courts have that considered whether dissemination the of DeCSS beenjoined.9 thewords thesuperior can In of court:
If the Court does not immediately enjoin the posting of this proprietary information, the Plaintiff's right to protect this information as secret will surely be lost, given the current power of the Internet to disseminate

information theDefendants' determination and stated to
do so. . ..

encryptionsystemlicensedby the Plaintiff, whetherto

In that event, the protection afforded by the

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limit DVD hardwareand softwaresuppliersor to control unauthorized copying and distribution of DVD content will becomecompletelymeaningless. AA 714-15. This devastatingconsequence particularly problematic is in this case becauseCSS is already encodedin both software and hardware, and there is no way of updating it to respond to DeCSS. With no injunction to preventDeCSSfrom becomingwidely available

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on the internet,goingafterindividuals who useit to piratecopyrighted material in suits for damages would be extremely difficult both
technologically and economically. By declaring the preliminary injunctive relief awarded under

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theCalifornia UTSA unconstitutional,Court Appeal's the of decision
9 "DeCSS enablesthe initial user to copy the movie in digital form and transmit it instantly in virtually limitless quantity, thereby depriving the movie producerof sales. The adventof the Internetcreatesthe potential for instantaneous worldwide distribution of the copied material." Corley, 273 F.3d at 429.

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not only decimatestrade secretprotection for DVD CCA and those California industriesthat rely on CSS trade secrets, also puts at risk it every California businessthat dependson trade secret law. If not reversed,the decisionwill discourage innovation,undenninebusiness morality, and otherwise impair the vital interests of the State of
California. 10

In contrast, neither the Court of Appeal nor Bunner has identified any concrete policy justification for banning preliminary injunctive relief prohibiting the disseminationof trade secretson First Amendmentgrounds. Certainly there is no specialFirst Amendment value in encouragingcommunicationsintended to destroy valuable trade secrets and to permit individuals to illegally copy and use others' copyrightedworks. Nor could the Court of Appeal recite any acceptedrationale for extending the prior restraint doctrine to cover speech-related conductthat violatesprivate intellectualproperty rights and promotesillegal copyright violations. The Court of Appeal's decision adopted an expansive and absolutist application of the prior restraint doctrine that wrongly makes courts impotent to enjoin clear trade secret violations, no matter how unjust the result, merely becausesomeexpressionis also incidentally present.

10 The decision of the Court of Appeal also threatensto put the United Statesin breachof one of its internationaltrade agreements, Agreement the on Trade-Related Aspectsof Intellectual Property Rights. That agreement requires treaty signatories to afford owners of trade secrets legal protections, including "provisional relief," to prevent the theft of such intellectual property. Agreementon Trade-Related Aspectsof Intellectual PropertyRights, Apr. 15, 1994,art. 41, 33 I.L.M. 1191,1213-14.
19

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ll. THE SUPERIOR COURT'S INJUNCnON PROHIBITING THE
DISTRIBUnON OF DECSS Is SUBJECTTO No MORE THAN INTERMEDIATE SCRUnNY UNDERTHE FIRsT AMENDMENT.

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The Court of Appealerredmost significantlyin its failure to

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apply lowerlevelof FirstAmendment a scrutiny in its mistaken and conclusion thedisseminationDeCSS theinternet "pure that of on is
speech." The SupremeCourt's First Amendmentjurisprudencedoes not and hasnever pennitted individuals to escape consequences the of their conduct simply by claiming that the conduct was expressiveor had communicative potential. Instead the Supreme Court has

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carefully defined a level of intennediate scrutiny that upholds governmental restrictionsthat regulatespeechin a contentneutralway or that focusprimarily on conduct(even thoughmixed with speech). A. The Injunction Under the California UTSA Is Subject

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to Intermediate Scrutiny Because the Statute Is
Content Neutral. By equating the act of posting DeCSS on the internet with

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"purespeech," Court Appeal the of wrongly leapfroggedthemost to restrictive of FirstAmendment level scrutiny, whenit should have carefully evaluated nature the California the of UTSAprovision
authorizing superiorcourt's injunctionand its relationto the the
alleged speechat issue. Even a restriction on pure political speech

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can survive scrutiny the restriction if itself is content neutral or

legitimately directed toward conduct.
The United StatesSupremeCourt has long held that regulations unrelatedto the content of speechare subject to only an intennediate
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levelof scrutiny.See Turner Broadcasting Inc. v. F.C.C. Sys., (1994)
512 U.S. 622, 642 (considering "must-carry" laws requiring cable
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operatorsto carry local stations);Wardv. RockAgainst Racism(1989) 491 U.S. 781, 791 (considering laws governing volume levels at a bandstandin New York City). When there is "no claim that the ordinance was designed to suppress certain ideas that the [government] finds distasteful," then intermediate scrutiny applies. Members of City Council v. Taxpayers for Vincent (1984) 466 U.S. 789, 802. The principal inquiry in detennining content neutrality is whetherthe governmenthasadopteda regulationof speech because of disagreement with the message conveys. Ward, 491 U.S. at 791. it The controlling consideration, therefore,is the legislature'spurposein enactinga trade secretlaw that pennits injunctive relief. Id. No court or commentatorhas ever suggested that California's trade secretact was enactedwith any thought, much less intention, to restrict speech with which the State disagrees. California, like other jurisdictions, adoptedthe commonlaw of trade secretsand later enactedits version of the Uniform Trade SecretsAct solely to protect trade secretsas a way of encouraging innovation, economic growth, and ethical business behavior. The purposeof enjoining the distribution of DeCSSwas not to stop the spread of any ideas contained in the program; it was to prevent the improper use of DVD CCA's trade secretsfor decrypting and illegally copying DVDs. BecauseCalifornia trade secret law neutrally prohibits the misappropriationand misuse of trade secrets, regardless any expressive of contentof the trade secretsthemselves or the manner in which they are misappropriated or misused, the

21 ;!

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California UTSA is content neutral. Bunner's claim to First Amendment protection subject mostto intermediate is at scrutiny. TheCourtof Appeal'sanalysis failedto recognize the First that

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Amendment, instead running of roughshod government over interests,
must sometimes be reconciled with them. In recent years this Court

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hasfrequently foundcause balance to First Amendment rightsagainst
various government interests. In Comedy III Productions, Inc. v. Gary Saderup (2001) 25 Cal.4th 387, the Court formulated a balancing test weighing the right of publicity against the First Amendment. Realizing that the First Amendment does not create a right to steal another's intellectual property, the Court upheld an injunction againstreproductionof materialsthat infringed on the right of publicity. Seeid. at 410. The Court has applied a balancingtest in a variety of First Amendment cases. See Thompsonv. Dept. of Corrections (2001) 25 Cal.4th 117 (prison regulation is not violation of inmate's First Amendment rights where regulation is reasonably

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related penological to interests); People Toledo v. (2001) Cal.4th 26 221 (California's criminalthreatstatute not a violationof is defendant's Amendment First rights); Smith Fair Employment v. and
Housing Commission(1996) 12 Cal.4th 1143 (FEHA's prohibition of

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discrimination basedon marital statusis not violation of landlord's
First Amendmentrights). B. The Distri~utio.n .of DeCSS ~y Intern~t Post~ng Is Conduct with Limited Expressive Capacity Subject at Most to Intermediate Scrutiny Under O'Brien.

One key category of content-neutral regulation includes restrictions on the nonspeechelements of expressive conduct. In

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UnitedStatesv. O'Brien (1968) 391 U.S. 367, the Supreme Court
upheld the criminal prosecutionof a man who burnedhis draft card in political protest. Although the expressiveness O'Brien's actions of constitutedprotectedpolitical speechof the highest d ~gree,the Court permitted the application of a statuteprohibiting the destructionof a draft card because statutehad a legitimate nonspeech the purposeand was directedat conductrather than the speechitself. "This Court has held that when 'speech' and 'nonspeech'elementsare combined in the same course of conduct, a sufficiently important governmental interest in regulating the nonspeechelement can justify incidental limitations on First Amendmentfreedoms." [d. at 376. The most glaring error in the Court of Appeal's analysisis its failure to even consider the nature of the speech at issue and the governmentalinterest in preventing the theft and destructionof trade secrets. While the court expresslyacknowledgedthat the California UTSA is intended to "protect trade secrets" and is not directed at speech,it wrongly assumed that suchstatutoryprovisionsmust "bow" to free speechconcernswith no further analysis. 113 Cal. Rptr. 2d at 349. 0 'Brien and its progeny teach otherwise. The SupremeCourt has been careful to uphold statutory and common-lawrestrictions on speechwhen the prohibition is directed at conduct rather than the speech itself. Thus, the Supreme Court has upheld not only a prohibition on the destructionof draft cards in 0 'Brien, but also, for instance,the regulation of the placementof tobaccoproductsfor sale, Lorillard Tobacco Co. v. Reilly (2001) 121 S.Ct. 2404, 2429, and prohibitions on public nudity, City of Erie v. Pap's A.M. (2000) 529 23

u.s. 277, 289, against claims that t~ose provisions improperly restrictedspeech. Importantly, the analysisis driven not by the nature of the speech,but by the nature of the governmentrestriction. See Cla'k v. Communityof Creative Non-Violence(1984) 468 U.S. 288,

298.Thus, factthatO'Brien the involved speech thenature core in of
political protest did not, for example, require a higher level of scrutiny,because statuteitself was directedat conduct,not speech. the Bunner cannot rationally argue that the California UTSA is directed at speechof any kind. As stated above, even the Court of Appeal acknowledgedthat its purpose is to "protect trade secrets,"

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andcourtsandcommentators lung agreed common-law have that and
statutory trade secretprotections are intended to promote substantial governmentinterestsin innovation and business morality. See,supra, pp. 18-19. Any impact on speech is purely incidental to the application in a particular case, as was Mr. O'Brien's ill-chosen method of protestingthe draft, and shouldnot doom the applicationof the trade secrets law merely because Bunner's statutory violation

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involved some elements conduct of capable expression. of
O'Brien applies because the California UTSA does not proscribe particular conduct on the basis of its alleged expressive

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elements.Texas Johnson v. (1989)491 U.S. 397,406; seeid. at 403
(explaining that "[i]fthe State'sregulationis not relatedto expression, then the less stringent standard we announced in [O'Brien] for regulations of noncommunicativeconduct controls"). The injunction prohibiting Bunner from posting DeCSShas nothing to do with any purported "expressiveelement" in the DeCSScode and everythingto

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do with protecting valuable tradesecrets copyrights.The sole and

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protected files. Thus,it hasa distinctlyfunctional, non-speech aspect
in addition to reflecting the thoughts of the programmers." See Universal City Studios, Inc. v. Reimerdes (S.D.N.Y. 2000) III F.Supp.2d294, 328-29 (aff'd in Corley). These realities require a First Amendment analysis that treats code as combining nonspeech and speechelements,i.e., functional and expressive elements.

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Neither DeCSSNor Bunner's Posting of It on the Internet Is Pure Speech.

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By erroneously concluding that "the trial court's preliminary injunction barring Bunner from disclosing DeCSS can fairly be characterized a prohibition of 'pure' speech,"the Court of Appeal as implicitly rejected the growing consensus that both sourceand object code are mixed speechand conductunder the First Amendment.13In

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Corley, which addressed DeCSS in the context of the Digital
Millennium Copyright Act, 17 V.S.C. §I201{a), the Second Circuit concluded that DeCSS is not pure speechbecauseit performs the functional task of decrypting DVDs rather than communicating

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12 See Commodity Futures Trading Comm'n v. Vartuli (2d Cir. 2000) 228

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F.3d 94, 111-12(holding that a currencytrading programis not speech).

13 The Court of Appeal's belief that DeCSS was only disseminated as

~our~e cod.e was in e~or. As the.r~cordreflects, and as Bunner pointed out
In hIS motIon to modIfy the decIsIon of the Court of Appeal, DeCSS also

exists,and was widely disseminated, "object code." AA, pp. 479-80. as
This misunderstandingby the Court of Appeal apparently affected its

decision, sinceit foundthat"objectcode"is not "expressive speech" and thusis notsubject FirstAmendment to protection. Cal.Rptr.2d at 348 113
("If the sourcecode were 'compiled' to createobject code, we would agree
ideas.").

. . . .
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that the resulting compositionof zeroesand ones would not convey

.,'~.:

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26

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infonnation.14 See 273 F.3d at 451. Once installed on a computer, DeCSSallows the operatorto decrypt and then illegally copy a DVD. As the court explained: DeCSS is computer code that can decrypt CSS. In its basic function, it is like a skeletonkey that can open a locked door, a combination that can open a safe, or a device that can neutralizethe security device attachedto a store'sproducts. DeCSSenablesanyoneto gain access to a DVD movie without using a DVD player. [d. at 453. Corley's analogizing of DeCSS to a key explains why posting DeCSScannotbe an act of pure speech. Posting DeCSS for othersto downloadand useis like making a million copiesof a key to someone'shouse and handing them out at the mall. While the act might have some expressivecontent, the First Amendment will not prohibit the courts from enforcing private intellectual property rights againstclearly violative conduct.

The Court of Appeal's erroneousconclusion that the source

code is more like a book than a key becauseof its communicative potential also ignores the fact that the First Amendment does not protect illegal behavior simply becauseit involves a technology with

communicativepotential; it protects only actual communication.IS
14 Bunnerhas contended that Corley is distinguishablebecause DMCA the

was passed Congresspursuantto its power under the Copyright Clause. by But the court's analysiswas very narrowly focusedon the threshold issue of whether DeCSS is speech. See generally Corley, 273 F.3d at 445. Nothing in the opinion suggeststhat the court concludedthat DeCSSwas pure speech whoseregulationwas nonetheless pernlissibleas an exerciseof Congress's Vartuli, 228 F.3d at 111-12(concludingthat code is not speech constitutionallygrantedcopyright power. 15See,e.g., whereit is not usedto communicateideas);seealso Ryan ChristopherFox, New Law and Old Technology: The Problem of Computer Code and the 27

"
TheFirstAmendment notshield sale a stolen simply does the of book
because someone may later read the book. Courts must examine the

.
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waycomputer codeis actuallyusedin a particular case should and not

rely on the theoretical possibility the codecan be usedto that
communicate.

.
. .

DeCSSwas posted as a meansof distributing softwareto
pennit others to download, install, and use the program to decrypt,
play, and copy protected movies on DVD. The posting is not

--

,.
-~

functionally different from the nonspeech commercial distribution of other free software over the internet, like Adobe's Acrobat Reader, Real Networks' RealAudio player, or Netscape'sNavigator browser. Bunner expressly conceded the software-distribution purpose in stating that he postedDeCSS to "provid[ e] others with accessto the 'deCSS' program,and thereby enabl[e] Linux usersto play 'DVDs'." AA, p. 287. In other words, he sought to distribute the DeCSS

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software thatothers so could the use functional capability busting of
the CSS encryption.

.

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DeCSS is a tool.

Making a tool available to someone-

shipping thema crowbarso that theycanbreakinto a house-is not a
protectedspeechact, even if it is accompanied speech. It doesnot by

matterthat theperson who sends crowbardoesnot useit, because the
the act of sending it is sufficiently distinguishable from any

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First Amendment (2002)49 UCLA L. REv. 871, 915 (concluding that courts mustlook to how codeis usedin orderto determine degree its of
protection);Orin S. Kerr, Are WeOverprotectingCode?Thoughtson FirstGeneration Internet Law (2000) 57 WASH. & LEE L. REv. 1287, 1287 (arguing that code should be governedbasedon what it "does," not what it ".IS ) . " 28

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accompanying speech to permit it to ~e independently regulated. Bunner made DeCSS,a tool designedto unlock DVDs, available to anyoneon the internet. Because DeCSSwas intendedto be used,and will in fact be used,for that purpose,Bunner's posting of DeCSSfor internet distribution is not protectedpure speech.SeeReimerdes,111 F.Supp.2dat 331 ("Given the virtually instantaneous and worldwide dissemination widely available via the Internet, the only rational assumptionis that once a computer program capable of bypassing suchan access control systemis disseminated, will be used."). it 2. The Courts Have Uniformly Treated Computer Code as Nonspeech or Mixed Speech and Conduct.

Every other court to consider the First Amendment status of computer code has concludedthat it is either not speechat all or is mixed speechand conduct subject to intermediate scrutiny.16 The SecondCircuit, addressing sameDeCSScode at issuein this case, the reasoned: just as the realities of what any computer code can accomplish must inform the scope of its constitutional protection, so the capacity of a decryption program like DeCSSto accomplishunauthorized-indeed, unlawfulaccess to materials in which the Plaintiffs have intellectual property rights must inform and limit the scopeof its First Amendmentprotection. Corley, 273 F.3d at 453 (emphasis added).
16 SeeCorley, 273 F.3d at 454; Vartuli, 228 F.3d at 111-12;Junger, 209 F.3d at 484; seealso Bernsteinv. United StatesDep't of Justice (1999) 176 F.3d 1132, 1140-41,reh 'g granted and opinion withdrawn, (9th Cir. 1999) 192 F.3d 1308;Bernstein v. United StatesDep't of State (N.D. Cal. 1996)

29

"..~-

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41

Likewise, Court Appeal's reliance Junger the of heavy on v.
Daley (6th Cir. 2000) 209 F.3d 481, is misplaced. The Court of Appeal correctly noted that Junger held that computer source code can be expressiveand therefore protected by the First Am~ndment. 113Cal.Rptr.2d at 348. But in finding that DeCSSis pure speech, the Court of Appeal completely disregarde~the Sixth Circuit's ultimate

. .
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.
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holding Junger thefunctional in that capabilitiesthecomputer of code
subjectedthe regulation only to intermediatescrutiny under the First Amendment. Junger, 209 F.3d at 485 ("The functional capabilitiesof sourcecode, particularly those of encryption source code, should be considered when analyzingthe governmentalinterestin regulating the exchangeof this form of speech."). In other words, the Court of Appeal relied on a preliminary finding in Junger to support a

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conclusion Jungeritself expressly that rejected. Seealso Karn, 925
F.Supp. at 10 (upholding regulation of cryptography software under intermediate scrutiny because "the government's rationale for the regulation controls, regardless the form of the speechor expression of I reguated" ) .

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The Court of Appeal'streatment the postingof DeCSSas of
pure speechfor which no injunction may issue would, if accepted, have seriousand harmful collateral consequences. suggests It that no party may obtain preliminary injunctive relief againstthe posting of a computer program on the internet, no matter what the functional capacity of the program, leading to patently absurdresults. A court

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couldnot, for instance, enjointheposting emailbroadcast a or of
922 F.Supp.1426, 1434-36; Karn v. United StatesDepartment State of
(D.D.C. 1996)925 F.Supp.1, 9-10.

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30

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worm-a self-replicating, self-executing computer virus that hops
from computer to computer erasing hard drives or causing other harm-because the worm itself would be consideredpure speech under the Court of Appeal's analysis. A suit for damages would be small comfort to businesses individuals whose serversare attacked or in the meantime, and it makes no sense to interpose the First Amendment as an obstacle to the best legal remedy available to prevent harm not causedby speech-just as it makes no senseto invoke the First Amendment to block courts from preventing the destruction of trade secrets through the distribution of illicit decryptionsoftwareover the internet. In sum, Bunner's posting of DeCSSwas conduct intendedas a means of distributing a software program that both violates DVD CCA's trade secretsand promotescopyright violations. Becausethe California UTSA and the trial court's injunction in this case are directed at preventing the irreparableharm causedby that conduct, and not at any speechelement that might be associated with it, the injunction shouldhave beenreviewedunder the intermediatescrutiny standardof 0 'Brien. C. The Superior Court's Intermediate Scrutiny. Injunction Withstands

Under 0 'Brien, a government regulation is sufficiently justified: (1) if it is within the constitutional power of the it furthers an important or substantial Government; (2) if

governmentalinterest; (3) if the governmentalinterest is unrelatedto the suppression free expression;and (4) if the incidental restriction of on allegedFirst Amendmentfreedomsis no greaterthan is essentialto 31

.
the furtherance of that interest. See O'Brien, 391 U.S. at 377. The It -

trial court's order easily passes that test. 1. The Injunction Is Within the Constitutional
Power of the Government.

:
~
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The CaliforniaUTSA was passed underthe state'sgeneral
police power. . It is undisputedthat the state has the power to pass trade secretlaws. SeeKewaneeOil Co. v. Bicron Corp. (1974) 416
U.S. 470, 493.

.

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2.

The
Government

Injunction
Interest.

Serves a

Substantial

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No one disputes that important government interests are furtheredby trade secretlaw. Trade secretlaws encourage growth by rewarding the producersof technological innovation. Beyond that, trade secret laws also promote business morality and protect the fundamentalrights of the trade secretowner by punishing those who engage in unethical or improper means to acquire another's trade secret. For these reasons,courts have long recognized that trade secretlaws further substantialgovernmentinterests.I7
3. California's Interest in Protecting Trade

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Secrets Is Unrelated to the Suppression of Free Expression. California's interest in protecting trade secretsis to encourage economicgrowth and ethical businessbehavior and has nothing to do

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with thesuppressionfreeexpression. inquiry whether of The is the
government'sinterestis in suppressing "expressive" aspects the the of
conduct, or instead is addressed to some other goal. See Texas v.

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Johnson(1989) 491 U.S. 397, 406. "Where 'speech'and 'nonspeech' elementsare combined in the samecourse of conduct, a sufficiently important governmentalinterest in regulating the nonspeech element canjustify incidental limitations on First Amendmentfreedoms." See id. The nonspeech function of DeCSSallows a user to decrypt and copy DVDs. See,supra, Section II(B). And while the DeCSScode may comn1unicate ideas about encryption technology to those few who can and careto read it, that is not the focus of the injunction, and Bunner doesnot contendthat the governmentwould have any interest in suppressing improper distribution of the encryption technology the contained in DeCSS or CSS if that were not the technology that protectsDVDs. The injunction enteredin this casewas for the sole and limited purposeof protectingDVD CCA's tradesecrets. 4. The Injunction Does Not Burden Substantially More SpeechThan Is Necessaryto Further the Government's Interest in Protecting Trade Secrets.

The trial court's injunction was narrowly tailored to burden no more speechthan absolutelynecessary protect DVD CCA's trade to secrets. The preliminary injunction expresslyavoidedprohibiting any pure speech by defendants: "Nothing in this Order shall prohibit discussion, comment or criticism, so long as the proprietary information identified above is not disclosedor distributed." AA, p. 716. The injunction does not prohibit any speech beyond DVD CCA's trade secrets. Bunner may still protest the existenceof CSS,
17 A

fuller discussionof the interestsservedby trade secretlaw is included

33

I

~

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-

DVD CCA, the movie industry in general, or the Trilateral Commission. Nothin~ preventshim from discussingthe theories or techniquesof encryption usedin DeCSS,so long as thosediscussions do not disclose trade secrets. The preliminary inju.lction does not

. . .

t;

.
. .

restrict Bunner discussingpublishing from or opinions and
information aboutCSSor DeCSS.It doesnot enjoinhim from developing ownencryption decryption his or technology. is free He
to studyandexperiment with cryptography. he maynot "express" But
his desire or ability to decrypt DVDs by distributing a computer program containing or substantially derived from misappropriated proprietary CSS algorithms and keys. Thus the injunction does not

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burden"substantially" morespeech thanis necessary protecttrade to
secrets.
III. THE SUPERIOR COURT'S NARROWLY TAILORED INJUNCTION

'1 ,.
c-

Is NOT AN IMPERMISSIBLE PRIOR RESTRAINT.

:~ A. Not Every Injunction Alleged to Restrict Expression Is an Impermissible Prior Restraint.

. .

Thepreliminary injunction entered thesuperior is a by court
routine order preserving private intellectual property rights, the and
Court of Appeal was wrong to suggest that injunctionsthat restrict
speechare only grantedin the rarestoccasions.As the district court in

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the DMCA noted: case
The classic prior restraint cases were dramatically
different from this one. Near v. Minnesota involved a

state procedure abating for scandalous defamatory and
United Statesdealt with an attemptto enjoin a newspaper

newspapers public nuisances. as New York TimesCo. v.

in SectionI, above. See,e.g., supra, footnote 8 and accompanying text.
34

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from publishing an internal government history of the Vietnam War. Nebraska Press Association v. Stuart concerneda court order barring the reporting of certain details about a forthcoming murder case. In each case, therefore, the governmentsought to suppressspeechat the very heart of First Amendmentconcern-expression aboutpublic issuesof the sort that is indispensable self to government. Reimerdes,111F.Supp.2dat 334 (footnotesomitted). Those concernsdo not exist when an injunction is soughtby a private party to enforce an intellectual property right and the government'sonly interestis to protect innovation by enforcing those private rights. The governmentmay not be able to prevent a person from speakingin a park, but surely a court can prevent that person from using property stolen from anotherto make that speech. That is why injunctions that incidentally restrict speechhave always been availableto protect intellectual property rights. "[T]here are not many reported cases in which challenges to copyright or trademark injunctions are made upon First Amendment grounds. Those

challengesthat are made have been summarily rejected." Ty, Inc. v. Publications International, Ltd. (N.D. Ill. 2000) 81 F.Supp.2d 899, 902. That fact was acknowledgedby Justice White in the Pentagon Papers case: "[n]o one denies that a newspaper can properly be enjoined from publishing the copyrighted works of another." New York TimesCo. v. United States(1971) 403 U.S. 713, 730 n.l (White, J., concurring). Justice White distinguished injunctions sought by private partiesto protect intellectual property rights from thosesought by the government:"when. . . the complainantis a private copyright holder enforcing a private right," the situation is "quite distinct from 35

the Government's request an injunction for against publishing
information about affairs government." the of Id.
B. The First Amendment Prior Restraint Doctrine Does Not Prohibit Injunctions to Protect Intellectual

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Property.

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Courts frequently have enjoined dissemination the of stolen
intellectual property, noting that such injunctions are not

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impermissible restraints. prior Whena "privateplaintiffI]" attempts
"to protect its property rights," a preliminary injunction does not

"constitute unconstitutional restraint.'" DallasCowboys an 'prior v.
Pussycat Cinema, Ltd. (2d Cir. 1979)604 F.2d 200, 206. Because
enforcementof intellectual property rights is content neutral, there is no questionof governmentcensorshipand henceno needto engagein the prior restraintanalysis. Seeid. The Court hasclearly statedthat "[a] prior restraintis a content-

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basedrestriction speech on prior to its occurrence." Planned
Parenthood Shasta-Diablo,Inc. v. Williams (1994) 7 Cal.4th 860, 871,judgment vacatedand remandedin light of Madsen v. Women's
Health Care Center (1994) 512 U.S. 573, (1994) 513 U.S. 956, and

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aff'd on remand,(1995) 10 Cal.4th 1009(quoting Northeast Women's Center,Inc. v. McMonagle (3rd Cir. 1991)939 F.2d 57,63) (emphasis added);see a/so Madsen, 512 u.S. at 763-64 (holding that a content

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neutral restriction politicalspeech subjected intermediate on is to
scrutiny, that "[nJot all"'1njunctions may incidentally and that affect

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expression.. are'priorrestraints' thesense thattermwas . in that
used in New York Times Co."); cf Southeastern Promotions, Ltd. v.
Conrad (1975) 420 U.S. 546, 558-59. Indeed, this Court upheld a

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content neutral injunction on expressive conduct protesting abortion, a matter of public concern and therefore generally entitled to the strongest protection. See Planned Parenthood, 10 Cal.4th at 1025. Because DVD CCA's trade secrets are not matters of public concern, however, their posting is entitled to even less First Amendment protection than the conduct of the picketers in Planned Parenthood. See Bartnicki v. Vopper (2001) 532 U.S. 514, 533. Trade secrets are so clearly not of public concern that the Supreme Court recently used them to exemplify matters of "purely private concern." See id.

Because injunctions to protect intellectual property are content neutral restrictions affecting conduct expressive of private concerns, they are not subject to a prior restraint analysis. This holds true in all areasof intellectual property law. Lanham Act injunctions to prevent the copying of trademarks, for instance, have successfully withstood all First Amendment challenges.I8 Similarly, injunctive relief has been repeatedly recognized as an 18See Brach Van Houten Holding, Inc. v. Save Brach's Coalition For Chicago (N.D. 111. 1994) 856 F.Supp. 472 (granting a preliminary injunction to prevent the defendant from using plaintiff s logo). "Trademarksare property rights and as such,neednot 'yield to the exercise of First Amendmentrights under circumstances where adequate alternative avenuesof communicationexist.'" Id. at 476. Seealso Goto.Com,Inc. v. Walt Disney Co. (9th Cir. 2000) 202 F.3d 1199 (affirming preliminary injunction in trademarkinfringement suit); Dallas CowboysCheerleaders, Inc. v. ScoreboardPosters,Inc. (5th Cir. 1979) 600 F.2d 1184 (affirming preliminary injunction and rejecting prior restraint argumentin a case of alleged copyright and service mark infringement); Ty, Inc. v. West Highland Pub., Inc. (N.D. Ill. Oct. 5, 1998) 1998 WL 698922, at *19; Playboy Enterprises,Inc. v. Calvin Designer Label (N.D. Cal. 1997) 985 F.Supp. 1220(granting preliminary injunction to preventallegedtrademark infringement); Hasbro v. Internet EntertainmentGroup, Ltd. (W.D. Wash.

37

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appropriate meansto protectthe right of publicity,despiteFirst
Amendment challenges. See, e.g., Winterland ConcessionsCo. v. Sileo (N.D. 111. 1981)528 F.Supp. 1201, 1214(preliminary injunction againstproduction of shirts bearingthe namesof musical entertainers because "[t]he First Amendment is 'not a license to trammel on

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legallyrecognized in intellectual rights property"') (quoting Dallas Cowboys Cheerleaders, F.2d 1188).19 600 at Requests preliminary for
injunctions against copyright infringement regularly also survive First
Amendment challenge. See e.g., Intellectual Reserve,Inc. v. Utah Lighthouse Ministry, Inc. (D. Utah 1999) 75 F.Supp.2d 1290, 1295 (upholding preliminary injunction against posting of plaintiff s copyrightedmaterialson the Internetbecause "[t]he First Amendment does not give defendantsthe right to infringe on legally recognized rights under the copyright law"). C. Preliminary Injunctions Are Available to Protect

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Stolen TradeSecrets.
California courtshaveenjoined dissemination tradesecrets of
in a variety of circumstances, courts have regularly issuedor and

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upheld injunctions the publication tradesecrets on of over First
Amendment defenses!O The Court of Appeal unsuccessfully
attempted to distinguish this case by noting that prior courts had

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enjoined "use" of tradesecrets, not their publication. 113 the but
1996) 1996 WL 84853 (granting preliminary injunction in trademark

infringement 19 Seealso case). v. Internet Entertainment Michaels Group, Inc. (C.D. Cal.
1998) 5 F.Supp.2d 823 (granting a preliminary injunction against the disseminationof a videotape of the plaintiff basedon a right-of-publicity
claim).

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20See, supra,footnotes andaccompanying 5-7 text.

38

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Cal.Rptr.2d at 349. In truth, however, most injunctions against the use or disclosureof tr~de secretsenjoin expressionas much or more than the preliminary injunction in this case. In caseslike Pepsico, Inc., v. Redmond(6th Cir. 1995) 54 F.3d 1262, in Nhich the court enjoined a former employeeof a companyfrom going to work for a competitor, the concernis nearly always that the departingemployee will communicate trade secretsto the new employer. Seeid. at 1272. No one worries that a former employeein possession proprietary of information-say, the designof an unpatented computerchip21-will go to a rival and start working on the factory floor. Instead,the harm is causedwhen the new employeecommunicates that trade secretto her employer, who then uses it to build a competing chip, much as Bunner has distributed DeCSS to allow users to decrypt and copy DVDs. When a trade secretis involved, it is the transferof the secret and its subsequent use that ultimately results in the harm-and that transfer always occurs in some expressiveform. Indeed, the order upheld in Pepsico explicitly enjoins the former employer "from forever disclosing [the former employer's] trade secrets," whether employedby the rival or not. Seeid. So common is it for courts to directly or indirectly enjoin the communication of a trade secret that it is difficult to find casesin which a First Amendment defense prevents an injunction against disclosing trade secrets. Instead,Bunner has relied on Procter and Gamble Co. v. Bankers Trust Co. (6th Cir. 1996) 78 F.3d 219, a case

21See Garth, 876 S.W.2d at 547-48.

39

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that has little to do with trade secret&,22 and Bridge C.A.7: Scan Associates v. Technicare Corp. (2d Cir. 1983) 710 F.2d 940, in which

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the court reachedthe oppositeconclusionfrom the one for which
BunJ.lercites it. Id. at 946 (noting that an injunction on publication may be available "where a party has obtained [trade secrets]

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innocently hasthereafter but learned theirmisappropriation," of but disapproving an injunction the absence evidence any of in of that
tradesecrets weremisappropriated). Bunner also relies on Ford Motor Co. v. Lane (E.D. Mich.
1999) 67 F.Supp. 745,747, which does conclude, erroneously, that the First Amendment protects publication of misappropriated trade secrets. This novel holding stands in stark relief to two centuries of precedent and has already been criticized by Roger Milgrim, author of the definitive trade secrets treatise, and others.23 The Court should 22In Procter & Gamble,the district court issueda protective order allowing litigants in a fraud case to designate which discovery documents they wanted filed under seal without judicial oversight. See 78 F.3d at 222. Eventually,both the district court and the court of appealconcludedthat the documentswere not e.ntitledto confi~entiality under FederalRule of Civil Procedure 26{c), whIch allows sealIng of court documents for "good cause." See id; FED. R. CW. P. 26{c). There was no evidence that the documents containedtradesecrets; court of appeals the notedthat they were "standardlitigation filings." 78 F.3d at 225. No less a commentatorthan
~oger M~lgrim h~s.noted that "the imv.lication ?f Procter & Gamble is that

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If there IS a legItImate trade secret Interest m the matter sought to be protected,then it is within the power of courts to grant injunctive relief." 3 MILGRIM, Slpra, § 14.01[2][a], at 14-26n.15.. 23 See3 MILGRIM,supra, § 14.01[2][a], at 14-26n.15. Milgrim notesthat the Ford court read Procter & Gamble to prohibit injunctions on the publication of trade secretswhen "Procter & Gamble held nothing of the sort," and comments that "there is a long line of authority upholding content neutral injunctions to protect intellectual property and that such injunctive relief is not an impermissibleprior restraint." See id. Seealso 40

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reject Ford's novel, rigid, and inaccurate reading of the First Amendment. D. The Superior Court's Injunction Enjoined Repeated Unlawful Conduct and Was Not an Impermissible Prior Restraint.

The superior court's injunction is excepted from the strict standard applied to prior restraints not only because it is a private party's content neutral attempt to enforce intellectual property rights, but also because it enjoins repeated, unlawful speech.24 The

protections of the First Amendment do not "extend to joining with others for the purpose of depriving third parties of their lawful rights." People ex reI. Gallo v. Acuna (1997) 14 Cal.4th 1090, 1112 (quoting Madsen v. Women's Health Center, Inc. (1994) 512 U.S. 753, 776).

Beckennan-Rodau,supra, at 5 ("trade secrets, despite any expressive component,shouldbe treatedas property that falls outsideof the domainof the First Amendment. The very existenceof a trade secretdependsupon maintaining its secrecy. Therefore, protection of a trade secret via preliminary relief is necessaryto avoid irreparable destruction of the ~ropertyprior to any adjudicationof rights in the tradesecret."). 4 See.e.g., National Society of ProfessionalEngineers v. United States

(1978) 435 U.S. 679 (approving an injunction against professional association'sadoption of official opinions, policy statements guidelines or implying that competitive bidding was unethical); Pittsburgh Press Co. v. Pittsburgh Comm'n on Human Relations (1973) 413 U.S. 376 (upholding injunction against newspaper's posting job advertisementsin genderdesignated columnswhen it was furtheranceof sex discrimination scheme); Hughes v. Superior Court (1950) 339 U.S. 460, 470 (holding that an injunction againstpicketing intendedto pressurea storeto adoptrace-based hiring is constitutional); Giboney v. Empire Storage & Ice Co. (1949) 336 U.S. 490, 498 (holding an injunction against peaceful picketing to be constitutional becauseit was part of a course of conduct to violate a criminal statuteagainst restraint of trade); N.L.R.B. v. Local No.3, Inter. Broth. of Elec. Workers,AFL-CIO (2d Cir. 1987) 828 F.2d 936 (holding that an injunction of union's threatto strike was constitutional). 41 -"

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injunction. a particular

See id. at 141-42. party on the basis

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specific

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issued

against

of a proven interests reached

course

of conduct, statutory in same Gallo,

poses less of a danger prohibition." Gallo, stating Id. that

to free speech The Court

than a general

at 145.

the same conclusion not impose the

a specific

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does

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'chill'" at 1114.

that a statutory

prohibition

on speech

does.

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court's

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than the one itself only to

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effect

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scrutiny. while

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injunction speech ,28 the

on pure importantly, is content rights,

speech, unlike neutral not

is mixed in Aguilar solely

and conduct. trial court's

the injunction

and was issued the

to protect disagreed

intellectual with

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government

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by DeCSS. prohibits the trade that conduct that is unlawful. compelling" Second Circuit the The that has

trial

court

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evidence secret posting Finally,

is "quite law. The

Bunner's

violated

independently See Corley,

concluded 273 F.3d

DeCSS DeCSS

violates

DMCA. to enable

at 455.

is designed copyrighted

users to violate sum, abets Bunner's

copyright posting

law by reproducing of DeCSS directly Indeed,

DVDs. statutes in

In and

violated the district

two court

the violation

of another.

Corley was not

28 See Aguilar, issued to regulate

121 Cal.4th "secondary

at 135 n.4 (holding effects"

that the injunction speech).

of the prohibited

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differs

whose

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the this would

lawfully

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posting

determination,

which

The

speech

82

dissemination record trial

case.

rationale

the

F.Supp.2d

arguably

purpose

use had

from

preliminary

concluded because that DeCSS allows copying DVDs,its posting of is

44
Moreover, possessed, order clearly the courts' in DeCSS cases the the superior behind before demonstrates such opportunity trade-secret of only power because and injunction DeCSS as it to the thus Pentagon court could view to prior the is that arguably context to make copyrighted heard was adequately restriction to the restraint consider Papers permit issued chief First that oral not

judge.

See

proceeding-is

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of

DeCSS

will

DeCSS

Reimerdes

p~ncipal

Aguilar

of

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IS

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211,

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break

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superior

223.29

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Amendment determinationsbecauseit '-:!islikes speechat issue. the For all these reasons, the superior court's injunction is not an impermissibleprior restraint.
CONCLUSION

For these reasons,the Court of Appeal's decision should be reversedand the injunction reinstated. DATED: March 22, 2002 JaredBobrow ChristopherJ. Cox WElL, GOTSHAL & MANGES LLP 20I RedwoodShoresParkway RedwoodShores,CA 94065 Telephone: (650) 802-3000 Jeffrey L. Kessler RobertG. Sugarman GregoryS. Coleman EdwardJ. Burke JohnF. Greenman WElL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153 (212) 310-8000
,

By: a-1'~~ <';7 -- c~Jo;h':;f~ox

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Attorneys for Petitioner DVD Copy Control Association,Inc.

45

,-""

PROOF OF SERVICE

I, Sylvia R. Vela, certify and declare as follows:

1.0

I am over the ageof 18years,andnot a party to this cause and employed the countywherethe mailing took place. My business in
addressis III CongressA ven~e, 4th Floor, Austin, Texas, which is located in Travis County, where the mailing took place. On March 22, 2002, I served Petitioner's Opening Brief on the Merits by placing a true copy in a sealed envelope and served to each party hereinby overnight delivery via Federal Express to: Court of Appeal of the Stateof California Sixth Appellate District

C .

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'7:

Attn: Mr. Willy Magsaysay
333 West SantaClara Street

Suite 1060

San CA Jose, 95113
Santa ClaraCountySuperior Court
Attn: Hon. William S. Elfving 191North First Street

.
.
. .

(8

.
8,..

SanJose, 95113-1 CA 090
Attorneys for Respondent,Andrew Bunner: James Wheaton(Bar No. 115230) R. David Green(Bar No. 16010)
First Amendment Project

.
~
. .

Oakland CA 94612

1736Franklin Ave., 9th Floor

. . .
i

.
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8;

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.
ThomasE. Moore, III (Bar No. 115107) TomlinsonZisko Morosoli & MaserLLP 200 PageMill Road,2nd Floor Palo Alto, CA 94306 Allonn E. Levy (Bar No. 187251) HS law Group 210 North Fourth Street,Suite 200 SanJose,CA 95112 Robin D Gross(Bar No. 200701) Electronic Frontier Foundation 454 Shotwell Street SanFrancisco,CA 94110 Attorneys for Amicus Curiae: EdwardJ. Black Computer& Communications Industry Association 666 EleventhStreet,NW Washington,DC 20001 Howard M. Freedland(Bar No. 142341) American Committeefor Interoperable Systems 901 SanAntonio Road MIS PAL 1-521 Palo Alto, CA 94303-4900 Annette L. Hurst (Bar No. 148734) Institute of Electrical Engineers, Inc. Howard, Rice, Nemerovski,Canady,Falk & Rabkin Three Embarcadero Center,7th Floor SanFrancisco,CA 94111-4065

47

!

i;l~
David E. Kendall
Thomas G. Hentoff Suzanne H. Woods (Bar No. 177853) Julia B. Shelton

"'j;;,

. . C

Williams & Connolly LLP

725TwelfthStreet, NW Washington, 20005 D.C.
I certify and declareunder penalty of perjury under the laws of the Stateof California that the foregoing is true and correct that this declarationwas executedat Austin, Travis County, Texas, on March
22,2002.

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CERTIFICATE OF COMPLIANCE

I certify that this brief complieswith the type-volumelimitation of the California Rulesof Court Rule I 4(c)( 1). Exclusiveof the exemptedportions in California Rulesof Court Rule 14(c)(3), the brief contains 12,284words.

r~~~~i~ 7W&---'
ChristopfierJ. Cox

49

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