[Note: this document came to me in ALLCAPS. I have converted it to all-lower-case, then ad
[Note: this document came to me in ALLCAPS. I have converted
it to all-lower-case, then added back capitalization of certain
proper names. This is an error-prone process, but I hope it improves
the readability of this document on the Net. -- Ron Newman]
pages 1 - 36
in the United States District Court
for the Northern District of California
before the Honorable Ronald M. Whyte, judge
Religious Technology Center? a
California non*-profit corporation;
and Bridge Publications, Inc., a
California non*-profit corporation,
plaintiffs,
vs. no. c-95-20091-rmw
Netcom On-line Communication
Services, inc., a Delaware
corporation; Dennis Erlich, an
individual; and Tom Klemesrud,
an individual, dba Clearwood Data
Services,
defendants.
___________________________________
Tuesday, February 21, 1995
San Jose, California
reporter's transcript of proceedings
appearances
for the plaintiffs
Wilson, ryan & campilongo
Andrew h. Wilson, esq.
115 sansome street, fourth floor
san francisco, california 94104
Small, larkin & kidde
Thomas m. Small, esq.
10940 wilshire boulevard, suite 1800
los angeles, california 90024
Helena k. Kobrin, esq.
7629 fulton avenue
north hollywood, california 91605
reported by shelly coffey,
official court reporter
computerized transcription by stenocat
for the defendant pillsbury, madison & sutro
Netcom on-line randolf j. Rice, esq.
communication melissa a. burke, esq.
services, inc. ten almaden boulevard
san jose, california 95113
for the defendant Dennis *Erlich
Dennis Erlich in *propria persona
1614 south central avenue
glendale, california 91204
for the defendant Horning, *janin & harvey
Tom Klemesrud Richard a. Horning, *esq.
555 montgomery street, suite 720
san francisco, california 94111
tuesday, february 21, 1995
the clerk: calling case c-95-20091, Religious Technology
versus Netcom on-line, et al. on for order to show cause re
preliminary injunction.
Mr. Wilson: good morning, Your Honor. Andrew Wilson, Thomas
Small and Helena Kobrin on behalf of the plaintiff. also present
in court this morning is Mr. warren mcshane.
Mr. Rice: good morning, Your Honor. randy Rice and melissa
burke on behalf of the defendant Netcom on-line communications,
and Netcom only.
Mr. Erlich: Dennis Erlich, Your Honor.
The Court: all right. before we start, one concern I have
is
that the order setting the hearing for this morning does say ten
o'clock, and i'm concerned that there might be further
individuals appearing. does anybody know one way or another?
Mr. Rice: Your Honor, we were never served with any notice
of when the hearing was. so we found out by calling your
chambers, and the chambers informed us it was 9:00.
The Court: 9:00 is my normal calendar time. but I think
when I signed the order, I usually have a criminal calendar that
starts at 9:00 and I assumed that we would have some matters on
before this and that's why the order says 10:00 I believe.
Mr. Small: yes, Your Honor. ten o'clock was in the order as
signed and as distributed and served, but I do recall that you
said nine o'clock as the time intended. it was just an oversight
that was missed.
The Court: did I say ten o'clock at the time?
Mr. Small: I think you said nine o'clock.
Mr. Wilson: I think you said 9:00. when we had the orders
retyped, Your Honor, and I brought them in here, I think I didn't
catch the fact that the order was typed up for 10:00 instead of
9:00 which I think you had written in the previous order.
Mr. Erlich: I was told that it was ten o'clock. I was
served with papers that was ten o'clock. these people didn't
bother to tell me that the time had been changed or that they
knew of any different time. so I have people coming at ten
o'clock. I don't know whether they're going to participate in
this or not, but ten o'clock was...
The Court: I think under the circumstances, and I apologize
particularly, Mr. Rice, to you, I think we better wait until
10:00 because that's what the order says.
Mr. Erlich: I appreciate that, Your Honor.
The Court: you were not served with the order?
Mr. Rice: well, what happened, we got every paper except a
signed copy of Your Honor's order.
The Court: we'll do it at 10:00.
(recess)
the clerk: recalling case c-95-20091, Religious Technology
versus Netcom on-line, et al. on for order to show cause re
preliminary injunction.
Mr. Wilson: good morning, Your Honor. Andrew Wilson, Thomas
Small, Helena Kobrin on behalf of the plaintiff. also present in
court is Mr. warren mcshane.
The Court: okay.
Mr. Rice: good morning, Your Honor. randy Rice on behalf of
Netcom on-line communications. with me is melissa burke.
Mr. Horning: good morning, Your Honor. Richard Horning for
defendant Thomas Klemesrud.
Mr. Erlich: good morning, Your Honor. Dennis Erlich in pro
per.
The Court: I have received some papers from the plaintiff
concerning the seizure that took place and some paper from
defendant Netcom with respect to their position with regard to
the request for preliminary injunction.
Mr. Rice: Your Honor, with regard to Netcom's pap we made a
copying error and we sent you all the odd numb pages but not the
even numbered pages to one of the exhibits. if you looked at the
green paper, you have pages 3, 5, 9, et cetera. so here is a
two-sided copy.
The Court: I was just going to tell you I have glanced at
your papers, but I have not read them with any degree of care as
shown by...
Mr. Horning: Your Honor, Richard Horning for Mr. Klemesrud.
I have a declaration of Mr. Klemesrud that I would like to
present to The Court. I wasn't retained until friday and I just
finished this last night.
The Court: do you want to give copies to everyone else.
Mr. Horning: yes, Your Honor.
The Court: let me make just a couple of preliminary
comments, and then i'll hear from each side briefly. with respect
to Mr. Erlich and with respect to a preliminary injunction and
retention of seized documents or software, my concern with
respect to the items seized is to make sure that anything that is
seized and retained is something that is protected from the
standpoint of not being publicly disseminated.
what i'm concerned about is that he has a right, it seems to
me, to do satires or articles or criticisms or anything he wants
to with respect to publicly available information pertaining to
Scientology. and looking through the list of items seized, it
may be that it includes some items that are articles by him that
he would have a right to do. I want to make sure that any
injunction, if one is issued, is issued in terms of making sure
that his right to comment and criticize a satire, if he wishes to
do so, is protected.
what I was concerned about from reading the original
application was what appeared to be wholesale publishing of
copyrighted material and some material that had been protected as
confidential or secret.
with respect to both Netcom and Tom Klemesrud -- i'm not
sure that's being pronounced correctly -- I have, obviously, just
glanced at the papers, but it does appear to me that it's
probably a practical impossibility for them to be expected to do
any kind of sensoring or checking what's published through their
services. so I have some real concern as to whether or not, one,
they're appropriate defendants, but perhaps more immediately
whether or not any type of injunction would be appropriate as to
them.
with that, Mr. Wilson, do you want to make any comments?
Mr. Wilson: Mr. Small was going to handle the argument.
The Court: Mr. Small.
Mr. Small: yes, Your Honor. Thomas m. Small from los
angeles.
as the report that you've received indicates, the seizure
was executed in accordance with the order and confirmed our
preliminary showing that Mr. Erlich, in fact, was engaging in
wholesale copying of the plaintiffs' copyrighted works, both
published and unpublished.
the seizure netted approximately 200 unauthorized copies of
those works, about 160 that had been downloaded from the
internet, about 30 that had been posted on the internet by Mr.
Erlich and stored in his hard drive, one which was on a floppy
disk but beside his computer, and about 30 other works that were
stored in the hard drive.
as the report will show and I suspected you haven't had a
chance to look at it in detail yet, Mr. Erlich attempted to
conceal his computer containing the hard drive, set up a decoy
computer in his computer room and attempted to divert our
attention from it. but ultimately when we found it, he had first
cooperated in guiding us to the portions of the hard drive that
were the materials that were copied from the plaintiffs' works
and assisted us in transferring that to floppy disks so that we
could take the floppy disk, delete it from the hard drive. that
was one category of works, and I have those transferred copies
in my possession. they have been cataloged and they are listed
in the materials that you have. we did not, of course, as you
directed, take the computer itself.
the circumstances of the seizure became rather difficult,
but toward the end Mr. Erlich changed his position and did not
cooperate and demanded that we refrain from taking the copies
that had been made and the disks that he originally had suggested
we take and examine elsewhere. with the assistance of the local
police -- the officers who had been appointed to do this managed
to remove the materials in an orderly fashion without any further
work.
we received this morning the paper from Netcom which
apparently was filed on friday but was not served until this
morning. we haven't had a chance to review it in detail, but it
appears that Netcom's position is that it has no control -- no
way to control what is posted through its computer facility on t0
the internet.
there is a statement in the declaration of rick francis
(phonetic) to the effect that they can't control what is
accessed from the internet. the implication is that there is no
control over what goes through on to the internet as well, and we
are led to believe that this is not the case; that, in fact, they
have the ability to -- particularly with the -- or point of
origin identified, to police what comes out of a particular
point of origin. at this point, however, we haven't had a chance
to look at Netcom's papers in detail and we haven't looked at
Klemesrud's papers at all.
The Court: how would they possibly police? how would they do
it?
Mr. Small: i'm not a computer engineer or programmer, so i
can't speak in detail to that. however, I understand that each
message carries with it the digital identifier as to its point of
origin. and given advanced notice of infringements originating
from a point of origin, I would think that computer science today
would have the ability to flag those messages and cause them to
be examined. I do realize, however, that there is a very large
volume of material that goes over the service. but it is a
computer facility, and it's digital data going through that
facility which I believe Netcom has the ability to and police.
Mr. Wilson: Your Honor, to amplify that point we had a
conversation with one of our programmers just the other day who
was able in a fairly short period of time of time to write a
program that allowed us to know when Mr. Erlich and other people
were actually logging on to the internet. and we believe that it
would be possibly in very short order to create software that
would allow the necessary monitoring to take place, and we're
willing to work with defendants on that.
and, also, I think your concern is well taken. I think that
if you have any concern about it and you're inclined to deny the
injunction as to Netcom or Klemesrud on this basis, that it at
least be continued for a period of two weeks. let us take the
depositions of the two people whose declarations are in front of
you, and we'd be able to provide you with a declaration from our
expert which would show you how this could be done without being
unduly burdensome to the defendants.
The Court: all right. let's take a look for a moment, if we
could, at your inventory of what was taken from Mr. Erlich.
Mr. Erlich: Your Honor, I haven't been provided with that
inventory.
Mr. Small: Mr. Erlich said he had not been provided with
that inventory. I understand that he was handed the inventory
in
the hall outside The Courtroom here this morning.
The Court: do you have some papers you were given this
morning?
Mr. Erlich: yes.
The Court: if you look at one that's entitled, "declaration
of warren mcshane, Thomas Small," so forth. I think that the
inventories are exhibits a, b, c, d and e.
Mr. Small: to my declaration.
The Court: is that right?
Mr. Small: yes. the preparation of these inventories, the
exhibits, has been very time consuming. they have not been
analyzed in great detail at this point, and they have not been
compared side by side with the works that are identified. but
the titles of virtually all of them are very clear as identifying
works of L. Ron Hubbard.
Mr. Erlich: what page is that? i'm sorry. I can't find --
The Court: it's exhibits a, b, c, d, e and --
Mr. Erlich: is that at the end or the beginning?
The Court: they should be tabbed at the bottom.
Mr. Erlich: there is no tabs on anything here. i'm sorry.
The Court: why don't you bring it up and i'll find it for
you.
Mr. Erlich: I also have a statement that I would like to
make.
The Court: you'll have your turn.
Mr. Erlich: great. these are the inventory of the
infringing material or the inventory of the other material that
they took without -- I mean allegedly infringing?
The Court: what I did on that is tab the beginning of the
inventory and the end of the inventory, Mr. Erlich, and my
understanding is that that is a listing of what was taken, so.
Mr. Erlich: thank you, Your Honor.
The Court: okay. what i'm concerned about in looking at
this list or these lists is trying to determine what each of
these is. and as I explained earlier, my concern is that the
order was issued because of a concern of basically wholesale
copying and publishing of protected materials, either trade
secret materials or copyrighted materials.
Mr. Small: Your Honor, if I --
The Court: what I don't want to -- what i'm real concerned
about is anything that would be commentary or satires or whatever
else that Mr. Erlich may have written from.
Mr. Small: may I address that?
the fair use question comes in there, Your Honor, which i
think the satire question and parity question will also raise.
if I may address that at this moment.
first of all, these are -- to the best of my knowledge but
without detailed examination, they are all copyrighted works of
L. Ron Hubbard as identified. all of the heading "HCOPL" in the
first item in the first document is Hubbard communication office
policy letter with a date indicating when it was first created or
published, and on through that "HCOB" you'll see item 11 is
Hubbard; communication office bulletin, "HCOPL" Hubbard
communication office policy letter and there are titles to the
various works.
Mr. Hubbard's works have been regularly registered in the
copyright office. we have not checked for the registration of
all of these works at this point. the ones that are involved in
the complaint all have been registered, we're sure of that, and
it's general practice here that the registration of the works in
issue in the complaint are sufficient for the judge's
jurisdiction and for the initiation of the suit and from that
point forward other infringements that are discovered can be
dealt with at that time.
The Court: but what i'm concerned about is which of these
items that are listed are in your view trade secrets and which
ones are copyrighted? because that makes a little bit of a
difference as to what can be done with them.
Mr. Small: yes, it does. and at this point these lists do
not identify separately the unpublished works. I can point out
some of them which I see just from the inventory, but they have
not been all flagged as such. the third item on the first list,
class 8, tape ten assist, 12 pages, is the items that was -- the
first item that Mr. Erlich copied on to the internet. i'm
correct on that?
Mr. Wilson: sure.
Mr. Small: and that is a confidential tape. there also in
here are a number of "ot" documents identified by titles that
contain "ot" or operating thetan, which are I believe all
confidential and unpublished works. and there are a number
which are identified as "nots" nots or "ned4ot's" which also are
confidential and published materials.
The Court: are the copyrighted materials that are -- the
published copyrighted materials that are listed, are all these
things verbatim publications?
Mr. Small: not necessarily. I have not had an opportunity,
nor have I had an opportunity to have someone else do this to
check each one of them on a side-by-side basis. some of them --
the ones that are identified as hard copies on the lists so
identified -- let's see. the ones that are identified as hard
copies and marked photocopies are things that can be checked as a
one-for-one literal, verbatim infringement, but they have not
been
so checked.
in that respect, Your Honor, paraphrasing of copyrighted
works, close paraphrasing, is copyright infringement as well, so.
The Court: well, that can be debatable.
Mr. Small: that's true. as to the fair use, parity, satire
question, this has not been addressed in detail in our briefs and
I don't believe it's been addressed in detail in Netcom's brief,
as well. it is mentioned in Netcom's brief as a possible issue.
the fact is that the copyright act lists four factors that
must be considered in determining whether there has been fair
use. these are in section 107, and they very clearly do not
permit wholesale copying nor do they permit multiple copying of
entire works from the same author. and where there are
unpublished works in particular, the impact on the writings of
the copyright holder -- that's a very major factor in ruling
against fair use. i'm informed, incidentally, that most of the
HCOPL's, HCOB's all are verbatim copies.
The Court: let me ask you this: how quickly can you provide
for The Court a listing of which of the items are unpublished and
in your view constitute trade secret information which are
copyrighted but publicly available and --
Mr. Small: do you mean publicly available? because the
unpublished works are not publicly available through legitimate
channels at least.
The Court: i'm trying to make a distinction.
Mr. Small: okay.
The Court: maybe to put it a different way: what contend
constitutes trade secret information.
Mr. Small: yes, Your Honor. we can do that quite quickly.
The Court: what constitutes what is copyrighted and of the
items are they verbatim copies or are they copies that are used
in some sort of article about Scientology or satire of
Scientology or criticism of it, and for anything that you contend
is a trade secret the basis for that contention. because I do
have a real concern that there may be more here that was seized
than -- that some of this material may not be stuff that should
remain seized, but I can't tell from looking at this.
Mr. Small: we can very quickly give you a listing of what is
the trade secret information and what is subject to copyright
protection, and that then would also raise the question of what
is registered as well as copyrighted but unregistered. those two
items can be provided in a matter of a day or two.
the third one, verbatim copies or copies used in some sort
of article or criticism, to my knowledge there is no use of
copies in articles or criticism, but we can review them and
determine whether there is anything in the materials that justify
that viewpoint.
The Court: just to give you an example, if you look at item
10, it says, "excerpt from Scientology 0-8, one paragraph." are
we talking about just one paragraph that was put on or was that
in the context of some sort of article or note in which there was
some then comment about or criticism of or something like that?
Mr. Small: I don't have that answer immediately at hand, but
we can provide that by going through all of the papers in detail
and checking them against the originals.
The Court: okay. let me hear from Mr. Erlich for a moment.
Mr. Erlich, you indicated you had some comments you wanted to
make.
Mr. Erlich: yes, Your Honor. i'll give a copy of it to you
and to Mr. Small here, if I could.
The Court: let me just take a quick glance at it before you
make your comments.
Mr. Erlich: okay.
(pause in proceedings)
The Court: okay. i've had a chance to glance through this
quickly. what seems to me to make sense is for plaintiffs to
prepare the list that i've requested and do it forthwith, to
provide you with a copy of it, and then have you put your
comments on it. and if you think something else -- because your
letter suggests that some other things were taken. anything else
that you feel was taken and then I can look at it and make an
appropriate order.
Mr. Erlich: that's fine, Your Honor. I mean, would it be
appropriate for me to make any comment or do you have any
questions of me?
The Court: you can now, if you want. it's a little hard
until I see more information to make any judgment. but if you
have some comments that you want to make in addition to what's in
your writing, you can do so.
Mr. Erlich: , yes, I do.
The Court: okay.
Mr. Erlich: with regard to the list that Your Honor has
marked for me, I would call to your attention that under hardcopy
works about midway through that batch of -- midway through the
batch on page -- looks like handwritten of -- the pages don't
make
any sense. right after exhibit d.
The Court: yes.
Mr. Erlich: to the end of the part that Your Honor marked
for me, these are works that they were obtained and in my
possession, hardcopy works that were obtained in a legal manner
and were in my possession for the purpose of studying and writing
about and satirizing and eventually bringing suit against the
cult of Scientology.
The Court: how did you get these hard copies?
Mr. Erlich: they were either given to me by other
individuals or I think were loaned to me. they were -- i
undoubtedly bought in a used book store because some of these
things had other people's names written on them, and Your Honor
can verify that because I understand that that material is here
and I can point to those things to let you know that they were
not obtained in any slightest illegal manner.
The Court: these are all --
Mr. Erlich: this whole batch.
The Court: this whole batch is publicly available, to your
knowledge?
Mr. Erlich: exactly. the other batch of materials, both the
supposedly trade secret or whatever you want to call it, this
confidential material, and the other -- all of this other
material which I excerpted from these larger works that are into
the hardcopy list, were all part of my ministerial training when
I was an ordained minister of Scientology and subsequently broke
away to attempt to reform the organization that I thought had
gone corrupt.
my position on internet is that a satirist, a writer, a
minister -- and I know in my heart that I have not in any way
made any profit whatsoever on materials that I either downloaded
from internet and made copy on and uploaded again. I have taken
no documents from the Church of Scientology. they were all
either given to me or loaned to me or sent to me anonymously, and
I simply reposted them with my comments or verification that
they are in fact what I studied when I was a minister of
Scientology.
The Court: what about, though, what appeared from the
application they filed with The Court that you were causing to be
published on internet pages of copyrighted materials?
Mr. Erlich: the most that I would ever post out of a book
of 400 pages would be maybe two pages excerpted with comments
about how this shows that these are the activities and real
beliefs of the Church of Scientology. and in that same vein, my
-- the postings to internet will reflect that as a former insider
my endeavor is simply to place into the public knowledge those
things which they do not have access to, but because I am a
minister and was a minister and was given these materials as a
minister that free speech with those materials is protected under
the first amendment.
The Court: when you got those materials, did you make any
agreement with respect to what you would do --
Mr. Erlich: none whatsoever, Your Honor. none whatsoever
and I wouldn't.
The Court: do you have copies of everything that you've
posted? I mean, did you have copies?
Mr. Erlich: no. unfortunately, they sat at my computer --
warren mcshane, the plaintiff, and one of his computer people --
and deleted and copied files wholesale without permitting me to
make an inventory of what they were actually deleting or copying.
so I have nothing even to defend myself to say, okay, these were
the original postings that I made.
perhaps these are archived somewhere on the internet. maybe
mit or something has these archived. but in that case I will
have to go see what I -- what they have archived, compare it to
what is being claimed i've posted, and then compare it to the
actual documents that I supposedly violated which I requested
from them before this matter ever became a filing.
I requested that they please send me a verification that
this is -- that these are, in fact, copywritten materials. and i
have letters and i'm sure that that was part of their filing that
say -- you know, copyright is a very exact right. it deals with
stealing another man's words, ideas, in an exact or nearly exact
form for the purpose of profit and commerce.
without your providing me with the exact works for
comparison I have no yardstick to determine whether or not
they're just trying to shut me up or are they actually -- do they
have a case against me?
and they kept on threatening me. they came to my house. and
so eventually I just said, look, take me to court, and it
resulted in this raid on my house which clearly was a violation
of my civil rights.
I intend to file back against the Church of Scientology and
all the people involved with regard to that violation, and I will
be very aggressive in pursuing that suit because I will not --
now that they have come against me in this way, i'm not going to
back down in any sense of the word, Your Honor. I have a right
to do what I did. I am the aggrieved party now, and now i'm
going to go forward with my suit.
The Court: well, okay. I understand what you say.
Mr. Erlich: great. i'll leave it to Your Honor.
The Court: who wants to go first? Mr. Horning?
Mr. Erlich: one more thing, Your Honor.
The Court: yes.
Mr. Erlich: this piece of paper, this unsigned piece of
paper, was the only inventory they allowed me to have when they
left and they would not let me verify it. they would not let me
verify, and I would -- you know, I would give it to you to copy,
but this is my only copy of it.
The Court: we can make a copy and give it back to you
Mr. Erlich: please do.
The Court: are you all set?
Mr. Horning: Richard Horning on behalf of Mr. Klemesrud,
Your Honor. from Your Honor's comments I don't know what points
you want me to address. The Court has picked up the essential
point of Mr. Klemesrud 's declaration which is the literal
impossibility of Mr. Klemesrud's taking any effective steps to
police Mr. Erlich's writings or the writings of anyone else for
that matter.
it's pretty apparent, Your Honor, from the letter that's
attached as exhibit b to Mr. Klemesrud's declaration that what
the plaintiffs seek in this case is an order from this court
compelling my client to keep Mr. Erlich off the air entirely,
whether he's engaged in legitimate criticism or wholesale
copyright violations or something in between. that's what they
want and that's why they've come to court. I don't think this
court should permit its processes to be used for those purposes.
but short of that, Your Honor, we have the situation where
again there is a very serious issue underlying this, which is an
attempt by the plaintiffs in this case to impose strict liability
upon a bulletin board operator for everything that crosses the
internet in a nanosecond, in the blink of an eye. and the
supreme court has said in the smith versus california case
that's improper for someone in my client's position, analogous to
a book seller, to have strict liability imposed upon it, and
there are a number of other cases to the same effect.
what we have here ultimately, Your Honor, is some form of
religious war as to which my client is, in essence, an unwilling
middleman, who has taken the postings of Mr. Erlich, made them
available. and as The Court can see from his declaration,
they're available for a short period of time on my client's
machine. then they get posted or deleted and they're gone. my
client has no effective means of policing what Mr. Erlich writes.
I think The Court has picked up on that. so I don't know if the
court wants me to say anything further.
The Court: no. I understand your position.
Mr. Rice?
Mr. Rice: thank you, Your Honor. i'd like to simply adopt
much of what Mr. Horning has said, but also to point out that the
position of Netcom is, in essence, one step removed from the
position of Klemesrud and to emphasize a point that we make in
our papers that there is absolutely no precedent, none
whatsoever, for the kind of order that the plaintiffs are seeking
to apply against Netcom.
it's a fair analogy to say that if you looked at this as a
pollution case what the plaintiffs are doing is pointing to a
polluted river and suing the river along with the polluter. that
is exactly the position of Netcom here. we are simply a means
of transmission.
if the tro or the preliminary injunction applies to Netcom,
the only way that Netcom can abide by it and enforce it is to
disconnect the 500 subscribers, to disconnect Mr. Klemesrud and
his 500 subscribers.
we are simply a passive transmitter, like a regional phone
company. and the only way that we could enforce a prohibition in
the way that the order is drafted would be by disconnecting that
community, the Klemesrud community. that would be an act which
disconnected not only the alleged wrongdoer, but all of the other
people who belong to that community who are not alleged to have
committed any wrongdoing.
i'd like to talk a little bit about two cases that the
plaintiffs cite and that we talk about in our papers, if the
court wants to hear that sort of argument; if not, i'll save it
for our motion to dismiss. but we're very concerned that no
injunction apply against us until we have the opportunity to file
a motion to dismiss because I think that when we file a motion to
dismiss and discuss the sega case, the playboy case and other
cases, you'll see that there is simply no precedent for finding
liability against a passive transmitter like Netcom.
do you want to talk about those cases?
The Court: I really don't think you need to, but you can if
you want to.
Mr. Rice: if I don't need to, I won't. I just want to be
sure -- I think Your Honor has picked up on the essential points.
there should be no preliminary injunction against Netcom. and
if, indeed, a preliminary injunction were to apply against
Netcom, we would be required to disconnect hundreds of innocent
people from the internet.
The Court: Mr. Wilson, any final comment?
Mr. Wilson: just very briefly, Your Honor.
first of all, with respect to the seizure, I think when you
read the report and the fallout from the report and what Mr.
Erlich is going to tell you, you'll see that a vast quantity of
infringing material was seized. the seizure order was necessary,
and you'll also see that Mr. Erlich tried to hide what he was
doing. so it's very clear to me that a preliminary injunction
was very proper against Mr. Erlich.
now, with respect to Netcom and Klemesrud, their argument
essentially is that we're trying to keep Mr. Erlich off the net
entirely. that's not true. that's a strawman. we are not
trying to have Mr. Erlich silenced. what we want is to have an
infringing material not appear on the net.
now, I think if you look at the article that's one of the
exhibits to Mr. Rice's filing, you'll see the analogy made that
this is like you're the owner of a super highway and you spent
money on this super highway and all of a sudden there is a pinto
driving down the highway. it's got some stolen material in it
and you're liable for that. that's a point that's made in one of
the exhibits to Mr. Rice's declaration, and that's not a proper
analogy.
the analogy is that you if you're Netcom you're the owner of
a super highway with a lot of other people, and you've got your
own little toll booth on an offramp or onramp and you get a call
from someone and that person says Mr. Erlich's driving down the
road, he's in his pinto and he's got a trunk full of material,
don't let him get on the highway.
and that's what happened here. they got prior notice. they
were told that Mr. Erlich was doing this. they knew where he
was, and they didn't do anything to stop him. that's the point.
and we say that there are reasonable means that can be used
to stop this from happening again; and if you have any doubt
about that, the tro should be continued for a period of two weeks
so that we can take the depositions of the people that we need to
take, put a declaration before you that will show you how this
can be done reasonably and without burdening the defendants.
Mr. Rice: two minutes, Your Honor. I would like to work
with that analogy, but I won't because I think that's always a
foolish temptation and i'll resist it.
I do want to point out that the plaintiffs have come into
The Courtroom today unable to identify to The Court exactly which
items are copyrighted and trade secret and exactly which are not.
they want to require Netcom, a passive transmitter, to make that
determination on a case-by-case basis with regard to each message
that comes over our system. if they can't do it I The Court
before Your Honor today, how can we do it on an ad hoc basis on a
case-by-case instance as it comes over our system? we cannot. it
simply is an improper order to require us to attempt us to do so.
Mr. Horning: just one brief comment, if I might. i'm, sorry,
Your Honor.
I urge The Court to look at exhibit b to Mr. Klemesrud 's
declaration. that is the letter that he received from one of
Netcom's lawyers in january. that makes it absolutely clear,
contrary to what Mr. Wilson has said, that what the plaintiffs
want in this case is for Mr. Klemesrud to bar Mr. Erlich from
access to the los angeles valley college bulletin board system
the letter says that that's what they want us to do, and
effectively that's the only way we could police any kind of an
order from this court.
we don't have the ability, just as Netcom does, to review
whatever the trade secrets might be. we don't know what they
are, whatever these voluminous writings might be and make some
determination. I can't look over my client's shoulder at all
this data streaming across his computer. he can't do it either.
thank you, Your Honor.
Mr. Erlich: one further thing, Your Honor, very briefly.
The Court: okay.
Mr. Erlich: I requested that they give me -- i'm sorry. i
requested of Small that he give me some sort of a documentation
of his rights to these materials, and I was refused those or i
never got such a list or a way I could verify their claim on
these materials to begin with.
had I gotten any sort of legal claims, something that i
could verify that they have claim to specific works, I told them
I would have and I certainly would have ceased any such posting
as they documented and would have deleted that posting wherever i
could and apologize publicly for that posting, but none was
forthcoming.
Mr. Small:, Your Honor, in that respect it should be made
clear that Mr. Erlich was given the order which identified the
things to be seized and was cooperating very well for a while
until he got the press on the premises and began drinking beer
and got a little unruly. so the end of the seizure was not as
orderly as it might have been otherwise.
and it's important, I think, that this question with respect
to publicly available documents be recognized up-front. a lot of
the documents are publicly available, but not for scanning into
the computer as Mr. Erlich did. he had a scanner by his computer
and used that to run whole works through the materials (sic), and
many of these works were one or two pages in length.
The Court: what i'm going to do is follows: with respect to
Netcom and Klemesrud i'm going to lift any tro as it purports to
affect them and deny without prejudice a preliminary injunction
as to them.
with respect to the items that were seized I want a list
prepared and given to Mr. Erlich and The Court of each item that
was seized, whether that item is considered a trade secret by
plaintiff and if so the basis for that. I want a list to
identify any material seized that is copyrighted and the basis
for that statement and an identification of any of the seized
materials which were published and if published in what way the
publication was verbatim, whether the publication was verbatim
and if not in what way it was varied from being verbatim.
and then after -- let's see. if that list could be provided
by the 24th; is that agreeable?
Mr. Small: 24th of?
The Court: february.
Mr. Small: three days, yes, Your Honor, I believe we can do
that.
The Court: and then that will be provided to The Court and
Mr. Erlich. and, Mr. Erlich, then by March 3 I want you to file
any comments or response you have to that list.
Mr. Erlich: fine, Your Honor.
The Court: and after I receive those, I will either make an
order with respect to what is to be done with the seized items or
i'll invite you for further comments to The Court. and if we do
that, Mr. Erlich, if you would prefer to do it by telephone, we
can do that to save travel.
Mr. Erlich: thank you, Your Honor.
The Court: with respect to a preliminary injunction I want
to -- well, I guess a better way of putting it, for the
continuation of a temporary restraining order I want to work on
the language as to that; that essentially the intent would be to
prohibit any publication of confidential matter or any
publication of copyrighted matter that was not that which is fair
criticism or comment or fair use. and then after I receive the
report, I will decide whether or not a preliminary injunction
should be issued; and if so, the language of that preliminary
injunction.
okay. anybody have any questions before we break for the
day?
Mr. Small: as I understand it, Your Honor, the tro then
continues in its present form until you have reworked the
language?
Mr. Rice: as to defendant Erlich only.
The Court: right.
Mr. Horning: I had a question, Your Honor. when the
plaintiffs filed the lawsuit, there was some form of application
-- two forms of application for protective order an for an order
sealing the file. i'm unclear from the papers --
The Court: the file is not sealed.
Mr. Horning: the file is now not sealed. was the protective
order ever entered?
The Court: i'm not sure what protective order --
Mr. Small: I believe not, Your Honor.
Mr. Horning: thank you, Your Honor.
Mr. Small: it has yet to be ruled on, the motion for
protective order as to the filing of confidential materials in
court and the sealing of those materials in The Court's files.
The Court: when did you make that application?
Mr. Small: along with the initial papers.
The Court: okay. then i'll take a look at that.
Mr. Horning: I don't think there is anything -- the only
reason I raise it, Your Honor, I don't think there is anything
that's been filed with The Court yet -- counsel correct me if i'm
wrong -- that is in the nature of what they claim is a trade
secret.
what as I understood the order to be is that they wanted the
protective order that -- so they might lodge this material with
The Court. I don't want to be receiving any material in the
absence of an order that I consent to that's claimed to be
protected. that's my only concern, Your Honor.
The Court: say that again.
Mr. Horning: my only concern, Your Honor, is that in the
course of filing the papers in this litigation I don't want to be
receiving any materials from the plaintiffs that they claim is
somehow protected by a protective order that i'm not aware of.
that's the only reason I raise it.
The Court: that's a legitimate concern. there is no
protective order as of the moment.
Mr. Horning: thank you, Your Honor.
The Court: I would assume that --
Mr. Erlich: for anybody.
The Court: -- if there is one, that it could be circulated
to
all parties.
Mr. Horning: thank you, Your Honor.
Mr. Small: Your Honor, one of the aspects of that request
for protective order is to prevent any filing of confidential
materials in The Court files by anyone and particularly by Mr.
Erlich that contained confidential information. we don't want
those filed except under seal.
The Court: I don't know of anybody seeking at this point to
file any confidential materials.
Mr. Erlich?
Mr. Erlich: i'm thoroughly confused, Your Honor, about what
-- what the current order on my -- with regard to my publishing
or my surmons. I understand that Your Honor wants me to limit
myself to fair use and I will do that, but is there currently a
restraining order on me or a temporary restraining order?
The Court: there was one that was issued initially and that
will be modified forthwith.
Mr. Erlich: has it -- does it lapse? does it lapse until the
modification?
The Court: no. it stays in effect until the modification.
the modification hopefully will be done today or tomorrow.
Mr. Erlich: in that case I have a question with regard to
-- with all due respect, you know, if my internet connection is
not cut and if I download files from this news group that contain
material that is questionable but not proven to be copywritten
or protected or trade secreted or whatever or I recognized it
from my training as a minister, are you restricting from
commenting on anything until that point? can I --
The Court: I have not read nor do I think the plaintiffs
read anything preventing you from fair use. the problem is that
there may be a disagreement as to what's fair use. that's one
reason I want to look again at the order to see if I can make
that clear, but fair use is something that you're allowed to do
under the law.
Mr. Erlich: right.
The Court: the concern I have is that what the application
indicated -- and I don't want to get in a dispute at this point
as to whether that's a fair representation -- but was that what
you were doing was publishing verbatim large portions of
copyrighted materials, whether they were downloaded and you put
them back on or whatever, but that's --
Mr. Erlich: that was their assertion.
The Court: that's what I don't want to have happen.
Mr. Erlich: absolutely not. and with regard to
questionable activities that -- in other words, i'm sure that i'm
going to be saying things on internet about this circumstance
that i'm in that may be objectionable to the plaintiffs in many
ways. in light of that, I would like you, Your Honor, to give me
some sort of guideline with regard to other invasions of my
privacy that might happen in the next two days as a result of
their disagreement with my postings on internet. am I likely to
get raided again, in other words, if I post a paragraph of some
of these works that they seem to think are in question?
The Court: well, i'm not sure that I would recommend that
you go out and you publish verbatim large portions of protected
works, if that's what your question is.
Mr. Erlich: comment on?
The Court: you know, if you want to comment on what's
happened in court or comment on something where you're not
revealing either information that's trade secret or copying large
portions of copyrighted material, you know, that's something that
you're entitled to do, but I would be careful.
Mr. Erlich: yes, Your Honor, I will be. thank you.
Mr. Small: Your Honor, the order has never prohibited Mr.
Erlich from commenting on the activities.
The Court: it certainly wasn't intended to. I want to
reread
the language.
Mr. Small: it does, however, prohibit him from reproducing
copyrighted materials.
The Court: and I think that's the distinction that I want to
try and make more clear than it is. okay. anything else?
Mr. Wilson: thank you, Your Honor.
Mr. Horning: thank you, Your Honor.
The Court: if either of you want an order, prepare it, run
it by plaintiff and submit it.
Mr. Rice: thank you, Your Honor, we will.
The Court: you've got your deadline end of this week and,
Mr. Erlich, March 3rd.
Mr. Erlich: thank you, Your Honor.
Mr. Small: yes, Your Honor.
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