January 3, 2003 5:40 PM PST

Supreme Court backs off DVD case

The U.S. Supreme Court has bowed out of a long-running dispute over a DVD descrambling utility, dealing a preliminary defeat to Hollywood studios and electronics makers.

Justice Sandra Day O'Connor placed a ruling by the California Supreme Court on hold last week, but rescinded her emergency stay on Friday.

O'Connor's decision came in response to court papers filed by lawyers for the defendant, Matthew Pavlovich, late Thursday. The effect is that Pavlovich is no longer barred from distributing the DeCSS descrambling utility by a court order, but he could be sued again if he decides to do so.

"The entertainment companies need to stop pretending that DeCSS is a secret," said Cindy Cohn, legal director for the Electronic Frontier Foundation, which is assisting Pavlovich. "Justice O'Connor correctly saw that there was no need for emergency relief to keep DeCSS a secret. It doesn't pass the giggle test."

An organization of movie studios and consumer electronics makers filed the lawsuit in 1999 against scores of people, including Pavlovich, who posted DeCSS. The DVD Copy Control Association's (DVDCCA) suit 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 4-3 decision last November, ruled that Pavlovich was a resident of Texas with no substantial contact with California who could not be sued in that state.

Jeffrey Kessler, a partner at Weil, Gotshal and Manges who is representing the DVDCCA, said on Thursday that suing Pavlovich in Texas was an option. A second alternative would be to file a petition for review by the full court, a slow process that would take one or two years and could be denied.

The DVDCCA'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. In Nov. 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."

Neither the Bunner nor the Pavlovich case is related to the case against 2600 magazine, which invoked the Digital Millennium Copyright Act to prevent the magazine from distributing DeCSS on its Web site. 2600 lost the case before the Second Circuit Court of Appeals and chose not to appeal to the Supreme Court.


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