De-Contents Scramble System (DeCSS) had been barred from publication as part of a case brought by the DVD Copy Control Association (DVDCCA).
Contents Scramble System is the name of the encryption mechanism used to keep the contents of DVDs from being copied.
The association's case is a separate one from the more well-known, but already decided, New York case that pitted 2600: The Hacker Quarterly against the Motion Picture Association of America (MPAA).
In that case, DeCSS was ruled to be illegal as it violated the anti-circumvention provision of the 1998 Digital Millennium Copyright Act (DMCA), which says that it is illegal to provide information or tools to circumvent copy control technologies.
The DVDCCA brought the lawsuit under the Uniform Trade Secrets Act, claiming that the disclosure of the code to unscramble CSS - either its posting or linking to Web sites that hosted it - was a violation of its trade secrets.
The defendants in this case include Jon Johansen, the 15-year-old Norwegian who created DeCSS, and Andrew Bunner, who posted the DeCSS code on his Web site.
On 21 January 2000, the trial court hearing the case issued an injunction against the "posting or otherwise disclosing or distributing on Web sites or elsewhere the DeCSS program, the master keys or algorithms of the Contents Scramble System, or any other information derived from this proprietary information".
The court refused to bar the use of links to sites hosting DeCSS, because links are crucial to the Internet and one site owner cannot be responsible for the content of another site. Bunner appealed against that injunction, which led to the current ruling.
The Court of Appeal for the State of California ruled that DeCSS could not be banned from publication, because doing so would violate the First Amendment as an unconstitutional prior restraint to publication.
"The DVDCCA's statutory right to protect its economically valuable trade secret is not an interest that is 'more fundamental' than the First Amendment right to freedom of speech or even on equal footing with the national security interests and other vital government interests that have previously been found insufficient to justify a prior restraint," the court said.
Further breaking from the New York court's decision, the court in California held that the source code to programs, such as the code to DeCSS, has an expressive nature and is thereby protected by the First Amendment.
The New York court had ruled that source code was not protected by freedom of speech, because it could be compiled into a functional program. The court in California ruled that although "the source code is capable of such compilation, that does not destroy the expressive nature of the code itself".
However, the court was at pains to make it clear that it held no opinion as to whether a permanent injunction might be issued at the end of the trial.
The court also upheld the DVDCCA's right to bring action against anyone who violates the Uniform Trade Secrets Act by conduct, as opposed to speech, or who was contractually bound by a "click-through" agreement not to disclose the code. The court also said anyone who infringes DVDCCA copyrights could be acted against under copyright law.
The lifting of the preliminary injunction will last until the original trial is concluded and a decision is made, although it is not clear when that will be.