EFF/Bunner Motion for Summary Judgement

(and Memorandum in Support) in DVDCCA v. McLaughlin, Bunner, et al. (Nov. 28, 2001)

RICHARD R. WIEBE (SBN 121156)

425 California Street, Suite 2025

San Francisco, CA 94104

Telephone: (415) 433-3200

Facsimile: (415) 433-6382

THOMAS E. MOORE III (SBN 115107)

TOMLINSON ZISKO MOROSOLI & MASER LLP

200 Page Mill Road, Second Floor

Palo Alto, CA 94306

Telephone: (650) 325-8666

Facsimile: (650) 324-1808

ALLONN E. LEVY (SBN 187251)

HS LAW GROUP
210 N. Fourth St. Suite 200
San Jose, CA 95112
Telephone:  (408) 295-7034
Facsimile: (408) 295-5799

CINDY A. COHN (SBN 145997)

ROBIN D. GROSS (SBN 200701)

ELECTRONIC FRONTIER FOUNDATION

454 Shotwell Street
San Francisco CA 94110
Telephone: (415) 436-9333
Facsimile: (415) 436-9993

Attorneys for Defendant ANDREW BUNNER

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SANTA CLARA

TABLE OF CONTENTS

TABLE OF AUTHORITIES

Cases

Aguilar v. Atlantic Richfield Co., 25 Cal.4th 826 (2001) 11

Alemite Mfg. Corp. v. Staff, 42 F.2d 832 (2d Cir. 1930) 10

Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989) 12, 13, 19

Enterprise Leasing Co. v. Ehrnke, 3 P.3d 1064 (Ariz. Ct. App 1999) 13

Griset v. Fair Political Practices Com., 8 Cal.4th 851, 866 (1994) 18

Hoechst Daifoil Co. v. Nan Ya Plastics Corp., 174 F.3d 411 (4^th Cir. 1999) 15

Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974) 12, 20

Los Angeles Alliance for Survival v. City of Los Angeles, 22 Cal.4th 352 (2000) 18

Murray v. Bank One, 649 N.E.2d 1307 (Ohio App. 1994) 13

Perry Ed. Assn. v. Perry Local Educators’ Assn., 460 U.S. 37 (1983) 18

Police Dept. of Chicago v. Mosley, 408 U.S. 92 (1972) 19

R. A. V. v. St. Paul, 505 U.S. 377 (1992) 18

Religious Tech. Center v. F.A.C.T.NET, Inc., 901 F.Supp. 1519 (D. Colo. 1995) 15

Religious Tech. Center v. Lerma, 908 F.Supp. 1362 (E.D. Va. 1995) 15, 16

Religious Tech. Center v. Netcom On-line Commun. Servs., 923 F.Supp. 1231 (N.D. Cal. 1995) 13, 14, 15

Reno v. A.C.L.U., 521 U.S. 844 (1996) 14

Rosenberger v. Rector and Visitors of Univ. of Va., 515 U.S. 819 (1995) 19

Simon & Schuster, Inc. v. Members of N. Y. State Crime Victims Bd., 502 U.S. 105 (1991) 18

Underwater Storage, Inc. v. U. S. Rubber Co., 371 F.2d 950 (D.C. Cir. 1966) 17

Vacco Industries, Inc. v. Van Den Berg, 5 Cal.App.4th 34 (1992) 13

Statutes

Civil Code § 3426 13

Civil Code § 3426.1 13

Civil Code § 3426.2 2, 15, 17

Code Civ. Pro. § 437c 11

Other Authorities

Sen. Com. on Jud., Rep. on Assem. Bill 501, 8 Sen. Jour. (1983-1984 Reg. Sess.) p. 13883 14, 15, 17

Unif. Trade Secrets Act § 2 cmt., reprinted in 14 Unif. Laws Annot. 450 (West 1990) 15

Unif. Trade Secrets Act § 6 cmt., reprinted in 14 Unif. Laws Annot. 462 (West 1990) 17

Treatises

1 Milgrim on Trade Secrets § 1.03 (2000) 14

1 Milgrim on Trade Secrets § 1.05[1] (2000) 13

Constitutional Provisions

Cal. Const., art. I, § 2 18

U. S. Const., amd. 1 1, 12, 18

U. S. Const., art. I, § 8 19

I. INTRODUCTION AND SUMMARY

Plaintiff DVD Copy Control Association, Inc. (DVD CCA) has brought a single trade secret cause of action against defendant Andrew Bunner, seeking only injunctive relief. DVD CCA alleges that it possesses trade secrets in the Content Scramble System (CSS) encryption system used in conjunction with DVD digital movie discs and alleges that Mr. Bunner disclosed those alleged trade secrets by posting a copy of the DeCSS DVD descrambling program on his web site. In January 2000, only a few weeks after this action was filed and after a hectic rush of briefing, the Court granted a preliminary injunction prohibiting Mr. Bunner from “[p]osting or otherwise disclosing or distributing, on [his] websites or elsewhere, the DeCSS program, the master keys or algorithms of the Content Scrambling System (“CSS”), or any other information derived from this proprietary information.” 1/21/00 Order Granting Prelim. Inj. at 2. Mr. Bunner has observed the terms of the injunction since it was issued. In issuing the preliminary injunction, however, the Court noted: “As Plaintiff conceded at the hearing on the TRO, once this information gets into the hands of an innocent party, the Plaintiff loses their ability to enjoin the use of their trade secret.” Ibid.

The passage of time since the Court enjoined Mr. Bunner has dramatically altered, clarified, and simplified the legal and factual landscape of this case. Legally, the Court of Appeal recently reversed the preliminary injunction, finding that the injunction infringed Mr. Bunner’s First Amendment right to free speech.

Factually, the Court now faces a vastly different record than that hurriedly presented at the time of the preliminary injunction. The undisputed evidence now shows that, as the Court foreshadowed, there is nothing secret about the CSS algorithms and keys:

• The DeCSS computer program is available throughout the world without restriction. DeCSS continues to be published at numerous sites on the Internet, and may be freely examined, copied, or downloaded by anyone wishing to do so.

• The CSS algorithms and keys have been the subject of worldwide academic study, research, teaching, and communication.

• Other DVD descrambling programs have now been created embodying and disclosing the same CSS encryption algorithms and keys disclosed by DeCSS and alleged by DVD CCA to be trade secrets.

• DVD descrambling programs has been published in the Massachusetts Institute of Technology’s journal Technology Review and Wired Magazine. One of the CSS encryption keys has been published in the Wall Street Journal.

• In the face of the ubiquity of DeCSS and other DVD descrambling programs, DVD CCA have ceased policing its alleged CSS trade secrets, claiming it would be too burdensome for it to examine every web site now posting a DVD descrambling program.

This evidence shows conclusively that the CSS algorithms and keys are no longer confidential information known only to DVD CCA but are now publicly available information free to all who wish to learn them.

This undisputable evidence of the general public availability of the CSS algorithms and keys is fatal to DVD CCA’s trade secret cause of action against Mr. Bunner, which seeks only injunctive relief. California’s trade secret statute prohibits any injunctive relief once a trade secret becomes generally known to the public. Civil Code § 3426.2(a). Because the essential element of continuing secrecy is absent here and the CSS algorithms and keys are generally available, DVD CCA’s cause of action fails. Judgment must be granted for Mr. Bunner and this action dismissed.

This simple and straightforward ground for summary judgment removes the necessity for the Court to decide the many challenging statutory and constitutional issues this case otherwise presents. These include the questions of whether the republication of information widely available on the Internet is a “misappropriation” under California’s Uniform Trade Secrets Act and whether the free speech and equal protection provisions of the California and federal Constitutions and the Intellectual Property Clause of the federal Constitution permit an injunction suppressing speech whose content is already a matter of widespread public knowledge.

II. FACTUAL BACKGROUND

A. DVD Movie Discs and the CSS Encryption System

DVDs are a digital information storage medium. Like the more familiar audio CDs, a DVD consist of a plastic disc beneath whose transparent surface lies a metal-coated layer in which is etched a spiral track of microscopic indentations. When a DVD hardware drive plays the DVD disc by spinning it, a laser beam tracks along the spiral path within the disc and the resulting pattern of reflectance and darkness caused by the presence or absence of these indentations is translated into the binary code—the ones and zeros—of digital data.

DVDs have a much greater data storage capacity than CDs, and for this reason may be used to store entire movies in digital form, as well as any other type of information that can be converted to a digital format. A DVD movie disc may be played on a standalone DVD player attached to a TV in the same manner as a VCR, or may be played on a personal computer by means of a DVD hardware drive and a DVD hardware or software decoder/player in the computer.

Audio CDs are not encrypted. By contrast, the manufacturers of DVD movie discs, DVD hardware drives, and DVD movie decoder/players have chosen to encrypt, or scramble, the digitized audiovisual information stored in DVD movie discs. A consumer cannot view the DVD movie disc he or she has purchased unless the audiovisual information is first descrambled.

The encryption system used by manufacturers of DVD movie discs, DVD hardware drives, and DVD hardware or software movie decoder/players is known as the Content Scramble System, or CSS. CSS was originally developed by Matsushita Electrical Industrial Co., Ltd. and Toshiba Corporation and licensed to others by a Japanese entity, the CSS Interim Licensing Organization. 8/10/00 Plaintiff’s Ans. & Objs. to Def. Bunner’s First Set of Special Interrogs., Ans. to Interrogs. 25, 39. DVD CCA then took over licensing of CSS in December 1999, shortly before filing this lawsuit.

The many steps by which CSS descrambles the scrambled audiovideo data on a DVD movie disc can be divided into two basic functions: 1) a mutual authentication function by which the DVD decoder/player on the one hand and the DVD drive on the other hand mutually authenticate each other to verify that each is a device authorized by DVD CCA; and 2) a descrambler function by which the decoder/player descrambles the scrambled audiovisual data of the encrypted movie stored on the disc. Both of these functions involve various encryption algorithms (each of which may be represented as a mathematical equation or series of equations) and encryption keys (numeric values used in conjunction with different encryption algorithms). Many of these keys are themselves encrypted as an additional security measure. In general outline, these two functions operate in the following manner. (This summary is based on Dr. Touretzky’s Decl. ¶¶ 3-12 and the 12/20/00 Amended Submission of Plaintiff DVD Copy Control Assoc., Inc., Pursuant to § 2019(d), at Ex. A (DVD CCA’s complete technical specifications for CSS, as set forth by DVD CCA’s predecessor Matsushita).)

In the authentication function, the DVD drive and the DVD decoder/player authenticate each other by exchanging random numbers, performing identical computations on the exchanged numbers using encryption algorithms, and comparing the results. If the results match, then each device considers the other to be authentic.

Descrambling of the movie audiovisual data on the disc uses a number of different encryption keys and algorithms. The scrambled audiovisual data on the DVD disc is divided into numerous files. The data in each file has been scrambled using a title key in conjunction with a scrambling algorithm. Different files use different title keys, and each file is associated with an encrypted version of the title key used to scramble the audiovisual data in that file. The different title keys used for the different files on the disc are all encrypted and stored on the DVD disc using a single disc key in conjunction with an encryption algorithm.

The disc key in turn is itself stored on the DVD disc in encrypted form. It is encrypted in 408 different versions using a single encryption algorithm with each of the 408 possible master key (also sometimes called player key) pairs DVD CCA has established. DVD CCA has assigned to each decoder/player manufacturer a single unique master key pair from this universe of 408 possible master key pairs. This unique master key pair is stored in every decoder/player made by that manufacturer. To insure that every disc will work with every decoder/player, the disc key on each disc is encrypted into 408 different versions by using one of the two master keys from each of the 408 master key pairs.

In order to play a scrambled DVD disc, CSS uses the master key in the DVD decoder/player to decrypt the disc key. It then uses the decrypted disc key to decrypt the title key for each file, and uses the decrypted title key to descramble the scrambled audiovisual data in that file. Once the audiovisual data is descrambled, it may be used to display the images and sounds of the movie to the consumer.

B. Andrew Bunner’s Republication of the DeCSS DVD Descrambling Program

The DeCSS DVD descrambling program was published on the Internet in October 1999. It is undisputed that Mr. Bunner had nothing to do with the creation or programming of DeCSS or any other DVD descrambling program, and nothing to do with the reverse engineering or technical analysis of CSS that preceded the creation of DeCSS. Bunner Decl. ¶¶ 2-3. Nor was Mr. Bunner involved in the original publication of DeCSS on the Internet. Id. at ¶ 4. He first learned of DeCSS after CSS had been reverse engineered and after DeCSS had been created and published on the Internet in October 1999. Id. at ¶ 5. Mr. Bunner then downloaded a copy of DeCSS from a publicly-available web site on the Internet and placed it on his personal web site. Id. at ¶ 6. In December 1999, before being served with the summons and complaint in this action, Mr. Bunner spoke by telephone with an attorney for DVD CCA. Id. at ¶ 7. Mr. Bunner immediately removed DeCSS from his web site server during his telephone conversation with DVD CCA’s attorney, has not disclosed or distributed DeCSS since that time, and has observed the terms of the preliminary injunction. Ibid.

C. The CSS Algorithms And Keys Remain Public Information Available To All Who Wish To Know

Pursuant to Code of Civil Procedure section 2019(d), DVD CCA has identified its alleged trade secrets as “the master keys, secured [i.e., encrypted] disc keys, disc keys and title keys themselves, the computational method for creating these keys, and the algorithms for using these keys in the encryption and decryption operations.” 12/20/00 Amended Submission of Plaintiff DVD Copy Control Assoc., Inc., Pursuant to § 2019(d), at 3. None of this information is currently secret, as is made abundantly clear by the accompanying declarations from:

• Princeton Computer Science Professor Edward Felten (on sabbatical this year at Stanford Law School’s Center for the Internet and Society; chief technical adviser to the U.S. Department of Justice in United States v. Microsoft)

• University of California-Berkeley Computer Science Professor David Wagner

• Carnegie Mellon University Principal Computer Scientist Dr. David Touretzky

• Carnegie Mellon University Computer Scientist Gregory Kesden

• Computer Scientist Roland Parviainen of Sweden’s Luleå University of Technology

As the evidence in these declarations demonstrates, persons other than the 22 defendants named and served in this action have made unlimited public disclosure of the CSS algorithms and keys through the publication and repeated republication of DeCSS, other DVD descrambling programs, and other information about CSS continuously from before this action was filed to the present time, a period now exceeding two years. Such information has been taught and discussed at universities and within the computer science community worldwide, is available at numerous Internet web sites, and has been published in print in the Wall Street Journal, Wired Magazine and MIT’s Technology Review as well as in course materials, widely distributed technical papers, and even on publicly posted adhesive stickers. It is available not only in the form of the original DeCSS computer program posted by Mr. Bunner on his web site, but also in other forms as well: other versions of DeCSS, other DVD software player computer programs that have subsequently been developed and published, as well as in narrative, mathematical, graphical, animated, and musical representations. There is nothing secret about CSS and its algorithms and keys, all of which are widely and readily available to the public. Prof. Felten Decl. ¶ 12; Prof. Wagner Decl. ¶ 27; Dr. Touretzky Decl. ¶¶ 31-32, Kesden Decl. ¶ 8; Parviainen Decl. ¶ 4.

1. DeCSS And Other DVD Descrambling Computer Programs Disclosing CSS Algorithms And Keys Remain Widely And Easily Available To All Who Wish Them.

The DeCSS computer program remains available, at the very least, at hundreds of locations on the Internet, in both source code and object code versions. Prof. Wagner Decl. ¶¶ 6-21; Dr. Touretzky Decl. ¶¶ 13-15, 18-23; Prof. Felten Decl. ¶¶ 14-15. Other DVD software players have been created since the creation of DeCSS that also disclose the CSS algorithms and keys: these include Videolan, developed at the École de Paris; Ogle, developed at Chalmers University in Sweden; and Xine. Prof. Wagner Decl. ¶¶ 22-25; Dr. Touretzky Decl. ¶¶ 11, 24-25, 30. These other DVD software players are available on the Internet. Dr. Touretzky Decl. ¶¶ 11, 24-25, 30; Prof. Wagner Decl. ¶¶ 22 25. Numerous additional programs performing the CSS descrambling function have been created in a variety of programming languages. Dr. Touretzky Decl. ¶¶ 14-15, 29. MIT’s journal Technology Review and Wired Magazine both recently published DVD descrambling programs, and the Wall Street Journal published one of the CSS master keys. Dr. Touretzky Decl. ¶¶ 10, 29 & Exs. A, B, C. Descrambling programs have even been publicly posted on adhesive stickers. Kesden Decl. ¶ 8 & Ex. C.

2. There Is Widespread Knowledge Of The CSS Algorithms And Keys In The Computer Science Community

CSS and its algorithms and keys have been the subject of research, discussion, and teaching worldwide within the computer science community, both academic and non-academic. Prof. Felten Decl. ¶¶ 12-13, 16-21; Prof. Wagner Decl. ¶¶ 28-33; Dr. Touretzky Decl. ¶¶ 26-32; Kesden Decl. ¶ 4-8; Parviainen Decl. ¶¶ 1-5. Professor Felten has taught a seminar on CSS at Princeton and has taught CSS and DeCSS in his Information Security course. Prof. Felten Decl. ¶ 19. Professor Wagner has taught CSS in his Security in Computer Systems course. Prof. Wagner Decl. ¶ 28. Dr. Touretzky of Carnegie Mellon University maintains a “Gallery of CSS Descramblers” web site (http://www.cs.cmu.edu/~dst/DeCSS/Gallery) on the Internet as an academic resource. Dr. Touretzky Decl. ¶ 14.

Computer Scientist Kesden teaches CSS as part of his course on operating systems at Carnegie Mellon University, and his course materials describing the operation of CSS are posted in the Gallery of CSS Descramblers. Kesden Decl. ¶¶ 1-5 & Ex. A. He has also lectured on CSS at the University of California, San Diego. Kesden Decl. ¶ 7. MIT has held a seminar on CSS and DeCSS. Dr. Touretzky Decl. ¶ 29. CSS algorithms and keys are available from Harvard University and Case Western Reserve University web sites. Prof. Wagner Decl. ¶ 26. Computer Scientist Parviainen of Sweden’s Luleå University of Technology teaches CSS in his Computer Security course as an example of how not to design an encryption system, as do Kesden of Carnegie Mellon University and Professor Wagner of Berkeley. Parviainen Decl. ¶ 5; Kesden Decl. ¶ 5; Prof. Wagner Decl. ¶¶ 28-29.

3. In Addition, There are Many Other Publicly Available Descriptions of The CSS Algorithms And Keys

Other descriptions and representations of the CSS algorithms and keys have been created in a vast variety of formats. Cryptographer Frank Stevenson’s technical paper describing the CSS algorithms and keys is widely known in cryptographic circles and is available on the Internet. Prof. Felten Decl. ¶¶ 17-20; Dr. Touretzky Decl. ¶¶ 11-12; Kesden Decl. ¶ 8 & Ex. B; see also 1/7/00 Stevenson Decl. ¶¶ 15-18. In it, he presents a method for deriving every possible master key. Dr. Touretzky Decl. ¶ 12. Stevenson also presents methods for deriving title keys without the use of a master key. Dr. Touretzky Decl. ¶ 12. Others have created narrative descriptions, mathematical descriptions, and graphical, animated, and musical renderings of the CSS algorithms and keys. Dr. Touretzky Decl. ¶¶ 14-18, 28.

4. DVD CCA Has Given Up Trying To Identify The “Thousands” Of Sources Publishing CSS Algorithms And Keys, Or To Name And Serve Them In This Litigation

Perhaps most telling, when requested in interrogatories to identify all sources currently disclosing the CSS algorithms or keys, DVD CCA frankly confessed it had given up any serious attempt to police its trade secrets. After identifying 72 of the “thousands of web sites and file transfer sites apparently claim[ing] to be posting materials containing Plaintiff’s trade secrets,” DVD CCA explained it was making no attempt to locate and identify, much less suppress, all of these thousands of sources publishing information about the CSS algorithms and keys, stating “Plaintiff cannot reasonably be expected to perform this process to verify the contents of thousands of web sites claiming to be posting Plaintiff’s trade secrets.” 10/3/00 Plaintiff’s Highly Confidential Supplemental Ans. & Objs. To Def. Andrew Bunner’s First Set of Interrogs., at 3-5; 8/10/00 Plaintiff’s Highly Confidential Ans. & Objs. To Def. Andrew Bunner’s First Set of Interrogs., at 3. This admission merely confirms the indisputable: There is nothing secret about the CSS algorithms and keys. ¹

DVD CCA also has never sought to bring before this Court all those “thousands” who are still publishing its alleged CSS trade secrets. DVD CCA to date has named only 24 defendants in this action and has served 22 of them. 10/9/01 Case Management Conference Questionnaire of DVD CCA. It has not sought to name and serve the publishers of the 72 web sites identified in its interrogatory answers. Nor has it sought to name and serve the publishers of the hundreds, if not thousands, of other web sites publishing CSS algorithms and secrets or the many other sources of information about CSS algorithms and keys we have described in our evidentiary submissions.

It is, of course, only by naming and serving as parties to this action all those who were allegedly violating its trade secrets that DVD CCA could have made the preliminary injunction, or any future permanent injunction, enforceable against them. As a matter of fundamental due process, the Court’s injunction is only effective against those defendants over whom the Court has acquired personal jurisdiction by the plaintiff’s service of a summons and the complaint. Judge Learned Hand long ago explained this point with his customary clarity and wisdom: “[N]o court can make a decree which will bind any one but a party; a court of equity is as much so limited as a court of law; it cannot lawfully enjoin the world at large, no matter how broadly it words its decree. If it assumes to do so, the decree is pro tanto brutum fulmen, and the persons enjoined are free to ignore it. It is not vested with sovereign powers to declare conduct unlawful; its jurisdiction is limited to those over whom it gets personal service, and who therefore can have their day in court.” Alemite Mfg. Corp. v. Staff, 42 F.2d 832, 832-33 (2d Cir. 1930). Whatever the explanation for DVD CCA’s failure to diligently enforce the injunction this Court granted it, that failure is further evidence of the unrestricted public availability of the CSS algorithms and keys.

5. DVD CCA’s Decision To Distribute CSS Worldwide In Software Form Made Its Disclosure Almost Certain, As DVD CCA And Its Licensees Recognized In The CSS License

DVD CCA and its predecessors in interest Matsushita, Toshiba, and the CSS Interim Licensing Organization made a considered business decision to permit the licensed distribution of CSS not only in the form of hardware DVD players for televisions and hardware DVD players for computers but also in the form of software DVD players for computers. These software DVD players necessarily contain in software form the CSS algorithms and keys. The decision of DVD CCA and its predecessors to distribute CSS in software form, however, made it almost certain that within no more than a few years of its initial release the CSS algorithms and keys would become public knowledge. Prof. Felten Decl. ¶¶ 22-29; Prof. Wagner Decl. ¶¶ 29, 34-40. The faulty encryption design decisions made by CSS’s designers likewise made it unreasonable to expect that CSS’s details would not become public knowledge. Prof. Felten Decl. ¶¶ 27-28; Prof. Wagner Decl. ¶ 29; Dr. Touretzky Decl. ¶¶ 11-12, 26; Kesden Decl. ¶ 5; Parviainen Decl. ¶ 5. These flaws, for example, make it possible to decrypt the title keys contained on each DVD movie disc without using a master key and to use the decrypted title keys to descramble the movie. Dr. Touretzky Decl. ¶¶ 11-12; 1/7/00 Stevenson Decl. ¶¶ 15-18. They also make it possible to derive all of the possible master keys using a purchased DVD movie disc. Dr. Touretzky Decl. ¶¶ 11-12; 1/7/00 Stevenson Decl. ¶¶ 15-18.

Thus, it is not surprising that the licenses used by DVD CCA and its predecessors in interest, as well as their licensees, expressly recognize the likelihood that the worldwide distribution of CSS would result in its public disclosure. Section 5.2 of the CSS Interim License Agreement, which imposes a confidentiality obligation upon licensees, explicitly acknowledges this eventuality. It excuses CSS licensees from their duty of confidentiality once CSS is publicly disclosed for more than 90 days:

(h) Confidentiality Exceptions. The confidentiality restrictions contained in Sections 5.2(a), (b) and (c) herein shall not apply to information that Licensee can demonstrate: (i) is either Confidential or Highly Confidential Information which is or becomes generally known to the public through no breach of Licensee’s obligations owed to [Blank] hereunder and which [Blank] failed to remove from public availability or to enjoin such public disclosure within ninety (90) days after the date such information is or becomes generally known as set forth above; . . .

CSS Interim License Agreement, ¶ 5.2(h), reproduced at 1/13/00 Hoy Reply Decl., Ex. C. The CSS algorithms and secrets have been generally known to the public not just for 90 days but for more than two years from sources not subject to this Court’s injunction, thus excusing DVD CCA’s licensees from any further duty of confidentiality. Clearly, it would be unjust and irrational to hold that Andrew Bunner, a stranger to DVD CCA with no contractual or fiduciary relationship with it, has an obligation to keep secret publicly available information which DVD CCA’s own licensees are no longer obligated to keep secret.

III. ARGUMENT

A. The Summary Judgment Standard

The familiar standard for summary judgment of Code of Civil Procedure section 437c provides that “summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Code Civ. Pro. § 437c(c). “A defendant or cross-defendant has met his or her burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to that cause of action.” Code Civ. Pro. § 437c(o)(2); see generally Aguilar v. Atlantic Richfield Co., 25 Cal.4th 826 (2001).

Here, to prevail on its sole cause of action for injunctive relief for trade secret misappropriation, DVD CCA as plaintiff has the burden of proving, among other things, that the CSS algorithms and keys still remain secret. The factual record in this case shows that DVD CCA cannot meet its burden of proof on the essential element of secrecy, for it is indisputable that its alleged trade secrets are widely known and have been continuously published for a period now exceeding two years.

B. California’s Uniform Trade Secrets Act Prohibits Injunctive Relief When The Alleged Trade Secret Is Publicly Known, As Is The Case Here

State trade secret law, as the Court of Appeal emphasized in its opinion, lacks the federal constitutional status that patent and copyright law possess. Slip op. at 16-17. The holder of a federal copyright or a patent is granted a constitutionally-sanctioned exclusive property right enforceable against the world at large. State trade secret law does not, and cannot, provide the holder of a trade secret with an exclusive property right in an idea, enforceable against the world; instead, it provides additional remedies only against certain parties who in obtaining or using the trade secret have violated some independent legal duty—a duty that has either been voluntarily assumed (e.g., by contract or as the consequence of a fiduciary relationship) or that is imposed as a generally applicable legal obligation (e.g., laws against theft, bribery, or trespass). See Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 156, 158 (1989) (Supreme Court struck down a “Florida statute endow[ing] the original boat hull manufacturer with rights against the world, similar in scope and operation to the rights accorded a federal patentee” because federal Constitution preempts states from creating intellectual property rights against the world for an idea embodied in “an item in general circulation”); Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 490 (1974) (patent rights operate “ ‘against the world’ ” while trade secret rights do not). Both the Intellectual Property Clause and the First Amendment of the federal Constitution limit the permissible scope of state law protection for trade secrets, for both protect and guard the public domain of free discourse in ideas. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. at 150-165; Court of Appeal’s slip op. at 16, 19.

An essential part of the framework of these constitutional limitations on state trade secret law is the fundamental requirement that “The subject of a trade secret must be secret, and must not be of public knowledge or of a general knowledge in the trade or business.” Kewanee Oil Co. v. Bicron Corp., 416 U.S. at 475. It is only because of this requirement of secrecy that, for example, “ ‘the [patent law] policy that matter once in the public domain must remain in the public domain is not incompatible with the existence of trade secret protection.’ ” Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. at 155.

California law is in accord with this constitutional requirement. For information to qualify as a protectable trade secret under California law, it is an essential requirement that the information be secret, something not generally known. The definition of “trade secret” under California’s Uniform Trade Secrets Act (Civil Code § 3426 et seq.) includes the requirement that it be “information . . . not . . . generally known to the public or to other persons who can obtain economic value from its disclosure or use.” Civil Code § 3426.1(d)(1).

Accordingly, under California’s Uniform Trade Secrets Act general public disclosure destroys the secrecy essential to a trade secret. Vacco Industries, Inc. v. Van Den Berg, 5 Cal.App.4th 34, 50 (1992) (“a trade secret is protectible only so long as it is kept secret”); Religious Tech. Center v. Netcom On-line Commun. Servs., 923 F.Supp. 1231, 1254 (N.D. Cal. 1995) (“Once trade secrets have been exposed to the public, they cannot later be recalled.”); Enterprise Leasing Co. v. Ehrnke, 3 P.3d 1064, 1069 (Ariz. Ct. App 1999) (applying Uniform Trade Secrets Act: “the hallmark of a trade secret obviously is its secrecy . . . . matters that are public knowledge are not safeguarded as trade secrets”) see also Murray v. Bank One, 649 N.E.2d 1307, 1313 (Ohio App. 1994) (applying Restatement (First) of Torts trade secret law; “If information is generally known in the industry, it is not ‘secret’ and ‘cannot qualify as a trade secret.’ ”); 1 Milgrim on Trade Secrets § 1.05[1], at 1-197 (2000) (“Since secrecy is a requisite element of a trade secret,  . . . unprotected disclosure of the secret will terminate that element and, at least prospectively, forfeit the trade secret status”)

In particular, widespread and sustained publication destroys the secrecy essential to a trade secret. Enterprise Leasing Co. v. Ehrnke, 3 P.3d at 1069 (applying Uniform Trade Secrets Act: “[i]nformation is considered public knowledge if it is available in trade journals, reference books or published materials”). The legislative history of California’s Uniform Trade Secrets Act confirms this fact; it notes that “[o]btaining the trade secret from published literature” is a proper means of acquiring knowledge of the information alleged to be a trade secret. Sen. Com. on Jud., Rep. on Assem. Bill 501, 8 Sen. Jour. (1983-1984 Reg. Sess.) p. 13883; see also 1 Milgrim on Trade Secrets § 1.03, at 1-163 (2000) (“[W]hether secrecy is lost through seepage in conduct of business, sale or exposition of a product embodying the secret, disclosure of the idea through a trade or technical publication, or by way of patent . . . the principle remains: a secret on the wing cannot be recalled.”).

This is equally true of publication on the Internet as it is of publication in more traditional media. As the United States Supreme Court has noted: “From the publishers’ point of view, [the Internet] constitutes a vast platform from which to address and hear from a world-wide audience of millions of readers, viewers, researchers, and buyers. Any person or organization with a computer connected to the Internet can ‘publish’ information. Publishers include government agencies, educational institutions, commercial entities, advocacy groups, and individuals.” Reno v. A.C.L.U., 521 U.S. 844, 853 (1996). Applying California’s Uniform Trade Secrets Act to publication on the Internet, the court in Religious Tech. Center v. Netcom On-line Commun. Servs., 923 F.Supp. 1231, 1256, addressed whether information can be considered secret if it has been posted to an Internet newsgroup, a much more limited form of distribution than publication on a web site. (“Newsgroups . . . serve groups of regular participants, but these postings may be read by others as well. There are thousands of such groups, each serving to foster an exchange of information or opinion on a particular topic running the gamut from, say, the music of Wagner to Balkan politics to AIDS prevention to the Chicago Bulls. . . . . In most newsgroups, postings are automatically purged at regular intervals.” Reno v. A.C.L.U., 521 U.S. at 851.) The Netcom court held: “Although a work posted to an Internet newsgroup remains accessible to the public for only a limited amount of time, once that trade secret has been released into the public domain there is no retrieving it.” 923 F.Supp. at 1256.

Significantly, the Netcom court held that the fact that those who originally posted the information to the Internet may have obtained the information by improper means cannot defeat the loss of secrecy that occurs upon general publication on the Internet. “While . . . those who made the original postings likely gained the information through improper means . . . this does not negate the finding that, once posted, the works lost their secrecy.” 923 F.Supp. at 1256.

Other courts have reached the same conclusion. In Religious Tech. Center v. Lerma, 908 F.Supp. 1362, 1368 (E.D. Va. 1995), the court held that the plaintiff’s alleged trade secrets had become “ ‘generally known’ ” when despite the plaintiff’s extraordinary efforts at suppression the information was published on an Internet newsgroup for ten days: “Once a trade secret is posted on the Internet, it is effectively part of the public domain, impossible to retrieve.” Ibid. Again, the court held that trade secret protection was lost notwithstanding the plaintiff’s allegations that those who originally posted the information on the Internet obtained it by improper means. Id. at 1364. In Hoechst Daifoil Co. v. Nan Ya Plastics Corp., 174 F.3d 411, 419 (4^th Cir. 1999), the United States Court of Appeals for the Fourth Circuit approved Lerma’s holding, stating that “the court correctly found that information which had been both disclosed in public court files and made ‘generally known’ by Internet publication had lost its trade secret status.” In Religious Tech. Center v. F.A.C.T.NET, Inc., 901 F.Supp. 1519, 1526-27 (D. Colo. 1995), the court likewise found that the alleged trade secrets at issue in that case were not secret because they were “widely known” “through multiple sources,” including the Internet.

Given the requirement that information must be secret in order to be protected as a trade secret, it is no surprise that California’s Uniform Trade Secrets Act prohibits injunctive relief once a trade secret ceases to be a secret: “Upon application to the court, an injunction shall be terminated when the trade secret has ceased to exist . . . .” Civil Code § 3426.2(a). As the legislative history to California’s Uniform Trade Secrets Act explains, “an injunction accordingly should terminate when a former trade secret . . . becomes generally known.” Unif. Trade Secrets Act § 2 cmt., reprinted in 14 Unif. Laws Annot. 450 (West 1990); Sen. Com. on Jud., Rep. on Assem. Bill 501, 8 Sen. Jour. (1983-1984 Reg. Sess.) p. 13883 (“the comments of the national conference with respect to the act reflect the intent of the Senate Committee on Judiciary in approving Assembly Bill 501”). The statute’s prohibition of injunctive relief for information no longer secret is absolute and mandatory, and is not conditioned on the manner in which the information has become public.

This unequivocal command from the Legislature must be obeyed. As the evidence laid out above makes clear, information disclosing the CSS algorithms and keys has been repeatedly and continuously published and republished throughout the world for a period now exceeding two years. It has been published not only at literally hundreds of web sites on the Internet (at one of which Mr. Bunner first encountered it) but in more tangible media as well, including MIT’s journal Technology Review, the Wall Street Journal, printed university course materials and handouts, adhesive stickers, and even a music CD. It has been the subject of academic research, teaching, and discussion by computer scientists at the University of California at Berkeley, Princeton, Carnegie Mellon University, MIT, Sweden’s Luleå University, and elsewhere, as well as disclosure in the larger computer science community.

Because the CSS algorithms and keys, DVD CCA’s alleged trade secrets in this action, lack the essential element of secrecy, DVD CCA’s cause of action seeking injunctive relief for trade secret misappropriation fails. The plain and unequivocal language of section 3426.2 forbids any injunctive relief in this case; accordingly, Mr. Bunner is entitled to summary judgment, and the action should be dismissed.²

In so holding, this Court need not go nearly as far as Religious Tech. Center v. Lerma, 908 F.Supp. 1362, which held that secrecy is lost by publication on the Internet even for ten days and even when publication occurs in a newsgroup rather than on a web site. The Court need not hold that any disclosure on the Internet, however obscure, evanescent, or brief, results in the loss of secrecy. Here there has been widespread and sustained publication of CSS algorithms and keys for more than two years not only at hundreds of Internet web sites but also in print media, as well as public disclosure and discussion in the academic community, the larger computer science community, and elsewhere. Thus, the Court need merely apply the well-settled rule, developed long before the Internet era, that widespread and sustained publication destroys secrecy and precludes an injunction against a third-party republisher who had no involvement in the initial public disclosure.³

C. The First Amendment And Other Federal And State Constitutional Provisions Prohibit Using State Trade Secret Law To Enjoin The Publication Of Publicly-Available Information

It is no accident that section 3426.2 prohibits the Court from enjoining the publication of information that is no longer secret. Most obviously, it would contradict section 3426.1(d)’s definition of a trade secret as “information . . . not generally known” to enjoin under section 3426.2(a) information that is generally known.

There are more fundamental constitutional concerns as well. Reimposing the injunction would not only flout the statute’s command but would raise serious constitutional questions under the free speech provisions of both the state and federal Constitutions. As the Court of Appeal concluded, Mr. “Bunner’s republication of DeCSS was ‘pure speech’ within the ambit of the First Amendment.” Slip op. at 18. Any permanent injunction against him would be a content-based restriction on speech, even if it did not run afoul of the constitutional prohibition against prior restraints on which the Court of Appeal relied to vacate the preliminary injunction. Content-based regulations of speech are presumptively invalid. R. A. V. v. St. Paul, 505 U.S. 377, 382 (1992). To pass muster under the First Amendment and the liberty of speech clause of the California Constitution, a content-based speech restriction must serve a compelling governmental interest and must be narrowly tailored to advance that interest while infringing on as little speech as possible. Simon & Schuster, Inc. v. Members of N. Y. State Crime Victims Bd., 502 U.S. 105, 118 (1991); Perry Ed. Assn. v. Perry Local Educators’ Assn., 460 U.S. 37, 45 (1983); Los Angeles Alliance for Survival v. City of Los Angeles, 22 Cal.4th 352, 365 (2000) (state Constitution). Clearly, there is no compelling governmental interest in prohibiting the further disclosure of information about CSS already in the public domain, information that DVD CCA’s own licensees are now permitted to disclose.

Nor is that the only constitutional hurdle an injunction of Mr. Bunner would have to surmount. To once again selectively gag Mr. Bunner while leaving all the rest of the world, including DVD CCA’s own licensees, free to speak and publish widely-available information about the CSS algorithms and keys offends both the First Amendment to the federal Constitution and the even “more protective” (Griset v. Fair Political Practices Com., 8 Cal.4th 851, 866, fn. 5 (1994)) liberty of speech clause of California’s Constitution, which guarantees “[e]very person” the right to “freely speak write and publish his or her sentiments on all subjects” (Cal. Const., art. I, § 2, italics added). Selective censorship, permitting some speakers to voice a message while forbidding others to voice the same message, is at the core of what our constitutional free speech provisions forbid: “In the realm of private speech or expression, government regulation may not favor one speaker over another.” Rosenberger v. Rector and Visitors of Univ. of Va., 515 U.S. 819, 828 (1995). Selective censorship is equally repugnant to the state and federal guarantees of equal protection, which “condemn[] such discrimination among different users of the same medium for expression.” Police Dept. of Chicago v. Mosley, 408 U.S. 92, 96 (1972).

Any attempt to create state trade secret rights in publicly available information would also run afoul of the preemptive force of federal patent and copyright law and the Intellectual Property Clause of the federal Constitution (art. I, § 8). “[I]deas once placed before the public without the protection of a valid patent are subject to appropriation without significant restraint. . . . [¶] . . . States may not offer patent-like protection to intellectual creations which would otherwise remain unprotected as a matter of federal law. . . . [C]oncepts within the public grasp, or those so obvious that they readily could be, are the tools of creation available to all.” Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. at 156. “ ‘[A]ll ideas in general circulation [are] dedicated to the common good unless they are protected by a valid patent.” Id. at 159-60.

Nor will granting summary judgment for Mr. Bunner sound the death knell of trade secret law, as DVD CCA will no doubt also argue. Trade secret law continues with full force against those who breach contractual obligations or fiduciary or other legal duties in revealing trade secrets on the Internet or elsewhere. It will continue to apply to those who thieve trade secrets. Even in the instance of DeCSS, DVD CCA may yet have claims against those directly involved in its initial public disclosure. But they do not have a claim for injunctive relief against Andrew Bunner, who merely found the program in the public domain and republished it. They certainly do not have a claim after the program has been freely and continuously available for several years all around the world and effectively the only persons restrained from publishing it are Mr. Bunner and a handful of co-defendants.

IV. CONCLUSION

“Trade secret law provides far weaker protection in many respects than the patent law. While trade secret law does not forbid the discovery of the trade secret by fair and honest means, e. g., independent creation or reverse engineering, patent law operates ‘against the world,’ forbidding any use of the invention for whatever purpose for a significant length of time. The holder of a trade secret also takes a substantial risk that the secret will be passed on to his competitors, by theft or by breach of a confidential relationship, in a manner not easily susceptible of discovery or proof. Where patent law acts as a barrier, trade secret law functions relatively as a sieve.” Kewanee Oil Co. v. Bicron Corp., 416 U.S. at 489-90 (citation and footnote omitted).

DVD CCA and its predecessors had a choice once they had created CSS and decided they were going to permit the public distribution of its algorithms and keys in software DVD players and DVD discs. They could have sought patent protection for CSS, which would have assured them the exclusive right to use it for the term of the patent. Instead, they gambled and chose to attempt to protect it under the much weaker and more fragile law of trade secrecy. In doing so they assumed the risk that through independent invention, reverse engineering, or general public disclosure secrecy would be lost (a risk that was a virtual certainty given their decision to permit distribution of CSS in software form and the weak encryption design of CSS), and assumed as well as the risk that CSS would prove to be so readily discoverable that it would not qualify as a trade secret in the first place. That CSS is now publicly known is due not to a shortcoming in trade secret law but to DVD CCA’s own business decisions.

Now that the CSS algorithms and keys are public knowledge, DVD CCA seeks to place the Court in the impossible position of trying to put the genie back in the bottle. Wisely, California’s Uniform Trade Secrets Act and the federal and state Constitutions bar DVD CCA, for the reasons we have explained above, from imposing that Sisyphean labor upon the Court.

Accordingly, summary judgment should be granted for defendant Andrew Bunner and the action dismissed.

Dated: November 29, 2001

Respectfully submitted,

Endnotes

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