Dvorak weighs in on Apple vs. ‘rumor website’ lawsuits

“In a recent hissy-fit, Apple Computer got bent out of shape after revelations about a future product appeared on three different websites that specialize in news and gossip about the company,” John C. Dvorak writes for CBS MarketWatch. “Risking customer alienation, the company sued and demanded that the sites turn over information as to the derivation of the information.”

“Immediately the Internet, particularly the so-called blogosphere, began a flame war regarding Apple’s lawsuits. These sites, after all were Apple boosters. It made no sense for Apple to attack them,” Dvorak writes. “The brouhaha regards a product code-named ‘Asteroid.’ Asteroid is reportedly nothing more than an inexpensive device called a break-out box. You can plug a guitar or microphone into it and it will move the signal into the computer via a 1394 high speed interface. This can be part of a system used to create a portable audio studio for musicians. This is nothing new. What’s new is that they have typically sold for $500 and the Apple device will sell for $150.”

Dvorak writes, “So Apple considered this a trade secret and now it wants to find out who in the company spilled the beans so they can be pilloried and used as an example of what can happen if you violate your terms of employment. Of course the websites might have gotten this information from anonymous sources… this court ruling represents a very slippery slope since it suggests that some members of the press would have to pass a government standard to be afforded the protection of shield laws designed to promote open and free discussion of ideas. Eventually this could lead to licensing. And we don’t need that since it would kill the free press and the substantial benefits to society that accrue from it.”

Full article here.

MacDailyNews Take: If you know your source is breaking their non-disclosure agreement (NDA) with Apple, is it okay to publish the information or not? What if you only suspect they might be breaking their NDA? If your sources are completely anonymous, how can you establish the veracity of their information? If “Asteriod” is/was an Apple “trade secret” is reporting its existence the stifling of “open and free discussion of ideas” or something else?

Related MacDailyNews articles:
Apple wins key ruling; three people who published trade secrets must reveal sources – March 11, 2005
Apple’s lawsuits to guard against rumor sites cause sour taste for some – March 09, 2005
Commentator: Apple need to patch its own ‘leaks’ to better protect trade secrets – March 07, 2005
Think Secret files motion to have Apple lawsuit dismissed – March 04, 2005
Attorneys expect decision ‘early next week’ on Apple trade secrets hearing – March 04, 2005
Forbes writer wonders if Apple is the new Microsoft – March 04, 2005
Apple wins initial ruling in ‘Asteriod’ case, can pursue publishers’ confidential sources – March 03, 2005
Apple suspends legal action against three journalists – February 17, 2005
ThinkSecret’s Ciarelli gains pro bono legal help in defense of Apple lawsuit – January 19, 2005
ThinkSecret’s Nick Ciarelli says he can’t afford to defend himself against Apple lawsuit – January 15, 2005
Harvard Student and ThinkSecret owner Nick Ciarelli faces Apple’s legal wrath over product ‘leaks’ – January 13, 2005
Stop the presses! Apple sues ThinkSecret over ‘Headless Mac,’ ‘iWork,’ and other rumors – January 05, 2005
Apple Computer sues three for posting Mac OS X ‘Tiger’ on Web – December 21, 2004
Apple sues anonymous people over leak of unreleased Apple product info on Web – December 17, 2004
RUMOR: Apple preps analog to FireWire audio device for GarageBand users – November 23, 2004

40 Comments

  1. As I understand Trade Secret law, what Apple is doing is absolutely NOTHING NEW. Trade secrets are treated like stolen property. If the party who is distributing said property knows that the property is stolen, the distributor is in trouble too. If the information was unkown to be stolen, then I think the distributor gets a pass on that.

    If this were a whistleblower case, it’d be a lot different and very much ok for a “member of the press” to publish information about illegal activities inside Apple.

    I think it’s rediculous for people to start complaining about “corporate power” being extended. If you don’t like it, don’t buy anything in a capitalist country. Corporations have rights that need to be protected just as much as the individual.

  2. I’m sorry, but I have to side with Apple on this one. While I understand we all want to “peek under the wrapping paper” now and then, this was a definite breach of someone’s NDA and it’s been happening with more and more frequency, lately. Apple has the right to find out who is undermining their secrecy efforts. Contrary to what some believe, disclosing this information on the rumor sites does not serve the public interest. What it does is feed the interested public what it wants, tidbits of information about their favorite company. However, it serves them no real benefit to get this early information. ThinkSecret and the EFF are trying to argue this solely on the grounds that this is a first ammendment issue, but it’s not, and so it must be tried and defended as a Trade Secrets issue. ThinkSecret either compelled someone to break their NDA or published information knowing it violated an NDA. Engaging in a criminal act does not protect you under the shield laws.

  3. go read John Gruber’s blog for the real story:
    http://daringfireball.net/2005/03/discovery_ruling

    the ruling says:
    “The statutes also support the compelling interest of disclosure which may, in the proper civil case, outweigh First Amendment rights. As discussed infra, the United States and California Supreme Courts have underscored that trade secret laws apply to everyone regardless of their status, title or chosen profession. The California Legislature has not carved out any exception to these statutes for journalists, bloggers or anyone else.”

    I don’t think the judge ruled that the sites in question were not legitimate press – he DID say, though, that it doesn’t matter whether they are or not.

  4. Is Dvorak reading the same decision that I did? The file that I read, had the judge avoiding classification of bloggers. It focused in on the fact that one freedom of speech is not exhaustive and two and interested public is not public interest. It’s not as if this breaks any new ground, there have always been limits on the freedom of speech, and there have always been limits on what journalist can get away publishing, regardless if we consider them journalist or not. I would assume most journalist and bloggers would have no issue with this. If you want to break the news to the world that Apple is spilling environmental containments or discriminates against women, collect your proof, get your confidential sources, and go ahead. [NEITHER TRUE TO MY KNOWLEDGE] Both items as well as a bevy of others are in public interest.

  5. If someone leaked a new track from a popular artist and Apple used it as their “Free Weekly Download” wouldn’t that be illegal?
    They wouldn’t make any money off of it and it’s merely a form of digital information, but instead of reading some text about the upcoming album, you get to hear what it’s going to sound like.
    Journalists report news that is collected under reasonable guidelines and methods (usually) and would understand when certain information is stolen (which is illegal no matter what the product).
    Bloggers don’t have a right to post stolen information any more than I have the right to download free songs from LimeWire ‘because I can’!!
    I agree with Apple suing for the purpose of outing the leaks. I would have more respect for ThinkSecret if they posted a story about how they helped Apple plug security holes instead of profiting from them.

  6. I’m with Apple on this one as well. They’re not making mechanical baby hearts or anything, but they do have the right to control the release of their product information. A premature leak about the iPod Shuffle, for example, could have seriously damaged it’s marketing position. Suppose Luxpro had gotten wind of the Shuffle in time to release their knock-off just days after Apple released the original?

  7. I know this is a hot issue here at MDN…and I have until now refrained from chiming in, but to say: Dvorak is a d%$#, just because he is typically (almost universally) anti-Apple is not necessary. Especially since in this case he is correct.

    I could care less if a blogger or a journalist is possibly aware that the source is breaking Apple’s NDA. Simply put they are not a party to nor are they privy to Apple’s NDA. The confidentiality of the source is broken when it is revealed. I know the issue is much more narrow here, in that Apple is merely trying to ID the potential source…but to subject a 3rd Party to the undue expenses of having to comply with Apple’s request causes, in some cases, severe economic harm and consequently a chilling effect.

    Who should have the final say as to whether or not this is a permissible action and whether or not an NDA was breached? Apple (eg any corporation)? A judge? This causes an undue uncertainty to otherwise permissible information, and the dangerous prophilatic chilling effect.

    Yes, I know Apple has a right to its corporate secrets. But it also has a duty to safeguard them.

    Zac

  8. And before you all jump down my throat, yes I do know the status of the Trade Secrets Act. What I am saying is that I don’t agree with it.

    What is key and fundamental in all your posts is the presumption that the 3rd Party was aware that the info leak was “illegal” or contrary to Apple’s NDA.

    Listen, I work for corporation ABC, and in three months we are going to release a product that will called speedwidget that will allow any computer to run at 10X it highest rated speed. The process is very simple and up until now unheard of. Did I just violate ABC’s NDA?

    Zac

  9. Sigh. Dvorak needs to actually read these things before he rambles.

    The Judge actually pretty well sidestepped the whole “legitimate members of the press” issue that Dvorak rambles on about. The Judge is more concerned with the issue of whether trade secrets trump “freedom of the press.” In his opinion, it does–whether or not the “press” is the New York Times or Joe Blogger.

    My favorite quote from the Judge, “an interested public is not the same as the public interest.”

  10. Zac
    On behalf of all the self righteous posters on this board and with the help of our greedy and overpaid lawyers we will suit your sad butt ASAP as you sir have been found to have exposed not only ABC’s ultimate computer for world domination to the media ( if you call MDN media) but the core of our total and complete stupidity.

    the not so magic word is “repent” as what you should start doing righ this moment.

  11. California has enacted the Uniform Trade Secrets Act. What is prohibitted is “misappropriation” of trade secrets, not theft of trade secrets. Misappropriation is broader than theft, because it includes both inducing someone to divulge secret information, as well as disclosing trade secrets when you knew or had reason to know that the person giving you the information was under a duty not to disclose it. Here’s a link to the California version of the act: http://w3.uchastings.edu/patent_01/Handouts/California Uniform Trade Secrets Act.pdf

    Findlaw has a summary of California’s version of the Uniform Trade Secrets Act: http://library.lp.findlaw.com/articles/file/00073/009531/title/Subject/topic/Intellectual Property_Trade Secrets/filename/intellectualproperty_1_764

  12. “Yes, I know Apple has a right to its corporate secrets. But it also has a duty to safeguard them.”

    maczac, what do you think Apple is doing by asking the bloggers in question who their source is? They are trying to safeguard their secrets by prosecuting the person(s) that are selling those secrets.

    By the way, I use the term “selling” loosely. I’m not implying that they sold the secrets for money (although that is a distinct possibility that I haven’t seen anyone bring up), it’s possible that they sold the secrets to boost their ego, to hurt Apple, or to gain favor or many other possible reasons.

    As far as I’m concerned the court’s ruling is just. If the “mole” was a whistle blower exposing some illegal activity, then I say the bloggers have first amendment rights, but that clearly isn’t the case here.

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