Apple Loses Big in Case against Online Journalists
News is news, a Cal. appeals court ruled, backing online journalists under fire from Apple for publishing what the firm called trade secrets regarding “Asteroid,” the code name Apple gave a sound-recording device in development. The 69- page Cal. Appeals Court decision scotched every argument Apple made for subpoenaing the website publishers and one defendant’s e-mail service provider, citing both federal and state law.
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PowerPage.org and AppleInsider.com, 2 websites following Apple news and rumors, ran articles in late Nov. 2004 in which they identified an audio interface box for GarageBand in development at Apple, supplying device details, schematics and a production schedule. Some authors wrote anonymously. Apple said the information came from materials marked “need- to-know confidential” whose public posting violated Cal. trade-secret law. Filing a complaint against several “Doe” defendants, the firm sought to serve subpoenas on PowerPage, Apple Insider, and other unofficial Apple news sites, as well as PowerPage’s e-mail provider, Nfox.com. The trial court authorized Apple to serve subpoenas, then decided only the Nfox action was “ripe,” because it had been delivered.
Defendants filed for protection against discovery on First Amendment and Cal. reporters’ privilege claims, saying they had received information from one or more confidential sources, and declaring a subpoena against Nfox violated the Stored Communications Act (SCA). In issuing the Nfox subpoena, the trial cited the confidential nature of much Apple material posted at PowerPage. Even if the defendants were journalists, they seemed to have committed a crime and didn’t show the disclosure addressed any legitimate “public interest,” despite the existence of an “interested public” composed of Apple fans, the court said.
The appeals court belittled Apple’s reading of the SCA property-rights exception for providers served with subpoenas. Apple’s argument that unless Nfox obeyed the subpoena would suffer economic harm without obeying the subpoena is “circular reasoning,” the court said, noting that Apple accused other defendants of the same: “Petitioners’ argument is sound, while Apple’s is not.” Apple gave no evidence that Congress didn’t mean to “preempt” civil discovery subpoenas in the SCA, the court said: “Here there is no pertinent ambiguity in the language of the statute. We should… stand aside and let the representative branch of government do its job.”
It’s clear Asteroid’s development was “news,” the appeals court said, responding to Apple’s claim that the defendants’ websites didn’t practice “legitimate journalism.” The Cal. shield law protects “news,” without saying what “legitimate” might mean, the court said. The verbatim publication of some Apple information verbatim is irrelevant, more so now that cheap technology can republish information verbatim, unlike in the days of “pre-digital technology,” the court said. It’s actually preferable for readers to have a “top-level summary with the ability to ‘drill down’ to source materials” through links, the court added.