Pavlovich v. The Superior Court Of Santa Clara County (Dvd Copy Control Association, Inc. Real Party In Interest

29 Cal. 4th 262, 58 P.3d 2 (2002)

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Nature of the Case

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Facts

The Content Scrambling System (CSS), a system used to encrypt and protect copyrighted motion pictures on DVD’s, was developed. The CSS technology prevents the playing or copying of copyrighted motion pictures on DVDs without the algorithms and keys necessary to decrypt the data stored on the disc. Real party in interest DVD Copy Control Association, Inc. (DVD CCA) is a nonprofit trade association organized under the laws of the State of Delaware with its principal place of business in California. The DVD industry created DVD CCA in December 1998 to control and administer licensing of the CSS technology. DVD CCA acquired the licensing rights to the CSS technology and became the sole licensing entity for this technology in the DVD video format. Pavlovich (D) is a resident of Texas and the president of Media Driver, LLC, a technology consulting company in Texas. D studied computer engineering at Purdue University in Indiana, where he worked as a systems and network administrator. D does not reside or work in California. He has never had a place of business, telephone listing, or bank account in California and has never owned property in California. Neither D nor his company has solicited any business in California or has any business contacts in California. D maintains a website that provides information; it does not solicit or transact any business and permitted no interactive exchange of information between its operators and visitors. The site sought to defeat the CSS technology and enable the decryption and copying of DVD’s containing motion pictures. It posted the source code of a program named DeCSS on its Web site as in October 1999. DeCSS allows users to circumvent the CSS technology by decrypting data contained on DVD’s and enabling the placement of this decrypted data onto computer hard drives or other storage media. D knew that DeCSS “was derived from CSS algorithms” and that reverse engineering these algorithms was probably illegal. He had also “heard” that “there was an organization which you had to file for or apply for a license” to the CSS technology. D did not know of P. DVD CCA (P) alleged that D misappropriated its trade secrets by posting the DeCSS program on the LiVid Web site because the “DeCSS program . . . embodies, uses, and/or is a substantial derivation of confidential proprietary information which DVD CCA licenses . . . .” The complaint sought injunctive relief but did not seek monetary damages. D filed a motion to quash service of process, contending that California lacked jurisdiction over his person. P contends that D “misappropriated P’s trade secrets knowing that such actions would adversely impact an array of substantial California business enterprises-including the motion picture industry, the consumer electronics industry, and the computer industry.” In a brief order, the trial court denied D’s motion, citing Calder v. Jones Panavision Intern., L.P. v. Toeppen. The Court of Appeal summarily denied the petition. The California Supreme Court granted review.