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.