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DVDs are an increasingly popular medium for distributing movies and
music, and the industry argues that the encryption format is a trade
secret that must be protected. However, the First Amendment is more
important, the court said.
The DVD industry's ``statutory right to protect its economically
valuable trade secret is not an interest that is `more fundamental' than
the First Amendment right to freedom of speech,'' Justice Eugene Premo
wrote for an unanimous three-judge panel.
The California appeals court ruling won't result in the DVD decryption
information being immediately unleashed on the Internet. In a related
case, a federal judge in New York last year issued a similar injunction
against Web site operators that remains in force.
But if upheld, the California ruling marks an unprecedented
establishment of free speech rights in cyberspace and could have sweeping
ramifications for the ability of businesses to police their trade secrets
on the Internet.
The California appeals court ruling stems from a 2-year-old lawsuit
filed by the Morgan Hill-based DVD Copy Control Association, which has
sought to bar Web sites with links throughout the world from posting the
software keys to the DVD encryption program.
The injunction had been issued against Andrew Bunner, the operator of
one of the sites, but Thursday's ruling applies broadly to the many sites
named as defendants by the industry.
The DVD industry, which is also backed by a computer industry trade
group, vowed to quickly appeal the ruling to the California Supreme Court.
``The decision would be a devastating blow to the U.S. economy, and it
makes absolutely no sense,'' said New York attorney Jeffrey Kessler, who
represents the DVD Copy Control Association. ``The decision is crazy.
Beyond our case, if this decision becomes the law of the United States,
all trade secrets laws are unconstitutional.''
Civil liberties groups and lawyers for the Web site operators,
meanwhile, called the decision a landmark endorsement of First Amendment
rights on the Internet.
``What this case isn't about is intellectual property rights,'' said
Robin Gross, an attorney with the Electronic Frontier Foundation. ``What
it is about is the First Amendment rights of people who come across
information in the public domain who want to republish and discuss that
information.''
The ruling was a change of fortune for free speech advocates, who have
repeatedly lost in their legal fight with the DVD industry.
Many of the Web site operators are Linux enthusiasts who have said they
legitimately reverse-engineered the DVD technology to allow DVDs to be
played on computers using the Linux operating system, and the dispute
traces back to a 15-year-old computer whiz in Norway who first posted the
technology in 1999.
In January 2000, Santa Clara County Superior Court Judge William
Elfving issued a sweeping injunction barring the posting of the code after
finding the industry's trade secrets would be lost if scofflaws were
allowed to post it, unrestricted, on the Internet. Elfving concluded that
unfettered access to information on the Internet does not equal a license
to steal or distribute protected trade secrets.
But the appeals court determined that the injunction goes too far,
cutting off the exchange of information -- in this case, source code --
among people who may not even know they are distributing a trade secret.
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