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Harvard Student and ThinkSecret owner Nick Ciarelli faces Apple’s legal wrath over product ‘leaks’
Thursday, January 13, 2005 - 03:00 PM EDT

"In the wake of Apple Computer's product announcement flurry this week, a Web site popular with Apple enthusiasts has evaluated its earlier predictions of the products and found it got much right--so much right that Apple has filed a law suit against the 19-year-old Harvard student who operates the Think Secret site," TechWeb.com reports.

"Undergraduate Nicholas M. Ciarelli had disclosed some details about Apple's 'headless iMac,' [Mac mini] the firm's under-$500 computer unveiled at Macworld this week. For that, and for other leaks on planned Apple product announcements, Ciarelli has incurred the wrath of Apple, which has filed the complaint in Superior Court of California, County of Santa Clara," TechWeb.com reports. "Ciarelli, who has been running the Think Secret site since he was 13, is an editor at Harvard's student newspaper, The Crimson. 'I employ the same legal newsgathering practices used by any other journalist,' he told the Crimson. 'I talk to sources of information, investigate tips, follow up on leads, and corroborate details. I believe these practices are reflected in Think Secret's track record.'"

Full article here.

Related MacDailyNews article:
Stop the presses! Apple sues ThinkSecret over 'Headless Mac,' 'iWork,' and other rumors - January 05, 2005

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Jan 13, 05 - 04:07 pm Comment from: J

Smart kid.

Jan 13, 05 - 04:20 pm Comment from: iMaki

The problem is that leaking confidential info can affect a company's marketability of products and stock value. It's serious stuff. While I like advance info as much as anyone on Apple products, a line has to be drawn on these paparazzi types to exist solely on digging up precious trade secrets from shady sources and spreading them to the world. The kid may be smart, but knowingly using sources that clearly breech legal confidentiality agreements is crossing the line of ethical journalism. Just my opinion.

Jan 13, 05 - 04:20 pm Comment from: Rene

Old news man! get with it MDN :D

Jan 13, 05 - 04:36 pm Comment from: RePlay

Give him a good tounge-lashing, tell him not to do it again…and let him go. Be good PR with the Mac community. smile

Jan 13, 05 - 04:46 pm Comment from: ndelc

"Give him a good tounge-lashing, tell him not to do it again…and let him go. Be good PR with the Mac community."

I think they've told him that several times already.

Jan 13, 05 - 04:56 pm Comment from: edgknight

RePlay: "Give him a good tounge-lashing, tell him not to do it again…and let him go. Be good PR with the Mac community."

Actually, they are going to have to bury the kid. Apple needs to set an example (if there is substantial evidence to back up the lawsuit) to others who would reveal such information. As they say in the legal profession, "A law is not a law unless you enforce it." (Because then there would be no reason to have the law!) The same argument exists in this case.

Jan 13, 05 - 05:02 pm Comment from: MadMac

Screw with the bull and you get the horn, I have no sympathy for the kid. He was warned but the smart ass had to keep screwing with Apple. Hope he learns something from this, but based on his track record I doubt it. cheese

Jan 13, 05 - 05:24 pm Comment from: Investor

A little info affects stock value only in the short run. Investors or would-be investors want to know the info.

Marketablity ? Only in the short run.

Jan 13, 05 - 05:28 pm Comment from: Sum Yung Gai

Regardless of what happens with the kid, I hope they find the source of the leak and make him work for Microsoft.

Jan 13, 05 - 05:33 pm Comment from: JediL1

The fear is that it allows competitors to make copycat products more quickly.

Remember how quickly that crappy Buymusic.com came online after the iTMS?

Imagine if they had gotten screenshots and detailed descriptions of its functionality a couple months before launch. It actually is a problem that could affect Apple and its shareholders materially.

Jan 13, 05 - 05:35 pm Comment from: Poor Richard

Guys, Apple can't touch him. Well, it depends on whether the courts determine whether he, as a student, is under the control of Harvard's aministrators.

Several court rulings in the 80s determined that student journalists don't get the same first amendment protection as do full-time journalists. But in this case, running his own web site, I think he could claim to be functioning as a journalist. In fact, anyone who writes for other than commercial purposes is a journalist. That's what the first amendment is all about. "Congress shall make NO LAW abridging the freedom of the press..."

Now, Apple can subponea him for his sources, and he might go to jail if he wants to protect those sources, if the judge on his case decides he doesn't have a right to protect his sources (it varies from state to state).

In this right-wing dominated world, I suspect that's the more likely outcome. Freedom is the last thing businesses want. Apple has always treated journalists like crap. They get what they deserve. If they were more open, maybe the rumor sits wouldn't be able to get traction with the public and hey'd fade.

Yeah, right. tongue laugh

Jan 13, 05 - 06:09 pm Comment from: dobbie

MadMac
You have a weird sense of the rights of the press. I'm sorry if you were abused as a child. Please don't perpetuate the abuse on others. Time to grow up.

Jan 13, 05 - 06:10 pm Comment from: Shadowself

I believe the issue will come down to whether his source was under a non disclosure agreement with regard to the information he posted on his site AND whether Mr. Ciarelli knew the person was under non disclosure.

If his source made any reference in any communication with Mr. Ciarelli about any confidentiality to which the source had agreed with respect to thise pieces of leaked information and Apple can point to any evidence to support this, then I think the guy may be toast.

On the other hand...
If he was told by "a friend of a friend of a friend who worked at Apple" and he checked with other sources with similar "friend of a friend of a friend" relationships to Apple personnel then I don't think Apple has a case at all.

It will probably come down to whether Mr. Ciarelli knew the data was restricted AND knew his source was violating agreements to provide the information.

A friendly judge might even rule that Mr. Ciarelli has no liability if he did not induce -- in any way whatsoever -- his source to divulge the information even if he knew the source was under a non disclosure. The concept goes something like: A source under non disclosure sends an email with documents to Think Secret with no prior contact from Think Secret or any of its personnel or representatives. Think Secret then has knowledge of this information, but is under no legal agreement with Apple to not disclose this information. What legal responsibility does Think Secret, and thus Mr. Ciarelli, have to maintain that confidentiality? Probably none.

Jan 13, 05 - 06:19 pm Comment from: me

Umm, Poor Richard, Steve Jobs is a left winger. Kind of blows your political opinion out of the water.

This post brought to you by "another" as in another poster trying to make a political issue out of nothing.

Jan 13, 05 - 06:35 pm Comment from: not really

Poor richard was simply identifying the climate surrounding adjudication of the issue, which doesn't have anything to do with who brought the suit or making a political statement.

Jan 13, 05 - 06:59 pm Comment from: edgeknight

Poor Richard wrote: "In fact, anyone who writes for other than commercial purposes is a journalist."

I think you're wrong (at least the way you phrased it). Most journalist write for commercial purposes... that's how they make a living. A newspaper hires a journalist to write reports for the paper where advertising space is sold in return to subsidize future reporting. This scenario is what ThinkSecret does!
Freedom of the press (free speech) is designed to protect "expression, ideas, and opinions" and the right to communicate those things. Free speech does not protect you from being sued for libel, national security, nor causing injury and suffering to others (for which you would be encroaching on their rights).

If Ciarelli were studying pre-law, he would know this. Unfortunately it seems that journalistic integrity is waning these days (in reference to various cases within the last few days, weeks, months, and years).

Jan 13, 05 - 07:00 pm Comment from: He is cool

Defend him, and let the dumb sheep on this board who want to throw him to the wolves go back to their John Kerry 'He was robbed of the Presidency' cry baby meetings.

Jan 13, 05 - 07:17 pm Comment from: Perry Mason

Just ignore em Nick. You're a kid, you got better things to do. They'll go away.

Jan 13, 05 - 07:35 pm Comment from: Al

His sources broke the law. He just reported what he was given.

Apple will look bad throwing him in jail if he tries to defend his sources.

Either way, the potential employers will be lining up to interview him in his final year.

Jan 13, 05 - 07:58 pm Comment from: Twenty Benson

Seems to me that Nick was pretty cocksure about what he published. Perhaps because he's got a dad (?) working in the legal business?

DOS Process (Address to which DOS will mail process if accepted on behalf of the entity)

http://appsext5.dos.state.ny.us/corp_public/display_entity?p_nameid=2515509&p_corpid=2489696&p_name_type=A&p_search_type=CONTAINS&p_request=1&p_entity_name=THE DEPLUME ORGANIZATION LLC&p_entity_name_input=DEPLUME

Selected Entity Name:
THE DEPLUME ORGANIZATION LLC
CIARELLI & DEMPSEY, ESQS.
425 BROAD HOLLOW ROAD
SUITE 112
MELVILLE, NEW YORK 11747

Jan 14, 05 - 02:10 am Comment from: MadMac

dobbie: If I offended you I'm sorry, sounds nice doesn't it. Actually I could give a s--t what you think, piss of jerk.

Jan 14, 05 - 02:47 am Comment from: rogozhin

Twenty Benson,

His dad must be some lawyer. Obviously doesn't have the sense to pick up the Restatement of Unfair Competition, section 39:

"A trade secret is any information that can be used in the iperation of a business or other enterprise and that is sufficiently valuable and secret to afford and actual or potential economic advantage over others."

Additionally, he must be so busy that he can't concern himself with the Uniform Trade Secret Act (USTA). Under the USTA, the definition of misappropriation can include simple acquisition of a trade secret by a person who knows or has reason to know that the trade secret was acquired by improper means. And by 'improper means', they mean theft, bribery, misrepresentation, breach or inducement of a breach of duty to maintain secrecy, or espionage through electronic or other means.

Folks, I'm don't have any special skills or extraordinary means of collecting this information -- I found it all on the internet. Surely a guy smart enough to get into Harvard, whose dad is a big-time lawyer, might have done some poking around before deciding to repeatedly ignore cease and desist letters. This lack of ingenuity and curiosity makes me wonder if the senior Ciarelli didn't buy his son's way into Harvard...

Jan 14, 05 - 03:21 am Comment from: absentminded

me thinks apple wants the leakers not the kid

Jan 14, 05 - 03:28 am Comment from: Hg Wells

I first wondered whether Nick could afford a lawyer to defend against the suit (assuming his father is not one). But, going to Harvard, I suppose he may have access to money somewhere?

It does seem to me that mainline journalists expose things that are not supposed to be exposed, sometimes even things dealing with "national security." I have not heard a herd of them being sued. It has been tried in the past, but the government often lost - as I recall. I think Nick has simply been reporting and speculating as many journalists do. I will be anxious to follow this.

Jan 14, 05 - 04:01 am Comment from: DaddySteve

"but knowingly using sources that clearly breech legal confidentiality agreements is crossing the line of ethical journalism."

iMaki,

No, it isn't!
Printing leaks from reliable sources (it was reliable) is good journalism. If Apple has a problem with someone who has signed a confidentiality agreement then they have the right to go after that person, not the publication. California, where Apple is headquartered, also has a shield law protecting journalist. (yes, by every definition he is a journalist, for that mater, so am I)
He CAN be "bullied" by the legal system even though he is in the right. Money allows one to pay for lawyers that can do a good job of bluffing someone into thinking they are in trouble or it will cost them more money than one can afford. Lawyers (nothing against them, my father was one) may also know legal tricks to harass people. It can be scary.
National security can be another mater, but even claim that is misused more than it is used. (my opinion)

Jan 14, 05 - 05:21 am Comment from: Ken

Apple must be super stupid going after the best Apple community news site that spreads so much cheer about its product.

Jan 14, 05 - 12:39 pm Comment from: effwerd

"[...] the Uniform Trade Secrets Act, versions of which have been adopted by about 45 states, including California, prevents third parties from exposing information knowingly obtained from sources bound by confidentiality agreements."

from the Washington Post

The kid better get a good lawyer.

Jan 14, 05 - 12:51 pm Comment from: effwerd

I don't understand why anyone who likes Apple products and likes the company would defend this kid. He is undermining Apple. Plain and simple. Sure it's unfortunate, kids make stupid choices in life sometimes. This shouldn't shield him from accountability though. He infringed upon Apple's rights.

And there is no way this kid can viably argue that he didn't know these were trade secrets. He runs an Apple rumor site. He knows Apple's feelings about confidentiality of upcoming products. He's not mentally deficient. If he were smart he'd realize he should change his intransigent attitude and seek a settlement.

Jan 14, 05 - 09:12 pm Comment from: rogozhin

Seems that "Ciarelli & Dempsey, Esqs." are not attorneys! Nick's dad is a music teacher or something.

could it be possible that Nick is misrepresenting his LLC's registered agents as lawyers??!! That's the impression I get when I look at the DOS file...

effwerd is right, this kid needs to go across campus and try to get an appointment with Alan Dershowitz!! he's gonna be in a world of hurt, not just from Apple, when this whole thing is said and done...

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