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TMO Reports - Judge Orders Mac Site to Reveal Sources; Appeal Planned (UPDATE)

by , 4:00 PM EST, March 11th, 2005

The Mac news site O'Grady's PowerPage must divulge confidential sources in a lawsuit brought by Apple Computer, Santa Clara County Superior Court Judge James Kleinberg ruled Friday. Attorney's representing the site say they will appeal the decision next week.

Judge Kleinberg denied a protective order barring Apple from seeking information on who leaked information about an un-announced product, code-named "Asteroid". The court said that Apple can now go ahead and obtain records from Nfox, the e-mail service provider to PowerPage, owned by Jason O'Grady. In the ruling, the judge said that Apple's interests in protecting its trade secrets outweighed the public interest in the information.

In his 13-page ruling, Judge Kleinberg wrote, "the rumor and opinion mills may continue to run at full speed...What underlies this decision is the publishing of information that at this early stage of the litigation fits squarely within the definition of trade secret...The right to keep and maintain proprietary information as such is a right which the California Legislature and courts have long affirmed and which is essential to the future of technology and innovation generally.

"Unlike the whistleblower who discloses a health, safety or welfare hazard affecting all, or the government employee who reveals mismanagement or worse by our public officials, (the enthusiast sites) are doing nothing more than feeding the public's insatiable desire for information," Judge Kleinberg wrote.

In the ruling, Judge Kleinberg largely ignored the question of whether the publishers were journalists and therefore protected from facing contempt charges for refusing to divulge sources under California's shield law. "The California Legislature has not carved out any exception to these statutes for journalists, bloggers or anyone else," he commented. "Defining what is a 'journalist' has become more complicated as the variety of media has expanded," he said. "But even if the movants are journalists, this is not the equivalent of a free pass. The journalist's privilege is not absolute."



Download the PDF of the ruling in its entirety.



The court decision does not affect the possible serving of subpoenas in the future to AppleInsider reporter Kasper Jade, who writes for the site under a pseudonym, and Monish Bhatia, who provides hosting services for AppleInsider. The Mac Observer has learned that subpoenas seeking information from Mr. Bhatia and Mr. Jade were never served and have since expired. It is not known if attorneys for Apple will seek to re-issue those subpoenas.

Lawyers for the non-profit digital rights group the Electronic Frontier Foundation (EFF) told The Mac Observer they will appeal the judge's ruling by the end of next week. The court has given the plaintiffs a stay of seven business days to appeal before subpoenas are delivered to owners of the Mac sites.

"We're disappointed that the trial court ignored the Supreme Court's requirement that seeking a journalist's confidential sources be a 'last resort' in civil discovery," said EFF Staff Attorney Kurt Opsahl. "Instead, the court asserts a wholesale exception to the journalist's privilege when the information is alleged to be a trade secret."

"The court decision is disappointing in that Judge Kleinberg agrees with Apple that they have exhausted all avenues of finding out who leaked the information," EFF attorney Kevin Bankston said. "We disagree with this because the judge has given no analysis as to why he thinks they have fulfilled their obligation."

Mr. Bankston said his clients are also disappointed that the court created an exception to the reporters privilege "when there is a mere allegation of a trade secret violation." He said the EFF believes this point affects "any and every business reporter in America."

"Essentially the court is saying that if a plaintiff alleges a reporter has published something containing trade secrets information, then that reporter is presumably a defendant and also has to give up their source without the litigant overcoming the First Amendment test."

Mr. O'Grady said Friday he is "disappointed" by the courts decision and will fight for his right to protect his sources.

"We're going to appeal," he told TMO. "This clearly flies in the face of the First Amendment. I think the judge's ruling is wrong, and we're going to fight this to the end."

On December 13, Apple filed suit against "Does 1-20" in a Santa Clara County district court. The company obtained a court order that allowed it to issue subpoenas to AppleInsider and PowerPage for the names of the "Does" who allegedly leaked the information in question. Journalists from PowerPage and AppleInsider had previously refused to release any information pertaining to the identities of their sources, citing first amendment protections and California's "shield" law, designed to protect journalists and encourage the publication of information in the public's interest.

Also named in the complaint was Mac site Think Secret. Although Apple first alleged Think Secret possessed trade secrets, it later admitted the site only linked to messages boards discussing the rumors of such a product and that those message boards were not owned by Think Secret. Apple has since allowed its subpoena against Think Secret owner Nick Ciarelli to expire, TMO has learned.

Mr. Bhatia and Mr. Jade refused comment to TMO on today's ruling, as did an Apple press spokesperson, who did not return repeated phone calls and e-mail for comment.

Brad Gibson contributed to this article.

Observer Comments

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View Name:Guest
Subject: justice is served...
View Name:Guest
Subject: RC is headed to jail! [NT]
View Name:Guest
Subject: daring sycophants, yea! rejoice! rejoice!
Close Name:AyaSofya Posts: 137 Joined: 11 May 2004
Subject: Well at least

At least the article prompted me to look up the definition of "movants".

I am mixed on this case, I can see both sides.

View Name:Guest
Subject:
View Name:Guest
Subject:
Close Name:Joseph Bruni Posts: 5 Joined: 11 Mar 2005
Subject:

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AyaSofya wrote:
At least the article prompted me to look up the definition of "movants".

I am mixed on this case, I can see both sides.


The problem that I currently have with the way EFF is handling this is they appear to be playing word games rather than getting to the crux of the situation. By playing word games, they are attempting to get people to react to generalizations. The judge on the other hand is doing a good job in getting past the rhetoric.

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View Name:Guest
Subject:
Close Name:AyaSofya Posts: 137 Joined: 11 May 2004
Subject: Not to mention

Not to mention that no matter our personal opinions on this case it is a matter of law.

I am leaning towards Apple's position. Not because I drink Arcee brand kool aid, but because of the trade secret aspects. Keeping a confidence is important to me, I am retired military.

When I worked for Beagle Bros Software, breaking an NDA was grounds for immediate dismissal. We took the warning seriously.

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Joseph Bruni wrote:
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AyaSofya wrote:
At least the article prompted me to look up the definition of "movants".

I am mixed on this case, I can see both sides.


The problem that I currently have with the way EFF is handling this is they appear to be playing word games rather than getting to the crux of the situation. By playing word games, they are attempting to get people to react to generalizations. The judge on the other hand is doing a good job in getting past the rhetoric.

View Name:Guest
Subject:
Close Name:Steve W Posts: 482 Joined: 22 Nov 2002
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Anonymous wrote:
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Guest wrote:
A great decision! There is no reason a company cannot protect it's trade secrets.


I cannot wait tiil some reporter is prevented from letting you know your kids' medicine causes cancer because how the product is made is a trade secret. Rejoice!

Agreed. Suddenly everything about every corporation will become a trade secret. The absolute last thing a corporation wants is for anyone to know or say anything about them that they haven't said themselves. This will guarantee it.

View Name:Guest
Subject:
View Name:Guest
Subject: Good thing MacWeek no longer exists
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View Name:Guest
Subject: One thing to consider...
Close Name:klamath Posts: 8 Joined: 06 May 2004
Subject: Really?

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Guest wrote:
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Guest wrote:
A great decision! There is no reason a company cannot protect it's trade secrets.


I cannot wait tiil some reporter is prevented from letting you know your kids' medicine causes cancer because how the product is made is a trade secret. Rejoice!


"Unlike the whistleblower who discloses a health, safety or welfare hazard affecting all, or the government employee who reveals mismanagement or worse by our public officials, (the enthusiast sites) are doing nothing more than feeding the public's insatiable desire for information," Judge Kleinberg wrote.

View Name:Guest
Subject:
View Name:Guest
Subject: Right or Wrong?
View Name:Guest
Subject: Hmm, Apple needs to show the damage, I think
View Name:Guest
Subject: Hysteria
View Name:Guest
Subject:
View Name:Guest
Subject: Reality
Close Name:trex67 Posts: 11 Joined: 22 Jan 2005
Subject: A rational decision

First, I'll admit I'm a total Mac-head Apple apologist sycophant cultist. That doesn't mean that I believe Jobs and/or Apple are infallible. If the reports of Apple selling used equipment as new, or that they've acted fraudulently in regard to warranties, etc., are true, we have a right to know. We don't have a right to know what their new offerings are, though, until they are officially announced.

I read Think Secret, Apple Insider, and O'Grady's Powerpage daily, but I don't believe I have a *right* to know alleged trade secrets published by these sites. Apple has an obligation to protect this information. If said information was obtained illegally, which is likely the case here, Apple is compelled to find the source if possible, and let the consequences fall as they will upon the responsible parties.

The First Amendment guarantees Americans our most important right, that is to freely express any idea. There are, however, obvious limitations to this concept. This is an easily proven fact; to dispute it is ridiculous. Publishing stolen information is no more legal than is libel, for instance, because they can be demonstrated in court as fact. There is no legal way to obtain this information without signing an NDA. (Rumors on the other hand, like satire, are usually protected by law due to the nature of the content, i.e. speculation, humor or opinion. That appears to be the opinion of the judge in this case, and I concur.)

I will be very surprised if Apple does not prevail in this case, regardless of the politics of the deciding jurist. It may cost Apple some goodwill in the online "press," and it may cost them some loss of customers as well. Contrary to the idea that Apple is acting out of arrogance, they are more likely responding out of obligations to corporate responsibility. If this sounds like BS to you, I must assume you are not a board member of a Fortune 500 company.

View Name:Guest
Subject: what?!
View Name:Guest
Subject: The judge put it succinctly
Close Name:BlueDjinn -   TMO Staff Posts: 708 Joined: 24 Jun 2001
Subject: You've completely missed the point.

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Guest wrote:
Sorry, they are not journalists, they are opportunists and do not and should not have the protections of journalists to cower behind while they count their cash, and in the case of Little Nicky, pay his way thru Harvard.

No, no and once again NO. That's NOT what the judge said at all. What he said was that IT DOESN'T MATTER whether they are "real" journalists or not; the bottom line is that the journalist-source-protection-clause doesn't apply in this case anyway, because a) there was no justifiable excuse for the info to be leaked (no public good); b) the leakers were committing a crime in doing so (violating their NDA); and c) the bloggers *knew* about b and proceeded to publish the info anyway, profiting from doing so (via increased ad revenue from the increased site traffic), which amounts to trafficing in stolen goods.

The judge *specifically* avoided ever addressing the question of whether the bloggers are "real" journalists and therefore whether they should be given the same protections as other "real" journalists. THAT'S the issue which so many bloggers are so concerned about, and it's ultimately a non-issue in this instance--no ruling was made one way or the other by this decision.

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Close Name:Jason Varner -   TMO Mac Specialist Posts: 1125 Joined: 05 Jan 2002
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Guest wrote:


An interested public is in the public interest! Maybe if more people were interest we'd have better voter turn out. Democracy where we can't get half the voters to turn out.


Might want to check the opinion again - I think you've either misread or misinterpreted. The precise quote you're referring to is:
Quote
Judge Kleinberg wrote:

{Page 12} An interested public is not the same as the public interest


In other words, just because the public is interested in something does not imply that disclosure of it is in the public interest. Public Interest is a legal term that covers materials that affect the health, safety, and well-being of the public. Disclosure of, in this case, technical specifications of an Apple-designed Firewire device, while certainly interesting to some segment of the public, does not fall under the category of Public Interest.

Quote

Anyway, what all of you guys fail to understand is this judge doesn't follow the law of the land! This case has been settled by the supreme court. This is protected. Auto magazines that publish upcoming model information have been found protected by the supreme court. The only difference is that these are bloggers and it's a CA court where they will do anything the tech/movie companies ask because that's CA's major industry. And it's exactly why CA is the most over turned court in the country BY FAR.


Could I ask you for a cite on that US Supreme Court decision? I'd be interested in reading it for myself. I doubt that the legal precedent here is quite as clear-cut as you make it out to be - the facts of that case may differ considerably from this one, making any precedent set there considerably less forceful. In addition, the Court may have been examining the application of a state "shield law", in which case its conclusions may not apply to California.

Lastly, I'm curious as to the source of your assertion regarding the California court system. I have heard an assertion like this regarding the 9th Circuit Court of Appeals, which holds jurisdiction over California. In which case, may I note, this motion was filed in a different court. Either way, I'd like to know how the 'most overturned court' decision is arrived at. For all I know, we're just counting the raw number of overturned cases, which is unlikely to be of much value, since the 9th Circuit Court, and California likely also, has a very heavy case load.

Jason

Close Name:Mav Posts: 1090 Joined: 17 Oct 2003
Subject:

To go off on a bit of a tangent, what's with the press calling PowerPage, AppleInsider and ThinkSecret "bloggers"? IMHO, they're simply rumor or rumor/news sites, since they predate "blogs" AFAIK, and don't really fit the definition of "blogs" (we're not talking "diaries" or "personal thoughts" here, really). I can't help but wonder if certain members of the press are up to their usual sensationalistic ways again, pointing to this case as crushing