Stanford Law School - Robert Crown Law Library

Filed 8/25/03



IN THE SUPREME COURT OF CALIFORNIA



DVD COPY CONTROL

ASSOCIATION, INC.

Plaintiff and Respondent,

S102588

v.

) Ct.App.

6

H021153

ANDREW BUNNER,

Santa Clara County

Defendant and Appellant.

Super. Ct. No. CV786804





Today we resolve an apparent conflict between California’s trade secret law

(Civ. Code, § 3426 et seq.)1 and the free speech clauses of the United States and

California Constitutions. In this case, a Web site operator posted trade secrets

owned by another on his Internet Web site despite knowing or having reason to

know that the secrets were acquired by improper means. The trial court found that

the operator misappropriated these trade secrets in violation of section 3426.1 and

issued a preliminary injunction pursuant to section 3426.2, subdivision (a),

prohibiting the operator from disclosing these secrets. Accepting as true the trial

court’s findings, we now consider whether this preliminary injunction violates the


1

All further statutory references are to the Civil Code unless otherwise

indicated.

1

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First Amendment of the United States Constitution and article I, section 2,

subdivision (a) of the California Constitution. We conclude it does not.



I.



A.

Digital versatile discs (DVD’s) “are five-inch wide disks capable of storing

more than 4.7 [Gigabytes] of data. In the application relevant here, they are used

to hold full-length motion pictures in digital form. They are the latest technology

for private home viewing of recorded motion pictures and result in drastically

improved audio and visual clarity and quality of motion pictures shown on

televisions or computer screens.” (Universal City Studios, Inc. v. Reimerdes

(S.D.N.Y. 2000) 111 F.Supp.2d 294, 307, fn. omitted (Reimerdes).)

“[T]he improved quality of a movie in a digital format brings with it the

risk that a virtually perfect copy, i.e., one that will not lose perceptible quality in

the copying process, can be readily made at the click of a computer control and

instantly distributed to countless recipients throughout the world over the

Internet.” (Universal City Studios, Inc. v. Corley (2d Cir. 2001) 273 F.3d 429, 436

(Corley).) Recognizing this risk of widespread piracy, the motion picture industry

insisted that a viable protection system be made available to prevent users from

making copies of motion pictures in digital form. Without such protection, it

would not have agreed to release movies on DVD’s.

To provide this protection, two companies, Toshiba and Matsushita Electric

Industrial Co., Ltd., developed the Content Scrambling System (CSS). “CSS is an

encryption scheme that employs an algorithm configured by a set of ‘keys’ to

encrypt a DVD’s contents. The algorithm is a type of mathematical formula for

transforming the contents of the movie file into gibberish; the ‘keys’ are in

actuality strings of 0’s and 1’s that serve as values for the mathematical formula.

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Decryption in the case of CSS requires a set of ‘[master] keys’ contained in

compliant DVD players, as well as an understanding of the CSS encryption

algorithm. Without the [master] keys and the algorithm, a DVD player cannot

access the contents of a DVD. With the [master] keys and the algorithm, a DVD

player can display the movie on a television or a computer screen, but does not

give a viewer the ability to use the copy function of the computer to copy the

movie or to manipulate the digital content of the DVD.” (Corley, supra, 273 F.3d

at pp. 436-437.)

The motion picture, computer, and consumer electronics industries decided

to use the CSS technology to encrypt copyrighted content on DVD’s and agreed

that this content should not be subject to unauthorized (i) copying or (ii)

transmission, including making the content available over the Internet. To this

end, they began licensing the technology in October 1996. Under the terms of the

licensing agreement, licensees had to maintain the confidentiality of proprietary

information embodied in the CSS technology, including the “master keys” and

algorithms. The agreement also contained other terms and conditions designed to

ensure the confidentiality of this proprietary information. These industries later

established the DVD Copy Control Association, Inc. (DVD CCA) as the entity

charged with granting and administering the licenses to the CSS technology.

Despite these efforts to safeguard the CSS technology, Jon Johansen, a

Norwegian resident, acquired the proprietary information embodied in the

technology—including the master keys and algorithms—by reverse engineering

software created by a licensee, Xing Technology Corporation (Xing). Xing’s

software is licensed to users under a license agreement, which specifically

prohibits reverse engineering. Using the proprietary information culled from this

software, Johansen wrote a program called DeCSS that decrypts movies stored on

DVD’s and enables users to copy and distribute these movies. According to DVD

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CCA, DeCSS “embodies, uses, and/or is a substantial derivation of confidential

proprietary information” found in the CSS technology. Johansen posted the

source code2 of DeCSS on an Internet Web site3 in October 1999.

Soon thereafter, DeCSS appeared on other Web sites, including a Web site

maintained by Andrew Bunner. Bunner posted DeCSS on his Web site allegedly

because “it would enable ‘Linux’ users to use and enjoy ‘DVDs’ available for

purchase or rental in video stores” and “make ‘Linux’ more attractive and viable

to consumers.” Bunner also claimed he wanted “to ensure [that] programmers

would have access to the information needed to add new features, fix existing

defects and, in general, improve the ‘[D]eCSS’ program.”

B.

Upon discovering the posting of DeCSS on the Internet, DVD CCA and the

Motion Picture Association (MPA) made extensive efforts to identify those Web


2

“The text of programs written in [computer programming] languages is

referred to as source code. And whether directly or through the medium of
another program, the sets of instructions written in programming languages—the
source code—ultimately are translated into machine ‘readable’ strings of 1’s and
0’s, known in the computer world as object code, which typically are executable
by the computer.” (Reimerdes, supra, 111 F.Supp.2d at p. 306, fns. omitted; for
an explanation of the more technical aspects of computers and computer software,
please read Judge Kaplan’s opinion in Reimerdes, supra, 111 F.Supp.2d 294.)
3

As we explained in Pavlovich v. Superior Court (2002) 29 Cal.4th 262,

265, “ ‘[t]he Internet is an international network of interconnected computers’
which ‘enables[] tens of millions of people to communicate with one another and
to access vast amounts of information from around the world.’ [Citation.] ‘The
best known category of communication over the Internet is the World Wide Web,
which allows users to search for and retrieve information stored in remote
computers, as well as, in some cases, to communicate back to designated sites. In
concrete terms, the Web consists of a vast number of documents stored in different
computers all over the world.’ [Citation.] On the Web, ‘documents commonly
known as Web “pages,” are . . . prevalent.’ [Citation.] These pages are located at
Web sites and have addresses marking their location on the Web. [Citation.]”

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sites disclosing proprietary CSS technology or linking to sites posting this

information. The MPA then sent notices to these Web sites and their Internet

service providers demanding that they remove this information from the sites.

Despite receiving these notices, many of these Web sites—including the site

operated by Bunner—refused to remove the information. DVD CCA then filed

this action against Bunner and numerous other named and unnamed individuals

who had published or linked to Web sites publishing DeCSS (collectively

defendants), alleging trade secret misappropriation.4

In the complaint, DVD CCA did not seek damages. Instead, it only sought

an order “enjoining and restraining [d]efendants . . . from making any further use

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 property

or trade secrets relating to the CSS technology and specifically enjoining

[d]efendants . . . from copying, duplicating, licensing, selling, distributing,

publishing, leasing, renting or otherwise marketing the DeCSS computer program

and all other products containing, using and/or substantially derived from CSS

proprietary property or trade secrets . . . .”

Soon after filing the complaint, DVD CCA filed an ex parte application for

a temporary restraining order (TRO). The trial court denied the request for a TRO

but issued an order to show cause “why the injunction and restraints sought in

[DVD CCA’s] proposed preliminary injunction should not be entered against

defendants . . . .”

Following a hearing and after considering written declarations submitted by

the parties, the trial court issued a preliminary injunction. The injunction enjoined

4

Following the filing of this action, Bunner apparently removed DeCSS

from his Web site.

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the named defendants, including Bunner, from “[p]osting or otherwise disclosing

or distributing, on their [W]eb sites or elsewhere, the DeCSS program, the master

keys or algorithms of the Content Scrambling System . . . , or any other

information derived from this proprietary information.” The court, however,

refused to enjoin the defendants from “linking to other [Web sites] which contain

the protected materials” because “such an order [would be] overbroad and

extremely burdensome.”

In issuing the injunction, the court concluded that DVD CCA was likely to

prevail on the merits and would suffer irreparable harm without injunctive relief.

First, the court concluded that the CSS technology contained protectable trade

secrets because it derived independent economic value from its secrecy and

because DVD CCA made reasonable efforts to maintain its secrecy. Second, the

court found that Johansen had obtained these trade secrets through reverse

engineering in violation of a license agreement and therefore acquired these

secrets by improper means. Third, the court found that the defendants, including

Bunner, knew or should have known that Johansen acquired these trade secrets by

improper means when they posted DeCSS on their Web sites. Fourth, the court

held that the trade secret status of the CSS technology had not been destroyed

because it had been posted on the Internet. Fifth, the court concluded that DVD

CCA would suffer irreparable harm without an injunction. “If the Court does not

immediately enjoin the posting of this proprietary information, [DVD CCA’s]

right to protect this information as secret will surely be lost . . . .” The court then

observed that an injunction would cause minimal harm to the defendants. Finally,

the court acknowledged potential enforcement problems, but held that “a

possibility or even a likelihood that an order may be disobeyed or not enforced in

other jurisdictions is not a reason to deny the relief sought.”

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Only Bunner appealed, and the Court of Appeal reversed. Rather than

review the trial court’s findings in support of injunctive relief, the Court of Appeal

assumed that DVD CCA was likely to prevail on the merits and would suffer

irreparable harm. The court then held that the preliminary injunction, even if

justified under California’s trade secret law, violated the First Amendment.

According to the Court of Appeal, DeCSS was “pure speech,” and the injunction

was an invalid prior restraint on pure speech. In reaching this conclusion, the

court distinguished those cases where courts had enjoined trade secret

misappropriation over a First Amendment defense because “they involved the

actual use of a secret or the breach of a contractual obligation.” The court also

found inapplicable the many cases upholding injunctions in copyright cases

against First Amendment challenges because of the differences between trade

secret and copyright protection. We granted review to decide this important

constitutional question.

II.

California has adopted without significant change the Uniform Trade

Secrets Act (UTSA). (§ 3426 et seq.; see Cadence Design Systems, Inc. v. Avant!

Corp. (2002) 29 Cal.4th 215, 221.) Under California’s version of the UTSA, a

trade secret consists of “information, including a formula, pattern, compilation,

program, device, method, technique, or process, that: [¶] (1) Derives

independent economic value, actual or potential, from not being generally known

to the public or to other persons who can obtain economic value from its

disclosure or use; and [¶] (2) Is the subject of efforts that are reasonable under the

circumstances to maintain its secrecy.” (§ 3426.1, subd. (d).)

Trade secret misappropriation occurs whenever a person: (1) acquires

another’s trade secret with knowledge or reason to know “that the trade secret was

acquired by improper means” (§ 3426.1, subd. (b)(1)); (2) discloses or uses,

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without consent, another’s trade secret that the person “[u]sed improper means to

acquire knowledge of ” (id., subd. (b)(2)(A)); (3) discloses or uses, without

consent, another’s trade secret that the person, “[a]t the time of disclosure or use,

knew or had reason to know that his or her knowledge of the trade secret was”

(a) “[d]erived from or through a person who had utilized improper means to

acquire it” (id., subd. (b)(2)(B)(i)), (b) “[a]cquired under circumstances giving rise

to a duty to maintain its secrecy or limit its use” (id., subd. (b)(2)(B)(ii)), or

(c) “[d]erived from or through a person who owed a duty to the person seeking

relief to maintain its secrecy or limit its use” (id., subd. (b)(2)(B)(iii)); or (4)

discloses or uses, without consent, another’s trade secret that the person, “[b]efore

a material change of his or her position, knew or had reason to know that it was a

trade secret and that knowledge of it had been acquired by accident or mistake”

(id., subd. (b)(2)(C)).

Acquisition of a trade secret by “ ‘[i]mproper means’ includes theft,

bribery, misrepresentation, breach or inducement of a breach of a duty to maintain

secrecy, or espionage through electronic or other means.” (§ 3426.1, subd. (a).)

“Reverse engineering or independent derivation alone,” however, is not

“considered improper means.” (Ibid.)

California’s trade secret law provides a trade secret owner with several

remedies against a misappropriator, including injunctive relief. Indeed, section

3426.2, subdivision (a) expressly states that “[a]ctual or threatened

misappropriation may be enjoined.” Thus, California law clearly contemplates the

use of injunctive relief as a remedy for trade secret misappropriation.

As relevant here, DVD CCA sought and obtained only injunctive relief

against Bunner. On review, the Court of Appeal did not examine the trial court’s

underlying factual findings. Instead, it assumed that these findings justified

“injunctive relief in the absence of any free speech concerns” under California’s

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trade secret law. The appellate court, nonetheless, held that the injunction violated

Bunner’s free speech rights under the First Amendment and reversed.

Because of the unusual procedural posture of this case, we follow the lead

of the Court of Appeal and assume as true the trial court findings in support of the

preliminary injunction. (Cf. Bartnicki v. Vopper (2001) 532 U.S. 514, 524-525

(Bartnicki) [making certain assumptions about the facts “[b]ecause of the

procedural posture of” the case].) Specifically, we accept for purposes of this

appeal that DVD CCA is likely to prevail on its claims that (1) the CSS

technology and its master keys and algorithms are trade secrets; (2) publication of

these trade secrets on the Internet has not destroyed their trade secret status; (3)

publication of DeCSS discloses these trade secrets; (4) the creator of DeCSS

acquired these trade secrets by improper means; and (5) Bunner knew or had

reason to know that DeCSS disclosed trade secrets acquired by improper means.5

We also assume that DVD CCA will suffer irreparable harm without injunctive

relief and that the injunction will cause minimal harm to Bunner. Thus, the

narrow question before us is whether the preliminary injunction violates Bunner’s

right to free speech under the United States and California Constitutions even

though DVD CCA is likely to prevail on its trade secret claim against Bunner.


5

Therefore, we need not decide whether the proprietary CSS technology is

part of the public domain and no longer a protectable trade secret or whether
Johansen acquired the trade secrets by improper means when he reverse
engineered the Xing software in violation of a license agreement. We also decline
to address Bunner’s contention that the preliminary injunction violates the
intellectual property clause of the United States Constitution (U.S. Const., art. I,
§ 8) because DVD CCA’s trade secrets have been publicly disclosed and are no
longer secret. We leave the resolution of these issues for the Court of Appeal on
remand.

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III.

A.

In answering this question, we must first determine whether restrictions on

the dissemination of computer codes in the form of DeCSS are subject to scrutiny

under the First Amendment. We conclude they are.

“ ‘[A]ll ideas having even the slightest redeeming social importance,’

including those concerning ‘the advancement of truth, science, morality, and arts’

have the full protection of the First Amendment.” (Junger v. Daley (2000) 209

F.3d 481, 484 (Junger), quoting Roth v. United States (1957) 354 U.S. 476, 484.)

“Even dry information, devoid of advocacy, political relevance, or artistic

expression, has been accorded First Amendment protection.” (Corley, supra, 273

F.3d at p. 446.) “[F]or example, courts have subjected to First Amendment

scrutiny restrictions on the dissemination of technical scientific information,

[citation] and scientific research, [citation] and attempts to regulate the publication

of instructions [citation].” (Id. at p. 447, fn. omitted.)

As such, “[i]t cannot seriously be argued that any form of computer code

may be regulated without reference to First Amendment doctrine.” (Reimerdes,

supra, 111 F.Supp.2d at p. 326.) “A computer program states or represents a

procedure or algorithm in a programming language. The same algorithm could be

written in a natural language like English or a programming language like C or

LISP, but it remains the same algorithm.” (Tien, Publishing Software as a Speech

Act (2000) 15 Berkeley Tech. L.J. 629, 633, fn. omitted.) Of course, “[n]ot

everyone can understand each of these forms. Only English speakers will

understand English formulations. Principally those familiar with the particular

programming language will understand the source code expression. And only a

relatively small number of skilled programmers and computer scientists will

understand the machine readable object code. But each form expresses the same

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idea, albeit in different ways.” (Reimerdes, at p. 326, fn. omitted.) Moreover, “the

fact that a program has the capacity to direct the functioning of a computer does

not mean that it lacks the additional capacity to convey information . . . .”

(Corley, supra, 273 F.3d at p. 447.) Because computer code “is an expressive

means for the exchange of information and ideas about computer programming”

(Junger, supra, 209 F.3d at p. 485), “we join the other courts that have concluded

that computer code, and computer programs constructed from code can merit First

Amendment protection” (Corley, at p. 449; see also Junger, at p. 485; United

States v. Elcom Ltd. (N.D. Cal. 2002) 203 F.Supp.2d 1111, 1126-1127; Reimerdes,

at p. 327.)

B.

“As computer code . . . is a means of expressing ideas, the First

Amendment must be considered before its dissemination may be prohibited or

regulated. . . . But that conclusion still leaves for determination the level of

scrutiny to be applied in determining the constitutionality of ” an injunction

prohibiting the dissemination of computer code.6 (Reimerdes, supra, 111

F.Supp.2d at p. 327.) In determining the appropriate level of scrutiny, the critical

question is whether the injunction is content neutral or content based. (See

Madsen v. Women’s Health Center (1994) 512 U.S. 753, 762-764 (Madsen); Los

Angeles Alliance for Survival v. Los Angeles (2000) 22 Cal.4th 352, 364-365 (Los

Angeles Alliance).) Content-based injunctions are subject to “the level of

heightened scrutiny set forth in Perry Ed. Assn. [v. Perry Local Educators Assn.

(1983)] 460 U.S. [37,] 45].” (Madsen, at pp. 763-764.) By contrast, content-

neutral injunctions are subject to the lesser level of scrutiny set forth in Madsen,

6

Bunner does not challenge the constitutionality of California’s trade secret

statutes.

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supra, 512 U.S. at page 765. In this case, we conclude that the preliminary

injunction issued by the trial court is content neutral and should be reviewed under

the standard articulated in Madsen. (See Planned Parenthood Shasta-Diablo, Inc.

v. Williams (1995) 10 Cal.4th 1009, 1023-1025 (Planned Parenthood II)

[reviewing a content-neutral injunction under the Madsen test].)

“Our principal inquiry in determining content neutrality is whether the

government has adopted a regulation of speech ‘without reference to the content of

the regulated speech.’ ” (Madsen, supra, 512 U.S. at p. 763, quoting Ward v. Rock

Against Racism (1989) 491 U.S. 781, 791.) “[L]iteral or absolute content

neutrality” is not necessary. (Los Angeles Alliance, supra, 22 Cal.4th at p. 368.)

“The government’s purpose is the controlling consideration,” and a governmental

regulation of speech is only content based if the government adopted the

regulation “because of disagreement with the message it conveys.” (Ward, at

p. 791.) This is true for “speech cases generally . . . .” (Ibid.) Thus, an injunction

“that serves purposes unrelated to the content of expression is deemed neutral,

even if it has an incidental effect on some speakers or messages but not others.”

(Ibid.) However, injunctions “that by their terms distinguish favored speech from

disfavored speech on the basis of the ideas or views expressed are content based.”

(Turner Broadcasting System, Inc. v. FCC (1994) 512 U.S. 622, 643.)

Applying this standard, we conclude that the preliminary injunction at issue

here is content neutral. The underlying basis for the injunction is the trial court’s

holding that Bunner misappropriated DVD CCA’s property—its trade secrets—in

violation of California’s trade secret law. (See Ruckelshaus v. Monsanto Co.

(1984) 467 U.S. 986, 1003-1004 (Monsanto) [holding that trade secrets are a

“property right . . . protected by the Taking Clause of the Fifth Amendment”].) In

issuing the injunction, the court therefore relied on the fact that DVD CCA made

reasonable efforts to keep the information secret (§ 3426.1, subd. (d)(2)), and that

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DVD CCA received a “competitive advantage over others . . . by virtue of its

exclusive access to the” information (Monsanto, at p. 1012). Thus, the injunction

singled out Bunner’s communications because of DVD CCA’s efforts to maintain

the secrecy of the CSS technology and the competitive advantage it enjoyed from

those efforts—and not because of the communications’ subject matter or any

disagreement with Bunner’s message or viewpoint. In other words, the trial court

issued the injunction to protect DVD CCA’s statutorily created property interest in

information—and not to suppress the content of Bunner’s communications.

Because the injunction is justified without reference to the content of Bunner’s

communications, it is content neutral. (See Bartnicki, supra, 532 U.S. at p. 526

[finding a statute that singled out communications “by virtue of the fact that they

were illegally intercepted . . . rather than the subject matter” is content neutral].)

Indeed, the governmental purpose behind protecting trade secrets like the

CSS technology through injunctive relief is wholly unrelated to their content.

“Trade secret law promotes the sharing of knowledge, and the efficient operation

of industry; it permits the individual inventor to reap the rewards of his labor by

contracting with a company large enough to develop and exploit it.” (Kewanee

Oil Co. v. Bicron Corp. (1974) 416 U.S. 470, 493 (Kewanee).) The law also

maintains important standards of commercial ethics. (Id. at p. 481.) Assuming, as

we do, that the trial court properly applied California’s trade secret law, the

preliminary injunction necessarily serves the broader governmental purpose

behind the law. Because the injunction does not purport to restrict DVD CCA’s

trade secrets based on their expressive content, the injunction’s restrictions on

Bunner’s speech “properly are characterized as incidental to the primary” purpose

of California’s trade secret law—which is to promote and reward innovation and

technological development and maintain commercial ethics. (San Francisco Arts

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& Athletics, Inc. v. United States Olympic Com. (1987) 483 U.S. 522, 536

(SFA&A).)

The fact that the preliminary injunction identifies the prohibited speech by

its content does not make it content based. “An injunction, by its very nature,

applies only to a particular group (or individuals) and regulates the activities, and

perhaps the speech, of that group. It does so, however, because of the group’s past

actions in the context of a specific dispute between real parties. The parties

seeking the injunction assert a violation of their rights; the court hearing the action

is charged with fashioning a remedy for a specific deprivation, not with the

drafting of a statute addressed to the general public.” (Madsen, supra, 512 U.S. at

p. 762.) In this case, the specific deprivation to be remedied is the

misappropriation of a property interest in information. (See § 3426.1, subd. (d)

[“ ‘Trade secret’ means information”]; Beckerman-Rodau, Prior Restraints and

Intellectual Property: The Clash Between Intellectual Property and the First

Amendment from an Economic Perspective (2001) 12 Fordham Intell. Prop. Media

& Ent. L.J. 1, 60 (Prior Restraints and Intellectual Property) [“Like other types of

intellectual property, a trade secret is information or knowledge that is

commercially valuable” (fn. omitted)].) Thus, any injunction remedying this

deprivation must refer to the content of that information in order to identify the

property interest to be protected. Such an injunction remains content neutral so

long as it serves significant governmental purposes unrelated to the content of the

proprietary information. (See SFA&A, supra, 483 U.S. at pp. 536-537 [finding

that an injunction that specifically prohibits the defendant’s use of the word

“Olympic” is content neutral because its restrictions serve “the primary

congressional purpose of encouraging and rewarding the [United States Olympic

Committee’s] activities”].) Because the preliminary injunction at issue here does

not “involve government censorship of subject matter or governmental favoritism

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among different viewpoints,” it is content neutral and not subject to strict scrutiny.

(Los Angeles Alliance, supra, 22 Cal.4th at p. 377.)

Bartnicki, supra, 532 U.S. 514, does not mandate a different conclusion.

Bartnicki addressed the constitutionality of several statutes, including title 18

United States Code section 2511(1)(c)—which punished the disclosure of illegally

intercepted communications. (Bartnicki, at p. 520, fn. 3.) Although the majority

observed that a “naked prohibition [like title 18 United States Code section

2511(1)(c)] against disclosures is fairly characterized as a regulation of pure

speech” (Bartnicki, at p. 526), it did not conclude that such a prohibition should be

subject to strict scrutiny. Indeed, the Bartnicki majority never expressly identified

the level of scrutiny it applied. (Smolla, Information as Contraband: The First

Amendment and Liability for Trafficking in Speech (2002) 96 Nw. U. L.Rev. 1099,

1118 (Information as Contraband) [“Astonishingly, at no point in Justice Steven’s

opinion does the Court come right out and say what standard of review or

doctrinal test it is applying to the laws before it”].) In any event, five justices in

Bartnicki endorsed the application of a lesser standard even though the statute

arguably prohibited “pure speech.” (See Bartnicki, supra, 532 U.S. 514, 536

(conc. opn. of Breyer, J.) [joined by O’Connor, J.]; id. at p. 544 (dis. opn. of

Rehnquist, C.J.) [joined by Scalia, J. and Thomas, J.].) Accordingly, we do the

same.

C.

Under the Madsen test, “when evaluating a content-neutral injunction . . .

[w]e must ask . . . whether the challenged provisions of the injunction burden no

more speech than necessary to serve a significant government interest.” (Madsen,

supra, 512 U.S. at p. 765.) This test requires “a balance between the

governmental interest and the magnitude of the speech restriction.” (SFA&A,

supra, 483 U.S. at p. 537, fn. 16.) As explained below, we conclude that the

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preliminary injunction issued by the trial court achieves the requisite balance and

burdens “no more speech than necessary to serve” the government interests at

stake here. (Madsen, at p. 765.)

As a threshold matter, a preliminary injunction properly issued under

California’s trade secret law undoubtedly serves significant government interests.

“Trade secrets . . . offer no protection against independent invention.” (Epstein,

Privacy, Publication, and the First Amendment: The Dangers of First Amendment

Exceptionalism (2000) 52 Stanford L.Rev. 1003, 1036 (Privacy, Publication, and

the First Amendment).) Rather, “[t]he basic logic of the common law of trade

secrets recognizes that private parties invest extensive sums of money in certain

information that loses its value when published to the world at large.” (Id. at

p. 1035.) Based on this logic, trade secret law creates a property right “defined by

the extent to which the owner of the secret protects his interest from disclosure to

others.” (Monsanto, supra, 467 U.S. at p. 1002.) In doing so, it allows the trade

secret owner to reap the fruits of its labor (see Kewanee, supra, 416 U.S. at p. 493)

and protects the owner’s “moral entitlement to” these fruits (Information as

Contraband, supra, 96 Nw. U. L.Rev. at p. 1164). As such, “trade secrets have

been recognized as a constitutionally protected intangible property interest.” (ITT

Telecom Products Corp. v. Dooley (1989) 214 Cal.App.3d 307, 318.)

By creating a limited property right in information, trade secret law “acts as

an incentive for investment in innovation.” (Prior Restraints and Intellectual

Property, supra, 12 Fordham Intell. Prop. Media & Ent. L.J. at p. 60.) “Trade

secret law encourages the development and exploitation of those items of lesser or

different invention than might be accorded protection under the patent laws, but

which items still have an important part to play in the technological and scientific

advancement of the Nation.” (Kewanee, supra, 416 U.S. at p. 493.) Like patent

and copyright law, trade secret law “prompt[s] the independent innovator to

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proceed with the discovery and exploitation of his invention.” (Id. at p. 485.) And

without trade secret protection, “organized scientific and technological research

could become fragmented, and society, as a whole, would suffer.” (Id. at p. 486.)

Trade secret law also helps maintain “standards of commercial ethics . . . .”

(Kewanee, supra, 416 U.S. at p. 481.) “The word ‘property’ as applied to

. . . trade secrets is an unanalyzed expression of certain secondary consequences

of the primary fact that the law makes some rudimentary requirements of good

faith.” (E.I. Du Pont de Nemours Powder Co. v. Masland (1917) 244 U.S. 100,

102.) By sanctioning the acquisition, use, and disclosure of another’s valuable,

proprietary information by improper means, trade secret law minimizes “the

inevitable cost to the basic decency of society when one . . . steals from another.”

(Kewanee, at p. 487.) In doing so, it recognizes that “ ‘good faith and honest, fair

dealing, is the very life and spirit of the commercial world.’ ” (Id. at pp. 481-482,

quoting National Tube Co. v. Eastern Tube Co. (1902) 3 Ohio C.C. (n.s.) 459,

462.)

Assuming, as we do, that the trial court properly granted injunctive relief

under California’s trade secret law, its preliminary injunction burdens no more

speech than necessary to serve these significant government interests. First,

prohibiting the disclosure of trade secrets acquired by improper means is the only

way to preserve the property interest created by trade secret law and its

concomitant ability to encourage invention. “Trade secrets are a peculiar kind of

property. Their only value consists in their being kept private.” (In re Iowa

Freedom of Information Council (8th Cir. 1983) 724 F.2d 658, 662.) Thus, “the

right to exclude others is central to the very definition of the property interest.

Once the data that constitute a trade secret are disclosed to others, or others are

allowed to use those data, the holder of the trade secret has lost his property

interest in the data.” (Monsanto, supra, 467 U.S. at p. 1011, fn. omitted.)

17

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The First Amendment does not prohibit courts from incidentally enjoining

speech in order to protect a legitimate property right. (See SFA&A, supra, 483

U.S. at pp. 526, 537-540 [holding that a statutory injunction prohibiting

promotional uses of the word “Olympic” without a showing of a likelihood of

confusion does not violate the First Amendment].) And “[t]he mere fact that”

Bunner “claims an expressive . . . purpose does not give [him] a First Amendment

right to ‘appropriat[e] to [himself] the harvest of those who have sown.’ ” (Id. at

p. 541, quoting International News Service v. Associated Press (1918) 248 U.S.

215, 239-240.) Indeed, the protection of trade secrets and the benefits to research

and development derived from the government’s recognition of this property right

depend on the judiciary’s power to enjoin disclosures by those who know or have

reason to know of their misappropriation. Bunner proffers, and we can think of,

no less restrictive way of protecting an owner’s constitutionally recognized

property interest in its trade secrets. Thus, the preliminary injunction burdens no

more speech than necessary to serve the government’s interest in encouraging

innovation and development.

Second, prohibiting Bunner—who knew or had reason to know that the

trade secrets were acquired by improper means—from disclosing those secrets

upholds the standard of commercial ethics maintained by trade secret law. The

duty to respect trade secrets imposed “on any person who acquires the secret with

knowledge that his transferor had improperly acquired it” is derived from “the

rules governing the receipt of stolen or misappropriated land or chattels.”

(Privacy, Publication, and the First Amendment, supra, 52 Stan. L.Rev. at

p. 1039.) Under these rules, a purchaser of stolen property with actual or

constructive notice of the true owner’s interests in that property cannot prevail

against that owner. (See, e.g., Oakland Village Group v. Fong (1996) 43

Cal.App.4th 539, 549 [holding that the defendant, who received funds with

18

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constructive knowledge of their conversion, could not prevail against the true

owner of the funds]; Hollywood Nat. Bank v. International Business Machines

Corp. (1974) 38 Cal.App.3d 607, 614-615 [holding that the plaintiff was not a

bona fide purchaser of a stock certificate because it had reason to know that the

transaction “reeked of chicanery”].) As we explained long ago, these rules

recognize that “[o]ne who acquires the property from the fraudulent vendee under

such circumstances that he cannot be held to be a purchaser in good faith and for a

valuable consideration is in no better position than the fraudulent vendee, and the

defrauded party has the same remedies against him that he had against such

fraudulent vendee.” (Wendling Lumber Co. v. Glenwood Lumber Co. (1908) 153

Cal. 411, 414 (Wendling Lumber).)

By prohibiting Bunner from exploiting and destroying DVD CCA’s trade

secrets because of his actual or constructive knowledge of its illegal acquisition,

the preliminary injunction merely applies this venerable standard of commercial

ethics to a constitutionally recognized property interest in information. Because a

person who knowingly exploits the illegal acquisition of property owned by

another should be in “no better position than” the illegal acquirer himself

(Wendling Lumber, supra, 153 Cal. at p. 414), the injunction burdens no more

speech than necessary to serve the government’s important interest in maintaining

commercial ethics.

Nonetheless, Bunner contends the preliminary injunction does not satisfy

the Madsen test because it enjoins disclosures by those with no connection to

DVD CCA or those people who acquired its trade secrets by improper means.

According to Bunner, the United States Supreme Court in Bartnicki established

that limitations on the disclosure of information by those who merely know or

have reason to know that the information was obtained unlawfully violate the First

Amendment. But Bartnicki is distinguishable.

19

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In Bartnicki, an unidentified person illegally intercepted and recorded a cell

phone conversation between a union negotiator and the union president (the

plaintiffs) discussing the status of collective bargaining negotiations that had

received “ ‘a lot of media attention.’ ” (Bartnicki, supra, 532 U.S. at p. 518.) The

defendants, who received a tape of the intercepted conversation from an

anonymous source, broadcasted and published a portion of the conversation. The

plaintiffs sued the defendants pursuant to statutes penalizing the disclosure of

illegally intercepted communications by persons “ ‘knowing or having reason to

know’ ” that the interception was unlawful. (Id. at p. 521, fn. 3.) The United

States Supreme Court held that the application of these statutes to the defendants

violated the First Amendment. (Id. at p. 535.) Despite recognizing the

government’s strong interest in preserving the privacy of communications, the

court concluded that “[t]he enforcement of [the statutes at issue] . . . implicates the

core purposes of the First Amendment because it imposes sanctions on the

publication of truthful information of public concern.” (Id. at p. 533, italics

added.) Thus, the “privacy concerns give way when balanced against the interest

in publishing matters of public importance.” (Id. at p. 534.)

The United States Supreme Court, however, expressly declined to extend

Bartnicki to “disclosures of trade secrets or domestic gossip or other information

of purely private concern.” (Bartnicki, supra, 532 U.S. at p. 533, italics added.)

In doing so, the court recognized that the First Amendment interests served by the

disclosure of purely private information like trade secrets are not as significant as

the interests served by the disclosure of information concerning a matter of public

importance. (See Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc. (1985) 472

U.S. 749, 759 (plur. opn. of Powell, J.) (Dun & Bradstreet) [“speech on matters of

purely private concern is of less First Amendment concern” than “ ‘speech on

public issues’ ”].) “The suppression of the publication of stolen information does

20

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nothing to hamper the critic from denouncing any firm that chooses to preserve its

trade secrets, or to chide any government agency for its lackluster enforcement of

the general law. It is something of a mystery as to how free and open debate is

frustrated by offering property protection to trade secrets.” (Privacy, Publication,

and the First Amendment, supra, 52 Stan. L.Rev. at p. 1043.) Thus, Bartnicki

implicitly acknowledges that a balancing of First Amendment interests against

government interests in the trade secret context may yield a different result.

In this case, the content of the trade secrets neither involves a matter of

public concern nor implicates the core purpose of the First Amendment. “Whether

. . . speech addresses a matter of public concern must be determined by the

content, form, and context of a given statement, as revealed by the whole record.”

(Connick v. Myers (1983) 461 U.S. 138, 147-148, fn. omitted.) DVD CCA’s trade

secrets in the CSS technology are not publicly available and convey only technical

information about the method used by specific private entities to protect their

intellectual property. Bunner posted these secrets in the form of DeCSS on the

Internet so Linux users could enjoy and use DVD’s and so others could improve

the functional capabilities of DeCSS. He did not post them to comment on any

public issue or to participate in any public debate. Indeed, only computer

encryption enthusiasts are likely to have an interest in the expressive content—

rather than the uses—of DVD CCA’s trade secrets. (See Tien, Publishing

Software as a Speech Act, supra, 15 Berkeley Tech. L.J. at pp. 662-663

[“Programming languages provide the best means for communicating highly

technical ideas—such as mathematical concepts—within the community of

computer scientists and programmers”].) Thus, these trade secrets, as disclosed by

Bunner, address matters of purely private concern and not matters of public

importance. (See Connick, at p. 148 [information that, “if released to the public,

would convey no information at all other than the fact that a single employee is

21

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upset with the status quo” does not involve a matter of public concern]; Dun &

Bradstreet, supra, 472 U.S. at p. 762 [“speech solely in the individual interest of

the speaker and its specific . . . audience” does not involve a matter of public

concern].)

The mere fact that DVD CCA’s trade secrets may have some link to a

public issue does not create a legitimate public interest in their disclosure. (Cf.

Board of Trustees of the State University of New York v. Fox (1989) 492 U.S. 469,

475 [speech merely linking “ ‘ “a product to a current public debate” is not thereby

entitled to the constitutional protection afforded noncommercial speech’ ”].)

Disclosure of this highly technical information adds nothing to the public debate

over the use of encryption software or the DVD industry’s efforts to limit

unauthorized copying of movies on DVD’s. And the injunction does not hamper

Bunner’s ability to “discuss and debate” these issues as he has “in the past in both

an educational, scientific, philosophical and political context.” Bunner does not

explain, and we do not see, how any speech addressing a matter of public concern

is inextricably intertwined with and somehow necessitates disclosure of DVD

CCA’s trade secrets. (Cf. id. at p. 474 [where nothing requires a speaker to

combine his noncommercial message with a commercial message, his commercial

speech is not inextricably intertwined with his noncommercial speech and is not

entitled to the full protection of the First Amendment].) The expressive content of

these trade secrets therefore does not substantially relate to a legitimate matter of

public concern. (Cf. Shulman v. Group W Productions, Inc. (1998) 18 Cal.4th

200, 223-224 [the publication of private information is only newsworthy if there is

a logical nexus between the information and a matter of legitimate public

interest].) As such, the First Amendment interests served by the disclosure of

DVD CCA’s trade secrets are less significant than the First Amendment interests

served by the disclosures at issue in Bartnicki. (See Dun & Bradstreet, supra, 472

22

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U.S. at p. 759 [speech addressing a purely private matter has less significance

under the First Amendment than speech addressing a matter of public concern].)

The First Amendment must therefore give way to the significant government

interests served by the preliminary injunction in this particular case.7

Finally, the preliminary injunction does not burden more speech than

necessary by prohibiting the disclosure of “information derived from” “the DeCSS

program, the master keys or algorithms of the [CSS].” Because we assume for

purposes of this appeal that the injunction is justified under California’s trade

secret law, we also assume that this provision of the injunction is necessary to

protect DVD CCA’s property interest in the misappropriated trade secrets.8


7

For the same reason, those cases where the United States Supreme Court

found unconstitutional statutes or injunctions prohibiting or penalizing the
disclosure of confidential information lawfully obtained and substantially related
to a matter of public significance are inapposite. (See The Florida Star v. B.J.F.
(1989) 491 U.S. 524 [holding that a statute making it unlawful to disclose the
name of a victim of a sexual offense obtained lawfully from the government itself
violated the First Amendment]; Smith v. Daily Mail Publishing Co. (1979) 443
U.S. 97 [holding that a criminal statute punishing a newspaper for publishing the
name of a juvenile offender lawfully obtained violated the First Amendment];
Landmark Communications, Inc. v. Virginia (1978) 435 U.S. 829 [holding that a
criminal statute punishing the dissemination of information about a proceeding
before a state judicial review commission lawfully obtained from the government
violated the First Amendment]; Oklahoma Publishing Co. v. District Court (1977)
430 U.S. 308 [holding that an injunction barring the news media from publishing
the name or picture of a juvenile offender obtained lawfully violated the First
Amendment]; Cox Broadcasting Corp. v. Cohn (1975) 420 U.S. 469 [holding that
a criminal statute punishing the publication or broadcast of the name or identity of
a rape victim obtained lawfully violated the First Amendment].) Indeed, the
United States Supreme Court has acknowledged that these cases may not apply
where, as here, the “sensitive information rests in private hands” (The Florida
Star, at p. 534) or the information was obtained unlawfully (id. at p. 535, fn. 8).
8

On remand, the Court of Appeal should determine whether the preliminary

injunction, including this portion, is justified under California’s trade secret law.

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Therefore, this portion of the injunction burdens no more speech than necessary to

serve the significant government interests at issue here. (See ante, at pp. 16-19.)

The preliminary injunction issued by the trial court therefore burdens no

more speech than necessary to serve the significant government interests promoted

by California’s trade secret law. Accordingly, it satisfies the Madsen test

D.

Although the preliminary injunction issued by the trial court survives the

Madsen test, we must still determine whether the prior restraint doctrine bars it.

Because the injunction is content neutral and was issued because of Bunner’s prior

unlawful conduct, we conclude it is not a prior restraint and therefore does not

violate the First Amendment.

“[P]rior restraints on speech and publication are the most serious and the

least tolerable infringement on First Amendment rights.” (Nebraska Press Assn. v.

Stuart (1976) 427 U.S. 539, 559.) “The term prior restraint is used ‘to describe

administrative and judicial orders forbidding certain communications when issued

in advance of the time that such communications are to occur.’ [Citation.]

Temporary restraining orders and permanent injunctions—i.e., court orders that

actually forbid speech activities—are classic examples of prior restraints.”

(Alexander v. United States (1993) 509 U.S. 544, 550.) Nonetheless, the United

States Supreme Court “has never held that all injunctions are impermissible.”

(Pittsburgh Press Co. v. Pittsburgh Comm’n on Human Relations (1973) 413 U.S.

376, 390.) “The special vice of a prior restraint is that communication will be

suppressed, either directly or by inducing excessive caution in the speaker, before

an adequate determination that it is unprotected by the First Amendment.” (Ibid.)

Thus, “[n]ot all injunctions that may incidentally affect expression . . . are ‘prior

restraints’ . . . .” (Madsen, supra, 512 U.S. at p. 763, fn. 2.)

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Despite these pronouncements, the United States Supreme Court has

“neither defined prior restraint, nor explained precisely why injunctions fit within

a definition of prior restraint.” (Meyerson, Rewriting Near v. Minnesota:

Creating a Complete Definition of Prior Restraint (2001) 52 Mercer L.Rev. 1087,

1087.) Nonetheless, the court has provided some guiding principles. For

example, the court has recently held that only content-based injunctions are subject

to prior restraint analysis. (See Thomas v. Chicago Park District (2002) 534 U.S.

316, 321-322 [holding that a licensing scheme did not need to “contain certain

procedural safeguards in order to avoid constituting an invalid prior restraint”

because the scheme was “not subject-matter censorship but content-neutral time,

place, and manner regulation of the use of a public forum”]; see also Avis Rent A

Car System, Inc. v. Aguilar (2000) 529 U.S. 1138, ___ [120 S.Ct. 2029, 2032, fn.

2] (dis. opn. of Thomas, J. to den. of pet. for cert.) [noting that “a content-neutral

injunction is not treated as a prior restraint”].) Based on our review of high court

decisions, we have also observed that “[a] prior restraint is a content-based

restriction on speech prior to its occurrence.” (Planned Parenthood Shasta-

Diablo, Inc. v. Williams (1994) 7 Cal.4th 860, 871, italics added (Planned

Parenthood I).) Consistent with these guiding principles, the United States

Supreme Court has declined to apply prior restraint analysis to a permanent

injunction (Madsen, supra, 512 U.S. at p. 763, fn. 2) and a preliminary injunction

(Schenck v. Pro-Choice Network of Western New York (1997) 519 U.S. 357, 374,

fn. 6 (Schenck) ) “issued not because of the content of petitioners’ expression . . .

but because of their prior unlawful conduct” (Madsen, at p. 763, fn. 2; see also

Schenck, at p. 374, fn. 6).

Applying these principles, we find that the preliminary injunction at issue

here is not a prior restraint. The injunction is content neutral (see ante, at pp. 11-

15), and the trial court found that Bunner had previously disclosed DVD CCA’s

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trade secrets in violation of California law. The court therefore issued the content-

neutral injunction because of Bunner’s “prior unlawful conduct.” (Madsen, supra,

512 U.S. at p. 763, fn. 2.) Although the court made its finding of prior unlawful

conduct in the context of a preliminary injunction and found only that DVD CCA

was likely to succeed on the merits, this finding is sufficient to render inapplicable

the heavy presumption against prior restraints. (See Schenck, supra, 519 U.S. at

p. 374, fn. 6 [refusing to apply prior restraint analysis to a preliminary injunction

because the injunction was content neutral and directed at prior unlawful

conduct].) Thus, “[t]his is not a case of government censorship, but a private

plaintiff’s attempt to protect its property rights.” (Dallas Cowboys Cheerleaders,

Inc. v. Pussycat Cinema, LTD. (2d Cir. 1979) 604 F.2d 200, 206.) Accordingly,

prior restraint doctrine does not bar the injunction.

CBS Inc. v. Davis (1994) 510 U.S. 1315 is inapposite. In CBS, a federal

district court issued an injunction “prohibiting CBS from airing videotape footage

taken at the factory of Federal Beef Processors, Inc.” (Federal) (id. at p. 1325),

because the tape disclosed Federal’s “ ‘confidential and proprietary practices and

processes . . . .’ ” (Id. at p. 1316.) Concluding that the injunction was an

unconstitutional prior restraint, Justice Blackmun stayed its enforcement. (Id. at

pp. 1317-1318.) As a single justice order, CBS is arguably not binding on this

court. In any event, it is distinguishable. Justice Blackmun, in finding a prior

restraint, relied on the lack of clear evidence establishing that CBS had acquired

Federal’s proprietary information by improper means. (Id. at p. 1318.) In

contrast, we assume for purposes of this appeal that Bunner knew or had reason to

know that DVD CCA’s trade secrets were acquired by improper means.

Moreover, unlike the trade secrets at issue here (see ante, at pp. 21-23), the

videotape footage at issue in CBS appeared to address a matter of public

concern—“unsanitary practices in the meat industry” (CBS, at p. 1315).

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Likewise, the out-of-state cases cited by Bunner are not persuasive. In

Bridge C.A.T. Scan Associates v. Technicare Corp. (2d Cir. 1983) 710 F.2d 940,

the Second Circuit Court of Appeals invalidated an injunction prohibiting the

plaintiff from disclosing trade secrets contained in an exhibit to its complaint. In

finding that the injunction was an invalid prior restraint, the court concluded that

there was no evidence the plaintiff had acquired the defendant’s trade secrets by

improper means or that the secrets were not publicly available. (Id. at pp. 946-

947.) In this decision, however, we assume that Bunner misappropriated

protectable trade secrets.

Oregon ex rel. Sports Mgmt. News v. Nachtigal (Or. 1996) 921 P.2d 1304 is

inapposite for similar reasons. In Nachtigal, the Oregon Supreme Court found that

a statute requiring court approval before a person involved in litigation may

disclose a trade secret constituted an invalid prior restraint. (Id. at pp. 90-91.) The

statute required court approval “even when there is no allegation that the third-

party publisher has violated the criminal or civil law to possess the information.”

(Id. at p. 83.) By contrast, DVD CCA alleged and established that Bunner

misappropriated its trade secrets in violation of California law. Moreover,

Nachtigal expressly distinguished the statute at issue from another Oregon statute

authorizing injunctive relief for the misappropriation of trade secrets (id. at p. 90),

and noted that its holding did not render the injunctive relief provision

unconstitutional (id. at p. 91, fn. 10). In any event, to the extent Nachtigal’s

literalistic analysis of content neutrality conflicts with our decision here, we have

impliedly rejected it (see Los Angeles Alliance, supra, 22 Cal.4th at pp. 367-368),

and therefore do not find it persuasive.

Proctor & Gamble Co. v. Bankers Trust Co. (6th Cir. 1996) 78 F.3d 219 is

also distinguishable. In Proctor & Gamble, the Sixth Circuit Court of Appeals

held that an order prohibiting Business Week from using Proctor & Gamble’s

27

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confidential and proprietary information in an article constituted an invalid prior

restraint. The court reached this conclusion in part because the district court never

determined whether the information used in the article was even proprietary—

must less a trade secret—before issuing the order. (See id. at p. 225 [finding that

“the District Court fail[ed] to conduct any First Amendment inquiry before

granting the two TROs”]; see also id. at p. 222 [noting that “[t]he parties and not

the court . . . determine[d] whether the particular documents” were proprietary].)

By contrast, the trial court in this case issued the preliminary injunction after

finding that Bunner likely misappropriated DVD CCA’s trade secrets in violation

of California law. Moreover, unlike Bunner, Business Week had not disclosed

any proprietary information prior to the issuance of the order. (Id. at p. 222.) In

any event, Proctor & Gamble is less than helpful because the Sixth Circuit Court

of Appeals apparently assumed the order was a prior restraint and offered no

analysis to support its assumption. For this reason, we also decline to adopt the

reasoning of Ford Motor Co. v. Lane (E.D. Mich. 1999) 67 F.Supp.2d 745.

Accordingly, the preliminary injunction is not an invalid prior restraint under the

First Amendment.

IV.

We now turn to Bunner’s final contention—that the preliminary injunction

violates the free speech provision found in article I, section 2, subdivision (a) of

the California Constitution. “[T]he California Constitution is independent and . . .

federal decisions interpreting the First Amendment are not controlling.” (Los

Angeles Alliance, supra, 22 Cal.4th at p. 367.) Nonetheless, “[i]n some areas we

have found that the protection afforded by the California liberty of speech clause

is coterminous with that provided by the federal Constitution.” (Id. at p. 367, fn.

12.) For example, we have regularly applied the Madsen test when determining

the constitutionality of a content-neutral injunction. (See, e.g., Gallo v. Acuna

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(1997) 14 Cal.4th 1090, 1199-1122; Planned Parenthood II, supra, 10 Cal.4th at

pp. 1019-1025.) Likewise, we have refused to apply prior restraint analysis to

content-neutral injunctions directed at prior unlawful conduct. (See Planned

Parenthood I, supra, 7 Cal.4th at p. 871.) Bunner cites, and we have found,

nothing to suggest that our analysis of the constitutionality of the injunction under

California’s free speech clause would yield a different result from our analysis

under the First Amendment in this context. Accordingly, we conclude that the

preliminary injunction does not violate the California Constitution.

V.

Our decision today is quite limited. We merely hold that the preliminary

injunction does not violate the free speech clauses of the United States and

California Constitutions, assuming the trial court properly issued the injunction

under California’s trade secret law. On remand, the Court of Appeal should

determine the validity of this assumption. Because there appears to be some

confusion over the proper standard of review, we offer guidance below.

In upholding the preliminary injunction against Bunner’s First Amendment

challenges, we rely on the assumption that DVD CCA is likely to prevail on the

merits of its trade secret claim against Bunner. As such, “any factual findings

subsumed” in the trade secret misappropriation determination “are subject to

constitutional fact review.” (Rankin v. McPherson (1987) 483 U.S. 378, 385, fn.

8.) “[W]here a Federal right has been denied as the result of a [factual] finding . . .

or where a conclusion of law as to a Federal right and a finding of fact are so

intermingled as to make it necessary, in order to pass upon the Federal question, to

analyze the facts,” the reviewing court must independently review these findings.

(Fiske v. State of Kansas (1927) 274 U.S. 380, 385-386.) “[F]acts that are

germane to” the First Amendment analysis “must be sorted out and reviewed de

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novo, independently of any previous determinations by the trier of fact.” (McCoy

v. Hearst Corp. (1986) 42 Cal.3d 835, 842.) And “the reviewing court must

‘ “examine for [itself] the statements in issue and the circumstances under which

they were made to see . . . whether they are of a character which the principles of

the First Amendment . . . protect.” ’ ” (Harte-Hanks Communications, Inc. v.

Connaughton (1989) 491 U.S. 657, 688, quoting New York Times Co. v. Sullivan

(1964) 376 U.S. 254, 285.)

On remand, the Court of Appeal must therefore “make an independent

examination of the entire record” (Bose Corp. v. Consumers Union of U.S., Inc.

(1984) 466 U.S. 485, 499), and determine whether the evidence in the record

supports the factual findings necessary to establish that the preliminary injunction

was warranted under California’s trade secret law (see Lindsay v. City of San

Antonio (5th Cir. 1987) 821 F.2d 1103, 1107-1108 [noting that appellate courts

must independently review factual findings relevant to the resolution of any First

Amendment issues]). If, after this examination, the court finds the injunction

improper under California’s trade secret law, then it should find that the trial court

abused its discretion. (See ibid. [holding that, in determining whether the

“issuance of a preliminary injunction constitutes an abuse of ” discretion under the

First Amendment, the reviewing court must independently review the factual

findings subsumed in the constitutional determination]; see also Gallo v. Acuna,

supra, 14 Cal.4th at p. 1109 [holding that preliminary injunctions are reviewed

“under an abuse of discretion standard”].) Otherwise, it should uphold the

injunction.

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DISPOSITION

We reverse the judgment of the Court of Appeal and remand for further

proceedings consistent with this opinion.

BROWN, J.

WE CONCUR:

GEORGE,

C.J.

BAXTER,

J.

RIVERA,

J.∗

ROBIE,

J.∗∗










∗

Associate Justice of the Court of Appeal, First Appellate District, Division

Four, assigned by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

∗∗

Associate Justice of the Court of Appeal, Third Appellate District, assigned

by the Chief Justice pursuant to article VI, section 6 of the California Constitution.

31

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CONCURRING OPINION BY WERDEGAR, J.




I write separately because I agree partly with the majority and partly with

Justice Moreno.

I agree with the majority’s conclusion that the First Amendment to the

United States Constitution does not necessarily preclude injunctive relief in trade

secret cases. I find in Justice Moreno’s concurring opinion, however, a more

satisfying reconciliation of that conclusion with the constitutional rules governing

prior restraints and content-based restrictions of speech.

The court agrees that a reviewing court in First Amendment cases must

examine the entire record independently to ensure that the factual predicates for

injunctive relief truly exist. Justice Moreno would have us conduct that

examination ourselves. Certainly we have the power to do so. In my view,

however, considerations of judicial economy justify the majority’s decision to

leave this factually intensive task to the Court of Appeal. (See Cal. Const., art. VI,

§ 12, subd. (c); Cal. Rules of Court, rule 29(b)(3).)

WERDEGAR, J.

1

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CONCURRING OPINION BY MORENO, J.




I concur in the majority’s narrow holding, which, as I understand it, is that

the First Amendment does not categorically prohibit preliminary injunctions to

enjoin the publication of trade secrets. I further agree that the First Amendment

requires independent appellate review of such preliminary injunctions, rather than

the deferential review usually accorded such injunctions. I write separately for

two reasons. First, I believe there is a need to clarify how the prior restraint

doctrine under the First Amendment applies to the publication of alleged trade

secrets. Second, I would forgo further proceedings in the Court of Appeal and

simply affirm that court’s judgment. In my view, the DVD Copy Control

Association’s (DVD CCA) trade secret claim against Bunner is patently without

merit for the reasons explained below.

I.

I agree with the majority that computer code is a form of speech under the

First Amendment. “Because computer code ‘is an expressive means for the

exchange of information and ideas about computer programming’ [citation], ‘we

join the other courts that have concluded that computer code, and computer

programs constructed from code can merit First Amendment protection.’ ” (Maj.

opn., ante, at p. 11.)

I also agree with the majority that the doctrine of prior restraint is not a

model of clarity, and that the definitions of and justifications for the doctrine do

1

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not constitute a coherent doctrinal unity. (See Tribe, American Constitutional

Law (2d ed. 1988) pp. 1039-1042 [noting that the “prior” in prior restraint can

mean both prior to publication and prior to the full adjudication of the merits].)

But the majority correctly identifies one of the meanings of and reasons for the

prohibition against prior restraint, quoting Pittsburgh Press Co. v. The Pittsburgh

Commission on Human Relations (1973) 413 U.S. 376, 390 (Pittsburgh Press

Co.): “ ‘The special vice of a prior restraint is that communication will be

suppressed, either directly or by inducing excessive caution in the speaker, before

an adequate determination that it is unprotected by the First Amendment.’ ” (Maj.

opn., ante, at p. 25.) Thus, a preliminary injunction poses a danger that permanent

injunctive relief does not: that potentially protected speech will be enjoined prior

to an adjudication on the merits of the speaker’s or publisher’s First Amendment

claims. Pittsburgh Press Co. recognized as much when affirming an order

prohibiting sex discrimination in a newspaper’s classified ads: “[B]ecause no

interim relief was granted, the order will not have gone into effect before our final

determination that the actions of Pittsburgh Press were unprotected.” (Pittsburgh

Press Co., supra, 413 U.S. at p. 390; see also Lemley & Volokh, Freedom of

Speech and Injunctions in Intellectual Property Cases (1998) 48 Duke L.J. 147,

158-164, 216-224 (Lemley & Volokh) [arguing that an important purpose of the

prior restraint doctrine should be curtailing premature censorship of potentially

protected speech through preliminary injunctions]; Redish, The Proper Role of the

Prior Restraint Doctrine in First Amendment Theory (1984) 70 Va. L.Rev. 53, 87-

88 (Redish) [arguing that the prior restraint doctrine recognizes that interim

equitable relief poses a particular danger to First Amendment rights].)

The same distinction was recognized by this court in Aguilar v. Avis Rent A

Car System, Inc. (1999) 21 Cal.4th 121, 138 (Aguilar), upholding a permanent

injunction enjoining the use of certain racial epithets in the workplace. The

2

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Aguilar plurality quoted approvingly from Auburn Police Union v. Carpenter (1st

Cir. 1993) 8 F.3d 886, 903, which upheld a statute prohibiting charitable

solicitation for the benefit of law enforcement agencies: “ ‘Although the classic

form of prior restraint involves an administrative licensing scheme, [citation], a

judicial injunction that prohibits speech prior to a determination that the speech is

unprotected also constitutes a prior restraint. [Citation.] . . . An injunction that is

narrowly tailored, based upon a continuing course of repetitive speech, and

granted only after a final adjudication on the merits that the speech is unprotected

does not constitute an unlawful prior restraint.’ ” (Aguilar, supra, 21 Cal.4th at p.

141, italics added.)

The present case involves a preliminary injunction issued prior to “a final

adjudication on the merits that the speech is unprotected.” Hence, the danger

posed by prior restraint is present. In general, a prior restraint comes with

“ ‘heavy presumption’ against its constitutional validity.” (Organization for a

Better Austin v. Keefe (1971) 402 U.S. 415, 419.)

The majority at one point seems to suggest that the bar against prior

restraint never applies to trade secret publication cases if a court has made a

preliminary finding that a defendant’s prior conduct has been unlawful. It

generalizes that the United States Supreme Court “has declined to apply prior

restraint analysis to a permanent injunction (Madsen [v. Women’s Health Center

(1994)] 512 U.S. [753,] 763, fn. 2) and a preliminary injunction (Schenck v. Pro-

Choice Network of Western New York (1997) 519 U.S. 357, 374, fn. 6 (Schenck))

‘issued not because of the content of petitioners’ expression . . . but because of

their prior unlawful conduct’ (Madsen, at p. 763, fn. 2; see also Schenck, at p. 374,

fn. 6).” (Maj. opn., ante, at p. 25.) The majority concludes: “The injunction [in

this case] is content neutral . . . , and the trial court found that Bunner had

previously disclosed DVD CCA’s trade secrets in violation of California law. The

3

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court therefore issued the content-neutral injunction because of Bunner’s ‘prior

unlawful conduct.’ (Madsen, supra, 512 U.S. at p. 763, fn. 2.) Although the court

made its finding of prior unlawful conduct in the context of a preliminary

injunction and found only that DVD CCA was likely to succeed on the merits, this

finding is sufficient to render inapplicable the heavy presumption against prior

restraints. (See Schenck, supra, 519 U.S. at p. 374, fn. 6 [refusing to apply prior

restraint analysis to a preliminary injunction because the injunction was content

neutral and directed at prior unlawful conduct].)” (Maj. opn., ante, at p. 26.)

The majority’s analysis of the above cited cases is incomplete. A closer

reading of these cases reveals that the United States Supreme Court declined to

apply prior restraint analysis not simply because those cases concerned findings of

past unlawful conduct, but also because they did not involve censorship of speech

but merely limits on its time, place and manner. For example, footnote 2 of

Madsen, on which the majority relies, states that prior restraint is not applicable

because “petitioners are not prevented from expressing their message in any one of

several different ways; they are simply prohibited from expressing it within the

36-foot buffer zone. Moreover, the injunction was issued not because of the

content of petitioners’ expression . . . but because of their prior unlawful conduct.”

(Madsen, supra, 512 U.S. at p. 763, fn. 2.) Schenck, supra, 519 U.S. at page 374,

footnote 6, also emphasizes both reasons: “[A]lternative channels of

communication were left open to the protesters, and ‘the injunction was issued not

because of the content of [the protesters’] expression, . . . but because of their prior

unlawful conduct.’ ”

Our

opinion

in

Planned Parenthood Shasta-Diablo, Inc. v. Williams (1994)

7 Cal.4th 860, also cited in support of the majority’s position, highlights the

locational nature of the injunction, in rejecting the applicability of prior restraint

analysis: “[P]etitioners’ claim that the injunction operates as an unconstitutional

4

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‘prior restraint’ on protected speech must fail. A prior restraint is a content-based

restriction on speech prior to its occurrence. [Citation.] Valid time, place and

manner restrictions which do not functionally prohibit all means of

communication are not prior restraints.” (Id. at p. 871, fn. omitted.)

In Thomas v. Chicago Park District (2002) 534 U.S. 316, also cited by the

majority, the court upheld a facial challenge to a municipal park ordinance that

required a permit for a more-than-50-person event. The court rejected the

argument that it was an invalid prior restraint similar to an administrative licensing

scheme designed to promote censorship, holding that a licensing scheme did not

need to “contain certain procedural safeguards in order to avoid constituting an

invalid prior restraint” because the scheme was “not subject-matter censorship but

content-neutral time, place, and manner regulation of the use of a public forum.”

(Id. at pp. 321-322.)

The

preliminary

injunction in this case is subject-matter censorship 

entirely prohibiting Bunner from publishing a particular type of information

related to the DVD CCA’s content scrambling system (CSS) and the descrambling

program (DeCSS)  not a content-neutral time, place, and manner regulation.

(See also Oregon ex rel. Sports Mgmt. News v. Nachtigal (Or. 1996) 921 P.2d

1304, 1308 [law requiring court approval of publication of alleged trade secrets is

directed at a “specific subject of communication, excluding some speech based on

the content of the message” and is an unlawful prior restraint].) If the alleged

trade secret is not in fact a trade secret, then the court will be enjoining protected

speech. A preliminary injunction issued prior to an adjudication on the merits

would therefore pose the precise danger of prior restraint identified in Pittsburgh

Press Co., i.e., “the special vice . . . that communication will be suppressed . . .

before an adequate determination that it is unprotected by the First Amendment.’ ”

(Pittsburgh Press Co., supra, 413 U.S. at p. 390; see also Lemley & Volokh,

5

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supra, 48 Duke L.J. at pp. 169-172; Redish, supra, 70 Va. L.Rev. at p. 88. ) But

that particular “special vice” would not threaten in the case of time, place, and

manner restrictive injunctions or ordinances, where speech is not being entirely

suppressed; instead, the special vice of those regulations is that their restrictions

may be stricter than needed to accomplish the government objective. (See

Madsen, supra, 512 U.S. at pp. 765-766.)1


1

In further support of its claim that the prior restraint doctrine does not

apply, the majority quotes without discussion the statement in Dallas Cowboys
Cheerleaders, Inc. v. Pussycat Cinema, Ltd. (2d Cir. 1979) 604 F.2d 200, 206, that
“[t]his is not a case of government censorship, but a private plaintiff’s attempt to
protect its property rights.” If this dictum is supposed to convey that the prior
restraint doctrine applies only to official government censorship and not to
injunctions issued in the course of litigation between private parties, then it is
simply untrue. (See Metropolitan Opera Association, Inc. v. Local 100, Hotel &
Restaurant Employees International Union (2d Cir. 2001) 239 F.3d 172, 176
[preliminary injunction against publication an unlawful prior restraint in private
defamation actions].) Nor is it at all clear that the prior restraint doctrine does not
apply whenever a plaintiff claims its intellectual property rights are being violated.


It should also be noted that the Court of Appeal properly rejected the DVD

CCA’s reliance on copyright cases in arguing that preliminary injunctions should
be routinely granted. As the Court of Appeal stated: “Protections for trade secrets
. . . are not comparable to protections for copyrights with respect to the First
Amendment. First, since both the First Amendment and the constitutional
authority underlying the Copyright Act are contained in the United States
Constitution, the resolution of a conflict between free speech and copyright
involves a delicate balancing of two federal constitutional protections. Article I of
the United States Constitution explicitly grants Congress the power ‘To promote
the progress of science and useful arts, by securing for limited times to authors and
inventors the exclusive right to their respective writings and discoveries.’ (U.S.
Const., art. I, § 8.) The [Uniform Trade Secrets Act], on the other hand, lacks any
constitutional foundation. . . . [¶] Second, injunctions in copyright infringement
cases have been upheld ‘on the ground that First Amendment concerns are
protected by and coextensive with the [Copyright Act’s] fair use doctrine.’ (Nihon
Keizai Shimbun, Inc. v. Comline Business Data (2d Cir. 1999) 166 F.3d 65, 74.)
The ‘fair use’ exception permits copying and use of a copyrighted work ‘for
purposes such as criticism, comment, news reporting, teaching . . . , scholarship, or


(footnote continued on next page)

6

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But concluding that prior restraint analysis applies in the case of

preliminary injunctions of alleged trade secret publications is not the same as

concluding that all such injunctions are prohibited. Both the United States

Supreme Court and this court have recognized that the First Amendment right to

free expression may be legitimately circumscribed by state law intellectual

property rights. (See Cohen v. Cowles Media Co. (1991) 501 U.S. 663, 669-670

[newspaper’s right to publish limited by confidentiality agreement enforceable

under state contract law]; Zacchini v. Scripps-Howard Broadcasting Co. (1977)
433 U.S. 562 [upholding right of publicity against having performance

misappropriated by television broadcast]; Comedy III Productions, Inc. v. Gary

Saderup, Inc. (2001) 25 Cal.4th 387, 396 [upholding right of publicity against

literal depictions of celebrities].) Trade secret law is an indisputably important

means of protecting a certain form of intellectual property for the benefit of

society as a whole. (See Kewanee Oil Co. v. Bicron Corp. (1974) 416 U.S. 470,

481, 493; maj. opn., ante, at pp. 13-14.) As the majority correctly recognizes,

“trade secret law creates a property right ‘defined by the extent to which the owner

of the secret protects his interest from disclosure to others.’ ” (Maj. opn., ante, at

p. 16, quoting Ruckelshaus v. Monsanto Co. (1984) 467 U.S. 986, 1002.) Because

the very existence of a trade secret is destroyed by its disclosure, a categorical

inability by trade secret holders to obtain preliminary injunctive relief against the



(footnote continued from previous page)

research’ under certain circumstances. (17 U.S.C. § 107.) It ‘offers a means of
balancing the exclusive rights of a copyright holder with the public’s interest in
dissemination of information affecting areas of universal concern, such as art,
science and industry. . . . . In contrast, the UTSA contains no exception for ‘fair
use’ or any other vehicle for safeguarding First Amendment concerns.”

7

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publication of trade secrets could significantly undermine their property rights.

(See Garth v. Staktek Corp. (Tex.App. 1994) 876 S.W.2d 545, 550 [preliminary

injunction necessary “to provide meaningful legal protection” to trade secret

holders].) In this respect, a trade secret plaintiff differs, for example, from

defamation plaintiffs who may rectify damages to their reputation not only with

monetary damages but also through the rehabilitation of their reputation with

additional speech and publication. Furthermore, as the majority suggests, the fact

that publication of most trade secrets does not address matters of public concern is

a factor that may somewhat lighten the heavy presumption against the

constitutional validity of a prior restraint.

The question, then, is how should a court balance First Amendment

protections with an alleged trade secret holder’s property rights when asked to

issue a preliminary injunction against publication? The answer lies in requiring

the plaintiff to make a sufficient evidentiary showing before the injunction is

granted.

The majority recognizes that a preliminary injunction against the disclosure

of an alleged trade secret without sufficient evidentiary support is an unlawful

prior restraint. As it states in discussing Bridge C.A.T. Scan Associates v.

Technicare Corp. (2d Cir. 1983) 710 F.2d 940: “[T]he Second Circuit Court of

Appeals invalidated an injunction prohibiting the plaintiff from disclosing trade

secrets contained in an exhibit to its complaint. In finding that the injunction was

an invalid prior restraint, the court concluded that there was no evidence the

plaintiff had acquired the defendant’s trade secrets by improper means or that the

secrets were not publicly available. [Citation.] In this decision, however, we

assume that Bunner misappropriated protectable trade secrets.” (Maj. opn., ante,

at p. 27.) In its discussion of CBS Inc. v. Davis (1994) 510 U.S. 1315, the majority

also distinguishes it from the present case in part because “Justice Blackmun, in

8

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finding a prior restraint, relied on the lack of clear evidence establishing that CBS

had acquired [the plaintiff’s] proprietary information by improper means.” (Maj.

opn., ante, at p. 26.) Implicit in these statements is the assumption that a

preliminary injunction of a trade secret publication without the requisite evidence

in support would be an unlawful prior restraint.

I agree, but this conclusion raises the question of what evidentiary showing

a plaintiff should be required to make in order to overcome the presumption

against a prior restraint? Ideally, the required showing for granting preliminary

injunctions would separate meritorious trade secret claims from those involving

protected speech. A court is to grant a preliminary injunction only if it finds a

“ ‘likelihood that the plaintiff will prevail on the merits at trial’ ” as well as that

the interim balance of harms favors the plaintiff. (Cohen v. Board of Supervisors

(1985) 40 Cal.3d 277, 286.) But in reality, courts are accorded a great deal of

leeway in deciding whether to grant such injunctions. “ ‘ “[By] balancing the

respective equities of the parties, [the trial court] concludes that, pending a trial on

the merits, the defendant should or . . . should not be restrained from exercising

the right claimed by him.” ’ [Citation.] [¶] . . . Generally, the ruling on an

application for a preliminary injunction rests in the sound discretion of the trial

court. The exercise of that discretion will not be disturbed on appeal absent a

showing that it has been abused.” (Ibid.) A trial court may grant a preliminary

injunction based only on a showing that “the questions of law or fact are grave and

difficult,” and the balance of harms favors plaintiff. (Wilms v. Hand (1951) 101

Cal.App.2d 811, 815.)

In my view, the need to safeguard the First Amendment right against prior

restraint, while not barring trade secret holders from obtaining preliminary

injunctions, requires that we make the standard for granting such injunctions more

rigorous. As Professor Redish has stated: “[B]ecause such prior restraints are

9

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imposed by a judicial officer following some form of adversarial judicial process,

the heavy negative presumption traditionally associated with the prior restraint

doctrine is inappropriate. Nevertheless, because prior restraints are issued

following only an abbreviated judicial inquiry, they are properly employed only if

the asserted governmental interest could not be adequately protected by regulation

following a full adversarial trial and only if the court determines that a strong

likelihood exists that the government will be able to establish that the challenged

expression is regulable under substantive first amendment standards. . . . The

traditional equitable principle that the issuance of such preliminary relief is largely

a matter of the court’s discretion . . . would have to change. Such broad discretion

is not consistent with first amendment concerns, and any court issuing such

preliminary relief against expression should expect no deference in the course of

appellate review.” (Redish, supra, 70 Va. L.Rev. at pp. 88-89, fns. omitted.)

A preliminary injunction in the case of an alleged trade secret publication

may be appropriate because the trade secret holder’s property rights “could not be

adequately protected by regulation following a full adversarial trial.” (Redish,

supra, 70 Va. L.Rev. at p. 88.) But when a publication presumptively protected by

the First Amendment is alleged to contain trade secrets, the broad discretion

usually granted trial courts in these matters should be, while not eliminated

entirely, considerably narrowed. A mere showing that the questions of law or fact

are grave and difficult would be insufficient to warrant a preliminary injunction.

Rather, a plaintiff should be required to actually establish a likelihood of

prevailing on the merits, regardless of the balance of harms.

The majority, as I understand it, implicitly acknowledges this heightened

standard when it holds, based on general First Amendment principles that a trial

court’s determination in these cases would be subject to independent appellate

review. As the majority states: “[T]he Court of Appeal must ‘make an

10

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independent examination of the entire record’ (Bose Corp. v. Consumers Union of

U.S., Inc. (1984) 466 U.S. 485, 499), and determine whether the evidence in the

record supports the factual findings necessary to establish that the preliminary

injunction was warranted under California’s trade secret law.” (Maj. opn., ante, at

p. 30.) The First Amendment’s requirement that appellate courts make an

independent examination of the whole record is designed to “make sure that ‘the

judgment does not constitute a forbidden intrusion on the field of free

expression.’ ” (Bose Corp. v. Consumers Union of U.S., Inc., supra, 466 U.S. at p.

499.) Accordingly, an appellate court must overturn the issuance of a preliminary

injunction against a publication allegedly containing trade secrets if it finds, on its

own examination of the record, no likelihood that the trade secret holder will

prevail on the merits. Otherwise, such independent appellate review would be

devoid of meaning.

In sum, a preliminary injunction on speech issued without a credible

determination that plaintiff will prevail on the merits is a quintessential case of

suppressing speech “ ‘before an adequate determination that it is unprotected by

the First Amendment’ ” (Pittsburgh Press Co., supra, 413 U.S. at p. 390) and

would therefore be an unlawful prior restraint. Unlike the Court of Appeal,

however, I would hold that when the alleged trade secret holder bringing an action

against a trade secret publisher or would-be publisher actually establishes both a

likelihood that it will prevail on the merits, and that the balance of harms is in its

favor, the issuance of a preliminary injunction would be an appropriate means of

preserving the secrecy that is the essence of plaintiff’s property interest, subject to

11

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independent appellate review. Because the majority arrives at essentially the same

conclusion, albeit by a different analytical path, I concur in its holding.2

II.

As we recently reaffirmed: “ ‘[B]ecause unnecessarily protracted litigation

would have a chilling effect upon the exercise of First Amendment rights, speedy

resolution of cases involving free speech is desirable.’ ” (Winter v. DC Comics

(2003) 30 Cal.4th 881, 891.) Undertaking independent review, I conclude, as a

matter of law, that there is no likelihood that the DVD CCA would prevail on the

merits. There is therefore no need to remand to the Court of Appeal for further

proceedings. The unnecessary delay in resolving this litigation can only further

burden speech protected by the First Amendment.

As explained in the majority opinion, Bunner is alleged to have

downloaded from the Internet and republished the DeCSS source code

incorporating CSS, the DVD CCA’s proprietary information. The general rule is

that “[o]nce the secret is out, the rest of the world may well have a right to copy it

at will; but this should not protect the misappropriator or his privies.”

(Underwater Storage, Inc. v. United States Rubber Co. (D.C. Cir. 1966) 371 F.2d

950, 955.) DeCSS was not demonstrably secret in this case when Bunner

republished it, and Bunner was neither alleged to be the original misappropriator

nor to be in privity with any such misappropriators.


2

I note that the above standard applies only when there is no indication that

the trade secret involves matters of public concern, as in the present case. As the
majority suggests, when public concern is implicated, the burden of overcoming
the presumption against prior restraint would be substantially higher. (See New
York Times v. United States (1971) 403 U.S. 713.)

12

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Civil Code section 3426.1, subdivision (d) defines “trade secret” as

“information, including a formula, pattern, compilation, program, device, method,

technique, or process, that: [¶] (1) Derives independent economic value, actual or

potential, from not being generally known to the public or to other persons who

can obtain economic value from its disclosure or use; and [¶] (2) Is the subject of

efforts that are reasonable under the circumstances to maintain its secrecy.” A

legislative committee comment further states: “The language ‘not being generally

known to the public or to other persons’ does not require that information be

generally known to the public for trade secret rights to be lost. If the principal

person who can obtain economic benefit from information is aware of it, there is

no trade secret. A method of casting metal, for example, may be unknown to the

general public but readily known within the foundry industry.” (Legis. Com. com.

12A pt.1 West’s Ann. Civ. Code (1997 ed.) foll. Civ. Code, § 3426.1, p. 239

(Legislative Committee Comment.).)

The Legislative Committee Comment further explains the original draft

defined a trade secret in part as “not being readily ascertainable by proper means”

and that “the assertion that a matter is readily ascertainable by proper means

remains available as a defense to a claim of misappropriation. [¶] Information is

readily ascertainable if it is available in trade journals, reference books, or

published materials.” (Legis. Com. Com., 12A pt. 1 West’s Ann. Civ. Code,

supra, foll. Civ. Code, § 3426.1, p. 239.)

Therefore, had Bunner obtained DeCSS information from a computer

magazine or a newspaper, the information would be considered “readily

ascertainable” and not a trade secret. Instead, he learned of DeCSS from a

computer discussion group and downloaded it from a Web site on the Internet.

The date of Bunner’s initial posting is unclear from the record, and the availability

of DeCSS on the Internet at the time of the posting is also not clear. The DVD

13

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CCA’s attorney declared that at the time the complaint against Bunner and others

was filed in December 1999, approximately two months after the initial posting, at

least 118 Web sites had been identified that either contained proprietary

information related to CSS or provided links to other Web sites with such

information. How can information published in a computer magazine be regarded

as “readily ascertainable” but not information published on numerous Web sites?

Nor is it at all clear that information published in a trade journal would have

greater permanency than information published on the Internet.3

Courts that have considered the matter have agreed that, generally

speaking, a party not involved in the initial misappropriation of a trade secret

cannot be prosecuted under trade secret law for downloading and republishing

proprietary information posted on the Internet, primarily because the information

is in the public domain and is no longer secret. (Religious Technology Center v.

Netcom On-Line Communications Services, Inc. (N.D.Cal. 1995) 923 F.Supp.

1231; Religious Technology Center v. Lerma (E.D.Va. 1995) 908 F.Supp. 1362;

Religious Technology Center v. F.A.C.T.NET, Inc. (D.Col. 1995) 901 F.Supp.

1519.) This conclusion is also consistent with the principle that the First

Amendment generally prohibits limitations, absent some extraordinary showing of

governmental interest, on the publication of information already made public.


3

I note that since the time the preliminary injunction went into effect, it

appears that the DVD CCA’s proprietary information has been widely distributed.
According to several uncontradicted declarations attached to Bunner’s motion to
dismiss for mootness, filed in this court on February 7, 2003, DeCSS remains
available at hundreds of locations on the Internet. Moreover, CSS and its
algorithms and keys have been the subject of extensive academic research and
discussion, including technical papers describing and analyzing CSS, and
computer science courses in which the methods and flaws of CSS encryption are
taught.

14

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(The Florida Star v. B.J.F. (1989) 491 U.S. 524 [state could not punish publication

of name of sexual offense victim lawfully acquired]; Smith v. Daily Mail Pub. Co.

(1979) 443 U.S. 97, 103 [newspapers could not be punished for publishing the

name of a juvenile charged with an offense, lawfully obtained by monitoring the

police radio transmissions]; Landmark Communications, Inc. v. Virginia (1978)
435 U.S. 829 [invalidating criminal sanctions against third party that published

report of judicial review commission]; Cox Broadcasting Corp. v. Cohn (1975)
420 U.S. 469, 491 [state could not forbid or punish the publication of the name of

a rape victim obtained from public records].) Furthermore, Internet speech and

publication are fully protected by the First Amendment. (Reno v. ACLU (1997)
521 U.S. 844, 870.) Thus, both trade secret law and the First Amendment are in

accord that information republished on the Internet after having been made public

on the Internet generally cannot be sanctioned.

The trial court, in preliminarily concluding that the trade secret was not

lost, stated: “Plaintiffs moved expeditiously, reasonably and responsibly to protect

their proprietary information as soon as they discovered it had been disclosed by

investigating, sending cease and desist letters all over the world and then filing suit

against those who refused within two months of the disclosure.” But under Civil

Code section 3426.1, subdivision (d), the question whether the information in

question “[i]s the subject of efforts that are reasonable under the circumstances to

maintain its secrecy” is separate from the question whether the information is “not

. . . generally known to the public or to other persons who can obtain economic

value from its disclosure or use.” In order to claim the existence of the trade

secret, both conditions must be present. Therefore, even when a trade secret

holder acts with perfect diligence, it has no action against the republisher of no-

longer-secret information who does not act in privity with the original

misappropriator. (See Religious Technology Center v. Lerma, supra, 908 F.Supp.

15

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1362, 1368 [information posted on the Internet for 10 to 12 days no longer a trade

secret].)

That is not to say that a trade secret is automatically lost any time it is

posted on the Internet. Amici Curiae Intellectual Property Law Professors et alia

argue, for example, that information posted on an obscure Internet site and

detected quickly should not lose trade secret status. This position is consistent

with case law holding that minor disclosures of a trade secret followed by a brief

delay in withdrawing it from the public domain do not cause trade secret status to

be lost. (Hoechst Diafoil Co. v. Nan Ya Plastics Corp. (4th Cir. 1999) 174 F.3d

411, 418 [recognizing as well established that the required secrecy is relative

rather than absolute]; Gates Rubber Co. v. Bando Chemical Indus., Ltd. (10th Cir.

1993) 9 F.3d 823, 849.) But a plaintiff carries the burden of showing that the trade

secret remains a secret despite the Internet posting. In the present case, nothing in

the record indicates that the DVD CCA met that burden. In fact, the trial court

failed to make any particularized findings at all that the information was still

secret when Bunner republished it, instead treating the 20 or so defendants as a

class and making general statements that these defendants had published secret

information. Without evidence in the record that the proprietary information was

still secret at the time Bunner downloaded it from the Internet, the DVD CCA

cannot sustain its burden of demonstrating a likelihood of prevailing on the

merits.4


4

Moreover, in assessing the balance of harms, the trial court neglected to

consider the harm to Bunner’s First Amendment rights. (See American
Booksellers Association, Inc. v. Superior Court (1982) 129 Cal.App.3d 197, 206.)

16

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III.

In sum, the DVD CCA has failed to establish that the information Bunner

republished was still secret at the time he republished it on his Web site.5

It is likely that the trial court’s view of this case was colored by the content

of the information  that DeCSS is designed to circumvent the encryption of

DVD’s. But the fact that the information at issue is being used for a decrypting

purpose is not significant from the standpoint of trade secret law. (See Chicago


5

I also note that it is highly doubtful the alleged trade secret was acquired by

improper means within the meaning of the trade secret law. Civil Code section
3426.1, subdivision (a), defining “improper means,” states “[r]everse engineering
. . . alone shall not be considered improper means.” Apparently the word “alone”
refers to the fact that the item reverse engineered would have to be obtained “by a
fair and honest means, such as purchase of the item on the open market for reverse
engineering to be lawful.” (Legis. Com. Com., 12A pt. 1 West’s Ann. Civ. Code,
supra, foll. Civ. Code, § 3426.1, p. 238, quoting Rest. Torts § 757, com. (f).)
According to the allegations of the complaint, the alleged initial misappropriator
of CSS, Jon Johannsen, acquired the secret through reverse engineering. There is
no allegation that he acquired the product containing CSS unlawfully, and that
therefore improper means were employed. The DVD CCA argument below that
violation of a “click license” agreement prohibiting reverse engineering
constituted the improper means does not appear to have merit. To be sure,
contract plays an important role in trade secret law by protecting the trade secret
holder against “unauthorized use or disclosure through a contract with the
recipient of a disclosure” or others who have had special access to trade secret
information, via confidentiality agreements and the like. (Rest.3d Unfair
Competition, § 41, com. d, p. 471, italics added.) But nowhere has it been
recognized that a party wishing to protect proprietary information may employ a
consumer form contract to, in effect, change the statutory definition of “improper
means” under trade secret law to include reverse engineering, so that an alleged
trade secret holder may bring an action even against a nonparty to that contract.
Moreover, if trade secret law did allow alleged trade secret holders to redefine
“improper means” to include reverse engineering, it would likely be preempted by
federal patent law, which alone grants universal protection for a limited time
against the right to reverse engineer. (See Bonito Boats, Inc. v. Thunder Craft
Boats, Inc. (1989) 489 U.S. 141, 155.)

17

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Lock Co. v. Fanberg (9th Cir. 1982) 676 F.2d 400, [overturning trade secret

injunction against publication of key codes for tubular locks by two locksmiths

who acquired codes properly by reverse engineering].) It may or may not be the

case that Bunner’s action violated the Digital Millennium Copyright Act (DMCA)

(17 U.S.C. § 1201), which explicitly prohibits various efforts to circumvent

“technological measures that effectively control access” to copyrighted works (id.,

§ 1201 (a)(1)(E), (2)(A)). Unlike trade secret law, the DMCA does not inquire

into whether technology-circumventing devices are acquired by improper means

or are based on secret information, but rather considers whether the primary

purpose of those devices was improper. (Ibid.; see Universal City Studios, Inc. v.

Corley (2d Cir. 2001) 273 F.3d 429, 440-441.) DVD CCA’s complaint did not

allege a violation of the DMCA and that issue is not before us. All I would decide

is that it is manifest from the record that the DVD CCA did not establish a

likelihood of prevailing on its trade secret claim.

Therefore, I conclude that the trial court’s preliminary injunction against

Bunner was an unlawful prior restraint. Accordingly, instead of remanding to the

Court of Appeal for further proceedings, I would affirm its judgment on the

alternate grounds stated above.

MORENO, J.

18

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See last page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion DVD Copy Control Association v. Bunner
__________________________________________________________________________________

Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 93 Cal.App.4th 648
Rehearing Granted

__________________________________________________________________________________

Opinion No. S102588
Date Filed: August 25, 2003
__________________________________________________________________________________

Court: Superior
County: Santa Clara
Judge: William J. Elfving

__________________________________________________________________________________

Attorneys for Appellant:

Richard R. Wiebe; Huber Samuelson, HS Law Group, Allonn E. Levy; First Amendment Project, James R.
Wheaton, David A. Greene; Tomlinson Zisko Morosoli & Maser, Thomas E. Moore III; Electronic Frontier
Foundation, Cindy A. Cohn and Robin D. Gross for Defendant and Appellant.

Howard M. Freedland and Edward J. Black for American Committee for Interoperable Systems and
Computer & Communications Industry Association as Amici Curiae on behalf of Defendant and Appellant.

Howard, Rice, Nemerovski, Canady, Falk & Rabkin and Annette L. Hurst for Institute of Electrical and
Electronics Engineers, Inc.-United States Board as Amicus Curiae on behalf of Defendant and Appellant.

Jennifer Granick for Computer Professionals for Social Responsibility as Amicus Curiae on behalf of
Defendant and Appellant.

Ann Beeson, Kevin S. Bankson; and Ann Brick for the American Civil Liberties Union and the American
Civil Liberties Union of Northern California as Amici Curiae on behalf of Defendant and Appellant.

Jane E. Kirtley for Silha Center for the Study of Media Ethics and Law as Amicus Curiae on behalf of
Defendant and Appellant.
__________________________________________________________________________________

Attorneys for Respondent:

Weil, Gotshal & Manges, Jared B. Bobrow, Christopher J. Cox, Jeffrey L. Kessler, Robert G. Sugarman,
Gregory S. Coleman, Edward J. Burke, Jonathan S. Shapiro, Sondra Roberto, Richard Simon, Rachel H.
Laskey and John F. Greenman for Plaintiff and Respondent.

Jennifer M. Urban and Pamela Samuelson for Intellectual Property Law Professors, The Computer &
Communications Industry Association and The United States Public Policy Committee of the Association
for Computing Machinery as Amici Curiae on behalf of Plaintiff and Respondent.



1

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Page 2 - counsel continued - S102588


Attorneys for Respondent (cont’d):

Richard A. Epstein; Thomas C. Rubin; Covington & Burling, Robert A. Long, Jr., and Anthony Hermann
for Microsoft Corporation, Ford Motor Company, The Boeing Company, Sears Roebuck & Co., The
Procter & Gamble Company, AOL Time Warner, Inc., BellSouth Corporation, The Coca-Cola Company
and The National Association of Manufacturers as Amici Curiae on behalf of Plaintiff and Respondent.

John K. Williamson, Ronald E. Myrick; Milbank, Tweed, Hadley & McCloy and James Pooley for The
Intellectual Property Owners Association as Amicus Curiae on behalf of Plaintiff and Respondent.

Dan Robbins, Jason M. Okai; Williams & Connolly, David E. Kendall, Thomas G. Hentoff, Janet C.
Fisher, Suzanne H. Woods, Julia B. Shelton; Paul, Hastings, Janofsky & Walker; Roger M. Milgrim; John
Fithian; Daniel L. Brenner, Neal M. Goldberg, Michael S. Schooler, Diane B. Burstein; David M. Proper;
William Daly; and Thomas J. Ostertag for Motion Picture Association of America, Inc., American
Federation of Musicians of the United States and Canada, American Federation of Television and Radio
Artists, AFMA (formerly The American Film Marketing Association), American Society of Composers,
Authors and Publishers, American Society of Media Photographers, Inc., Association of American
Publishers, Inc., Business Software Alliance, Broadcast Music, Inc., Department of Professional
Employees, Directors Guild of America, Graphic Artists Guild, Interactive Digital Software Association,
National Academy of Recording Arts & Sciences, Inc., National Association of Theatre Owners, National
Cable & Telecommunications Association, Inc., National Football League, National Football League
Properties, Inc., National Hockey League, National Music Publishers’ Association, Office of the
Commissioner of Baseball, Producers Guild of America, Professional Photographers of America,
Recording Industry Association of America, Screen Actors Guild, Inc., Video Software Dealers
Association and Writers Guild of America, West, Inc., as Amici Curiae on behalf of Plaintiff and
Respondent.

Bill Lockyer, Attorney General, Manuel M. Medeiros, State Solicitor General, Richard M. Frank, Chief
Assistant Attorney General, Louis Verdugo, Jr., Assistant Attorney General, Catherine Z. Ysrael, Regina J.
Brown and Emilio E. Varanini IV, Deputy Attorneys General, as Amici Curiae on behalf of Plaintiff and
Respondent.




2

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Counsel who argued in Supreme Court (not intended for publication with opinion):

David A. Greene
First Amendment Project
1736 Franklin Street, Ninth Floor
Oakland, CA 94612
(510) 208-7744

Robert G. Sugarman
Weil, Gotshal & Manges
767 Fifth Avenue
New York, NY 10153
(212) 310-8000







3

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Opinion Information

Date:	Citation:	Docket Number:	Cross Referenced Cases:
Mon, 08/25/2003	31 Cal. 4th 864, 75 P.3d 1, 4 Cal. Rptr. 3d 69	S102588	111 F.Supp.2d 294 273 F.3d 429 512 U.S. 753 416 U.S. 470 532 U.S. 514

Disposition
Aug 25 2003	Opinion: Reversed

Dockets
Dec 4 2001	Petition for review filed   Respondent DVD Copy Control Association
Dec 4 2001	Record requested
Dec 5 2001	Received Court of Appeal record   2-file jackets, briefs and 2-accordion folders
Dec 24 2001	Answer to petition for review filed   by counsel for RPI
Jan 25 2002	Time extended to grant or deny review   to and including March 4, 2002.
Feb 20 2002	Petition for Review Granted (civil case)   Votes: George, CJ., Baxter, Chin, Brown, and Moreno, JJ. Kennard, J., was recused and did not participate.
Mar 25 2002	Opening brief on the merits filed   by counsel for resp DVD (timely per Rule 40k)
Apr 3 2002	Request for extension of time filed   for aplt to file the answer brief on the merits, to 5-22.
Apr 10 2002	Extension of time granted   to 5-22-02 for aplt Bunner to file the answer brief on the merits. No further extensions will be granted.
May 22 2002	Answer brief on the merits filed   Appellant [ Bunner ]
Jun 12 2002	Reply brief filed (case fully briefed)   by resp. (timely per Rule 40k)
Jul 3 2002	Request for extension of time filed   by Attorney General to August 2, 2002 to file amicus curiae brief.
Jul 8 2002	Extension of time granted   to 8-2-02 for the A.G. to file the amicus curiae brief. Any answers to the A/C brief maybe filed by 8/22/02.
Jul 11 2002	Received application to file amicus curiae brief; with brief   by Intellectual Property Law Professors, Computer & Communications Industry Assn., and the U.S Public Policy Committee of the Assn. for Computing Machinery.
Jul 11 2002	Received application to file amicus curiae brief; with brief   by the Intellectual Property Owners Assn. in support of resp.
Jul 11 2002	Received application to file amicus curiae brief; with brief   by Computer Professionals for Social Responsibility.
Jul 11 2002	Received application to file amicus curiae brief; with brief   by ACLU and Silha Center for Study of Media Ethics in support of aplt.
Jul 11 2002	Received application to file amicus curiae brief; with brief   by Microsoft Corp., Ford Motor Co., Boeing Co., AOL Time Warner Inc., BellSouth Corp., Sears Roebuck Co., Proctor& Gamble Co., Coca-Cola Co., and the Nat. Assn. of Manufacturers in support of resp.
Jul 11 2002	Received application to file amicus curiae brief; with brief   by Motion Picture Assn. of America, American Federation of Musicians, et al, in support of resp. with Notice of Lodging Non-Calif. Authorities in support of A/C brief.
Jul 19 2002	Permission to file amicus curiae brief granted   by Intellectual Property Law Professors et al. Any answers may be filed w/in 20 days.
Jul 19 2002	Amicus Curiae Brief filed by:   Intellectual Property Law Prof. et al.
Jul 19 2002	Permission to file amicus curiae brief granted   by Intellectual Property Owners Assn. in support of resp. Answers w/in 20 days.
Jul 19 2002	Amicus Curiae Brief filed by:   Intellectual Prop. Owners Assn. in suppt of resp
Jul 19 2002	Permission to file amicus curiae brief granted   by Computer Professionals For Social Responsibility. Answers w/in 20 days.
Jul 19 2002	Amicus Curiae Brief filed by:   Computer Prof. for Social Responsibility
Jul 19 2002	Permission to file amicus curiae brief granted   by American Civil Liberties Union et al in support of aplt. Answers w/in 20 days.
Jul 19 2002	Amicus Curiae Brief filed by:   A.C.L.U. et al in suppt of aplt.
Jul 19 2002	Permission to file amicus curiae brief granted   by Microsoft Corp et al in support of resp. Answers w/in 20 days.
Jul 19 2002	Amicus Curiae Brief filed by:   Microsoft Corp. et al in suppt of resp.
Jul 19 2002	Permission to file amicus curiae brief granted   by Motion Picture Association of America et al in support of resp. Answers w/in 20 days.
Jul 19 2002	Amicus Curiae Brief filed by:   Motion Picture Assn. of America et al in suppt of resp. One vol. of non-Calif. authorities lodged herewith.
Jul 31 2002	Application to appear as counsel pro hac vice (granted case)   by David E. Kendall (for A/C Motion Picture Assn. of America et al)
Jul 31 2002	Application to appear as counsel pro hac vice (granted case)   by Roger Milgrim for amicus curiae Motion Picture Association of America et al.
Aug 2 2002	Amicus Curiae Brief filed by:   Attorney General Lockyer in support of respondent
Aug 5 2002	Received letter from:   Hitachi Data Systems (non-party)
Aug 5 2002	Received letter from:   AOL Time Warner (non-party)
Aug 7 2002	Application to appear as counsel pro hac vice granted   by Roger M. Milgrim for amicus curiae
Aug 7 2002	Application to appear as counsel pro hac vice granted   David E. Kendall for amicus curiae
Aug 8 2002	Response to amicus curiae brief filed   counsel for respondent (DVD Copy Control) to amicus curiae briefs in support of appellant (A. Bunner).
Aug 9 2002	Response to amicus curiae brief filed   by counsel for appellant (A. Bunner) to amicus briefs in support of respondent. (40k)
Aug 22 2002	Response to amicus curiae brief filed   by aplt to amicus brief of A.G.
Feb 7 2003	Motion to Dismiss filed   (for mootness) by aplt
Feb 11 2003	Request for extension of time filed   By counsel for Respondent {DVD Copy Control Asson. INC.,} asking until February 25, 2003 to file Respondent's Response to Appellant's Motion to Dismiss for Mootness.
Feb 14 2003	Extension of time granted   To February 25, 2003 to file Respondent's Answer to Appellant's Motion to Dismiss for mootness.
Feb 25 2003	Filed:   Resp DVD's opposition to motion to dismiss.
Mar 5 2003	Received document entitled:   Deft. Bunner's reply in support of his motion to dismiss for mootness.
Apr 30 2003	Case ordered on calendar   5-29-03, 9am, S.F.
May 14 2003	Motion to dismiss denied   Defendant Andrew Bunner's Motion to Dismiss for Mootness is denied. Kennard, J., and Chin, J., were recused and did not participate. Moreno, J., is of the opinion the motion should be granted.
May 23 2003	Filed letter from:   Robert Sugarman, counsel for resp, notifying court that he wishes to allocate 10 min. of oral argument to A.G. Bill Lockyer. (faxed)
May 23 2003	Order filed   The letter filed by counsel for respondent DVD Copy Control Assn. on May 23, 2003, is treated as a request to divide oral argument time under Calif. Rules of Court, rule 29.2(f)(2). The request to allocate 10 minutes of its oral argument time to amicus curiae Attorney General of California is granted.
May 23 2003	Application to appear as counsel pro hac vice (granted case)   by Robert G. Sugarman for respondent
May 23 2003	Application to appear as counsel pro hac vice granted   The application of Robert. G Sugarman to appear as pro hac vice for resp at oral argument is granted.
May 29 2003	Cause argued and submitted
May 29 2003	Filed:   by counsel for petitioner (Bunner) Substitution of Attorney. former legal rep. HS Law Group new legal rep. Allonn E. Levy, Esq.
Aug 25 2003	Opinion filed: Judgment reversed   and remanded for further proceedings consistent with the opinion. Majority Opinion by Brown, J. --------joined by George, C.J., Baxter, Rivera*, Robie*, JJ. (*assigned justices) Concurring opinion by Werdegar, J. Concurring opinion by Moreno, J.
Sep 8 2003	Rehearing petition filed   by aplt
Sep 15 2003	Time extended to consider modification or rehearing   to and including November 21, 2003, or the date upon which rehearing is either granted or denied, whichever occurs first.
Sep 16 2003	Answer to rehearing petition filed   by counsel for respondent (DVD Copy Control Assoc., Inc.)
Oct 15 2003	Rehearing denied   Kennard, J., was recused and did not participate. Baxter, J., was absent and did not participate. Chin, J., was recused and did not participate.
Oct 15 2003	Opinion modified - no change in judgment
Oct 15 2003	Remittitur issued (civil case)
Oct 24 2003	Note:   records returned to CA 6

Briefs
Mar 25 2002	Opening brief on the merits filed
May 22 2002	Answer brief on the merits filed
Jun 12 2002	Reply brief filed (case fully briefed)
Jul 19 2002	Amicus Curiae Brief filed by:
Jul 19 2002	Amicus Curiae Brief filed by:
Jul 19 2002	Amicus Curiae Brief filed by:
Jul 19 2002	Amicus Curiae Brief filed by:
Jul 19 2002	Amicus Curiae Brief filed by:
Jul 19 2002	Amicus Curiae Brief filed by:
Aug 2 2002	Amicus Curiae Brief filed by:
Aug 8 2002	Response to amicus curiae brief filed
Aug 9 2002	Response to amicus curiae brief filed
Aug 22 2002	Response to amicus curiae brief filed

Brief Downloads
Opening Brief on the Merits.pdf (7324047 bytes) - Opening Brief on the Merits
Amicus brief - ACLU.pdf (260425 bytes) - Amicus Brief - ACLU
Amicus brief - CA Att'y General.pdf (2136116 bytes) - Amicus Brief - California Attorney General
Amicus brief - Computer Professionals for Social Responsibility.pdf (218454 bytes) - Amicus Brief - Computer Professionals for Social Responsibility
Amicus brief - IP Law Professors.pdf (111390 bytes) - Amicus Brief - IP Law Professors
Amicus brief - IP Owners Ass'n.pdf (662474 bytes) - Amicus Brief - IP Owners Association
Amicus brief - Microsoft.pdf (229375 bytes) - Amicus Brief - Microsoft

If you'd like to submit a brief document to be included for this opinion, please submit an e-mail to the SCOCAL website

Jun 30, 2011 Annotated by clinton martin

-Facts- DVDs are encrypted with a method called the Content Scrambling System (CSS). Jon Johansen reverse engineered a computer program that was able to undo the CSS encryption and decrypt the information on a DVD, but he did so in violation of a license agreement. He obtained secret encryption keys and algorithms for CSS from the program and used them to write an unauthorized DVD decryption program called DeCSS. In 1999, he posted source code for DeCSS on a website, and people distributed it to other websites. Andrew Bunner was one of the people who posted the source code for DeCSS on his website. The Motion Picture Association and the DVD Copy Control Association (DVD CCA), which is the licensing body for the CSS technology, sued individuals who had posted the DeCSS source code on their websites for trade secret misappropriation. Mr. Bunner was one of the people they sued. -Procedural history- The trial court found that CSS was a protectable trade secret, that Johansen had obtained the secret improperly because his reverse engineering violated the license agreement, and that Mr. Bunner knew or should have known that the trade secrets contained in DeCSS were obtained improperly. The trial court also found that the secrecy of CSS had not been destroyed despite the DeCSS source code being posted on the Internet, that DVD CCA would suffer irreparable harm without an injunction, and that an injunction would harm Mr. Bunner minimally. Accordingly, the court issued a preliminary injunction prohibiting Mr. Bunner from posting DeCSS or distributing related confidential information. Mr. Bunner appealed. The Court of Appeals did not review the trial court’s findings; it assumed that the trial court was correct in finding that DVD CCA likely would prevail on the merits and suffer irreparable harm. The Court of Appeals, however, determined that the injunction violated the First Amendment because it was a prior restraint on pure speech. Accordingly, they reversed the trial court. The California Supreme Court granted review on whether the injunction violated the First Amendment. -Issues- Whether a preliminary injunction against a website operator who knew or should have known that information he published was a misappropriated trade secret violates the First Amendment or the free speech clause of California’s Constitution. -Holding- The injunction did not violate the First Amendment nor the free speech clause of California’s Constitution, assuming that the trial court properly had issued the injunction under California’s trade secret law. -Analysis- The court assumed that the trial court’s injunction was proper under California’s trade secret law, and it examined only whether the injunction violated the First Amendment or the free speech clause of the California Constitution. The court determined that restrictions on the dissemination of computer code are subject to First Amendment scrutiny. The court also determined that the injunction at issue was content-neutral rather than content-based and that the trial court’s injunction burdened no more speech than was necessary to serve the government’s interest in protecting trade secrets. The court finally concluded that the injunction was not, in fact, a prior restraint because the injunction was content neutral and was issued as a result of Mr. Bunner’s unlawful disclosure of trade secrets. The injunction, therefore, did not violate the First Amendment. The court also stated that analyzing the injunction under the free speech clause of California’s Constitution would yield the same result, so the injunction also did not violate the California Constitution. -Key Related Cases- Universal City Studios, Inc. v. Reimerdes (S.D.N.Y. 2000) 111 F.Supp.2d 294 http://scholar.google.com/scholar_case?case=4887310188384829978 Universal City Studios, Inc. v. Corley (2d Cir. 2001) 273 F.3d 429 http://scholar.google.com/scholar_case?case=5930508913825375010 Madsen v. Women’s Health Center (1994) 512 U.S. 753 http://scholar.google.com/scholar_case?case=7454820790275139037 Kewanee Oil Co. v. Bicron Corp. (1974) 416 U.S. 470 http://scholar.google.com/scholar_case?case=7210506171880070328 Bartnicki v. Vopper (2001) 532 U.S. 514 http://scholar.google.com/scholar_case?case=2171346211086974391 -Tags- trade secret publication misappropriation First Amendment prior restraint free speech encryption confidential Internet speech By Clinton Martin