Apple Wins Subpoena in Trade Secrets Case

In a case closely watched by media sites online and off, a judge in California has ruled that Apple has the right to subpoena an ISP in order to gain information about unidentified sources it charges stole its trade secrets.

Judge James Kleinberg of the Santa Clara County Superior Court ruled Friday that Nfox, the Internet provider for blogger Jason O’Grady, can be subpoenaed as part of Apple’s complaint against individuals it says leaked trade secret information about its products.

The judge’s ruling was careful to note that, in setting aside the bloggers’ attempts to block Apple’s subpoena, it was focusing on the narrow issue of discovery and cautioned against the ruling being interpreted more broadly. That said, he ruled, Apple’s claims about trade secrets being stolen were within the law, namely California’s Uniform Trade Secret Act Civil Code 3426 and Penal Code 499c.

“As such it is stolen property, just as any physical item, such as a laptop computer containing the same information on its hard drive (or not) would be,” the ruling said. “The information remains the same and is not transformed by its form or who receives it.”

Apple filed a lawsuit against over 20 individuals, none of them identified, in
December 2004, charging they leaked pre-release information about its products. Three bloggers subsequently posted the information about an upcoming product, code named Asteroid, on their blogs.

Apple has tried to get the owners of PowerPage, AppleInsider and ThinkSecret to reveal the sources of the information. The bloggers maintain they have a right to keep their sources confidential.

However, the same judge issued a preliminary ruling that forces the bloggers to reveal their sources as part of Apple’s complaint. No subpoenas have been issued against them at this point. Kurt Opsahl, one of the lawyers from the Electronic Frontier Foundation (EFF), which is representing the bloggers for AppleInsider and PowerPage, said a ruling is still pending over whether Apple can subpoena the bloggers over its trade secret complaint.

Apple officials were not available for comment.

Opsahl said he would ask the California Appellate Court to intervene in this case as well. He said he is disappointed that Apple decided to go after a journalist’s confidential sources before exhausting all other options available.

Kleinberg’s ruling said he felt comfortable with the efforts Apple made to discover the identities of the individuals who leaked the information before turning to Nfox, conducting a thorough investigation and exhausting all alternative means.

The judge said despite the question of whether the individuals involved call themselves bloggers or journalists, he maintained that the reporter’s right to shield sources does not apply when the law is broken.

“Defining what is a ‘journalist’ has become more complicated as the variety of media has expanded,” he wrote in his decision. “But even if the [bloggers] are journalists, this is not the equivalent of a free pass. The journalist’s privilege is not absolute.”

Opsahl said he disagrees with Kleinberg’s assessment of the ruling, saying the reasons presented don’t apply to this case.

“The information being sought is information that is alleged to belong in some civil case. This is a civil case, so I think the court’s discussion of criminality and the penal code is a little bit in opposite,” he said. “This was not brought by the district attorney in Santa Clara but rather by Apple, and Apple is not a public prosecutor.”

News Around the Web