Chunn to circumvent Pearl’s password-protected VPN and gain unauthorized access to its ATS
system running on the VPN, which included Pearl’s copyrighted software.^1110
Pearl brought claims against Standard and Chunn for, among other things, violation of
Section 1201(a)(1)(A) of the DMCA based on the alleged creation of the tunnel. Both the
plaintiff and the defendants sought summary judgment on the claim. The court ruled that
Standard was entitled to summary judgment because the evidence was undisputed that Chunn, in
developing and operating his automated trading system, was acting solely on his own and not as
an employee of Standard. Standard could therefore not be held liable for his actions.^1111
The court, however, denied summary judgment to Chunn. First, the court ruled that
Pearl’s VPN was the “electronic equivalent” of a locked door that fit the definition of a
technological protection measure put in place by the copyright owner to control access to Pearl’s
copyrighted ATS software.^1112 The court rejected the argument that the VPN did not effectively
control Chunn’s access to the ATS system in view of the fact that he had written the ATS system
himself and maintained a backup file of it for Pearl. “The question of whether a technological
measure ‘effectively controls access’ is analyzed solely with reference to how that measure
works ‘in the ordinary course of its operation.’ 17 U.S.C. § 1201(a)(3)(B). The fact that Chunn
had alternative means of access to the works is irrelevant to whether the VPN effectively
controlled access to them.”^1113 Finally, the court ruled that because there was a factual dispute
about whether only employees of the service provider, rather than Chunn, had configured the
tunnel from Chunn’s server to the Pearl VPN, or whether Chunn had configured his server and
router to tunnel into Pearl’s network, Chunn was not entitled to summary judgment on the
DMCA claim.^1114
In a subsequent jury trial, the jury found for Chunn on Pearl’s DMCA claim.^1115(viii) 321 Studios v. Metro Goldwyn Mayer Studios, Inc.In this case, 321 Studios marketed and sold software called DVD Copy Plus, which was
capable of copying the video contents of a DVD, both encrypted and unencrypted with the
DeCSS encryption scheme, onto a recordable CD. 321 Studios sought a ruling that its software
did not violate the anti-circumvention provisions of the DMCA.^1116 The court ruled that the
software’s capability to decrypt DVDs encoded with CSS did violate the anti-circumvention
(^1110) Id. at 341-42 & n.36, 349.
(^1111) Id. at 346-47, 349-50.
(^1112) Id. at 350.
(^1113) Id.
(^1114) Id.
(^1115) See Pearl Investments v. Standard I/O, Inc., 324 F. Supp. 2d 43 (2004) (rejecting Pearl’s claim that the jury’s
verdict in favor of Chunn on the DMCA claim was inconsistent with its conclusion that Chunn’s physical
hookup to the Pearl system caused damage to Pearl).
(^1116) 321 Studios v. Metro Goldwyn Mayer Studios, Inc., 307 F. Supp. 2d 1085, 1089-90 (N.D. Cal. 2004).