Biased Journalism Vol. 2, issue 14

Biased Journalism: a net magazine designed to compensate for the shortcomings of the professional news media.

Copyright 1996 Shelley Thomson; all rights reserved.

Mail, articles and comment may be directed to Netiquette will be observed with all communication, except for the following: harassing or threatening mail will be posted to the net immediately.

Table of Contents for Biased Journalism.

Biased Journalism Volume 2, issue 14 July 30, 1996.


SPECIAL BULLETIN: As a public service we present two documents filed by Morrison and Foerster, the San Francisco law firm known as "the mighty MOFO", on behalf of Dennis Erlich. The first selection contains a moving account of the raid on Erlich's home by agents of the church of scientology. The second item is a comprehensive discussion of trade secrets and the internet. It is highly informative about the issues. The plaintiffs are hammered for making assertions without evidence, misstating facts, and so forth. The famous survey is roundly criticized and Judge Whyte is asked to throw it out. Trade secrets once posted to the net are dead, dead, dead. MOFO has spoken.


CARLA B. OAKLEY (Bar No.130092)
MATTHEW K. FAWCETT (Bar No.161087)
345 California Street
San Francisco, California 94104-2675
Telephone:	(415) 677-7000
Facsimile:	(415) 677-7522

Attorneys for Defendant
Dennis Erlich



California non-profit corporation; and BRIDGE
PUBLICATIONS, INC., a California non-profit
	Date: December 8, 1995
DENNIS ERLICH, an individual; TOM	Time: 9:00 a.m.
KLEMESRUD, an individual, dba	The Hon. Ronald M. Whyte
SERVICES, INC., a Delaware corporation,


I, Dennis Erlich, declare as follows:

I. I have personal knowledge of the facts set forth herein and, if called as a witness, could and would testify thereto of my own personal knowledge.


2. On the morning of Monday, February 13, 1995, at 7:30 a.m., I was awake and working at my computer in the office of what was then my home in Glendale, California. The doorbell rang and I looked out the window and observed a group of approximately twenty-five people at my door and in my driveway. I remained inside the house, but soon received a call from someone identifying himself as an off-duty Sergeant Ed Eccles of the Inglewood Police Department. Mr. Eccies told me that he was standing outside my home, that he had a writ of seizure which allowed him to enter my home and that if I failed to open the door, he would carry out the writ by force.

3. I told Mr. Eccles that I refused to let so many people in my home. After some discussion, six people came inside my home. Apart from Mr. Eccles, these people included three people identified to me as officials of the Religious Technology Center ("RTC") -- Warren McShane, Thomas Small and Paul Wilmhurst, RTC's computer operator. Also present were on-duty Glendale police officer Steve Eggert, off-duty Inglewood police officer Mark Fronterotta, and a private investigator hired by RTC's counsel, Robert Shovlin. I did not learn their names until after the seizure was over. Only Mr. Eccles identified himself at the outset, but he said he would not identify the others until after the raid. Once inside my home, Mr. Eccles presented me with a sheaf of legal documents and declared, "This house is now under our control."

4. The RTC officials and the other individuals identified in the preceding paragraph entered my office and proceeded to hook up one of my computers, which had been disconnected. For approximately one hour, Mr. Wilmhurst searched through the computer's hard drive. Mr. Wilmhurst and Mr. McShane also used a separate computer, which they brought, to search my floppy disks.

5. After approximately one hour, off-duty officer Eccles and officer Eggert left the scene, leaving Robert Shovlin, the private investigator, to observe the seizure.

6. The RTC officials demanded to know where my "other" computers were. They insisted that I unlock the room containing my music studio; once inside the room, they demanded that I open a closet that held my second, larger computer.

7. The RTC representatives dragged the second computer into my office, connected it and began searching my files.

8. Using a 250 megabyte backup tape, the RTC officials began to copy many of the files from the hard drive of my second computer. They then proceeded to erase the files that they copied from my hard drive. All of this occurred without my permission or consent. From what I can tell, the RTC officials erased files dealing with numerous topics -- including Internet messages, my financial records, my own independent research into Scientology, and other miscellaneous files having nothing to do with Scientology or L. Ron Hubbard. Unfortunately, I cannot know for sure exactly what, or how much, was downloaded or erased because the RTC officials would not permit me to make an inventory of the files.

9. In addition to copying and erasing my computer files, RTC officials searched throughout the remainder of my house. They searched many areas of my home -- including every closet and cupboard -- that contained no items related to computers or to Scientology. Finally, they kicked in my garage door in an attempt to search my garage.

10. While the RTC officials were searching my home and my computers, the off-duty officers and/or Mr. Shovlin monitored my movements around the house. When I walked towards the bathroom, Officer Fronterotta escorted me.

11. I placed telephone calls to my lawyer and a representative of the Cult Awareness Network to notify others that I was being subjected to a search. I also wanted to inform them who was executing the search, but the RTC officials still refused to identify themselves.

12. The search of my home by RTC officials lasted approximately seven hours. The search was interrupted by the arrival of members of the media, who took photographs and videotaped the proceedings. Nevertheless, RTC officials continued to search through my home and my belongings until approximately 2:00 p.m.

13. Near the end of the search, RTC officials called in their personal photographer. Without my permission or consent, the photographer took numerous photographs of my home (inside and out) and my belongings, including the contents of the cupboards and closests they searched. RTC's photographer also had a video camera with him.

14. As the RTC officials and the off-duty and retired police officers prepared to depart, an on-duty Glendale police officer arrived. I asked the officer for an inventory of the items that were being taken away. The officer refused my request for an inventory. Consequently, my sole record of the items taken from home was a handwritten, incomplete list of items prepared by Sgt. Eccles at approximately 9:00 a.m. A copy of this list is attached as Exhibit A.

15. The RTC officials ultimately took numerous items from my home. These items included:

a. approximately 300 computer disks in the form of 3 1/2 inch and 5 1/4 inch floppy disks, containing such computer programs as DOS, Aldus Page Maker, Word Perfect, Turbo Tax, and Quicken;

b. approximately 40 of my books pertaining to Scientology;

c. personal papers pertaining to my research into Scientology;

d. a transcript of a radio broadcast debate between myself and Scientology official Herber Jentsche;

e. a "demo" tape of songs written by me; and

f. an envelope containing my most recent bank statement.

16. In addition to the articles removed without my consent from my home, the following articles from my home were damaged by the search conducted by RTC officials:

a. the computer in my office (the first computer subjected to search by RTC officials) failed to boot up property after the seizure;

b. my second computer could not run the Windows operating system program, since RTC officials deleted a necessary instruction in the Windows program file containing the word "Clear";

c. my garage door was damaged by being kicked in by RTC officials.

17. Although the numerous computer disks mentioned above have been returned to me, I cannot use these disks for fear that they contain potentially harmful computer viruses. Thus, these disks -- worth at least several thousand dollars -- are effectively worthless to me.


18. It is my understanding that many of the documents RTC seeks to include in a revised and expanded preliminary injunction are copies of alleged copyright protected documents that were found on my computer hard drive during the February 13, 1995, seizure of my home. In the case of many of the documents, RTC does not claim that I posted them to the Internet (or anywhere else), but that they were just archived on my computer. I would like to explain to the Court generally how this would occur.

19. Given my computer set-up, the way I review all the messages that are posted to the alt.religion.scientology newsgroup ("a.r.s.") is via an off-line reader. I connect to the Internet through my phone line, but I only "log on" to the Internet for a very brief period of time. All I do, once I am on-line," is execute a command that makes an automatic and sweeping download of all messages posted to a.r.s. that I have not already downloaded (this can run into the hundreds). I usually do this one or more times a day. Once the downloading is complete, which generally last just a couple of minutes, I immediately disconnect from the Internet. Thus, the only time that I am actually on the Internet for a.r.s. review is the time it takes for my computer automatically to download the entire a.r.s. newsgroup on to my computer's hard drive.

20. I do not control in any way the number or selection of messages that are downloaded from a.r.s. on to my hard drive. I also do not in any way "pre-screen" the a.r.s. postings before they are downloaded onto my hard drive. Everything that occurs in the downloading process happens electronically and without my control. Thus, if anybody posts copyrighted works to a.r.s., those postings would automatically be downloaded to and stored on my hard drive without my control, along with everything else posted on a.r.s.

21. After my computer executes the downloading, all the postings are stored on my hard drive. Then, I can read all the new a.r.s. messages at my leisure. Generally, I do not delete these messages after I have read them, but instead retain them for my personal research and study.


22. The patterns and practices for posting messages to the a.r.s. newsgroup is important to evaluating my postings to a.r.s. Specifically, the way that "threads" of postings relate to one another and spark debate, in what must seem like a chaotic environment to novices, is critical. Given the unmoderated and often volatile environment or the a.r.s. newsgroup, in my view it is especially necessary to use the words of L. Ron Hubbard exactly as they were written in order to carry out an effective and meaningful critique of Scientology's practices.

23. The a.r.s. newsgroup is incredibly busy. An enormous number of messages are posted there every day. In order effectively to carry out my mission of educating the public about what I believe is a deceitful and dangerous organization, it is absolutely critical that readers of the a.r.s. newsgroup believe I am credible. In order to achieve that level of credibility, it is essential to acknowledge, understand and comment on the words of Mr. Hubbard precisely and as written. There are at least four reasons for this.

24. First, it ensures my audience that I know what I am talking about, that I am familiar with Scientology. This is important because there are many people who post messages (both critical and praiseworthy) who simply do not have sufficient experience and knowledge to comment intelligently about the issues. In order for me to be able to reach and help a number of people on a.r.s., these people need to know that I have seen and studied the actual Scientology texts, and can help foster the debate and explain them. This is especially true because it is not uncommon for the pro-Scientology faction on a.r.s. to claim that other people's interpretation of Mr. Hubbard's policies are inaccurate -- even when they are not -- because they fear that the public will be dissuaded from joining the "church." I am one of the few people with the knowledge and experience to combat that tactic by verifying and explaining Hubbard's policies.

25. Second, as somebody who spent many years as a Scientology minister, I am one of the most knowledgeable contributors to the a.r.s. newsgroup about Scientology's practices -- and that includes the Scientologists who participate in the newsgroup. In that position, I feel I have an additional responsibility to the a.r.s. community to help facilitate debate on topics chosen by others. As a result, various people will often post a portion of what they think is authentic Hubbard material, and ask if I can "authenticate" it. In fact, there has always been a great deal of discussion on the newsgroup just about the authenticity of various quotes and writings attributed to Hubbard. This discussion often becomes the foundation for debate about important aspects of the Scientology belief system. I have, in the past, been able to verify for the a.r.s. community whether an alleged Hubbard work is real or not, which then helps the participants have a productive discussion about the topic. A good example of that is when I first saw OT III materials posted. I did not originally post those documents to the newsgroup, but I did verify -- for the benefit of the a.r.s. community and to further our discussion and debate -- that they were authentic. A true copy of my posting reflecting this is attached as Exhibit B. I feel it is important to let people know that they are debating the authentic works. Furthermore, as I explained in my deposition, I only obtained the OT III documents and the vast majority of the other allegedly secret documents because somebody else had first posted them to the Internet before me.

26. Third, it is important to utilize Scientology works themselves because one of the first things a Scientologist is conditioned to believe is that only Mr. Hubbard's precise words can be used for teaching Scientology. It is absolutely forbidden for an instructor or supervisor to provide an "interpretation" of the texts, only Hubbard's words are allowed to be used. In fact, there are important Scientology policies on this very point. True and correct copies of two of those policies are attached as Exhibits C and D respectively. Those policies explain -- in Hubbard's words -- how instructors cannot actually explain Hubbard's writings, but can only direct pupils to the writings. Because part of my mission is to enlighten people who are already Scientologists, it is a forgone conclusion that they will ignore anything that is not actually Hubbard's writings. One of the things I must do in order to reach those people is actually use Hubbard's words, but juxtapose some of his policies in a way they may not have seen before. By doing this, I try to highlight the contradictions and conflicts in Scientology in a way that cannot be ignored. The result I try to accomplish is to present Scientology's practices so that they will evoke a response from current Scientologists, and help them see the hyprocrisy of the "church." Unfortunately, because of the way Scientologists are conditioned to reject anything other than Hubbard's words, a mere discussion about Scientology without quoting Hubbard's words is unpersuasive and ineffectual.

27. Fourth, and most significantly, if I did not use Mr. Hubbard's own words in the precise way they were written, I would quickly be accused by the pro-Scientology faction on a.r.s of twisting Mr. Hubbard's words, using them out of context or simply making up fake documents. These tactics are a very common way that the Scientology proponents deflect criticism of Scientology doctrines and practices and attempt to silence all critics. By claiming that a critical posting has misquoted Hubbard or taken his words out of context, the pro-Scientology faction can (and does) stifle debate on the subject and interfere with the free exchange of ideas. Because I want to foster such debate, the only way I can avoid being accused of using untrustworthy or bogus materials is to actually quote enough of the underlying works to prove that Mr. Hubbard actually advocated such outrageous things.


28. The level activity on a.r.s. is often frenzied and disparate. On any given day, there can be a number of distinct topics being debated at the same time (these topics are sometimes called "threads"). For somebody who is not familiar with the unmoderated nature of newsgroups generally, and the frenetic pace of a.r.s. in particular, it would be extremely difficult, if not impossible, to follow the threads. Because I have extensive experience with Scientology and with a.r.s., I can follow the many different debates occurring simultaneously. Often, the threads touch upon topics for which there are specific Scientology policies. To animate and elevate the debate, I have, in the past, posted portions of those directly applicable policies, so the rest of the group can refer to and make use of them in the debate. Contrary to what the plaintiffs claim, I do not simply post portions of Scientology documents for no reason. Instead, my postings are a small, though relevant, part of an ongoing and much larger debate. My goal in posting the works has been to provide the true words of Mr. Hubbard and my comments about his words, so that all interested parties can carry on the debate in which I participate.

29. A good example of this rather typical pattern can be illustrated with the a.r.s. discussion about Scientology's method of handling its critics. This debate was occurring in late August of 1994, when I was fairly new to the newsgroup. Attached as Exhibits E, F and G are postings that began the discussion of Scientology's "fair game" policy, a term of art that refers to the ruthless attacks Scientologists are taught to make against their critics.

30. Exhibit E reflects a conversation between a Scientologist and me, where I saw the term "fair game" used for the first time on a.r.s. Because I feel that policy is particularly relevant for my mission, I inquired whether the group had discussed the policy yet.

31. Exhibit F reflects a response to that inquiry. As the Court can see, the response states in part "I think that posting the Fair Game policy would be a good place to start. Do you happen to have it available for posting?"

32. Exhibit G reflects my initial response, where I posted a small portion of the policy, as well as a long letter I had received about a couple who had been the victims of "fair game." I included that letter because many low-level Scientologists are told that the "fair game" policy is no longer in use, but clearly it is.

33. My next postings, attached as Exhibits H and I, and for which I am being sued, are fuller portions of the "fair game" policy. For example, Exhibit H explains how a Suppressive Person ("SP") becomes "fair game." According to Hubbard, an SP: "May be deprived of property or injured by any means by any Scientologist without discipline of the Scientologist. May be tricked, sued or lied to or destroyed." As Mr. McShane testified, Scientology has officially declared that I am an SP.

34. As generally happens, those postings sparked even more discussion. True copies of some of those postings are attached as Exhibits J and K. Exhibit J reflects a debate between two other people on a.r.s. about whether "fair game" is still employed. Exhibit K is a declaration that describes what happened to somebody who was declared "fair game." Therefore, my postings constitute just a small part of a larger thread of debate on a particular topic. This group of exhibits is by no means the relevant thread in its entirety, but offers a relatively small sample.

35. Finally, the purpose of all of my postings has been to critique and comment on Scientology practices. I do not ask for, or receive, any compensation for my work. To the contrary, my work has caused considerable disruption to my life, including the seizure of my home and other harassment outside of this litigation.


36. As I noted above, I originally obtained the vast majority of the allegedly secret documents at issue here because somebody else had posted them to the a.r.s. newsgroup. I have been able to retrieve some of those original postings to illustrate this point to the Court.

37. Attached as Exhibit L hereto is a true copy of the original posting of NOTS Issue 1. As the headers on that document reveal, it was first posted by "" on December 24, 1994.

38. Attached as Exhibit M hereto is a true copy of the original posting of NOTS Issue 34. As the headers on that document reveal, it was first posted by "" on December 24, 1994.

39. Attached as Exhibit N hereto is a true copy of the original posting of NOTS Issue 35. As the headers on that document reveal, it was first posted by "" on December 24, 1994.

40. Attached as Exhibit 0 hereto is a true copy of the original posting of NOTS Issue 36. As the headers on that document reveal, it was first posted by "" on December 24, 1994.

41. Attached as Exhibit P hereto is a true copy of the original posting of NOTS Issue 43. As the headers on that document reveal, it was first posted by "" on December 24, 1994.

42. I have no idea who originally posted these materials.

43. Additionally, I know of, and have even seen, the documents known as SCAMIZDAT. I am not involved in any way with the creation or publication of SCAMIZDAT.

44. I did not post the document titled LRH ED 149 INT, BRANCH 5 PROJECT SQUIRREL, as RTC claims.


45 1 have reviewed the declaration of Kim Baker, filed by RTC in support of its motion to expand the prelimary injunction. While most of the declaration does not seem to have anything to do with me, Ms. Baker states that I was oidained as a minister in some group called the United Free Zone Fellowship. That is absolutely false.

46. The only other part of Ms. Baker's declaration that mentions me has to do with somebody who apparently wanted to donate money. I have no personal knowledge of that incident.

I declare under penalty of perjury undcr the laws of the United States of America that the foregoing is true and correct,

Executed on November 16, 1995, at Glendale, California.

Rev. Dennis Erlich


CARLA B. OAKLEY (Bar No.130092)
MATTHEW K. FAWCETT (Bar No.161087)
345 California Street
San Francisco, California 94104-2675
Telephone:	(415) 677-7000
Facsimile:	(415) 677-7522

Attorneys for Defendant
Dennis Erlich



        RELIGIOUS TECHNOLOGY CENTER, a       No. C-95-20091 RMW
California non-profit corporation; and
California non-profit corporation,        DEFENDANT ERLICH'S POST-
                                          HEARING MEMORANDUM OF
Plaintiffs,                               POINTS AND AUTHORITIES IN
                                          FURTHER OPPOSITION TO
        v.                                RTC'S MOTION FOR
                                          TRADE SECRET RULING                                                      RECONSIDERATION OF
DENNIS ERLICH, an individual; TOM       
KLEMESRUD, an individual, dba
CLEARWOOD DATA SERVICES; and              Date:   June 10, 1996
NETCOM ON-LINE COMMUNICATION              Time:   10:00 am
SERVICES, INC., a Delaware                The Hon. Ronald M. Whyte



sf-I 56308
TABLE OF CONTENTS                                                Page

TABLE OF AUTHORITIES	............... iii


ARGUMENT                                                             5
              SECRET AND HAVE BEEN MISAPPROPRIATED                   5
              NOT SECRET                                             7
        A.    RTC Has Not Met Its Burden Of Proving That Posting
              Of Its Documents On The Internet Has Not Negated Their
              Alleged Trade Secret Status                            7
        B.    It Is Irrelevant That The Internet Is A "New" Medium  10
        C.    Special Rules For The Internet Are Unnecessary And Are
              More Appropriately The Province Of The Legislature Or
              Congress                                              11
              SCIENTOLOGIST ARE IRRELEVANT                          11
        A.    There Still Is No Evidence Proving That Mr. Erlich
              Acted In Concert With The Anonymous Poster            12
        B.    Anonymous Postings Are Protected Free Speech And It
              Cannot Be Assumed That They Are Improper              12
        C.    Under The Circumstances, Mr. Erlich's Belief That
              The Scientology Documents Were Not Secret Is
              Reasonable And His Status As A Former Member Is
              Irrelevant                                            13
        D.    Because Publicly Available Information Cannot Be
              Recalled Into Trade Secret Status, The Anonymous
              Status Of One Who Discloses Such Information To The
              Public Can Have No Bearing On This Court's Decision   16
        A.    RTC's Surveys Do Not Prove Its Materials Are Secret   17
        B.    Under The California Statute, Information That Is
              Publicly Available Is Considered "Generally Known"
              By The Relevant Audience And Need Not Be Actually
              Remembered                                            18
        C.    Absence Of The "Readily Ascertainable" Standard In
              California's Trade Secrets Act Is Irrelevant Because
              RTC's Documents Have Been Publicly Available In Their
              Entirety                                              18

CONCLUSION                                                          20




American Civil Liberties Union v. Reno,
1996 U.S. Dist. LEXIS 7919
        (E.D.Pa.June ll, 1996)    7,10,13

Associated Gen. Contractors, Inc. v. Coalition for Economic Equitv,
950 F.2d 1401(9th Cir. 1991),
        cert. denied, 503 U.S. 985 (1992)    6       

CBS Inc. v. Davis,

        114 S. Ct. 912 (1994)    6

Chicago Lock Co. v. Fanberg,
	676F.2d400(9thCir. 1982)	5,15

Frodge V. United States,
	180 U.S.P.Q. (BNA) 583 (Ct. Cl. 1974)	10,17

Garter-Bare Co. V. Munsingwear, Inc.,
	723 F.2d 707 (9th Cir. 1984)	5-6

In re Remington Arms Co.,
        952 F.2d 1029(8th Cir. 1991)    9,16

Integral Sys., Inc. V. PeopleSoft, Inc.,
1991 U.S. Dist. LEXIS 20878
        (N.D. Cal. July 19, 1991)        6

Jensen v. Redevelopment Agency,
	998 F.2d 1550(10th Cir. 1993)	5,17

Kewanee Oil Co. V. Bicron Corp.,
	416U.S.470(1974)	9

Lamb- Weston, Inc. V. McCain Foods, Ltd.,
        941 F.2d 970 (9thCirl99l)   14 n.12

Litton Sys., Inc. v. Honeywell Inc.,
        1995 U.S. Dist. LEXIS 729 (C.D. Cal. Jan. 4, 1995)   14

ALAI Sy's. Corp. v. Peak Computer, Inc.,
991 F.2d511 (9thCir. 1993),
	cert. dismissed, 114 S. Ct. 671(1994)	5.6n.6

Wasson v.New Yorker Magazine, Inc.,
	1996 U.S. App. LEXIS 13326 (9th Cir. June 5, 1996)	9

McIntyre v. Ohio Elections Comm 'n,
	115 S. Ct. 1511(1995)	12

Montgomery County Ass'n of Realtors,Inc. v. Realty Photo Master Corp.,
	878 F. Supp. 804 (D. Md. 1995)	5 n.5

Motorola, Inc. v. Computer Displays Int 'I, Inc.,
        739 F.2d 1149 (7th Cir. 1984)    8 n.7

Religious Technologv Ctr. v. F.A.C.T.Net, Inc.,
	901 F. Supp. 1519 (D. Cob. 1995)	passim

Religious Technologv Ctr. v. Lerma,
	908 F. Supp. 1362 (E.D. Va. 1995)	4,8,9

Ruckelshaus v. Monsanto Co.,
	467 U.S. 986(1984)	8

Scott v. Snelling & Snelling, Inc.,
        732 F. Supp. 1034 (N.D. Cal. 1990)       18

Smith v. Dravo Corp.,
        203F.2d 369 (7th Cir. 1953)        16

Stutz Motor Car v. Reebok Int'l, Ltd.,
	909 F. Supp. 1352 (C.D. Cal 1995)	18

Underwater Storage, Inc. V. United States Rubber Co.,
        371 F.2d 950 (D.C. Cir. 1966),
	cert. denied, 386 U.S. 911(1967)	8

Vekamaf Holland B..V v. Pepe Benders, Inc.,
	211 U.S.P.Q. (BNA) 955 (D. Minn. 1981)	16

Western Medical Consultants, Inc. v. Johnson,
	80F.3d 1331 (9thCir. 1996)	10,18

Wilkes v. Pioneer American Ins. Co.,
	383 F. Supp. 1135 (D.S.C. 1974)	8 n.7

ABBA Rubber Co. v. Seaquist,
	235 Cal. App. 3d 1(1991)	19.20

Boeing Co. v. Sierracin Corp.,
	738 P.2d 665 (Wash. 1987)	9 n.9

Masonite Corp. v. County of Mendocino Air Quality Management Dist.,
	42 Cal. App. 4th 436 (1996)	passim

Moss, Adams & Company V. Shilling,
	179 Cal. App. 3d 124(1982)	18

Precision Moulding & Frame, Inc. v. Simpson Door Co.,
	888P.2d 1239 (Wash. Ct. App. 1995)	17n.16

Vacco Indus., Inc. v. Van Den Berg,
        5 Cal. App. 4th 34 (1992)       10 n.11

Liberty Mut. Ins. Co. v. Arthur j Gallagher & Co.,
	No. C94-3384	18

Religious Technology Ctr. v. Henson,
        No. C-96-20271 RMW (N.D. Cal.)   13

Religious Technology Ctr. v. Lerma,
	No.95-1107-A (E.D. Va. Dec. 1, 1995)	9

Religious Technology Ctr. V. Ward.
        No. C-96-20207 RMW (N.D. Cal.)   13

Cal. Civ. Code
         3426.1        5,19

Restatement (Third) of Unfair Competition  39 (1995)
        comment d        6 n.6
        comment f        16.20
Gary H. Anthes, 'Stealth E-mail' Poses Corporate Security Risk,
        February l2, 1996 II

Comment, The Secret '5 Out: California's Adoptions of the Uniform
        Trade Secrets Act - Effects on the Employer-Employee
        20 Loy. LA. Rev. 1167(1987)     19.20


1. Does publication of Scientology documents on the Internet defeat a claim that the materials (or some undefined portion thereof) constitute trade Secrets?

2. Is the anonymous status of Internet postings, or the status of readers of the anonymous postings, relevant to whether the posted materials are "secret"?

3 Given the worldwide distribution of Scientology documents on the Internet, are potential competitors or members of the general public the proper audience for determining whether the published documents are still secret?


In discussing these three discrete issues, plaintiff Religious Technology Center ("RTC") improperly mixes and misstates the legal requirements for a trade secret claim, mlsrepresents the record and relies on more inadmissible evidence. Stripped of these distortions, the law and record mandate denial of RTC's motion for reconsideration of this Court's September 22, 1995, trade secret ruling because RTC still has not identified its alleged trade secrets with particularity, the documents at issue -- if previously secret -- lost their essential status as secrets through no fault of Mr. Erlich when published on the Internet and became available to "potential competitors" (assuming they have commercial value). RTC has not met its burden of proving likelihood of success or serious questions going to the merits of both the secrecy element and the independent misappropriation element of its trade secrets claim and is not entitled to preliminary injunctive relief.

As this Court held in its earlier order, the Scientology documents cannot be classified as "secret" because they were disseminated on the Internet before Mr. Erlich allegedly posted or parodied excerpts of those documents. Preliminary Injunction Order (9/22/95) at 30. To be a trade secret, the first and most important requirement is that the information be secret. Publication of documents on a medium read by millions, and that here plainly allowed for easy preservation of the documents in digital or paper form, precludes classification of them as "secret."

The anonymous status of the person or persons who published random Scientology documents before Mr. Erlich allegedly posted excerpts or parodies of them is irrelevant to whether the information is secret. It is likewise irrelevant that Mr. Erlich is a former member of Scientology because the materials were not secret by at least the time he fairly and honestly obtained them from the Internet. At best, RTC's unsupported assumptions regarding the source of the anonymous Internet postings go to the misappropriation element of its claim, not whether the documents are secret. As to RTC's unsupported assumptions, there was no evidence last year, and there is none today, that Mr. Erlich was linked to the source of the anonymously-posted Scientology materials. He was not. Significantly, RTC found no evidence during its seven-hour raid of Mr. Erlich's home that might prove he had the materials before obtaining them from the Internet. He did not.

As for the audience for determining whether documents are secret, RTC concedes that it is unnecessary to address the general public if the materials are generally known to potential competitors. RTC's surveys ignore this essential audience. As this Court correctly found, the works at issue have become known to potential competitors (assuming there are potential competitors). Preliminary Injunction Order (9/22/95) at 30 ("posting works to the Internet makes them generally known' to the relevant people -- the potential 'competitors' of the Church"); see also id. at 33 ("court is also not entirely persuaded by RTC's argument that its secrets have competitive value to future breakaway groups").


The issues addressed in this brief pertain to RTC's claims that Mr. Erlich misappropriated its as-yet unspecified alleged trade secrets in documents identified in Exhibits B and B-I to the First Amended Complaint. Exhibit B identifies nine documents and Exhibit B-I identifies twenty documents (all but three of which are actually included in the nine documents listed on Exhibit B). [1] The Exhibit B-1 documents can be grouped as follows: OT 1, 2 and 3 documents, six NOTS series, the Class VIII Assists tape transcript and the Sunshine Rundown.

RTC for the first time at the hearing, and now again in its latest brief, somehow divides the twenty Exhibit B-1 documents into forty-two documents (although the basis for the division is unexplained). See Defendant Erlich's Motion to Strike, filed herewith, at 3-6. RTC has never filed any originals of these documents (whether identified as nine, twenty or forty-two documents). The nine Exhibit B documents produced by RTC to Mr. Erlich's counsel and filed by Mr. Erlich (attached to the declaration of Matthew K. Fawcett, filed June 9, 1995) do not reflect RTC's new title or numbering scheme.

RTC has never filed Internet postings of excerpts or parodies allegedly made [2] by Mr. Erlich of the Exhibit B-1 documents. The only evidence in the record of any Exhibit B-1 documents are postings that include excerpts of five NOTS series that Mr. Erlich filed, not RTC. See Fawcett 11/16/95 Ded., 12-1 7, Exhs. G-K. RTC also has never filed the anonymous Internet postings of any Exhibit B-1 documents that it falsely implies (RTC Supp. Brf. at 2 n.2) may have been made by Mr. Erlich.

With the exception of the historical story in the Class VIII Assists transcript and NOTS 24 (which Mr. Erlich received anonymously in the mail ([Oakley 6/9/95 Ded., Exh. A at 253:12-254:8]), the record is undisputed that Mr. Erlich obtained the Exhibit B/B-1 documents from anonymous Internet postings and he was not associated with these anonymous postings in any way. [3] Erlich 11/16/95 DecI., ~ 25, 36-42; Oakley 6/9/95 DecI., Exh. A at 247: 10-15, 261:12-20, 264:14-23, 265:9-12, 266:16-21. There is no evidence that Mr. Erlich posted messages anonymously. [4] Furthermore, while RTC contends for the first time that Mr. Erlich was the first person to post "Advanced Technology" and that there were no anonymous postings of its materials before RTC sent demand letters to Mr. Erlich (RTC Supp. Brf. at 1:21-22, 8:14-15), there is no admissible evidence to establish these baseless claims. See Defendant Erlich's Motion to Strike, filed herewith, at 4-5.

[1] Exhibit B identifies OT 1, OT 2, NOTS 1, 24, 34, 35, 36 and 42, and the Class VIII Assists Tape. Exhibit B-1 identifies two portions of OT I, eight portions of OT 2, two portions of OT 3, NOTS 1, 24, 34, 35, 36 and 42, the Class VIII Assists Tape and the Sunshine Rundown.

[2] Warren McShane does not contend in his voluminous February 24, 1995, declaration, which purports to identify which works were posted by Mr. Erlich, that Mr. Erlich ever posted the Sunshine Rundown. RTC has never produced any evidence that he posted from this document.

Regarding the OT documents, these have been widely disseminated as exhibits to the Fishman Declaration and were available for more than two years in open court files in Los Angeles. See, e.g., Declaration of Gary Cann, filed November 16, 1995; Declaration of James O'Meara, filed with Defendant Erlich's Request for Judicial Notice on November 16, 1995. Religious Technology Ctr. v. F.A.C.T.Net, Inc., 901 F. Supp. 1519, 1526 (D. Cob. 1995); Religious Technology Ctr. v. Lerma, 908 F. Supp. 1362. 1368 (E.D. Va. 1995). RTC's attempt [to] minimize the significance of this dissemination is unintelligible and inadmissible. See Defendant Erlich's Motion to Strike, filed herewith, at 5-7. Regarding the NOTS documents, these too have been disseminated on the Internet on at least two separate occasions, as part of a posting of the entire NOTS series. See Declaration of Helena Kobrin, filed in Religious Technology Ctr. v. Ward, No. C-96-20207 RMW (N.D. Cal.), at 2 (NOTS materials posted May 6, 1996, and May 9, 1996) and submitted here as Exhibit A to the Declaration of Carla B. Oakley filed herewith. There is no evidence linking Mr. Erlich to dissemination of any kind of the Fishman Declaration or the complete NOTS works.

[3] While RTC seized hard copies of the Class VIII Assists transcript and NOTS 24 from Mr. Erlich's home, RTC found no evidence to support the notion that he had any Exhibit B or B-I documents other than what he received from the anonymous Internet postings.

[4] RTC refers to (but does not provide evidence of) an alleged example of Mr. Erlich posting through an anonymous remailer. McShane 6/18/96 DecI., Exh. A. If the underlying posting is authentic, it reveals on its face that Mr. Erlich identified the posting as from "Rev. Dennis Erlich," not just "The Informer," as RTC alleges. It was not an anonymous posting.

Despite the passage of many, many months now, there is no evidence or credible claim that Mr. Erlich has posted any Scientology materials, of any kind, in violation of this Court's orders.



In considering the issues addressed here, it is essential to remember that, to prevail on its claims, RTC must prove that its alleged trade secrets, which must be identified with particularity, (i) are secret and that reasonable steps are taken to maintain the secrecy; (ii) derive independent economic value from not being known [5] to competitors; and (iii) have been misappropriated unlawfully. Cal. Civ. Code 3426.1; MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 520-21(9th Cir. 1993), cert. dismissed, 114 5. Ct. 671 (1994). These are separate elements and RTC has the burden of proof on each. See Jensen V. Redevelopment Agency, 998 F.2d 1550, 1556-57 (10th Cir. 1993) (plaintiff has burden of proving secrecy and "there is no presumption in [their] favor"); Chicago Lock Co. v. Fanberg, 676 F.2d 400, 405 (9th Cir. 1982) (plaintiff has burden of proving misappropriation).

There is no basis for shifting the burden to Mr. Erlich, as RTC urges the Court to do, because it is unrefuted that Mr. Erlich received the Scientology documents at issue by fair and honest means from the Internet and there is no evidence linking him to those Internet postings. RTC Supp. Brf. at 3:9-12, 5:22-27, citing Garter- Bare Co. v. Munsingwear, Inc., 723 F.2d 707, 715 (9th Cir. 1984). Contrary to RTC'5 claim, the Garter-Bare court did not shift the burden of proof on the secrecy issue to the defendant. Rather, because the defendant was subject to confidentiality obligations, it was required -- as Mr. Erlich has done here -- only to prove that it obtained the information by alternative means. 723 F.2d at 715. The defendant was not required to prove that the alleged trade secret was "generally known," as RTC argues. Id.; see also id. at 720 (Ely, J., dissenting) (confirming this distinction); cf Integral Sys., Inc. v. PeopleSoft, Inc., 1991 U.S. Dist. LEXIS 20878, at *36 (N.D, Cal. July 19, 1991) (shifting burden on misappropriation, not secrecy, but then rejecting plaintiff's claim). Since Mr. Erlich did not receive the Scientology materials illegally, or through his affiliation with Scientology more than a decade ago, the burden remains fully on RTC.

[5] The only "value" recognized by the Court is that RTC obtains licensing revenues from its course materials. Preliminary Injunction Order (9/22/95) at 26. Thus, the purported value rests not on the competitive advantage recognized by trade secret law, but instead on the ability to license the works under copyright law. The two values should not be confused. Cf Montgomery Co~nty Ass 'n of Realtors, Inc v. Realty Photo Master Corp., 878 F. Supp. 804, 814 (D;Md. 1995) (because knowledge of database was already widespread, trade secret claim was properly understood as another way of asserting the copyright claim").

RTC also carries the burden at this preliminary injunction stage, particularly since RTC seeks an injunction that necessarily will prevent future critical free speech. Associated Gen. Contractors, Inc. v. Coalition for Economic Equity, 950 F.2d 1401, 1410 (9th Cir. 1991), cert. denied, 503 U.S. 985 (1992) (plaintiff has burden on all claims for preliminary injunction); CBS Inc. v. Davis, 114 5. Ct. 912, 913-14 (1994) (Justice Blackmun, as Circuit Justice, staying preliminary injunction prohibiting CBS from airing footage that allegedly disclosed trade secrets).[6]

[6] RTC has yet to identify its trade secrets with sufficient particularity. Preliminary Injunction Order (9/22/95) at 25:7-19 ("court is not satisfied that plaintiffs have identified their trade secrets with sufficient definiteness to support injunctive relief"), at 29:18-20 (expressing uncertainty as to how to define properly the "secrets"), and at 30:7-9 (expressing inability to determine what is generally known without a clear definition of the trade secrets). RTC's failure to provide the required specificity echoes its actions in F.A.C.T.Net. F.A.C.T.Net, 901 F. Supp. at 1527 ("RTC's ambivalence and admission as to the non-secret nature of certain portions of the Works casts some doubt on the secret status of Works as a whole."). RTC is not entitled to relief until it satisfies this requirement. Restatement (Third) of Unfair Competition 39 comment d, at 430 (1995) (party claiming rights in a trade secret bears the burden of defining information with "sufficient definiteness"). MAI Systems Corp., 991 F.2d at 522-23. This is particularly critical for documents like the Class VIII Assists transcript that appear to be a fictional history discussion, not a formula or instruction. See Fawcett 6/5/95 Ded., Exh. A.


Secrecy is critical to a trade secret claim. As this Court held, because the Scientology documents that allegedly contain unspecified trade secrets were posted on the Internet and were available for the public to view and download before Mr. Erlich allegedly posted or parodied excerpts, they were not secret before he allegedly misappropriated them and RTC is not likely to succeed on its claims. RTC has not identified law or facts that require a contrary conclusion and it cannot.

A. RTC Has Not Met Its Burden Of Proving That Posting Of Its Documents On The Internet Has Not Negated Their Alleged Trade Secret Status.

This Court correctly held that publication of an alleged trade secret on the Internet negates its trade secret status:

Although the Internet is a new technology, it requires no great leap to conclude that because more than 25 million people could have accessed the newsgroup postings from which Erlich alleges he received the Exhibit B works, these works would lose their status as secrets. While the Internet has not reached the status where a temporary posting on a newsgroup is akin to publication in a major newspaper or on a television network, those with an interest in using the Church's trade secrets to compete with the Church are likely to look to the newsgroup. Thus, posting works to the Internet makes them 'generally known" to the relevant people-the potential "competitors" of the Church.

Preliminary Injunction Order (9/22/95) at 30:15-22 (emphasis added). See also American Civil Liberties Union V. Reno, 1996 U.S. Dist. LEXIS 7919, at *20, *202 (E.D. Pa., June 11, 1996) (three judge panel assessing constitutionality of the Communications Decency Act describes explosive growth of the Internet, with 40 million users worldwide; "the most participatory form of mass speech yet developed"). RTC argues that this Court's decision was incorrect, claiming that its materials have not lost their alleged trade secret status as a result of Internet postings. RTC's Supp. Brf. at 12-15. The law and facts are to the contrary.

Once a trade secret is disclosed to the public, it necessarily loses its legal protection as a trade secret. See Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1002 (1 984) (public disclosure extinguishes trade secret status); Masonite Corp. v. County of Mendocino Air Quality Management Dist., 42 Cal. App. 4th 436, 455 (1996) (rejecting plaintiff's attempt to resurrect trade secret status of information disclosed inadvertently to public agency, but not yet disclosed to persons in the industry); see also Underwater Storage, Inc. v. United States Rubber Co., 371 F.2d 950, 954-55 (D.C. Cir. 1966) (information loses its trade secret status once it is publicly disclosed), cert. denied, 386 U.S. 911(1967). RTC admitted that Internet postings caused widespread dissemination of its documents when it argued irreparable harm to support injunctive relief. See, e.g., Plfs' Opp. to Mot. to Dissolve or Amend TRO, dated May 31, 1995, at 39 ("high" potential that Internet users will obtain materials from the Internet to compete with RTC); see also Plfs' Opp. to Klemesrud Mot. Jgt. Pldgs, dated June 2, 1995, at 22.[7]

Two other district courts that have confronted this issue have held, like this Court held in its September 22 ruling, that information posted on the Internet is not secret and cannot be a trade secret. In F.A.C.T.Net, 901 F. Supp. at 1527, the court denied RTC's motion for preliminary injunction, finding that "[t]he evidence showed the Works are widely known outside of the Church through multiple sources," including the Internet. In Lerma, 908 F. Supp. at 1368, the court granted the Washington Post's motion for summary judgment on RTC's trade secret claims, holding that "[o]nce a trade secret is posted on the Internet, it is effectively part of the public domain, impossible to retrieve" and that the Scientology works had been "potentially available to the millions of Internet Users around the world." Id. On a similar motion by Defendant Lerma, who had posted the Fishman Declaration, Judge Brinkema again held that the Scientology documents were not secret because they had been posted to the Internet. Lerma, No. 95-1107-A (E.D. Va. Dec. 1, l995).[8]

[7] RTC cites Motorola, Inc. v. Computer Displays Int'l, Inc., 739 F.2d 1149, 1151(7th Cir. 1984), and Wilkes v. Pioneer American Insurance Co., 383 F. Supp. 1135, 1141 (D.S.C. 1974), for the proposition that its alleged trade secrets were not lost by posting on the Internet. RTC Supp. Brf. at 10-Il. Regarding Motorola, the jump cite specified is not to relevant text of the opinion and the opinion does not address the issue. Rather, the court expressly said it "need not reach the issue" of whether confidential information was involved. 739 F.2d at 1159. Regarding Wilkes, that case involved forms that did not fully disclose the trade secrets and that customers were not allowed to keep Here, in contrast, Internet readers easily can download and create digital or hard copies of the documents at issue.

It is, as a practical matter, impossible for this Court to resurrect trade secret status to information that the Lerma and F.A.C.T.Net courts found have entered the public domain and that Mr. Erlich has shown was widely available over the Internet (see O'Meara Ded., and Cann Ded., passim, both filed November 16, 1995). See Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 484 (1974) ("matter once in the public domain must remain in the public domain"); In re Remington Arms Co., 952 F.2d 1029, 1033 (8th Cir. 1991) (same).[9]

RTC failed to meet its burden of proving that its documents remained secret, despite their publication for as many as fourteen days to a newsgroup on the Internet (as alleged in RTC's complaint). [10] Preliminary Injunction Order (9/22/95) at 32:12-15 (RTC "failed to meet its burden on the issue of secrecy"); accord Frodge v. United States, 180 U.S.P.Q. (BNA) 583, 587 (Ct. Cl. 1974) (plaintiffs have burden to prove existence of trade secret, without any presumptions in their favor), see a/so American Civil Liberties Union, 1996 U.S. Dist. LEXIS 7919, at *36 ("newsgroups are among the most popular and widespread applications of Internet services"). A single message allegedly post to a.r.s. that requests documents does not establish secrecy, but rather supports the conclusion that relevant parties know where to obtain them. Whether secrecy is a question of fact or can be decided here as a matter of law does not matter, since RTC has not met its burden in either case.[11]

[8] RTC will be collaterally estopped by the decisions once they become final. See Masson v. New Yorker Magazine, Inc., 1996 U.S. App. LEXIS 13326, at *l4~15 (9th Cir. June 5, 1996) (defensive collateral estoppel prevents a "plaintiff from asserting a claim the plaintiff has previously litigated and lost against another defendant").

[9] Neither Masonite Corp. nor Boeing Co. v. Sierracin Corp., 738 P.2d 665 (Wash. 1987), cited by RTC, require a different result. In Masonite Corp., the court, for public policy reasons, only allowed trade secret status for limited documents inadvertently disclosed by a public agency in a limited manner to noncompetitors. See 42 Cal. App. 4th at 451 n.11. The court denied trade secret status for documents inadvertently disclosed to the public agency by the owner of the trade secrets. Id. at 455 (redacting of information after it became part of public record does not establish trade secret status). In the Boeing case, public access was denied as the general public had been excluded from the courtroom, the parties had stipulated to protect confidential data at trial, and the court had sealed the record. 738 P.2d at 676.

[10] Contrary to the impression RTC seeks to create, this is not a case where the Internet postings at issue existed for only a few minutes or hours. Rather, the postings necessarily lasted for days, consistent with the allegations in RTC's complaint. First Amended Complaint, 25, 34. Since Mr. Erlich was able to download and save the materials, there is no reason to believe that millions of others were unable to do so as well. There is no evidence that RTC was able promptly to cause removal of the anonymous postings.

B. It Is Irrelevant That The Internet Is A "New" Medium.

RTC argues that Internet postings should be disregarded because the Internet is not subject to the same rules as traditional media and postings are allegedly transitory. RTC Supp. Brf. at 10-12. Trade secret protection does not, however, turn on the medium through which the alleged secret loses its secrecy, but simply on whether the alleged secret is available to the public or potential competitors.

For example, in Masonite Corp., a case cited by RTC (RTC Supp. Brf. at 8-10), the court held that information filed inadvertently without a trade secret designation with a public agency had lost its trade secret status because it automatically became a public record. 42 Cal. App. 4th at 453-55. (While the case involved application of a special statute pertaining to agency filings, the Masonite court looked to trade secret principles to resolve the issues.) Also, in Western Medical Consultants, Inc., 80 F.3d 1331(9th Cir. 1996), another case cited by RTC (RTC Supp. Brf. at 7 n.8), the Ninth Circuit found that alleged trade secrets lost their trade secret status when they were available in state insurance agencies and at "generally attended trade shows." Id. at 1337 n.7. Thus, traditional publications are not the only means by which trade secrets can be lost.

[11] Vacco Indus., Inc. v. Van Den Berg, 5 Cal. App. 4th 34 (1992), cited by RTC, is easily distinguished. Vacco Industries involved theft of secrets by a former employee for a competitive business, and confirms that trade secrets disclosed by the products themselves are not secret and that the plaintiff has the burden of identifying and proving secrecy of its trade secrets.

Because Internet postings can easily be saved in digital or print form, the postings are not too transitory and there is no basis to treat them differently than journals or published materials, which RTC readily admits are not secret. RTC Supp. Brf. at 10:14-17. Even without immediate saving by Internet readers, RTC admits that postings may last twelve to fourteen days. See First Amended Complaint at 25, 34.

C. Special Rules For The Internet Are Unnecessary And Are More Appropriately The Province Of The Legislature Or Congress.

Speculative concerns that Internet postings will threaten commercially oriented enterprises simply have failed to materialize. The Internet and anonymous remailers have been in existence and heavy use for a significant period of time, and yet disgruntled employees simply are not posting trade secrets to Internet newsgroups, anonymously or otherwise. The potential to destroy a trade secret anonymously existed well before the advent of the anonymous remailer. See, e.g., Gary H. Anthes, Stealth E-mail' Poses Corporate Security Risk, Computerworld, Feb. 12, 1996, at 1, 57 (quoting experts who say "the threat from remailers is greatly exaggerated"). The law compels the conclusion that the Exhibit B and B-1 documents lost any secrecy they may have had once posted in a publicly accessible Internet newsgroup. To the extent RTC argues for a different conclusion based only on the fact that the dissemination was over the Internet, and not in "traditional" media, that is a legislative, not a judicial question.


It is of no consequence that Mr. Erlich and other a.r.s. readers receive various alleged trade secret materials through anonymous Internet postings. Likewise, Mr. Erlich's status as a former Scientologist supposedly charged at one time with confidentiality obligations does not require the Court to reverse its ruling.

A. There Still Is No Evidence Proving That Mr. Erlich Acted In Concert With The Anonymous Poster.

After more than a year, there still is no evidence establishing that Mr. Erlich posted Scientology works anonymously or that he is "privy" to anyone who has. This Court acknowledged this fact. Preliminary Injunction Order (9/22/95) at 31:20-32:4. Faced with this dilemma, RTC has attempted to construct theories out of whole cloth, suggesting that the timing of postings proves Mr. Erlich's alleged complicity. RTC Supp. Brf. at 2 n.2. RTC could not be further from the truth.

First, RTC's chart that purports to reflect this timing suffers numerous fatal evidentiary defects, as discussed in the accompanylng motion to strike. Second, RTC has not provided this Court with the anonymous postings or the postings it claims Mr. Erlich made, and therefore it has proven nothing. Third, even if the timeline were accurate (which we do not concede), it is entirely logical that Mr. Erlich and others would re-post excerpts or parodies of the materials close in time, as this back-and-forth discussion is common practice for newsgroups. Also, as Mr. Erlich testified, he has in the past re-posted materials to authenticate them. Erlich 11/15/95 Ded., 25. Fourth, there is no evidence that Mr. Erlich has ever, in fact, posted anything anonymously. Lastly, RTC located no evidence (there was none) from its raid of Mr. Erlich's home and seizure of tens of thousands of pages of material that would prove that he had copies of any of the works at issue, except for the anonymous postings that RTC concedes he downloaded.

B. Anonymous Postings Are Protected Free Speech And It Cannot Be Assumed That They Are Improper.

The mere fact that postings are anonymous does not taint them. The First Amendment fully protects anonymous speech. See McIntyre V. Ohio Elections Comm 'n, 115 S. Ct. 1511, 1516 (1995) ("[A]n author's decision to remain an aspect of the freedom of speech protected by the First Amendment."). To assume that anything posted anonymously is illegal would seriously undermine the First Amendment values recognized in such speech. Due to the significant public benefit of the mass communication and open debate that it affords, "The Internet deserves the broadest possible protection from government imposed content-based regulation." American Civil Liberties Union, 1996 U.S. Dist. LEXIS 7919, at *194. Any special rules for anonymous postings will necessarily restrict this flow of communication and run afoul of the First Amendment.

Given RTC's reputation for harassment of those who critique its practices and policies, it is entirely reasonable that a critic would elect to act anonymously. In addition to the present litigation, RTC is currently involved in at least four other cases involving trade secret claims. See Religious Technology Ctr. v. Henson, No. C-96-20271 RMW (N.D. Cal.); Religious Technology Ctr. V Ward, No. C-96-20207 RMW (N.D. Cal.); Lerma, 908 F. Supp. at 1362; and F.A.C.T.Net, 901 F. Supp. at 1519.

C. Under The Circumstances, Mr. Erlich's Belief That The Scientology Documents Were Not Secret Is Reasonable And His Status As A Former Member Is Irrelevant.

It was entirely reasonable for Mr. Erlich to believe the Scientology works he found without restriction on the Internet were, at least as of that time (if not earlier), no longer secret because of the worldwide reach of the Internet and the popularity of the a.r.s discussion group. Scientology documents have lost their secrecy through a variety of channels over the years, including by careless handling of the materials by its members. One district court has already found this to be true:

Despite RTC and the Church's elaborate and ardent measures to maintain the secrecy of the Works, they have come into the public domain by numerous means. RTC's assertion that the only way in which the materials have escaped its control was through two thefts in Denmark and England was not supported by the evidence: A former senior Scientology official testified to ongoing difficulties the Church incurred in keeping the Works secret, including members losing materials in their possession. The evidence also showed portions of the Works have been made available on the Internet through persons other than Lerma, with the potential for downloading by countless users.

F.A.C.T.Net, 901 F. Supp. at 1526 (emphasis added). See also Declaration of Carla B. Oakley, Exh. A (V. Young testimony) (describing loss of materials by members, including a briefcase with OT materials lost after it fell off a car). This Court acknowledged that widespread disclosure to thousands of Scientology members would, at the very least, make it risky that secrets would be leaked. Preliminary Injunction Order (9/22/95) at 28 n.25. That leakage started long ago.

There is no evidence that the anonymous poster or posters obtained documents at issue in an improper manner, despite the fact that RTC continually characterizes the anonymous postings as "unauthorized." See RTC Supp. Brf. at 5:27, 10:3. Whether RTC authorized the postings does not determine whether the alleged trade secret information was gained through improper means. Cf Litton Sys., Inc. v. Honeywell Inc., 1995 U.S. Dist. LEXIS 729, at *153 (C.D. Cal. Jan. 4, 1995) ("A contract to restrict the use of trade secrets cannot itself establish that trade secrets actually existed or that they were infringed."). If such were the case, plaintiffs in trade secret cases would never have to prove anything other than that they did not "authorize" the disclosure. Instead, courts consider the circumstances of use and purported protection of the secret. See, e.g., F.A.C.T.Net, 901 F. Supp. at 1526 (factors include "extent to which the information is known outside the business" and "the precautions taken by the holder of the trade secret to guard the secrecy").

The crucial, but wholly unsupported, assumption RTC makes is that the anonymous Internet poster gained the works through improper means. See RTC Supp. Brf. at 4:19-5:6 (Court should "take judicial notice that knowledge of improper origins of these works would inhere in the a.r.s. newsgroup followers"). RTC has not, however, satisfied its burden of proving that the alleged trade secret information was originally posted or subsequently acquired by Mr. Erlich through improper means. See Chicago Lock Co., 676 F.2d at 405 (rejecting misappropriation claim because plaintiff could not prove that the sources of the trade secret information breached any confidential relationships).

[12] Lamb-Weston, Inc. v. McCain Foods, Ltd., 941 F.2d 970 (9th Cir 1991), cited by RTC, is inapposite. In Lamb-Weston, the defendant hired employees from the plaintiff and the defendant knew these employees had confidential information. Here, in contrast, Scientology documents may be publicly available through proper means. as found by Judge Kane in F.A.C.T.Net. Also, all Internet readers are not bound by RTC's conclusory claims of confidentiality.

Given the F.A.C.T.Net decision quoted above and the risk of leaks acknowledged by this Court (Preliminary Injunction Order (9/22/95) at 28 n. 25) it is at least as likely that RTC's alleged trade secrets became public through accidental disclosure as any other means. A trade secret may enter the public domain as the result of accidental disclosure. See Masonite Corp., 42 Cal. App. 4th at 455 (trade secret status lost by filing with a public agency and becoming a public record, regardless of whether any competitor obtained the information or whether such disclosure occurred "deliberately or inadvertently," or "even if mistaken"); Chicago Lock Co., 676 F.2d at 404 (trade secret law does not protect against "accidental disclosure"). Thus, the means by which Judge Kane recognized the works had entered the public domain legitimately negated the works' trade secret status, despite RTC's claim that it did not authorize the disclosures.[13]

[13] There is no evidence to support RTC's argument that a theft of unidentified documents was so notorious as to defeat any claim that the documents were obtained fairly. RTC Supp. Brf. at 4:19-5:6. There is, in fact, no admissible evidence in the record to establish such notoriety or that the theft predates all leaks. It is also impossible for Mr. McShane to testify to the means by which the anonymous poster obtained the materials. See Erlich's Motion to Strike filed herewith.

D. Because Publicly Available Information Cannot Be Recalled Into Trade Secret Status, The Anonymous Status Of One Who Discloses Such Information To The Public Can Have No Bearing On This Court's Decision.

Once information is in the public domain and accessible by potential competitors, it cannot be recalled into trade secrecy. See Preliminary Injunction Order (9/22/95) at 31:10-16 (holding that "once that trade secret has been released into the public domain there is no retrieving it"). This decision rests on solid authority. See Masonite Corp., 42 Cal. App. 4th at 453-54 (rejecting plaintiff's attempt to "resurrect trade secret privilege" after inadvertent public disclosure); In re Remington Arms Co., 952 F.2d at 1033; Smith v. Dravo Corp., 203 F.2d 369, 373 (7th Cir. 1953) ("That which has become public property cannot be recalled to privacy."); Vekamaf Holland B. V. v. Pepe Benders, Inc., 211 U.S.P.Q. (BNA) 955, 979 (D. Minn. 1981).

Finally, the basic premise of trade secret law-that the information sought to be protected is secret-precludes any conclusion different than that reached by this Court in its September 22 ruling. See Restatement (Third) Unfair Competition 39, comment f, at 431 (1995) ("To qualify as a trade secret, the information must be secret."); Vekamaf Holland, 211 U.S.P.Q. (BNA) at 978 (same). This standard leaves no room for claims that an anonymous posting of information alleged to be a trade secret should be treated different.


While RTC over-emphasizes the "general public" test of secrecy, RTC now concedes that, even if the general public does not know the information at issue, the information cannot be a trade secret if generally known by competitors or potential competitors. RTC Supp. Brf. at 13:15-18. The RTC surveys, even if they are admissible (which we dispute), do not test the appropriate group. [14] RTC also focuses, improperly, on what can be actually recalled from memory rather than what easily could have been obtained, in permanent form, from Internet postings. It is of no consequence that the California statute does not include the "readily ascertainable" standard.

[14] It is unlikely that RTC could "survey" the relevant group, as it is highly unlikely that a potential competitor would admit to downloading Scientology documents.

A. RTC's Surveys Do Not Prove Its Materials Are Secret.

As discussed in Mr. Erlich's motion to strike filed November 16, 1995, RTC's surveys suffer serious evidentiary defects. [15] With respect to the surveys filed with RTC's motion, they purport to test the actual knowledge of the general public. As this Court noted, the general public is largely irrelevant. Transcript at 8:16-17. With respect to RTC's surveys lodged with the Court, these are also defective as they target Internet users generally, with no attempt to query people who participate in a.r.s. or access any of the other Internet locations that include discussion of [16] Scientology. These surveys cannot establish that the works remain a secret.

RTC argues that Mr. Erlich has not proven that any competitors have copies of the works. RTC Supp. Brf. at 14:5-6 This is not his burden. The plaintiff claiming the protection of an alleged trade secret has the burden of proving the existence of that trade secret. See Jensen, 998 F.2d at 1 556-57; Preliminary Injunction Order (9/22/95) at 32:12-15; Frodge, 180 U.S.P.Q. (BNA) at 587. This Court correctly held that the alleged trade secret information was available for all the world on a.r.s. and that "those with an interest in using the Church's trade secrets to compete with the Church are likely to look to the newsgroup." Preliminary Injunction Order (9/22/95) at 30:19-20. By filing numerous trade secret lawsuits, several of which are before this Court, RTC admits that others already have copies of the materials.

[15] Mr. Erlich moved to strike the survey evidence offered by RTC with its opening papers. At the hearing on its motion, RTC offered additional surveys that purportedly tested the recall of Internet users. The Court said it would advise the parties if the surveys would be considered and would allow Mr. Erlich an opportunity to lodge appropriate objections at that time. Transcript at 11:4-9 and 11:22-12:4.

[16] RTC argues that former Scientologists would be its most likely competitors, but that these people would be bound by confidentiality agreements and prohibited from using the documents to compete. See RTC Supp. Brf. at 13:20-24. RTC defines potential competitors in an unnecessarily restrictive fashion. See Precision Moulding & Frame, Inc. V. Simpson Door Co., 888 P.2d 1239, 1243 (Wash. Ct. App. 1995) (holding that the UTSA "does not confine the relevant industry only to persons involved in a particular application of certain information or a particular process"). RTC also ignores the likelihood of inadvertent disclosure, discussed above.

B. Under The California Statute, Information That Is Publicly Available Is Considered "Generally Known" By The Relevant Audience And Need Not Be Actually Remembered.

RTC argues that the Scientology documents at issue, even those found not to be trade secrets by district courts in Colorado and Virginia, are still somehow trade secrets within California because the general public cannot recite the contents of the documents. RTC Supp. Brf. at 3:16-4:18. Actual memory is not, however, the proper test. Rather, information loses whatever trade secret status it had once it is publicly available. See Liberty Mut. Ins. Co. V. Arthur J. Gallagher & Co., 1994 U.S. Dist. LEXIS 18412, at *12 (N.D. Cal. Dec. 19, 1994) (information "readily obtainable through public services" cannot be trade secrets); Scott v. Snelling & Snelling, Inc., 732 F. Supp. 1034, 1044 (N.D. Cal. 1990) (same); Stutz Motor Car v. Reebok Int'l Ltd., 909 F. Supp. 1352, 1359~ (C.D. Cal. 1995) (unprotected disclosure of trade secret in patent places the information into the public domain and extinguishes the trade secret status); Western Medical Consultants, Inc. v. Johnson, 80 F.3d at 1337 (applying Oregon law, which is the same in relevant part as California law, information "readily obtainable" from public services cannot be trade secret); see also Moss, Adams & Company V. Shilling, 179 Cal. App. 3d 124 (1986) (customer addresses "easily obtainable" from public services are not trade secrets).

C. Absence Of The "Readily Ascertainable" Standard In California's Trade Secrets Act Is Irrelevant Because RTC's Documents Have Been Publicly Available In Their Entirety.

RTC makes much ado out of the fact that the California trade secrets statute does not include the 'readily ascertainable" standard found in other state's acts. RTC Supp. Brf. at 5-7. This is a non-issue and has no bearing on this case.

The "readily ascertainable" standard was removed "because the original language was viewed as ambiguous in the definition of a trade secret." Legislative Committee Comment to Cal. Civ. Code 3426.1. "[M]aking the existence of a trade secret dependent upon the information not being 'readily ascertainable' invites the various parties to speculate on the time needed to discover a secret." Comment, The Secret's Out: California's Adoptions of the Uniform Trade Secrets Act - Effects on the Employer-Employee Relationship, 20 Loy. L.A. Rev. 1167, 1214 n.231 (1987) (quoting Senate Committee on Judiciary). The statutory comments clearly state that "the assertion that a matter is readily ascertainable by proper means remains available as a defense to a claim of misappropriation."

The drafters of California's UTSA were concerned that trade secret misappropriation cases would become bogged down in an evidentiary battle over whether the trade secret could be reconstructed through public sources of information. This reasoning is demonstrated in the facts of ABBA Rubber Co. v. Seaquist, 235 Cal. App. 3d 1(1991), which RTC relies upon. The court in ABBA Rubber was confronted with the argument that a customer list could not receive trade secret protection because the identity of such customers could be "readily ascertained" by reviewing sources such as trade directories and telephone books which would reveal companies that would be likely to purchase rubber rollers. The court rejected the argument, citing specifically to the legislative history outlined above. Id. at 21.

The drafters, however, only intended to exclude disputes over ascertaining secrets from sources other than the trade secret itself What is not excluded is whether the defendant could have accessed the information through publicly disclosed copy of the trade secret itself. "This [readily ascertainable] requirement, found in section l(4)(i) of the Uniform Act, compelled the court to consider the ease with which the information in question could be ascertained from sources other than the trade secret." Comment, The Secret's Out, supra, at 1213 (emphasis added). Thus, if the defendants in ABBA Rubber knew of a publicly available copy of the customer list (like the anonymous postings here), the California statute would not preclude consideration of whether they could have accessed such information.

Deletion of "readily ascertainable" from the California UTSA does not require that the "readily accessible" nature of a work be disregarded. The Restatement provides: information that is disclosed in a patent or contained in published materials reasonably accessible to competitors does not qualify for protection under this Section. Similarly, information readily ascertainable from an examination of a product on public sale or display is not a trade secret." Restatement (Third) of Unfair Competition 39 comment f, at 432 (1995) (emphasis added).

The posting of the Scientology works to the Internet by the anonymous party made the information publicly accessible, since it was available long enough to have been downloaded by millions of people. This therefore negated its alleged trade secret status at least before Mr. Erlich made subsequent posts. The deletion of the "readily ascertainable" provision from California's version of the UTSA does not impact this conclusion of law one way or the other.


The law and the facts require that the issues raised by the Court all be resolved in favor of Mr. Erlich and against reversal of this Court's September 22 ruling that RTC is not likely to prevail on its trade secrets claim.

Dated: June 25, 1996

Harold J. McElhinny
Carla B. Oakley
Matthew K. Fawcett
Morrison & Foerster LLP

Carla B Oakley

Attorneys for Defendant
Dennis Erlich

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