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Universal City Studios, Inc., et al v. Shawn Reimerdes, et al.

82 F. Supp. 2d 211 (LAK) (S.D.N.Y., Feb. 2, 2000)

The court issued a preliminary injunction, enjoining the defendants from continuing to provide on their web sites DeCSS, a software utility that permits users to make copies of DVD movies protected by the Content Scramble System ("CSS") copy protection system.

The plaintiffs are eight movie studios that distribute their copyrighted motion pictures on digital versatile disks, otherwise known as DVDs. DVDs contain motion pictures in digital format. To prevent unauthorized copying of these works, the plaintiffs encrypt them with CSS, which, according to the court, "is an encryption-based security and authentication system that requires the use of appropriately configured hardware such as a DVD player or a computer DVD drive to decrypt, unscramble and play back ... the motion pictures on DVDs." This hardware contains a "player key" which permits the DVDs to be unscrambled, and the motion picture thereon to be played.

In or about October 1999, the software utility DeCSS was created, which permits users to break the CSS copy protection system and make and distribute unauthorized copies of the motion pictures protected thereby. According to the court, "defendants each are associated with Web sites that were distributing DeCSS at the time plaintiffs moved for injunctive relief." The court determined that each of the defendants was "personally ... involved in providing and distributing DeCSS over the Internet via these Web sites."

Plaintiffs moved for a preliminary injunction, enjoining defendants from further distributing DeCSS. Finding such relief warranted, the court issued the requested injunction.

Plaintiffs are entitled to such relief if they can show both that absent the requested injunction, they will suffer irreparable harm, and that they have a likelihood of succeeding on the merits of their claim. The court found that both elements were met in this case.

The court held that, for the purpose of awarding injunctive relief, irreparable injury is presumed when a defendant is offering technology that facilitates copyright infringement. As such was the case here, the court concluded that the plaintiffs had met this part of their burden.

The court also held that plaintiffs were likely to succeed on the merits of their claim that defendants' conduct constituted a violation of section 1201(a)(2) of the Digital Millennium Copyright Act ("DMCA"). That section provides that "no person shall ... offer to the public, provide or otherwise traffic in any technology ... that ...(B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under [the Copyright Act]...". The court held that plaintiffs were likely to succeed on the merits of this claim because "it is undisputed ... that DeCSS defeats CSS and decrypts copyrighted works without the authority of the copyright owners. As there is no evidence of any commercially significant purpose of DeCSS other than circumvention of CSS, defendants' actions likely violated Section 1201(a)(2)(B)."

The court rejected defendants' arguments that their conduct fell within the ambit of a number of the exceptions contained within the DMCA. Of note, the court rejected defendants' contentions that their acts are protected by the "fair use" doctrine embodied in section 107 of the Copyright Act. The court held that this section does not offer immunity to a claim asserted under section 1201(a)(2)(B) of the DMCA. Section 107 only protects certain uses of copyrighted works from claims of copyright infringement. Because a claim under DMCA is not a claim for copyright infringement, Section 107 is inapplicable to claims brought under that section. The court applied similar reasoning in rejecting defendant Kazan's claim that because of his status as a service provider, his conducted was protected under section 512(c) of the Copyright Act. Like section 107, section 512(c) only affords protection from copyright infringement, not for a claim under section 1201(a)(2)(b) of the DMCA.

The court also rejected the defendants' claim that the DMCA, insofar as it prohibits the dissemination of DeCSS to the public, violates their First Amendment rights.

The First Amendment does not shield copyright infringement. Because the DMCA was a proper exercise of Congress' power under the Necessary and Proper Clause of the United States Constitution to protect the copyrights granted to authors in their writings, the court concluded that it did not run afoul of the First Amendment. The court further held that under a traditional balancing approach between the public interest in the restrictions at issue versus the speech in question, the public interest in the restrictions as issue clearly prevailed. The source code that comprises the DeCSS has, at most, minimal expressive content. Allowing the unrestricted dissemination of DeCSS threatens the ability of those such as plaintiffs to utilize DVD's to distribute their products, and seriously undermines the copyright protection in those works already distributed in this medium. Faced with such a balance, the court concluded that:

Executable computer code of the type at issue ... does little to further traditional First Amendment interests. The DMCA, in contracts, fits squarely within the goals of copyright, both generally and as applied to DeCSS. In consequence, the balance of interests in this case falls decidedly on the side of plaintiffs and DMCA.

The court further upheld the DMCA statute at issue because the posting of the DeCSS "is part of a course of conduct the clear purpose of which is the violation of law" i.e. the facilitation of copyright infringement. The First Amendment, held the court, does not preclude regulation of speech when such speech is part of a violation of law. Said the court:

The record clearly demonstrates that the chief focus of those promoting the dissemination of DeCSS is to permit widespread copying and dissemination of unauthorized copies of copyrighted works. The dissemination of DeCSS therefore is the critical component of a course of conduct, the principal object of which is copyright infringement. ... [D]efendants cannot latch onto the expressive aspect in order to shield a key aspect of a chain of events, the main purpose of which is unlawful. Application of the DMCA to prohibit production and dissemination of DeCSS therefore does not violate the First Amendment.

Lastly, the court rejected defendants' claim that the DMCA, as applied in the case at bar, represented an impermissible prior restraint on speech that ran afoul of the First Amendment. In reaching this conclusion, the court relied on the grave harm the plaintiffs might sustain in the absence of the requested relief, the minimal limitations on expressive speech the injunction would pose, the adversary hearing that preceded the award of injunctive relief, and the offer by the court to conduct a prompt, and indeed, almost immediate trial on the merits of the claims at issue.

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