Apple Loses Big in Case against Online Journalists

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.”

Apple’s request went far beyond the articles or the e- mail authors’ identities, the court said, disputing an amicus brief. The e-mail subpoena asked for “all documents relating to” the Asteroid product, and identities of both senders and receivers of the information. That would itself disclose the contents of communications, and SCA refers to “subscribers,” not anyone connected to a message, the court said.

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.

Defendants’ use of websites to disseminate the Apple information doesn’t deprive them of shield protection, the court said, calling that means “conceptually indistinguishable from publishing a newspaper.” Website owners are clearly “publishers” under Cal. law, especially given the phrase “books, newspapers… and the like” in its definitions. The defendants called their websites “magazines,” a term now commonly used to describe online properties of traditional print magazines, and even online- only Slate magazine, the court said. The law doesn’t mention TV or radio, but they're obviously protected for disseminating news, the court added.

Apple didn’t explain well why it couldn’t have found the requested information short of going to the implicated website publishers, the court said. The firm said the file in question was sent to 25 recipients, the court noted: “Was the file e-mailed? Placed on an intranet server?… Each of these possibilities would presents its own opportunities for, or obstacles to, further investigation.” The company provided no network logs to show transfers or “other suspicious processing” of the file by recipients.

More than Apple’s trade-secret interest is at stake in this case, the court said: “When two public interests collide” -- commercial privilege and the public’s right to know -- “it is no answer to simply point to one and ignore the other.” There was no indication that Apple’s proprietary technology was exposed or compromised, the court said: “What occurred here was more like publicizing a secret plan to release a new cereal,” not the cereal recipe itself. Apple’s planned product would be a world-significant event, the court said, “blurring the line between professional and amateur audio production,” just like the now-blurred line between professional and amateur publishing.

Journalists, ISPs Happy with Decision

The decision won press freedom backers’ praise. “This is a huge win!” said Lauren Gelman, assoc. dir of the Stanford Law School’s Center for Internet & Society: “Journalists can feel safe knowing that they can protect their sources’ identity no matter in which medium they choose to disseminate news,” a point the Center made in its amicus brief.

The ruling is consistent with those by courts in other cases involving ISPs, U.S. Internet Industry Assn. (USIIA) Pres. Dave McClure said. The decision stays true to the Telecom Act, which said Web operators couldn’t be held accountable for postings on a site, he said. It also goes hand-in-hand with precedent holding, at least in terms of the FEC and campaign finance, that bloggers and site operators can be deemed legitimate members of the press, he said. Mainly, the ruling “maintained the integrity” of the SCA, for which USIIA argued in an amicus brief. “You can’t simply walk in and demand that kind of thing -- even if you're Apple, even if you feel aggrieved,” he said: “What the judge did was consistent and it sounds like very good law to me.”

“It’s great to see that the court is reading the definition of journalist expansively enough to include new types of journalists like bloggers and website operators,” said Gregg Leslie, legal defense dir. for the Reporters Committee for Freedom of the Press. While his group doesn’t like it when govt. tries to define journalism, “when you're arguing for privilege, there has to be some definition,” he told us. The judge recognized “that there are important reasons why journalists need to have control over their own materials, even if they're held by a 3rd party,” Leslie said.

The ruling doesn’t directly affect an ongoing fight over data retention, McClure said, but it’s a related issue and the legal win could play to his industry’s favor. Law enforcement sends mixed signals about what it wants when it seeks material from the Internet community, he said. “They say they just want IP addresses, but those are almost worthless because you can’t maintain a clean evidence chain… You have no way of knowing whether the IP add leads back to any individual. It only leads back to a box,” McClure said.

If investigators want information on an IP address, they can serve an ISP with a warrant and ask to freeze a particular account to retrieve what they need, he said: “It’s not that they can’t get access to data, it’s that they want more. When we ask them more what, no one wants to say.” Those pushing for data retention laws should heed Apple v. Does, he said: “Americans are growing wary of violations of privacy, even if it’s by their own government and even if it seems to be for a good cause.”