The California Supreme Court's Recent Decision On DeCSS, the DVD Encryption-Cracking Code:
Its Reasoning and Significance

Monday, Sep. 01, 2003

On August 25, the California Supreme Court issued a decision in DVD Copy Control Assn., Inc. v. Bunner. Rejecting a First Amendment challenge, it held that websites can be preliminarily enjoined to de-post allegedly trade-secret-revealing computer code while the case is being decided.

To issue a preliminary injunction, a judge must find both that the trade secret plaintiff is likely to win its case against the website, and that the trade secret plaintiff will suffer irreparable harm if the website fails to de-post. The narrow question the Court considered in Bunner was whether, if these findings are properly made, the resulting injunction violates the First Amendment, and must therefore be voided.

In this column, I will discuss why the case is important; the significance of the plaintiffs' use of trade secret law; the reasons why the court ruled as it did; and the interesting issues the case raises for the future.

The Facts of the Case: Posting the DeCSS Code on the Internet

The case began when a series of websites publicly posted the DeCSS code - which allows the user to decrypt encrypted DVD movies. (The code is called "DeCSS" because it allows users to crack an encryption scheme called "CSS" - the Content Scrambling System.)

Once the movie's protections are breached using the DeCSS code, the user may also, if he so chooses, copy and distribute the movie for free. Thus, DeCSS - in the wrong hands - can become a tool of copyright infringement.

Angered at that prospect, the DVD Copy Control Association (DVD CCA) demanded that the websites de-post the DeCSS code. But some website owners, including Andrew Bunner, refused.

After a hearing, however, the California trial court issued a preliminary injunction compelling them to do so until the case has been decided. Bunner appealed, claiming a violation of the First Amendment, but in the end, it was to no avail: As noted above, the California Supreme Court upheld the injunction.

Why the Case Was An Important One

The case was rightly seen as a hugely important one. It drew "friend of the court" briefs from major players such as the ACLU, the Electronic Frontier Foundation, Microsoft, and the Motion Picture Association of America.

Why were the stakes so high? Because if the court had ruled the other way - which was very unlikely - trade secret protection on the Internet, which is already embattled (as I discussed in a prior column), would have entirely disappeared. Trade secrets would hardly be secret in any meaningful sense anymore, as they would be allowed to remain on the Internet for all the months or years during which a case is pending.

Moreover, if the court had ruled the other way, copyright protection on the Internet would also have taken a huge body blow. The more DeCSS is promulgated, the more users will be enabled to crack movie encryption codes and view copyrighted movies for free.

The DVD industry is terrified that rather than buying or renting DVDs, movie watchers will just steal (or "share") them instead. And they are especially terrified that DVD copies will leak before the movie is even released - thus dampening demand for theatrical showings.

Because of the California ruling, that won't happen as much as it might have. In truth, though, this wasn't so much a case of secret-stealing, as of copyright combat. Once again, as has happened over and over in California courts, anti-copyright (and, to be fair, pro-First Amendment, and pro-"fair use") forces lost.

Using Trade Secrets, Not the DMCA, to Attack DeCSS

In several well-known earlier cases, noted for this site in columns by Laura Hodes, Chris Sprigman, and myself, websites' postings of DeCSS had been attacked via the Digital Millenium Copyright Act (DMCA). (Like Bunner, those cases raised their own First Amendment issues - as does the DMCA itself.)

In Bunner, the DVD CCA took a different tack: As noted above, it invoked trade secrets law. Specifically, it alleged that the inventor of DeCSS, Jon Johansen, had to "reverse engineer" proprietary CSS code containing trade secrets, in order to create DeCSS. In addition, it alleged that, partially for this reason, DeCSS "embodies, uses, and/or is a substantial derivation of confidential proprietary information" within or related to CSS.

The tactic of invoking trade secret law in this context is ingenious. But it's also a bit weird. Just because DeCSS decrypts CSS, doesn't mean it must incorporate CSS's trade secrets. (After all, a can opener doesn't resemble the can it pries open.) And how secret were these supposed secrets, anyway, if reverse engineering could reveal them?

However, the California Supreme Court did not address any of this weirdness. Rather, it assumed that, as the trial court found, DVD CCA will indeed be likely to be able to prove a trade secrets violation. Only time, evidence, and further trial court proceedings will show if this is actually true. In short, the trade secrets battle over DeCSS not only has not been lost - it was never even fought.

Why the Court's First Amendment Holding Was A No-Brainer

But the First Amendment battle over DeCSS has been lost, and it was quite clear, from the outset, that it would be.

The California Supreme Court acknowledged that computer code is protected by the First Amendment, because it expresses ideas. But that's only half the battle. Courts analyzing First Amendment issues also look to what standard of review should apply, and to what interest the state puts forward to justify its infringement of free speech.

In this case, the DVD CCA successfully argued for a low standard of review. The Court agreed that this standard was proper because the applicable law - trade secrets law, as enforced by the particular injunction at issue here - was "content-neutral."

The First Amendment is primarily concerned with "content-based" laws (which target particular ideas), not "content neutral" ones (which do not). And while the injunction targeted Bunner's DeCSS code posting, it did not do so because of its content.

That's clear because no matter what ideas had been disclosed by DeCSS, as long as the trial court found (as it did) that they derived from trade secrets, they would still have been enjoined.

Therefore, the California Supreme Court held that the injunction and the relevant law were content-neutral. And once it did so, its decision was a foregone conclusion. When it looked to the state interests behind trade secrets law, the court judged them to be strong. Powerful interests in protecting property justify the law, and thus the injunction - and especially given the low standard of review, only an egregious free speech violation could overcome them.

(Moreover, in the background - also stacking the deck against a free speech victory - was the implicit copyright infringement issue. The state's interest in protecting copyright is also a powerful interest that only an egregious free speech violation could defeat.)

In the end, it's hard to argue with the Court's decision as a matter of law. But as I've pointed out in a previous column, decisions that address dual-use technologies like the DeCSS code are always troubling because they tend to apply too broadly. Decisions like Bunner, of course, deny access to would-be copyright infringers. But they will also deny access to those whose only goal is "fair use" - such as film students who want to sample parts of DVD movies for a class project.

As long as criminal uses of dual-use technologies are the focus, and fair uses are virtually ignored, free speech and thought will be impoverished. Our society - and our courts - should worry about the good guys who want to make fair use of copyrighted material, not just the bad guys whose only goal is misuse.

Two Interesting Issues the Case Raises for the Future

Though the California Supreme Court's decision was predictable, it did raise two issues that will be very interesting for the future.

The first is an issue about the prior restraint doctrine. That doctrine says that given the choice, a court should not prevent ideas from being expressed; instead, it should allow them to be expressed, and let whoever is hurt sue for damages.

Typically, the prior restraint doctrine is raised in suits about libel and government censorship, but in theory it could apply in any suit with a First Amendment dimension. The key to the doctrine is simply the idea of "Publish and pay" - that is, you might risk damages if you publish, but you won't face an injunction.

Because computer code is protected by the First Amendment, as the court held, it should ideally be protected by the prior restraint doctrine.

In this case, however, the California Supreme Court held that the prior restraint doctrine didn't apply, for a very simple reason: The posting of the DeCSS code had already occurred even before the injunction was issued. And the doctrine applies only to laws and injunctions that forbid publication in advance.

That seems to be plainly the right result, given relevant legal doctrine. But what if that doctrine is behind the times? What does it mean to have a restraint be "in advance of publication," when publication on the Internet is so much less irrevocable than in a newspaper or magazine? A posting can be posted, de-posted, and re-posted in minutes.

The second interesting issue the case raises for the future concerns the intersection of "reverse engineering," trade secrets law, and the First Amendment. (Again, reverse engineering, very roughly, is figuring out how to engineer something by simply examining it.)

The basic question is this: Is reverse engineering itself protected by the First Amendment? It seems plausible that it would be, since it is plainly a creative process, and one that spurs innovation. Arguably, reverse-engineering is also a type of "fair use" of copyrighted or trade-secret-protected material.

In the Bunner case, for instance, much was made of the fact that DeCSS creator Johansen allegedly had to violate a licensing agreement for CSS, in order to create DeCSS. But that licensing agreement itself may be unenforceable to the extent that its purpose was to infringe on the right to reverse engineer.

These two difficult issues will have to be left for the future. For now, all the California Supreme Court has made clear is that information likely to be proven to be a trade secret can stay secret while litigation over its status continues.

Julie Hilden, a FindLaw columnist, practiced First Amendment law at the D.C. law firm of Williams & Connolly from 1996-99

Hilden's first novel, 3, was published this summer. Kirkus Reviews wrote about 3, "When tragedy intervenes, it's no surprise but shocking nonetheless -- testament to Hilden's rather uncanny abilities." Hilden maintains a website at that includes MP3 and text downloads of the novel's first chapter.

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