Opinion: Apple, reporters, and judicial cowardice

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What’s next?

Although Apple has not commented publicly on the ruling, it’s all but certain the company will appeal the ruling, in one form or another, to the California Supreme Court. Partners like Intel and Genentech will all but demand an appeal — unlike the trial court, which went out of its way to affirm that its decision was in one specific case and had no bearing on others, the Sixth District Appellate Court authorized its ruling for publication.

Lawyers in any relevant case in the district, including Santa Clara and Santa Cruz counties, can cite this ruling to bolster their claims. If other courts cite this ruling as justification for granting shield protections to online writers, then it will become the far-ranging precedent that is missing from the actual text but that so many people ardently assume is already there. That includes the horrible analysis of trade secrets. Right now in Silicon Valley there is no such thing as a “trade secret,” because the state court for the area has ruled that the First Amendment right to express yourself always trumps the right to protect a trade secret or other intellectual property. Companies like Genentech must be close to incontinent over the ramifications of that.

However, Apple has other options before, or in addition to, an appeal to the state’s highest court. As the ruling noted more than once, Apple could simply name O’Grady as a defendant in the case, and allege that he knew (or should have known) that the information he published was Apple’s trade secret and that he did it anyway to increase circulation.

If O’Grady becomes a defendant in the suit, he loses a lot of the shield’s protections. The law was never intended to make reporters immune from liability for their actions, but to insure that they’re not used as a shortcut to information that a plaintiff can’t easily discover in other ways. Apple risks a countersuit and damages if it loses such a case, but even the appellate court agrees that naming O’Grady as a defendant probably pierces the reporter’s shield.

The issue of exhausting other possible sources for the information raises some interesting possibilities as well. The appellate court told Apple that it had to question its employees under oath to come close to exhaustive investigation, and noted that if any of the 29 people who had access to the “Asteroid” presentation refused to cooperate or invoked their Fifth Amendment right against self-incrimination (because misappropriation of trade secrets can be a crime), that would tell Apple a lot by itself.

The court also rather obliquely noted that while Apple cannot subpoena Nfox for O’Grady’s e-mail, that Nfox has every ability under the Stored Communications Act to turn over those e-mails with the consent of one of the parties to the communication. Applying the former logic (and reminding that we are not lawyers), it seems at least possible that Apple could require all 29 people who had access to the “Asteroid” presentation to sign a waiver consenting to Apple obtaining their communications with O’Grady from Nfox.

If any one of those 29 people is the leaker, then that person’s waiver allows Nfox to deliver the information to Apple whether O’Grady likes it or not, just as you can redistribute a copy of an e-mail you sent or received without the consent of the other party (ignoring copyright issues, since they wouldn’t come into play for messages that the leaker authored). If any refuse to sign a narrow, specific waiver that applies only to e-mail that those people might have sent to O’Grady through Nfox, then as the court said, that will tell Apple much.

If they all sign waivers and Nfox says that none of those people communicated with O’Grady, that may not tell Apple much. Nfox would only be able to examine the communications identified as from those people. If “Bob Smith” was the leaker and signed a waiver, but sent the information to O’Grady as

, Nfox would not know that the address belongs to the person who signed the waiver unless the waiver includes that address. Apple could question its employees under penalty of perjury about every e-mail address they’ve used, but unless they find the right one to put on the waiver, Nfox can’t connect the dots.

Any of these actions might tell Apple what it wants to know long before the California Supreme Court would rule on any appeal. If the parties then took any remaining federal issue disputes to the U.S. Supreme Court, there’s absolutely no chance the court would hear the case before the October 2007 term, probably rendering a decision in the first half of 2008. Nonetheless, it’s difficult to imagine Apple not appealing the trade secrets and some of the shield questions to the California Supreme Court. The precedent is just too awful to let stand unchallenged, and only Apple has standing at present to challenge it.

Excerpted with permission from the May 31 issue of MWJ, published by MacJournals.com. Copyright 2006, GCSF Incorporated. For a free trial to MWJ, visit www.macjournals.com.

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