JAN 21 2000
Chief Executive Officer
Superior Court of CA County of Santa Clara
By ___________________ DEPUTY


et al.

Case No. CV 786804


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 algorithyms of the Content Scrambling system
("CSS"), or any other information derived from this proprietary information.

Plaintiff, DVD Copy Control Assosciation, is the sole licensing entity which grants licenses
to the CSS technology in the DVD format. CSS, "Content Scrambling System," is an encryption
system designed 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 the 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 occured
on October 6 and then on October 25, 1999. Plaintiff's evidence shows that the Motion Picture
Assosciation 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 Plaintiss 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
proceedings, 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 Plaintiss 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, §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.I. du Pont de
Nemours & Co., inc. c. 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.

Plaintiff must also show that the trade secret was misappropriated, or that the trade secret was
obtained through improper means and that the Defendants knew or should have know that the trade
secret was obtained through improper means when they posted it or its derivitive to the Internet.
(Civil Code § 3426.1(b)) Although the parties dispute the who and how, the evidence is fairly clear
that the trade secret was obtained through reverse engineering. The Legislative comment to the
Uniform Trade Secret Act states, "Discovery by "reverse engineering," that is, by starting with the
known product and working backward to find the method by which it was developed," is considered
proper means. The only way in which the reverse engineering could be considered "improper
means" herein would be if whoever did the reverse engineering was subject to the click license
agreement which preconditioned installation of DVD software or hardware, and prohibited reverse
engineering. Plaintiff's case is problematic at this pre-discovery stage. Clearly they have no direct
evidence at this point that Mr. Hon Hohansen did the reverse engineering, and that he did so after
clicking on any license agreement. However, in trade secret cases, it is a rare occasion when the
Plaintiff has a video of an employee walking out with trade secrets, or an admission of a competitor

that they used improper means to obtain Plaintiff's intellectual property. In most situations,
Defendants try to cover their tracks with considerably more effort than the Defendant did herein.
The circumstantial evidence, available mostly due to the various defendants' inclination to boast
about their disrespect for the law, is quite compelling on both the issue of Mr. Johansen's improper
means and that Defendants' knowledge of impropriety.

        Defendants make the additional argument that even if Johansen clicked on the license
agreement, such an agreement contravenes Norwegian law. This Court is not well positioned to
interpret Norwegian Law, and Defendant's own expert, even if this Court could consider expert
testimony on a question of legal interpretation,¹ states that the issue has not been conclusively
decided in Norway. Defendants have not sufficiently supported their argument that the licence
agreement, like the one at issue here, would be disallowed by Norwegian Law, although they may
at some point be able to do so.
        ¹Defendant stated in passing at the hearing on Preliminary Injunction that issues of
foreign law are questions of fact, however neither side has provided this Court with argument or
authority on this point.
        Most compelling in this matter is the relative harm to the parties. At this point in the
proceeding, the harm to the Defendants is truly minimal. They will simply have to remove the trade
secret information from their web sites. They may still continue to discuss and debate the subject
as they have in the past in both an educational, scientific, philosophical and political context.
Defendants have not provided evidence of any economic harm which an injunction could currently
cause, although if such an injunction were not granted it is quite possible that this could change
which could potentially shift the burden of harm in Defendants' favor.

        On the other hand, the current and prospective harm to the Plaintiff, if the Court does not
enjoin the display of their trade secret, will be irreparable. It is undisputed that the Plaintiff's
predecessor-in-interest expended considerable time, effort and money in creating the intellectual

property at issue in order to protect the copyrighted information contained on DVDs. As Plaintiff
conceded at the hearing on the TRO, once this information gets into the hands of an innocent party,
the Plaintiff loses their ability to enjoin the use of their trade secret. If the Court does not
immediately enjoin the posting of this proprietary, the Plaintiff's right to protect this
information as secret will surely be lost, given the current power of the Internet to disseminate
information and the Defendants' stated determination to do so. Religious Technology Center v.
Netcom on-Line.com (N.D. Cal 1995) 923 F.Supp. 1231  In that event, the protection afforded by
the encryption system licenced by the Plaintiff, wether to limit DVD hardware and software
suppliers or to control unauthorized copying and distribution of DVD content will become
completely meaningless. The encryption system which the Plaintiff licences cannot simply be
changed like a secret code used by a military where everyone involved simply changes to the new
code because millions of people own current DVDs and DVD viewing systems.

        The Court is not persuaded that trade secret status should be deemed destroyed at this stage
merely by the posting of the trade secret to the Internet. Religious Technology Center v. Netcom
on-Line.com supra. To hold otherwise would do nothing less than encourage misappropriaters of
trade secrets to post the fruits of their wrongdoing on the Internet as quickly as possible and as
widely as possible thereby destroying a trade secret forever. Such a holding would not be prudent
in this age of the Internet. Plaintiffs moved expeditiously, reasonably and responsibly to protect
their proprietary information as soon as they discovered it had been disclosed by investigating,
sending cease and desist letters all over the world and then filing suit against those who refused
within two months of the diclosure. The Court is satisfied that trade secret status has not been

        Whether or not the Defendants agree that such information as at issue here should be
protected or secret is irrelevant to the determination herein. Our system currently places high
importance on protecting such intellectual property, and this Court must enforce such protections
with all appropriate and availible means.

        In granting this injuction this Court is mindful of the many potential enforcement problems.
However, a possibility or even likelihood that an order may be disobeyed or not enforced in other
jurisdictions is not a reason to deny the relief sought. For the reasons Plaintiff has clearly articulated
in their complaint and moving papers, it has chosen this jurisdiction to seek an injunction. If this
Court determines that Plaintiff has met its burden when they are entitled to the relief sought, and
seeking enforcement of the order, whether in this or other jurisdictions becomes Plaintiff's

        However, the Court refuses to issue an injunction against linking to other websites which
contain the protected materials as such an order is overbroad and extremely burdensome. Links to
other websites are the mainstay of the Internet and indispensable to its convenient access to the vast
world of information. A website owner simply cannot be held responsible for all of the content
of the sites to which it provides links. Further, an order prohibiting linking to websites with
prohibited information is not necessary since the Court has enjoined the posting of the information
in the first instance.

        Nothing in this Order shall prohibit discussion, comment or criticism, so long as the
proprietary information identified above is not disclosed or distributed.

        IT IS FURTHER ORDERED that Plaintiff DVD-CCA shall post a bond in the amount of
$10,000 pursuant to CCP § 529..

Dated: January 21, 2000
William J. Elfving
Judge of the Superior Court