August 27, 2003

Is a Trade Secret Still a Trade Secret if it’s No Longer Secret? DVD Encryption Safe for Now from First Amendment Arguments for Free Speech

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In a Monday ruling, the California Supreme Court decided that distributing the computer code behind the DeCSS app, designed to crack the CSS copy-protection on DVD movies, over the Internet was a violation of trade secret law. In what was an apparent victory for Hollywood, the broader application of trade secret law is the real question. That is, is it still a trade secret if it’s no longer secret?

That was the argument by the Electronic Frontier Foundation in their support of defendant Andrew Bunner, alongside Bunner’s First Amendment rights. "We'll go back down to the court of appeal and present the facts and it will be painfully clear that DeCSS is not a secret," said Cindy Cohn, EFF’s legal director. "It's on T-shirts [ed. the pic here shows the legal one, which you can also buy here]. It's on neckties. It's in thousands of places. Just do a Google search and you'll find it."

So, does that mean that a company’s customer list or secret sauce formula still has protection even if some Norwegian teenager figures out how to post it to the Internet (Jon Johansen, originator of the DeCSS code, was acquitted by Norway of trade secret wrongdoing in January)?

In the end, this wasn't a clear victory for either side - the court made no determination of whether the code was, in fact, a trade secret... It'll be up to a lower court to decide what to do next. Because it's available essentially everywhere - Google it and see - and, it was also likely possible to do the same four years ago, although perhaps with a bit more fuss... Therefore, the code was not secret and would thus not be protected by Calfornia's trade secret law.

That means that if a trade secret is ever published, even if it was misappropriated by hackers or spies or whatever, it's no longer a trade secret. Who's right? Comment here and let us all know what you think.

- Arik

P.S. - check the following links for further info and watch for more on the issue:

Posted by Arik Johnson at August 27, 2003 01:38 PM | TrackBack