Hulu Warns Remote Source Code Viewing Could Destroy Biz

By Dani Kass
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Law360 (May 14, 2020, 5:39 PM EDT) -- Hulu has urgently pushed a California federal judge not to let Canon attorneys and experts access Roku's source code remotely due to COVID-19 restrictions, a plea that will now be decided by the Texas judge overseeing underlying infringement litigation.

Hulu LLC's amicus brief on Wednesday urged the California court to quash a Canon Inc. subpoena asking for remote access to Roku Inc.'s operating system source code. That subpoena stems from infringement litigation in Texas between Canon and another company.

The streaming company said its own business is at risk, given its partnership with Roku, and that the precedent is dangerous for all tech companies aiming to protect their data from malware or hackers.

"Hulu has significant and serious concerns about the diminished security to that source code if similar requests are granted in patent cases where Hulu's source code has been or will be made available for inspection," the amicus brief states.

But then Thursday, U.S. Magistrate Judge Joseph C. Spero in California transferred the subpoena dispute to the Eastern District of Texas. Canon had been pushing for this, saying its related motion to modify a protective order in Texas was essentially the same fight, and posed the risk of inconsistent rulings. Judge Spero agreed.

Neither Hulu nor Roku are parties to the underlying infringement litigation. Canon has accused TCL Electronics Holdings Ltd. of infringing its patents with the TCL Roku TV.

Roku was not named in that litigation, as Canon would have had to forfeit jurisdiction in the patent-owner friendly venue, the nonparty said. Roku said it has agreed to give Canon its source code, just not in a way that would allow attorneys and experts to view it from their own homes.

On May 4, Roku filed the motion to quash in California, and Judge Spero on May 8 told the companies to make a good faith attempt to work it out before asking the court to intervene.

Hulu stepped in to back up Roku on Wednesday, both from its role as a partner whose content is available on Roku and as a company that gets pulled into patent infringement litigation where its source code can be part of discovery.

While Hulu acknowledged that there are "unprecedented challenges" to discovery procedures during COVID-19, it said Canon's bid to view the source code remotely can't provide enough protection. Even presuming that the attorneys and experts fully complied with a protective order, the costs and risks of this virtual discovery are too high, Hulu said.

Placing itself as an example, Hulu said to make sure computers were safe from malware and other "malicious software," Hulu would have to provide its own computers, connect those to the company's virtual private network, ship those to attorneys and experts, pay someone to monitor them over Wi-Fi or cellular camera, and have someone else monitor the usage of the computer.

"Even if Hulu had the ability to enforce such supervision and surveillance for limited periods of time during regular business hours, the cost in resources and employee time to Hulu (multiplied by each individual granted remote access to the source code) would be significant, if not prohibitive," the company said.

Hulu noted that not even its own engineers have full access to source code, instead working on the sections necessary to their work and only on Hulu's premises or on a VPN.

"Hulu spends significant financial and physical security resources every time an engineer is authorized to access its source code remotely," the brief states. "No such authorization can be provided in connection with outside experts or opposing counsel in the course of litigation, due to the heightened risk and lack of complete control over their activities, whether malicious or merely lacking in the necessary security protocols."

If the source code were to become public, Hulu said its business would be irreparably harmed, since "malicious actors" could "hijack" it to sell a "free and uncontrolled" version of the service, or download and pirate its content. That would lead to subscribers leaving and a destroyed relationship with advertisers and content providers, the company said.

To avoid this, viewing of source code must remain on standalone computers, unconnected to the internet, in secure facilities where who has access, what tools can be connected to the computer and what devices are brought into the room can be controlled, Hulu said.

Attorneys for Canon and Roku declined to comment on the amicus briefs and transfer. Counsel for Hulu didn't immediately respond to either request Thursday.

Canon is represented by Yar R. Chaikovsky and Andy Legolvan of Paul Hastings LLP.

Roku is represented by Andrew N. Thomases and Andrew T. Radsch of Ropes & Gray LLP.

Hulu is represented by Brett J. Williamson and Cameron W. Westin of O'Melveny & Myers LLP.

TCL is not active in the California case, but is represented in Texas by attorneys from Haltom & Doan and Ropes & Gray.

The cases are Canon Inc. v. TCL Electronics Holdings Ltd., case number 3:20-mc-80079, in the U.S. District Court for the Northern District of California and Canon Inc. v. TCL Electronics Holdings Ltd., case number 2:18-cv-00546, in the U.S. District Court for the Eastern District of Texas.

--Editing by Orlando Lorenzo.

Update: This story has been updated to include Judge Spero's transfer order.

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