ELECTRONIC CITATION: 2000 FED App. 0117P (6th Cir.)

                                  File Name: 00a0117p.06

                            UNITED STATES COURT OF APPEALS

                                 FOR THE SIXTH CIRCUIT

                                   _________________
 Peter D. Junger,
           Plaintiff-Appellant,
           v.
 William Daley, United States Secretary of Commerce, et al.,
           Defendants-Appellees.

                                                        No. 98-4045

                            Appeal from the United States District Court
                             for the Northern District of Ohio at Akron.

                            No. 96-01723--James S. Gwin, District Judge.

                                 Argued: December 17, 1999

                                Decided and Filed: April 4, 2000

 Before: MARTIN, Chief Judge; CLAY, Circuit Judge; WEBER, District Judge.(*)
                                   _________________

                                       COUNSEL

ARGUED: Gino J. Scarselli, ACLU OF OHIO FOUNDATION, Cleveland, Ohio, for
Appellant. Scott R. McIntosh, U.S. DEPARTMENT OF JUSTICE, CIVIL DIVISION, APPELLATE STAFF, Washington, D.C., for Appellees. ON BRIEF: Gino J. Scarselli, Raymond Vasvari, ACLU OF OHIO FOUNDATION, Cleveland, Ohio, Kevin F. O'Neill, CLEVELAND-MARSHALL COLLEGE OF LAW, Cleveland, Ohio, for Appellant. Scott R. McIntosh, U.S. DEPARTMENT OF JUSTICE, CIVIL DIVISION, APPELLATE STAFF, Washington, D.C., for Appellees. David W. Addis, Kurt A. Wimmer, COVINGTON & BURLING, Washington, D.C., Robert M. O'Neil, J. Joshua Wheeler, THOMAS JEFFERSON CENTER FOR THE PROTECTION OF FREE EXPRESSION, Charlottesville, Virginia, Paul F. Gamble, Bloomfield Hills, Michigan, for Amici Curiae.
                                   _________________

                                       OPINION

                                   _________________

     BOYCE F. MARTIN, JR., Chief Judge. This is a constitutional
challenge to the provisions of the Export Administration
Regulations, 15 C.F.R. Parts 730-74, that regulate the export of
encryption software. Peter D. Junger appeals the district court's
grant of summary judgment in favor of Secretary Daley and the other
defendants.

     The district court found that encryption source code is not
sufficiently expressive to be protected by the First Amendment, that
the Export Administration Regulations are permissible content-neutral
restrictions, and that the Regulations are not subject to a
facial challenge as a prior restraint on speech. Subsequent to the
district court's holding and the oral arguments before this Court,
the Bureau of Export Administration issued an interim final rule
amending the regulations at issue. See Revisions to Encryption
Items, 65 Fed. Reg. 2492 (2000) (to be codified at 15 C.F.R. Parts 734,
740, 742, 770, 772, 774). Having concluded that the First
Amendment protects computer source code, we reverse the district court
and remand this case for further consideration of
Junger's constitutional claims in light of the amended regulations.

                          ENCRYPTION AND SOFTWARE BACKGROUND

     Encryption is the process of converting a message from its original
form ("plaintext") into a scrambled form ("ciphertext").
Most encryption today uses an algorithm, a mathematical transformation
from plaintext to ciphertext, and a key that acts as a
password. Generally, the security of the message depends on the strength
of both the algorithm and the key.

     Encryption has long been a tool in the conduct of military and
foreign affairs. Encryption has many civil applications, including
protecting communication and data sent over the Internet. As technology
has progressed, the methods of encryption have changed
from purely mechanical processes, such as the Enigma machines of Nazi
Germany, to modern electronic processes. Today,
messages can be encrypted through dedicated electronic hardware and also
through general-purpose computers with the aid of
encryption software.

     For a general-purpose computer to encrypt data, it must use
encryption software that instructs the computer's circuitry to
execute the encoding process. Encryption software, like all computer
software, can be in one of two forms: object code or source
code. Object code represents computer instructions as a sequence of
binary digits (0s and 1s) that can be directly executed by a
computer's microprocessor. Source code represents the same instructions
in a specialized programming language, such as BASIC,
C, or Java. Individuals familiar with a particular computer programming
language can read and understand source code. Source
code, however, must be converted into object code before a computer will
execute the software's instructions. This conversion is
conducted by compiler software. Although compiler software is typically
readily available, some source code may have no
compatible compiler.

                               REGULATORY BACKGROUND

     The Export Administration Regulations create a comprehensive
licensing scheme to control the export of nonmilitary
technology, software, and commodities. In 1996, the President
transferred export jurisdiction over nonmilitary encryption items
from the State Department to the Commerce Department's Bureau of Export
Administration.

     The Regulations are structured around the Commodity Control List,
which lists items subject to export control. See 15 C.F.R.
Part 774. Each item on the List is given an Export Control
Classification Number that designates the category of the controlled
item and the reasons why the government controls the item's export. See
15 C.F.R. § 738.2. The reasons for control affect the
nature and scope of the export controls.

     Encryption software, including both source code and object code, is
regulated under Export Control Classification Number
5D002 for national security reasons. See id. § 772 Supp. 1. In addition,
encryption technology and encryption hardware are
regulated for national security reasons under different Classification
Numbers. Generally, the Regulations require a license for the
export of all encryption items to all foreign destinations, except
Canada. See 65 Fed. Reg 2492, 2499 (to be codified at 15 C.F.R. §
742.15(a)). Although the regulations provide some exceptions, most
encryption software in electronic form remains subject to the
license requirements for export. Encryption software in printed form,
however, is not subject to the Regulations. See 15 C.F.R.
§ 734.3(b)(2).

     The Regulations define "export" as the "actual shipment or
transmission of items subject to the EAR out of the United States."
Id. § 734.2(b)(1). For encryption software, the definition of "export"
also includes publication of the software on the Internet,
unless steps are taken to restrict foreign access to the Internet site.
See 65 Fed. Reg. 2492, 2496 (to be codified at 15 C.F.R. §
734.2(b)(9)(ii)).

                                 FACTUAL BACKGROUND

     Peter Junger is a professor at the Case Western University School
of Law. Junger maintains sites on the World Wide Web
that include information about courses that he teaches, including a
computers and the law course. Junger wishes to post on his
web site encryption source code that he has written to demonstrate how
computers work. Such a posting is defined as an export
under the Regulations.

     On June 12, 1997, Junger submitted three applications to the
Commerce Department, requesting determinations of commodity
classifications for encryption software programs and other items. On
July 4, the Export Administration told Junger that
Classification Number 5D002 covered four of the five software programs
he had submitted. Although it found that four programs
were subject to the Regulations, the Export Administration found that
the first chapter of Junger's textbook, Computers and the
Law, was an allowable unlicensed export. Though deciding that the
printed book chapter containing encryption code could be
exported, the Export Administration stated that export of the book in
electronic form would require a license if the text contained
5D002 software. Since receiving the classification determination, Junger
has not applied for a license to export his classified
encryption source code.

     Junger filed this action to make a facial challenge to the
Regulations on First Amendment grounds, seeking declaratory and
injunctive relief that would permit him to engage in the unrestricted
distribution of encryption software through his web site. Junger
claims that encryption source code is protected speech. The district
court granted summary judgment in favor of the defendants,
holding that encryption source code is not protected under the First
Amendment, that the Regulations are permissible
content-neutral regulations, and that the Regulations are not subject to
facial challenge on prior restraint grounds.

     We review the grant of summary judgment de novo. See Smith v.
Wal-Mart Stores, Inc., 167 F.3d 286, 289 (6th Cir. 1999).

     The issue of whether or not the First Amendment protects encryption
source code is a difficult one because source code has
both an expressive feature and a functional feature. The United States
does not dispute that it is possible to use encryption source
code to represent and convey information and ideas about cryptography
and that encryption source code can be used by
programmers and scholars for such informational purposes. Much like a
mathematical or scientific formula, one can describe the
function and design of encryption software by a prose explanation;
however, for individuals fluent in a computer programming
language, source code is the most efficient and precise means by which
to communicate ideas about cryptography.

     The district court concluded that the functional characteristics of
source code overshadow its simultaneously expressive nature.
The fact that a medium of expression has a functional capacity should
not preclude constitutional protection. Rather, the
appropriate consideration of the medium's functional capacity is in the
analysis of permitted government regulation.

     The Supreme Court has explained that "all ideas having even the
slightest redeeming social importance," including those
concerning "the advancement of truth, science, morality, and arts" have
the full protection of the First Amendment. Roth v. United
States, 354 U.S. 476, 484 (1957) (quoting 1 Journals of the Continental
Congress 108 (1774)). This protection is not reserved for
purely expressive communication. The Supreme Court has recognized First
Amendment protection for symbolic conduct, such as
draft-card burning, that has both functional and expressive features.
See United States v. O'Brien, 391 U.S. 367 (1968).

     The Supreme Court has expressed the versatile scope of the First
Amendment by labeling as "unquestionably shielded" the
artwork of Jackson Pollack, the music of Arnold Schoenberg, or the
Jabberwocky verse of Lewis Carroll. Hurly v.
Irish-American Gay, Lesbian and Bisexual Group, 515 U.S. 557, 569
(1995). Though unquestionably expressive, these things
identified by the Court are not traditional speech. Particularly, a
musical score cannot be read by the majority of the public but can
be used as a means of communication among musicians. Likewise, computer
source code, though unintelligible to many, is the
preferred method of communication among computer programers.

     Because computer source code is an expressive means for
the exchange of information and ideas about computer
programming, we hold that it is protected by the First Amendment.

     The functional capabilities of source code, and particularly those
of encryption source code, should be considered when
analyzing the governmental interest in regulating the exchange of this
form of speech. Under intermediate scrutiny, the regulation
of speech is valid, in part, if "it furthers an important or substantial
governmental interest." O'Brien, 391 U.S. at 377. In Turner
Broadcasting System v. FCC, 512 U.S. 622, 664 (1994), the Supreme Court
noted that although an asserted governmental
interest may be important, when the government defends restrictions on
speech "it must do more than simply 'posit the existence
of the disease sought to be cured.'" Id. (quoting Quincy Cable TV, Inc.
v. FCC, 768 F.2d 1434, 1455 (D.C. Cir. 1985)). The
government "must demonstrate that the recited harms are real, not merely
conjectural, and that the regulation will in fact alleviate
these harms in a direct and material way." Id. We recognize that
national security interests can outweigh the interests of protected
speech and require the regulation of speech. In the present case, the
record does not resolve whether the exercise of presidential
power in furtherance of national security interests should overrule the
interests in allowing the free exchange of encryption source
code.

     Before any level of judicial scrutiny can be applied to the
Regulations, Junger must be in a position to bring a facial challenge to
these regulations. In light of the recent amendments to the Export
Administration Regulations, the district court should examine the
new regulations to determine if Junger can bring a facial challenge.

     For the foregoing reasons, we REVERSE the district court and REMAND
the case to the district court for consideration of
Junger's constitutional challenge to the amended regulations.
 
                                        Footnotes

*The Honorable Herman J. Weber, United States District Judge for the
Southern District of Ohio, sitting by
designation.