Introduction

Recently, Apple Computer successfully sued a number of “bloggers” running Apple rumor websites, forcing them to divulge their source of leaked Apple information. In this precedent-setting lawsuit, it was determined that posting leaked information was in effect theft of protected trade secrets. This ruling has significant reprecussions beyond leaked rumors and may be a major setback for online journalism.

Summary of the Case

I’ll start by summarizing the case as briefly as I can for all of us non-lawyers. Keep in mind that this is designed to just highlight the important points of discussion and is not a comprehensive discussion.

In December, several Apple enthusiast online magazines such as AppleInsider and PowerPage published information on Apple's upcoming Firewire audio interface for GarageBand, then codenamed “Asteroid.” The information included a diagram from a confidential Apple slide presentation and contained a list of specifications taken verbatim from the slide. Apple filed a lawsuit against 25 “John Does” for leaking confidential trade secrets and in doing so, violating California’s Uniform Trade Secret Act.

However, Apple had no clue who they were actually suing. Literally. They were suing 25 hypothetical individuals for leaking information and not the journalists themselves. While this appeared to be a pointless lawsuit to some, assuming that it was simply Apple trying to save face, this was actually only the first step. With the formal lawsuit in the system, Apple then issued subpoenas to the journalists running those websites demanding that the operators of those websites divulge their sources. The teams running the websites argued that as journalists, they were entitled to a journalist’s right to preserve the anonymity of their sources and the first amendment rights of free speech. Consequently they filed to have protection under the law from Apple’s subpoenas.

Apple’s lawyers responded forcefully. They took a two-pronged attack. First, they contended that the information being leaked was a trade secret and hence publishing the information was a criminal act. Using the DeCSS case from 2003 as prior case law, Apple indicated that free speech protection did not provide refuge for the theft and dissemination of trade secrets.

The second attack was that websites did not qualify for the protections normally associated with journalists. In order to invoke the shield law, the websites had to represent “investigative reporting.” Apple claimed that these websites did not qualify because they regularly published information without fact checking and were simply systematically disseminating trade secrets. According to Apple, these websites were not even “legitimate members of the press.” That is, even if Apple could not prevent the websites from staying quiet from the first prong, Apple claimed that the bloggers didn’t even qualify for journalistic protection.

You see, there are legal precedents that have tried to help define a journalist. The federal courts have already indicated that journalistic protection isn’t automatic. To date, in addition to the traditional media, courts have ruled that documentary film makers, authors of technical publications, and professional investigative books qualify under the protective laws for journalists. In California, a freelance writer who had not even signed a contract to publish his work counted. Apple quoted a federal appeal court ruling citing that “any person with a manuscript, a web page or a film” was not automatically a journalist. (This was a case of selective quoting, since the original quote should read a journalist wasn’t “any person with a manuscript, a web page or a film, but [required] an intent at the inception of newsgathering process to disseminate investigative news to the public.”)

The websites countered that they were legitimate journalists and that Apple’s so-called trade secrets were consistently at risk for being leaked. They argued that there was a public demand for information about Apple products and that it was really wasn’t a trade secret after the informant had already leaked the information.

The case was heard by the Superior Court of California, County of Santa Clara, and after a review of the facts, the Honorable Judge James P. Kleinberg ruled in favor of Apple and determined that the websites had no rights to a protective order against Apple’s subpoena. This meant that the bloggers did not have protection under Shield Laws and potentially could be held in contempt of court if they did not fulfill subpoena. This ruling was based upon the fact that leaking of Apple’s upcoming product announcements qualified as a trade secret, thus the distribution of the information was itself a criminal act. In doing so, Apple’s first prong of their legal attack was successful – there was no need address Apple’s second contention. Whether or not they were journalists didn’t matter, the websites would automatically lose the case because it was a leak of trade secrets.

Since the issue of whether bloggers are journalists was not going to be a deciding factor, the
judge remained ambiguous about this issue, and said that it “it is far from clear” whether or not the websites reflected true journalists because the websites simply “took the information and turned around and put it on the [website] with essentially no added value.” In his closing paragraph, the judge wrote that “nothing in this order is meant to preclude the exchange of opinions and ideas, speculation about the future, or analyses of known facts. The rumor and opinion mills may continue to run at full speed.”