December 20th, 2007

Apple Shuts Down Think Secret: Do Journalists Have the Right to Reveal Corporate Trade Secrets?

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Apple has settled a lawsuit with the popular Apple rumor blog Think Secret, which requires the blog to cease publication. This news, not surprisingly, has the blogosphere up in arms — certainly there is the appearance that Apple acted dictator-like in silencing a new voice of the Fourth Estate. As Mathew Ingram put it:

Meanwhile, Apple comes off looking like some power-crazed South American dictator, the kind who can’t stand it when the media reveal government secrets and so arrests the entire press corps.

But is revealing corporate trade secrets really the same as revealing government secrets? Does it really serve the public good in the same way? And I’m not talking about revealing corporate malfeasance, illegal activities, or information that shareholders of public companies have a right to know. I mean real TRADE SECRETS — does the public have the right to know such secrets? Do companies, like individuals, have a certain right to privacy?

Apple, for example, invents the iPhone, legally and without deceiving shareholders — does the public have the RIGHT to know before Apple chooses to announce it publicly? Or does Apple have the right to protect those trade secrets, even if it means “silencing” the press.

Certainly, my instinctive reaction is that a company shutting down a blog is not a good thing. But before I throw a brick through Apple’s window, I thought it was worth asking the question.

There’s a strong argument that the Think Secret blogger deserves the same protection as a journalist. That’s why I posed the question in terms of what journalists have a right to do.

UPDATE

Some great responses to my question in the comments below, but it still strikes me that this particular case is more complicated than the headline “Evil Apple Forces Think Secret To Shut Down, Threatens Journalism And Democracy” adequately captures. For example, from Ars Technica:

But the EFF’s Kurt Opsahl has a different perspective on why things went down the way they did, and what it means for the community. “I’m very happy to see that no sources were disclosed,” Opsahl told Ars.

He explained that Ciarelli had made a motion to have the case stricken under California’s Anti-SLAPP (Strategic Lawsuits Against Public Participation) laws, which protect citizens from being held liable for exercising speech rights. “Apple was faced with losing the case and having to pay attorney’s fees,” explained Opsahl, which is likely part of the reason why it decided to settle instead of continuing to pursue it. As for Ciarelli, “We understand that Nick is very satisfied with the outcome of the case,” Opsahl said. “We hope that Apple learns a lesson over this.”

Comments (12 Responses so far)

  1. Scott,

    I spent years in the 90s editing articles on Apple’s “trade secrets” for a trade pub called MacWEEK. We made a regular habit of publishing the specs, prices, positioning and bugs of Apple products before they were released. Apple never sued, and in fact we had thousands of subscribers on their Cupertino campus.

    Of course, we were in print.

    We were also part of a large publishing company with real lawyers. And every year those lawyers trotted us into a conference room for a refresher on trade secret law and investigative journalism. They’d probably cringe at the oversimplification, but the core lesson each year was this:

    “It’s not a trade secret if the company itself intends to tell everyone about it.”

    Coke’s formula is a trade secret, because it’s has business importance and Coke doesn’t won’t be issuing a press release in 60 days announcing it. The specs and price of the iPhone, on the other hand, is just a normal secret.

  2. I’m not following your question. Is there some tribunal you’d like to set up to determine what is news and what is a trade secret. Also, isn’t it Apple’s responsibility to keep its employees from revealing trade secrets? If its employees decide to reveal such trade secrets, does a company have the right to sue a media company to discover who revealed the secret? (That’s the legal issue, here.) More importantly, would they have sued the New York Times or WSJ or IDG if they had revealed such mis-labeled “trade secrets.” Also, almost weekly, I read of some stock analyst who tries to interpret some component order in China to determine how many iPhones are going to be sold next quarter — is that information from a sub-contractor a trade secret? Is Apple suing Goldman Sachs, or whoever? No, they’re too busy trying to portray their crack-head fans into criminals.

  3. Stephen,

    Thanks for answering the question based on such directly relevant experience. That issue of what a company plans to do with the secret is certainly at the heart of this particular drama — and whether it’s just a matter Think Secret stealing Steve Jobs’ thunder.

    Rex,

    All good points as well (as usual), thanks for adding to the Q&A.

    One clarification:

    “If its employees decide to reveal such trade secrets, does a company have the right to sue a media company to discover who revealed the secret? (That’s the legal issue, here.)” — I believe there were two law suits, and this is not the result of the one attempting to discover the identity of the leaker.

  4. You’ve put your finger on the central question, Scott. My answer would be yes — depending on how they do it. I’m pretty sure Chiquita sued a journalist for breaking into its private voice mail network, which is clearly a crime.

    On the other hand, the courts have also ruled that simply printing what a source from within a company tells you is not a crime. This case hinged on what the definition of a “trade secret” is. As your first commenter points out, that’s a shifting target, especially with Apple.

    Was the iPhone a trade secret? Hundreds of outlets wrote about it, and many got some of the details right — and that business is a huge moneymaker for Apple. And yet, no lawsuits.

  5. Usually, if the media company did noting illegal to obtain the information, then there is likely no cause of action against it (think “Pentagon Papers” but in a slightly different context).

    Obviously there is always a cause of action against the individual who illegally reveals, assuming that the company whose “trade secret” it is took the necessary precautionary measures.

    Are you suggesting that there is a case that required the media to reveal the source? Please post it because that would make for interesting reading.

  6. I have been a big fan of Apple since the 80’s. I am one of those people that love Apple products. I have sold more iPhones than I can count because everyone I show and explain what this device can do end up buying one even strangers I did not know before. I said this just to show how devoted I am to Apple.
    ThinkSecret is one of my favorite sites to learn of upcoming Apple products and upgrades. To learn that Apple shut this site down is like hearing that your grandfather killed your best friend, on purpose. I am pretty mad at this action Apple has taken.
    What ThinkSecret did or has been doing, does not hurt Apple, it actually help Apple as a company. If Apple is worried about its secrets, it should deal with its employees, suppliers and manufacturers.
    It goes to show that you cannot trust corporate America. What happened to Freedom of Speech. First it was the Bush Administration against the news media, now it is Apple against a website. Money and power have replaced our rights and freedom. The way this is going, it is going to get worse. Silence is what these power-hungry establishments want from the public. Shame, shame, shame to Apple and Steve Jobs!

  7. re: What the specific “issue” was of the lawsuit.

    Perhaps I was wrong in referring to the “legal” issue. Perhaps I should have said, “the motivation of Apple in bringing the suit”…

    From Wired.com’s story and interview w/ Ciarelli:

    “It’s widely believed that Apple’s ultimate goal wasn’t to get the site closed down, but rather to hunt down mole(s) feeding Think Secret information. “I’m not going to speculate on that,” Ciarelli said. “I’m not going to weigh in on the company’s motivations.””

  8. First of all, I wouldn’t characterise what Nick did at Think Secret as “blogging” – Nick was engaged in real journalism, as I know from first hand experience working with him. He corroborated stories with more than one source, and was rigorous in his journalism – more so than many professionals I’ve met. He was a trade journalist, not a blogger.

    Secondly, as Stephen has pointed out, a lot hinges on what you define as a trade secret – I wrote a post back in 2005 partly about this (the second half of the post at http://www.technovia.co.uk/2005/03/why_the_think_s.html). If the courts found that “trade secret” simply meant “any document which a company makes an attempt to keep secret” then it would cover a vast amount of information, and go well beyond the original intention of the laws which make dissemination of trade secrets illegal.

    What Nick published was actually pretty vague, and some details were incorrect. My guess is that Apple realised that the courts would go against them on the grounds that what was published wasn’t a trade secret under the appropriate law, and – rather than set what it would see as a dangerous precedent – Apple opted for a settlement.

    This settlement suits both parties. Apple gets what looks to some like a victory, with no precedents set on what constitutes a trade secret. It also sends a warning shot across the bows of other sites.

    Nick simply gets to move on. He’s graduating from Harvard soon, and I very much doubt he would have wanted to continue Think Secret anyway – he’s outgrown the small pond of Mac journalism. I would be very surprised if a certain amount of Apple money did not change hands as part of the settlement – more than enough to cover legal bills and so on. The archives remain – there’s no indication that the site is coming down, only that it will “no longer be published” – which means he’ll also get a pretty reasonable income off it for years to come.

  9. The idea that a company has the same right to privacy as an individual is bogus, IMO. Laws are designed to protect people (including people who work in companies), but not companies themselves.

    Also, whether some fact is or is not in the public interest is beside the point. The press should be able to publish anything that is provably true. That’s what the Constitution says, anyway.

  10. [...] down The Secret Diary of Steve Jobs through a settlement similar to the one that resulted in the shut down of Think Secret. This post was followed by a series claiming that Apple was pissed at him for posting about the [...]

  11. Ian writes: “This settlement suits both parties. Apple gets what looks to some like a victory, with no precedents set on what constitutes a trade secret. It also sends a warning shot across the bows of other sites.”

    That’s precisely what’s so pernicious to press freedom about this settlement. Sure, Nick walks away, probably with an undisclosed handsome sum, but now the other sites know that Apple’s lawyers will squash you like a bug, even if they are in the wrong. Quoting Ian again: “My guess is that Apple realised that the courts would go against them on the grounds that what was published wasn’t a trade secret under the appropriate law, and – rather than set what it would see as a dangerous precedent – Apple opted for a settlement.”

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