Apple Can't Subpoena to Get Web Journalists' Sources

[David Farber <dave () farber net>]

Begin forwarded message:

From: "CONNIE GUGLIELMO, BLOOMBERG/ SAN FRANC"  
<cguglielmo1 () bloomberg net>
Date: May 26, 2006 7:16:29 PM EDT
To: dave () farber net
Subject: (BN ) Apple Can't Subpoena to Get Web Journalists' Sources


Apple Can't Subpoena to Get Web Journalists' Sources (Update4)
2006-05-26 19:05 (New York)


     (Adds description of Asteroid in the 10th paragraph.)

By Joel Rosenblatt and Karen Gullo
     May 26 (Bloomberg) -- Apple Computer Inc. can't force online
journalists to disclose their sources of confidential information
used for news stories, a California appeals court ruled.
     Online writers are protected by the state's reporter
``shield law,'' as well as by the First Amendment right to free
speech, the state Court of Appeal in San Jose ruled today,
reversing a lower court decision.
     Apple, maker of the iPod music player, subpoenaed the e-mail
provider of Jason O'Grady, publisher of O'Grady's PowerPage, an
Internet site that posted information in 2004 about an unreleased
Apple product. The ruling establishes that Web reporters have the
same right to protect sources as print reporters, said lawyers at
the Electronic Frontier Foundation.
     The decision is a ``victory for the rights of journalists,
whether online or offline, and for the public at large because it
protects the free flow of information to the press and from the
press to the public,'' said Kurt Opsahl, a lawyer at the San
Francisco-based EFF, a privacy-rights group which sided with the
journalists.
     Apple argued that O'Grady posted trade-secret information
stolen from the company, and that the company's need to learn the
identity of the thieves trumped California's shield law. The
court disagreed, saying the shield law ``is intended to protect
the gathering and dissemination of news, and that is what
petitioners did here.''

                       Trade Secret Leaked

     ``We can think of no workable test or principle that would
distinguish `legitimate' from `illegitimate' news,'' the appeals
court said. ``Any attempt by courts to draw such a distinction
would imperil a fundamental purpose of the First Amendment.''
     The ruling overturned a March 2005 ruling by Superior Court
Judge James Kleinberg in San Jose, California, saying Apple could
subpoena two online news sites, the e-mail service provider for
O'Grady and the publisher of a third Web site to find out the
source of the leak. Kleinberg said the information the publishers
posted was a trade secret. O'Grady appealed.
     Opsahl said the decision is also important for Internet
service providers because it extends legal protections to
subscribers' e-mail.
     ``It protects the privacy of e-mail communications, so they
can't be subpoenaed in private litigation without you having an
opportunity to present whatever privileges you may be entitled
to,'' Opsahl said.

                       Corporate `Shivers'

     Apple argued that O'Grady and two other publishers used
stolen information to publish 2004 stories on their Web sites
that described an unreleased Apple product code-named
``Asteroid'' as an external audio device that plugs into Apple
computers, allowing customers using Apple software for recording
and mixing music to incorporate instruments and other audio
sources.
     Apple filed the lawsuit in December 2004 against unknown
individuals, identified in court documents as ``John Does,'' to
find out who gave the information to the Web publishers.
     Intel Corp. and Genentech Inc. filed papers supporting
Apple, while news organizations, including Tribune Co.'s Los
Angeles Times and Hearst Corp. filed briefs supporting the online
publishers.
     Schuyler Moore, an intellectual property attorney at Stroock
& Stroock & Lavan LLP in Los Angeles who's not involved in the
case, said the ruling ``is going to send shivers down corporate
America.''
     Spokesman Steve Dowling of Cupertino, California-based Apple
and company spokeswoman Kristin Huguet didn't return calls
seeking comment.
     Apple shares fell 78 cents to $63.55 in Nasdaq Stock Market
Composite trading. They have dropped 12 percent this year.
     The case is O'Grady v. Superior Court of Santa Clara County,
H028579, Sixth District Appeals Court (San Jose).

--Editors: Farr (cwc/lwo/shw).

Story illustration: For Apple's balance sheet data, see
{AAPL US <Equity> CH3 <GO>}. For a menu of Bloomberg legal
resources see {BLAW <GO>}. To read today's top legal news, see
{TLAW <GO>}.

To contact the reporters on this story:
Joel Rosenblatt in San Francisco
at (1) (415) 912-2992 or jrosenblatt () bloomberg net;
Karen Gullo in San Jose, California,
at (1) (415) 271-0448 or kgullo () bloomberg net.

To contact the editor responsible for this story:
Patrick Oster at (1) (212) 893-4088 or poster () bloomberg net.

[TAGINFO]
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DNA <Equity> CN
5673Z US <Equity> CN
TRB US <Equity> CN

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#<256910.91116.2005-11-10T14:40:00.25>#
-0- May/26/2006 23:05 GMT

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