March 7, 2000

VIA HAND DELIVERY

The Honorable Robert N. Chatigny

United States District Court

District of Connecticut

450 Main Street

Hartford, Connecticut 06103

Re: Universal City Studios, Inc. et al. v. Hughes

Case No. 300CV72 RNC

Your Honor:

This office represents the defendant Jeraimee Hughes. Pursuant to § (b) of the Court’s Standing Order on Pretrial Deadlines, Mr. Hughes hereby respectfully submits this prefiling letter requesting a conference prior to the filing of F.R.C.P. 17 and F.R.C.P. 12(b) motions by Mr. Hughes. The nature of the proposed motions and a brief summary of the basis for each motion are set forth below. We ask that the Court kindly note that in several cases, there is more than one basis for a motion under the same Rule.

  1. Procedural History and Brief Statement of the Facts:

The complaint in this matter was filed by plaintiffs on or about January 14, 2000. Defendant filed a Motion for Extension of Time to file an answer or otherwise reply on February 3, 2000, which Motion was granted by the Court on February 7, 2000.

The plaintiffs in this action are the eight major motion picture studios in the United States. Mr. Hughes is alleged to be an operator and content provider of the ct2600 website. Complaint at ¶ 6. Plaintiffs allege that defendant posted the decryption code to DVD discs on his website in violation of the the Digital Millenium Copyright Act ("DMCA") 12 U.S.C. § 1201 et seq., and more specifically, 17 U.S.C. § 1201(a)(2). Plaintiffs engage in the business of producing, manufacturing and distributing motion pictures. The relevant medium within which the motions pictures are distributed is digital versatile discs ("DVDs"). The plaintiffs claim that they adopted a technological measure, the contents scramble system ("CSS") in order to provide "security" to the copyrighted contents of DVD discs. The DVD discs contain encryption "keys" that can only be unlocked or decrypted by licensed DVD playback devices. It should be noted that such devices can be found not only free-standing, as in a home entertainment system, but also in personal computers. Plaintiffs further aver that "all members of the DVD industry, including software and hardware manufactures of DVD players, DVD replicators and the content providers -- the motion picture studios -- adopted CSS as direct licensees or by contracting CSS through direct licensees." Compliant at ¶ 18. To license the CSS technology, the members of the DVD industry created the DVD Copy Control Association, Inc. ("DVD CCA") to be the owner of the CSS license.

In October of 1999, a Norwegian individual decrypted the CSS encryption scheme. He did so, as is more fully described herein, in order to allow his lawfully purchased DVD disc to play on his "Linux"-run computer. "Linux" is a computer operating system that has been independently developed openly on the Internet by individuals seeking an alternative to the "Windows" computer operating system, which many feel is full of operating flaws or "bugs." When DVD discs began to enter commerce, however, Linux operators found they could not fully "play" the DVD discs on their Linux computers. This was an "interoperability" problem -- one type of technology introduced into commerce could not communicate with another technology. Ultimately, a portion of the CSS encryption technology was reverse-engineered to allow Linux-based system users to play DVD discs. That solution was called "DeCSS" for decryption of CSS. There has been no piracy or unauthorized copying of DVD discs, and indeed, plaintiffs allege none.

The Norwegian individual then posted his solution to the interoperability problem on the Internet, and that information was eventually picked up by website operators and other individuals in the United States. The DVD CCA and later the eight plaintiffs herein subsequently brought two suits, captioned below, in California and New York, seeking to prevent the posting of DeCSS on Internet sites.

Mr. Hughes therefore objects to the complaint on various grounds, including but not limited to the fact that the DMCA does not apply to DeCSS, there is a reverse engineering exception to the DMCA, plaintiffs are misusing their copyright, plaintiffs invoke the wrong section of the DMCA, the DMCA is an unconstitutional prior restrain on free speech, and the alleged posting of the DeCSS is protected political speech. Mr. Hughes further objects to the standing of the plaintiffs to bring the within action, and argues that the complaint is deficient on a number of grounds, including, but not limited to failure to bring an action by the real party in interest, failure to join a party needed for a just adjudication, and numerous failures to state a claim upon which relief can be granted.

II. Proposed Motions and Basis for Each Motion:

  1. The within complaint should be dismissed because under F.R.C.P. 17(1) because plaintiffs are not the real party in interest. The eight named plaintiffs claim, in their complaint, that they are "the major motion picture studios in the United States," and that "[e]ach plaintiff is engaged in the business of producing, manufacturing, and/or distributing copyrightable material, including, specifically motion pictures." Complaint at ¶ 2. Plaintiffs then admit that they are members of the digital versatile disc ("DVD") industry, and that they are either direct licensees or contractors of direct licensees, of the contents scramble system ("CSS"). Compliant at ¶ 18.

    2. Plaintiffs, however, have chosen to bring their action under the Digital Millennium Copyright Act ("DMCA") 12 U.S.C. § 1201 et seq., and more specifically, 17 U.S.C. § 1201(a)(2), claiming that by "offering to the public, providing, or otherwise trafficking in DeCSS, defendant has violated the provisions governing circumvention of copyright protection systems" as set forth in the DMCA. Complaint at ¶ 27. Putting aside the issue whether the alleged actions of Mr. Hughes are a violation of any provisions of the DMCA vel non, the fact remains that by bringing an action alleging circumvention of the CSS system, plaintiffs have attempted to bring an action for the benefit of the DVD Copy Control Association, Inc. ("DVD CCA"), the holder of the CSS licence, which is the real party in interest and whose presence is necessary for a just adjudication.

    The DVD CCA, organized under § 501(c)(3) of the Internal Revenue Code, is a voluntary organization created by the computer hardware, consumer electronics and motion picture industries to create technological standards for DVD technology. The DVD CCA is the owner of the CSS technology and licenses that technology to the various industries and manufacturers supplying product to those industries. The eight named plaintiffs in the within action are not the owners of the CSS technology they claim has been circumvented, nor are they the only members of the entity owning and licensing the CSS technology. Therefore it is only the DVD CCA which has the arguably protestable interest which plaintiffs allege was affected by Mr. Hughes. It is the DVD CCA that owns the license rights to CSS technology, and the motion picture industry therefore cannot seek to prosecute the rights or another.

    The party invoking federal jurisdiction bears the burden of establishing that it has standing, and must "clearly ... allege facts demonstrating that it is a proper party to invoke judicial resolution of the dispute." United States v. Hays, 515 U.S. 737, 115 S.Ct. 2431, 2435, 132 L.Ed.2d 635 (1995) (internal quotation marks and citations omitted). Plaintiffs cannot sustain this burden.

  2. The complaint should likewise be dismissed under F.R.C.P. 12(b)(7) because plaintiffs have failed to join a necessary party under F.R.C.P. 19. Aside from the arguments supporting defendant’s F.R.C.P. 17 motion hereinabove, the DVD CCA is also a necessary party to this action pursuant to F.R.C.P. 19(a)(2)(ii). Failure to include DVD CCA as a party in the within action would subject Mr. Hughes to the substantial risk of incurring double or multiple obligations. If the eight named members of the motion picture industry are allowed to prosecute this action, there is no protection for Mr. Hughes, as well as any other persons similarly situated, that would prevent Mr. Hughes from later being sued for alleged DMCA violations by the DVD CCA. The fact that the DVD CCA would be able to bring a separate and independent claim based upon the same facts and allegations asserted in the present action, seeking essentially the same damages that are being sought in this action, means that if the action proceeded without the DVD CCA, and the present within plaintiffs were successful, defendant would remain subject to multiple obligations on the same claim. See Rose v. Simms, 1995 WL 702307, at 6 (S.D.N.Y. Nov. 29, 1995); Avon Cosmetics (FEBO) Ltd. v. New Hampton, Inc., 1991 WL 90808 at 4 (S.D.N.Y. 1991). This is specifically the "substantial risk or incurring double, multiple, or otherwise inconsistent obligations" that F.R.C.P. 19(a)(2)(ii) seeks to avoid.

  3. The complaint likewise should be dismissed under F.R.C.P. 12(b)(7) because adjudication of the within claims by plaintiffs without the DVD CCA could impair or impede DVD CCA’s ability to protect their interests in the CSS technology. Therefore, under F.R.C.P. 19(a)(2)(i), compulsory joinder under the "impair or impede clause" is warranted to protect the absentee’s (DVD CCA’s) ability to protect its interest. As discussed above, DVD CCA is the sole licensing entity for CSS technology. Complaint at ¶ 18. See also Complaint for Injunctive Relief for Misappropriation of Trade Secrets, DVD Copy Control Association v. McLaughlin, et. al. (Santa Clara County, California). Clearly, any decision as to the legitimacy of distributing DeCSS has direct and immediate consequences to DVD CCA’s interests in the CSS technology. Plaintiffs do not adequately represent the interests of DVD CCA because plaintiffs only represent but one portion of the industries represented in the DVD CAA. The interests of the computer and consumer electronics industries, which also comprise the DVD CCA, are unrepresented and subsequently the action should be dismissed for failure to join a necessary party.

  4. The within complaint should be dismissed under F.R.C.P. 12(b)(6) because plaintiffs erroneously invoke the DMCA, which does not apply the alleged conduct by Mr. Hughes. Assuming, arguendo, that Mr. Hughes posted the DeCSS code on the website ct2600, the fact remains that DeCSS is not an "access control device" to copyrighted material as defined by the DMCA. The material "protected" by CSS also includes non-copyrighted material, such as regional playback control codes ("RPC"), commercial advertising and other non-expressive aspects of DVD playback, including code that prevents users from skipping or fast forwarding through the former. DVD licenses are required, by the terms of their CSS license, to enable these functions. By protecting such non-expressive functional content behind the CSS firewall, the plaintiffs propose too broad a definition to access control device than Congress intended. To adopt plaintiff’s definition of CSS as an access control device is to allow copyright holders to misuse their copyright to cover or cloak information or data that otherwise would not be covered by their copyright .

    5. DeCSS is fair use of CSS and the copyright material it protects -- to obtain interoperability for Linux users; it certainly does not constitute copyright infringement. This is consistent with Sony v. Universal City Studios, 464 U.S. 417 (1984) (sale of copying equipment for video tapes does not constitute contributory copyright infringement if the product is widely used for legitimate purposes), and analogous to Sega v. Accolade, 977 F.2d 510, 527-28 (9th Cir. 1993) (the disassembly of copyrighted object code is fair use of copyrighted work if such disassembly provides the only means of access to that copyrighted code and copier has a legitimate for seeking access). This fair use argument we make here is also strongly analogous to Sony Computer Entertainment, Inc. v. Connectix Corp., No. 99-15852 (9th Cir. Feb 10, 2000) (reverse engineering by copying functional elements of programming to create alternative playback platform for computer game constitutes fair use).

    Defendant’s reading of "fair use" is likewise consistent with the DMCA framers’ expressed intent, to wit: 17 U.S.C. § 1201(c)(1) provides that "[n]othing in this section shall affect rights, remedies, limitations, or defenses to copyright infringement, including fair use, under this title." See also S.Rep.No. 105-190 at 25 (1998): "[The provisions of subsection (d)] are intended to ensure that none of the provisions in section 1201 affect the existing legal regime established by the Copyright Act and case law interpreting that statute." For this reason as well, plaintiffs fail to state a claim upon which relief can be granted.

  5. The complaint should also be dismissed under F.R.C.P. 12(b)(6) because plaintiffs have invoked the wrong section of the DMCA. 17 U.S.C. § 1201(a)(2) covers access control devices, but plaintiffs’ claims are based on a copyright control / infringement theory, which is only covered by 1201(b)(2). This argument is consistent with the legislative history, which explains that 1201(a)(2) and 1201(b) are "designed to protect two distinct rights and to target two distinct classes of devices. Subsection 1201(a)(2) is designed to protect access to a copyrighted work. Section 1021(b) is designed to protect the traditional rights of a copyright owner. ... The two sections are not interchangeable .... For example, if an effective technological protection measure does nothing to prevent access to the plain text of the work, but is designed to prevent that work from being copied, then a potential cause of action against the manufacturer of a device designed to circumvent the measure lies under subsection 1021(b), but not under 1201(a)(2). " S.Rep.No. 105-190 (1998).

  6. The within complaint should also be dismissed under F.R.C.P. 12(b)(6) because DeCSS falls within the "reverse engineering" exception of the DMCA, 17 U.S.C. § 1201(f), which is specifically drafted to allow the resolution of computer and other technology interoperability problems. § 1201(f) provides that notwithstanding any of the prohibitions of § 1201(a) and (b) a person "may circumvent a technological measure .... to achieve interoperability of an independently created computer program with other programs ... or for the purpose of enabling interoperability of an independently created compute program with other programs ... and the information acquired through [such] acts and the means [so permitted] may be made available to others ... solely for the purpose of enabling interoperability of an independently created computer program with other programs...."

    7. DeCSS was developed by a user of the "Linux" computer operating system, a consumer co computer operating system developed on the Internet and effectively "owned" by the community of its users, many of whom contributed towards its development. Linux was independently developed as an alternative the omnipresent "Windows" operating system owned and licensed by Microsoft Corporation, which Windows program, in the opinion of many, contains many errors and "bugs" making it undesirable. With the advent of DVD technology, however, Linux users discovered that they could not fully "play" lawfully obtained DVD discs, which they had purchased in commerce, on their computers operating under the Linux system. The CSS technology of the DVD discs would not operate in the Linux environment. This posed a classic interoperability problem -- the manufactures and distributors, in international as well as United States commerce, of a consumer product had not provided for the operation of that product in any operating system but "Windows." The Linux community eventually sought to remedy that problem, and DeCSS was created. Because "[t]he purpose of [1201(f)] is to foster competition and innovation in the computer and software industry" S.Rep.No. 105-190 at 28 (1998), and the DMCA expressly provides for an exception for reverse engineering to solve interoperabilty problems, plaintiffs fail to state a cause of action.

  7. Plaintiffs also fail to state a cause of action under F.R.C.P. 12(b)(6) because the posting of DeCSS by defendant was protected political speech. The ct2600 website, upon which plaintiffs allege Mr. Hughes posted DeCSS, is a forum for constructive commentary upon Internet issues of interest to those who visit the website. Specifically, if one assumes, arguendo, that DeCSS was posted on ct2600, it was posted within the context of discussion and debate concerning the California and New York cases, DVD Copy Control Association, Inc., v. McLaughlin, et al., and Universal City Studios, et al. v. Reimerdes, et al. As such constitutionally protected speech, it is immunized from plaintiffs’ claims.

  8. Plaintiffs fail to state a cause of action because plaintiffs’ requested injunction, restraining speech prior to publication, is presumptively unconstitutional. It is beyond cavil that a "prior restraint" is any governmental action, including a court injunction, that prevents speech from reaching the public. Any prior restraint is the most dangerous imposition on individuals' freedom of speech. Nebraska Press Ass'n v. Stuart, 427 U.S. 539, 559 (1976) ("Prior restraints on speech and publication are the most serious and least tolerable infringement on First Amendment rights"). Therefore, request for such a restraint "comes to [the] Court bearing a heavy presumption against its constitutional validity." New York Times Co. v. United States, 403 U.S. 713, 714 (1971).

    9. The U.S. Supreme Court has noted that the Internet is one of the most egalitarian mediums invented and one of the greatest democratic tools for the 21st century. Reno v. American Civil Liberties Union, 521 U.S. 844, 851 (1997). The Internet is "the most participatory form of mass speech yet developed - [and] is entitled to the highest protection from governmental intrusion." Id. at 883, 884. The Supreme Court recognized in Reno that the Internet is a "unique and wholly new medium of worldwide human communication" which disseminates "content as diverse as human thought." Id. at 852. Recognizing the need for the highest level of protection from governmental restraints on speech, the Supreme Court likened expression in on-line chat rooms to town criers with voices resonating far from the soap box, and likened expression in newsgroups having characteristics similar to traditional street pamphleteers. Id. at 2344.

    In the instant case, plaintiffs seek to protect only private interests, and have not narrowly tailored their requested relief. As such, plaintiff cannot overcome the presumption that the requested prior restraint is unconstitutional. As well, plaintiffs cannot point to any damage caused by defendant’s protected speech. The requested relief therefore has no legitimate purpose, and would serve only to have a chilling effect on free speech in cyberspace.

    Further as the hard and soft technology of cyberspace continues to grow exponentially, interoperability issues will continue to proliferate. Consequently, the necessity to decrypt technology and offer solutions to interoperability problems increases as well. Plaintiffs’ requested relief would chill the ability of Internet users to actively pursue, discuss and distribute interoperabilty solutions. This requested relief is not what the framers of the DMCA intended. Furthermore, individuals who do not have the resources to rule out any potential complaints of infringement or misappropriation will be forced to refrain from posting, linking or discussing interoperability problems and solutions on the Internet for fear of lawsuits. Additionally, the removal of links to other web sites (through the injunction) will also effectively restrain any additional speech contained on the linked web site, regardless of whether or not it relates to DeCSS.

  9. The complaint should be dismissed under F.R.C.P. 12(b)(1) because plaintiffs are misusing their copyright. The DMCA cannot be used to extend the copyright of copyright holder beyond its scope to affect marketing power in another area. Plaintiffs are attempting to extend power over exhibition software, which is a different area than that protected by their copyrights. Further, the plaintiffs are attempting to dictate the business model of Linux, owned by its community of users, to prevent the creation of alternative platforms for operation of DVD discs.

The Supreme Court has implied that the doctrine of "patent misuse" applies to copyright infringement actions, approving a lower court's borrowing of the patent misuse doctrine to invalidate a "block-booking" arrangement whereby the holder of copyrights in certain films conditioned the granting of licenses to show the film upon the purchase or rental of other non- copyrighted films. U.S. v. Paramount Pictures, 68 S.Ct. 915, 92 L.Ed. 1260, 77 U.S.P.Q. 243 (1948). Defendant’s argument is therefore consistent with the principle that a copyright holder cannot seek to artificially enlarge its copyright by conditioning use of its copyrighted materials (the motion picture itself) on the purchase of other copyrighted materials (CSS), for that reason that it "adds to the monopoly of a single copyrighted picture that of another copyrighted picture which must be taken and exhibited in order to secure the first. That enlargement of the monopoly of the copyright was condemned below in Paramount, in reliance on that principle. See Ethyl Gasoline Corporation v. United States, 309 U.S. 436, 459, 60 S.Ct. 618, 626, 84 L.Ed. 852; Morton Salt Co. v. Suppiger Co., 314 U.S. 488, 491, 62 S.Ct. 402, 404, 86 L.Ed. 363; Mercoid Corp. v. Mid-Continent Investment Co., 320 U.S. 661, 665, 64 S.Ct. 268, 271, 88 L.Ed. 376. In following this reasoning, the Court below in U.S. v. Paramount, supra, enjoined defendants from performing or entering into any license in which the right to exhibit one feature is conditioned upon the licensee's taking one or more other features.

Defendant’s argument here is further supported by the legislative history of the DMCA’s precursor proposed legislation, H.R. 2271. "In its original version, H.R. 2281 contained a provision that would have made it unlawful to circumvent technological protection measures that effectively control access to a work, for any reason. In other words, the bill, if passed, unchanged, would habe given copyright owners the legislative muscle to "lock up" their works in perpetuity unless each and every one of us separately negotiated for access. In short, this provision converted an unobstructed marketplace that tolerates "free access" in some circumstances to a "pay-per-access" system, no exceptions permitted .... In our opinion, this not only stands copyright law on its head, it makes a mockery of our Constitution." 105 H.Rpt. 551, Prt. 2 (July 2, 1998). For this reason as well, Mr. Hughes submits the complaint must be dismissed.

 

Therefore, defendant Jeraimee Hughes respectfully requests that this Court schedule a prefiling conference, and that after such conference, he be permitted to file the aforesaid motions on the articulated grounds together with more fully developed legal memoranda on the matter.

We thank Your Honor in advance for your courtesies and look forward to working with the Court.

Very truly yours,

CHAPMAN & ASSOCIATES, LLC

 

 

AVERY S. CHAPMAN

cc: Robert P. Dolian, Esq., counsel for plaintiffs.

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