Apple's Trade Secrets example essay topic

Apple has two lawsuits pending that involve rumor-tracking Web sites. In Apple Computer vs. Doe No. 1, et al. (or Apple vs. Does for short), the company is suing up to 25 unnamed individuals for misappropriation of trade secrets-specifically, leaking Apple's confidential information about an unreleased audio product code-named "Asteroid" to Think Secret, Apple Insider, and Jason O'Grady's Power Page. As part of the discovery process, Apple obtained subpoenas for all three sites for any and all information related to "Asteroid", including the identity of all people who leaked the information, or communications that might reveal said identities. None of the sites is a defendant in the Does suit, though Apple has made clear that they could be named as defendants if evidence shows that they knowingly published Apple's trade secrets (and Think Secret is a defendant in a second lawsuit not related to "Asteroid").

Both Think Secret and Apple Insider have their own e-mail service, so obtaining information about their e-mail records and messages would require subpoenaing the sites themselves, invoking difficulties about journalist privileges. When Apple learned that Power Page used an external e-mail provider, the company's legal team found its path of least resistance. Nfox has gone beyond refusal to contest the subpoena-the ISP refused to promise O'Grady that it would not comply with the subpoena before appeals were exhausted. That's when the Electronic Frontier Foundation, representing the three sites, went to court seeking a protective order on O'Grady's behalf to prevent Nfox from turning over the information to Apple. On March 4, lawyers for Apple and for the three subpoenaed sites met in the San Jose courtroom of Superior Court Judge James P. Kleinberg. They were arguing over the sites' motion for a protective order barring Nfox from honoring Apple's subpoenas.

It was an uphill battle, because one day earlier, Judge Kleinberg tentatively ruled in Apple's favor. On March 11, the Judge formalized his preliminary decision, denying the motion for the protective order, leaving Nfox free to honor Apple's subpoenas and turn over all information from O'Grady's e-mail related to "Asteroid", including that which may identify the person who sent it to the sites. In the 13-page ruling, Kleinberg essentially told the three sites (the ones who moved to have the subpoenas quashed, hence their reference as in the decision) that their status as journalists does not matter-if they had Pulitzer Prizes, they'd still have to honor the subpoenas. Trade Secrets The law in question-one that nearly all the heated coverage of Apple's lawsuits has managed to ignore-is the California Uniform Trade Secrets Act, or UTSA. California is one of seven states that adopted the 1979 version of UTSA drafted by the National Conference of Commissions on Uniform State Laws. Thirty-seven other states and the District of Columbia adopted the amended 1985 version, and it's pending in the 2005 New Jersey legislature.

Only New Jersey, Massachusetts, North Carolina, New York, Texas, and Wyoming don't have the UTSA in state law. Common law recognizes the existence of trade secrets that are, in the NCCUSL's words, "basically, information of commercial value". The group continues, "Key to the need for protection is the fact that the information is not generally known to others and is not readily ascertainable by proper means. A trade secret, generally, would be exclusive knowledge, of economic value, which has been generated by the labors of a specific person or persons who have an interest in protecting its value". Although the US Supreme Court has ruled that facts cannot be copyrighted, both common law and the UTSA firmly establish that trade secrets are property. Specifically, trade secrets are information, and information is property.

Ironically, for this discussion, the Supreme Court affirmed that information is property in Carpenter vs. United States, the case in which the court upheld the conviction of Wall Street Journal reporter R. Foster Winans for fraud. Winans had written the Journal's influential "Heard on the Street" column, and had been secretly leaking the contents of upcoming columns before they were published. Those who received the leaks could act on the news before the rest of the market, gaining an advantage. Winans had argued that his own knowledge of his columns was an "intangible right", but the Journal-the press, mind you-testified that it considered everything in an unpublished article confidential until it was published.

The courts found that Winans had "misappropriated" the Journal's property, and that was the foundation for upholding the fraud convictions. Since trade secrets are property whose value is tied to their secrecy, the courts have ruled that people who possess trade secrets that they do not own do not have a constitutional right to share those secrets. Normally, activities like speaking or printing what you know would be constitutionally protected as freedom of speech or freedom of the press. In this case, however, revealing (or misappropriating) a trade secret is essentially theft-the taking or destroying of property-and the courts have consistently held that you have no constitutional right to perform criminal acts..