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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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    12 Responses to “The Real Losers in the Think Secret Settlement”

    1. Pila says:

      I believe you see it totally wrong.
      There is this little grown up twit, who has been able one way or the other to infiltrate in your business and gives out YOUR business secrets just before you do.
      Anybody and I mean anybody will be very annoyed by that and will do everything possible to stop
      this.
      Apple has all the rights.

      Pila

    2. I believe you see it totally wrong.
      There is this little grown up twit, who has been able one way or the other to infiltrate in your business and gives out YOUR business secrets just before you do.
      Anybody and I mean anybody will be very annoyed by that and will do everything possible to stop
      this.
      Apple has all the rights.

      Pila

      I fully understand Apple being annoyed. I am concerned about the nature of the reaction, and the fact that we’re talking about a publicly-traded multinational corporation here, not just an individual.

      Peace,
      Gene

    3. Jim says:

      In things like this it takes two to tango.

      Apple, to some point, is upset with Ciarelli for what he published from his sources. Those sources, presumabley inside or very close to Apple are perhaps the bigger problem for if there weren’t any loose lips, no ship ( Think Secret) would have been sunk. Of course we won’t hear anything on what happened internally and you can be sure something did. Steve was surely not very happy that his plans were made public, compromising a marketing advantage. Too bad for Ciarelli, but if there was money, lets hope is was for that education and better things.

    4. Dana Sutton says:

      When a corporate employee leaks trade secrets to the press, it’s very okay for his employer to go after him hammer and tongs. But to go after the press outlet that publishes his revelations? That makes no sense at all, unless the press outlet has bribed or blackmailed said employee into divulging his information. In this case, it’s very difficult to imagine that a Harvard undergraduate would have the wherewithal to do the one thing or the leverage to do the other. It would be absolutely unthinkable for a corporation to go after, say, the New York Times or CBS News for putting out such information, no corporation would dream of doing that. Apple’s lawyers seem to have tried to float a legal theory that electronic journalism does not enjoy all the same protection as print journalism, which seems intrinsically absurd and probably impossible to defend in a court of law, especially as so many print and broadcast new outlets operate their own Web sites. And it seems very strange and counterproductive that Apple, of all corporations, should rely on this theory, seeing that it pushes the “i-Life” so much in promoting its products.

    5. mark says:

      IANAL so what happens if someone was to leak private information, let’s say, personal health and/or financial records, to a blogger or journalist, and that blogger/journalist publishes the leaked private information?
      Do the people who’ve had their information leaked have any rights to sue the blogger/journalist (or the company they work for)? Or can they only go after the original leaker (the someone in the first sentence)? Does it matter if the blogger/journalist was seeking the information for the purpose of publishing it?

      If the answer differs from that in the Apple/Think Secret case, then what’s the difference between personal private information, and corporate private information (trade secrets)?

    6. Richard Taylor says:

      Here is the line as I see it — does it serve the greater good? If a reporter digs up information about a company that proves it is making a product that causes cancer, or will fail under use and kill someone, that’s something society needs, so it’s okay to seek out such information and publish it.

      If, on the other hand, a reporter digs up proprietary information that relates solely to the company’s business and whose publication will harm the company, then that’s crossing the line.

      Apple has a right to protect trade secrets just as you do, just as I do, and Think Secret was crossing that line.

    7. Dana Sutton says:

      Mark raises interesting questions. I’m no lawyer, but let me take a whack at them. 1.) I doubt it’s right to lump journalists and bloggers together. Journalists enjoy the protection of the First Amendment, I doubt that bloggers do (at least to the same extent). Maybe from the legal standpoint the real question of the Think Secret case was where the line is to be drawn between e-journalism and blogging. If so, it’s a pity that this case didn’t go to trial so that we could get a ruling on this. 2.) There may be a distinction between revealing, say, a private citizen’s health records and a corporation’s trade secrets, based on the concept of “newsworthiness,” since a corporation is a public entity and issues a publicly-traded stock. And, for that matter, if you apply the “newsworthiness” concept, what if the public citizen in question happens to be a political candidate? As I say, I’m no lawyer, but I suspect the question is a lot more complex than Mark thinks. Richard may be closer to what a court might decide. The only thing I feel strongly about is that e-journalism (as opposed to mere blogging, and I think you probably can develop some tests to distinguish the two) ought to be entitled to the same degree of First Amendment protection that is given print and broadcast journalism (and of course, should adhere to the same ethical standards as traditional journalism).

    8. DBL says:

      Nick caved. Simple as that. He should be as ashamed of himself as Apple should be of themselves. He doesn’t get points in my book for not revealing his sources but shutting down, anyway, because the end result is the same: the chilling of Mac-related speech. When you keep the potential negative consequences firmly in mind, you realise that there is essentially no difference between Nick revealing his sources or shutting down, when it comes to the public good. When it comes to the interests of the sources themselves, obviously, there is a big difference, but that’s not the point. I didn’t support Nick to save the jobs of his sources. I supported him to save the freedom of the Mac press. In that light (the only rational light, here, in my view), this is a terrible outcome, and Nick certainly should not be crowing about it or claiming victory.

    9. Adam says:

      MThe only thing I feel strongly about is that e-journalism (as opposed to mere blogging, and I think you probably can develop some tests to distinguish the two) ought to be entitled to the same degree of First Amendment protection that is given print and broadcast journalism (and of course, should adhere to the same ethical standards as traditional journalism).

      I agree with your sentiments, but I do not think ThinkSecret adhered to the same standards normally found in traditional journalism. Apple’s business plan (and recent success) relies hugely on controlling the flow of product announcements. This is true of every major corporation out there, BTW. In Apple’s case it is more extreme but when you invest in a company you invest in that company’s marketing strategy as well. Leaking product information covered by non-disclosure agreements is never in the best interests of the company, the stock holders, or the public (provided the product is not demonstrably harmful) if the company is following a well established marketing plan. This is why you will never see CNN, NBC, Reuters, whoever, talking about the newest upcoming car/refrigerator/Intel chip (insert product here) until they get a press release about it. That is a big difference.

      Yes, there is freedom of information, but there is also legally protected intellectual property rights. did ThinkSecret break the law? Debatable. did their source? Absolutely (I signed an Apple NDA and contract law is still law). did the nature of the leaked information rise to the level of “ethical standards as (used by) traditional journalism”? Absolutely not. This is not a whistle-blower case, this is public announcement of privileged information.

      My $.02

    10. Bill says:

      Doesn’t matter what anyone thinks.

      California shield law as applied to this case confirmed he is a journalist and can’t be required to reveal his source to Apple.

      Apple really needed that source to have a chance in their civil suit, but since they were shot down in that effort, there was little choice but to settle.

      Remember, regardless of what the plaintiff asserts in their filing, it’s not a “trade secret” violation until a jury agrees and awards damages.

    11. Adam says:

      Doesn’t matter what anyone thinks.

      California shield law as applied to this case confirmed he is a journalist and can’t be required to reveal his source to Apple.

      Apple really needed that source to have a chance in their civil suit, but since they were shot down in that effort, there was little choice but to settle.

      Remember, regardless of what the plaintiff asserts in their filing, it’s not a “trade secret” violation until a jury agrees and awards damages.

      Well, I suppose I am really thinking about this in terms of what I think is right or wrong. I am not a lawyer and I live on the East Coast so I have no idea what burden of proof must be met for “trade secrets”. This is absolutely a violation of confidentiality, as defined in the contract the source entered into for their employment. That is wrong, period. The source promised to live by an agereement and violated that agreement. The reporter did not contribute to the public welfare. It’s tabloid journalism of the type seen in every supermarket in the nation.

      Incidentally, the “trade secret” rule didn’t mean a lot to the team of Mac Genii who were fired for releasing developer builds of Leopard on the torrent sites. As my grandpappy would have said: if you can’t talk about it, you ought not be doing it.
      Again, I want it clear that a true whistle-blower should be able to talk about what they do because there is demonstrable benefit. This case falls well short of that mark.

      Maybe ThinkSecret did not violate the law. Frankly I will support the freedom of the Press until the day I die. I just don’t think this case is a shining example of why that freedom exists.

      Cheers

    12. kenh says:

      What about the concept of “fruit of the poisoned tree”, which is applied to search and seizure cases? It means that evidence seized illegally cannot be used to prove guilt.

      Some people seem to think that even though a non-disclosure law is violated, if the information somehow gets out, (or is sold, which is more likely) that it is then open season for anyone to distribute it, (for yet more money).

      Not by the principle of “fruit of the poisoned tree”. If you got it illegally, it cannot become legal just because I want it to be. To put it more simply wrong is wrong, and a violation is a violation.

      And then, who decides whether “whistle blowing” is in the public interest. In a world that seems to hold up over-stimulated 7th graders as the intellectual and behavioral models, the answer is: What I believe and want to put on the internet is the Gold Standard, and what every one else wants, (or may OWN) is mine, too. I am a teacher so I know about 7th graders and am constantly amazed how many 35 year old 7th graders there are out there.

      “If you can’t talk about it, you ought not be doing it” I would love to see that as a Constitutional Amendment. Then we could have some true “progress” in the world.

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