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From braintree!news.sprintlink.net!ns1.usa1.com!news.vii.com!news1.cris.com!news2.acs.oakland.edu!newsxfer.itd.umich.edu!tank.news.pipex.net!pipex!dispatch.news.demon.net!demon!mail2news.demon.co.uk!server.nlis.net Mon Oct 16 11:34:42 1995 Path: braintree!news.sprintlink.net!ns1.usa1.com!news.vii.com!news1.cris.com!news2.acs.oakland.edu!newsxfer.itd.umich.edu!tank.news.pipex.net!pipex!dispatch.news.demon.net!demon!mail2news.demon.co.uk!server.nlis.net From: Joe Harrington Newsgroups: alt.religion.scientology Subject: RTC v Lerma transcripts #3 Date: Wed, 11 Oct 1995 20:32:05 -0400 (EDT) Lines: 637 Message-ID: X-NNTP-Posting-Host: server.nlis.net MIME-Version: 1.0 Content-Type: TEXT/PLAIN; charset=US-ASCII 5 1 1 days that we are talking about, they had all of these 2 materials and we had hardly any of them. So I object. 3 THE COURT: All right. 4 MR. COOLEY: That is really an unfair 5 characterization of the history. These infringing hits were 6 furnished to them on the day after the last hearing, that 7 Saturday, after putting them together, the Court said give 8 them all to them. We gave them to them. They have had them 9 ever since. Mr. McShane has pulled them together, wants the 10 Court to know, that I think there is 128 infringements, 11 point out what the infringements are, where they came from 12 on Mr. Lerma's computer or in his floppies; and then give 13 the Court a document that we furnished this morning that 14 makes the comparison with the actual materials. 15 That it seemed to me was the burden that I had 16 here today to do, and that's what I came prepared to do. 17 For the defendants to claim surprise is totally 18 disingcmnuous. 19 THE COURT: Let me see this document we are 20 talking about because the Court hasn't seen it either. 21 MR. LEVINE: Your Honor, I have never seen that. 22 I have seen athing about this thick. 23 THE COURT: Wait. You are getting it right now. 24 MR. COOLEY: Yes, Your Honor. This is submitted 25 confidentially and under seal, because it contains the 52 1 original materials of confidential upper-level materials of 2 L. Ron Hubbard. 3 THE COURT: All right. So what I am looking at 4 here is a page of handwritten -- handwriting. 5 MR. COOLEY: That's Mr. Hubbard's handwriting, 6 Your Honor. 7 THE COURT: On the left side, I am seeing 8 something in type. 9 MR. COOLEY: That's the infringement from 10 Mr. Lerma's,computer. 11 THE COURT: And in the course of the discovery 12 that went on in this case, was not this analysis asked for, 13 Mr. Levine? 14 MR. LEVINE: It was, Your Honor. 15 THE COURT: Was it provided? 16 MR. COOLEY: It was not, Your Honor. I cannot -- 17 MR. LEVINE: (Interposing) Y.Qur Honor, what we got 18 that was asked -- I can get the specific requests pulled if 19 Your Honor wants to see them. 20 THE COURT: I will tell you what I am going to 21 do. Do you have your stuff here with you? Do you have it 22 here, the requests that you made? 23 MR. LEVIME: Yes, Your Honor. 24 THE COURT: Rather than wasting my time, we will 25 take a brief recess. You find where it is in your papers, 53 1 all right? Because this was absolutely the analysis that 2 needed to be performed. If it was not performed before 3 today, that is, if counsel for Mr. Lerma was not given this 4 before today, it is absolutely inappropriate for them to 5 have to respond to it by the seat of the pants. 6 And therefore, since the burden is on the 7 plaintiff to make its case, and everybody got discovery so 8 that these types of matters could be fairly presented to 9 both sides, so each side had a right to respond, I will be 10 concerned about that. 11 So you see whether or not it's been asked for. I 12 am going to take a look at this briefly in Chambers. Recess 13 about 15 minutes. 14 (Whereupon, at 10:28 o'clock p.m., a 15-minute 15 recess was taken.) 16 THE COURT: All right, let's go. Is Mr. Levine 17 here? From Mr. Lermals side, is Mr. Levine here? .18 (Whereupon, Mr. Levine entered the courtroom.) 19 THE COURT: All right, have you found where the 20 request was made? 21 MR. LEVINE: Yes, Your Honor. 22 THE COURT: Just read it in the record, please. 23 MR. LEVINE: It was actually made in two places, 24 Your Honor. 25 For your ease of reference and if you don't have 54 1 it, we have a second binder that we can hand up to the 2 Court. 3 THE COURT: Just read it to me real fast. We have 4 got them here, but rather than my having to look at them. 5 What volume? 6 MR. LEVINE: The declaration of Merril Hirsch. 7 It's Exhibit E to that document, an August 30th, 1995, 8 letter from Mr. Hirsch to counsel, which attaches Defendant 9 Lerma's second set of interrogatories to the plaintiff. 10 Those interrogatories specifically ask them to do what they 11 have now apparently done. 12 I would like to read to the Court, if I might -- 13 THE COURT: (Interposing) Yes, go ahead. 14 MR. LEVINE: -- a sentence or two from the cover 15 letter that went with those interrogatories. 16 THE COURT: Just read me what the interrogatory 17 specifically asks for. MR. LEVINE: Okay, that's fair enough. "Identify 19 by disk number, page and quotation those portions of the 20 materials on disks Nos. 1 through 58 described in the letter 21 attached as Exhibit 1,11 which is their letter to us. 22 THE COURT: Okay. Just say that slower, please? 23 MR. LEVINE: I'm sorry. "Identify by disk number, 24 page and quotation those portions of ttie material on disk 25 Nos. I through 58, described in the letter attached as 55 1 Exhibit 1, and listed in the attachment to that letter that 2 plaintiff maintains infringes any copyright held by 3 plaintiff." 4 That was a letter that we got from them giving us 5 the disks that they alleged contain infringing material. 6 The second interrogatory says, "Identify by disk 7 number, page and quotation those portions of the material on 8 disks Nos. 1 through 58 described in the letter attached as 9 Exhibit I and listed in the attachment to that letter the 10 plaintiff maintains misappropriates any trade secret of the 11 plaintiff." 12 So we had copyright in the first interrogatory and 13 trade secrets in the second. 14 THE COURT: What answer did you get to that? 15 MR. LEVINE: Well, we got nothing for a long time, 16 and then we got a box. The box contained disks with little 17 yellow sticky.tabs, printouts of the disks with little 18 yellow sticky tabs with no explanation on places. So we 19 wrote them a letter dated September 7th, which is attached 20 as Exhibit J to the Hirsch declaration. 21 It says, "Third, we wanted to discuss RTC's 22 response to Mr. Lerma's second set of interrogatories. 23 Among the materials we received from you on Monday 24 afternoon, September 4th, was a box that appears to us 25 without page-by-page comparison" -- I want to emphasize that 56 1 -- "Without page-by-page comparison to be a printed version 2 of the documents on disks 1 through 58 with yellow post-it 3 notes at various places. Although we appreciate receiving 4 this material, we have not received an explanation of what 5 the post-it notes are intended to indicate. 6 "The two interrogatories in our second set 7 respectfully ask that the RTC separately identify those 8 portions in the materials on disks 1 through 58 that the RTC 9 maintains, one, infringes any of its copyrights, and two, 10 misappropriates any trade secrets. 11 "As discovery was supposed to be completed 12 yesterday, we would appreciate it if you would provide us 13 with a sworn written response today." 14 We got a letter on September -- I'm sorry. We 15 didn't hear anything the next day. Your Honor will recall 16 the deadline for submitting briefings was September llth, so 17 on September 8th, we wrote them another letter following up 18 and asking what was going on and.why we hadn't received that 19 information. That's Exhibit K to the Hirsch declaration. 20 And then finally, on September llth, and that's 21 Exhibit N to the Hirsch declaration, as our brief was going 22 out the door, we got a letter from the plaintiff's counsel 23 in which they say -- this is a week after the close of 24 discovery -- not attaching that big book or even the chart 25 that we got this morning but saying, "Each of the documents 57 1 you received on Monday, September 4th, 1995, is a printed 2 copy of one of the 58 disks, containing copyright 3 infringements and/or trade-secret misappropriations. The 4 yellow post-it notes mark the specific offending sections of 5 those documents." 6 That's what they told us on that day. That was 7 September llth. 8 This morning, we got this document, which was 9 delivered at 10:00 this morning with the service copy of 10 their filings this morning. It contains a chart that is 11 supposed to or purports to compare infringing -- 12 infringements by Mr. Lerma with their infringed works. 13 our very quick review of this this morning as one 14 of my colleagues was sitting in court suggests that there 15 are a number of things included on this list that they 16 identified as noninfringing in their responses to our 17 discovery. There are a number of things that have now been 18 added to this list that cut in the opposite direction. 19 What we appear to have been given today, this big, 20 thick book of stuff that we never saw before, appears -- is 21 basically what we were asking for all along and never got. 22 I am prepared very preliminarily, Your Honor, to 23 address what's wrong with it, but I think the Court should 24 not accept it at this juncture. 25 THE COURT: Tell me what you think is wrong with 58 1 it. 2 MR. LEVINE: A number of things. First of all, it 3 is very deceptive in that it does not contain the whole of 4 any infringing work. When you look at it, they have taken 5 each time Mr. Lerma they claim used a passage from any of 6 their works and they have broken it up into a separate page 7 to make it appear there are a lot more infringements than a 8 reasonable viewing of it would even say is arguable; and 9 then they attach a small portion of the work they claim is 10 infringed, but they never attach the whole work, so you 11 don't know how big the work is. 12 You don't know where it fits in the context of the 13 work. You don't know conversely whether what Mr. Lerma has 14 done in the context of its whole is an infringement or not. 15 So we think it's -- based on our very preliminary 16 review, it is very deceptive. Second of all, it appears to 17 include things they have previously told us are 18 noninfringing and they are now coming back and alleging are 19 infringing. 20 THE COURT: All right. 21 MR. COOLEY: To begin with, Your Honor, the tabs, 22 we tabbed the material that we gave to them. The tabs 23 marked the start and the end of what we claim to be the 24 infringing material. All they had to do was read between 25 those tabs, and they had the infringing material. 59 1 That's all they asked us for. They never asked us 2 to do the comparison and sit down and put together the kind 3 of exhibit we put together here for the Court. 4 We gave them the start and the end, and they had 5 it, and we defined it for them. That's what they asked 6 for. 7 You won't find anywhere a request from these 8 people saying, will you please now do the comparison for us 9 with the original works? 10 We gave them the full portion that was infringed 11 of both the original and of the copy. And in order to be 12 able to compare volume, we gave them the totality of what 13 was registered with the Copyright Office so that you can at 14 least see the thickness of it and the size of it as compared 15 to what was infringed. The Copyright Office copy, of 16 course, is masked, but the volume is clearly addressed. 17 Moreover, these upper-level materials are 1& copyrighted as a series, with each series listed in the 19 copyright. So the series applies to each issue. To talk in 20 terms of deception, to suggest that everything in the work 21 has to be considered on the issue of fair use is again, I 22 believe, disingenuous. Each issue is listed in the 23 copyright, and Mr. McShane is prepared to point that out to 24 the Court, and the issues-that have been infringed are 25 clearly before the Court. 60 1 What they are saying is they want the work product 2 that we did to prepare to come in here, which incidentally, 3 didn't get finished until the wee hours of this morning, and 4 wanted to have it in advance so that the work that we do, we 5 should have done for them. 6 We gave them what they asked for. And for them to 7 suggest that they have been caught by surprise is really 8 foolish. They have had it. They know what we claim 9 infringes. 10 If they have got some questions on 11 cross-examination of Mr. McShane, then they can ask them. 12 They have had an opportunity to depose him for two days and 13 go over what he claimed the infringes to be, and I don't see 14 how they can possibly come in here now and block us from 15 putting in the case that we need to put in as a prerequisite 16 to the preliminary injunction. 17 I might also add that we have returned to 18 Mr. Lerma his -- a computer with a sanitized hard drive. He 19 has got everything back except the stuff that's in issue in 20 this case. 21 And for them.to be suggesting that he somehow is 22 being prejudiced by his failure to have the infringing 23 materials it seems to me is preposterous. 24 THE COURT: When you say how much stuff is 25 infringing, what kind of stuff are we talking about? 6 1 1 MR COOLEY: We are talking about specific issues. 2 That's in this big book that Your Honor has, where 3 Mr. McShane lays side by side the infringing material 4 published by Mr. Lerma and the actual material from which 5 the infringement was taken. 6 THE COURT: In other words, you are telling me 7 that what has not been returned to Mr. Lerma at this point 8 would be the yellow highlighted text that's on the left side 9 of this book. The printed stuff on the left side is the 10 allegedly infringing -- 11 MR. COOLEY: (Interposing) The stuff that we found 12 in his computer that we are now telling you infringes. 13 Everything else has gone back. 14 THE COURT: For example, though, let's just take 15 the first tab. 16 MR. COOLEY: I want to make sure. Just a moment. 17 (Counsel conferring off the record.) 18 MR.. COOLEY: The file that contains it has not 19 gone back. It's being held by an independent, the 20 independent person that we agreed upon, the independent 21 company. After the I-Net was replaced, and we agreed to 22 another company, they are holding it. 23 But, you see, it appeared in a file, and so the 24 entire file is being held by that company. 25 THE COURT: And so how many files are still being i 62 1 held by the company? Does anybody know? 2 MR. LEVINE: Fifty-eight this morning they have 3 not returned. 4 THE COURT: Fifty-eight files have not been 5 returned? 6 MR. SULLIVAN: Fifty-eight disks, Your Honor. p 7 MR. COOLEY: Fifty-eight disks containing the hits 8 are in the hands of the independent custodian. 9 THE COURT: All right, and everything else has 10 been returned to Mr. Lerma at this point. 11 MR. HIRSCH: Your Honor? 12 THE COURT: Yes, sir? 13 MR. HIRSCH: My name is Merril Hirsch. Owing to 14 the time -- 15 THE COURT: (Interposing) Come up to the lectern. 16 MR. HIRSCH: -- different people have worked on 17 different things, so I am a little more familiar with this. 18 What has been returned to Mr. Lerma is his C hard 19 drive, sanitized of all of the 114 hits, files, that 20 contained hits that at one time a Scientologist said, "Oh, 21 this is a hit. Let's put it on a disk and spend more time 22 looking at it." 23 That 114 contains more than the 20 files that they 24 currently maintain hits, and each file contains in some 25 cases vastly more pages than the ones that they claim are 63 1 infringement. You have files with 250 pages of E-Mails, and 2 they claim that a page or two or 10 or 20 of those are 3 infringing. 4 So that what you have are -- plus, in addition to 5 that, you have all of the disks on which any file was found, 6 disks, I mean by floppy disks, separate from his hard drive, 7 all of the disks on which any single file was found that was 8 originally declared a hit, whether or not they maintained it 9 was infringing after they looked at it on August 25th or 10 whether they maintained it was infringing after they gave us 11 that box of stuff on September 4th or whether they 12 maintained it is infringing now. 13 So it's the complete disk that contains any of 14 those files. There are 25 total files, according to 15 Mr. Settles' testimony, that were on floppy disks. 16 Now, in addition, they are also continuing to hold 17 his complete D hard drive, which is a substantial mirror of 18 his C hard drive but .contains some difference of files. 19 That is also being held at command. 20 MR. COOLEY: We are not holding anything, Your 21 Honor. 22 THE COURT: Well, it's being held. 23 MR. HIRSCH: They are continuing to impound 24 through that command, Your-Honor. 25 THE COURT: I have to tell you, Mr. Levine, in 64 1 looking at this book quickly, and again, no one has had time 2 to really study it, there would appear to be significant 3 lines of duplicated material here; and they are, I guess, 4 just as an example, let's look at the first tab, tab one 5 under OT Roman numeral III. 6 On the right is handwriting, and we have looked at 7 it in Chambers during the recess, and the majority of the 8 text, the printed text, which is that which was printed off 9 the computer, is verbatim. 10 This quote, for example, that I am just looking at 11 right now is, I think, longer than what I saw in the 12 Washington Post article, and, of course, there are numerous 13 ones. In some cases, in a couple of cases, I think, the 14 entire page that's on the right side is also copied on the 15 left side. 16 What confuses the Court is that on the left side, 17 the left being, again, I'll call it the.Lerma data, I don't la know what the context is of that statement. In other words, 19 I don't know if that is a quote. Mr. Cooley has represented 20 to the Court today that there was wholesale publication of 21 verbatim material that didn't have any comment or discussion 22 around it. 23 Now, that is very different from the Washington 24 Post situation in which those quotes appeared within the 25 context of the news story with analysis and giving the 65 1 quotes as examples or illustrative or whatever. So the 2 factual situation here is somewhat different, it seems to 3 me. 4 I want you to address that, please. 5 MR. LEVINE: I will, Your Honor. It is somewhat 6 different, I concede, and I would like to explain to th6 7 Court. 8 THE COURT: All right. 9 MR. LEVINE: What I understand this to be and then 10 why I don't think it's a distinction with a difference. 11 There is no question that the exhibits to the 12 Fishman declaration that Mr. Lerma posted to the Internet 13 contained portions of excerpts from some of their 14 materials. We have arguments in our brief that explain why 15 some of those materials that they claim were infringed are 16 no longer in use and haven't been since the late '70s, and I 17 won't go into that. 18 But what you have here -- but there is no question 19 that there were excerpts, some as many as ten or so pages 20 that are attached as exhibits to the Fishman declaration. 21 What you can't glean from looking at this exhibit 22 is that these particular excerpts are parts of 300-page 23 documents or 200-page documents. OT 2 is 300 pages. OT 3 24 is 200 pages, I believe, and that he did nut post nearly all 25 of the entirety of the work as they claim. 66 1 But we are not denying and have never denied that 2 the attachments to the Fishman declaration contained 3 portions of materials that they claim is copyrighted. 4 What we are saying, and this is very important, is 5 that Mr. Lermals copying of that constitutes a fair use. 6 The reason it constitutes a fair use is threefold. 7 Number one, if you go through the four fair-use 8 factors as this Court did with respect to the Post, we are 9 identical to the Post on three of the four factors. We win 10 on three of the four factors. This is a noncommercial use. 11 This was a use, the purpose of which was to contribute to 12 public debate on Scientology. 13 THE COURT: How does it contribute to public 14 debate if there is no discussion or comment with these 15 texts? 16 MR. LEVINE: That is a very good question, Your 17 Honor- That is the difference, I think, the essential 18 differt-nce between the Internet and a news group on the 19 Internet and a single edition of the Washington Post. 20 We have submitted declarations from Professor 21 Cleat (phonetic), a professor of computer science, we have 22 submitted a declaration from Mr. Lerma, Digital has 23 submitted a declaration that make clear that this Alt 24 Religion Scientology news group is essentially a newspaper 25 without editor, a town meeting, if you will, in which people 67 1 are constantly debating issues back and forth, bringing to 2 each other's attention the source material on which they are 3 basing their comments and criticisms. 4 It's a data-rich medium in which people regularly 5 post on the Internet the materials about which they are 6 talking. There is undisputed testimony in the record that 7 Mr. Lerma didn't just post this declaration in isolation. 8 He has posted dozens of affidavits and court pleadings and 9 deposition transcripts from court cases relevant to 10 Scientology that he believed were relevant to the public 11 debate. 12 It is true that within the four corners of this 13 particular posting, Mr. Lerma did not say, "Here I am 14 posting this document, and here are my views on it," but it 15 is undisputed that -- well, there was hardly any after 16 because the stuff was seized, but before and for a long 17 period of time, Mr. Lerma and others, as testified to by 18 Professor Cleek among others,in his declaration, were out 19 there discussing the legitimacy of these materials, 20 discussing their role in coercive mind control, discussing, 21 in short, an issue of very great public importance. 22 I think that it would be an incorrect analysis of 23 the Internet and news groups on the Internet specifically to 24 Itie ourselves down to old technology versions of what 25 constitutes fair use by looking at a single posting in 6 8 1 isolation. 2 THE COURT: Let's go back to the Washington Post. 3 Let's assume the Washington Post, rather than the article on 4 religion in cyberspace or whatever it was that the Post did 5 that, I think, was at issue the other day, rather than the 6 Post writing that article had taken text from the documents 7 and simply published it in the pages of the Washington Post, 8 no comment, no explanation, no critique, just these are 9 these paragraphs from it, I am not convinced the Washington 10 Post would have won the motion, because fair use doesn't 11 mean we are going to just broadside it. It means, it's 12 being used in a certain kind of context. All right. 13 I don't think the example I have given you is any 14 different from what you are telling me. I don't think that 15 the Internet necessarily opens that kind of a door. 16 MR. LEVINE: Let me give Your Honor a twist on 17 that, if I might, that might illuminate it. 18 THE COURT: All right. 19 MR. LEVINE: I think context, but broader context, 20 is all important. If the Washington Post on Monday wrote 21 the article that they wrote, and said at the bottom of the 22 page, "Tomorrow, we are going to publish the full Fishman 23 declaration and his exhibits so that our readers can see 24 exactly what is at issue here and what this public 25 controversy is all about," I think that the Court would 69 1 weigh that next day's publication in the context of 2 determining whether or not the fair-use doctrine applies. 3 I don't say for sure because I don't know what all 4 the factors would be how you would come out on that fair 5 use, but it would not be determinative against the 6 Washington Post that the story ran on Monday and the 7 excerpts ran on Tuesday. 8 I think, moreover, in any fair-use case, it is 9 important that the Court look at all four factors and 10 determine whether in the totality, including the flexible 11 additional factors that we think are explained here, whether 12 the fair-use doctrine applies. 13 And lastly, and I think most importantly, and the 14 Court has recognized this itself in its ruling with respect 15 to the Post, we are talking here about an injunction, 16 whether or not they ultimately prevail on the issue of 17 whether the one posting that we are focused on was fair use. la We have raised sufficiently serious questions 19 going to whether it was or not, and the additional factors 20 relating to irreparable harm, balance of hardships and the 21 public interest that the Court identified in connection with 22 its ruling on the Post motion apply as well here that 23 injunctive relief is not the way to go. 24 I say that for an additional reason, and that is, 25 look at the Cleat declaration. Look at the additional 70 1 materials that we have put into this record showing the 2 wide, wide dissemination of this material both on the 3 Internet and elsewhere before Arnie Lerma ever posted a 4 single word from this Fishman declaration. 5 There is a decision in the Ninth Circuit -- it is 6 unpublished -- but there is a decision in the Ninth Circuit 7 that we cite in our papers in which the Ninth Circuit 8 observes that OTs I through 3, the ones where there is, in 9 Your Honor's view on this page-by-page comparison, a lot of 10 copying, had been widely available or widely disseminated. 11 That's a quote from the Ninth Circuit. 12 The balance of hardships here, the fact that these 13 materials are broadly available suggests that injunctive 14 relief is as much a violation of Mr. Lerma's First Amendment 15 rights as it is of the Washington Post's. That's 16 essentially what the judge in Colorado held looking at this 17 exact same material. 18 So I think that whatever happens on ihe remedy of 19 damages, the issue of prior restraint and injunctive relief 20 is much, much different. 21 The Supreme Court said that in the Campbell vs. 22 Acock Rose Case. It said courts better start thinking about 23 injunctions as a different kind of and more serious remedy 24 in the copyright area than damages, especially when the 25 injunction seeks to prohibit the dissemination of materials 7 1 1 on matters of public concern. 2 In that regard, let me make one more point and I 3 will sit down. The point is that Mr. Lerma is more than 4 happy to abide by an order of the kind that the Court 5 entered with respect to the Post, that the Court in Colorado 6 entered with respect to the defendants there, and that is 7 that Mr. Lerma's future use of this until this proceeding 8 finally determines itself will be limited to fair use of 9 these materials. 10 That is important, because these defendants -- 11 these plaintiffs, I'm sorry -- have shown an incredible 12 penchant for taking any kind of court order that they get 13 and misusing it to stifle the very kind of criticism that's 14 at the heart of the First Amendment. 15 I invite the Court to take a look at paragraph 16 16 of Mr. Cleat's declaration. In that declaration, he talks 17 about how he himself participating in this debate on the 18 Intern@t quoted one or two sentences from some Church of 19 Scientology work. 20 He got a letter ordering him to cease and desist 21 doing that from the church's lawyers. The admission of the 22 university on which he is on the faculty got a letter 23 demanding that they order him to cease and desist from doing 24 it, and that letter made the bald statement that any use of 25 an unpublished work constitutes copyright infringement. 72 1 They have sued the Washington Post over its minor 2 use of these works in its published materials, and today 3 they have filed a motion with this Court asking that our 4 briefs in this case be sealed because although they don't 5 quote from or reference any of these materials, they talk 6 about the same subject matter. 7 They will misuse and have misused any order that 8 is given them in the nature of injunctive relief, and that 9 is an additional reason why a preliminary injunction should 10 not issue here. Thank you, Your Honor. 11 THE COURT: All right. 12 MR. COOLEY: We have misused no order, Your 13 Honor. We are trying to protect these materials. Fair use, 14 you see, in the interim that they are now advocating for, 15 when the use to begin with wasn't even remotely fair, is 16 fair use defined by Lerma, and he has already defined what 17 he means by fair use; posting. 18 They come up now and say he is not going to post 19 them again. He already did that. But to reward him with an 20 ongoing right of fair use when he posted without comment, 21 without any journalistic input, and now what they attempt to 22 do is to bootstrap a comment on the ARS in as the context in 23 which it occurred. Where is that comment? It's not in 24 evidence here, from which the Court could even begin to 25 decide that if such a far-out principle were to apply, that 7 3 1 there is a context. 2 He talks about Lerma posted other affidavits. 3 That's right, and we didn't sue him for them because they 4 didn't contain copyrighted trade-secret material. 5 We only sue, Your Honor, notwithstanding the brush 6 with which we have been tarred, when it does get into that 7 area. We haven't sued for -- he could post affidavits that 8 call us names until the cows come home, and that's what he 9 has done. That's okay, because it doesn't infringe. It 10 doesn't misappropriate. But when you cross that line, 11 that's when the church's back is to the wall, and they have 12 to bring the suit. 13 I don't know of any case anywhere that stands for 14 the proposition that has just been argued to this Court that 15 he can post them. Counsel even suggests that if the Post 16 did what he says in successive of days that it might be a 17 problem, I don't know. I don't have to deal with that 18 issue. I have got enough trouble dealing with.the issue as 19 it happened. But I know one thing, that Arnie Lerma didn't 20 even say, here is the stuff we have been talking about lo 21 these many months, because they hadn't. 22 He didn't say, you remember the debate that we 23 were having here on this thread? Here is these materials. 24 He didn't say that. He just banged them up there, period. 25 That was the end of the inquiry. 74 1 Now he says as a reward for having done that, he 2 should during the pendency of this case be rewarded with a 3 fair-use right. Your Honor, there is no case. 4 Now, counsel knows there is no case, and so what 5 does he say? He says we are dealing with a new technology. 6 This is really where we are at, Your Honor. Because there 7 is substantial advocacy on the Internet that the new 8 technology has repealed intellectual property law, that the 9 new technology has done that to copyright. 10 The Copyright Office just came out with a white 11 paper. I don't know if you have had a chance to see it. 12 It's sweeping in its scope and its implications. 13 one of the things that they destroy right off the 14 bat is Mr. Lerma's corporation's claim that because it was a 15 preservational archive, it could keep these materials; and 16 the white paper clearly shows the Congressional debate that 17 makes it very clear that facsimile reproduction or 18- photographic reproduction is what they are talking about, 19 and that electronic or digital reproduction is not 20 sanctioned by the archival section of Section 108. 21 Now, the same thing is true on the library 22 exemption. The library exemption deals with specific 23 factors that have to apply, and Mr. Wallersheim immediately 24 eliminated those as being the stuff is not available to the 25 public. We don't even use it. It's only accessible by me 75 To be continued in part #4

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