DVD COPY CONTROL ASSOCIATION, INC., Plaintiff and Respondent, v. ANDREW BUNNER, Defendant and Appellant.
No. S102588
Supreme Court of California
Aug. 25, 2003.
31 Cal.4th 864
Richard R. Wiebe; Huber Samuelson, HS Law Group, Allonn E. Levy; First Amendment Project, James R. Wheaton, David A. Greene; Tomlinson Zisko Morosoli & Maser, Thomas E. Moore III; Electronic Frontier Foundation, Cindy A. Cohn and Robin D. Gross for Defendant and Appellant.
Howard M. Freedland and Edward J. Black for American Committee for Interoperable Systems and Computer & Communications Industry Association as Amici Curiae on behalf of Defendant and Appellant.
Howard, Rice, Nemerovski, Canady, Falk & Rabkin and Annette L. Hurst for Institute of Electrical and Electronics Engineers, Inc.-United States Board as Amicus Curiae on behalf of Defendant and Appellant.
Jennifer Granick for Computer Professionals for Social Responsibility as Amicus Curiae on behalf of Defendant and Appellant.
Ann Beeson, Kevin S. Bankson; and Ann Brick for the American Civil Liberties Union and the American Civil Liberties Union of Northern California as Amici Curiae on behalf of Defendant and Appellant.
Jennifer M. Urban and Pamela Samuelson for Intellectual Property Law Professors, the Computer & Communications Industry Association and the United States Public Policy Committee of the Association for Computing Machinery as Amici Curiae on behalf of Defendant and Appellant.
Weil, Gotshal & Manges, Jared B. Bobrow, Christopher J. Cox, Jeffrey L. Kessler, Robert G. Sugarman, Gregory S. Coleman, Edward J. Burke, Jonathan S. Shapiro, Sondra Roberto, Richard Simon, Rachel H. Laskey and John F. Greenman for Plaintiff and Respondent.
Richard A. Epstein; Thomas C. Rubin; Covington & Burling, Robert A. Long, Jr., and Anthony Hermann for Microsoft Corporation, Ford Motor Company, The Boeing Company, Sears Roebuck & Co., The Proctor & Gamble Company, AOL Time Warner, Inc., BellSouth Corporation, The Coca-Cola Company and the National Association of Manufacturers as Amici Curiae on behalf of Plaintiff and Respondent.
John K. Williamson, Ronald E. Myrick; Milbank, Tweed, Hadley & McCloy and James Pooley for the Intellectual Property Owners Association as Amicus Curiae on behalf of Plaintiff and Respondent.
Dan Robbins, Jason M. Okai; Williams & Connolly, David E. Kendall, Thomas G. Hentoff, Janet C. Fisher, Suzanne H. Woods, Julia B. Shelton; Paul, Hastings, Janofsky & Walker; Roger M. Milgrim; John Fithian; Daniel L. Brenner, Neal M. Goldberg, Michael S. Schooler, Diane B. Burstein; David M. Proper; William Daly; and Thomas J. Ostertag for Motion Picture Association of America, Inc., American Federation of Musicians of the United States and Canada, American Federation of Television and Radio Artists, AFMA (formerly American Film Marketing Association), American Society of Composers, Authors and Publishers, American Society of Media Photographers, Inc., Association of American Publishers, Inc., Business Software Alliance, Broadcast Music, Inc., Department of Professional Employees, Directors Guild of America, Graphic Artists Guild, Interactive Digital Software Association, National Academy of Recording Arts & Sciences, Inc., National Association of Theatre Owners, National Cable & Telecommunications Association, Inc., National Football League, National Football League Properties, Inc., National Hockey League, National Music Publishers’ Association, Office of the Commissioner of Baseball, Producers Guild of America, Professional Photographers of America, Recording Industry Association of America, Screen Actors Guild, Inc., Video Software Dealers Association and Writers Guild of America, West, Inc., as Amici Curiae on behalf of Plaintiff and Respondent.
OPINION
BROWN, J.—Today we resolve an apparent conflict between California‘s trade secret law (
I.
A.
Digital versatile discs (DVD‘s) “are five-inch wide disks capable of storing more than 4.7 [Gigabytes] of data. In the application relevant here, they are used to hold full-length motion pictures in digital form. They are the latest technology for private home viewing of recorded motion pictures and result in drastically improved audio and visual clarity and quality of motion pictures shown on televisions or computer screens.” (Universal City Studios, Inc. v. Reimerdes (S.D.N.Y. 2000) 111 F.Supp.2d 294, 307, fn. omitted (Reimerdes).)
“[T]he improved quality of a movie in a digital format brings with it the risk that a virtually perfect copy, i.e., one that will not lose perceptible quality in the copying process, can be readily made at the click of a computer control and instantly distributed to countless recipients throughout the world over the Internet.” (Universal City Studios, Inc. v. Corley (2d Cir. 2001) 273 F.3d 429, 436 (Corley).) Recognizing this risk of widespread piracy, the motion picture industry insisted that a viable protection system be made available to prevent users from making copies of motion pictures in digital form. Without such protection, it would not have agreed to release movies on DVD‘s.
The motion picture, computer, and consumer electronics industries decided to use the CSS technology to encrypt copyrighted content on DVD‘s and agreed that this content should not be subject to unauthorized (i) copying or (ii) transmission, including making the content available over the Internet. To this end, they began licensing the technology in October 1996. Under the terms of the licensing agreement, licensees had to maintain the confidentiality of proprietary information embodied in the CSS technology, including the “master keys” and algorithms. The agreement also contained other terms and conditions designed to ensure the confidentiality of this proprietary information. These industries later established the DVD Copy Control Association, Inc. (DVD CCA), as the entity charged with granting and administering the licenses to the CSS technology.
Despite these efforts to safeguard the CSS technology, Jon Johansen, a Norwegian resident, acquired the proprietary information embodied in the technology—including the master keys and algorithms—by reverse engineering software created by a licensee, Xing Technology Corporation (Xing). Xing‘s software is licensed to users under a license agreement, which specifically prohibits reverse engineering. Using the proprietary information culled from this software, Johansen wrote a program called DeCSS that decrypts movies stored on DVD‘s and enables users to copy and distribute these movies. According to DVD CCA, DeCSS “embodies, uses, and/or is a substantial derivation of confidential proprietary information” found in the
Soon thereafter, DeCSS appeared on other Web sites, including a Web site maintained by Andrew Bunner. Bunner posted DeCSS on his Web site allegedly because “it would enable ‘Linux’ users to use and enjoy ‘DVDs’ available for purchase or rental in video stores” and “make ‘Linux’ more attractive and viable to consumers.” Bunner also claimed he wanted “to ensure [that] programmers would have access to the information needed to add new features, fix existing defects and, in general, improve the ‘[D]eCSS’ program.”
B.
Upon discovering the posting of DeCSS on the Internet, DVD CCA and the Motion Picture Association (MPA) made extensive efforts to identify those Web sites disclosing proprietary CSS technology or linking to sites posting this information. The MPA then sent notices to these Web sites and their Internet service providers demanding that they remove this information from the sites. Despite receiving these notices, many of these Web sites refused to remove the information. DVD CCA then filed this action against Bunner and numerous other named and unnamed individuals who had published or linked to Web sites publishing DeCSS (collectively defendants), alleging trade secret misappropriation.4
In the complaint, DVD CCA did not seek damages. Instead, it only sought an order “enjoining and restraining [d]efendants . . . from making any further use or otherwise disclosing or distributing, on their web sites or elsewhere, or
Soon after filing the complaint, DVD CCA filed an ex parte application for a temporary restraining order (TRO). The trial court denied the request for a TRO but issued an order to show cause “why the injunction and restraints sought in [DVD CCA‘s] proposed preliminary injunction should not be entered against defendants . . . .”
Following a hearing and after considering written declarations submitted by the parties, the trial court issued a preliminary injunction. The injunction enjoined the named defendants, including Bunner, from “[p]osting or otherwise disclosing or distributing, on their [W]eb sites or elsewhere, the DeCSS program, the master keys or algorithms of the Content Scrambling System . . . , or any other information derived from this proprietary information.” The court, however, refused to enjoin the defendants from “linking to other [Web sites] which contain the protected materials” because “such an order [would be] overbroad and extremely burdensome.”
In issuing the injunction, the court concluded that DVD CCA was likely to prevail on the merits and would suffer irreparable harm without injunctive relief. First, the court concluded that the CSS technology contained protectable trade secrets because it derived independent economic value from its secrecy and because DVD CCA made reasonable efforts to maintain its secrecy. Second, the court found that Johansen had obtained these trade secrets through reverse engineering in violation of a license agreement and therefore acquired these secrets by improper means. Third, the court found that the defendants, including Bunner, knew or should have known that Johansen acquired these trade secrets by improper means when they posted DeCSS on their Web sites. Fourth, the court held that the trade secret status of the CSS technology had not been destroyed because it had been posted on the Internet. Fifth, the court concluded that DVD CCA would suffer irreparable harm without an injunction. “If the Court does not immediately enjoin the posting of this proprietary information, [DVD CCA‘s] right to protect this information as secret will surely be lost . . . .” The court then observed that an injunction would cause minimal harm to the defendants. Finally, the court acknowledged potential enforcement problems, but held that “a possibility or even a likelihood that an order may be disobeyed or not enforced in other jurisdictions is not a reason to deny the relief sought.”
II.
California has adopted without significant change the Uniform Trade Secrets Act (UTSA). (
Trade secret misappropriation occurs whenever a person: (1) acquires another‘s trade secret with knowledge or reason to know “that the trade secret was acquired by improper means” (
California‘s trade secret law provides a trade secret owner with several remedies against a misappropriator, including injunctive relief. Indeed,
As relevant here, DVD CCA sought and obtained only injunctive relief against Bunner. On review, the Court of Appeal did not examine the trial court‘s underlying factual findings. Instead, it assumed that these findings justified “injunctive relief in the absence of any free speech concerns” under California‘s trade secret law. The appellate court, nonetheless, held that the injunction violated Bunner‘s free speech rights under the First Amendment and reversed.
Because of the unusual procedural posture of this case, we follow the lead of the Court of Appeal and assume as true the trial court findings in support of the preliminary injunction. (Cf. Bartnicki v. Vopper (2001) 532 U.S. 514, 524-525 [149 L.Ed.2d 787, 121 S.Ct. 1753] (Bartnicki) [making certain assumptions about the facts “[b]ecause of the procedural posture of the case].) Specifically, we accept for purposes of this appeal that DVD CCA is likely to prevail on its claims that (1) the CSS technology and its master keys and algorithms are trade secrets; (2) publication of these trade secrets on the Internet has not destroyed their trade secret status; (3) publication of DeCSS discloses these trade secrets; (4) the creator of DeCSS acquired these trade secrets by improper means; and (5) Bunner knew or had reason to know that DeCSS disclosed trade secrets acquired by improper means.5 We also assume that DVD CCA will suffer irreparable harm without injunctive relief and that the injunction will cause minimal harm to Bunner. Thus, the narrow question before us is whether the preliminary injunction violates Bunner‘s right to free speech under the United States and California Constitutions even though DVD CCA is likely to prevail on its trade secret claim against Bunner.
A.
In answering this question, we must first determine whether restrictions on the dissemination of computer codes in the form of DeCSS are subject to scrutiny under the First Amendment. We conclude they are.
” ‘[A]ll ideas having even the slightest redeeming social importance,’ including those concerning ‘the advancement of truth, science, morality, and arts’ have the full protection of the First Amendment.” (Junger v. Daley (2000) 209 F.3d 481, 484 (Junger), quoting Roth v. United States (1957) 354 U.S. 476, 484 [1 L.Ed.2d 1498, 77 S.Ct. 1304].) “Even dry information, devoid of advocacy, political relevance, or artistic expression, has been accorded First Amendment protection.” (Corley, supra, 273 F.3d at p. 446.) “[F]or example, courts have subjected to First Amendment scrutiny restrictions on the dissemination of technical scientific information, [citation] and scientific research, [citation] and attempts to regulate the publication of instructions [citation].” (Id. at p. 447, fn. omitted.)
As such, “[i]t cannot seriously be argued that any form of computer code may be regulated without reference to First Amendment doctrine.” (Reimerdes, supra, 111 F.Supp.2d at p. 326.) “A computer program states or represents a procedure or algorithm in a programming language. The same algorithm could be written in a natural language like English or a programming language like C or LISP, but it remains the same algorithm.” (Tien, Publishing Software as a Speech Act (2000) 15 Berkeley Tech. L.J. 629, 633, fn. omitted.) Of course, “[n]ot everyone can understand each of these forms. Only English speakers will understand English formulations. Principally those familiar with the particular programming language will understand the source code expression. And only a relatively small number of skilled programmers and computer scientists will understand the machine readable object code. But each form expresses the same idea, albeit in different ways.” (Reimerdes, at p. 326, fn. omitted.) Moreover, “the fact that a program has the capacity to direct the functioning of a computer does not mean that it lacks the additional capacity to convey information . . . .” (Corley, supra, 273 F.3d at p. 447.) Because computer code “is an expressive means for the exchange of information and ideas about computer programming” (Junger, supra, 209 F.3d at p. 485), “we join the other courts that have concluded that computer code, and computer programs constructed from code can merit First Amendment protection” (Corley, at p. 449; see also Junger, at p. 485; United States v. Elcom Ltd. (N.D.Cal. 2002) 203 F.Supp.2d 1111, 1126-1127; Reimerdes, at p. 327.)
“As computer code . . . is a means of expressing ideas, the First Amendment must be considered before its dissemination may be prohibited or regulated . . . . But that conclusion still leaves for determination the level of scrutiny to be applied in determining the constitutionality of” an injunction prohibiting the dissemination of computer code.6 (Reimerdes, supra, 111 F.Supp.2d at p. 327.) In determining the appropriate level of scrutiny, the critical question is whether the injunction is content neutral or content based. (See Madsen v. Women‘s Health Center (1994) 512 U.S. 753, 762-764 (Madsen); Los Angeles Alliance for Survival v. Los Angeles (2000) 22 Cal.4th 352, 364-365 [93 Cal.Rptr.2d 1, 993 P.2d 334] (Los Angeles Alliance).) Content-based injunctions are subject to “the level of heightened scrutiny set forth in Perry Ed. Assn. [v. Perry Local Educators’ Assn. (1983)] 460 U.S. [37,] 45.” (Madsen, at pp. 763-764.) By contrast, content-neutral injunctions are subject to the lesser level of scrutiny set forth in Madsen, supra, 512 U.S. at page 765. In this case, we conclude that the preliminary injunction issued by the trial court is content neutral and should be reviewed under the standard articulated in Madsen. (See Planned Parenthood Shasta-Diablo, Inc. v. Williams (1995) 10 Cal.4th 1009, 1023-1025 [43 Cal.Rptr.2d 88, 898 P.2d 402] (Planned Parenthood II) [reviewing a content-neutral injunction under the Madsen test].)
“Our principal inquiry in determining content neutrality is whether the government has adopted a regulation of speech ‘without reference to the content of the regulated speech.‘” (Madsen, supra, 512 U.S. at p. 763, quoting Ward v. Rock Against Racism (1989) 491 U.S. 781, 791 [105 L.Ed.2d 661, 109 S.Ct. 2746].) “[L]iteral or absolute content neutrality” is not necessary. (Los Angeles Alliance, supra, 22 Cal.4th at p. 368.) “The government‘s purpose is the controlling consideration,” and a governmental regulation of speech is only content based if the government adopted the regulation “because of disagreement with the message it conveys.” (Ward, at p. 791.) This is true for “speech cases generally . . . .” (
Applying this standard, we conclude that the preliminary injunction at issue here is content neutral. The underlying basis for the injunction is the trial court‘s holding that Bunner misappropriated DVD CCA‘s property—its
Indeed, the governmental purpose behind protecting trade secrets like the CSS technology through injunctive relief is wholly unrelated to their content. “Trade secret law promotes the sharing of knowledge, and the efficient operation of industry; it permits the individual inventor to reap the rewards of his labor by contracting with a company large enough to develop and exploit it.” (Kewanee Oil Co. v. Bicron Corp. (1974) 416 U.S. 470, 493 [40 L.Ed.2d 315, 94 S.Ct. 1879] (Kewanee).) The law also maintains important standards of commercial ethics. (Id. at p. 481.) Assuming, as we do, that the trial court properly applied California‘s trade secret law, the preliminary injunction necessarily serves the broader governmental purpose behind the law. Because the injunction does not purport to restrict DVD CCA‘s trade secrets based on their expressive content, the injunction‘s restrictions on Bunner‘s speech “properly are characterized as incidental to the primary” purpose of California‘s trade secret law—which is to promote and reward innovation and technological development and maintain commercial ethics. (San Francisco Arts & Athletics, Inc. v. United States Olympic Com. (1987) 483 U.S. 522, 536 [97 L.Ed.2d 427, 107 S.Ct. 2971] (SFA&A).)
The fact that the preliminary injunction identifies the prohibited speech by its content does not make it content based. “An injunction, by its very nature, applies only to a particular group (or individuals) and regulates the activities, and perhaps the speech, of that group. It does so, however, because of the group‘s past actions in the context of a specific dispute between real parties. The parties seeking the injunction assert a violation of their rights; the court hearing the action is charged with fashioning a remedy
Bartnicki, supra, 532 U.S. 514, does not mandate a different conclusion. Bartnicki addressed the constitutionality of several statutes, including
Under the Madsen test, “when evaluating a content-neutral injunction . . . [w]e must ask . . . whether the challenged provisions of the injunction burden no more speech than necessary to serve a significant government interest.” (Madsen, supra, 512 U.S. at p. 765.) This test requires “a balance between the governmental interest and the magnitude of the speech restriction.” (SFA&A, supra, 483 U.S. at p. 537, fn. 16.) As explained below, we conclude that the preliminary injunction issued by the trial court achieves the requisite balance and burdens “no more speech than necessary to serve” the government interests at stake here. (Madsen, at p. 765.)
As a threshold matter, a preliminary injunction properly issued under California‘s trade secret law undoubtedly serves significant government interests. “Trade secrets . . . offer no protection against independent invention.” (Epstein, Privacy, Publication, and the First Amendment: The Dangers of First Amendment Exceptionalism (2000) 52 Stan. L.Rev. 1003, 1036 (Privacy, Publication, and the First Amendment).) Rather, “[t]he basic logic of the common law of trade secrets recognizes that private parties invest extensive sums of money in certain information that loses its value when published to the world at large.” (Id. at p. 1035.) Based on this logic, trade secret law creates a property right “defined by the extent to which the owner of the secret protects his interest from disclosure to others.” (Monsanto, supra, 467 U.S. at p. 1002.) In doing so, it allows the trade secret owner to reap the fruits of its labor (see Kewanee, supra, 416 U.S. at p. 493) and protects the owner‘s “moral entitlement to” these fruits (Information as Contraband, supra, 96 Nw. U. L.Rev. at p. 1164). As such, “trade secrets have been recognized as a constitutionally protected intangible property interest.” (ITT Telecom Products Corp. v. Dooley (1989) 214 Cal.App.3d 307, 318 [262 Cal.Rptr. 773].)
By creating a limited property right in information, trade secret law “acts as an incentive for investment in innovation.” (Prior Restraints and Intellectual Property, supra, 12 Fordham Intell. Prop. Media & Ent. L.J. at p. 60.) “Trade secret law encourages the development and exploitation of those items of lesser or different invention than might be accorded protection under the patent laws, but which items still have an important part to play in the technological and scientific advancement of the Nation.” (Kewanee, supra, 416 U.S. at p. 493.) Like patent and copyright law, trade secret law “prompt[s] the independent innovator to proceed with the discovery and exploitation of his invention.” (Id. at p. 485.) And without trade secret protection, “organized scientific and technological research could become fragmented, and society, as a whole, would suffer.” (Id. at p. 486.)
Assuming, as we do, that the trial court properly granted injunctive relief under California‘s trade secret law, its preliminary injunction burdens no more speech than necessary to serve these significant government interests. First, prohibiting the disclosure of trade secrets acquired by improper means is the only way to preserve the property interest created by trade secret law and its concomitant ability to encourage invention. “Trade secrets are a peculiar kind of property. Their only value consists in their being kept private.” (In re Iowa Freedom of Information Council (8th Cir. 1983) 724 F.2d 658, 662.) Thus, “the right to exclude others is central to the very definition of the property interest. Once the data that constitute a trade secret are disclosed to others, or others are allowed to use those data, the holder of the trade secret has lost his property interest in the data.” (Monsanto, supra, 467 U.S. at p. 1011, fn. omitted.)
The First Amendment does not prohibit courts from incidentally enjoining speech in order to protect a legitimate property right. (See SFA&A, supra, 483 U.S. at pp. 526, 537-540 [holding that a statutory injunction prohibiting promotional uses of the word “Olympic” without a showing of a likelihood of confusion does not violate the First Amendment].) And “[t]he mere fact that” Bunner “claims an expressive . . . purpose does not give [him] a First Amendment right to ‘appropriat[e] to [himself] the harvest of those who have sown.’ ” (Id. at p. 541, quoting International News Service v. Associated Press (1918) 248 U.S. 215, 239-240 [63 L.Ed. 211, 39 S.Ct. 68].) Indeed, the protection of trade secrets and the benefits to research and development derived from the government‘s recognition of this property right depend on the judiciary‘s power to enjoin disclosures by those who know or have reason to know of their misappropriation. Bunner proffers, and we can think of, no less restrictive way of protecting an owner‘s constitutionally recognized property interest in its trade secrets. Thus, the preliminary injunction burdens no more speech than necessary to serve the government‘s interest in encouraging innovation and development.
By prohibiting Bunner from exploiting and destroying DVD CCA‘s trade secrets because of his actual or constructive knowledge of its illegal acquisition, the preliminary injunction merely applies this venerable standard of commercial ethics to a constitutionally recognized property interest in information. Because a person who knowingly exploits the illegal acquisition of property owned by another should be in “no better position than” the illegal acquirer himself (Wendling Lumber, supra, 153 Cal. at p. 414), the injunction burdens no more speech than necessary to serve the government‘s important interest in maintaining commercial ethics.
Nonetheless, Bunner contends the preliminary injunction does not satisfy the Madsen test because it enjoins disclosures by those with no connection to DVD CCA or those people who acquired its trade secrets by improper means. According to Bunner, the United States Supreme Court in Bartnicki established that limitations on the disclosure of information by those who merely know or have reason to know that the information was obtained unlawfully violate the First Amendment. But Bartnicki is distinguishable.
In Bartnicki, an unidentified person illegally intercepted and recorded a cell phone conversation between a union negotiator and the union president (the
The United States Supreme Court, however, expressly declined to extend Bartnicki to “disclosures of trade secrets or domestic gossip or other information of purely private concern.” (Bartnicki, supra, 532 U.S. at p. 533, italics added.) In doing so, the court recognized that the First Amendment interests served by the disclosure of purely private information like trade secrets are not as significant as the interests served by the disclosure of information concerning a matter of public importance. (See Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc. (1985) 472 U.S. 749, 759 [86 L.Ed.2d 593, 105 S.Ct. 2939] (plur. opn. of Powell, J.) (Dun & Bradstreet) [“speech on matters of purely private concern is of less First Amendment concern” than ” ‘speech on public issues’ “].) “The suppression of the publication of stolen information does nothing to hamper the critic from denouncing any firm that chooses to preserve its trade secrets, or to chide any government agency for its lackluster enforcement of the general law. It is something of a mystery as to how free and open debate is frustrated by offering property protection to trade secrets.” (Privacy, Publication, and the First Amendment, supra, 52 Stan. L.Rev. at p. 1043.) Thus, Bartnicki implicitly acknowledges that a balancing of First Amendment interests against government interests in the trade secret context may yield a different result.
In this case, the content of the trade secrets neither involves a matter of public concern nor implicates the core purpose of the First Amendment. “Whether . . . speech addresses a matter of public concern must be determined by the content, form, and context of a given statement, as revealed by the whole record.” (Connick v. Myers (1983) 461 U.S. 138, 147-148, fn. omitted.) DVD CCA‘s trade secrets in the CSS technology are not publicly available and convey only technical information about the method used by specific private entities to protect their intellectual property. Bunner posted these secrets in the form of DeCSS on
The mere fact that DVD CCA‘s trade secrets may have some link to a public issue does not create a legitimate public interest in their disclosure. (Cf. Board of Trustees of the State University of New York v. Fox (1989) 492 U.S. 469, 475 [106 L.Ed.2d 388, 109 S.Ct. 3028] [speech merely linking “‘a product to a current public debate’ is not thereby entitled to the constitutional protection afforded noncommercial speech‘“].) Disclosure of this highly technical information adds nothing to the public debate over the use of encryption software or the DVD industry‘s efforts to limit unauthorized copying of movies on DVD‘s. And the injunction does not hamper Bunner‘s ability to “discuss and debate” these issues as he has “in the past in both an educational, scientific, philosophical and political context.” Bunner does not explain, and we do not see, how any speech addressing a matter of public concern is inextricably intertwined with and somehow necessitates disclosure of DVD CCA‘s trade secrets. (Cf. id. at p. 474 [where nothing requires a speaker to combine his noncommercial message with a commercial message, his commercial speech is not inextricably intertwined with his noncommercial speech and is not entitled to the full protection of the First Amendment].) The expressive content of these trade secrets therefore does not substantially relate to a legitimate matter of public concern. (Cf. Shulman v. Group W Productions, Inc. (1998) 18 Cal.4th 200, 223-224 [74 Cal.Rptr.2d 843, 955 P.2d 469] [the publication of private information is only newsworthy if there is a logical nexus between the information and a matter of legitimate public interest].) As such, the First Amendment interests served by the disclosure of DVD CCA‘s trade secrets are less significant than the First Amendment interests served by the disclosures at issue in Bartnicki. (See Dun & Bradstreet, supra, 472 U.S. at p. 759 [speech addressing a purely private
Finally, the preliminary injunction does not burden more speech than necessary by prohibiting the disclosure of “information derived from” “the DeCSS program, the master keys or algorithms of the [CSS].” Because we assume for purposes of this appeal that the injunction is justified under California‘s trade secret law, we also assume that this provision of the injunction is necessary to protect DVD CCA‘s property interest in the misappropriated trade secrets.8 Therefore, this portion of the injunction burdens no more speech than necessary to serve the significant government interests at issue here. (See ante, at pp. 880-881.)
The preliminary injunction issued by the trial court therefore burdens no more speech than necessary to serve the significant government interests promoted by California‘s trade secret law. Accordingly, it satisfies the Madsen test.
D.
Although the preliminary injunction issued by the trial court survives the Madsen test, we must still determine whether the prior restraint doctrine bars it. Because the injunction is content neutral and was issued because of
“[P]rior restraints on speech and publication are the most serious and the least tolerable infringement on First Amendment rights.” (Nebraska Press Assn. v. Stuart (1976) 427 U.S. 539, 559 [49 L.Ed.2d 683, 96 S.Ct. 2791].) “The term prior restraint is used ‘to describe administrative and judicial orders forbidding certain communications when issued in advance of the time that such communications are to occur.’ [Citation.] Temporary restraining orders and permanent injunctions—i.e., court orders that actually forbid speech activities—are classic examples of prior restraints.” (Alexander v. United States (1993) 509 U.S. 544, 550 [125 L.Ed.2d 441, 113 S.Ct. 2766].) Nonetheless, the United States Supreme Court “has never held that all injunctions are impermissible.” (Pittsburgh Press Co. v. Human Rel. Comm‘n (1973) 413 U.S. 376, 390 [37 L.Ed.2d 669, 93 S.Ct. 2553].) “The special vice of a prior restraint is that communication will be suppressed, either directly or by inducing excessive caution in the speaker, before an adequate determination that it is unprotected by the First Amendment.” (Ibid.) Thus, “[n]ot all injunctions that may incidentally affect expression . . . are ‘prior restraints’ . . . .” (Madsen, supra, 512 U.S. at p. 763, fn. 2.)
Despite these pronouncements, the United States Supreme Court has “neither defined prior restraint, nor explained precisely why injunctions fit within a definition of prior restraint.” (Meyerson, Rewriting Near v. Minnesota: Creating a Complete Definition of Prior Restraint (2001) 52 Mercer L.Rev. 1087, 1087.) Nonetheless, the court has provided some guiding principles. For example, the court has recently held that only content-based injunctions are subject to prior restraint analysis. (See Thomas v. Chicago Park District (2002) 534 U.S. 316, 321–322 [151 L.Ed.2d 783, 122 S.Ct. 775] [holding that a licensing scheme did not need to “contain certain procedural safeguards in order to avoid constituting an invalid prior restraint” because the scheme was “not subject-matter censorship but content-neutral time, place, and manner regulation of the use of a public forum“]; see also Avis Rent A Car System, Inc. v. Aguilar (2000) 529 U.S. 1138, 1142 [146 L.Ed.2d 971, 120 S.Ct. 2029] (dis. opn. of Thomas, J., to den. of pet. for cert.) [noting that “a content-neutral injunction is not treated as a prior restraint“].)
Based on our review of high court decisions, we have also observed that “[a] prior restraint is a content-based restriction on speech prior to its occurrence.” (Planned Parenthood Shasta-Diablo, Inc. v. Williams (1994) 7 Cal.4th 860, 871 [30 Cal.Rptr.2d 629, 873 P.2d 1224], italics added (Planned Parenthood I).) Consistent with these guiding principles, the United States Supreme Court has declined to apply prior restraint analysis to a permanent injunction (Madsen, supra, 512 U.S. at p. 763, fn. 2) and a preliminary injunction (Schenck v. Pro-Choice Network of Western New York (1997) 519 U.S. 357, 374, fn. 6 [137 L.Ed.2d 1, 117 S.Ct. 855] (Schenck))
Applying these principles, we find that the preliminary injunction at issue here is not a prior restraint. The injunction is content neutral (see ante, at pp. 877–879), and the trial court found that Bunner had previously disclosed DVD CCA‘s trade secrets in violation of California law. The court therefore issued the content-neutral injunction because of Bunner‘s “prior unlawful conduct.” (Madsen, supra, 512 U.S. at p. 763, fn. 2.) Although the court made its finding of prior unlawful conduct in the context of a preliminary injunction and found only that DVD CCA was likely to succeed on the merits, this finding is sufficient to render inapplicable the heavy presumption against prior restraints. (See Schenck, supra, 519 U.S. at p. 374, fn. 6 [refusing to apply prior restraint analysis to a preliminary injunction because the injunction was content neutral and directed at prior unlawful conduct].) Thus, “[t]his is not a case of government censorship, but a private plaintiff‘s attempt to protect its property rights.” (Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd. (2d Cir. 1979) 604 F.2d 200, 206.) Accordingly, prior restraint doctrine does not bar the injunction.
CBS Inc. v. Davis (1994) 510 U.S. 1315 [127 L.Ed.2d 358, 114 S.Ct. 912] is inapposite. In CBS, a federal district court issued an injunction “prohibiting CBS from airing videotape footage taken at the factory of Federal Beef Processors, Inc.” (Federal) (id. at p. 1325), because the tape disclosed Federal‘s “‘confidential and proprietary practices and processes ....‘” (Id. at p. 1316.) Concluding that the injunction was an unconstitutional prior restraint, Justice Blackmun stayed its enforcement. (Id. at pp. 1317–1318.) As a single-justice order, CBS is arguably not binding on this court. In any event, it is distinguishable. Justice Blackmun, in finding a prior restraint, relied on the lack of clear evidence establishing that CBS had acquired Federal‘s proprietary information by improper means. (Id. at p. 1318.) In contrast, we assume for purposes of this appeal that Bunner knew or had reason to know that DVD CCA‘s trade secrets were acquired by improper means. Moreover, unlike the trade secrets at issue here (see ante, at pp. 883–885), the videotape footage at issue in CBS appeared to address a matter of public concern—“unsanitary practices in the meat industry” (CBS, at p. 1315).
Likewise, the out-of-state cases cited by Bunner are not persuasive. In Bridge C.A.T. Scan Associates v. Technicare Corp. (2d Cir. 1983) 710 F.2d 940, the Second Circuit Court of Appeals invalidated an injunction prohibiting the plaintiff from disclosing trade secrets contained in an exhibit to its complaint. In finding that the injunction was an invalid prior restraint, the court concluded that there was no evidence the plaintiff had acquired the
Oregon ex rel. Sports Mgmt. News v. Nachtigal (1996) 324 Ore. 80 [921 P.2d 1304] is inapposite for similar reasons. In Nachtigal, the Oregon Supreme Court found that a statute requiring court approval before a person involved in litigation may disclose a trade secret constituted an invalid prior restraint. (Id. at pp. 90–91Id. at p. 83.) By contrast, DVD CCA alleged and established that Bunner misappropriated its trade secrets in violation of California law. Moreover, Nachtigal expressly distinguished the statute at issue from another Oregon statute authorizing injunctive relief for the misappropriation of trade secrets (id. at p. 90), and noted that its holding did not render the injunctive relief provision unconstitutional (id. at p. 91, fn. 10). In any event, to the extent Nachtigal‘s literalistic analysis of content neutrality conflicts with our decision here, we have impliedly rejected it (see Los Angeles Alliance, supra, 22 Cal.4th at pp. 367–368), and therefore do not find it persuasive.
Procter & Gamble Co. v. Bankers Trust Co. (6th Cir. 1996) 78 F.3d 219 is also distinguishable. In Procter & Gamble, the Sixth Circuit Court of Appeals held that an order prohibiting Business Week from using Procter & Gamble‘s confidential and proprietary information in an article constituted an invalid prior restraint. The court reached this conclusion in part because the district court never determined whether the information used in the article was even proprietary—much less a trade secret—before issuing the order. (See id. at p. 225 [finding that “the District Court fail[ed] to conduct any First Amendment inquiry before granting the two TROs“]; see also id. at p. 222 [noting that “[t]he parties and not the court determine[d] whether the particular documents” were proprietary].) By contrast, the trial court in this case issued the preliminary injunction after finding that Bunner likely misappropriated DVD CCA‘s trade secrets in violation of California law. Moreover, unlike Bunner, Business Week had not disclosed any proprietary information prior to the issuance of the order. (Id. at p. 222.) In any event, Procter & Gamble is less than helpful because the Sixth Circuit Court of Appeals apparently assumed the order was a prior restraint and offered no analysis to support its assumption. For this reason, we also decline to adopt the reasoning of Ford Motor Co. v. Lane (E.D.Mich. 1999) 67 F.Supp.2d 745. Accordingly, the preliminary injunction is not an invalid prior restraint under the First Amendment.
We now turn to Bunner‘s final contention—that the preliminary injunction violates the free speech provision found in
V.
Our decision today is quite limited. We merely hold that the preliminary injunction does not violate the free speech clauses of the United States and California Constitutions, assuming the trial court properly issued the injunction under California‘s trade secret law. On remand, the Court of Appeal should determine the validity of this assumption. Because there appears to be some confusion over the proper standard of review, we offer guidance below.
In upholding the preliminary injunction against Bunner‘s First Amendment challenges, we rely on the assumption that DVD CCA is likely to prevail on the merits of its trade secret claim against Bunner. As such, “any factual findings subsumed” in the trade secret misappropriation determination “are subject to constitutional fact review.” (Rankin v. McPherson (1987) 483 U.S. 378, 385, fn. 8 [97 L.Ed.2d 315, 107 S.Ct. 2891].) “[W]here a Federal right has been denied as the result of a [factual] finding or where a conclusion of law as to a Federal right and a finding of fact are so intermingled as to make it necessary, in order to pass upon the Federal question, to analyze the facts,” the reviewing court must independently review these findings. (Fiske v. State of Kansas (1927) 274 U.S. 380, 385–386 [71 L.Ed. 1108, 47 S.Ct. 655].) “[F]acts that are germane to” the First Amendment analysis “must be sorted out and reviewed de novo, independently of any previous determinations by the trier of fact.” (McCoy v. Hearst Corp. (1986) 42 Cal.3d 835, 842 [231 Cal.Rptr. 518, 727 P.2d 711].) And “the reviewing court must ‘examine for [itself] the statements in issue and the circumstances under which they were made to see . . . whether they are of a character which the principles of the First Amendment . . . protect.‘” (Harte-Hanks Communications, Inc. v. Connaughton (1989) 491 U.S. 657, 688 [105 L.Ed.2d 562, 109 S.Ct. 2678], quoting New York Times Co. v. Sullivan (1964) 376 U.S. 254, 285 [11 L.Ed.2d 686, 84 S.Ct. 710].)
On remand, the Court of Appeal must therefore “make an independent examination of the entire record” (Bose Corp. v. Consumers Union of U.S., Inc. (1984) 466 U.S. 485, 499 [80 L.Ed.2d 502, 104 S.Ct. 1949]), and determine whether the evidence in the record supports the factual findings necessary to establish that the preliminary injunction was warranted under California‘s trade secret law (see Lindsay v. City of San Antonio (5th Cir. 1987) 821 F.2d 1103, 1107–1108 [noting that appellate courts must independently review factual findings relevant to the resolution of any First Amendment issues]). If, after this examination, the court finds the injunction improper under California‘s trade secret law, then it should find that the trial court abused its discretion. (See ibid. [holding that, in determining whether the “issuance of a preliminary injunction constitutes an abuse of” discretion under the First Amendment, the reviewing court must independently review the factual findings subsumed in the constitutional determination]; see also Gallo v. Acuna, supra, 14 Cal.4th at p. 1109 [holding that preliminary injunctions are reviewed “under an abuse of discretion standard“].) Otherwise, it should uphold the injunction.
DISPOSITION
We reverse the judgment of the Court of Appeal and remand for further proceedings consistent with this opinion.
George, C. J., Baxter, J., Rivera, J.,* and Robie, J.,† concurred.
WERDEGAR, J., Concurring.—I write separately because I agree partly with the majority and partly with Justice Moreno. I agree with the majority‘s conclusion that the First Amendment to the United States Constitution does not necessarily preclude injunctive relief in trade secret cases. I find in Justice Moreno‘s concurring opinion, however, a more satisfying reconciliation of that conclusion with the constitutional rules governing prior restraints and content-based restrictions of speech.
MORENO, J.—I concur in the majority‘s narrow holding, which, as I understand it, is that the First Amendment does not categorically prohibit preliminary injunctions to enjoin the publication of trade secrets. I further agree that the First Amendment requires independent appellate review of such preliminary injunctions, rather than the deferential review usually accorded such injunctions. I write separately for two reasons. First, I believe there is a need to clarify how the prior restraint doctrine under the First Amendment applies to the publication of alleged trade secrets. Second, I would forgo further proceedings in the Court of Appeal and simply affirm that court‘s judgment. In my view, the DVD Copy Control Association‘s (DVD CCA) trade secret claim against Bunner is patently without merit for the reasons explained below.
I.
I agree with the majority that computer code is a form of speech under the First Amendment. “Because computer code ‘is an expressive means for the exchange of information and ideas about computer programming’ [citation], ‘we join the other courts that have concluded that computer code, and computer programs constructed from code can merit First Amendment protection.‘” (Maj. opn., ante, at p. 876.)
I also agree with the majority that the doctrine of prior restraint is not a model of clarity, and that the definitions of and justifications for the doctrine do not constitute a coherent doctrinal unity. (See Tribe, American Constitutional Law (2d ed. 1988) pp. 1039–1042 [noting that the “prior” in prior restraint can mean both prior to publication and prior to the full adjudication of the merits].) But the majority correctly identifies one of the meanings of and reasons for the prohibition against prior restraint, quoting Pittsburgh Press Co. v. The Pittsburgh Commission on Human Relations (1973) 413 U.S. 376, 390 [37 L.Ed.2d 669, 93 S.Ct. 2553] (Pittsburgh Press Co.): “‘The special vice of a prior restraint is that communication will be suppressed, either directly or by inducing excessive caution in the speaker, before an adequate determination that it is unprotected by the First Amendment.‘” (Maj. opn., ante, at p. 886.) Thus, a preliminary injunction poses a danger that permanent injunctive relief does not: that potentially protected speech
The same distinction was recognized by this court in Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 138 [87 Cal.Rptr.2d 132, 980 P.2d 846] (Aguilar), upholding a permanent injunction enjoining the use of certain racial epithets in the workplace. The Aguilar plurality quoted approvingly from Auburn Police Union v. Carpenter (1st Cir. 1993) 8 F.3d 886, 903, which upheld a statute prohibiting charitable solicitation for the benefit of law enforcement agencies: “‘Although the classic form of prior restraint involves an administrative licensing scheme [citation], a judicial injunction that prohibits speech prior to a determination that the speech is unprotected also constitutes a prior restraint. [Citation.] An injunction that is narrowly tailored, based upon a continuing course of repetitive speech, and granted only after a final adjudication on the merits that the speech is unprotected does not constitute an unlawful prior restraint.‘” (Aguilar, supra, 21 Cal.4th at p. 141, italics added.)
The present case involves a preliminary injunction issued prior to “a final adjudication on the merits that the speech is unprotected.” Hence, the danger posed by prior restraint is present. In general, a prior restraint comes with a “‘heavy presumption’ against its constitutional validity.” (Organization for a Better Austin v. Keefe (1971) 402 U.S. 415, 419 [29 L.Ed.2d 1, 91 S.Ct. 1575].)
The majority at one point seems to suggest that the bar against prior restraint never applies to trade secret publication cases if a court has made a preliminary finding that a defendant‘s prior conduct has been unlawful. It generalizes that the United States Supreme Court “has declined to apply prior restraint analysis to a permanent injunction (Madsen [v. Women‘s Health Center (1994)] 512 U.S. [753,] 763, fn. 2) and a preliminary injunction (Schenck v. Pro-Choice Network of Western New York (1997) 519 U.S. 357,
The majority‘s analysis of the above cited cases is incomplete. A closer reading of these cases reveals that the United States Supreme Court declined to apply prior restraint analysis not simply because those cases concerned findings of past unlawful conduct, but also because they did not involve censorship of speech but merely limits on its time, place and manner. For example, footnote 2 of Madsen, on which the majority relies, states that prior restraint is not applicable because “petitioners are not prevented from expressing their message in any one of several different ways; they are simply prohibited from expressing it within the 36-foot buffer zone. Moreover, the injunction was issued not because of the content of petitioners’ expression . . . but because of their prior unlawful conduct.” (Madsen, supra, 512 U.S. at p. 763, fn. 2.) Schenck, supra, 519 U.S. at page 374, footnote 6, also emphasizes both reasons: “[A]lternative channels of communication were left open to the protesters, and ‘the injunction was issued not because of the content of [the protesters‘] expression, . . . but because of their prior unlawful conduct.‘”
Our opinion in Planned Parenthood Shasta-Diablo, Inc. v. Williams (1994) 7 Cal.4th 860 [30 Cal.Rptr.2d 629, 873 P.2d 1224], also cited in support of the majority‘s position, highlights the locational nature of the injunction, in rejecting the applicability of prior restraint analysis: “[P]etitioners’ claim that the injunction operates as an unconstitutional ‘prior restraint’ on protected speech must fail. A prior restraint is a content-based restriction on speech prior to its occurrence. [Citation.] Valid time, place and manner restrictions which do not functionally prohibit all means of communication are not prior restraints.” (Id. at p. 871, fn. omitted.)
In Thomas v. Chicago Park District (2002) 534 U.S. 316 [151 L.Ed.2d 783, 122 S.Ct. 775], also cited by the majority, the court upheld a facial
The preliminary injunction in this case is subject-matter censorship entirely prohibiting Bunner from publishing a particular type of information related to the DVD CCA‘s content scrambling system (CSS) and the descrambling program (DeCSS), not a content-neutral time, place, and manner regulation. (See also Oregon ex rel. Sports Mgmt. News v. Nachtigal (Or. 1996) 324 Ore. 80 [921 P.2d 1304, 1308] [law requiring court approval of publication of alleged trade secrets is directed at a “specific subject of communication, excluding some speech based on the content of the message” and is an unlawful prior restraint].) If the alleged trade secret is not in fact a trade secret, then the court will be enjoining protected speech. A preliminary injunction issued prior to an adjudication on the merits would therefore pose the precise danger of prior restraint identified in Pittsburgh Press Co., i.e., “the special vice . . . that communication will be suppressed . . . before an adequate determination that it is unprotected by the First Amendment.” (Pittsburgh Press Co., supra, 413 U.S. at p. 390; see also Lemley & Volokh, supra, 48 Duke L.J. at pp. 169-172; Redish, supra, 70 Va. L.Rev. at p. 88.) But that particular “special vice” would not threaten in the case of time, place, and manner restrictive injunctions or ordinances, where speech is not being entirely suppressed; instead, the special vice of those regulations is that their restrictions may be stricter than needed to accomplish the government objective. (See Madsen, supra, 512 U.S. at pp. 765–766.)1
The question, then, is how should a court balance First Amendment protections with an alleged trade secret holder‘s property rights when asked to issue a preliminary injunction against publication? The answer lies in requiring the plaintiff to make a sufficient evidentiary showing before the injunction is granted.
The majority recognizes that a preliminary injunction against the disclosure of an alleged trade secret without sufficient evidentiary support is an unlawful prior restraint. As it states in discussing Bridge C.A.T. Scan Associates v. Technicare Corp. (2d Cir. 1983) 710 F.2d 940: “[T]he Second Circuit Court of Appeals invalidated an injunction prohibiting the plaintiff from disclosing trade secrets contained in an exhibit to its complaint. In finding that the injunction was an invalid prior restraint, the court concluded that there was no evidence the plaintiff had acquired the defendant‘s trade secrets by improper means or that the secrets were not publicly available. [Citation.] In this decision, however, we assume that Bunner misappropriated protectable trade secrets.” (Maj. opn., ante, at pp. 887–888.) In its discussion of CBS Inc. v. Davis (1994) 510 U.S. 1315, the majority also distinguishes it from the present case in part because “Justice Blackmun, in finding a prior restraint, relied on the lack of clear evidence establishing that CBS had acquired [the plaintiff‘s] proprietary information by improper means.” (Maj. opn., ante, at p. 887.) Implicit in these statements is the assumption that a preliminary injunction of a trade secret publication without the requisite evidence in support would be an unlawful prior restraint.
I agree, but this conclusion raises the question of what evidentiary showing a plaintiff should be required to make in order to overcome the presumption against a prior restraint. Ideally, the required showing for granting preliminary injunctions would separate meritorious trade secret claims from those involving protected speech. A court is to grant a preliminary injunction only if it finds a “‘likelihood that the plaintiff will prevail on the merits at trial‘” as well as that the interim balance of harms favors the plaintiff. (Cohen v. Board of Supervisors (1985) 40 Cal.3d 277, 286 [219 Cal.Rptr. 467, 707 P.2d 840].) But in reality, courts are accorded a great deal of leeway in deciding whether to grant such injunctions. “‘[By] balancing the respective equities of the parties, [the trial court] concludes that, pending a trial on the merits, the defendant should or . . . should not be restrained from exercising the right claimed by him.’ [Citation.] . . . Generally, the ruling on an application for a preliminary injunction rests in the sound discretion of the trial court. The exercise of that discretion will not be disturbed on appeal absent a showing that it has been abused.” (Ibid.) A trial court may grant a preliminary
In my view, the need to safeguard the First Amendment right against prior restraint, while not barring trade secret holders from obtaining preliminary injunctions, requires that we make the standard for granting such injunctions more rigorous. As Professor Redish has stated: “[B]ecause such prior restraints are imposed by a judicial officer following some form of adversarial judicial process, the heavy negative presumption traditionally associated with the prior restraint doctrine is inappropriate. Nevertheless, because prior restraints are issued following only an abbreviated judicial inquiry, they are properly employed only if the asserted governmental interest could not be adequately protected by regulation following a full adversarial trial and only if the court determines that a strong likelihood exists that the government will be able to establish that the challenged expression is regulable under substantive first amendment standards. . . . The traditional equitable principle that the issuance of such preliminary relief is largely a matter of the court‘s discretion . . . would have to change. Such broad discretion is not consistent with first amendment concerns, and any court issuing such preliminary relief against expression should expect no deference in the course of appellate review.” (Redish, supra, 70 Va. L.Rev. at pp. 88–89, fns. omitted.)
A preliminary injunction in the case of an alleged trade secret publication may be appropriate because the trade secret holder‘s property rights “could not be adequately protected by regulation following a full adversarial trial.” (Redish, supra, 70 Va. L.Rev. at p. 88.) But when a publication presumptively protected by the First Amendment is alleged to contain trade secrets, the broad discretion usually granted trial courts in these matters should be, while not eliminated entirely, considerably narrowed. A mere showing that the questions of law or fact are grave and difficult would be insufficient to warrant a preliminary injunction. Rather, a plaintiff should be required to actually establish a likelihood of prevailing on the merits, regardless of the balance of harms.
The majority, as I understand it, implicitly acknowledges this heightened standard when it holds, based on general First Amendment principles, that a trial court‘s determination in these cases would be subject to independent appellate review. As the majority states: “[T]he Court of Appeal must . . . ‘make an independent examination of the entire record’ (Bose Corp. v. Consumers Union of U.S., Inc. (1984) 466 U.S. 485, 499 [80 L.Ed.2d 502, 104 S.Ct. 1949]), and determine whether the evidence in the record supports the factual findings necessary to establish that the preliminary injunction was warranted under California‘s trade secret law.” (Maj. opn., ante, at p. 890.)
In sum, a preliminary injunction on speech issued without a credible determination that plaintiff will prevail on the merits is a quintessential case of suppressing speech “‘before an adequate determination that it is unprotected by the First Amendment‘” (Pittsburgh Press Co., supra, 413 U.S. at p. 390) and would therefore be an unlawful prior restraint. Unlike the Court of Appeal, however, I would hold that when the alleged trade secret holder bringing an action against a trade secret publisher or would-be publisher actually establishes both a likelihood that it will prevail on the merits, and that the balance of harms is in its favor, the issuance of a preliminary injunction would be an appropriate means of preserving the secrecy that is the essence of plaintiff‘s property interest, subject to independent appellate review. Because the majority arrives at essentially the same conclusion, albeit by a different analytical path, I concur in its holding.2
II.
As we recently reaffirmed: “‘[B]ecause unnecessarily protracted litigation would have a chilling effect upon the exercise of First Amendment rights, speedy resolution of cases involving free speech is desirable.‘” (Winter v. DC Comics (2003) 30 Cal.4th 881, 891 [134 Cal.Rptr.2d 634, 69 P.3d 473].) Undertaking independent review, I conclude, as a matter of law, that there is no likelihood that the DVD CCA would prevail on the merits. There is therefore no need to remand to the Court of Appeal for further proceedings. The unnecessary delay in resolving this litigation can only further burden speech protected by the First Amendment.
As explained in the majority opinion, Bunner is alleged to have downloaded from the Internet and republished the DeCSS source code incorporating CSS, the DVD CCA‘s proprietary information. The general rule is that
The Legislative Committee Comment further explains the original draft defined a trade secret in part as “not being readily ascertainable by proper means” and that “the assertion that a matter is readily ascertainable by proper means remains available as a defense to a claim of misappropriation. [] Information is readily ascertainable if it is available in trade journals, reference books, or published materials.” (Legis. Com. com., 12A pt. 1 West‘s Ann. Civ. Code, supra, foll.
Therefore, had Bunner obtained DeCSS information from a computer magazine or a newspaper, the information would be considered “readily ascertainable” and not a trade secret. Instead, he learned of DeCSS from a computer discussion group and downloaded it from a Web site on the Internet. The date of Bunner‘s initial posting is unclear from the record, and the availability of DeCSS on the Internet at the time of the posting is also not clear. The DVD CCA‘s attorney declared that at the time the complaint against Bunner and others was filed in December 1999, approximately two months after the initial posting, at least 118 Web sites had been identified that either contained proprietary information related to CSS or provided links to other Web sites with such information. How can information published in a computer magazine be regarded as “readily ascertainable” but not information
Courts that have considered the matter have agreed that, generally speaking, a party not involved in the initial misappropriation of a trade secret cannot be prosecuted under trade secret law for downloading and republishing proprietary information posted on the Internet, primarily because the information is in the public domain and is no longer secret. (Religious Technology Center v. Netcom On-Line Communications Services, Inc. (N.D.Cal. 1995) 923 F.Supp. 1231; Religious Technology Center v. Lerma (E.D.Va. 1995) 908 F.Supp. 1362; Religious Technology Center v. F.A.C.T.NET, Inc. (D.Colo. 1995) 901 F.Supp. 1519.) This conclusion is also consistent with the principle that the First Amendment generally prohibits limitations, absent some extraordinary showing of governmental interest, on the publication of information already made public. (See The Florida Star v. B.J.F. (1989) 491 U.S. 524 [state could not punish publication of name of sexual offense victim lawfully acquired]; Smith v. Daily Mail Publishing Co. (1979) 443 U.S. 97, 103 [newspapers could not be punished for publishing the name of a juvenile charged with an offense, lawfully obtained by monitoring police radio transmissions]; Landmark Communications, Inc. v. Virginia (1978) 435 U.S. 829 [invalidating criminal sanctions against third party that published report of judicial review commission]; Cox Broadcasting Corp. v. Cohn (1975) 420 U.S. 469, 491 [state could not forbid or punish the publication of the name of a rape victim obtained from public records].) Furthermore, Internet speech and publication are fully protected by the First Amendment. (Reno v. ACLU (1997) 521 U.S. 844, 870 [138 L.Ed.2d 874, 117 S.Ct. 2329].) Thus, both trade secret law and the First Amendment are in accord that information republished on the Internet after having been made public on the Internet generally cannot be sanctioned.
The trial court, in preliminarily concluding that the trade secret was not lost, stated: “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
That is not to say that a trade secret is automatically lost any time it is posted on the Internet. Amici curiae Intellectual Property Law Professors et alia argue, for example, that information posted on an obscure Internet site and detected quickly should not lose trade secret status. This position is consistent with case law holding that minor disclosures of a trade secret followed by a brief delay in withdrawing it from the public domain do not cause trade secret status to be lost. (Hoechst Diafoil Co. v. Nan Ya Plastics Corp. (4th Cir. 1999) 174 F.3d 411, 418 [recognizing as well established that the required secrecy is relative rather than absolute]; Gates Rubber Co. v. Bando Chemical Indus., Ltd. (10th Cir. 1993) 9 F.3d 823, 849.) But a plaintiff carries the burden of showing that the trade secret remains a secret despite the Internet posting. In the present case, nothing in the record indicates that the DVD CCA met that burden. In fact, the trial court failed to make any particularized findings at all that the information was still secret when Bunner republished it, instead treating the 20 or so defendants as a class and making general statements that these defendants had published secret information. Without evidence in the record that the proprietary information was still secret at the time Bunner downloaded it from the Internet, the DVD CCA cannot sustain its burden of demonstrating a likelihood of prevailing on the merits.4
III.
In sum, the DVD CCA has failed to establish that the information Bunner republished was still secret at the time he republished it on his Web site.5
Therefore, I conclude that the trial court‘s preliminary injunction against Bunner was an unlawful prior restraint. Accordingly, instead of remanding to the Court of Appeal for further proceedings, I would affirm its judgment on the alternate grounds stated above.
Appellant‘s petition for a rehearing was denied October 15, 2003, and the opinion was modified to read as printed above. Kennard, J., Baxter, J., and Chin, J., did not participate therein.
Notes
It should also be noted that the Court of Appeal properly rejected the DVD CCA‘s reliance on copyright cases in arguing that preliminary injunctions should be routinely granted. As the Court of Appeal stated: “Protections for trade secrets . . . are not comparable to protections for copyrights with respect to the First Amendment. First, since both the First Amendment and the constitutional authority underlying the Copyright Act are contained in the United States
Constitution, the resolution of a conflict between free speech and copyright involves a delicate balancing of two federal constitutional protections.