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  • The Real Losers in the Think Secret Settlement

    December 24th, 2007

    I don’t know about you, but I’ve always had mixed feelings about Mac rumor sites. Yes, they often make for  an entertaining read. Sometimes they even get the facts correct, or mostly correct, and clue us in on a genuine new Apple product or service.

    Now up until a few years ago, Apple accepted the existence of such sites grudgingly. When they got too close to the facts, or published the wrong screenshot (at least to Apple), they’d get a cease and desist letter. The sites would generally take down the offending content, so as not to have to hire high-priced intellectual property attorneys to defend themselves.

    Behind the scenes, you might expect that Steve Jobs wasn’t as sanguine about such things as he appeared in public, where he even joked about it from time to time. But you had to feel the sound of his teeth grinding.

    When Apple filed lawsuits against Apple Insider, O’Grady’s PowerPage and Think Secret, you had to feel they had just gone way too far. Sure, Apple has the right to protect their trade secrets, and certainly take appropriate measures to clamp down on their employees and contractors of they break their nondisclosure agreements. Indeed, if a site got such information via questionable means, maybe they’d have a case.

    Instead, Apple attacked these bloggers on the pretext that they weren’t actually journalists and thus weren’t covered by the various shield laws that allowed them to protect their sources.

    In the end, Apple lost its case against Apple Insider and Jason O’Grady had a huge weight lifted from his shoulders as well. But the Think Secret matter persisted, until the other day when an unexpected settlement was announced.

    According to Nick Ciarelli, the Harvard undergrad who runs the site:

    Apple and Think Secret have settled their lawsuit, reaching an agreement that results in a positive solution for both sides. As part of the confidential settlement, no sources were revealed and Think Secret will no longer be published. Nick Ciarelli, Think Secret’s publisher, said “I’m pleased to have reached this amicable settlement, and will now be able to move forward with my college studies and broader journalistic pursuits.”

    Of course, beneath this simple paragraph, there are a wealth of implications. Ciarelli started Think Secret when he was a mere lad of 13, and grew it to the point where it attracted Apple’s close attention. That’s a very big deal, even if that attention caused ripples that eventually rose to the level of a lawsuit.

    In the wake of the lawsuit, Think Secret toned down its act, and new articles were few and far between. To some degree, they seemed to be echoing Apple Insider in terms of predictive content. Did Ciarelli lose interest, or was he just holding tight, expecting a settlement that would settle the matter once and for all?

    Another question: Did money change hands? Did Apple pay Ciarelli to close shop and get back to schoolwork? Certainly, the details of the settlement are confidential, so we’ll probably never know. I expect, though, that Ciarelli probably didn’t want to begin his career with a lawsuit from Apple Inc. on his record, and that could certainly have dissuaded potential employers from offering him jobs until this albatross was lifted.

    Or would Ciarelli’s notoriety, his fifteen minutes of fame, open him up to unexpected career opportunities? I don’t pretend to know, but I am troubled by how it all went down.

    I can see where Ciarelli may have been sorely tempted to put this episode behind him as painlessly as possible. After all, getting a college education is monstrously expensive, and getting that education at Harvard is a six-figure expense. Sure, maybe Ciarelli’s parents are well off. Maybe they set aside a smaller sum for his education early on, and it grew over time. Maybe he has a rich relative, or, like many other students of modest means, he found a way to earn some money, from his site and other pursuits, and collected scholarships, grants and took out college loans to cover the rest of his huge bill.

    If Apple said they’d take care of that bill, rather than leave him saddled with huge college loans to pay off over the next 20 years,  that would be a tempting incentive to take the money and run.

    On the other hand, freedom of the press played second fiddle here. I can perhaps forgive Ciarelli for cutting his losses, and maybe he lost interest anyway in maintaining the site with the press of his studies and other matters taking up more and more of his spare time. But Apple has set a dangerous precedent here, because it means they can use their huge cash reserves their legal power to buy off and shut down bloggers they don’t like. That is the most troubling issue of all.

    Once again, I don’t know the fine details of this settlement. Maybe it’s all very benign and simply closed a door that nobody wanted opened in the first place, no harm done. But the next time a site runs afoul of Apple’s alleged trade secrets, would Apple use this tactic as a weapon against the next innocent would-be infringer?

    If that’s the case, then I am truly saddened by this development. I wish Nick Ciarelli well in his pursuits, and he will, over time, no doubt survive and conquer the journalistic world in some other fashion.

    I just hope that Apple doesn’t get some nasty ideas, though, of what they might do next to halt press coverage that they don’t like.



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