I am over 18 years of age and a resident of Chicago, Illinois. I received a Bachelor of Science degree from the College of Engineering at the University of Illinois in 1960 and a Juris Doctor from the University of Illinois College of Law in 1962. I am a member of the Bars of the State of Illinois and the District of Columbia and of various federal district and appellate courts. I am also a member in good standing of the United States Supreme Court. I am a shareholder in the intellectual property law firm of William Brinks Hofer Gilson & Lione in Chicago, Illinois. I have practiced with that firm for over 25 years.
Throughout my 33 years in practice I have been active in related bar and professional associations. I am Past President of the Licensing Executives Society (USA & Canada). I have also held the position of Chairman of the Patent, Trademark & Copyright Council of the Illinois Bar Association, and Chairman of the Intellectual Property Litigation Committee of the Litigation Section of the American Bar Association. I am currently Vice President of the Intellectual Property Law Association of Chicago and a member in the American Law Institute.
I have had a strong interest in legal writing and teaching in the intellectual property law field. I have authored a three-volume treatise published by Clark Boardman Callahan Company entitled Trade Secrets Law, which has been published since 1982. I am an adjunct professor of patent law at the University of Illinois of Champaign-Urbana, Illinois. I have also been on the faculty as an adjunct professor of trade secrets law for the Masters level program at The John Marshall Law School in Chicago, Illinois.
In January of this year, the Restatement 3d of Unfair Competition was published by the Reporters of the American Law Institute (ALI). It was the first revision of that Restatement in 51 years. I was invited to assist and consult with the Reporters of ALI regarding the trade secrets section of the Restatement.
I am one of the attorneys that represents the Church of Scientology in intellectual property matters. I was retained on behalf of Religious Technology Center (RTC), the Scientology Church which owns its confidential, unpublished religious scriptures (the Advanced Technology), to focus on the issue of the protection of the Advanced Technology under trade secrets law. I was retained for this purpose because RTC takes the protection of its confidential scriptures very seriously, and chose me as its counsel in light of my treatise on the subject. The “Reporters' Note” to the trade secrets section (Section 39) of the Restatement 3d of Unfair Competition refers to my treatise as one of the two “principal treatises on the law of trade secrets.” Moreover, I engage in a continuous effort to review trade secrets law and update my treatise twice per year. I am, thus, thoroughly familiar with the trade secrets laws of the states of California and Virginia, as well as other jurisdictions and decisions which articulate relevant legal principles.
It is my opinion, based on years of study of trade secrets law in every jurisdiction in the United States, the Advanced Technology scriptures of Scientology qualify for trade secret protection under applicable law. In the first instance, protection of these religious scriptures would further two of the fundamental public policies underlying trade secrets law. One key underpinning for the enactment of trade secrets laws is the public policy of encouraging morality in dealings between people and entities and discouraging theft of confidential information belonging to someone else. Protecting the Advanced Technology scriptures under trade secrets law encourages morality in the relationships between people and preserves and protects the most fundamental rights of privacy. The Supreme Court has recognized these public policy foundations and rights under trade secrets law in Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 487 (1973). The need to carry out these policies of encouraging morality and protecting rights to privacy is exceptionally strong when the trade secrets, as here, involve unique religious scriptures which form the core beliefs of a religion and when it is a fundamental premise of those religious beliefs that the Advanced Technology scriptures must be kept confidential and only divulged to those who have reached the requisite prior level of spiritual enlightenment and who have sworn to uphold the confidentiality requirements.
My conclusions are also mirrored in the declarations of Professor Bryan Ronald Wilson, Reader Emeritus in Sociology at the University of Oxford; Professor Lonnie D. Kliever, Chairperson of the Department of Religious Studies at the Southern Methodist University; and Dr. Frank Flinn, adjunct professor in religious studies at Washington University in St. Louis, Missouri
The foregoing declarations of religious scholars establish several important points which I consider highly relevant to the question of trade secrets protection of the Advanced Technology, which I will briefly summarize here. First, the Church of Scientology constitutes a bonafide new religious movement which manifests the characteristics of other discernible religions around the world (Flinn Decl. Pages 7-9). Furthermore, the beliefs of Scientologists, particularly the “hidden” or “upper OT level” teachings (the Advanced Technology) comprise a unique compilation of teachings, ideas and knowledge based on the creative thoughts of L. Ron Hubbard (Kliever Decl. Pages 7-10).
The religious scholars also noted that secret and confidential teachings of religious scriptures, which are disclosed only to qualified parishioners at certain levels after following certain time sequences and procedures, is a common trait for religions (Flinn Decl. Page 9). The secrecy and selected knowledge and use of the religious scriptures comprising the Advanced Technology of the Church of Scientology is therefore not unique in religious doctrine (Flinn Decl. Pages 10-18). Such beliefs are the esoteric elements of a religious tradition composed of knowledge and techniques that are restricted to an elite group of insiders of a religion (Kliever Decl. Page 6, et seq.).
The confidentiality restrictions and control over the exposure and use of the Advanced Technology is an integral part of the religious beliefs of Scientologists (Kliever Decl. Pages 11- 12). Similar confidentiality beliefs and practices are part of many established religions (Kliever Aff. Sec. III). More than “secrecy for secrecy's sake” is at work. Scientology, as well as other religions, involves a progressive mastery of information at different and deepening levels of spiritual experience and understanding. Secrecy is thus an integral part of the empowering ritual (Kliever Aff. Pages 23-24).
For Scientologists, the time and order in which secret information is mastered is a religious tenet. Scientologists consider that the progressive auditing and training of these beliefs deepen the individual's spiritual awareness and ability. As stated by Professor Kliever: “The Church of Scientology is fully entitled to maintain the strict confidentiality of its upper levels of auditing and training materials as a matter of religious duty and legal right” (Kliever Decl. Page 24).
I have never seen a concern for confidentiality of materials which is greater than that of the Church of Scientology and its adherents, nor have I ever worked with any group which was willing to put more resources into the protection of its secrets. Unlike many trade secrets which become obsolete as technology marches on, the Advanced Technology information, per the pronouncements of its creator, L. Ron Hubbard, is to remain secret in perpetuity because of religious concerns.
The Advanced Technology also meets the other criteria for trade secret protection. It already has been granted trade secret protection in Bridge Publications, Inc. v. Vien, 827 F. Supp. 629, 633 (S.D. Cal. 1993). Vien followed the 9th Circuit decision in Religious Technology Center v. Scott, 869 F. 2d 1306, 1309-10 (9th Cir. 1989), which indicated that the Advanced Technology would qualify for trade secret protection if it has sufficient economic value for the Church, in addition to the other characteristics required to qualify as a trade secret under the law. In Vien, the court found that the Church certainly did derive economic value from the Advanced Technology. Based upon my knowledge of trade secrets law, no other conclusion is justified. RTC's president, Warren McShane, has submitted declarations showing that RTC receives licensing fees from the advanced level Scientology churches which are licensed to deliver the services which utilize these materials. Those licensees receive donations in connection with the delivery of those services. Therefore, RTC and its licensees all derive economic value from the Advanced Technology.
I also understand from Mr. McShane's Third Declaration that in the past, disaffected former Scientologists have opened competing groups to deliver services using stolen copies of these materials, and in some instances have derived substantial income as a result of their use of stolen copies of the Advanced Technology materials, and that RTC has taken aggressive legal measures to put a stop to such activity. With these two factors combined — the income RTC and other Churches derive from these materials and the fact that actual competing groups have been set up — there is no doubt whatsoever that the economic advantage prong of trade secret law, as it exists in Virginia and in any other state, is satisfied. No greater showing is required by trade secrets statutes or case law. The past splinter activities show that there are clearly other potential sources of harm, and the Vien and RTC v. Scott cases show that the religious nature of the works does not lessen the fact of trade secret protection or change that the other criteria have been met. The splinter activities also demonstrate that there is an outside “market” for these writings.
With respect to the confidentiality factor, I also conclude that RTC meets that requirement of the trade secrets law. My opinion is based on years of study of trade secrets law and a strong familiarity with the current state of that law. Relative, rather than absolute, secrecy is all that is required by the law. Restatement (Third) of Unfair Competition, Sec. 39 Comment (f). Partial or qualified secrecy is sufficient. Jostens, Inc. v. National Computer Systems, Inc., 214 U.S.P.Q. 918, 924 (Minn. S. Ct. 1982), and Pressed Steel Car Co. v. Standard Steel Co., 210 Pa. 464, 472, 60 A. 4,8 (1904). Even widespread distribution of a brochure containing trade secrets was distributed — to thousands of people — has been found not to wipe out trade secret status. Data General Corp. v. Digital Computer Controls, Inc., 357 A.2d 105 (Del. Ch. 1975).
The law also requires that the trade secrets owner take measures that are reasonable under the circumstances to protect its trade secrets. National Legal Research Group v. Latham, 1993 WL 169789 (W.D. Va. 1993). Only reasonable efforts, not all conceivable efforts, are required. Surgidev Corp. v. ETI, Inc., 4 U.S.P.Q.2d 1090, 1092 (8th Cir. 1987). The law does not require the owner of a trade secret to guard against unanticipated, undetectable or unpreventable methods of misappropriation. E.I. du Pont de Nemours & Co. v. Christopher, 431 F.2d 1012, 1016-17 (5th Cir. 1970); Aries Information Systems, Inc. v. Pacific Management Corp., 226 U.S.P.Q. 440, 442 (Minn. Ct. App. 1985); and Technicon Data Systems Corp. v. Curtiss 1000, Inc., 224 U.S.P.Q. 228, 292 (Del. Ch. St. 1984).
Under trade secrets law, the Advanced Technology has the requisite relative secrecy and has been subject to extraordinary efforts to maintain that secrecy. No proof exists in the record of Civil Action No. 95-1107-A that any significant portion, let alone the entire body or compilation of Advanced Technology, has become sufficiently disseminated on the Internet or elsewhere to lose trade secret protection. The only exhibit submitted on this point establishes the opposite, namely that the Church and its counsel have taken measures with access providers to ensure that any portions of the Advanced Technology materials which surface on the Internet are removed or blocked from access rapidly. In each instance where posting on the Internet was attempted, the Church of Scientology was effective in having the posting removed. The Church in fact has been required to expend substantial efforts in constantly monitoring the Internet to prevent any substantial dissemination of its religious secrets. Despite allegations to the contrary, I am aware of no evidence that would defeat the necessary relative secrecy requirements for establishing that the Advanced Technology is a protectable trade secret.
The Church also took all reasonable and necessary steps to prevent the abuse of the court proceedings by disclosure of the Advanced Technology in the court files in Church of Scientology v. Fishman. The religious material improperly filed with the court had no relevancy to any matter before the court, and played no part in any relevant judicial decision. Protective orders were obtained, and motions to seal the record were thereafter sought. Appeals were made to the Ninth Circuit, and the file in Fishman was under consideration for sealing at all relevant times. The record in Fishman was sealed the day after the Washington Post obtained copies of the Advanced Technology, but before any articles were published by the Washington Post. In addition, before any records were obtained from the court, the Washington Post was clearly put on notice, by correspondence to the Washington Post from other attorneys for RTC, that the information was highly confidential trade secret material and was copyrighted as an unpublished work. I am also aware that representatives of the Post had several conversations with Church representatives and with attorneys for RTC informing the Post of the copyrighted and trade secret nature of the materials and the law which prohibited the Post's use or disclosure of those materials. My own letter to the Post of August 17, 1995 again put the Post on notice of these facts before its publication of excerpts from the materials.
The material was therefore obtained and published by the Post after it knew that the information was proprietary, confidential and copyrighted. The law is clear that a party cannot claim innocence in misappropriating trade secrets when it has used or disclosed them after being warned of their status as trade secrets. I must therefore conclude that the Post's acquisition of a copy of these materials and its publication of excerpts from them in spite of the extensive warnings it had received was clearly a calculated effort to violate the rights of the trade secrets owner, and not the result of a “legitimate search,” that RTC is likely to prevail on the merits of this point, and that the fact that the Post physically obtained the materials one day before the file was sealed does not vitiate the impropriety of its actions.
The law protecting trade secrets is equitable in nature. The equitable principles involved do not require misappropriation to involve all relevant trade secret material. The misappropriation of a single trade secret is recognized as improper. FMC Corp. v. Varco International, Inc., 677 F.2d 500, 503 (5th Cir. 1982). Fair use is not a part of trade secrets law doctrine. The law also holds that a party should not be able to benefit from his or her own wrong by misappropriating trade secrets and then attempting to destroy any rights of the owner, by distribution or publication. In my opinion, these equitable principles are violated if valuable trade secrets embodied in the Advanced Technology can be destroyed by parties who know or have reason to know that the information was stolen, and who nevertheless proceeded to attempt to improperly acquire, use and disseminate the information.
Melvin F. Jager
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September, 1995