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News media back bloggers in Apple trade-secrets case

By The Associated Press
04.12.05

SAN JOSE, Calif. — More than a half-dozen news organizations are supporting three online journalists who published articles about a top-secret technology product that Apple Computer Inc. says was protected by trade-secret laws.

In December, Apple sued 25 unnamed individuals — presumed to be Apple employees — who allegedly leaked confidential product information to three people who run Web sites widely read by Apple enthusiasts. The Cupertino-based company said the leaks violated nondisclosure agreements and California’s Uniform Trade Secrets Act.

Apple then demanded that the online reporters’ Internet providers identify the leakers by turning over e-mail records. The online reporters sought to block the subpoenas, saying that identifying sources would create a “chilling effect” that could erode the media’s ability to report in the public’s interest.

Santa Clara County Superior Court Judge James Kleinberg ruled in Apple’s favor last month, saying that reporters who publish “stolen property” aren’t entitled to protections. The online reporters then appealed.

Now the mainstream media have weighed in: eight of California’s largest newspapers and the Associated Press submitted a court brief on April 7 asking that the online publishers be allowed to keep their sources confidential.

The media companies said Kleinberg’s ruling, if upheld, could impair the ability of all journalists to reveal important news, from financial corruption to government cover-ups. Before demanding that the online publishers’ Internet provider turn over e-mail records, the companies said, Apple should “exhaust all alternative sources” of identifying the source of the leaks.

“Recent corporate scandals involving Worldcom, Enron and the tobacco industry all undoubtedly involved the reporting of information that the companies involved would have preferred to remain unknown to the public,” the 38-page brief stated. “Just because a statute seeks to protect secrecy of such information does not mean that the First Amendment protections provided to the news media to inform the public are wiped away.”

Joining the brief were the Tribune Co.’s Los Angeles Times, Hearst Newspapers’ San Francisco Chronicle, Knight Ridder Inc.’s San Jose Mercury News, the Copley Press Inc.’s San Diego Union-Tribune and Freedom Communications Inc.’s Orange County Register, as well as the McClatchy Co.’s Bee newspapers in Sacramento, Fresno and Modesto. Also supporting the brief were the California Newspaper Publishers Association, California First Amendment Coalition, Reporters Committee for Freedom of the Press, Society of Professional Journalists and Student Press Law Center.

Apple spokesman Steve Dowling wouldn’t comment specifically on the media companies’ brief but emphasized that Apple must protect its product secrets.

“Apple’s DNA is innovation, and protection of trade secrets is crucial to our success,” Dowling said yesterday.

But Peter Scheer, executive director of the San Rafael-based California First Amendment Coalition, said the reporters were members of the media — and the case could impair all journalists’ abilities to develop sources.

“Even if these stories had been written by The New York Times, not only could The New York Times be forced to disclose its sources but because of the nature of the information, The New York Times might even be at risk for criminal prosecution for publishing such a story,” Sheer said. “This started out as an important but quirky case about bloggers but it morphed quickly into a much more important case about First Amendment protections when newspapers are writing about information that can be characterized as being a trade secret.”

Dave Tomlin, assistant general counsel for the AP, said the case has implications for bloggers, online reporters and traditional journalists.

“For us, this case is about whether the First Amendment protects journalists from being turned into informants for the government, the courts or anybody else who wants to use them that way,” Tomlin said. “We believe strongly that it does, and that it’s a good thing for all of us that journalists have this protection.”

Shares of Apple, which is scheduled to release quarterly results tomorrow, fell $1.82, or 4.2%, to close at $41.92 on the Nasdaq Stock Market after a Caris & Co. analyst lowered his rating yesterday on Apple shares. The stock has traded in a 52-week range of $12.75 to $45.44.


Update
Calif. appeals court: Shield law protects online reporters, bloggers
Unanimous panel denies Apple Computer Inc.'s bid to identify sources of leaked product information that appeared on Web sites. 05.30.06

Previous
Court won't block subpoenas for Web publishers in Apple case
California judge rules online reporters may have to I.D. confidential sources, says there are no legal protections for those who publish trade secrets. 03.14.05

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