Plaintiff's Application for TRO and for Injunction Order, in DVD CCA v. McLaughlin, Bunner, et al.

(Ex Parte Application for the Issuance of a Temporary Restraining Order and Order to Show Cause Re: Preliminary Injunction Against All Defendants; Dec. 28, 1999)

[6 pages]

WEIL, GOTSHAL & MANGES LLP
JARED B. BOBROW (State Bar No. 133712)
2882 Sand Hill Road
Menlo Park, CA 94025
Telephone: (650) 926-6200
Facsimile: (650) 854-3713

WEIL, GOTSHAL & MANGES LLP
JEFFREY L. KESSLER*
ROBERT G. SUGARMAN*
767 Fifth Avenue
New York, NY 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007

Attorneys for Plaintiff
DVD COPY CONTROL ASSOCIATION, INC.

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SANTA CLARA

___________________

*Pro Hac Vice applications being submitted to the Court.

INTRODUCTION

Plaintiff, DVD Copy Control Association, Inc. ("DVD CCA"), is a trade association and the sole licensor of the technology that allows consumers to view movies through digital technology known as Digital Video Discs or "DVDs." This is the next generation of technology for the motion picture industry, much in the way that music compact discs have replaced records. To prevent copying of the motion pictures, the DVDs are encrypted, that is, the digital signal is "scrambled." The proprietary technology at issue here, called the Content Scramble System, or "CSS," allows digital data to be decrypted (or unscrambled) so that the underlying copyrighted images -- such as motion pictures -- can be viewed on DVD players or on personal computer DVD drives. CSS thus provides protection for the valuable intellectual property of the motion picture industry. Access to the CSS trade secret technology is granted only to those licensees that provide the software and hardware to enable consumers to view motion pictures and who agree to a stringent set of controls to protect the confidentiality of the CSS system.

Defendants in this action have misappropriated the proprietary CSS trade secrets by improper means and either have posted it on their Internet web sites and/or "linked" to another web site which posts such proprietary information. If this Court does not enjoin this malicious, continuous and illegal theft of proprietary information, which is subject to trade secret protection under California law, the CSS technology will be severely compromised. The DVD CCA and both the motion picture industry and the companies which provide the software and hardware which permit consumers to view motion pictures in a digital format (the licensees) are and will continue to suffer irreparable damage without the protection of preliminary relief.

Defendants have not only misappropriated the technology at issue, but have done so with reckless abandon, announcing their defiance of the law on their web sites. To quote a few:

"Mark of the scofflaw! Here's my local copy of CSS decryption software, enjoy.

"I may very well be sued."

"F[_ _ _] the feds!' . . . '[h]uh? Aren't these files legal? Oh, well, I didn't know that."

(See Complaint, ¶ 50).

Defendants have posted CSS trade secrets on their web sites as a direct attack on DVD CCA and the motion picture industry's copyrighted content contained on the DVDs in an effort to encourage illegal pirating of such DVDs. Defendants' actions threaten not only the economic viability of this new digital format, but also the consumer electronics and personal computer industries, which provide the necessary hardware and software to access digital images. Without the motion picture companies' copyrighted content for DVD video, there would be no viable market for computer DVD drives and DVD players, as well as the related computer chips and software necessary to run these devices and, thus, there would be no DVD video industry. Many of the companies who manufacture these products, the licensees of the CSS technology, are located in Santa Clara County, the Bay Area and the State of California. In fact, 73 of the more than 400 CSS licensees are located in California, of which there are 42 in Santa Clara County alone and an additional 17 in other Bay Area locations. Companies which have invested millions of dollars and employ thousands of people developing the digital technology to display these images to the public will suffer significant and irreparable harm.

If left unchecked, Defendants' misappropriation of proprietary trade secrets will also have a chilling effect on future technological innovation in these and other industries and will discourage other companies and industries from making their content available to the public in new formats. As a result, consumers will be deprived of the benefits of superior technology.

DVD CCA urges this Court to stop this illicit activity by granting the preliminary and permanent injunctive relief sought in this action.

APPLICATION

Plaintiff, DVD COPY CONTROL ASSOCIATION, INC., is a not-for-profit trade association with its principal place of business in Morgan Hill, California. DVD CCA is the duly authorized and sole licensing entity for a proprietary system for the encryption and decryption of data contained on Digital Video Discs ("DVD"). DVD CCA makes this Application for the issuance of a Temporary Restraining Order and Order to Show Cause re: Preliminary Injunction pending trial of this action ("Application") enjoining Defendants, and their officers, directors, principals, agents, servants, employees, attorneys, successors and assigns, from making any further use of or otherwise disclosing or distributing, on their web sites or elsewhere, or "linking" to other web sites which disclose, distribute or "link" to, any proprietary information or property or trade secrets relating to the CSS technology, and specifically enjoining Defendants, their officers, directors, principals, agents, servants, employees, attorneys, successors and assigns; and from copying, duplicating, licensing, selling, distributing, publishing, leasing, renting or otherwise marketing any and all products containing, using and/or substantially derived from CSS proprietary information or property or trade secrets of DVD CCA. Defendants have and continue knowingly and willfully to disclose on their web sites the proprietary trade secrets licensed by DVD CCA as part of a scheme to defeat DVD encryption/decryption software and enable users illegally to pirate copies of copyrighted motion pictures and other digital images contained on DVDs.

Defendants continue to misappropriate the CSS proprietary trade secrets that they themselves obtained by improper means or, alternatively, that they knew or should have known upon receipt was obtained by others by improper means. Indeed, most of the defendants have already been notified by the Motion Picture Association ("MPA"), through its anti-piracy task force, that they are unlawfully making proprietary information available on their web sites and demanding that they take down such proprietary information from their sites. (Declaration of Harvey Shapiro, Esq., filed in Support of this Application ["H. Shapiro Decl."], ¶¶ 3-4; Declaration of Frederic Hirsch, Esq., filed in Support of this Application ["Hirsch Decl."], ¶¶ 7-9). In fact, 25 web sites, after having received such notice from the MPA, voluntarily removed the trade secrets at issue from their sites. (See H. Shapiro Decl., ¶¶ 6-71 ). The others have not done so.

This Application is brought under California Code of Civil Procedure sections 526 and 527. Unless Defendants are restrained and enjoined during the pendency of this litigation from disseminating over the Internet the trade secrets and proprietary information licensed by DVD CCA, DVD CCA will suffer irreparable injury because such activities will completely destroy its business of licensing and policing the CSS technology. Irreparable injury will also be suffered by the motion picture industry and the DVD industry, which is substantially located in California. DVD CCA has no adequate, plain or speedy remedy at law.

Notice of this ex parte Application has been given to Defendants, pursuant to California Code of Civil Procedure section 527(c), California Rule of Court 379 and Local Rule 1.3.5. As detailed in the accompanying Declaration of Jonathan S. Shapiro, Esq., filed in Support of this Application ("J. Shapiro Decl."), counsel for DVD CCA made a thorough and extensive search to determine the owners of the web sites that were either posting the proprietary information at issue or "linking" to web sites that were posting it. DVD CCA has given notice of this Application to the defendants by sending an e-mail to each of the named defendants (at their web site addresses) and to the Doe defendants (where the name of the web site owner could not be identified) at the web sites which either post or link to the proprietary information at issue containing the following: (i) a Notice of the filing of this Application, a copy of which is attached to the J. Shapiro Declaration as Exhibit A (the "Notice"); and (ii) a copy of the Complaint. For both the Notice and the Complaint, DVD CCA has sent one version in English and one version in the language of the apparent host country. (J. Shapiro Decl., ¶ 16). For those defendants residing in California, DVD CCA also attempted to serve the Notice and Complaint on them by hand. (Id., ¶ 17). Furthermore, for those defendants located in the United States, DVD CCA also attempted to give notice of DVD CCA's Application by telephone. (Id.). The results of these attempts to provide notice are set forth in the J. Shapiro Decl. at ¶¶ 16-31 . DVD CCA has not previously sought such a temporary restraining order or preliminary injunction against Defendants.

This Application is based on the Complaint filed in this action, this Application, the accompanying Memorandum of Points and Authorities in Support, the Declarations of John Hoy, Bruce H. Turnbull, Esq., Frederic Hirsch, Esq., Harvey Shapiro, Esq. and Jonathan S. Shapiro, Esq., and all exhibits attached thereto, filed concurrently herewith, and upon such further evidence and upon such argument as may be presented at the hearings on this Application.

Dated: December 28, 1999
Menlo Park, California

Respectfully submitted,

WEIL GOTSHAL & MANGES LLP
JARED B. BOBROW (State Bar No. 133712)

By: [Signature]
Jared B. Bobrow

Attorneys for Plaintiff
DVD COPY CONTROL ASSOCIATION, INC.

OF COUNSEL:

WEIL, GOTSHAL & MANGES LLP
JEFFREY L. KESSLER*
ROBERT G. SUGARMAN*
EDWARD J. BURKE
JONATHAN S. SHAPIRO*

___________________

* Pro Hac Vice application being submitted to the Court.

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