The U.S. Supreme Court has granted Hollywood studios and electronics makers a temporary victory by stepping into a long-running dispute over software that can be used to copy DVDs. Justice Sandra Day O'Connor last week placed a ruling by the California Supreme Court on hold, a decision that effectively enforces an injunction until the full court can consider the case.
An organization of movie studios and consumer-electronics makers filed the lawsuit in 1999 against scores of activists who posted the DeCSS.exe utility. The suit by the DVD Copy Control Association (DVD CCA) alleged violations of California's trade secret laws, and a state judge granted an injunction against the defendants.
But the California Supreme Court, in a split decision last November, ruled that defendant Matthew Pavlovich was a resident of Texas with no substantial contact with California who could not be sued in that state.
O'Connor's order "stays the injunction and keeps it in effect for Mr. Pavlovich until the U.S. Supreme Court can decide what it's going to do next," said Jeffrey Kessler, a partner at Weil, Gotshal and Manges who is representing the DVD CCA. Kessler had asked the U.S. Supreme Court to take up the case.
A response from Pavlovich's attorney, Allon Levy, is due by the end of the day on Thursday. Because O'Connor is the Supreme Court justice responsible for cases arising out of California, she has the ability to place some decisions on hold until the complete court can meet and vote to take the case or deny the petition for review.
While the DVD CCA's lawsuit began as a relatively straightforward argument about alleged trade secret violations, its attorneys' tactics turned it into what could become a precedent-setting case about where people who post information on the Internet can be sued. To simplify their legal strategy, the attorneys sought to sue more than 500 people from all around the world in one lawsuit brought in Santa Clara County, Calif.
In an August 2001 opinion, a California appeals court said that was perfectly acceptable. The court said Pavlovich, who organized the "LiVid" Linux video project, "knew, or should have known, that the DVD republishing and distribution activities he was illegally doing and allowing to be done through the use of his Web site, while benefiting him, were injuriously affecting the motion picture and computer industries in California."
But a majority of the state's high court judges disagreed and overturned the ruling, writing that the DVD CCA's interpretation "would subject any defendant who commits an intentional tort affecting the motion picture, computer or consumer-electronics industries to jurisdiction in California even if the plaintiff was not a California resident."
Kessler said that if the Supreme Court rejects his arguments, DVD CCA would consider filing suit against Pavlovich in Texas. "But the point is we would like to get the Supreme Court to affirm that the use of one case to (target) multiple people who are distributing information is appropriate," Kessler said. "Otherwise it makes it much more expensive and difficult to go after people one by one in different jurisdictions."
The DVD CCA's case bifurcated after a second defendant, California resident Andrew Bunner, did not fight the court's jurisdiction but argued he had a First Amendment right to distribute DeCSS.exe. The program allows encrypted DVDs to be descrambled.
In November 2001, a California state appeals court sided with Bunner, saying a "prohibition of future disclosures of DeCSS was a prior restraint on Bunner's First Amendment right to publish the DeCSS program."
Now the Bunner case is on appeal. "We're waiting for the California Supreme Court to set a hearing date," said David Greene, executive director of the First Amendment Project in Oakland, Calif., who is providing free legal representation.
Neither the Bunner nor the Pavlovich case is related to the one against 2600 magazine, which invoked the Digital Millennium Copyright Act to prevent the magazine from distributing DeCSS.exe on its Web site. 2600 lost the case before the Second Circuit Court of Appeals and chose not to appeal to the U.S. Supreme Court.