Advanced Copyright Issues on the Internet - Fenwick & West LLP

Department to block it from prosecuting the symposium organizers for allowing the paper to bepresented. 742 On Nov. 28, 2001, a district judge in New Jersey dismissed the lawsuit, apparentlyconcluding that neither the RIAA nor the Justice Department had imminent plans to seek to stopProf. Felten from publishing his findings. 743 Citing assurances from the government, the RIAA,and the findings of the district judge, in Feb. of 2002, Prof. Felten and his research team decidednot to appeal the dismissal of their case. 744(vii) Pearl Investments, LLC v. Standard I/O, Inc.In this case, Pearl hired Standard to perform software programming services to developan automated stock-trading system (ATS). After completion of ATS, an employee of Standardnamed Chunn who had helped develop ATS, working on his own time, created software for hisown experimental automated trading system, which he maintained on a server separate from theserver that Pearl’s ATS system was operating on, although Chunn’s server was hosted by thesame service provider as Pearl’s ATS system. 745 Pearl’s ATS system operated on a virtualprivate network (VPN) that contained access restrictions implemented through a special router tothe VPN. 746 At one point, Pearl requested the service provider to install Linux on its ATS server.The service provider mistakenly installed Linux on Chunn’s server, which was plugged intoPearl’s router. Pearl alleged that a “tunnel” (a secure connection) was configured in the routerthat provided a connection between Chunn’s server and Pearl’s server, thereby allowing Chunnto circumvent Pearl’s password-protected VPN and gain unauthorized access to its ATS systemrunning on the VPN, which included Pearl’s copyrighted software. 747Pearl brought claims against Standard and Chunn for, among other things, violation ofSection 1201(a)(1)(A) of the DMCA based on the alleged creation of the tunnel. Both theplaintiff and the defendants sought summary judgment on the claim. The court ruled thatStandard was entitled to summary judgment because the evidence was undisputed that Chunn, indeveloping and operating his automated trading system, was acting solely on his own and not asan employee of Standard. Standard could therefore not be held liable for his actions. 748The court, however, denied summary judgment to Chunn. First, the court ruled thatPearl’s VPN was the “electronic equivalent” of a locked door that fit the definition of a742743744745746747748Declan McCullagh, “Code-Breakers Go to Court” (June 6, 2001), available as of Jan. 19, 2002 atwww.wired.com/news/mp3/0,1285,44344,00.html.Robert Lemos, “Court Dismisses Free-Speech Lawsuit” (Nov. 28, 2001), available as of Jan. 19, 2002 athttp://news.cnet.com/news/0-1005-200-8010671.html.Electronic Frontier Foundation press release, “Security Researchers Drop Scientific Censorship Case” (Feb. 6,2002), available as of Feb. 10, 2002 at www.eff.org/IP/DMCA/Felten_v_RIAA/20020206_eff_felten_pr.html.The government stated in documents filed with the court in Nov. 2001 that “scientists attempting to studyaccess control technologies” are not subject to the DMCA. Id.Pearl Investments, LLC v. Standard I/O, Inc., 257 F. Supp. 2d 326, 339-40 (D. Me. 2003).Id. at 342, 349.Id. at 341-42 & n.36, 349.Id. at 346-47, 349-50.- 173 -