DVD Copy Control Association Amicus Curiae for Plaintiffs, in MPAA v. 2600 Case

(officially Universal v. Reimerdes), March 19, 2001

00-9185

____________________________________________________________________

United States Court Of Appeals

^{for the}

Second Circuit

* * * * *

UNIVERSAL CITY STUDIOS, INC., PARAMOUNT PICTURES

CORPORATION, METRO GOLDWYN MAYER STUDIOS INC., TRISTAR

PICTURES, INC., COLUMBIA PICTURES INDUSTRIES, INC., TIME

WARNER ENTERTAINMENT COMPANY, L.P., DISNEY ENTERPRISES

INC., TWENTIETH CENTURY FOX FILM CORPORATION,

Plaintiffs Appellees,

  against 

ERIC CORLEY, also known as Emmanuel Goldstein

and 2600 ENTERPRISES INC.,

Defendants Appellants,

  and 

SHAWN C. REIMERDES and ROMAN KAZAN,

Defendants.

^{_______________________}

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK

____________________________________________________________________

BRIEF OF DVD COPY CONTROL ASSOCIATION,

INC., AS AMICUS CURIAE, IN SUPPORT OF

APPELLEES AND AFFIRMATION OF JUDGMENT BELOW

____________________________________________________________________

WEIL, GOTSHAL & MANGES LLP

JEFFREY L. KESSLER

ROBERT G. SUGARMAN

GEOFFREY D. BERMAN

767 Fifth Avenue

New York, NY 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007

Attorneys for Amicus Curiae

DVD Copy Control Association, Inc.

____________________________________________________________________

DVD Copy Control Association, Inc. (“DVD CCA”) respectfully submits this memorandum as an amicus curiae to provide the Court with its views as a non-party with a substantial interest in the outcome of these proceedings.¹

INTERESTS OF AMICUS CURIAE

DVD CCA is a not-for-profit trade association formed by companies in the motion picture industry, the computer industry and consumer electronics industry.² It is the sole licensor of a proprietary system for the encryption and decryption of data contained on Digital Versatile Discs (“DVDs”) known as the Content Scramble System (“CSS”).

CSS was designed to prevent the unauthorized copying and distribution of copyrighted motion pictures contained on DVDs. The Defendants-Appellants are among those who developed and/or disseminated computer programs designed to defeat CSS, including a program called DeCSS. These actions facilitate the wholesale infringement of copyrighted motion pictures by individuals worldwide.

The development and/or dissemination of DeCSS and similar computer programs not only constitutes a violation of the Digital Millenium Copyright Act ("DMCA"), as the district court in this action found, it also constitutes misappropriation of DVD CCA’s trade secrets. Such misappropriation damages DVD CCA directly, does considerable harm to its licensees and has a substantial adverse effect on the motion picture, consumer electronics and computer industries.

1.In order to protect its trade secrets, in December, 1999, DVD CCA filed an action in the Superior Court for Santa Clara County, California, against numerous defendants, including Defendant-Appellant Eric Corley, to enjoin their misappropriation of DVD CCA’s trade secrets, including the posting and distribution of DeCSS (the “California Action”). On January 21, 2000 Judge J. William Elfving of the Santa Clara County Superior Court granted in part DVD CCA’s request for preliminary injunctive relief to prevent dissemination of its proprietary information. The Preliminary Injunction prevents the defendants from:

Posting or otherwise disclosing or distributing, on their websites or elsewhere, the DeCSS program … or any other information derived from this proprietary information.

See Order Granting Preliminary Injunction, p. 2, attached as Exhibit A.

The principal argument raised by the defendants in the California Action is that the First Amendment permits the theft of DVD CCA’s trade secrets. Similarly, the Defendants-Appellants in this action have raised the First Amendment as a defense to their violation of the Plaintiffs’-Appellees’ intellectual property rights. DVD CCA has successfully argued in the California Action, and respectfully submits to this Court, that the First Amendment has never been, and cannot be, used to completely negate intellectual property rights. If this Court were to overturn the injunction issued below on First Amendment grounds – as the Defendants-Appellees request – the harm to DVD CCA, its licensees and the industries it represents would be immeasurable.

ARGUMENT

DVD CCA respectfully urges this Court to reject the Appellants’ argument that the First Amendment somehow immunizes their publication and dissemination of DVD CCA’s intellectual property. Just as it is unlawful to publish the stolen combination to someone’s safe or the stolen code to someone’s burglar alarm, it is unlawful to publish a computer program the manufacture and public dissemination of which both violates the DMCA and misappropriates DVD CCA’s trade secrets.

Courts have long held that “[t]he First Amendment is not a license to trammel on legally recognized rights in intellectual property.” Dallas Cowboys Cheerleaders, Inc. v. Scoreboard Posters, Inc., 600 F.2d 1184, 1187-88 (5th Cir. 1979); see Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 600 (1980) (J. Stewart, concurring) (holding that “[t]he preservation of trade secrets … might justify the exclusion of the public from at least some segments of a civil trial”); Dr. Seuss Enterprises. v. Penguin Books USA, Inc., 109 F.3d 1394, 1403 (9th Cir. 1997) (rejecting claim that injunctions against copyrighted material constitute prior restraint in violation of the First Amendment); Federal Election Comm’n v. International Funding Inst., Inc., 969 F.2d 1110, 1120 (D.C. Cir. 1992) (C.J. Buckley, concurring) (“[The defendant] would have us extend the reach of the First Amendment beyond reason when it asks us to sanction what would otherwise be an act of piracy”) cert. denied 506 U.S. 1001; Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d 829 (11th Cir. 1990) (finding maker of computer chip used to pirate cable television signals not protected by First Amendment); United Video, Inc. v. FCC, 890 F.2d 1173, 1191 (D.C. Cir. 1989) (finding no first amendment right to use the copyrighted works of others); In re the Iowa Freedom of Info. Council, 724 F.2d 658, 664 (8th Cir. 1983) (denying news media’s petition to unseal court transcripts containing a private litigant’s trade secrets); See Standard & Poor’s Corp. Inc. v. Commodity Exch., Inc., 541 F. Supp. 1273 (S.D.N.Y. 1982) (holding that a newspaper had no First Amendment right to access a corporation’s trade secrets sealed during a litigation).

The Second Circuit has long-embraced this line of authority. In 1986, this Court addressed a first amendment challenge to the ‘manufacturing clause’ of the Copyright Act. In rejecting that challenge, this Court held that:

…the cases plaintiffs rely upon establish that there is a constitutional right to freely circulate one’s ideas. They also establish the public’s right to receive those ideas. They do not, however, create any right to distribute and receive material that bears protection of the Copyright Act.

Authors League of America, Inc. v. Oman, 790 F.2d 220, 223 (2nd Cir. 1986). This Court went on to note “the absence of precedent granting any such right and of any judicially cognizable reason or policy to establish such a right…” Id.; see also Nihon Keizai Shimbun, Inc. v. Comline Business Data Inc., 166 F.3d 65, 74-75 (2nd Cir. 1989); New Era Publications International v. Henry Holt and Co., Inc., 873 F.2d 576, 584 (2nd Cir. 1989).

The unbroken line of cases rejecting first amendment attacks on intellectual property rights continues to this day. On February 12, 2001, the Court of Appeals for the Ninth Circuit, in A&M Records, et al. v. Napster, Inc., 2001 WL 115033 (9th Cir.), addressed the legality of an Internet-based computer program that facilitates the infringement of copyrighted music. Napster argued that the First Amendment protected its actions. In rejecting that argument, the Ninth Circuit held that

First Amendment concerns in copyright are allayed by the presence of the fair use doctrine.…Uses of copyrighted material that are not fair uses are rightfully enjoined.

Napster, Inc., 2001 WL 115033, at *22. (citations omitted).

Similarly, on February 15, 2001, the Court of Appeals for the D.C. Circuit upheld the Copyright Term Extension Act of 1998 over a First Amendment attack brought by many of the same law professors who submitted amicus briefs in support of Defendants-Appellants herein. The appellants in that case argued that the First Amendment rendered aspects of the Act unconstitutional. The court disagreed, holding that:

The relevant question under the First Amendment – regardless of whether it arises as a defense in a suit for copyright infringement or in an anticipatory challenge to a statute or regulation – is whether the party has a first amendment interest in a copyrighted work…. [Works under copyright are] subject to fair use. This obviates further inquiry under the First Amendment.

Eldred v. Reno, 2001 WL 127725, at *4 (D.C. Cir.) (emphasis supplied). The appellants, the court concludes, “lack any cognizable first amendment right to exploit the copyrighted works of others.” Id. at *5.

In issuing the preliminary injunction in the California Action, Judge Elfving followed the same line of reasoning, ruling that although “[t]hey may still continue to discuss and debate the subject,” the defendants “will simply have to remove the trade secret information from their web sites.” Exh. A, p. 4. Judge Elfving emphasizes that “[o]ur system currently places high importance on protecting such intellectual property, and this Court must enforce such protections with all appropriate and available means.”

Far from stifling speech and free expression, injunctions against the unauthorized use of intellectual property – or against dissemination of the tools of infringement – actually promote these important values by encouraging and protecting creative thought and expression. The Supreme Court has long recognized that:

A copyright, like a patent, is “at once the equivalent given by the public for benefits bestowed by the genius and meditations and skill of individuals, and the incentive to further efforts for the same important objects.”

Fox Film Corp. v. Doyal, 286 U.S. 123 (1932) citing Kendall v. Winsor, 21 How. 327, 328 (1858). As the Court of Appeals for the Fifth Circuit recently put it:

The core purpose of copyright law is to “secure a fair return for an author’s creative labor” and thereby “to stimulate artistic creativity for the general public good.”

Veeck v. Southern Building Code Congress International, Inc., 2001 WL 96046, at *12 (5th Cir.), quoting in part Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975); see also Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 481-82 (1974).

True to this long line of authority, the injunction issued in this case protects DVD CCA’s intellectual property and the Studios copyrighted movies from theft and unauthorized use, thereby encouraging the development and proliferation of new ideas and new forms of expression. The injunction does not restrict the defendants from discussing or publishing opinions and information about CSS or DeCSS. It does not enjoin the defendants from developing their own encryption or decryption technology. Defendants are free to study, discuss, debate and experiment with cryptography. But they may not “express” their desire or ability to decrypt DVDs through unauthorized dissemination of an unlawful circumvention device comprising DVD CCA's intellectual property. Any ruling to the contrary would stifle expression by denying to intellectual property owners the rewards of their work.

CONCLUSION

The First Amendment never has been and cannot now be used as a license for the unauthorized use, sale or distribution of others’ intellectual property. The advent of the Internet, and the ability for rapid and widespread distribution of information that has come with it, cannot be used as an excuse for wholesale theft and misappropriation. Rather, such technological innovations make all the more essential the preservation of this nation’s intellectual property protections.

Respectfully submitted,

Dated: February 27, 2001

______________________________

ROBERT G. SUGARMAN

WEIL, GOTSHAL & MANGES LLP

767 Fifth Avenue

New York, NY 10153

Of Counsel

JEFFREY L. KESSLER

GEOFFREY D. BERMAN

Attorneys for Amicus Curiae

DVD COPY CONTROL ASSOCIATION, INC.

FRAP 26.1 DISCLOSURE STATEMENT

Pursuant to Federal Rule of Appellate Procedure 26.1, Amicus Curiae DVD Copy Control Association, Inc., hereby declares that:

(i) It has no parent corporations; and

(ii) There is no publicly held company that owns 10% or more of DVD CCA's stock.

TABLE OF CONTENTS

Page

FRAP 26.1 DISCLOSURE STATEMENT i

TABLE OF AUTHORITIES iii

INTERESTS OF AMICUS CURIAE 1

ARGUMENT 2

CONCLUSION 7

TABLE OF AUTHORITIES

FEDERAL CASES

A&M Records, et al. v. Napster, Inc., 2001 WL 115033 (9th Cir.) 4

Authors League of America, Inc. v. Oman, 790 F.2d 220 (2nd Cir. 1986) 4

Cable/Home Communication Corp. v. Network Productions, Inc.,
902 F.2d 829 (11th Cir. 1990) 3

Dallas Cowboys Cheerleaders, Inc. v. Scoreboard Posters, Inc.,
600 F.2d 1184 (5th Cir. 1979) 3

Dr. Seuss Enterprises v. Penguin Books USA, Inc.,
109 F.3d 1394 (9th Cir. 1997) 3

Eldred v. Reno, 2001 WL 127725, at 4 (D.C. Cir.) (emphasis supplied) 5

Federal Election Commission v. International Funding Institute, Inc.,
969 F.2d 1110 (D.C. Cir. 1992) 3

Fox Film Corp. v. Doyal, 286 U.S. 123 (1932) 6

In re the Iowa Freedom of Information Council, 724 F.2d 658 (8th Cir. 1983) 3

Nihon Keizai Shimbun, Inc. v. Comline Business Data Inc.,
166 F.3d 65 (2nd Cir. 1989) 4

Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974) 6

New Era Publications International v. Henry Holt and Co., Inc.,
873 F.2d 576 (2nd Cir. 1989) 4

Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555 (1980) 3

Standard & Poor's Corp. Inc. v. Commodity Exch., Inc.,
541 F. Supp. 1273 (S.D.N.Y. 1982) 3

United Video, Inc. v. FCC, 890 F.2d 1173 (D.C. Cir. 1989) 3

Veeck v. Southern Building Code Congress International, Inc.,
2001 WL 96046 (5th Cir.) 6

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