DVD COPY CONTROL ASSOCIATION, INC.,
Plaintiff,
vs.
ANDREW THOMAS MCLAUGHLIN, et al.
Defendants,
Case No. CV 786804
ORDER GRANTING PRELIMINARY INJUNCTION
The above-entitled matter came on for hearing before the Honorable William J. Elfving on January 18, 2000 at 1:30 p.m. in Department 2. The matter having been taken under submission, the Court orders as follows:
The Plaintiff's Motion for Preliminary Injunction is GRANTED in part as follows:
The named Defendants, their officers, directors, principals, agents, servants, employees, attorneys, successors and assigns, representatives and all persons acting in concert with them, are hereby enjoined from: Posting or otherwise disclosing or distributing, on their websites or elsewhere, the DeCSS program, the master keys or algorithms of the Content Scrambling system ("CSS"), or any other information derived from this proprietary information.
Plaintiff, DVD Copy Control Association, is the sole licencing entity which grants licenses to the CSS technology in the DVD format. CSS, "Content Scrambling System," is an encryption system developed by Plaintiff's predecessor-in-interest in order to protect the copyrighted materials stored on DVDs. The alleged misappropriation of the CSS algorithm and master keys is the subject of this action and the instant Motion for Preliminary Injunction.
The evidence is fairly clear and undisputed that the original postings of DeCSS, a program which allegedly embodies, uses and/or is a substantial derivation of CSS, to the Internet occurred on October 6 and then on October 25, 1999. Plaintiff's evidence shows that the Motion Picture Association immediately began an investigation and sent cease and desist letters on November 18, 1999. Some individuals and entities such as CNET's download.com removed the alleged trade secret materials; other did not. Thereafter, on December 27, 1999 Plaintiff filed this lawsuit seeking the limited remedy of injunctive relief for misappropriation of its trade secret. The Court denied Plaintiff's very broad request for a Temporary Restraining Order, and the parties proceeded to submit extensive argument and evidence for the Court's consideration. In the course of these proceeding, Plaintiff narrowed the scope of the injunction which they seek to only prohibit Defendants from posting and/or knowingly linking to any websites which post the trade secret and/or its derivatives.
In order to prevail on their Motion for Preliminary Injunction in a misappropriation of trade secret case, the Plaintiff must show that they are likely to prevail on the merits, and that the burden of harm weighs in their favor. (See generally Witkin, Cal. Procedure, 4th ed., Provisional Remedies, IV Injunctions, Section 296) "A preliminary injunction may be properly issued whenever the questions of law or fact are grave and difficult, and injury to the moving party will be immediate, certain, and great if it is denied, while the loss to the opposing party will be trivial if it is granted." Wilms v. Hand (1951) 101 Cal.App.2d 811, 815
In order to prevail on the merits, Plaintiff must establish that they had a trade secret which was misappropriated. The Plaintiff has shown that the CSS is a piece of proprietary information which derived its independent economic value from not being generally known to the public and that Plaintiff made reasonable efforts under the circumstances to maintain its secrecy. Although Defendants argue extensively that a 40 bit encryption system is weak at best, it is undisputed that the encryption remained a secret for close to three years and was limited in its strength by certain international export regulations. Under the law, a system to protect secrecy does not become unreasonable simply because a clever thief finds a way to penetrate the security. (E.L. du Pont de Nemours & Co., inc. v. Christopher, (CA5, 1970) 431 F.2d 1012) Under these circumstances, the Court is satisfied that Plaintiff has shown a likelihood of prevailing on the issue of trade secret.