Bunner Hearing

Went to the Bunner hearing at the California Supreme Court today. The issue is whether a trade secret preliminary injunction to stop Bunner from distributing deCSS is valid. The trial court said yes. The Appeals court said that it was a prior restraint on speech and that the plaintiff needed to meet the First Amendment burden and had not. Bill Lockyer (the California Attorney General) and Robert Sugarman (from Weil Gotshal) argued on behalf of the Plaintiff. David Green argued on behalf of Bunner. Each argument was interesting in its own way.

Sugarman led off with the argument that the injunction prevented conduct not speech (citing Bartnicki). In other words, that the posting of deCSS was not "pure speech" deserving of First Amendment protection, but instead is conduct. This was his and AG Lockyer's major theme and they proposed an interesting test for Defendants desiring First Amendment protection. Sugarman said that unless Bunner could disaggregate pure speech from functional speech or conduct, then the injunction was OK and did not need to be reviewed by First Amendment principles. Thus the burden of disaggregation is on speakers. This was repeated by Sugarman and Lockyer over and over again but is not (and should not) be the law. Imagine if the Supreme Court had said: “we know flag burning is expressive, but it is also conduct. Unless you can remove the conduct from the expressive component you lose. Why don't you just write about burning the flag?”

I thought that Green answered this concern well (though not as directly as above) by stressing that the First Amendment is concerned with state actions, not the speech they prevent. If the injunction constrains pure speech, then, even if it also constrains functional speech, it must meet the constitutional tests.

Next Sugarman delved into whether the injunction was content neutral. I felt that the Justices mostly agreed with him that it was. I am midway through a great draft of an article by Eugene Volokh which makes the case that Intellectual Property laws are, by their nature, not content neutral. This was a hard sell for Green, who focused on the injunction, prohibiting disclosure of specific content.

Justices Moreno and George then brought up the trade secret issue of impropriety and the related prior restraint issue of prior unlawful conduct. Sugarman answered that though reverse engineering is not illegal under the Uniform Trade Secrets Act, Johansen had also violated a click wrap agreement. He argued that Bunner knew or should have known that he was publishing a misappropriated trade secret. Sugarman agreed that a finding of prior unlawful conduct was important in terms of saving the injunction from the prior restraint analysis. Later Green tried to clear up the Court misconception that there had been such a finding below. Green said that in the trial court's analysis of the preliminary injunction test, the trial court found that likelihood of success was low but that the balance of harms was overwhelmingly in favor of the injunction. Sugarman contested this in his rebuttal.

Werdegar then asked about the standard of review in terms of whether the deCSS is a trade secret. Sugarman basically didn't answer though he seemed to suggest that the answer was no. Green said the answer is yes. I am a little worried that this will be the Court's escape route from the tougher First Amendment issues.

Lockyer basically echoed Sugarman. The Justices were extremely generous to him and let him talk almost without interruption. The only thing he added was a list of what the State's interests: preservation of secrets, prevention of piracy (he named Napster as the bogeyman -- that is the first time I have heard Napster in the context of trade secrets), encouraging investment, promoting the arts, promoting commercial ethics and protecting California businesses.

I thought Green's presentation was very good. As stated above, he hammered home that the restriction is what is at issue, not the speech and that there was no finding of prior unlawful conduct. He was fuzzy on what the test should be in other trade secrets cases -- and was repeatedly questioned on this. He also made a compelling argument that Bunner's speech related to a matter of important public concern. And, when questioned about why Reimerdes could be enjoined under the DMCA but not Bunner under trade secret law, he admitted that the Plaintiffs could have enjoined Bunner under the DMCA and (IMHO) did not persuade the judges that there was a principled decision to be drawn.