Apple's "Trade Secrets"

AP: Judge: Apple can press bloggers on sources. A California judge on Friday ruled that three independent online reporters may have to divulge confidential sources in a lawsuit brought by Apple Computer Inc., ruling that there are no legal protections for those who publish a company's trade secrets.

Reporting on business, if this bad ruling is upheld on appeal, will be a great deal harder in the future. Companies will simply slap "trade secret" protection on everything they do, and any reporter who gets a scoop on anything the company doesn't want the public to know about will be under a legal threat.

At least the judge didn't fully buy Apple's contention that the bloggers are not journalists. He ducked the question. His ruling suggests he was half-persuaded that these folks may well be journalists after all. Thanks for small favors.

But there will be long-range damage from this. Apple's acolytes, who keep finding reasons to worship a company that deserves increasing contempt, won't care. Someday, they will, but maybe too late by then.

During the time Steve Jobs has run the company, Apple has been hostile to truly independent journalism about its products and policies. This current attack on journalism -- and that is precisely what is going on here -- reflects the side of Jobs that will someday lead the company back down from its current heights. He is a genius, no question, but he is a control freak who doesn't seem to care whatsoever that he's infuriating some natural allies.

I'm writing this on a Mac. If I were buying a replacement today, I'm not at all sure I'd make the same choice again.

Comments

[Denis de Bernardy]

Err... Dan...

Companies already label much about everything they do as 'trade secrets'.

Moreover, I'd be quite amazed if firms did not try to bully journalists into simply repeating whatever BS their PR specialists come up with. And sue for damage repairs whenever a nosy or opiniated journalist (or a blogger, for that matter) writes something they do not like.

Imho, the US journalists and bloggers are in a quite comfortable position. In France, a recent law allows companies to sue newspapers (and bloggers, presumably) for damage repairs for as long as the information is online (including, say... in archive.org or in google's cache, for instance). This contrasts with France's century old law on the freedom of press, which used to only give 3 months to the parties to seek damage repairs.

[loid]

Journalists may be better equipped in the U.S. than France to conduct business reporting, but both are being unfairly hamstrung by the legal system in cahoots with corporate interests.

This curren ruling is pathetic.

It gives corporate attorneys the ability to bludgeon any reporter who gets too close to a story - before the story is published.

This is really bad because most American newspapers already backed away from agressive business coverage 20 years ago. First, business reporting is more complicated than covering the police or city government, and most publishers don't want to have to pay the salaries for more experienced reports. Second, good, tough business coverage makes waves, and publishers don't want to make business owners angry, since they tend to own businesses that may advertise in the papers.

Rulings like this help keep the covers over things like Enron insider trading and government complicity in same.

By the way, anyone notice that Martha Stewart already has been sprung from jail and Ken Lay doesn't even go to trial for another year? They're doing everything possible to erase the prickly financial public memories before they do a flawed job with the prosecution on that one.

[loid]

Dan, your comment on giving pause to buying another Mac suggests a possible response to Apple.

If Jobs is going to prosecute bloggers, maybe bloggers should organize a Mac boycott. There's space for a lot of online billboards...

[LR]

As you point out Dan, companies will simply categorize everything as a "trade secret" and make it illegal to discuss/disclose it. This ruling does to general information what the DMCA did to technical circumvention knowledge.

[david]

Well Dan, if Apple's actions give you pause to buy another Mac then surely Microsoft's lack of ethics must do the same. Of course China's lack of respect for intellectual property, the environment, and workers' right will push you to avoid any Chinese made component. Actually that would hold true for most of the Asian rim with the possible exception of Taiwan.

So you next computer will be....an Atari 800?

[Denis de Bernardy]

Loid: I perfectly agree with your point. There might be a way to circle these kinds of rulings, however, since by its very nature Internet is disrupting law-systems: If you cannot publish an information in one area, you may very well be elligible to publish it in another. You could imagine online newspapers hosting their web sites in banana republics where no laws protect corporate bullies.

[Harry Lime]

I think the key factor that the Judge ruled on was that the information was clearly lifted from a highly confidential source. This strikes me as different from investigative journalism. If Ciarelli has put the details together from legit sources, he'd be cool now, but he had a mole leaking trade secrets and that is covered by CA law. Apple didn't write the law they are simply asking that it be followed. Cut Apple some slack here - much as I like to read the scoops from Think Secret - I can afford to wait one extra day.

[Chuck]

Dan,
What is so hard about understanding that these bloggers/journalists obtained information they should have never had in the first place? It's like a person in possession of a gun that someone else used to murder someone. They shouldn't have it! These websites should have never published what they should not have been privy to. Would anyone have been hurt by saying "no?" And personally attacking people who happen to like the products Apple makes just makes you look silly and whiny. Lastly, what about all the people who work at Apple? Apple is not Steve Jobs. Apple is thousands of people who create products and receive a paycheck for their efforts. Who speaks for their job security? Steve did. He wants control of the fruits of Apple's labors. I don't see anything wrong with that. All of you who disagree with this decision need to put yourself in the shoes of ALL the parties here and stop looking at it only from a journalistic or technological perspective. The world is not coming to an end just because Apple is allowed to hold onto their property.

[Bob Crisler]

The debate on this issue has become hysterical. And I don't mean 'hysterical' in the funny way, either. Irrational, driven by emotion ... that's what I mean. There are bloggers who are journalists, and there are bloggers who are not. And I'm not sure that the so-called rumor sites, whose best 'scoops' are in fact leaked trade secrets, are deserving of the title 'journalist.' They are, in fact, witnesses to a crime. In many cases, they are parties to crime, as they actively encourage the crime.

Apple's future as a business may or may not depend on their famous secrecy. But that's for them to determine. Not for a blabbermouth employee and a kid with a website.

[Herb]

A lot of people have looked at this ruling as the Big Bad Corporation stomping all over the rights of the small journalist. I see it somewhat differently - this ruling protects small business like mine from the Big Bad Media companies who might try to publish illegally obtained information about my R&D or clients' interests.

I don't see a problem with this, especially since the judge strongly implied that information involving "a health, safety or welfare hazard affecting all" or government "mismanagement" does deserve protection. You don't have a right to know my research secrets any more than I have the right to know about Dan's sex life (not that I want to know! ;)

[Leonardo]

I think you are wrong on this matter of whether Apple is right about protecting their secrets about coming products. The judge, Kleinberg has ruled clearly on whether a forthcoming product's specs were thrown out in to the public view.

He has not ruled against small electronic print journalists, one man presses. He made that clear.

Has independent evaulation, or consideration of Apple, or anyone else's direction been hurt?

On this, I agree with you, that Apple was wrong to contend, as its attorney did, that the small web site print journalists should not be considered journalists. This should be resisted. You are also right that many of the folks who took up this cause are natural allies of Apple. I hope this concludes soon, and I certainly hope that Apple will acknowledge and be for the small and independent minded 'press', or just individuals in the blogosphere. It is a side that Apple needs to be on, or that I want it to be on.

I would like to think that you are wrong about Steve Jobs. He has shepherded along this personal computer for quite a long time. I hope that he realises that they took off on a wrong bent to consider small presses, which after all Apple has done much to help, as not being journalists.

[Kelly]

Herb- You underestimate the effect of this ruling. Here in Washington state a company could claim the internal workings of their company to be covered by this kind of trade secret law. While that wouldn't help them if they were actually breaking a law, imagine this type of scenerio. M$ decides to fire all Gays employed in the state. Since it's legal in this state to fire someone because of their sexuallity, would leaking this action to the press constitute a breach of trade secret?

[Jim Royal]

Okay, let's create a hypothetical example to move away from the particulars of this case.

Let's suppose Ford is planning to build a new plant in your state/province. They're trying to decide between your town and a neighbouring town. Delicate negotiations are underway between the municipalities, Ford, and local construction unions. The negotiations are confidential, and all parties are under an NDA until a site is picked and contracts are signed.

Further, let's suppose that a secretary in one of the construction unions leaks details to a local paper suggesting that one town is more likely to receive the plant than the other. She does this in voilation of the NDA.

Question 1: Does the paper have the right to print the information?

Question 2: Is there any news value in running this story?

This is clearly not a case of a whistler-blower. There appears to be little or no public interest in prematurely releasing details of the negotiations. And premature disclosure could increase Ford's costs if negotiations become more heated as a result, or possibly even derail the whole process. So:

Question 3: If the paper runs the story, and Ford sues, is the paper's legal position defensible?

I'm not a legal expert, but my gut tells me no. There is no public good that comes from using the information provided by the secretary. The paper gets spanked.

[David]

Dan,

It saddens me to see that you seem to think investigative journalism is nothing more than repeating information given by people under non-disclosure agreements.

You're the one arguing for transparency in journalism, yes? So if a reporter learns a trade secret in a legitmate way, that is, without anyone violating an NDA, then the information can be reported in a transparent manner, with all the steps layed out how information was obtained, and then the public has more reason to trust the information and companies cannot prosecute if it is obvious no one violated an NDA.

[Jose L. Hales-Garcia]

"During the time Steve Jobs has run the company, Apple has been hostile to truly independent journalism about its products and policies"

In the highly competitive computer market that is defined by the Microsoft establishment, it's Apple's foremost responsibility to guard its future plans from all informers, most especially from false allies. To do otherwise would be caving into the Microsoft establishment's favorite charge that Apple is irrelevant.

If while guarding its secrets from the Microsoft establishment, I'm denied my ability to pry, then that is alright with me. I will be content finding out about their products when they decide it's appropriate.

[Michael]

Does anyone actually read the stories or just the headlines?

First of all, for all those that are compaining about Apple suing the websites/bloggers, they aren't. They are suing John Doe's for not respecting the NDAs they signed. They are merely asking that the websites/bloggers reveal their sources so they can change those John Doe's into real names.

Second of all, I don't see how the press should be exempt from laws that the rest of us have to hold to. What may of you are saying is that being an accessory to a crime should be OK for journalists. That doesn't make any sense. They should not be able to use stolen information any more than anyone can use a stolen TV.

Third, the judge stated (and is absolutely correct as far as I'm concerned). There is a difference between "interested public" and "public interest". Just because people want to know doesn't mean they have a right to know. Those websites/bloggers put themselves in this position by using stolen information.

Under the logic of many people wanting to protect the press, this scenario would be legal. Joe Reporter wants a big story. So, he entices a guy that works at a bank to rob the bank, then to tell him how it can be done, so he can write about it. The police come to the reporter and ask who did it because from the detail that the reporter had, he obviously talked to the bank robber himself. The reporter says no, because his sources don't have to be divulged. The is exactly analogous to what happened in this case.

Let's stop trying to protect criminals by privacy laws.

[Jeff Hume]

Dan, you may have a point, but I would content that there is far far more nuance to this issue than you and many others are presenting.

I wonder if you even bothered to read the judge's ruling and see what he actually said. He said that public interest would still be presented. The specs of the next iMac are not something that should be considered under investigative journalism.

[Karl Groeger]

Apparently a lot of people, after all this hoopla, still don't understand the difference between speculation about business products and theft of of product information. One can speculate that Ford is going to come out with a six-wheel drive, six dour convertible, and that's covered by free speech. One cannot illegaly acquire actual product information from a Ford employee that is sworn to secrecy, and then publish that information. That's covered under trademark laws, and for some reason, some can't differentiate between the two. This has nothing to do with journalism; it has to do with enforcing law that is on the books. If one doesn't like the law, then they have the right to work to get it changed, but not by breaking it.

Dan, if this causes you to reconsider buying a Mac next time, perhaps pencils and legal pads would be more appropriate, as Microsoft's business practices have landed it in far more courts than Apple.

[rajesh]

Here's a case really worthy of Dan's saber rattling: Microsoft takes a kid to federal court for auctioning off software he didnt use and was authorized to sell: http://www.kptv.com/Global/story.asp?S=3041350.

I wont bother restating the real issue (enforcement of NDAs) since Karl, David and Michael above state it succintly - the real question for Dan is: much as I enjoy sites like appleinsider, macrumors etc., do you think NDAs are worthless and employees shouldn't bother enforcing confidentialty agreements? What happens to all those silicon valley stealth startups then?

I hate that Apple is suing "kids" and getting negative press but then the entire validity of NDAs goes down the tube if enforcement is not a consideration.

Fyi..I am looking for a replacement for my powerbook and it'll for damn sure be another Mac.

[Herb]

"Herb- You underestimate the effect of this ruling"

Knowledge of discriminatory practices (even if legal) falls under the public interest. Knowledge of ongoing R&D doesn't. Again, I don't see the issue.

[NoName]

This is a good thing!

Find the bastard/bitch who can't keep their mouth shout!

This is not about some punks blogging but about finding the leak and canning their ass!

Go Apple :-)

[rathersilly]

Has anyone communicated with Al Gore on this subject?

He's on the Board of Directors of Apple.

And, as the CREATOR of the Internet, for goodness sakes, you'd think he would be sensitive to the issues involved.

[Joe I.]

I would urge all bloggers to BOYCOTT Apple. Put away your Macs and put off purchases....The problem here is Apple, although not dominate like Microsoft, is and has been much more arrogant with its users and business practices. It is their way or the highway.

By the way I am on a PowerBook and really kind of agree with the judge but if bloggers feel strongly why would you use the platform from a corporation that might due your work the most harm?

[Joe I.]

I would urge all bloggers to BOYCOTT Apple. Put away your Macs and put off purchases....The problem here is Apple, although not dominate like Microsoft, is and has been much more arrogant with its users and business practices. It is their way or the highway.

By the way I am on a PowerBook and really kind of agree with the judge but if bloggers feel strongly why would you use the platform from a corporation that might due your work the most harm?

[Bob Crisler]

You know, one of the things that sucks the most about the Internet is the capacity it has for edification, and how so much of that capacity goes unused. 'rathersilly,' above, repeats the Republic Party attack chiding Al Gore for saying something he never said. Easily enough, one could read Vinton Cerf's posting on the subject: http://www.interesting-people.org/archives/interesting-people/200009/msg00052.html

See, the Internet CAN be useful ... and Al Gore deserves some of the credit for it.

If your partisan blinders won't allow you to acknowledge the conributions of others, in this case simply because one of these others dared run against Dubya, you may continue making stupid jokes instead of contributing to society.

My children wish to thank you for the unprecedented, drunken-sailor spending of their money.

[James Katt]

Dan, you are WRONG, WRONG, WRONG.

I have been a Mac user since April 1984. I have owned 17 Macs. I'm a huge Mac fan. If Steve Jobs had to leave, I'd love to be the CEO of Apple. I even bought stock in Apple.

The most important thing is Apple's survival. Journalists who engage in industrial espionage, who recruit people who break the law are wrong. They put Apple's survival at risk. Apple should be able to obtain the sources for these Journalists.

If you don't want to use or buy a Mac, that's your choice. But TRUE Mac fans see the ruling as a good thing. I will continue to buy Macintoshes. I applaud the judge's ruling.

Go Apple!

[anonymous]

Just a comment about the example of companies engaged in secret negotiations with competing communities... those negotations and terms should be public and we need to create a public ecnomic policy that is fair to both... not one that drives towns and neighborhoods into tax-give aways for the lure of a handful of jobs. That's the problem that needs fixing, not protecting the right of companies to threaten, cajole, & "bribe" local communities into submission.

In the scenario outlined, the newspaper not only has the right to publish the story, it is failing in its duty if it doesn't. (Consider the Pentagon Papers as an even bigger "secret" that the Supreme Court ruled could be published.)

Dan is right is his take on all this. What Apple is doing is trying to control the media & the hype and spin... they love rumors and speculations until it hits too close to home. Those were not "trade secrets" being published, and the "details" were released close to the time of the unveiling anyway--no time for anyone to profit by it. There was no harm done except to Job's ego.

For an historic look, go back to the Mac's launch. Apple didn't sue then because it was in their interest...

"A look at secret new Apple computer" at http://www.mercurynews.com/mld/mercurynews/7731271.htm Google and check the cached version if you're asked to register.

Come on folks, don't be naive about corporate power and its influence on the media and the society. Just consider what happened to Boston Legal and its show airing tomorrow that was to have had a criticism of Fox "News" in it.

[rathersilly]

"I took the lead in creating the Internet"

-Al Gore.

Sorry folks, he really said it.

[machead]

Why does journalist think they have any human value? Simply stated, they don't!!!

[Jay O'Conor]

Mr. Gillmor,

I appreciate your position, but I believe that the community and industry would be better served if you were to take a moment to look at this problem from the other perspective.

As an Apple customer, I eagerly read various Apple/Mac oriented rumor websites. Advance insight into Apple's plans definitely helps me as a consumer.

As an Apple stockholder, I *expect* Apple to protect their intellectual property very agressively. If Apple employees are leaking proprietary information, then Apple should take every step possible to stop this. Encouraging Apple employees to reveal proprietary information is despicable, and not legitimate journalism, whatever the venue used for the reporting. Reporting on unreased Apple products does not serve a greater public good than protecting property rights.

I am sure you have been in this industry long enough to remember the problem that advance information given to the public caused for Adam Osborne. I'm sure Mr. Jobs remembers this lesson as well.

This issue demonstrates a very difficult balance between property rights and First Amendment rights. Both rights are very valuable aspects of our democracy.

[MD]

Whether these sites are journalists or bloggers is irrelevant. Whether or not they printed "trade secrets" is also irrelevant. What IS relevant is that they solicited/induced individuals under NDA to divulge information covered by NDA -- that's illegal, and the press is ONLY exempt from such laws in the case of clear public interest. Meaning Watergate, not upcoming Mac models.

The hysteria about this case is riduculous. It's fairly cut-and-dried, and it has nothing to do with "freedom of the press."

[Anspar Jonte]

As a life-long Windows user, I have to say that the only time I'm even aware of new Macintosh products is when I see the scuttlebutt secrets whispered around on blogs. If Apple takes that away, I pretty much will forget that Apple exists.

You've gotta be pretty stupid to litigate away free advertising.

[shaitan]

Seems all so childish to me - So take that Apple, I'm going to spite myself by not buying your product. I suppose in so way you fell your Jounalist-hood is being threatened. Too bad, but the facts are clear, illegal means were used to obtain that which serve absolutely no public good. I like rumours and speculation and that's where it should stay, but to have someone ruin my Christmas, by saying "I tore open the vault and I found the hidden gifts, and this is what you are going to get..." is no fun at all.

[Scote]

This is interesting. Dan doesn't normally get this many hits on his new blog and it is also odd to see so many pro-corporate / anti-journalism voices here. It is almost like an orchestrated campaign...

The Apple case really is a key moment for the future of journalism. As some have suggested, a corporation could declare that all of its information is a trade secret, even its malfeasance. Clearly Enron's use of market gaming techniques was the secret to its success in the competitive energy market. These fraudulent methods could easily constitute a Trade Secret, and Enron could sue any paper that published such information based on the Apple ruling. After all, the judge said that an interested public isn't the same as public interest--apparently the judge will decide for us what is news and what isn't.

Additionally, there is no way for a reporter to know what is and isn't a trade secret. Is the number of Apple's on-line music sales a trade secret? Is someone who reverse engineers an iPod to put Linux on it revealing "Trade Secrets" when they say how the iPod boot loader works? Are all rumors about Apple de-facto trade secrets if they turn out to be true? And how can you know whether it is a trade secret until it turns out to be true or not?

Because companies can declare anything and everything to be a trade secret and because it is impossible for a reporter to know what is or is not a trade secret, it is vital to the public interest (and an interested public) that this judge's shortsighted ruling be overturned as soon as possible. If it stands, it will reduce business and tech reporting to nothing but printing nice, safe-from-litigation company press releases.

[jdb]

I doubt anyone will read down this far but I want to pose an analogy anyway.

Dan, let's assume you are an investigative reporter. And let's say someone broke into your office and put a keystroke logger on your keyboard. The logger sends everything you write to the criminal electronically. He takes your words and work and gives them away to another journalist "anonymously". That journalist discovers you do good work and everything given to him is true and accurate and it isn't like he is the one who stole your work. Oh and by the way, your byline is on each of these unpublished reports but the other journalist just deletes that as inconvenient.

Now, how do you feel about keeping anonymous sources anonymous in the face of broken laws? In this case, wouldn't you really want to know how and who was stealing your work? But you can't because all journalists are always allowed to protect their sources.

The argument is ridiculous on the face and you and other journalists need to step back from your own agenda and see that.

[me]

Wahhh... Wahhh... I'm wirting this on a mac, and I won't be next time because Apple protected their propietary information legally... Wahhh... I want my mommy. You're a joke.

[Zato]

"Enron's use of market gaming techniques was the secret to its success in the competitive energy market. These fraudulent methods could easily constitute a Trade Secret, and Enron could sue"

Really! A "fraudulent method" could be a trade secret protected by NDA's. Give me a break. A fraudulent method written on paper is called a confession.

[Stuart Logan]

Jason O'Grady (of PowerPage) took a slide presentation that contained an exact copy of a detailed drawing of 'Asteroid' created by Apple. Apparently the drawing came from a set of slides marked "Apple Need-to-Know Confidential," the judge wrote in his decision. The circumstances under which those slides were obtained convinced the judge that O'Grady was in violation of a state law that protects intellectual property (trade secrets) from being disclosed.

The Powerpage is no friend of the Apple community when they are willing to post stolen information on the web to drive hits on their website. They are acting for personal benefit and to the detriment of the Apple community. As much as Mr Gillmor wants to make this about who is a journalist, or the first amendment, it is not. It's about some people who posted trade secrets on the web and no don't want to be accountable for their acts. They do a diservice to true journalists by tring to hide beneath their petticoats.

Disclosure: I have been an Apple customer for 20+ years and am also a stockholder in Apple Computer.

[Scote]

Zato wrote:
"Really! A "fraudulent method" could be a trade secret protected by NDA's. Give me a break."

Sorry, but you are wrong on this. Fraud is only fraud once you have proved it in court, but you can't prove it in court without knowledge of the fraud and evidence of it. Until a case of fraud has been proven against a company such as Enron, their market gaming techniques could be considered an innovative business method--and a court may have ruled in Enron's favor. To this date, Enron has not been held to be legally culpable for the totality of its dealings.

The problem is that corporations are inherently amoral. You can't jail a corporation, you can only fine it or tell it to Cease and Decist. Laws are only important to a corporation to the extent that they threaten the profitability of the company. For instance, if dumping toxic selenium in to the bay is worth a $10,000 fine but the cost to for a new system that would not to dump the to waste in the bay is $10,000,000, the business decision may favor dumping the waste--depending on what other potential liabilities their might be.

Zato will probably try to say such a decision matrix would never happen, but we have seen very similar equations happen in the automobile industry. Car manufacturer's decided to settle SUV roll over law suits for years rather than make the SUVS lower and wider. Settling the suits was cheaper and the internal documents regarding their knowledge of the roll over risk were secret, and kept secret in all of the sealed settlements. Secrecy, in this instance, was against the public interest, but what news organization will risk a trade secrets suit to investigate this kind of story now?

Zato also doesn't seem to realize that NDAs can cover more than trade secrets. In the case of the Michael Jackson Trial, the previous civil case against Jackson was settled secretly. It wasn't clear that even the government could compel the boy in that case to give a deposition because of the NDA. In this case, the government believed they could break the NDA, but the same could not be said for another civil suit. If Zato's little boy had allegedly been harmed by Mr. Jackson, Zato's attorneys could not subpoena the sealed records from the previous cases nor could they depose the previous accuser because of the NDA.

Secrecy is generally against the public interest, and the Apple ruling is, too. Apple's interests are not the public's interest. Corporations are not the public.

[~bc]

I really enjoy Dan's work generally, but feel he's missing this one by a mile, and I can see why. He's given up his whole career to concentrate on the convergence of blogs and journalism, and he feels these proceedings will have a chilling effect on his new venture. Without this sounding like a personal attack, I don't really blame him for taking an extreme stance that paints his interests as infallible. After all, he's trying to portray bloggers as legit news reporters.
The achilles heel of this is that he's tying his wagon to a bunch of theives and petty criminals. If these site were reporting on a company who was doing something illegal, there would be no doubt, they'd have a right. The public would benefit. They are not doing anything for the public good. They are only benefiting Apple's competitors. You and I get no benefit (except for perhaps entertainment) but the competitors start their copying early. There is no journalism going on here, so that is besides the point. Dan is thus indirectly representing that theft of proprietary information is good journalism is going to do more harm in portraying bloggers as theives and hacks than its going to help good, legit, news-reporting bloggers (like Dan himself). He's associating himself with the worst of breed instead of the best of breed. And I wouldn't even call these places blogs so much as just "sites." why must everything be a "blog?"
I was pleased that so many of his readers (like myself) disagree with him.

[Jeff]

Dan,

I usually agree with you. My knee-jerk response to litigation where a corporation sues a little guy is usually to support the little guy since I have a tremendous distrust for corporations.

However, even before the judge ruled in this case, I could see that my knee-jerk response was wrong this time. I, too, was upset that Apple's lawyers tried to argue that bloggers weren't journalists and my hope was that he would see through that garbage and he did. My hope was for a narrow ruling. That's exactly what he handed down -- a very narrow ruling that protects journalists where they deserve to be protected. Assisting in corporate espionage is a different matter and he stated that in the ruling.

You and several others commenting here have put forth the "slippery slope" argument as a reason to oppose this ruling. Frankly, it's a lame argument. It reminds me of the way the NRA endlessly argues that if you outlaw machine guns it will lead to outlawing shotguns and ultimately to a police state. Nonsense. The judge in this case saw through the BS put forth by both sides and made a common sense ruling.

[Al]

I can fully understand the concerns of those worried about First Ammendment rights and the journalism profession. But, as someone who is bound by implied NDAs everytime someone in the industry discusses "not for public disclosure" future product or business plans, I have to concur with the judge's decision.

It should be remembered that the person or person's who passed on the trade secrets to the web sites in question were violating the NDAs they signed as terms of their employment/work with the company. They were in violation off their employment contract. Period.

The fact that they may have been satisfying the Apple/MacIntosh public's curiosity does not mitigate the breach of contract. If I, or someone in my position, were to commit such acts, which are not specifically serving the public need to know, I/they would be subject to job termination and civil court actions. That is a reality.

No, I am not an Apple shareholder.

Yes, I am for free speech.

I have bought Apple products for my own personal use, despite working in VAX, UNIX or Microsoft environments most of my professional career. I will continue to do so.

Passion for knowledge is noble. Breaching a contract, or eliciting others to do so, is not.

[Scote]

"I really enjoy Dan's work generally,"

-Right...

But: " I don't really blame him for taking an extreme stance that paints his interests as infallible. After all, he's trying to portray bloggers as legit news reporters.
The achilles heel of this is that he's tying his wagon to a bunch of theives and petty criminals."

I can't speak for Dan, but it seems clear to me that you don't get anything he's doing. By your definition, not only are the Apple news sites "a bunch of theives and petty criminals," but so is every other reporter and news organization that covers government and industry.

By your post, I'd say that you think that the sites should have called their nearest Federal Prosecutor and turn over the names of every person who has ever told them anything about apple, ever. After-all, all of those things could have been trade secrets at one time.

" Assisting in corporate espionage is a different matter and he stated that in the ruling."

You act like they posted the source code to Final Cut, or the schematics or something. They didn't. They just posted info about an upcoming product, not how to make one.

The ridiculous over use of NDAs is bad for America, Democracy and the exchange of information that in the past has led to so much innovation here in the US.

[Herb]

"Secrecy is generally against the public interest,"

So how about posting your full name, SSN, mother's maiden name, phone number, home & business addresses, and your income? Oh, and a valid email address while you're at it. I'm an interested member of the public ;)

And if secrecy is against the public interest, isn't that an argument *for* Apple's case: that the 'secret' source(s) should be revealed?

[AT]

Apple is right. The judge is right. Dan is wrong. Dan can't seem to tell the difference between journalism and scooping for financial gain. Dan doesn't seem to care about the spirit of the laws, which protects reporting when it's in the public interest, rather than patently peddling illegaly obtained and disseminated information. Apple has always surprised me with how far ahead they are, and I've come to expect that. What I've stopped frequenting is the infantile rumor sites, because Apple has finally started delivering on the promise of the last 25 years and you can count on it, rather than whipping yourself into a lather. The rumor sites add nothing to debate, probity or culture, other than a trashy frenzy around product releases.
I am not only NOT boycotting Apple, I am putting Dan on notice that if he keeps driving dumb-ass arguments like this one, he might be dropped from my reading list like a brick, which he is mimicking in his reasoning this time...

[don't be silly]

get clear on what Gore actually said:

What he said was, quote, "When I served in the Congress, I took the lead in creating the internet" unquote.

Now you can argue that that's an exaggeration of his role... but if you talk to the people who were involved in the early days of the internet, they will tell you that among politicians, Gore was something of a visionary in this area.

But he was clearly talking about his service in the Congress. He was not saying that he was down in his basement, you know, writing computer code and inventing file transfer protocol.

[degustibus]

Shoot, I'm ahead of the curse, I've like been boycotting Apple.......forever

[Alex in Los Angeles]

I'm glad the Judge did not rule bloggers were not journalists.

I'm glad the Judge in effect stated that any journalist would be treated as these bloggers were.

But, I sure wish some of Dan's readers would stop confusing NDA with Trade Secret. Just because company X makes people sign an NDA does not mean they can now sue any journalist who publishes NDA covered information. That company better be sure it has a trade secret in question before it tries to sue the NY Times. In the same sense that the journalist has to show the story is in the public interest, a company should need to show that their secret is truly a trade secret.

Also, I think reporting news on factory closings/openings is exactly the kind of news that is in the public interest. A NY Times story on that kind of news would inform the livelihood of a whole community, however much it inconveniences the business' interests. Obviously whoever leaked the information should suffer consequences, but I think the public would have been well served.

I'm definitely glad California has a shield law already, because it seems like some of Dan's readers would throw all media in the slammer for pissing off their favorite corporate daddies.

[anon]

I have an interest in Apple on many levels, including having a significant chunk of my portfolio invested in the company. I watched the stock become unstable as the leaks were published. I also saw as the product announcements didn't produce as much of a bounce in the stock price. Timing is everything. These announcements are very strategically planned. Leaks being published undermines this strategy and, ultimately, affects the value of the company.

That said, Apple was not suing the web site owners for damages. They were only asking for the sources of the leaks, so that they could execute their right to throw the book at them.

California has state laws that prohibit anyone from publishing information that is known to be trade secrets. Unannounced products are trade secrets. Information about unannounced products are trade secrets. For competitors to know about these products even a week before they're released would result in damages to the company. Their competitors would have an additional week to catch up to their designs, specs, pricing, etc. Thus, leaking information one week early means Apple will have competition to its new product a week earlier than if the secrets had remained confidential. These are concrete damages.

Some have argued that journalists should have a right to break stories about companies who might be breaking the law, and that this ruling sets a precedent that will discourage this type of reporting. Most states have whistleblower laws that protect journalists and their sources in cases where journalists discover an entity engaging in fraudulent or otherwise illegal activities.

The point: Apple could have easily gone after the web site owners themselves for damages, as California law allows it. As was mentioned earlier, some of the documents leaked to them clearly indicated that it was confidential. They published it knowing this. Apple chose to limit the case to just suing for their sources, though, which does show some restraint on Apple's part.

If the web sites had published libelous/slanderous information relating to Apple, would those of you who support them still be on their side?

[Scote]

"So how about posting your full name, SSN, mother's maiden name, phone number, home & business addresses, and your income? Oh, and a valid email address while you're at it. I'm an interested member of the public ;)"

You miss my oh-so-clever qualifier "generally". But I supposed I should be more clear: Secrecy by organizations that have power over the public is generally bad for society. Secrecy is used to cover up a variety of ill, corporations use secrecy to defraud their shareholders, governments use secrecy to illegally hold prisoners, and individuals use secrecy to force people in settlements to keep information about alleged criminal acts secret (eg. the 1st Michael Jackson settlement.)

The information you requested could be used to commit fraud. The information about Apple's upcoming product can't. Plus, the freedom to speak is benefited by the freedom to speak anonymously, so we can be free of harassment.

>And if secrecy is against the public interest, isn't that an argument *for* Apple's case: that the 'secret' source(s) should be revealed?

The freedom of the press is not unlimited, and some transgressions warrant a search of the e-mail records; however, that bar needs to be set high to protect the rights of a free press. As many have pointed out, Apple has not done a thorough internal investigation first. They actually want the records of the ISPs of the Apple news sites, without exhausting other avenues. A non-internet equivalent might be that someone told you about about a cool new Apple product and then you told some friends at a bar. The next thing you know, Apple is asking your ISP for all of your email. That really is what is happening, and that is without even taking into account the role of the Apple news sites as news organizations.

[Scote]

Alex in Los Angeles wrote:
"But, I sure wish some of Dan's readers would stop confusing NDA with Trade Secret. Just because company X makes people sign an NDA does not mean they can now sue any journalist who publishes NDA covered information. That company better be sure it has a trade secret in question before it tries to sue the NY Times. In the same sense that the journalist has to show the story is in the public interest, a company should need to show that their secret is truly a trade secret."

This is wrong on a couple of points. One, the trade secret definition is extremely broad and can be interpreted to mean just about anything:

"d) "Trade secret" means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and
(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy."

Second, AinLA assumes that the purpose of the subpoenas is to file lawsuits under for illegally disseminating Trade Secrets. However, subpoenas against websites have often been used just to get the names of people to fire. While it may be within Apple's rights to fire an employee over this matter, that doesn't meant that it should be able to sift through the records of the News Site's ISP.

[David Harris]

In all the diatribes I've read never is the word honesty mentioned. The persons who revealed this information signed nondisclosure statements. They broke their word and tried to stab Apple in the back. This is dishonest, unethical, dishonorable, contemptible.....

Sorry, but my Appleworks thesaurus has run out of synonyms. Where's your sense of values folks? I certainly would not look to the press for any.

[Herb]

"The information you requested could be used to commit fraud. The information about Apple's upcoming product can't."

Sure it could. Take the iPod shuffle for example - have you seen the LuxPro 'Super Shuffle'? One could imagine that had the iPod's design been leaked earlier, LuxPro could have had their knock-off out to market before the iPod Shuffle was announced.

Or in the case of 'Asteroid' (which is what the ruling is about), the product hasn't even been *announced* yet, much less released which could result in damages.

" As many have pointed out, Apple has not done a thorough internal investigation first. '

So what is a thorough investigation? Would conducting a search of its own internal email and asking all employees + contractors to sign affidavits suffice?

"Secrecy is used to cover up a variety of ill"

Free speech is used to cause harm. Sometimes, in a free society, you have to take the good with the bad.

[Jeff]

I would like to hear anyone's comments on the following hypothetical scenario and how it is similar or dissimilar to the Apple lawsuit.

Let's say the criminals that recently stole the personal information of about 150,000 people from Choicepoint decided to give that information to some blogger and he published the information on his website. If you were one of the people whose personal information was made public by the blogger, would you feel it is your right to sue the blogger to reveal the source of your personal information? Or, would think that he should be able to invoke journalistic privileges to hide his sources?

[Other jeff]

Dan, why am I feeling this is an "all or nothing" issue with the press?

Where is the concept of "reasonable" here? Like the old yelling "fire" free speech limitation freedom of the press has it's limitations. Today it's the limits under liable and slander laws while tomorrow it may include the use of knowingly printing stolen information for NO OTHER REASON than to publish it.

Make no mistake there are no Bob Woodward's here looking for corruption or cooked books, but a few guys going out of their way to uncover and publish a specific company's trade secrets, and exploit them for personal or business gain.

These guys, who by the way are NOT bloggers, went out of their way to specifically induce, tempt, and feed of people's desire to be seen as "in the know" to break a their legal agreement with Apple. If the judge ruled your way NDA's and confidentiality contracts wouldn't be worth the paper they were printed on.

These people knew, and I think based upon his ruling the Judge agreed, they were getting confidential and sometimes stolen information. They did so not as journalists but some guys making a little cash on the sale of banner ads but more, like the guys that feed them the info, out of a desire to look like they are "in the know". These guys even knew they were doing damage to Apple and often admitted as much when they would say things like, "we've embargoed come details until we see the release get closer so not to...bla ...bla..."

I am all for a free press, and freedom of speech, but I am also for the implied "right of privacy" and if people can break business agreements, how long before my accountant can give my tax returns to a local newsperson and hide protected behind that newsperson's shield.

Anyway, I have a lot of respect for your opinion, but I hope your new venture doesn't blind you to what's right and wrong in some idealistic quest to protect what you see as the next great estate.

The Other Jeff

[Scote]

Herb, claiming the product release info could be used for fraud:

"Sure it could. Take the iPod shuffle for example - have you seen the LuxPro 'Super Shuffle'? One could imagine that had the iPod's design been leaked earlier, LuxPro could have had their knock-off out to market before the iPod Shuffle was announced."

Why yes, I have seen the Super Shuffle, and it is an interesting case. But it is not an example of fraud. Apple may have a trade dress, or design pattent lawsuit they can file against Luxpro; however, that kind of legal protection for IP requires *public* information and registration of the trade dress or patent--not secrecy.

Part of the problem with the iPod shuffle is that it doesn't represent any kind of technological innovation, so it is super easy to copy, even without any inside information. In fact, the Supper Shuffle has *more* features than the Apple iPod Shuffle because of Apple's deliberate policy of feature paucity. Apple decided not to use a number of features built-in to the off-the shelf chip they used as the Shuffle's guts, including WMV, DRM-WMV and FM-Radio support. However, Apples proprietary DRMed ACC iTunes Music Store format has me locked in to Apple players. Other than ACC support, the Supper Shuffle may be a superior product, in-spite of its copycat origins.

[Chuck]

What is wrong with a DNA? If you don't want to be privy to information, then don't sign it. Pretty straightforward to me. Once again, it assumes people are trustworthy and that is how the system will work. But when someone signs it and then decides, for whatever purpose, to break the agreement, then they should be punished (unless criminal activity is involved). This is elementary school logic here, but some of you want to pretend it's something to haggle over in a judge's chambers for posterity's sake. Please. Get over it. I think the Internet and open-source software has turned some people in the Tech community into Communists: people have a right to anything...for free! Free software, free data, free information. "As long as I can get my hands on it I can pass it around because it belongs to all of us." No thank you. The Wall fell years ago. I prfer Capitalism where privacy and profit can provide people a safe and secure income. Linus Torvald and his Linux fellows can trade free software all day long, but let's understand there is a difference when a company like Apple decides to protect its assets, no matter how THEY decide.

[Chuck]

Sorry about the typo above. Should have read "NDA."

[Scote]

"The Wall fell years ago."

And has been replaced by a new wall--one constructed by borderlines matrix of corporate and government collusion. This new, invisible wall treats corporations with more rights than individuals and protects corporate profits and business models as if the corporation is the public interest.

What is wrong with NDAs? If NDAs were only an occasional requirement, used sparingly, I'd say they were fine. But increasingly, companies require NDAs, Non-compete agreements and binding arbitration agreements. Companies can even fire you for drinking a competitors beer, *on your own time*!

I'm not saying that the NDAs in Apple's case are wrong, but the ability of Apple to go into the private records of a newsite to satisfy its corporate curiosity about who might have leaked the info is too much. Perhaps they should be allowed to just put Carnivore on the internet and search for any email that mentions "Apple" and "Asteroid?" Why not? After-all, the only way people could put those two words together is if someone broke an NDA...

[Scote]

"borderlines matrix" should read "a border-less matrix"

[anon]

Scote...

"Part of the problem with the iPod shuffle is that it doesn't represent any kind of technological innovation, so it is super easy to copy, even without any inside information."

Me...

Scote, you really don't know what you're talking about here. I can think of no Apple product that has not included components or technology that Apple has patented over the course of its development. Even their optical mouse ended up resulting in something like 30 patents over the course of its development, even though, from the outside, it seems like nothing unique.

Details such as the ball bearings that secure the cap to the USB jack, the battery technology, the software integration, the OS, even the buttons or the plastics could have included research and technology that previosly didn't exist and that is being patented/has been patented. Apple does patent the techbology they develop for their new devices prior to release. Doing so does not then make the final product or its relevant IP no longer a trade secret. It's one thing to patent a technology or a component and make that bit public. It's another thing entirely for someone to publish details on the product utilizing those components and technology. The product is what generates Apple's revenue.

The fact is that this leak resulted in concrete damages to APple's bottom line, and, in turn, to the value of my own investments as a stockholder.

In California, it is against the law to knowingly publish information that is a trade secret, precisely for this reason. Doing so defrauds the owner of the secret and, in this case, resulted in damages.

Apple has a right to prosecute (and an obligation to its stockholders to do so), and the only way to uphold this right is to demand that the journalists reveal their sources. These sources are not protected, according to the law. Simple as that.

You seem to have an attitude that corporations are inherently evil. This is irrational on several levels. Corporations are comprised of the "workers" you are so fond of, as well as more "workers" who hold a stake in the company. Our legal system is just as much obligated to protect this amalgamation of "workers" as it is to protect any single one of them.

[Scote]

"Scote, you really don't know what you're talking about here. I can think of no Apple product that has not included components or technology that Apple has patented over the course of its development. Even their optical mouse ended up resulting in something like 30 patents over the course of its development, even though, from the outside, it seems like nothing unique."

You point actually undermines your argument. The patented Apple technology is not harmed by being revealed, it is *patented*. A patent is legal protection an individual gets (the constitution patents cannot be awarded directly to corporations) by publicly registering all of the details of a novel invention with the Patent Office. Patents are the opposite of a trade secret. There is no such thing as a secret patent, and secret patent is, in fact, an oxymoron.

"The fact is that this leak resulted in concrete damages to APple's bottom line, and, in turn, to the value of my own investments as a stockholder"

The leak of Asteroid has not resulted in "concrete" damages. Name the exact, concrete damages, other than hypotheticals. Hypotheticals are the opposite of "concrete."

The California Trade Secrets Law is way too broad, as quoted earlier:
"d) "Trade secret" means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and
(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy."

This means that *any* information that a company has that could lower its stock value can be called a Trade Secret, whether that information is about projected sales, poor investments, defective products, illegal accounting. All of those things could be used by someone to drive the stock price up or down allowing " other persons [to] obtain economic value from its disclosure or use."

This broad language that comprises what can be a Trade Secret means that a corporation could legally sue any news enterprise over any internal information they report that could affect the stock price.

The Apple ruling is extremely bad for the ability of a free press to accurately report the news. This is why the rulings allowing for subpoenas need to be as few and infrequent as possible and only for major breaches of Trade Secret IP, like source code and schematics and such, not just about the release of some general information about an upcoming product. Apple is using police state level powers over a fairly minor breach.

"You seem to have an attitude that corporations are inherently evil. This is irrational on several levels. Corporations are comprised of the "workers" you are so fond of, as well as more "workers" who hold a stake in the company. Our legal system is just as much obligated to protect this amalgamation of "workers" as it is to protect any single one of them."

No, corporations are not inherently evil, they are inherently amoral. Ambrose Bierce described what a corporation is rather sucinctly:
"CORPORATION, n.
An ingenious device for obtaining individual profit without individual responsibility."

Yes publicly held corporations are made up of individuals, but those individuals are not the corporation. The corporation is a legal entity made to maximize shareholder profit and the best interests of the legal entity are not necessarily the best interests of the individuals who work there. For the most part, employees at a corporation are a commodity, to be bought at the lowest possible price.

Because corporations are inherently amoral, we need strong laws with big financial consequences to financially encourage corporations to act morally for the good of the public as well as the good of the individual company.

[Owen]

Scote...an NDA is effectively a contract granting access in return for an agreement not to betray private information. Journalists sign them every day, as do software designers, advertising agencies, government workers, researchers and many other occupations. It's a serious, legally binding document, whether you or anybody else thinks the protected information is worth the NDA.

The "Is a blogger a journalist" red herring isn't the question, nor is the right of Apple to fire, sue or otherwise punish violators of the NDA in their employ. The question the judge addressed was Apple's right to sue for disclosure of private data. His decision makes me nervous, but so does disrespect for anybody's rights, even those of an "amoral" company.

Dan, your petulant reaction to the decision...to demean a company and product you've lauded in the past...is childish and unworthy.

[Scote]

"The question the judge addressed was Apple's right to sue for disclosure of private data."

Except, in this case, the question is if Apple can subpoena information from news organizations *who are not parites* to the NDA and have not signed it. You may note that the judge didn't decide if the Apple news sites were legitimate news sites. That is part of the problem, he said that his ruling would apply to any news organization.

Because any and everything can be a "Trade Secret" under the overly broad definition of the Trade Secret law, the judge should have set the far bar higher for Apple's attempt to use the Apple news sites as its personal spy agency, to ferret out an *alleged* breach of an NDA--since we don't know who leaked the information we don't know that person even signed an NDA.

[Mayuresh]

Dan,

Your comment about not waiting to buy a Mac simply based on Jobs and Apple's obsessive nature with secrecy and their willingness to fight over what is rightfully theirs is IMHO misplaced.

I have great respect for what you are trying to do with journalism but the facts in this case are quite simple. Yes, the bloggers have rights under various laws and the US constitution, yes they are independent and have the right to express their opinions freely, but with rights comes responsibility.

I agree with Chuck above who has very well said that good journalism is transparent journalism.

These websites have knowingly breached trade secrets, period, and they should pay the price for it.

Mayuresh

[Scote]

"Yes, the bloggers have rights under various laws and the US constitution, yes they are independent and have the right to express their opinions freely, but with rights comes responsibility."

The right to free expression for journalists is null and void when any company can hang the possibility of ruinous litigation over the head of a News site for doing basic reporting. Apple is going on a fishing expedition. They don't know who the leaker is or even if the leak is by someone who has signed an NDA with them, so they have subpoenaed *multiple* website's ISPs for records because they don't know what they are looking for.

Why not add every blog that has covered the issue to the list? I've been rather strong in my opinion in support of the Apple news sites, so it is possible that I'm the mole; therefore, under your reasoning, Apple could sue Dan's blog, typepad and any related ISPs for the IP logs of every comment posted. And, since Dan is a technology journalist, he undoubtedly "knows something," so subpoena him, too. Granted, my example may seem a little extreme, but that is my point. Apple's subpoena's are extreme, too.

"These websites have knowingly breached trade secrets, period, and they should pay the price for it."

First off, you are making an accusation that could be considered libel. You don't know for a fact that any of the websites "knowingly" breached trade secrets--you are making an assumption and declaring it as fact. Not even the judge in the case claimed that the websites knowingly breached trade secrets--he very specifically did not comment on the merits of Apple's case. So, perhaps the websites should subpoena Dan's records so they can get your name and sue you for libel? Based on your standards of what it is ok to subpoena from a news site, your IP address would clearly qualify as a fair target.

So, what should the websites do? Under your proposed standards, Mayuresh, what is legitimate? Printing old Apple press releases, talking about old products? Do the Apple news sites have to ask their sources to only tell them things that are guaranteed to be false, so they can be sure they are not reporting "Trade Secrets?" With all of the speculation about Apple products some guesses are bound to be true, so should Apple be able to sue them for every correct guess?

Without the ability to talk about things companies don't want you to talk about, thre can be no critical news reporting about the tech industry, or industry in general.

[Owen]

"Without the ability to talk about things companies don't want you to talk about, thre can be no critical news reporting about the tech industry, or industry in general." Hogwash...first of all, journalists can use other sources and their own thought processes to speculate, analyze, research and opine to their heart's content. Secondly, the opinion doesn't address content, but sources.

As I said earlier, there are troubling aspects of the decision, to which point Dan and many contributors here have very eloquently referred. But taking the arguments to the all-or-nothing, sky-is-falling poles of the debate over access vs. privacy does nothing to advance either understanding or resolutions.

[The Other Jeff]

Just got to thinking, and not sure this has been asked, too many posts! ;-) Dan, have you ever knowingly violated an NDA? Would you have ever gone to Apple for a briefing and then turned around and published the info? Did you simply not take NDA meetings? If so were you ever approached with what you knew was "confidential" information and then publish it? Just wondering where you personally stand on the conduct apart from the law.

-The Other Jeff

[Scote]

Quote:
"Without the ability to talk about things companies don't want you to talk about, thre can be no critical news reporting about the tech industry, or industry in general." Hogwash...first of all, journalists can use other sources and their own thought processes to speculate, analyze, research and opine to their heart's content.
Unquote

And where will those magical "other sources" information come from? And what will the journalists "own thought processes" be based on? News organizations will be stuck looking from the out side, with no access to any real information about companies, only press releases and sanitized quarterly releases. This would be like Jacques Cousteau trying to do a documentary on octopi by filming only from dry land.

Every dirty dealing done by Enron and Worldcom was also potential trade secret (see my explanations above) and a potential lawsuit for any reporter brave enough to research these companies. Not every lead on these companies is going to pan out and every bit of information a reporter dug up could be another chance for these companies to sue over "Trade Secrets."

PS, to the "Other Jeff"
What you didn't ask Dan was anything that was analogous to the situation in question, where a reporter printed information about an upcoming product but the *reporter* had never signed an NDA with that company.

[Owen]

Much intelligence gathering...for military, market research, investment or old-fashioned news reporting purposes...comes from hard work, not having illegal data dropped in your lap. Interviews, publicly available data, SEC filings, product and market trends, gossip and unrestricted company sources are among the sources of data a competent researcher or reporter will explore and...here's the tough part...actually think about it to form conclusions.

I've worked with a lot of reporters over the years. The good ones are smart, informed and hard working; the bad ones are superficial, lazy and not very analytical.

[Scote]

"Much intelligence gathering...for military, market research, investment or old-fashioned news reporting purposes...comes from hard work, not having illegal data dropped in your lap. Interviews, publicly available data, SEC filings, product and market trends, gossip and unrestricted company sources are among the sources of data a competent researcher or reporter will explore and...here's the tough part...actually think about it to form conclusions."

Your summary seems a fair one with one gaping problem, with the over broad Trade Secrets law, "gossip and unrestricted company sources" are out. There is no such thing as an unrestricted company source now, because they need not specifically be under an NDA in order for a company to claim "Trade Secret" status on internal company information.

Viewing a company solely from the outside severely restricts good journalism, and could never have revealed the biggest business scandals. Your obvious remarks that good reporters "are smart, informed and hard working; the bad ones are superficial, lazy and not very analytical" has nothing to do with what a good reporter needs to do a story. Your implication that only lazy reporters would use inside sources is not borne out by examples of good journalism where reporters combine inside sources and with other information from outside to make a complete and insightful story.

Certainly, there will be some form of reporting that can continue under this threat of Trade Secrets litigation, but it will be an emasculated form of reporting, and much more domesticated and "business friendly."

[Alex in Los Angeles]

Scote,

I agree with you.

My point about NDA's and Trade Secrets assumed that trade secrets must reach a high bar. If you are correct that trade secrets are practically anything the company wants, then I sure hope Apple or someone sues the NY Times as quickly as possible. Why? Because the NY Times would teach any business and this judge in CA a thing or two about journalism in America.

I also agree with you that CA's trade secret law is overly broad and needs to be challenged in court. Maybe Apple's Asteroid secret is a big deal and Apple deserves to pressure journalists over its leak, but I really think the burden of proof should be on Apple.

Most of Dan's readers seem to think journalists should be automatically sued for posting anything a business was trying to keep secret, however innocuous(interested public vs. public interest). In fact, many seem to feel that innocuous data (public curiosity) of seeming little public interest value makes for a stronger legal case against the journalist. IMHO, this is backwards in that the constitution protects Freedom of Speech not freedom to keep secrets. Secret keeping, even by your favorite corporate daddies, should be a more limited right than journalism.

In other words, if a journalist wants to gossip about business secrets, however pissed off the company and however protected the secret, a high burden of proof should be on the company to prove the information is not in the public interest and the data's secrecy trumps our freedom of the press. Of course, both rights are limited, and obstensibly, the Judge made this determination. I would hope we as the public don't just take this case as a cue to dump our freedom of the press in all similiar cases. Make the businesses work to limit our freedom of the press.

Cheers!

[Alex in Los Angeles]

"Make the businesses work to limit our freedom of the press."

Well, that didn't come out right. I think I meant, "make businesses prove they deserve protection of their secret at the expense of freedom of the press."

However, this raises the thought of bullying lawsuits. See this story by Andrew Lark, at corante.com
http://www.corante.com/brandshift/archives/2005/03/13/apple_ruling_has_implications_for_brand_communicators.php

[Alex in Los Angeles]

See also this CNET story:
http://news.com.com/Apple+lawsuit+Thinking+different/2010-1047_3-5611497.html?tag=nefd.ac

[John]

Scote: You should read the Neo articles at Macsimumnews.com. He uses everything but trade secrets to make all sorts of connections on future Apple products and services. I can even make reasoned guesses as to what is coming next without reading a protected internal Apple document. Can't you?

Alex: The Constitution also places a high value on protection of real (as in real-estate-type real) and personal property. Information is personal property. And secret information is personal property. There's plenty of information about you that would be illegal for any business, media, or the government to make public, except under special circumstances. In the same way, businesses and the government have secret information that would be illegal for anyone else to make public, except under particular circumstances, of which two are noted in the UTSA - illegal activity and legal evidence. Have you ever read Hernando de Soto's book called The Mystery of Capital? Then you might appreciate the real value of property.

[John]

Scote writes "This broad language that comprises what can be a Trade Secret means that a corporation could legally sue any news enterprise over any internal information they report that could affect the stock price."

Yes, except protected information has to be protected by reasonable means (read the UTSA). That means it is limited to something less than "any". A company cannot claim something is a trade secret after it's already been published unless it was protecting it prior to publication. That means, that such information needs to be stamped Confidential, Need-to-Know, Secret, Not-for-Public-Release, For-Official-Use-Only, etc. The accusing company has to pass this burden-of-proof before it can claim a trade secret.

So in the Asteroid case, we now know from the ruling how particular the information was - a specific diagram and spec list protected under Apple Need-to-Know Confidential stamp. And therefore, we now know how narrow in scope (Apple is only claiming information protected under that stamp, and not just anything that could've been derived from non-protected sources) and how strong Apple's case is.

An argument could be made that had the offending parties not published the copy of the diagram (which is a smoking gun!), that even though info is protected per a stamp, that the information could've been derived from other non-protected sources. This is certainly more of a possibility with the Think Secret/Mac mini case, i.e., could've known about no monitor, cheaper than eMac by about $200, G4 and other similar to eMac specs, release at MacWorld. But I suspect that the TS post has matched the info in a specific protected document that might've been planted to catch NDA-breakers - maybe the 1.73" height pizza-box aspect tied to a particular codename. (I'm convinced now given the Tiger source leak case and the Kleinberg revelations, that Apple has sued TS because the evidence is so clear-cut, they don't think there's anyway they can lose. )

As for economic value, stock market and bond market variation is one possible claim, as the variation can affect borrowing, hiring/retention, buying out another company, etc. Other possibilities are ability for a competitor to produce competing product, and ability to inhibit potential purchasers from purchasing. These are the obvious ones, but there's many more possibilities.

[Mayuresh]

I'll reply to Sote's comments above which are very well put and some other comments that have been floating around.

"Without the ability to talk about things companies don't want you to talk about, there can be no critical news reporting about the tech industry, or industry in general."

I disagree. There is a difference between critical reporting and simply fanning gossip/ rumours. If TS wanted to do critical reporting, they would analyze Apple's market position, have interviews with Apple personnel, their products, etc. and then make a case as to what Apple needs a Mac Mini (or whatever they wanted to call it before the Mini was released). You do not need the help of people who have potentially broken an agreement or got hold of material that you think may be tainted, to be good, critical journalists.

I agree that I made a callous call in my original comment about them knowingly published tainted material and I withdraw it. However, now that it has been published and Apple has taken offence, Apple has the right to question this in court because the details TS published could not have been got legally – at least in Apple’s opinion.

I agree with what ‘Alex in Los Angeles’ that the onus of proving something wrong has happened is in this case, with Apple. They have taken this up and proved it satisfactorily in court that their business interests were harmed or some law was broken. I myself am sceptical of just how much damage this could possibly have done to Apple; I think it did more good than bad but that is beside the point.

All this comes back to what journalists can/ should and cannot/ should not report. Should you report on some horrific accident or someone suffering (not torture or anything illegal) only because it improves ratings? Should you film some Hollywood icon having sex on the beach and sell it for profit? It is and always has been a matter of judgement. Sometimes, the law finds that such calls are not made with the best interest in mind and punishes those responsible. If the law doesn’t, the public will.

In the end, it is about protecting the sprit of the law.

Continuing on the same theme, on what basis does any government go about banning radical religious websites preaching the wrong things or arresting and prosecuting those who run them? Don’t they have the freedom of speech? They do, but they do not handle it responsibly. Any law, even if it freedom of speech, is only as important or useful as how people use or abuse it.

Disclaimer: I will be the first to admit that I am no legal expert, I have not studied many if any cases but I just have a strong if maybe wrong opinion on this. Also, I am a big fan of Apple but am not an ass-licker that I need to side with them in everything they do.

Mayuresh