The case was brought by the California-based DVD Copy Control Association (CCA), a group that licenses encryption software for DVDs, against Matthew Pavlovich, now president of a Texas-based IT consultancy.
The group claims that Pavlovich infringed trade secrets by posting on his web site the source code that can be used to decrypt Content Scrambling Code (CSS), a software system protecting copyrighted motion pictures on DVDs.
Pavlovich posted the code, known as DeCSS, in 1999, when he was a college student in Indiana. He claimed that he could not be sued in California because he posted the code passively and had no substantial contact with California. He also argued that he had no intention to harm the state's computer and movie industries.
The DVD CCA, on the other hand, claimed that he should be sued in California, since the movie industry, that was most harmed by DVD copying, was based there.
The group's arguments were initially rejected by a lower court in California. The Supreme Court, however, ruled yesterday 4-3 that there was no evidence suggesting Pavlovich specifically targeted California and therefore he could not be sued there.
The court ruled that Pavlovich should have known that his activities would harm the movie industry, which is largely based in California. It concluded, however, that this fact was not enough to establish jurisdiction in the case of an out of state resident.
The decision does not prevent the DVD CCA from suing Pavlovich in Texas. The court ruled that "Pavlovich may still face the music – just not in California."
The decision could affect another 500 individuals who have been sued by the DVD CCA for posting the code.
The California Supreme Court decision is available as a 53-page PDF at:
www.courtinfo.ca.gov/opinions/documents/S100809.PDF