Date 20 Mar 95 132913 To All From News Subj FEB 21 HEARING TRANSCRIPT com.com!howland.rest

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Date : 20 Mar 95 13:29:13 To : All From : News Subj : FEB 21 HEARING TRANSCRIPT ============================================================================== com.com!howland.reston.ans.net!news.sprintlink.net!pipex!peernews.demon.co.uk!su pport.com!mail.processor Newsgroups: alt.religion.scientology From: mail.processor@support.com (mail.processor) Organization: L.A. Valley College Public BBS (818)985-7150 Subject: Feb 21 hearing transcript Date: Wed, 15 Mar 1995 00:09:27 +0000 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 TO 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. (PROCEEDINGS ADJOURNED)

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