California Supreme Court determines that third-party Web posting of trade secret may not be speech protected by the First Amendment.(Internet Law Update)(DVD Copy Control Association Inc.)

The California Supreme Court resolved the potential conflict between California trade secret law and the free speech clauses of the California and US Constitutions. [DVD Copy Control Association, Inc. v. Bunner, 31 Cal. 4th 864 (2003).] The case involved DVD encryption technology, specifically known as the Content Scrambling System (CSS). Essentially, the system functions as a lock and key, with DVD-players given the "keys" to access CSS encoded DVD's, while eliminating the ability to copy and distribute their content.

The motion picture, computer, and consumer electronics industries jointly decided to use the CSS system to encrypt copyrighted content on DVDs. Thus, they licensed the CSS technology in order to prevent unauthorized copying or transmission of copyrighted content. Licensees of the CSS technology were specifically bound to maintain the confidentiality of the master keys and algorithms that allowed the CSS technology to operate.

However, a Norwegian resident, Jon Johansen, acquired the master keys and algorithms of CSS via reverse engineering of software created by Xing Technology Corporation, a CSS licensee. Xing's software was licensed to users under an agreement that …