Article 62488 of alt.religion.scientology: Path: news.cybercom.net!uunet!in1.uu.net!newsfeed.pitt.edu!bb3.andrew.cmu.edu!andrew.cmu.edu!wb24+ From: William Bardwell Newsgroups: alt.religion.scientology Subject: CO FACTNet 1st verified complaint (by plaintiffs) Date: Sat, 6 Jan 1996 01:22:04 -0500 Organization: Computer Science Department, Carnegie Mellon, Pittsburgh, PA Lines: 1030 Message-ID: NNTP-Posting-Host: po7.andrew.cmu.edu Here is the current(I think) update of the complaint by the plaintiffs...(in the Colorado FACTNet vs. Scientology (RTC/BPI) case) (will post the latest defendants response and the response to that response from the plaintiffs shortly...) (OCRed, but fairly clean, note: the section and double section symbols have been replaced with the text "section" and "sections" respectivly) ---- [Filed October 2, 1995] IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 95-K-2143 RELIGIOUS TECHNOLOGY CENTER, a California non-profit corporation; and BRIDGE PUBLICATIONS, INC. , a California non-profit corporation, Plaintiffs, v. F.A.C.T.NET, INC., a Colorado corporation; LAWRENCE WOLLERSHEIM, an individual; and ROBERT PENNY, an individual, Defendants. ------------------------------------------------------------------- FIRST AMENDED VERIFIED COMPLAINT FOR INJUNCTIVE RELIEF AND DAMAGES FOR: (1) COPYRIGHT INFRINGEMENT; AND (2) TRADE SECRETS MISAPPROPRIATION (C.R.S. sections 7-74-102 et seq.) ------------------------------------------------------------------- Plaintiff Religious Technology Center ("RTC") and Bridge Publications, Inc. ("BPI") alleges as follows: INTRODUCTORY AVERMENTS 1. Plaintiff RTC is the owner of certain unpublished and confidential materials and the exclusive licensee under the copyrights in those materials. The materials ("Advanced Technology materials") contain fundamental religious and philosophical teachings of the founder of the Scientology religion, L. Ron Hubbard. These materials are available only to selected and qualified church parishioners on a confidential basis. They are of immense value. RTC has regularly taken all required steps to duly 1 protect those materials under the Copyright Act and applicable Colorado trade secrets laws. 2. Plaintiff BPI is the exclusive licensee under the copyrights in certain published materials which also contain religious and philosophical teachings of Mr. Hubbard which form a fundamental part of the Scientology religion (the "Published Literary Works"). BPI and the owner of the copyrights have regularly taken all required steps to duly protect those materials under the Copyright Act. 3. This action is filed to protect RTC's and BPI's rights from further encroachment by these Defendants; to halt Defendants' public, direct and imminent threat of unauthorized further copying, disclosure and publication of copyrighted and trade secret materials; and to remedy recent violations of plaintiffs' rights by these Defendants. 4. Defendants F.A.C.T.Net, Inc. ("FACTNET"), Lawrence Wollersheim ("Wollersheim") and Robert Penny ("Penny") (collectively, "Defendants") have recently engaged and expressed a present intent to further engage in extensive, willful, and spiteful copyright infringement and trade secret misappropriation, targeting unpublished, confidential, copyrighted religious materials belonging to RTC and published religious materials in which BPI holds the exclusive licenses. They are motivated by an abiding disrespect for, and an apparently implacable desire to harm, the Scientology religion and its parishioners. 2 5. Recent activities on the part of Defendants make fast action by this Court imperative to protect RTC's and BPI's rights. On August 1-3, 1995, an individual, Arnaldo Lerma, posted some of RTC's Advanced Technology materials to the international computer network known as the Internet without the authorization or consent of RTC, in violation of RTC's intellectual property rights. On August 11, 1995, RTC obtained a Temporary Restraining Order and Writ of Seizure against Lerma from the United States District Court in Alexandria, Virginia. The seizure was executed on August 12, 1995 by United States Marshals and unauthorized copies of copyrighted and trade secret materials were seized. On August 15, 1995, RTC first learned that Lerma was acting as an agent of FACTNET, and in collusion with, and with the support, concurrence, and ratification of, FACTNET's officers and directors, which include Defendants Wollersheim and Penny. On that same date, RTC first learned FACTNET had downloaded the same infringing materials to an Internet site, thereby threatening potential access and copying by others, and offered the same materials for viewing and sale in breach of confidentiality agreements which obligated Wollersheim and Penny to maintain the confidentiality of the very materials whose copyrights they have infringed and the trade secrets which they have misappropriated. 6. On August 21, 1995, the original complaint in this action was filed. The Honorable Lewis Babcock issued a Temporary Restraining Order and Order of Impoundment and ordered the Clerk to issue a Writ of Seizure to be executed at the residences of - 3 - defendants Wollersheim and Penny with respect to any materials which infringed copyrights of L. Ron Hubbard, and computer equipment and media which were the means of engaging in such infringements. On August 22, 1995, the Writ of Seizure was executed at the two residences by the United States Marshals, assisted by attorneys for and representatives of RTC. 7. In the course of the seizures at the Wollersheim and Penny residences, computer equipment, floppy disks, computer compact disks, computer tapes, and hard copy documents were seized. Review of these materials revealed over 6,000 infringements, consisting of copies of over 1,800 hard copy pages, or the computer equivalent, of RTC's Advanced Technology materials, and over 22,000 pages of BPI's published Literary Works, in hard copy or the equivalent in electronic media storage. Of those copies, thousands of pages were scanned onto electronic media storage. 8. FACTNET has also made an unauthorized disclosure of the contents of at least one portion of the Advanced Technology materials to a newspaper reporter in Golden, Colorado, undoubtedly for the purpose of facilitating further unauthorized distribution, copying and dissemination through the newspaper. Through its director, Lerma, FACTNET has also made a disclosure of portions of the Advanced Technology materials to the Washington Post. 9. These violations of RTC's and BPI's intellectual property rights are part of a deliberate scheme of harassment undertaken by Defendants and others who fill the Internet with, and otherwise promulgate, propaganda and religious intolerance, and now - 4 - have moved from the equivalent of computer hate graffiti to violations of intellectual property rights. They reflect a profound enmity toward Scientology and an equally profound disrespect for intellectual property laws. The campaign of electronic hate mongering, copyright infringement, and trade secret misappropriation is personified by these Defendants, who disseminate documents f rom a collection of home-based computer files and hard copy documents for the avowed purpose of trying to discredit the Scientology religion. 10. Hate and religious prejudice to one side, these Defendants have compiled a massive volume of computer data and hard copy documents with the intention of violating and facilitating the violation of RTC's intellectual property rights, and promise to continue to do so and to assist and encourage and facilitate others to do so. Defendants have even stated they will do everything in their power to accumulate, copy, disseminate, and distribute data, in violation of plaintiffs' intellectual property rights, in support of a baseless attempt to damage the Scientology religion by attempting to trigger insupportable and unwarranted government investigations. Those violations have been and will be committed by FACTNET itself and by its officers and directors, Defendants Wollersheim and Penny, and by FACTNET's newly appointed director, Lerma. Wollersheim is also FACTNET's sole employee. 11. Defendants' campaign has been pursued through copyright infringement and trade secret misappropriation on a calculated, systematic basis with the intention to try to destroy - 5 - RTC's trade secrets and copyrights through repeated violations of those rights. These acts have occurred despite their knowledge of Temporary Restraining Orders and seizure orders issued by other courts against FACTNET allies and directors. FACTNET has publicly encouraged and facilitated the wrongful copying and misappropriation of unauthorized copies of RTC's unpublished Advanced Technology and BPI's Literary Works. FACTNET remains able to pursue the campaign against RTC's and BPI's rights despite such judicial actions because these Defendants, Wollersheim, Penny and FACTNET, have not been deterred. 12. These Defendants and their cohort and fellow FACTNET director, Lerma, further harassed RTC and BPI with their open and active support for another computer user whose flagrant intellectual property violations of RTC's rights led to the aforementioned TRO and seizure order in California. Then FACTNET's director Lerma continued this campaign and violated RTC's rights by posting of 63 pages of copyright and trade secret materials to the Internet on August 1, 1995, and again the next day, after spending hour after hour unlawfully scanning them into his computer for such willful infringement and misappropriation. 13. Following Lerma's copyright terrorism and the seizure which resulted, Defendants, like a terrorist organization boasting of their acts, on August 15, 1995 issued their "terrorist manifesto" which: (a) takes credit for Lerma's acts as committed in his official capacity and, within the scope of his authority as a director of FACTNET; (b) identifies materials which FACTNET - 6 - provided to Lerma to forward their mutual unlawful ends; (c) admits that they are in possession of the very documents which were seized and impounded as a result of Lerma's infringement, and that they have stored unauthorized copies of such documents in FACTNET's computer databases and elsewhere in computer accessible locations; and (d) announces their threats to escalate their campaign by calling for "100-1000 times more" infringements like that which Lerma committed for each time Plaintiffs take actions to protect their rights, to achieve "world wide distribution on the Internet" of Plaintiffs' protected documents. Furthermore, Lerma has stated that he received the Advanced Technology materials which he posted from Wollersheim. 14. Based upon the facts set forth in this First Amended Complaint (the "Complaint"), RTC seeks the Court's immediate intercession by way of injunction, seizure and impoundment, together with full legal and equitable remedies at trial. Based upon the same facts, BPI seeks the Court's immediate intercession by way of injunction and an impoundment order, together with full legal and equitable remedies at trial. Absent fast action by this Court, RTC and BPI face irreparable harm at the hands of Defendants who have already shown their lack of respect for intellectual property rights, the court system and court orders. JURISDICTION AND VENUE 15. Subject matter jurisdiction of this action exists pursuant to 28 U.S.C. sections 1331 and 1338(a) and (b) in that this is an action for copyright infringement under 17 U.S.C. section 501 joined - 7 - with a claim for unfair competition through trade secrets misappropriation. In addition, this court has supplemental jurisdiction under 28 U.S.C. section 1367 over the trade secrets misappropriation, as a claim that arises out of the same transactions and occurrences. There is also jurisdiction under 28 U.S.C. section 1332 in that there is a complete diversity of citizenship between the Plaintiffs and the Defendants, and the amount in controversy exceeds $50,000. 16. Venue is proper in this District pursuant to 28 U.S.C. section 1391(b) in that events or omissions giving rise to the claims occurred in this judicial district, Defendants Wollersheim and Penny reside in this district and Defendant FACTNET has its principal place of business in this district. THE PARTIES 17. RTC is, and was at all times relevant herein, a California non-profit religious corporation duly organized and existing under the laws of the State of California with its principal office in the City of Los Angeles, County of Los Angeles, State of California. 18. BPI is, and was at all times relevant herein, a California non-profit religious corporation duly organized and existing under the laws of the State of California, with its principal office in the City of Los Angeles, County of Los Angeles, State of California. 19. Plaintiffs are informed and believe that Defendant FACTNET is a corporation duly organized and existing under the laws - 8 - of the State of Colorado with its principal place of business in Denver, County of Denver State of Colorado. In reality, FACTNET is a home-based computer database operating out of Wollersheim's and Penny's residences. 20. Defendant Wollersheim is a citizen and resident of the City of Boulder, County of Boulder, State of Colorado. 21. Defendant Penny is a citizen and resident of the City of Longmont, County of Boulder, State of Colorado. GENERAL AVERMENTS A. The Copyrighted Works of L. Ron Hubbard 22. L. Ron Hubbard, a United States citizen who died in 1986, was a world-renowned philosopher and the prolific author of numerous original works on applied religious philosophy and spiritual healing technology, including training materials and course manuals of the Scientology religion (hereinafter the "Religion") of which Mr. Hubbard was the founder. Certain of Mr. Hubbard's original written and recorded works have been published and made generally available, while others have not. Among the unpublished works is a body of special works, sometimes referred to as the "Advanced Technology materials," which contains confidential and proprietary information ("the Advanced Technology") constituting trade secrets (hereinafter referred to as the "Unpublished Confidential Works"). 23. A list of the Unpublished Confidential Works that were created by Mr. Hubbard and are relevant to this action is - 9 - attached as Exhibit "A," showing the titles of the works along with the numbers and dates of applicable United States copyright registrations. In addition to the infringing Unpublished Confidential Works known to RTC prior to the filing of the original complaint, this list also includes Advanced Technology Works which were discovered in the possession of Defendants Wollersheim and Penny in the course of searches conducted of the hard copy and electronically stored documents seized from Defendants pursuant to the Writ of Seizure issued by the Court. Copies of the Works are not attached in view of their bulk and confidentiality. 24. A list of the published literary works (hereinafter the "Published Literary Works") that were created by Mr. Hubbard and are relevant to this action is attached hereto as Exhibit "B," showing the titles of the works along with the numbers and dates of the applicable United States copyright registrations. This massive volume of infringements (over 6,100 infringements, totalling over 22,000 pages) was discovered in the course of the searches conducted of the seized materials, pursuant to the Writ of Seizure, for infringements of any works by Mr. Hubbard. Copies of the Published Literary Works are not attached in view of their bulk. 25. Initially, L. Ron Hubbard owned all rights in his literary works, both published and unpublished, and all rights in the Advanced Technology, and granted licenses to others under his rights, including the right to use and license the use of the Advanced Technology, with the obligation to protect the - 10 - confidentiality of the Advanced Technology and the Advanced Technology materials. 26. In 1982, L. Ron Hubbard assigned to Plaintiff RTC his entire right, title and interest (apart from copyrights) in and to the Advanced Technology, including all rights to use and to license the use of the Advanced Technology in the United States. This assignment includes the obligation to protect the confidentiality of the Advanced Technology and enforce the obligation of conf- identiality of all those who have received authorized disclosures of the Advanced Technology. A true and correct copy of this assignment is annexed as Exhibit "C" to this Complaint. 27. Following Mr. Hubbard's death in 1986, ownership of the copyrights in the Published Literary Works and the Unpublished Confidential Works passed to his Estate, which granted to Plaintiff RTC, on September 17, 1987, an exclusive license in the copyrights pertaining to the Unpublished Confidential Works, with the right and obligation to enforce all the copyrights in those works and the right to determine when and whether such a Work should be published. A true and correct copy of this License Agreement is annexed to this complaint as Exhibit "D". 28. In 1991, an exclusive license agreement was entered into (hereinafter "the Literary Agreement") which granted BPI, inter alia, the exclusive right to print, publish and sell the Published Literary Works, and to make and publish compilations and derivative works of and from the Published Literary Works, and to - 11 - enforce all rights in the Published Literary Works. A true and correct copy of the Literary Agreement is attached hereto as Exhibit "E". 29. All of the assets of the Estate of L. Ron Hubbard, including the copyrights pertaining to the Works, were distributed in 1993. The successor in interest to the copyrights affirmed RTC's September 17, 1987 copyright license and BPI's October 1, 1991 copyright license. True and correct copies of these Assignment and Assumption agreements are annexed to this complaint as Exhibits "F" and "G". 30. The Published Literary Works and the Unpublished Copyrighted Works were wholly original with Mr. Hubbard and are copyrightable subject matter under the laws of the United States. Mr. Hubbard and his successors and licensees have complied in all respects with the copyright laws of the United States and secured the exclusive rights in and to the copyrights in the Works. They have received from the Register of Copyrights Certificates of Registration of these copyrights. 31. The Advanced Technology contained in the Unpublished Confidential Works is of immense value to RTC. Plaintiff and its predecessors have taken in the past, and continue to take, extensive efforts to protect and maintain the confidentiality and secrecy of the Advanced Technology. Physical access to the materials has always been limited and carefully monitored and the materials made available only to a limited group of people. The efforts used to maintain the secrecy were always more than - 12 - reasonable under the circumstances and included, but were not limited to, storage in locked cabinets in locked rooms with access permitted only to Scientology parishioners who have met stringent requirements, transport of any portion of the materials only in locked briefcases, security personnel and confidentiality agreements. 32. RTC derives independent economic value, actual and potential, from the Advanced Technology, which is secret and of considerable value. RTC receives from the advanced Churches of Scientology which are licensed by Plaintiff to use the Advanced Technology licensing fees equal to six (6) percent of the income received for delivery of Advanced Technology services. These licensing fees provide substantial financial support for RTC's operations, and account for in the range of 95% of its income. B. Defendants, Violations of Plaintiff's Rights 33. Defendants have been infringing RTC's copyrights in the Unpublished Confidential Works (Exhibit "A") , and the Published Literary Works (Exhibit "B") , by: (a) reproducing each of these works electronically; (b) posting the works on the Internet; (c) loading them into computer databases at sites on the Internet and making them available for potential downloading by others; or (d) selling all or portions of the databases containing plaintiffs' proprietary Works, all without any authorization from Plaintiffs. And in taking such actions with the Unpublished Confidential Works, Defendants Wollersheim and Penny have been breaching their confidentiality agreements. - 13 - 34. Wollersheim is a former Scientologist who was a parishioner between approximately 1969 and 1979. While a parishioner, Wollersheim received Scientology ministerial counselling services, known as "auditing," and received access to certain of the Works under the same vigorously controlled, monitored, and confidential conditions as other parishioners. 35. Wollersheim was made aware in his Scientology training that all persons who were permitted access to the Advanced Technology were required to protect and maintain the secrets of the Advanced Technology, and to sign confidentiality agreements, including oaths and guarantees to maintain the security of the materials. In or about the period from 1972 to 1978, Wollersheim received training and auditing on the doctrine, theory and procedures of certain confidential levels which utilize the Advanced Technology, including OT I-VII and NED for OTs. "OT" is an abbreviation for Operating Thetan. A "thetan" in Scientology doctrine is a name for the individual spiritual being who is immortal and who survives from lifetime to lifetime. The term "operating thetan" designates a person able to "operate" to his full potential as a spiritual being. "Dianetics" is a sub-study of the Scientology religion, and "NED for Ots" is an abbreviation for "New Era Dianetics for Operating Thetans." In undertaking the study of the materials relating to this Advanced Technology, Wollersheim acknowledged the confidentiality of each such level of the Advanced Technology. - 14 - 36. Before being permitted to examine the Advanced Technology materials of each level, Wollersheim agreed both orally and by written contract to maintain the confidentiality of the inf- ormation contained in the Advanced Technology, in return for the privilege of having access to the materials. True and correct copies of confidentiality agreements executed by Wollersheim are annexed as Exhibits "H" through "K" to this Complaint. 37. Wollersheim left the Scientology religion in or about 1979, and embarked upon a campaign of hostile, malicious, unlawful activities directed towards his former religion that led to this action. on information and belief, from the moment he left the Church, Wollersheim has had virtually no stable employment, but has instead spent his time attacking, harassing, and interfering with the Church in the attempt to destroy the Scientology religion and its intellectual properties. In the course of those activities, in or about January 1994, Wollersheim founded FACTNET, whose purpose was to harass and attack the Scientology religion and spread and foment hate against the Church and its members. On information and belief, Wollersheim is currently an officer and director of FACTNET, Penny is an officer of FACTNET, and Lerma has been a director of FACTNET since mid-July 1995. Among FACTNET'S, Wollersheim's, and Penny's activities intended to harass Plaintiff is their unauthorized copying and disclosure of portions of Advanced Technology materials, by uploading of the materials onto their computers, posting copies of such portions on the Internet, and making hard copies. Plaintiffs are informed and believe that, - 15 - on or about July 6, 1995, Wollersheim also disclosed a portion of the Advanced Technology level known as "OT III" to a newspaper reporter, and on or about August 7, 1995, Lerma, acting as a director of FACTNET, disclosed portions of the Advanced Technology materials to the Washington Post. 38. Penny is a former Scientologist who left the religion in approximately 1986. He later joined forces with Wollersheim in attacking his former religion as an officer of FACTNET. Penny was a parishioner between approximately the early 1970's and 1986. While a parishioner, Penny received Scientology auditing, and. received access to certain of the Works under the same vigorously controlled, monitored, and confidential conditions as other parishioners. 39. Penny was made aware in his Scientology training that all persons who were permitted access to the Advanced Technology were required to protect and maintain the secrets of the Advanced Technology, and to sign confidentiality agreements, including oaths and guarantees to maintain the security of the materials. In or about 1981-1985, Penny received training and auditing on the doctrine, theory and procedures of certain confidential levels which utilize the Advanced Technology, including OT I-IV and NED for Ots. In undertaking the study of the materials relating to this Advanced Technology, Penny acknowledged the confidentiality of each such level of the Advanced Technology. Before being permitted to examine the Advanced Technology materials of each level, Penny agreed both orally and by written contract to - 16 - maintain the confidentiality of the information contained in the Advanced Technology, in return for the privilege of having access to the materials. True and correct copies of the confidentiality agreements executed by Penny are annexed as Exhibits "L" through "M" to this Complaint. 40. Defendants are aware that, like Wollersheim and Penny, Lerma is a former Scientologist, who: (a) received Scientology auditing and training between approximately 1968 and 1977 on the doctrine, theory and procedures of certain of the confidential levels which utilize the Advanced Technology; (b) received access to certain of the Works under the same vigorously controlled, monitored, and confidential conditions; (c) was made aware of the confidentiality obligations which attached to parishioners being permitted such access; and (d) agreed by written contract to maintain the confidentiality of the information contained in the Advanced Technology, in return for the privilege of having access to the materials. 41. Defendants and Lerma openly supported another former Church member who was bound by -confidentiality obligations, whom RTC was forced to sue to Put a stop to his unauthorized postings of Advanced Technology materials and against whom RTC has obtained a temporary restraining order and seizure order against further infringements. And now, through Lerma, Defendants have continued their campaign by engaging in the unauthorized copying, displaying, disclosing, using and distributing of the Works. Defendants have furnished the materials to Lerma, who has carried out his part of - 17 - this campaign by scanning them onto his computer, posting copies on the Internet, and making hard copies. Through Lerma, Defendants have rebuffed all attempts to resolve the dispute over their illicit posting short of litigation, and have insisted on their right to proceed unfettered. When suit was filed against Lerma and a court-ordered seizure was executed, Lerma lied to those executing the seizure, in the attempt to dissuade them from seizing and examining his hard drive, stating that he had deleted the copies of the Works from his hard drive. A search of the seized computer revealed that, not only were copies of the Unpublished Confidential works he had posted to the Internet still on his hard drive, but copies of various other Advanced Technology materials were there as well. 42. Following Lerma's posting, Defendants herein posted on the Internet a message entitled "FACTNET'S statement on SCIENTOLOGY'S RAID ON FACTNET DIRECTOR ARNIE LERMA" on alt.religion.scientology. In this posting, Defendants stated that Lerma had been a member of FACTNET's Board of Directors since mid- July 1995. They also stated that when Lerma posted certain of the Unpublished Confidential Works listed in Exhibit "A," he "was acting within his powers as a member of FACTNET's Board of Directors," that the Board of Directors of FACTNET stood behind Lerma, "who acted in accordance with [FACTNET's] organizational purposes" in his posting, and that Lerma had FACTNET records in his possession. Defendants further threatened and solicited blatant willful infringement by calling for there to be "100-1000 times" - 18 - more copies of the Unpublished Confidential Works or other works posted "into world wide distribution on the Internet" by "a corps of emergency volunteers." 43. RTC does not publish and has chosen not to publish the Unpublished Confidential Works, does not give access to the Unpublished Confidential Works to anyone without permission, and does not permit copies to be made or circulated. As former members of the Church of Scientology, subject to confidentiality agreements themselves, Wollersheim and Penny were well aware of the restrictions imposed by RTC and its predecessors on access to the materials. Defendants could not have obtained a copy of these materials other than by illicit means constituting misappropriation, or from someone who obtained the copy by illicit means constituting misappropriation or theft. 44. RTC is informed and believes, and on that basis alleges that Defendants Wollersheim and Penny have breached their confidentiality agreements by, without authorization, reproducing, disclosing, displaying, distributing and using portions of the Unpublished Confidential Works-listed in Exhibit "A," in which the exclusive rights under copyrights are owned by RTC, and by, without authorization, electronically reproducing, disclosing, displaying, distributing and using portions of these Unpublished Confidential Works in violation of RTC's copyrights. 45. RTC is informed and believes, and on that basis alleges that, as a result of the foregoing, Defendants, and each of them, thus have reproduced and posted or stored portions of RTC's - 19 - Unpublished Confidential Works listed on Exhibit "A," and each such portion, without the authorization of RTC. In this manner, Defendants have directly infringed RTC's copyrights, and have also contributorily infringed the copyrights by facilitating Lerma's infringements, and potential infringements by others who may have received the materials from Defendants. 46. RTC is informed and believes, and on that basis alleges that, at all times relevant herein, Defendants knew or had reason to know that they acquired copies of the Unpublished Confidential Works listed on Exhibit "A" through improper means. 47. RTC is informed and believes, and on that basis alleges that, at all times relevant herein, Defendants knew or had reason to know that the Unpublished Confidential Works listed on Exhibit "A" constituted trade secrets and that they obtained the Unpublished Confidential Works through a person who had acquired them by improper means. 48. RTC is informed and believes, and on that basis alleges that, at all times relevant herein, Defendants knew or had reason to know that when they acquired the copies of the Unpublished Confidential Works listed on Exhibit "A" the circumstances were such that they and/or their source had a duty to maintain its secrecy or limit its use. 49. Defendants Wollersheim and Penny, on behalf of defendant FACTNET, have also scanned and otherwise electronically or in hard copy reproduced, displayed, and distributed over 2,400 Published Literary Works listed in Exhibit "B" consisting of over - 20 - 22,000 pages, to which BPI is the exclusive licensee. This wholesale copying is of massive proportions and was unknown to BPI prior to the filing of the original complaint herein. BPI is informed and believes, and on that basis alleges, that Defendants have made and sold numerous compact disks containing copies of certain of the Published Literary Works which Defendants copied onto the compact disks. 50. BPI is informed and believes, and on that basis alleges that, as a result of the foregoing, Defendants, and each of them, thus have reproduced, displayed, or distributed portions of BPI's Published Literary Works listed on Exhibit "B," without the authorization of BPI. In this manner, Defendants have directly infringed BPI's copyrights. 51. Defendants are and have long been on notice of the unlawful nature of anyone copying, displaying, using, distributing, and disclosing the Unpublished Confidential Works of RTC and the unlawful nature of all unauthorized copying, displaying, and distributing of the Published Literary Works of BPI. Wollersheim and Penny are aware through their former affiliation with the Scientology religion, and specifically their' confidentiality agreements, that Unpublished Confidential Works are confidential and not to be disclosed to anyone unauthorized. Defendants have also received letters from BPI's counsel informing them that they are not authorized to make copies of the Published Literary Works. Moreover, Defendants have knowledge that plaintiffs are pursuing claims against others based on wrongful use, copying, - 21 - dissemination, distribution, and disclosure of the Unpublished Confidential Works and Published Literary Works, including FACTNET's director, Lerma, and that their past and future threatened actions constitute copyright infringement and trade secret misappropriation. 52. Defendants' refusal to cease their posting, transmission, reproduction, disclosure, display, distribution or use of unauthorized copies of portions of Plaintiffs' Works creates an immediate and real threat of continuing irreparable harm to Plaintiffs' intellectual property rights. 53. All acquisition, copying, disclosure, distribution, display, or use by Defendants of portions of the Unpublished Confidential Works listed in Exhibit "A" and the Published Literary Works listed in Exhibit "B" have been unauthorized and constitute willful copyright infringement, and in the case of the Unpublished Confidential Works, also constitute trade secret misappropriation. FIRST CLAIM FOR RELIEF (Copyright Infringement of Unpublished Confidential Works 17 U.S.C. sections 101 et seq. Against All Defendants) 54. Plaintiff RTC incorporates by reference the allegations contained in paragraphs 1 through 53 above as though set forth fully herein. 55. The Unpublished Confidential Works listed in Exhibit A hereto are owned by RTC and are protected under the Copyright Act of 1976, 17 U.S.C. sections 101 et seq. They have been registered with - 22 - the Copyright Office by depositing masked copies of the Unpublished Confidential Works. 56. The foregoing acts of Defendants violate RTC's exclusive rights to reproduce, publish, display, and distribute the Unpublished Confidential Works listed in Exhibit "A" hereto, all in violation of RTC's exclusive copyrights under 17 U.S.C. section 106. Such acts constitute copyright infringement under 17 U.S.C. section 501 and have contributed to infringement by others. 57. Unless restrained, Defendants will continue the acts complained of herein, to RTC's irreparable injury. 58. Defendants' unlawful acts set forth above constitute willful copyright infringement under 17 U.S.C. section 504. 59. As a direct and proximate result of the foregoing acts of Defendants, RTC has suffered damages in an amount which cannot now be ascertained or computed but that is capable of proof at trial. 60. In the alternative, RTC seeks statutory damages from Defendants under 17 U. S. C. section 504 (c) (1) and (2) for infringement of RTC's copyrights in the Works, in the amount of $100,000 for each such Work. SECOND CLAIM FOR RELIEF (Copyright Infringement of Published Literary Works 17 U.S.C. sections 101 et seq. Against All Defendants) 61. Plaintiff BPI incorporates by reference the allegations contained in paragraphs 1 through 15 above as though set forth fully herein. - 23 - 62. The Published Literary Works listed in Exhibit "B" are protected under the Copyright Act of 1909, 17 U.S.C. sections 1 et sea. (repealed) , and the Copyright Act of 1976, 17 U.S.C. sections 101 et seq., and BPI holds the exclusive license in the copyrights. 63. The foregoing acts of Defendants violate BPI's exclusive rights to reproduce, publish, display, and distribute the Published Literary Works, listed in Exhibit "B" hereto, all in violation of BPI's exclusive copyrights under 17 U.S.C. section 106. Such acts constitute copyright infringement under 17 U.S.C. section 501 and have contributed to infringement by others. 64. Unless restrained, Defendants will continue the acts complained of herein, to BPI's irreparable injury. 65. Defendants' unlawful acts set forth above constitute willful copyright infringement under 17 U.S.C. section 504. 66. As a direct and proximate result of the foregoing acts of Defendants, BPI has suffered damages in an amount which cannot now be ascertained or computed but that is capable of proof at trial. 67. In the alternative, BPI seeks statutory damages from Def- endants under 17 U. S. C. section 504 (c) (1) and (2) for infringement of BPI's copyrights in the Published Literary Works in the amount of $100,000 for each such Work. THIRD CLAIM FOR RELIEF (Misappropriation of Trade Secrets, C.R.S. sections 7-74-102, et seq. Against All Defendants) - 24 - 68. Plaintiff RTC incorporates by reference the allegations in paragraphs 1 through 53 above as though set forth fully herein. 69. By their acts, as aforesaid, Defendants have acquired, disclosed and used, without authorization, valuable and conf- idential trade secret information constituting the portions of the Advanced Technology that are contained in the Unpublished Confidential Works listed in Exhibit "A" hereto. 70. Defendants' aforesaid acts create an immediate and real threat of future unauthorized disclosure and use of the trade secret information. 71. Defendants' aforesaid acts were done with full knowledge that the Works contained valuable and confidential trade secret information. 72. By their aforesaid acts, Defendants have misappropriated RTC's trade secrets in violation of RTC's rights under Colorado law, Colo. Rev. Stat. sections 7-74-102, et seq. 73. Unless restrained by this Court, Defendants will continue the acts complained of herein, and RTC will continue to incur irreparable injury, for which there is no adequate remedy at law. 74. As a direct and proximate result of the foregoing acts of Defendants, RTC has suffered damages in an amount which cannot now be ascertained but that is capable of proof at trial. 75. As a direct and proximate result of the foregoing acts of Defendants, Defendants have been unjustly enriched in an - 25 - amount which cannot now be ascertained but that is capable of proof at trial. 76. RTC is informed and believes, and on that basis alleges that, in committing the foregoing acts, Defendants acted willfully and maliciously, thereby entitling RTC to exemplary damages in an amount equal to the award of actual damages and the unjust enrichment to Defendants, as well as attorneys' fees and costs. WHEREFORE, Plaintiffs pray for the entry of judgment against Defendants as follows: 1. ON THE FIRST CLAIM FOR RELIEF: (a) For an award of damages to Plaintiff RTC against Defendants, and each of them according to proof at trial, and for all gains, profits and advantages derived by Defendants by their infringement of the copyrights of RTC in the Unpublished Confidential Works; (b) For an award of statutory damages to RTC under 17 U.S.C. section 504 (c) (1) of $100,000.00 for each of the Unpublished Conf idential Works infringed by Defendants pursuant to 17 U. S. C. 504(c)(2); (c) For an order that Defendants, and each of them, and all of their officers, agents, employees, partners and attorneys, and all persons in active concert or participation with them having notice of this order, be enjoined, during the pendency of this action and permanently thereafter, from making, publishing, displaying, or distributing, or causing to be made, published, - 26 - displayed or distributed, any unauthorized reproductions of the Unpublished Confidential Works, including, without limitation, the transmitting or loading of any of them onto, or downloading any copies of them from, any computer, database, information service, electronic bulletin board service or network, and that Defendants, and each of them, be required to remove from any computer facility database, information service, bulletin board service, or network, or other medium, all copies of the Unpublished Confidential Works which Defendants, or any of them loaded, or caused to be loaded; and (d) For an award of RTC's attorneys' fees and costs pursuant to 17 U.S.C. section 505. 2. ON THE SECOND CLAIM FOR RELIEF: (a) For an award of damages to Plaintiff BPI against Defendants, and each of them according to proof at trial, and for all gains, profits and advantages derived by Defendants by their infringement of the copyrights of BPI in the Published Literary Works; (b) For an award of-statutory damages to BPI under 17 U.S. C. 504 (c) (1) of $100,000. 00 for each of the Published Literary Works infringed by Defendants pursuant to 17 U.S.C. section 504(c)(2); (c) For an order that Defendants, and each of them, and all of their officers, agents, employees, partners and attorneys, and all persons in active concert or participation with them having notice of this order, be enjoined, during the pendency of this - 27 - action and permanently thereafter, from making, publishing, displaying, or distributing, or causing to be made, published, displayed or distributed, any unauthorized reproductions of the Published Literary Works, including, without limitation, the transmitting or loading of any of them onto, or downloading any copies of them from, any computer, database, information service, electronic bulletin board service or network, and that Defendants, and each of them, be required to remove from any computer facility database, information service, bulletin board service, or network, or other medium, all copies of the Published Literary Works which Defendants, or any of them loaded, or caused to be loaded; and (d) For an award of BPI's attorneys' fees and costs pursuant to 17 U.S.C. section 505. 3. ON THE THIRD CLAIM FOR RELIEF: (a) For an order that Defendants, and all their agents, employees, partners and. attorneys, and all persons in active concert or participation with them having notice of this order, be enjoined, during the pendency of this action and permanently thereafter, from further unauthorized disclosure and use of any of the Works or any of the Advanced Technology, and specifically from transmitting or otherwise loading of any of the Advanced Technology materials onto any computer, database information service, electronic bulletin board service, network, or other medium; (b) For an order directing Defendants and their agents, employees, ]partners and attorneys, and all persons in active concert or participation with them having notice of this order, to - 28 - return immediately to counsel of record herein for Plaintiff RTC all documents in their possession, custody or control that contain any of the Advanced Technology; (c) For an order enjoining Defendants and their agents, employees, partners and attorneys, and all persons in active concert of participation with them having notice of this Order.. from filing with the court, except under seal, and from otherwise disclosing or using, any documents that contain any of the Advanced Technology; (d) For compensatory damages, including RTC's actual damages, and any just enrichment to Defendants, according to proof at trial; (e) For an award of RTC's attorneys' fees and costs pursuant to C.R.S. section 7-74-105; and (f) For exemplary damages in an amount to be determined at trial. 1. For such other and further relief as this Court deems just and proper. Dated: October 2, 1995. Respectfully submitted, SHERIDAN ROSS & McINTOSH, P.C. By: [Signed] Todd P. Blakely Robert R. Brunelli, 1700 Lincoln street Suite 3500 Denver, Colorado 80203 Telephone: (303) 863-9700 Facsimile: (303) 863-0223 - 29 - Earle C. Cooley COOLEY, MANION, MOORE & JONES, P.C. 21 Custom House Street Boston, MA 02110 Telephone: (617) 737-3100 Facsimile: (617) 737-3114 Helena K. Kobrin 7629 Fulton Avenue North Hollywood, CA 91605 Telephone: (213) 960-1933 Facsimile: (213) 960-3508 ATTORNEYS FOR PLAINTIFFS RELIGIOUS TECHNOLOGY CENTER and BRIDGE PUBLICATIONS, INC. - 30 - VERIFICATION I, Warren McShane, am the President of Religious Technology Center, Plaintiff in this action. I have read the FIRST AMENDED VERIFIED COMPLAINT FOR INJUNCTIVE RELIEF AND DAMAGES FOR: (1) COPYRIGHT INFRINGEMENT; AND (2) TRADE SECRETS MISAPPROPRIATION (C.R.S. sections 7-74-102 ET SEQ.). The same is true of my own knowledge, except as to matters which are stated on information and belief, and as to those matters, I believe them to be true. I declare under penalty of perjury that the foregoing is true and correct. Executed on this 2 day of October 1995 in Denver, Colorado. [Signed] Warren McShane [31] VERIFICATION I, John Goodwin, am the Vice President of Bridge Publications, Inc., plaintiff in this action. I have read the FIRST AMENDED VERIFIED COMPLAINT FOR INJUNCTIVE RELIEF AND DAMAGES FOR: (1) COPYRIGHT INFRINGEMENT; AND (2) TRADE SECRETS MISAPPROPRIATION (C.R.S. sections 7-74-102 ET SEQ.). The same is true of my own knowledge, except as to matters which are stated on information and belief, and as to those matters, I believe them to be true. I declare under penalty perjury that the foregoing is true and correct. Executed on this 1 day of October 1995 in Los Angeles, California. [signed] John Goodwin William Bardwell wbardwel+@[cs.]cmu.edu