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March 12, 2005

Comments

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

Alex in  Los Angeles

Mayuresh wrote:

"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."

Are you defending a govt's right to close down religious website based upon "preaching the wrong things?" What country are you talking about, because in the USA we don't allow the govt to do any such thing.


NOTE: At the risk of being redundant, I wanted to restate my concern with precedent and CA's Trade Secret's Act. I am not concerned with the Judges determination that Apple's info was a legitimate trade secret.

I think we would all be better served if the press had a right to protect their insider sources when publishing SOME types of "trade secrets." I think in Apple's case, their data was probably rightly protected, but I don't think CA laws, and some arguments I've read, leave much room for anything other than illegal or legal evidence exceptions. I would agree with Scote that we need to limit what can be called a trade secret, otherwise any corporation can take a journalist to court to let the judge settle what is in the public interest. I would want to limit journalists' exposure to that kind of harrassment.

I think billion dollar multinationals have been given quite a nice legal bludgeon against journalists. I think it is silly to think there is no risk this precedent would be exploited and abused by corporations against the press, especially independent press that tended to piss off said businesses.

Do people believe that in the long run we'll all be better off for reigning in that nosy business press; surely, with corporations now as powerful as many governments it is dangerous not to limit what a corporation can call a trade secret. Having an open society with a free press as a watchdog should not only apply to government and politics, but also to our dealings with corporations.

I wonder should the following allowed to be called trade secrets, and do you think their protection should trump "public interest" in all cases:

Questionable financial dealings (were all of Enron's tricks technically criminal?)
Lobbying plans
Product safety data (not showing criminal negligence but still raising concerns, and which a corporation would want to release on its own terms)
Manufactoring practices data (use of potentially hazardous materials, pesticides, etc.)

Stan Krute

The amusing thing, for we who see the most
addled Mac-volk as sad cultists, is the defense
that Apple must do whatever it can to ensure
its survival, even if what it does if done
by another corp. would be supremely odious.

The amusement stems from the obvious parallels
to defenses given by fans of the Russian revolution
of 1917 for the excesses of Stalin.

-- stan

David Burdette

Scote. I think we all know your opinion on this. How about letting someone else express theirs without you reiterating yours over and over again. And by the way, you are wrong.

Bob Perdriau

http://daringfireball.net/

Scote

"Scote. I think we all know your opinion on this. How about letting someone else express theirs without you reiterating yours over and over again. And by the way, you are wrong."

Well, first off, I'm not trolling. I'm trying to present cogent arguments for what I think is an important position and I do try and respond to specific issues brought up by others in each of my responses. Note that I don't post so prolifically in all the comment pages. I was also specifically trying to counter what seemed like an unusually high proportion of people who think that companies should be suing reporters and/or that the websites in question are not news operations.

Second, my posts don't prevent anyone from expressing their opinion--it's not like there is a space limit and everyone of my posts means one less post for someone else.

And third, you must be joking if you ask me not to post any more, then bait me by saying, "And by the way, you are wrong."

[Sarcasm]
Really, I must complement you on your brilliantly presented evidence and thoroughly reasoned conclusion. I've never seen a critique which so completely devastated each and every one of my points. Wow, "And by the way, you are wrong" With that kind of powerful writing, you should live in constant fear of how you might accidentally change the world with your supernatural persuasive ability.
[/Sarcasm]

Alex in  Los Angeles

Here's an interesting read from the Mercury News on the potential impact of this ruling. Of course, I agree with it, so YMMV.
http://www.mercurynews.com/mld/mercurynews/news/opinion/11168527.htm

laura

You know....my opinion is that secrecy has been Apple's "branding". Just as other products have a strategy and a feel (think Gap or Abercrombie or McDonalds)...with Apple it's all about the element of unveiling a huge masterpiece. I think Jobs has a right to fight to keep that "branding". I also think he has a right to lean on people that leak pre-release info for their sources. If there is a mole at Apple, Jobs has the right to find out who that mole is and remove him/her.

We aren't talking about news reporters covering the fight for democracy or top secret government information...we are talking about CAPITALISM. Face it, we may think we are all about freedom & democracy, but we are really about the dollar. Jobs is simply protecting his business..his brand.

Sorry to disagree with so many.

Lewis in SF

Stan wrote:

"The amusing thing, for we who see the most
addled Mac-volk as sad cultists, is the defense
that Apple must do whatever it can to ensure
its survival, even if what it does if done
by another corp. would be supremely odious.

The amusement stems from the obvious parallels
to defenses given by fans of the Russian revolution
of 1917 for the excesses of Stalin."

I find it unfortunate that you say "the most addled Mac-volk as sad cultists" as if we are all addled at least to some extent. This snide name calling lessons your credibility from the start. Have you no room for thinking we can appreciate the qualities of Apple's products, and even vocally and passionately promote or defend what we see as quality, while still being independent thinkers who aren't part of a cult?

I've read all the posts here and while many have said that Apple should do what it needs to do to protect itself, I didn't see anyone saying Apple should do ANYTHING regardless of the consequences. You made a giant assumption or leap there, my friend. Many of us think Apple should do what it has a RIGHT to do to protect itself, not just ANYTHING it wants--then it would be no different from the companies we hate.

If Microsoft, a company I truly think is evil, sued teenagers running rumor sites to get the names of people who broke NDAs I think I would accept that as their right. So, to answer your charge, I don't find what Apple is doing would be odious if another company were doing it (with the possible exception of any attempt Apple may have made to argue that "all bloggers are not journalists"--which I'm not sure they argued).

I doubt the other people defending Apple on this forum think Apple's actions would be odious if another company did them. I see no evidence in our writing that we are like Soviet style authoritarian communists as you're comparing us to. Somehow I doubt people would pay as much attention to this issue if it had been Microsoft suing to protect it's rights.

The unfortunate thing is Apple walked into a thorny mess where both the progressive left (the unthinking, gut reactors in the bunch anyway) and many traditional Apple bashers (largely the Microsoft establishment) feel they have ammo to slur Apple and it's proponents. Whoopee! Same ol' same ol'.

I'll chime in with what some others have said--I usually very much enjoy Dan's writing and his reporting and I'm very happy he's attempting to promote and advance alternative forms of journalism, but in this case I think he's off-base and maybe reacting a little too personally and defensively. I sent the link to this entry to a Windows using friend and her immediate reaction was, "He sounds bitter."

Please Dan, read all the comments on here and answer our points beyond labeling most of us as "Apple's acolytes, who keep finding reasons to worship a company that deserves increasing contempt". Those of us who generally follow your writing, support your efforts and promote your site and who also happened to make sound rational arguments against your points here deserve better than this from you.

Scote

"I doubt the other people defending Apple on this forum think Apple's actions would be odious if another company did them."

This is called a "straw argument." When you are incapable of criticizing what someone has *actually* written, you make up something you claim your opponent *might* think and criticize that instead.

In my case, you have it backwards. I think the suits brought by Apple would be just as odious if brought by any other company. The case of Apple, the lines are fairly clear cut: what Apple does is news.

"Apple walked into a thorny mess where both the progressive left (the unthinking, gut reactors in the bunch anyway) and many traditional Apple bashers (largely the Microsoft establishment) feel they have ammo to slur Apple and it's proponents"

So, the right of a free press is only supported by "unthinking, gut reactors" and Apple bashers? I'd like to think that a press that doesn't have to cower in the corner under the constant threat of lawsuits is good for democracy, whether you are on the left or the right. I'd say that the Bush Administration has different view on a free press, though.

The Apple suits aren't about liking or hating Apple, they are about the rights of a free press, a press vital to the working of a democratic capitalist society, where an informed public is the only way we can insure freedom and government and corporate honesty.

Alex in  Los Angeles

Another story from the NYTimes highlighting the importance of the Judges ruling on trade secrets and narrow definition of public interest:
http://www.nytimes.com/2005/03/21/technology/21law.html?ex=1197781200&en=40d294ccfa312c66&ei=5035&partner=MARKETWATCH

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