A Core Question

By Bergman, Hannah | News Media and the Law, Summer 2006 | Go to article overview
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A Core Question


Bergman, Hannah, News Media and the Law


Whose interests prevail when balancing the First Amendment with company trade secrets?

When Apple Computer subpoenaed Web site operators who published information about upcoming products in an attempt to identify who inside the company leaked, the big question seemed to be whether the online journalists could claim protection under the reporter's privilege.

But the trial court in San Jose surprised observers, deciding the case based only on Apple's interests in protecting trade secrets, and did not address the reporters' interests in keeping information confidential.

A California appeals court overturned the decision in May and told judges they must grapple with a thorny legal issue: how to balance the competing interests when the First Amendment and intellectual property law butt heads.

"When two public interests collide, it is no answer to simply point to one and ignore the other," Presiding Justice Conrad L. Rushing wrote in the Apple case for a unanimous three-judge panel of the California Court of Appeal in San Jose.

While First Amendment law is wellestablished, trade secret law is ill-defined, governed by state laws that vary across the country, said Peter Scheer, the executive director of the California First Amendment Coalition.

"We're talking about things that are not special enough and original enough to have patent protection," Scheer said. "We're talking about things that are not necessarily copyrighted."

In this case, the trade secret Apple claimed was news of its upcoming release of an audio device that can be connected to an analog musical instrument allowing recording in conjunction with Apple software called GarageBand.

"This case involves not a purely private theft of secrets for venal advantage, but a journalistic disclosure to, in the trial court's words, 'an interested public.' In such a setting, whatever is given to trade secrets law is taken away from the freedom of speech," Rushing wrote.

Apple has decided not to appeal.

The dispute began in December 2004, when Apple sued 25 unknown individuals, presumably Apple employees, suspected of leaking information about the Apple product. The information was published on Jason O'Grady's PowerPage, Monish Bhatia's Mac News Network and Kasper Jade's Apple Insider, all online publications focusing on the latest products to come out of Apple Computer.

Apple subpoenaed the Internet service providers that hosted the journalists' e-mail accounts and the journalists themselves in an attempt to find the source of the information. The journalists lost initially when the trial court ruled that trade secret interests trump the news media's confidentiality interests, but the appeals court ruled they did not have to disclose their sources because they are covered by the California reporter's shield law.

Apple's position was that reporters violated trade secret laws by publishing confidential information. The journalists, arguing that the information is not a trade secret, maintained that they were protected by the First Amendment and California's shield law. The Reporters Committee filed a friend-of-the-court brief in the case.

In ruling that the journalists also were protected by a qualified, federal constitutional privilege, the appeals court discussed trade secrets in the context of the role of the reporters in the lawsuit and the importance of preserving confidentiality.

Apple accused the reporters of misappropriating trade secrets but at the same time refused to name the reporters as defendants in the case, according to the ruling.

"Apple cannot have it both ways," Rushing wrote.

If the reporters had misappropriated trade secrets, then they should be defendants, he wrote. If Apple would not name them as defendants, then the company could not argue, as a reason for forcing the reporters to their reveal sources, that they had misappropriated trade secrets, the court said.

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