Court Hears Final Arguments in Apple Trade Secret Suit

Lawyers presented final arguments in Apple Computer's trade secrets lawsuit that could determine whether bloggers and enthusiast Web sites are entitled to protect the identity of their sources.

Lawyers presented final arguments April 20 in Apple Computer Inc.s trade secrets lawsuit that could determine whether bloggers and enthusiast Web sites are entitled to protect the identity of their sources.

The sites and their legal allies contend that they should have the same protections as journalists working under the First Amendment of the United States Constitution, which guarantees freedom of the press.

Apple filed suit in Santa Clara County Superior Court laiming that its trade secrets had been compromised when confidential information about an unreleased Apple product code-named "Asteroid" was published on the "Power Page" Web site by Jason OGrady and others.

A three-judge panel heard the lawsuit, "Apple Computer Inc. v. Does," and is expected to return a decision within 90 days.

The famously secretive Apple has played cat and mouse with many of the Apple-focused rumor sites, which compete with mainstream media organizations to break stories about the latest products before the company is ready to announce them.

Apple often dispatched cease and desist letters to the editors or these sites or initiated internal investications to smoke out which of its employees were leaking information.

But the lawsuit against the Power Page marked the first time that Apple attempted to use California law protecting corporate trade secrets to suppress the early disclosure of its product development plans by a Web media outlet.

The Electronic Frontier Foundation, which is representing the Does, or the unnamed sources of the alleged information leak, contends that a ruling in this case could set a precedent that determines whether online sites can qualify as journalists who can work under First Amendment protections.

Lawyers for Apple claimed that the information posted was trade secrets, and that none of the Web sites qualified as publications deserving of First Amendment protections.

The court also heard amicus curiae briefs from the Bear Flag League, a consortium of conservative California bloggers, which addressed both sides, and from Intel, which argued in favor of Apple.

The suit was originally filed December 13, 2004. Apples alleged that a person or persons unknown had released confidential information about an upcoming product.

The original filing stated that Apple was unaware of the real identities of the defendants, but it would amend the filing once they were known.

Soon after, on January 4, 2005, Apple filed another suitin Santa Clara County Superior Court. This one targeted the Web site Think Secret for revealing information about an unreleased Apple product. This suit claimed that Think Secret had misappropriated trade secrets and was liable under the California UTSA (Uniform Trade Secrets Act).

/zimages/4/28571.gifClick here to read about a judges ruling that the Web sites Apple is suing couldnt seek protection under journalist shield laws.

Apple agreed in February 2005 to stay its subpoenas in its original case against the "Does", including OGrady. This was a temporary move, pending the judges ruling on the EFFs request for a protective order for its clients.

However, in March, the court issued a tentative ruling that none of the Web sites in question could seek protection under journalist shield laws. Apples subpoenas were allowed to proceed.

On April 20, the EFFs Kurt Opsahl argued that Apple did not serve the subpoenas properly. Instead of going to the defendants, Apple issued a subpoena to, the ISP for, in an attempt to extract information about who sent "Asteroid" information to the Web site.

This, Opsahl said, was in violation of the federal SCA (Stored Communication Act).

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