Ex Parte TRO/Seizure App Andrew H. Wilson WILSON, RYAN + CAMPILONGO 115 Sansome Street Fou

Ex Parte TRO/Seizure App Andrew H. Wilson WILSON, RYAN & CAMPILONGO 115 Sansome Street Fourth Floor San Francisco, California 94104 (415) 391-3900 Thomas M. Small Janet Kobrin SMALL, LARKIN & KIDDE 10940 Wilshire Boulevard, Suite 1800 Los Angeles, California 90024-3945 (310 209-4400 Helena K. Kobrin 7629 Fulton Avenue North Hollywood, CA 91605 (213) 960-1933 Attorneys for Plaintiffs RELIGIOUS TECHNOLOGY CENTER and BRIDGE PUBLICATIONS, INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ______________________________________ RELIGIONS TECHNOLOGY CENTER, a California non-profit corporation; and BRIDGE PUBLICATIONS, INC., a California non-profit corporation, No. C-95-20091-RMW (EAI) Plaintiffs, v. EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER, ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION, AND FOR ORDER OF IMPOUNDMENT; MEMORANDUM OF POINTS AND AUTHORITIES NETCOM ON-LINE COMMUNICATION SERVICES, INC., a Delaware corporation; DENNIS ERLICH, an individual; and TOM KLEMESRUD, an individual, dba CLEARWOOD DATA SERVICES, Defendants. ______________________________________ TO THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA: Plaintiffs Religious Technology Center ("RTC") and Bridge Publications, Inc. ("BPI") hereby apply to this Court for an order directing defendants Netcom On-Line Communication Services, Inc. ("Netcom"), Dennis Erlich ("Erlich") and Tom Klemesrud, dba Clearwood Data Services ("Klemesrud"), to appear before this Court at a specified time and date to show cause why a Preliminary Injunction should not be issued requiring said defendants to cease and desist from infringing plaintiffs' rights under the federal copyright laws by making unauthorized reproductions of copyrighted works on the Internet network or other databases, and from violating RTC's rights under California trade secrets laws by copying unauthorized copies of confidential works of L. Ron Hubbard onto that network's database. The contents of those confidential works are known as "the Advanced Technology" of the Scientology religion. Because defendants' actions are ongoing and have not ceased in the face of multiple warnings to cease and desist, plaintiff further apply for a temporary restraining order restraining defendants, their agents, and persons acting in concert with them, from engaging in any such conduct pending the hearing on plaintiffs' application for preliminary injunction. The form of the requested order to show cause, temporary restraining order, and an order of impoundment are more particularly described below and in the accompanying proposed form of Temporary Restraining Order, Order to Show Cause Re: Preliminary Injunction, and Order of Impoundment. GROUNDS FOR APPLICATION Plaintiffs apply to the Court for the requested relief pursuant to Rule 65 of the Federal Rules of Civil Procedure, on the grounds that plaintiffs hold exclusive rights relating to the reproduction, publication, and display of numerous literary works that are protected under federal law, some also containing trade secrets protected under state law; that in violation of those rights, defendants are, and recently have been, copying those works totaling at least 154 pages to date, with many works in their entirety, or causing them to be copied onto computerized data base information services, in violation of the copyright laws and state law; that defendants have continued their actions in spite of notification by plaintiffs of their rights and objections to the unauthorized copying and disclosure; and, that plaintiffs will suffer irreparable injury unless defendants are restrained from such actions during the pendency of this action. FORM OF TEMPORARY RESTRAINING ORDER REQUESTED Plaintiffs request that, pending the hearing on the Order to Show Cause Re: Preliminary Injunction, this Court issue a Temporary Restraining Order enjoining and restraining defendants, their agents, and all persons acting in concert with them or on their behalf: 1. From all copying of any of the copyrighted works of L. Ron Hubbard including, but not limited to, those identified in Exhibits A and B to the Complaint, and in particular from copying any of the copyrighted works into any computer data base, information service, storage facility, archives, or other computerized network or facility; 2. From disclosing or displaying, or causing to be disclosed or displayed, any portion of the unpublished confidential works identified in Exhibit B to the Complaint, or of any other work that is part of the Advanced Technology; and 3. From destroying or concealing, or in any way disposing of any reproduction, copy, facsimile, excerpt, or derivative of any work of L. Ron Hubbard that is in defendants' possession, custody or control. FORM OF REQUESTED ORDER TO SHOW CAUSE Plaintiffs further request that this Court issue an order directing defendants to show cause why a preliminary injunction should not be issued enjoining and restraining them, their agents, and all persons acting in concert with them or on their behalf, from violating the copyrights and trade secret rights of plaintiffs during the pendency of this action, and particularly: 1. From all copying of any of the copyrighted works of L. Ron Hubbard including, but not limited to, those identified in Exhibits A and B to the Complaint, and in particular from copying any of those works into any computer data base, information service, storage facility, archives, or other computerized network or facility; 2. From disclosing, displaying or reproducing, or causing to be disclosed, displayed or reproduced, any of the Unpublished Confidential Works identified in Exhibit B to the Complaint or any other work that is part of the Advanced Technology; 3. From destroying or concealing, or in any way disposing of any reproduction, copy, facsimile, excerpt, or derivative of any work of L. Ron Hubbard that is in defendants' possession, custody or control. FORM OF IMPOUNDMENT ORDER Plaintiffs request that this Court issue an order that defendants Netcom and Klemesrud turn over for impoundment, to remain in the custody of plaintiffs' counsel during the pendency of this action, all unauthorized copies in their possession, custody or control of any copyrighted works of L. Ron Hubbard, including, but not limited to: 1. All copies of the copyrighted published literary works of L. Ron Hubbard; 2. All copies of the unpublished confidential works of L. Ron Hubbard, containing Advanced Technology; and 3. All computer disks, cassette tapes and other media on which defendants have stored such works. This application is based upon this Ex Parte Application, the accompanying Memorandum of Points and Authorities, the fact set forth in the accompanying declarations of Thomas M. Small, Warren McShane, Marilyn Pisani and Helena K. Kobrin, the accompanying Ex Parte Application for Order for Issuance of Writ of Seizure and related Memorandum of Points and Authorities, the Verified Company in this action, and such additional evidence and arguments as may be properly presented at or before the hearing of the Application. Dated: February __, 1995 WILSON, RYAN & CAMPILONGO By: Andrew H. Wilson Thomas M. Small Janet Kobrin SMALL, LARKIN & KIDDE Helen K. Kobrin Attorneys for Plaintiffs RELIGIOUS TECHNOLOGY CENTER and BRIDGE PUBLICATIONS, INC. TABLE OF CONTENTS Page I. PRELIMINARY STATEMENT...........................7 II. FACTUAL STATEMENT...............................8 A. Plaintiffs Have The Exclusive Rights To Reproduce And Publish The Materials That Are The Subject Of This Application.........................................8 B. Defendants Are Engaging In Unlawful Copying And Publishing Of Plaintiffs' Literary Works...........................11 C. Absent A Restraining Order, There Is A Strong Likelihood That Defendants Will Continue To Make And Publish Unauthorized Copies Of The Copyrighted Materials........15 III. DEFENDANTS PLAINLY HAVE INFRINGED PLAINTIFFS' COPYRIGHTS UNDER FEDERAL LAW..............................................16 IV. PLAINTIFFS ARE ENTITLED TO A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION ON ALL CAUSES OF ACTION.......................17 A. Plaintiffs Have Established A Likelihood Of Success On The Merits Of Each Cause Of Action..........................18 B. Plaintiffs Will Be Irreparably Injured If Defendant Is Not Preliminarily Enjoined..................................19 C. The Equities Weigh Heavily In Favor Of Granting The Temporary Restraining Order And Preliminary Injunction...............................................20 D. Defendants Should Not Be Given Notice Prior To Issuance Of The Temporary Restraining Order.........................21 V. PLAINTIFFS ARE ENTITLED TO AN ORDER IMPOUNDING THE INFRINGING MATERIALS AND THE ARTICLES BY WHICH UNAUTHORIZED COPIES HAVE BEEN REPRODUCED...............................................22 A. Impoundment May Be Ordered In An Action For Copyright Infringement To Prevent Ongoing Infringement............22 B. An Impoundment Order Should Issue In This Case..........25 VI. VI. CONCLUSION...............................................26 STATEMENT OF ISSUES The principal issue presented by this application is whether defendants' actions in infringing plaintiffs' copyrights warrant the issuance of a temporary restraining order and an order to show cause why a preliminary injunction should not be issued requiring the defendants to cease and desist from infringing plaintiffs' rights under the federal copyright laws by making unauthorized reproductions of copyrighted works on the Internet network or other databases, and from violating RTC's rights under California trade secrets laws by copying unauthorized copies of confidential works of L. Ron Hubbard onto that network's database. A related issue is whether those actions entitle plaintiffs to an order impounding the infringing materials and the articles by which unauthorized copies have been reproduced. MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION I. PRELIMINARY STATEMENT By virtue of exclusive licenses, plaintiffs Religious Technology Center ("RTC") and Bridge Publications, Inc. ("BPI") hold exclusive rights to reproduce, publish and display numerous copyrighted literary works of L. Ron Hubbard. Some of these works are unpublished and contain confidential information consisting of trade secrets owned by RTC. Defendants Netcom On-Line Communications Systems, Inc. ("Netcom"), Dennis Erlich ("Erlich"), and Tom Klemesrud, dba Clearwood Data Services ("Klemesrud") (collectively, "defendants") have engaged in a scheme of unauthorized, wholesale copying of the copyrighted materials onto the Internet computer network ("Internet") via newsgroups on the Internet. In this fashion, defendants have collected copyrighted literary works subject to plaintiffs' exclusive licenses and are engaging in unauthorized reproduction of these works, passed on to others by means of defendants' computer equipment. Many of the works that have been copied into the Internet are unpublished and confidential works containing trade secrets. At least 154 pages of copyrighted materials have been so copied and in many instances constitute the totality of the copied work. Defendants' copying of plaintiffs' copyrighted literary works violates federal copyright law, and the unauthorized disclosure of the contents of the unpublished works violates RTC's rights under California trade secrets laws as well. Absent the issuance of the restraining and impoundment orders requested, defendants will continue their unlawful actions and may expand those actions. Defendant Erlich has already stated that "No local government or court in the U.S. has the power to tell (him) otherwise." (Kobrin Dec., Ex. F.) There also is a danger that defendants may conceal the unauthorized copies or transfer those copies to other, unknown locations. Plaintiffs accordingly request issuance of the ex parte temporary restraining order and order to show cause re: preliminary injunction mandated under these circumstances by Rules 64 and 65 of the Federal Rules of Civil Procedure and of the impoundment order permitted by 17 U.S.C. 503. II. FACTUAL STATEMENT A. Plaintiffs Have The Exclusive Rights To Produce And Publish The Materials That Are The Subject Of This Application Prior to his death in 1986, L. Ron Hubbard created numerous literary works which are protected by federal copyright law. (Pisani Dec., 2-3.) Mr. Hubbard died on January 24, 1986, and Norman F. Starkey was, on February 18, 1986, duly appointed the Executor of the Estate of L. Ron Hubbard by the Superior Court in and for the County of San Luis Obispo, California, Case No. 20885. By agreement dated September 17, 1987, all rights in the copyrights to certain of Mr. Hubbard's unpublished works, referred to as the "Advanced Technology material," were granted by the Estate to plaintiff RTC. RTC was granted authority, inter alia, to enforce all rights belonging to the holder of the copyrights in the Advanced Technology materials. At all relevant times that agreement has remained in full force and effect. (McShane Dec., 2 4.) In 1989, all of the assets of the Estate of L. Ron Hubbard, including the copyrights pertaining to the literary works and the Advanced Technology materials, were distributed to Author's Family Trust-B ("the Trust"), and in 1993, the assets of the Trust were distributed to Church of Spiritual Technology, a California nonprofit religious corporation ("CST"), which now is the owner of the copyrights in the literary works. While the copyrights in the literary works were held by the Trust, on October 1, 1991, the Trustee entered into an exclusive license agreement with BPI (hereinafter "the Literary Agreement") which granted to BPI, inter alia, the exclusive right in the United States to print, publish and sell the literary works, other than the Advanced Technology materials, and to make and publish compilations and derivative works of and from the published literary works, and to enforce all rights in those works. (Pisani Dec., 3.) In an agreement dated November 29, 1993, CST affirmed RTC's September 17, 1987 license under all copyrights pertaining to the Advanced Technology materials with the right and obligation to enforce all the copyrights in the Advanced Technology materials. (McShane Dec., 6.) In an agreement dated November 29, 1993, CST assumed and affirmed the Literary Agreement with BPI. (Pisani Dec., 4.) Plaintiff BPI derives substantial revenue from the distribution and sale of L. Ron Hubbard's published literary works. Plaintiff RTC derives substantial revenue from the delivery of services utilizing Mr. Hubbard's unpublished literary works containing the Advanced Technology. (Pisani Dec., 3; McShane Dec., 8.) Accordingly, the activities at issue in this action have caused and continue to cause substantial injury to plaintiffs. Plaintiffs and their licensors have perfected their copyrights in the works in question. The copyrights in works listed in Exhibits A and B to the Complaint have been duly registered with the United States Copyright Office. (Pisani Dec., 6; McShane Dec., 41.) In addition, like all of the Advanced Technology materials, the unpublished confidential works are unpublished materials containing trade secrets which are maintained confidential by RTC and all other entities licensed by RTC for their use, and substantial measures are taken by RTC and its licensees to protect the confidentiality of the Advanced Technology materials. As more fully described in the declaration of Warren McShane, these measures include, inter alia, the numbering of all copies of the materials containing Advanced Technology; locking all such materials in locked cabinets or safes when not in use; logging of the materials upon each use; electronically connecting the materials to the cabinets in which they are stored and to the tables on which they are used and monitoring of those connections by security computers and alarm systems; issuing photo-identity cards to those who are authorized to access the materials; separating the Advanced Technology course rooms from all other parts of the organization; locking the doors of the Advanced Technology course rooms at all times and magnetically locking them while materials are moving between a file cabinet and the table where they will be used; and posting security personnel at all times. (McShane Dec., 14-19.) The unpublished confidential works are never available outside the protected premises of RTC or its licensees except as the result of theft or unauthorized disclosure. (McShane Dec., 22.) The trade secrets status of the Advanced Technology materials has been judicially recognized in court decisions dealing with this question. See Bridge Publications Inc. v. Vien, 827 F.Supp. 629, 633 (S.D.Cal. 1993), and cases cited therein. Thus, the right of plaintiff RTC to protect these materials against unauthorized disclosure under California law is clear. B. Defendants Are Engaging In Unlawful Copying And Publishing Of Plaintiffs' Literary Works As shown by the accompanying declarations, defendant Erlich has engaged in the repeated unlawful copying of the literary works onto the Internet, the international network of computer networks, through postings on a newsgroup, or public discussion group, known as "alt.religion.scientology." Erlich's postings are made through a bulletin board service maintained by Klemesrud, who accesses the Internet via Netcom's system, to which Klemesrud is a subscriber, and include both published literary works and unpublished confidential works of L. Ron Hubbard, as listed in Exhibits A and B of the Complaint herein. Klemesrud and Netcom provide the gateway through which Erlich's Internet access is achieved. On or about August 3, 1994, defendant Erlich copied or caused to be copied onto the Internet via the alt.religion.scientology newsgroup an unauthorized copy of 17 pages of the transcript of a confidential lecture, referred to as "Class VIII," that is one of the works containing part of the Advanced Technology. (McShane Dec., 28.) Such copying violated RTC's rights as the exclusive licensee of the copyright materials. On August 22, 1994, plaintiffs' attorney wrote to Erlich informing him that his unauthorized copying of the Class VIII work violated RTC's copyrights and trade secrets rights in the material and demanding that Erlich cease and desist in all such copying. (Small Dec., 5.) On the same date, Erlich responded with a denial that his copying constituted copyright infringement and a assertion of the right to continue his activities on the Internet. (Small Dec., 6, and Exhibit B thereto.) On that same date, Erlich re-copied 17 pages of the Class VIII work onto the alt.religion.scientology newsgroup, along with counsel's August 22 letter, and announced his intention to continue such activities. (Small Dec., 6, and Ex. B thereto.) On August 25, 1994, plaintiffs' counsel again wrote to Erlich, informing him that his position regarding his copying of the confidential work was legally incorrect. (Small Dec., 7.) In his response of August 25, 1994, which Erlich posted on the alt.religion.scientology newsgroup, Erlich again claimed that his copying of the confidential work did not violate the law. (Small Dec., and Ex. D thereto.) On August 28 and 29, 1994, and September 2, 14, 22, 26, 27, and 28, 1994, Erlich copied or caused to be copied onto the alt.religion.scientology newsgroup substantial portions of the additional copyrighted works listed in Exhibit A to the Complaint, including the copyright notices on certain of the works and consisting of a total of 16 pages of copyrighted materials. (Pisani Dec., 6a-6j.) On or about September 8, 1994, he copied onto the alt.religion.scientology newsgroup an unauthorized copy of another confidential work known as "NOTs Series 24." (McShane Dec., 31.) After the exchanges between plaintiffs' counsel and Erlich in September, it appeared that Erlich had acquiesced to plaintiffs' demands and had ceased his infringing actions. Then, on or about December 24, 1994, Erlich reposted, through Klemesrud's and Netcom's systems, the following confidential works: two pages of OT 1, 12 pages of OT 2, and the entire 2 pages of NOTs Series 36. (McShane Dec. 33.) And on or about December 29, 1994, Erlich posted the following additional confidential works onto the Internet via Klemesrud's and Netcom's systems: three pages of OT 1, 42 pages of OT 2, a few of which were duplicates of each other, and oneparagraph of NOTs Series 34. Erlich also informed plaintiffs' attorney that he was "exercising [sic] his rights as a citizen of the United States." (Kobrin Dec., Ex. A.) On December 29, 1994, plaintiffs' counsel gave notice to Netcom via its Manager of Computer Operations regarding Erlich's unauthorized postings through Netcom and requested that Netcom take whatever measures necessary to suspend access to its system for Erlich's unlawful postings. Netcom did not take any such measures. On December 30, 1994, plaintiff RTC, through its counsel, notified Klemesrud that his system was being used for unlawful postings of RTC's copyrighted and trade secret materials, requesting that he take action to eliminate the unlawful postings, and informing him that failure to do so would be deem contributory infringement. (Kobrin Dec., 4 and Ex. C.) On December 31, 1994, Klemesrud responded to RTC's counsel, refuse to eliminate Erlich's Internet access. (Kobrin Dec., 5 and Ex D.) On January 2, 1995, Erlich sent a message to Klemesrud via "e-mail" admitting that Erlich was reposting the materials sent to him on the Internet and that it was his choice to make. He further stated that "No local government or court in the US ha the power to tell me otherwise." (Kobrin Dec., 7 and Ex.F.) During the first several days of January, counsel for plaintiffs communicated again with representatives of Netcom regarding the need to take action to prevent these postings from going to the Internet via its system. They refused to take any action to stop such postings. (Kobrin Dec., 8 and Ex. G.) A since that time, Erlich's postings of plaintiffs' copyrighted trade secret materials have continued. (McShane Dec., 37-38.) In summary, defendant Erlich has resumed, and continues to engage in, unauthorized copying and publication of the works in violation of plaintiffs' copyrights and trade secrets rights. He is obviously in possession of hard copies of the works as the sources of the unauthorized copies which he is creating on the Internet. All copies which defendant Erlich possesses of the confidential works and of any other Advanced Technology materials are unauthorized. No authorized copies of the Advanced Technology materials ever have been distributed outside the advanced Churches of Scientology which are licensed by RTC to receive such Advanced Technology materials under confidentiality agreements and to deliver the services to which the Advanced Technology relates. (McShane Dec., 55.) A theft of the NOTs Series materials from a Church of Scientology in Denmark occurred in 1983. Testimony in a lawsuit against those involved in the theft shows that Erlich was in communication with the defendants in that case during the time period surrounding the theft. (McShane Dec., 22.) C. Absent A Restraining Order, There Is A Strong Likelihood That Defendants Will Continue To Make And Publish Unauthorized Copies Of The Copyrighted Materials Erlich has shown his total disregard for plaintiffs' rights, and also has shown contempt for the power of the court in his statement that: "No local government or court in the U.S. has the power to tell me otherwise." This shows that defendant Erlich will continue his infringing conduct unless effectively restrained by this Court. The failure of Klemesrud and Netcom to prevent Erlich's access to Internet with infringing copying is an essential component of the continuing infringement, and they also should be restrained by this Court to halt the ongoing conduct. III. PLAINTIFF'S COPYRIGHTS UNDER FEDERAL LAW Only two elements must be proven in a copyright infringement action: ownership of a valid copyright and copying of the copyrighted work. Data East USA, Inc. v. Epyx. Inc., 862 F.2d 204, 206 (9th Cir. 1988); Baxter v. MCA, Inc., 812 F.2d 421, 423 (9th Cir. 1987), cert. denied, 484 U.S. 954, 108 S.Ct. 346 (1987); M. Nimmer, 3 Nimmer on Copyright 13.01. Title 17 U.S.C. 201(d) provides that "The owner of any particular exclusive right is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner by this title." Plaintiffs are exclusive licensees and therefore are entitled to the same remedies and protections as the original holders of the copyrights. Hearst Corp. v. Stark, 639 F.Supp. 970, 973 (N.D.Cal. 1986); M. Nimmer, 3 Nimmer on Copyright, 13.01[A]. The literary works in question have been duly registered pursuant to the Copyright Act (McShane Dec., 41; Pisani Dec., 6a-6j). Plaintiffs thereby have secured and perfected their exclusive rights and privileges in and to those copyrights. Thus, plaintiffs, as the exclusive licensees of the copyrights, may bring this action for copyright infringement pursuant to 17 U.S.C. 501(b). That defendants "copied" the copyrighted works is beyond doubt; defendants duplicated all or substantial portions of numerous works onto a newsgroup on an international computer network and thereby published and made them potentially accessible to millions of Internet subscribers who could become additional copiers. The conduct of defendant Erlich is wholesale and willful copying of copyrighted materials subject to the special remedies of 17 U.S.C. 504(c)(2), and the conduct of defendants Klemesrud and Netcom constitutes either direct or contributory copyright infringement through their providing Erlich the facilities through which unlawful copying may occur and their additional publication of such copies. See Sega Enterprises Ltd. v. Maphia, 1994 WL 132215, 1322 (N.D.Cal. March 26, 1994). By continuing to make infringing copies of literary works for which United States copyright protection exists, defendants have engaged in undeniable infringement of plaintiffs rights as exclusive licensees of the copyrights, in violation of the Copyright Act, 17 U.S.C. 101, et seq. IV. PLAINTIFFS ARE ENTITLED TO A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION ON ALL CAUSES OF ACTION The Copyright Act provides that injunctive relief is an appropriate remedy for the infringement of a copyright: Any court having jurisdiction of a civil action arising under this title may . . . grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright. 17 U.S.C. 502(a). In the Ninth Circuit, a party seeking preliminary injunctive relief must show: "(1) a likelihood of success on the merits and the possibility of irreparable injury or (2) the existence of serious questions going to the merits and the balance of hardships tipping in its [the copyright owner's] favor." Apple Computer, Inc. v. Formula Int'l. Inc., 725 F.2d 521, 523 (9th Cir. 1984); Beltran v. Myers, 677 F.2d 1317, 1320 (9th Cir. 1982); Aleknagik Natives, Ltd, v. Andrus, 648 F.2d 496, 502 (9th Cir. 1980). The two standards actually are not separate tests but are the "outer reaches" of a single continuum such that the greater the balance of hardships tips in favor of the moving party, the less likelihood of success on the merits need be shown. Apple Computer, Inc. v. Formula Int'l. Inc., 562 F.Supp. 775, 783 (C.D. Cal. 1983) aff'd 725 F.2d 521 (9th Cir. 1984); Los Angeles Memorial Coliseum v. NFL, 634 F.2d 1197, 1201 (9th Cir. 1980). Rule 65 of the Federal Rules of Civil Procedure, "by its very terms allows for the issuance of an ex parte temporary restraining order when (1) the failure to issue it would result in 'immediate and irreparable injury, loss, or damage'and (2) the applicant sufficiently demonstrates the reason that notice should not be required."' Matter of Vuitton et Fils S.A., 606 F.2d 1, 4 (2nd Cir. 1979). A. Plaintiffs Have Established A Likelihood Of Success On The Merits Of Each Cause of Action In the instant case, ownership of the copyrighted works is clearly established. The certificates of registration provide prima facie proof of validity and ownership of the copyrights. 17 U.S.C. 410(c); Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1019 (9th Cir. 1985), cert. denied, 474 U.S. 1059, 106 S.Ct. 802 (1985); National Theme Productions, Inc. v. Jerry B. Beck, Inc., 696 F.Supp. 1348, 1352 (S.D. Cal. 1988. Plaintiffs, as exclusive licensees, are entitled "to all of the protection and remedies accorded the copyright owner by this title." 17 U.S.C. 201(d). Thus, plaintiffs are likely to prevail at trial. B. Plaintiffs Will be Irreparably Injured If Defendant Is Not Preliminary Enjoined As a general rule, if the holder of the copyright establishes a probability of success on the merits, a court will presume irreparable harm. Apple Computer, supra, 725 F.2d at 525. ("A showing of a reasonable likelihood of success on the merits in a copyright infringement claim raises a presumption of irreparable harm."); Wainwright Sec. v. Wall Street Transcript Corp., 558 F.2d 91, 94 (2nd Cir. 1977), cert. den., 434 U.S. 1014, 98 S.Ct. 730 (1978) ("[I]f probable success -- a prima facie case of copyright infringement -- can be shown, the allegations of irreparable injury need not be very detailed, because such injury can normally be presumed when a copyright is infringed."). In addition, the difficulty of measuring the extent of injury to plaintiffs through Internet publication is justification itself for granting a temporary restraining order, since any remedy at law would be inadequate. U-Haul International, Inc. v. Jartran, Inc., 522 F.Supp. 1238, 1255 (D.Ariz. 1981), aff'd, 681 F.2d 1159 (9th Cir. 1982). In U-Haul, a case under the Lanham Act involving false and deceptive advertising, the court found irreparable injury without any proof of actual injury. The Court noted: [I)njury sometimes occurs whose measure is uncertain and a threat of injury may be quite real even though the measure ofthreatened injury defies calculation. . . . Indeed, one reason for issuing an injunction may be that damages, being immeasurable, will not provide a remedy at law. Id. at 1255-56 (quoting Treasure Valley Potato Bargaining Asson v. Ore-Ida Foods, Inc., 497 F.2d 203, 218 (9th Cir. 1974), cert. denied, 419 U.S. 999, 95 S.Ct. 314 (1974)) (emphasis added). Here, the danger of irreparable injury is even greater than in the usual case, because defendants are copying not only published works available for purchase, but also unpublished works. Furthermore, the unauthorized publication of the works is over an international network of computer networks which potentially exposes the infringements to 25 million users, with the attendant risk that the works could be copied and recopied virtually without limit. Plaintiffs have no control over copy by defendants and others, and that lack of control constitutes irreparable injury sufficient to support the issuance of a preliminary injunction. C. The Equities Weigh Heavily In Favor Of Granting The Temporary Restraining Order And Preliminary Injunction In this case, all equitable considerations lie on the side of plaintiffs and weigh heavily in favor of granting a temporary restraining order and preliminary injunction. If relief is denied, plaintiffs will continue to suffer inevitable and irreparable harm, both under the law and in fact, as a result o the violation of plaintiffs' exclusive rights to publication o the copyrighted works in question, including the unpublished confidential works which are never published or sold to anyone Even if defendants could show any harm as a result of the requested injunctive relief, such harm should not enter into the Court's consideration. Where a defendant acts with full knowledge of the plaintiff's rights and with an understanding of the consequences which might ensue, there shall be no such balancing of equities. Morgan v. Veach, 59 Cal.App.2d 682, 690, 139 P.2nd 976, 980 (1943); People ex rel. Younger v. F.E. Crites, Inc., 51 Cal.App.3d 961, 968, 124 Cal.Rptr. 664, 668 (1975). Despite their protestations to the contrary, defendants obviously acted with full knowledge of the copyrighted nature of the literary works, even copying the copyright notices on those works in many instances. Their copying is clearly intentional and without justification. D. Defendants Should Not Be Given Notice Prior To Issuance Of The Temporary Restraining Order In view of the malicious and intentional nature of Erlich's actions, and his contempt for the power of the courts, every possible measure should be used to prevent him from engaging in further destructive copying and publication of plaintiffs' protected works. Accordingly, this Court should grant the temporary relief sought without notice to the defendants, and also should grant the seizure order sought herein. Further, if Erlich is permitted to dispose of or hide his unauthorized copies after he learns of this litigation, but before he is enjoined from doing so, the damage to plaintiffs will continue, and this litigation could be fruitless. (McShane Dec., 56-57.) Plaintiffs will be put to greatly increased expense to track down the additional unauthorized copies in the hands of individuals who may have copied them from the Internet into different archives and data bases across the globe. There will be a great likelihood thatplaintiffs will be unsuccessful in locating those infringing copies. The law does not require notice under these circumstances. To the contrary, a temporary restraining order should issue ex part. Matter of Vuitton et Fils S.A., 606 F.2d 1, 3 (2nd Cir. 1979). V. PLAINTIFFS ARE ENTITLED TO AN ORDER IMPOUNDING THE INFRINGING MATERIALS AND THE ARTICLES BY WHICH UNAUTHORIZED COPIES HAVE BEEN REPRODUCED A. Impoundment May Be Ordered In An Action For Copyright Infringement To Prevent Ongoing Infringement 17 U.S.C. 503 provides in pertinent part: (a) At any time while an action under this title is pending, the court may order the impounding, on such terms as it may deem reasonable, of all copies . . . claimed to have been made or used in violation of the copyright owner's exclusive rights, and of all plates, molds, matrices, masters, tapes, film negatives, or other articles by means of which such copies . . . may be reproduced. Section 503 became effective January 1, 1978. Its predecessor, former 17 U.S.C. 101, contained a similar provision providing for impoundment "during the pendency of the action upon such terms and conditions as the court may prescribe. . . ." By demonstrating the need for ex parte injunctive relief to restrain further infringement of plaintiffs' exclusive rights regarding the copyrighted works, plaintiffs have met the standard for granting ex parte relief. See, Duchess Music Corporation v. Stern, 458 F.2d 1305, 1307 (9th Cir. 1972), cert. denied. 409 U.S. 847 (1972) (plaintiffs obtained ex parte order to show cause, a temporary restraining order and a writ of seizure upon showing that defendants were making cassette tape recordings of phonograph records legitimately issued by plaintiffs from copyrighted compositions). The procedures for impounding articles by court-ordered deposit or seizure by the United States Marshal during the pendency of an action have been set by the United States Supreme Court in its Rules of Practice for Copyright Cases. The procedure is a summary one. As the Ninth Circuit stated in Duchess Music Corporation v. Stern, supra, 458 F.2d at 1308: [T]he statutory mandate is clear. "All articles alleged to infringe the copyright" are to be impounded, and "all infringing copies . . . " are to be destroyed. Neither the statute nor the Supreme Court rules give the District Court any discretion to determine what to impound or what to destroy. The process Congress granted the aggrieved copyright proprietor is a summary one. . . . It is to impound everything the plaintiff alleges infringes his copyright. Rules 9 and 10 then provide that the defendant may apply to the court for return of the seized articles if he shows that the articles seized are not infringing copies, records, plates, molds, matrices, or other means for making the copies alleged to infringe the copyright.' Rule 9 . . If the articles seized are infringing copies or infringing means, the District Court has no discretion to return them. (Emphasis in the original.) See also, Jondora Music Publishing Company v. Melody Recording, Inc., 362 F.Supp. 494, 499 (D.N.J. 1973), vacated on other grounds, 506 F.2d 392 (3rd Cir. 1974), cert. denied, 421 U.S. 1012, 95 S.Ct. 2417 (1975). The Second Circuit has re-affirmed the propriety of impoundment, and even seizure by the United States Marshals, of articles during the pendency of a copyright action. Warner Bros., Inc. v. Dae-Rim Trading.Inc., 877 F.2d 1120, 1123-26 (2nd Cir. 1989). In their separate Application for Writ of Seizure, plaintiffs are requesting that such a writ issue only against defendant Erlich as a result of his repeated and willful copying of Advanced Technology materials and other materials. With respect to the remaining defendants, plaintiffs do not request an ex parte seizure order permitting the United States Marshal to seize the infringing materials and the instrumentalities by which they have been and may be reproduced. Instead, plaintiffs seek only an order of impoundment requiring defendants Klemesrud and Netcom to turn over within 24 hours, by their own hands, all unauthorized copies in their possession. Once they have done s they are free to move the Court to release any materials which they believe have been wrongfully subjected to impoundment, although there should be none in light of the narrowly drawn impoundment request. B. An Impoundment Order Should Issue In This Case The accompanying declarations demonstrate the following facts: 1. BPI has an exclusive license to print, publish and sell the published literary works. (Pisani Dec., 3.) RTC has an exclusive license under the copyrights in the unpublished confidential works containing the Advanced Technology. (McShane Dec., 4, 24.) 2. Defendants have copied and published electronically, and are continuing to copy and publish, a large number of copyrighted works without authorization to do so, in violation of plaintiffs' copyrights in the works. (McShane Dec., 28-39, 4348; Pisani Dec., 6.) 3. Because of defendants' unauthorized copying and publication of the copyrighted works, BPI's and RTC's rights under the copyright laws are being and have been violated by defendants. Erlich's possession of copies of the works which he has used, and continues to use, to make and publish unauthorized copies, as well as those unauthorized copies which already have been made, increases both the actual and potential harm suffered by plaintiffs. Therefore, to the extent that these copies are not subject to a writ of seizure, they should be subject to the requested impoundment order. Plaintiffs' proposed Impoundment Order is narrowly drawn and specifies the materials to be turned over. VI. CONCLUSION As shown by the foregoing, Erlich has commenced and is continuing an insidious campaign of copyright infringement and trade secrets misappropriation in violation of federal and state law by reproducing and publishing copyrighted materials over an international medium of gargantuan distribution capabilities, and has been enabled in this respect by Klemesrud and Netcom. Unless enjoined, defendants are likely to continue to copy and publish plaintiffs' copyrighted works in violation of the exclusive rights of plaintiffs in these works. Plaintiffs have established clear copyright infringement and irreparable harm which justify the requested relief. The law prohibits the activities engaged in by defendants, mandates the issuance of the requested temporary restraining order and preliminary injunction, and justifies the Order of Impoundment permitted by 17 U.S.C. 503. Dated: February 7, 1995 Respectfully submitted, WILSON, RYAN & CAMPILONGO By: Andrew H. Wilson Thomas M. Small Janet Kobrin SMALL, LARKIN & KIDD� Helena K. Kobrin Attorneys for Plaintiffs RELIGIOUS TECHNOLOGY CENTER and BRIDGE PUBLICATIONS, INC.