A Virginia federal court judge has ruled against the Church of Scientology in its claim that the publishing of excerpts of church documents in The Washington Post violated its rights to the material as a trade secret.

Here's the opinion, issued November 28, 1995.

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA  
  
Alexandria Division  
  
RELIGIOUS TECHNOLOGY CENTER )   
  
Plaintiff,   
  
v.   
  
ARNALDO PAGLIARINA LERMA, DIGITAL GATEWAY SYSTEMS, THE   
WASHINGTON POST, MARC FISHER, and RICHARD LEIBY,   
  
Defendants.      
  
Civil Action No 95-1107-A  
  
MEMORANDUM OPINION  
  
Before the Court is the Motion for Summary Judgment filed by defendants, The   
Washington Post, and two of its reporters, Marc Fisher and Richard Leiby   
(hereinafter referred to collectively as "The Post".)  A court may grant summary   
judgment "only when there is no genuine issue of material fact and the moving   
party is entitled to judgment as a matter of law." Miller v. Leathers, 913 F.2d   
1085, 87(4th Cir. 1990) (citing Fed. R. Civ. P. 56(c). In ruling on such motions,   
the court must construe the facts and  all inferences drawn from those facts in   
favor of the non-moving party. Charbonnaves de France v. Smith, 597 F.2d406,   
414 (4th Cir. 1979). Having performed this analysis, the Court finds that   
summary judgment should be entered in favor of the defendants.  
  
1. UNDISPUTED FACTS  
  
The essential facts are not in dispute. In 1991, the Church of Scientology sued   
Steven Fishman, a disgruntled former member of the Church of Scientology, in   
the United States District Court for the Central District of California. Church of   
Scientology  Int'l v. Fishman, No. CV 91-6426. On April 14,1993, Fishman filed   
in the open court file what has come to be known as the Fishman affidavit, to   
which were attached 69 pages of what the Religious Technology Center ("RTC")   
describes as various Advanced Technology works,specifically levels OT-I   
through  OT-VII documents. Plaintiff claims that these documents are protected   
from both unauthorized use and unauthorized disclosure under the copyright   
laws of the United States and under trade secret laws, respectively.  
  
In California, the RTC moved to seal the Fishman affidavit,arguing that the   
attached OT documents were trade secrets. That motion was denied and the   
Ninth Circuit upheld the district court's decision not to seal the file. Church of   
Scientology Int'l v. Fishman, 35 F.3d 570 (9th Cir. 1994).The case was   
remanded for further proceedings and the district court again declined to seal the   
file, which remained unsealed until August 15, 1995.  
  
Defendant Arnaldo Lerma, another former Scientologist, obtained a copy of the   
Fishman affidavit and the attached documents. Lerma admits that on July 31 and   
August 1, 1995, he published the documents on the Internet through defendant   
Digital Gateway Systems ("DGS"), an Internet access provider. RTC, which   
regularly scans the Internet, discovered the publication of documents and on   
August 11,1995, warned Lerma to return the documents and not publish them   
any further. After Lerma refused to cooperate, RTC obtained a Temporary   
Restraining Order prohibiting Lerma from any further publication of the   
documents and a seizure warrant which authorized the United States Marshal to   
seize Lerma's personal computer, floppy disks and any copies of the copyrighted   
works of L. Ron Hubbard, the author of the documents.  
  
During the same time period, on or abut August 5 or 6,1995, Lerma sent a hard   
copy of the Fishman affidavit and attachments to Richard Leiby, an investigative   
reporter for The Washington Post. On August 12, 1995, counsel for RTC   
discovered this disclosure and approached  The Post, which was told that the   
Fishman affidavit might be stolen. In response to the RTC's representations, The   
Post returned the actual copy which Lerma had given it. However, The Post had   
by then learned that a copy of the same Fishman affidavit was available in the   
open court file in the United States District Court for the Central District of   
California. On August 14, 1995, The Post sent Kathryn Wexler, a news aide   
stationed in California, to that court to obtain a copy Fishman affidavit. The   
Clerk's office made a copy for Wexler, who then mailed it to Washington.   
Although it is undisputed that RTC staff members had been checking that file   
out and holding it all day to prevent anyone from seeing it, the file was not   
sealed and obviously was available, upon request, to any member of the public   
who wished to see it.  
  
The day after The Post obtained its copy of the Fishman affidavit, the RTC   
applied for a sealing order and the trial judge ordered the file sealed. However,   
there is no evidence in the record that the judge ordered The Post to return the   
copy made by the Clerk's office or that any kind of a restraining order was issued   
by that court against The Post.  
  
Five days later, on August 19, 1995, The Post published a news article, entitled   
_Church in Cyberspace: Its Sacred Writ is on the Net.  Its Lawyers are on the   
Case," written by defendant Marc Fisher. In that article, RTC's lawsuit against   
Lerma and the seizure of his computer equipment were discussed, as was the   
history of Scientology litigation against its critics and the growing use of the   
Internet by Scientology dissidents. The article included three brief quotes   
(totalling 46 words) from three of the documents. On August 22, 1995, the RTC   
filed its First Amended Verified Complaint for Injunctive Relief and Damages in   
which it added The Washington Post and its two reporters, Fisher and Leiby, as   
additional defendants. A Second Amended Verified was later filed and is now   
the subject of this summary judgment motion.  
  
II. THE COPYRIGHT CLAIM  
  
Although the Court has serious reservations about whether the documents at   
issue in this litigation are properly copyrighted, for the purposes of this motion,   
the Court assumes that the RTC holds properly registered, valid copyrights for   
the documents attached to the Fishman affidavit.  
  
The Post does not deny that it copied the documents and quoted from them. It   
argues, however, that this copying and these quotations fall squarely within the   
"fair user exception. Thus, the dispositive issue as to the copyright claim is   
whether or not The Post's use of the documents falls within the fair use   
exception to the copyright law. Under that exception, "the fair use of a copyright   
... for purposes such as criticism, comment, news reporting ... or research, is not   
an infringement of copyright." 17 U.S.C.A.  107 (West Supp. 1995) (emphasis   
added).  As the Supreme Court has held "fair use is a mixed question of law and   
fact." Harper & Row Publishers Inc. v. Nation Enters, 471U.S. 539, 560 (1985).   
In the instant case, the Court finds no material facts in dispute; therefore, the   
issue can be resolved as a matter of law.  
  
At the outset of its opposition, the RTC argues that because the fair use doctrine   
is an equitable one, The Post should not be allowed to rely on defense because of   
unclean hands. Specifically, the RTC points to The Post's failure to disclose that   
it had made several copies of the Fishman affidavit. In an affidavit signed on   
September 26, 1995, Mary Ann Werner, a Post Vice President and counsel,   
averred that "only one copy of that [Fishman] declaration has been made." In   
fact, through discovery RTC has learned, and The Post does not dispute, that   
other copies were made. Wexler admits that she made an additional copy of the   
materials received from the Clerk's office. She sent that copy to Washington as   
well to ensure that Washington got a copy. A second copy was created, not by   
copying the Fishman affidavit which had been obtained in California, but by   
down loading a copy off the Internet. The Post argues persuasively here that the   
presence of the AT documents on the Internet was part of their very news   
worthiness and that making this copy was an act of legitimate   
newsgathering.  
  
A third copy of the AT documents was generated after Lerma sent a duplicate of   
the Fishman affidavit to Leiby via e-mail. That e-mail was copied to a disk in   
response to a demand by RTC's counsel on August 12, 1995, that The Post   
secure any materials it had been sent by Lerma. (SecondWerner Decl.    4-  
5).  
  
None of these acts of copying strike this Court as constituting unethical behavior   
and the Court is satisfied from her second declaration that Ms. Werner did not   
mislead the Court or counsel in referring to one copy. In any case, the Court   
agrees with The Post that the issue of unclean hands is a weak attempt by RTC   
to avoid the real issue of fair use.  
  
In determining whether the use of a copyrighted work is fair use and therefore   
not an infringement, the Court must consider four factors:  
  
1. the purpose and character of the use, including whether such use is of a   
commercial nature or is for nonprofit educational purposes;  
  
2. the nature of the copyrighted work;  
  
3. the amount and substantiality of the portion used in relation to the   
copyrighted work as a whole;  
  
4. the effect of the use upon the potential market for or value of the copyrighted   
work.  
  
The fact that a work is unpublished shall not itself  bar a finding of fair use if   
such finding is made upon consideration of all the above factors.  
  
17 U.S.C.A.   107 (west Supp. 1995). These four statutory factors may not "be   
treated in isolation, one from another. All are to be explored, and the results   
weighed together, in light of the 6 purposes of copyright." Campbell v.Acuff-  
Rose Music Inc., 114 S. Ct. 1164, 1170-71 (1994). The interplay of the four   
factors is recognized elsewhere as well. See, e.g., Sony Corp. of America v.   
Universal Studios, Inc., 464 U.S. 417, 449-450 (1984) (reproduction of entire   
work "does not have its ordinary effect of militating against a finding of  fair   
use" as to home videotaping of television programs); Harper & Row,Publishers,   
Inc. v. National Enterprises, 471 U.S. 539, 564(1985) ("[E]ven substantial   
quotations might qualify as fair use in a review of a published work or a news   
account of a speech" but not in a scoop of a soon-to-be-published memoir). Thus,   
we may not evaluate any single fair use factor in isolation.  
  
As to the first factor, the purpose and character of the use, there is no evidence   
in this record that The Post copied the documents for any purposes other than   
newsgathering, news reporting and responding to litigation. Although the RTC   
has argued that The Post harbors some animus towards Scientology, an unbiased   
observer would conclude that the Church of Scientology and its treatment of   
critics is a newsworthy subject about which The Post is permitted to investigate   
and report. There is no evidence that The Post was trying to "scoop" the RTC in   
quoting the documents or trying to avoid payment of a royalty, conduct to which   
other courts have looked in finding that a media organization violated copyright.   
Harper & Row Publishers, Inc., v. Nation Enterprises, 471 U.S. 539(1985); Iowa   
State University Foundation, Inc., v. American Broadcasting Co., Inc., 463 F.   
Supp. 902 (S.D.N.Y. 1978).  
  
Under the second factor, the scope of the fair use doctrine is greater with respect   
to factual works than creative or literary works. Hubbard's works are difficult to   
classify and courts dealing with this issue have differed in their conclusion. As   
the Second Circuit stated in New Era Publications Int'l v. Carol Publishing   
Group, 904 F.2d 152,158 (2d Cir.), cert. denied, 111 S. Ct. 297   
(1990),"reasonable people-can disagree over how to classify Hubbard's works."   
However, that court also concluded that the works "deal with Hubbard's life, his   
views on religion, human relations, the Church, etc. -- [and] are more properly   
viewed as factual or informational." Id. at 157.The United States District Court   
for the Southern District of California is of another view, however. In Bridge   
Publications, Inc. v. Vien, 827 F. Supp. 629, 636 (S.D.Cal. 1993), the court   
stated that "[t]he undisputed evidence shows that L. Ron Hubbard's works are   
the product of his creative thought process, and not merely informational.  
   
However, in this litigation the RTC has characterized the documents essentially   
as training materials. Therefore, this Court concludes that despite their obtuse   
language the documents are intended to be informational rather than creative   
and, therefore, that a broader fair use approach is appropriate.  
  
To evaluate the third factor, which essentially requires making a qualitative as   
well as quantitative analysis of the use made of the work, the three quotes need   
to be read in the context of the article. The first and longest quote is obviously   
included merely as an example of the obtuse language used in the documents.   
No fair-minded reader could possibly construe this quote otherwise.  
  
Most of the 103 pages of disputed texts from the  Fishman file are instructions   
for leaders of the  training sessions. They are written in the dense jargon of the   
church. 'If YOU do and he's still in his head, all is not lost, you have other   
actions you can take. Clusters,Prep-Checks, failed to exercise directions.'  
  
The second quote describes how in "one high-level session trainees are asked to   
pick an object "wrap an energy beam around it and pull themselves toward the   
object," the quote occurs in the very next sentence which describes how trainees   
are to "be in the following places--the room, the sky, the moon, the sun. These   
underlined words comprise the total of the copyrighted materials quoted.  
  
The RTC argues that where quotes, although fragmentary, are of "significant   
material," even de minimis copying infringes. It then bootstraps this argument   
by claiming that because Fisher chose to include these three quotes in his article,   
the quoted language must necessarily be significant. Under this reasoning, no   
one, let alone a newspaper, could ever quote from copyrighted materials without   
fear of being hauled into court for infringement because any quote would be   
deemed significant. To accept this argument would essentially destroy the fair   
use doctrine. It also clearly is unsupported by the facts because as discussed   
above, the three quotes, read in context of the entire article, are offered solely as   
illustrations of the author's claims about Scientology. They are not intended to   
offer a complete definition of the Scientology religion or to capture the total   
essence of what it means to be a Scientologist.  
  
Lastly, we must look at the effect of The Post's use upon the potential market for   
or value of the copyrighted work. Although the RTC claims it has demonstrated   
an enormous effect upon its potential market, a fair view of the record discloses   
no evidence of any economic exploitation by The Post of RTC's copyrighted   
material. As The Post cogently argues, no follower of Scientology could possibly   
be satisfied by these three random fragments quoted in its article so as to bypass   
the complete regime of indoctrination.  
  
Although both sides have raised numerous additional issues the essential   
analysis for the copyright claim comes down to these four factors. Based on this   
analysis, we find for the defendants. RTC properly argues that the mere   
existence of a copyrighted work in an open court file does not destroy the   
owner's property interests in that work. In the same way, the placement of a   
copyrighted book on a public library shelf does not permit unbridled   
reproduction by a potential infringer. However, RTC cannot selectively avail   
itself of only a segment of the copyright law. With the preservation of copyright   
protection invariably comes the fair use exception, and on that ground The Post's   
actions are proper.  
  
III. ATTORNEY'S FEES  
  
Because The Post has been found to be the prevailing party on the copyright   
claim, it qualifies for an award of attorney's fees and litigation expenses. The   
RTC opposes such an award. Whether to award such fees is a matter left to the   
Court's discretion. Foqerty v. Fantasy, Inc. ,--U.S.--, 114 S. Ct. 1023, 1033   
(1994). In deciding the appropriateness of a fee award, the Court should   
consider the motivation of the plaintiff in bringing the action for copyright   
infringement and the extent to which plaintiff's position is reasonable and well-  
grounded in fact and law.  
  
On the first issue, the Court finds that the motivation of plaintiff in filing this   
lawsuit against The Post is reprehensible. Although the RTC brought the   
complaint under traditional secular concepts of copyright and trade secret law, it   
has become clear that a much broader motivation prevailed--the stifling of   
criticism and dissent of the religious practices of Scientology and the destruction   
of its opponents. L. Ron Hubbard, the founder of Scientology, has been quoted as   
looking upon the law as a tool to harass and discourage rather than to win. The   
law can be used very easily to harass and enough harassment on somebody who   
is simply on the thin edge anyway, well knowing that he is not authorized, will   
generally be sufficient to cause his professional decease. If possible, of course,   
ruin him utterly.  
  
(Declaration of Mary Ann Werner, Attachment A, at C5;see also The Post's   
reply brief at p. 24, note 23).  
  
The context and extent in which The Post copied and quoted from the    
documents was so de minimis that this Court finds that no reasonable copyright   
holder could have in good faith brought a copyright infringement action.   
Although there are limits beyond which the media may not go, even in the   
interests of news gathering and reporting, this case does not come anywhere near   
those limits. Therefore, an award of reasonable attorneys' fees is appropriate and   
granted.  
  
IV. MISAPPROPRIATION CLAIM  
  
To prove misappropriation of a trade secret, the RTC must show (1) that it   
possessed a valid trade secret, (2) that the defendant acquired its trade secret,   
and ( 3) that the defendant knew or should have known that the trade secret was   
acquired by improper means. Trandes Corporation v. Guy F. Atkinson, 996 F.2d   
655, 660 (4th Cir. 1993), cert.denied, -- U.S. --, 114 S.Ct. 443 (1993) .  
  
The Post argues persuasively that the documents were no longer trade secrets by   
the time The Post acquired them. They point to the following undisputed facts.   
First, the Fishman affidavit had been in a public court file from April 14, 1993   
until August 15, 1995, for a total of 28 months. Although RTC has shown that it   
went to extraordinary efforts to control access to that file by having church   
members sign out the file and keep it in their custody at the courthouse, the file   
nevertheless was an open file, available to the public. The Post was able to   
obtain a copy of the Fishman affidavit without any difficulty, by merely asking   
the Clerk of the court to copy it. Thus, having been in the public domain for an   
extensive period of time, these documents cannot be deemed "trade secrets."   
Kewanee Oil Co. v. Bicron Corm., 416 U.S. 470,484 (1974).  
  
Of even more significance is the undisputed fact that these documents were   
posted on the Internet on July 31 and August 1, 1995. (Lerma Affidavit). On   
August 11, 1995, this Court entered a Temporary Restraining Order among   
other orders which directed Lerma to stop disseminating the documents.   
However, that was more than ten days after the documents were posted on the   
Internet, where they remained potentially available to the millions of Internet   
users around the world.  
  
As other courts who have dealt with similar issues have observed, "posting   
works to the Internet makes them generally known'" at least to the relevant   
people interested in the news group. Religious Technology Center v. Netcom   
On-Line Communications Services, Inc., No. C.95-20091 RMW (N.D. Cal.) Slip   
Opinion entered 9/22/95 at 30. Once a trade secret is posted on the Internet, it is   
effectively part of the public domain, impossible to retrieve. Although the person   
who originally posted a trade secret on the Internet may be liable for trade secret   
misappropriation, the party who merely down loads Internet information cannot   
be liable for misappropriation because there is no misconduct involved in   
interacting with the Internet.  
  
Even if one were to assume that the AT documents are still trade secrets, under   
Virginia law, the tort of misappropriation of trade secrets is not committed by a   
person who uses or publishes a trade secret unless that person has used unlawful   
means, or breached some duty created by contract or implied by law resulting   
from some employment or similar relationship. Smith v. Snas-On Toss Corp.,   
833 F.2d 578, 581 (5th Cir. 1988); Aerospace Am.,Inc. v. Abatement Tech.,   
Inc., 738 F. Supp. 1061, 1071(E.D. Mich. 1990).  
  
It is the employment of improper means to procure the trade secret, rather than   
the mere copying or use, which is the basis of [liability] . . . Apart from breach   
of contract, abuse of confidence or impropriety in the means of procurement,   
trade secrets may be copied freely as devices or processes which are not   
secret.  
  
Trandes Corporation v. Guy F. Atkinson Company, 996 F.2d at660, (quoting the   
Restatement  (First of Torts)) (emphasis in original). The Trandes court notes   
that abuse of confidence or impropriety in the means of procurement represented   
the "essential element' and the "core" of a misappropriation claim. Id.  
  
The RTC claims that because The Post was on notice of the RTC's allegations   
that the AT documents were stolen and were both trade secrets and unpublished   
copyrighted works, The Post was under a legal obligation not to copy or use the   
documents. This Court knows of no law which required The Post to sit on its   
hands and do no further investigation into what was obviously becoming a   
newsworthy event and newsworthy documents. The RTC's allegations are still   
just allegations. The very court from which the Fishman affidavit was obtained   
still has under advisement the issue of whether the AT documents are trade   
secrets. Although The Post was on notice that the RTC made certain proprietary   
claims about these documents, there was nothing illegal or unethical about The   
Post going to the Clerk's office for a copy of the documents or downloading them   
from the Internet.  
  
Because there is no evidence that The Post abused any confidence, committed an   
impropriety, violated any court order or committed any other improper act in   
gathering information from the court file or down loading information from the   
Internet, there is no possible liability for The Post in its acquisition of the   
information. This is true regardless of the documents status as trade secrets. As   
for the disclosure of the information, The Post did nothing more than briefly   
quote from publicly available materials. These acts simply do not approach a   
trade secret misappropriation, and, therefore, summary judgment must be   
entered for the defendants.  
  
The Clerk is directed to forward copies of this Memorandum Opinion to counsel   
of  record.  
  
Entered this 28th day of November, 1995.  
  
Alexandria, Virginia  
  
Lionie M. Bringema United States District Judge