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California Court Upholds Property Rights

A California court has ruled that if someone receives stolen property they must tell the owner of the property who they got it from.

That of course is not how many in the blogosphere are reporting this story. They want you to think that a big bad corporation is taking away the first amendment rights of a blogger. (who BTW is not a blogger) But the case was never about the first amendment. Nowhere in the first amendment does it give someone the right to traffic stolen property.

The case was a no brainer for people who put aside their prejudices and thought about it.

As I said months ago: Just because you claim you are a journalist does not give you the legal right to steal other people's property.

I proved months ago, that if people drop their prejudices and stick to the facts of the case they will universally agree with the court... Some people just can't do that.

Update: I always did like this guy.


Listed below are links to weblogs that reference California Court Upholds Property Rights:

» Darleen's Place linked with Linky goodness

» The Shape of Days linked with A follow-up: More on the Apple lawsuits

» Hold The Mayo linked with Taking a Bite Out Of Apple

» Blind Mind's Eye linked with Common sense prevails in Apple v. Think Secret

» Rip & Read Blogger Podcast linked with Rip & Read Blogger Podcast for 2005-03-12

» Sierra Sanity linked with No Worms in This Apple

» The Other Corner linked with No Worms in this Apple

Comments (33)

Ah, the pleasures of clear ... (Below threshold)

Ah, the pleasures of clear thinking ...

Since this Apple story got ... (Below threshold)

Since this Apple story got widespread play, I've had a hard time trying to figure out why people wanted these "on line journalist" protected?

If the story was a murder case or even of corporate malfeasance at Apple, I could see those "bloggers" receiving first amendment protection.

But by revealing trade secrets that could cost shareholders profits and even employees their jobs, these guys have put themselves beyond the pale.

Actually, if that stolen pr... (Below threshold)

Actually, if that stolen property is in the form of language, then the First Amendment does give you the right to traffic in it, as it is written in absolute terms to cover all speech. Fortunately, however, there is a little matter of the Fourth Amendment, which, by virtue of coming after the First, trumps it in all conflicts. So, while the First gives you that right, the Fourth takes it away.

I agree with your analysis,... (Below threshold)

I agree with your analysis, but saying, "Nowhere in the first amendment does it give someone the right to traffic stolen property." leaves an aftertaste. The First Amendment doesn't GIVE anyone any rights. It guarantees that the government won't infringe upon a pre-existing, God given right. Same goes for the rest of the "Bill of Rights".

Similarly, stealing was wrong before there were any codified laws against it. And you couldn't make stealing right by passing a law or writing a constitution that said it was.

CrowScape --- where did you... (Below threshold)

CrowScape --- where did you get the idea that one of the Bill of Rights amendments trumps another because it comes after it? That's silly.

I'm with Wavemaker. The ide... (Below threshold)

I'm with Wavemaker. The idea that unrelated (or, at best, only thematically related) amendments nullify previous amendments is just wacky.

Not sure if you realized th... (Below threshold)

Not sure if you realized this, or even care, but I agree with you. Freedom of speech has very little to do with this one particular case. An employee (most likely) willingly shared information they knew they shouldn't. They should be outted out. You really dont' want someone like that working for your company.

I agree with Angie. They sh... (Below threshold)

I agree with Angie. They should definitely be outted out.

(I'm not making fun, Angie, I promise. Well, maybe a little, but only because I love "outted out" so much. It makes perfect sense syntactically, and it's so much fun to say: "Outted out, outted out, outted out." Try it! It's a hoot!)

How someone comes to have p... (Below threshold)

How someone comes to have property is one issue -- what someone does with that property once he has it is another issue. These two issues are independent of each other.

Case 1: Person "A" obtains property that person "B" stole from a company. The police discover this and arrest person "A". The court tries person "A" and compels person "A" to reveal the identity of the person they obtained the stolen property from.

Case 2: Same as case 1, except that person "A" responds to the court by saying, "I am a journalist, so you cannot compel me to reveal who I obtained the property from."

Now, consider the two cases very carefully. The notion of "publishing the property" is not part of either case. It is irrelevant. In summary, being a journalist is not a defense to receiving stolen property.

I think a lot of bloggers h... (Below threshold)

I think a lot of bloggers have missed the big issue in the Apple case (intellectual property rights) because they are blinded by the smaller issue (whether bloogers should receive the same privileges as journalists).

I don't see any reason to allow journalists to protect their sources in most cases, and the knowing publication of stolen propietary information would certainly not warrant non-compliance with a court order or subpoena.

I must disagree with the la... (Below threshold)
Michael A:

I must disagree with the label "stolen property" in this case. It is my limited understanding that for property to be stolen it must be taken in such a way that the owner is utterly deprived of the property and its benefits directly by the act of stealing. In this case the benefits of this property may have been diminished by publication of information ABOUT the property, but the property is still in the posession of Apple Computer.

It's good to see someone wh... (Below threshold)

It's good to see someone who isn't whining like a small child over this. I have found very few other bloggers who can put their pettiness aside for even a second here to realize that they are without a case here. I tore apart some of Malkin's buddies here.

Michael A. -- limited under... (Below threshold)

Michael A. -- limited understanding indeed. The property is stolen in the same sense as a song, play, work of fiction or any other intelletual property can be stolen, even though a copyrighted version of it may be in the artist's possession or even on file at the Copyright Office. Theft has devalued the product in any number of ways, and the original owner is entitled to protect its value (or recover damages) through civil action. Perhaps your confusion is that you regard the term "stolen" in the criminal sense, as in, could the Apple employees who stole the work be prosecuted for larceny. Even in this sense, one may be criminally prosecuted, where the stolen property is converted by the thieves, as in sold to another for cash (as opposed to published in the open, so as to ruin its value without financial gain to the thieves). Think of a spy selling secret documents to foreign agents, for instance (granted, there are specific federal statutes regarding this, bu the common law principles are similar.

The First Amendment should ... (Below threshold)
Mark A.:

The First Amendment should be applied equally to "bloggers" and "journalists." However, neither should be protected from *trafficing* stolen property, which is the real issue here. Nor should they be allowed to protect the thieves they received that property from.

Yes, Michael A., it is theft.

Crowscape, your analysis is the silliest exercise of constitutional construction I have ever heard. I hope you're not an attorney.

wavemaker: I get that idea ... (Below threshold)

wavemaker: I get that idea because they happen to be called "amendments." Your question is a bit like asking why do I think light with a wavelength of 475 nm is blue.

If this was reported in the... (Below threshold)

If this was reported in the New York Times instead of a blog, would you still be saying it's fair to sue for reporting second-hand information? How far are you willing to push this "sue a reporter for reporting information" model? Would Bob Woodward be a criminal in your eyes?

Let's not even discuss how utterly stupid it is to sue the biggest fans of your company...

BTW, if the reporting of th... (Below threshold)

BTW, if the reporting of this information has hurt Apple and devalued the product in some way...


Not one single rumor has slowed the massive success of any of Apple's new products. Sholdn't there have to be damages in order to claim the product's early reports were, you know, damaging?

The whole thing is stupid.

RE: MikeF's post (March 12,... (Below threshold)

RE: MikeF's post (March 12, 2005 08:15 PM) and his blog entry

Your tearing was rippingly good. Well done. I particularly liked one of your closing paragraphs re Michelle Malkin. While I'm a big fan of hers, I probably diverge a bit from her on this topic. Admittedly, she clarifies with:

My concern has been Apple's contention that the bloggers in this case are not journalists and therefore do not deserve journalistic protections under California's Shield Law and the First Amendment to the U.S. Constitution.

OK, I can agree with that concern, but this isn't so much about defining what a blogger is or is not; rather, it is a consideration of whether or not disclosure that has nothing to do with public welfare and everything to do with opportunists looking to make a buck at the expense of another and the trafficking of that disclosure should be allowed under the guise of journalism. I dare say the corporations have rights too and that theirs should not be trumped by dubious actors however defined. Unimpeded information exchange is always acceptable by those who act as conduits and profit from such trafficking since it is not their information that is being "stolen". They'll hide under the ruse of 1st Amendment protection as a convenience. Conversely, and so well pointed out by Mike, were the material under consideration created and owned by the traffickers of whom we speak, the outcry would be shrill and perpetual. I sense an undercurrent of hypocrisy.

RE: JimK's post (March 13, ... (Below threshold)

RE: JimK's post (March 13, 2005 12:25 AM)
...Would Bob Woodward be a criminal in your eyes?

You pose some good questions. Globally, I would afford currently defined journalists and bloggers the same protections. The line demarcating the two will blur in short order such that they will likely be inseparable. We cannot know how long that will take but it seems inevitable.

So what of Woodward or Bernstein? Whether journalist or blogger, I'd say their investigations differ from the insider info from Apple's core. The NYeT employees were serving a truly public interest in exposing a high crime or misdemeanor. That was a public service much as I typically despise that particular institution. Had they disclosed trade secrets that really served more of a personal economic interest (feduciary incentive trumping public-good), then I'd close that 1st Amendment loophole, assuming that it even exists.

AD: Should it really be up ... (Below threshold)

AD: Should it really be up to a court to decide who is and isn't newsworthy and who is or isn't reporting newsworthy information?

Besides: THERE WERE NO DAMAGES. Unless Apple is lying about the success of all the new products, all the leaks do is drive the faithful into a frenzy to buy.

This is hurting who, exactly, besides the rights of other bloggers if this horrible precedent comes to pass?

JimK--what do you think you... (Below threshold)
Mark A.:

JimK--what do you think you're talking about?

Apple has not lied about the success of the new product divulged through the leak--it hasn't even been released yet!

Nor are damges a necessary prerequisite for protecting trade secrets. They are primarily seeking equitable relief.

Apple is seeking to plug the leak of its trade secrets. They are attempting to prevent future damages. It has a valid cause of action against the rumor mongers, and is using that as leverage to learn the source of the leak. Once that is divulged, as it should, the focus will likely turn away from the rumor site.

If you haven't noticed, immitators are quick to copy Apple products and themes. Imagine if trade secrets regarding the iPod were leaked before its introduction, and Bill Gates took those secrets and beat Apple to market. How could Apple have forseen and proven the magnitude of damages it would have suffered if it were required to do so five years ago? Obviously it couldn't. That's why the law is designed to allow them to protect the trade secrets before devastating damages ensue.

RE: JimK's post (March 13, ... (Below threshold)

RE: JimK's post (March 13, 2005 02:29 AM)

1a - Should it really be up to a court to decide who is and isn't newsworthy...

In my mind? No. This is my sweeping generalization so it is probably flawed when one introduces law; but I think the the protections, or lack of them, should apply equally to any party. There is an inherent expectation of professionalism that defines "journalist" from non-journalist, so that is where some of the grey area can be more accurately colored. If one receives compensation for reportage, then I guess one would qualify as journalist. However, if we introduce this to the equation, we may still be muddying the waters and be making relevant what shouldn't be. Ultimately, I don't even think the magnitude or presence of compensation should define journalist though I could see where law might want to. The 1st Amendment should apply equally to any party without preferential deference.

1b - ...and who is or isn't reporting newsworthy information?

This one is a bit tougher. In this particular case there isn't a separation of newsworthy from non-newsworthy. The information disclosed was material acquired from employees who had signed NDAs with full a priori knowledge that such dissemination was a violation of company policy and exposed them to legal prosecution. I don't know the level to which this criminality climbs, but it is apparent that the disclosure was criminal. The "journalists" are not entitled to collude. And as the judge ruled:

"The journalist's privilege is not absolute," Kleinberg wrote. "For example, journalists cannot refuse to disclose information when it relates to a crime."
"Kleinberg refused to say whether Bhatia, O'Grady and Jade were members of a protected class of journalists. He did not rule against the reporters because they wrote for relatively obscure Internet sites, he said, but because they violated trade secret laws."

So the court has not actually determined the newsworthiness of it all. It has determined that a company's trade secrets were violated, an entirely different animal.

Now if one were to remove the illegal trade secret violations from the equation, things get much tougher and I'm not sure how I would answer. It wouldn't seem to me that the court could codify what is or is not in the public's interest. Maybe gray area in this regard would not be a bad thing and flexibility is the order of the day when setting guides. Suffice it to say, any journalist should be aware that they put themselves in legal jeopardy if they get fast and loose with their reportage, and that may be self-policing enough. People really concerned with public welfare would likely not be prosecuted; others, serving more self-serving interests would likely be prosecuted. Do we like the imposition of moveable goalposts? No, or at least I don't. But like I said, I don't have an all-encompassing answer that could address every eventuality.

2 - THERE WERE NO DAMAGES. Unless Apple is lying about the success of all the new products, all the leaks do is drive the faithful into a frenzy to buy.

Conspiracy eh? ;) That may be but the damages exist despite being somewhat intangible. IP works that way. I'm not familiar with what exactly was exposed since I'm a PC person. Macs could disappear and I probably wouldn't know about it. Well, not really, but you get my point.

Ignoring the specifics of this case for a moment, let me offer a simple example. Once upon a time, loaves of bread were solid masses of raised dough. Then, someone came up with the grand idea of selling sliced bread! Can you believe it?! Actually sliced... and a revolution in the sandwich making industry ensued. Now, the inventors of this idea (still an IP idea until mechanism was actually implemented) had to scheme, invest, design, and roll out the end product. It was a huge competitive advantage to other whole-loaf vendors in the world... the technological troglodytes. What if an insider let this information out and Mrs. Baird got the jump on Wonder's grand plan? That could have resulted in a competitive advantage for the recipients of that IP who had not done anything other than steal the idea. Their R&D costs to conceptualize such a novel idea would have been zero. Their implementation of the idea might have been abbreviated. They might even have beat Wonder to market with the end product. These are not inconsequential losses though they are intangible in some regards. That is a theft with real consequences. Apple should be allowed the same opportunity to control its IP even if they never turn that IP into anything. That employees violated an agreement to employment makes the violation that much worse. Journalists are not allowed to contribute to the furthering of such abuse.

Boy, I've worked up an appetite. For some reason I'm feeling peckish for a PB&J and a McIntosh...

It would appear that Mark A... (Below threshold)

It would appear that Mark A. and I are on the same wavelength here. Sorry Mark, I hadn't seen your post (honest) before I commented... please don't sue me.

Wait a minute. I've signed no NDA. I received no IP from an intermediary. I'm a journalist of sorts. You know what? [picture Cartman of South Park] Screw you guys, I'm posting on!

Umm ... This is probably a... (Below threshold)
Mike G in San Diego:

Umm ... This is probably a stupid question, but why should we believe that under the Constitution a trade secret is a form of "intellectual property" worthy of protection?

Article I Section 8 Clause 8: To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

It's my impression that this was a relatively new right granted by the government, and that intellectual property (at least at the time the Constitution was written) did not otherwise exist.

I don't see how people or corporations who choose to NOT submit their writings or discoveries to the patent or copyright process, but instead intend to keep said secrets for an unlimited time and to prevent the dissemination of knowledge to the community should be granted any protection.

IANAL, of course, and I suppose it shows ...

AnDriv -- what you say, dud... (Below threshold)

AnDriv -- what you say, dude --- Jim K, take note.

Whether or not there are money damages is irrelevant. When trade secrets are at stake, there can be a demonstration of irreparable harm, a legal standard required of the plaintiff in order to be granted injunctive relief (in this case, probably an order to relevant persons not to continue to publish the secrets, to return the information to Apple, to destroy soft files containing the information, etc --- which is why it is critical to identify the thieves -- so they can be made parties to the case and have the injunctive order applied to them).


wavemaker: I get that idea because they happen to be called "amendments." Your question is a bit like asking why do I think light with a wavelength of 475 nm is blue.

Another ridiculous comment. I presume your observation about blue light is a scientific fact, and so you are answering "because" to my question "why." Dude, you're just wrong. What does the fact that they're called "amendments" have to do with your silly idea that the 4th amendment trumps the 1st in all cases because it comes after it? Come on dude. Stick to science, maybe.

Mike G -- There are forms o... (Below threshold)

Mike G -- There are forms of intellectual property that are not patentable or eligible for copyright, or are not suitable to be put in the public domain --- for instance, do you think that Coca Cola should be compelled to disclose its COKE formula in order to have it protected from copying? Of course not. That's why they're called "trade secrets." They have been protected by federal common law since prior to the Industrial Revolution.

RE: wavemaker's post (March... (Below threshold)

RE: wavemaker's post (March 13, 2005 08:40 AM)

AnDriv -- what you say, dude...

It's the Cartman quip, isn't it? :D

Whether or not there are money damages is irrelevant...

Actually, I think you've covered it pretty well. There may be some debate as to whether the realm is civil or criminal and I'm not expert enough to discern; but we'll assume for the sake of argument that this is civil law since you brought up injunctive relief and not necessarily criminal prosecution. It would seem to me that in the quest for economic restitution, the plaintiff need evaluate the "cost" of the transgression and the entire scope of violation. The court is not going to volunteer the economic sanction - the plaintiff will have to offer one and the judge will follow precedential law to determine the final payout. It may adjust upwardly or downwardly depending on what it thinks is fair, but make no mistake that the onus will be placed on the plaintiff. To that end I should think the plaintiff would be given wide latitude to evaluate that figure. To me it just seems fair since the company's rights (it is a corporation in the Apple case though, ultimately, it really wouldn't matter) have been violated.

The same principles would apply to other remedying sanction including the ones you mention; to wit, cease and desist, asset return, asset destruction, verifiable proof of such, probation excluding future coverage of said offended company by defendants, termination of employment, discovery of theft MO, and who knows what else. The plaintiff can get as creative as they want and a judge will tweak it to suit the law. Or an activist judge could step in and expand the penance... who knows?

The point is that IP often has value as tangible or more tangible than any manufactured widget though quantifying it can be elusive. The plaintiff deserves the entire scope of discovery to evaluate exactly how to quantify that loss in a legal manner. They have a case to prove.

As I said before, I thought your commentary said this already.

Now that we're on the same ... (Below threshold)

Now that we're on the same page about journalists don't really have to out their sources if a crome is involved. Maybe we should be getting on Novac's case for outing a CIA officer. I'd love to see Bush's Brain get his due.

Joser, the page is that jou... (Below threshold)

Joser, the page is that journalists DO have to "out their sources" if a "crome" is involved.

Hampton, if you can underst... (Below threshold)

Hampton, if you can understand Joser's post, could you please translate? Or is it a waste of time?

Apple (or more specifically... (Below threshold)

Apple (or more specifically Apple's lawyers) did itself no favors saying things like "free speech protection applied only to legitimate members of the press". This case wasn't about free speech protection, as you noted, but Apple's lawyers were still glad to state their position that only journalists are entitled to free speech. This is, of course, absurd. Only journalists are 'entitled' to freedom of the press - by definition - but every citizen is entitled to free speech. They would have been much better off to keep their case and their public statements about the narrow issue of whether the Shield Law applied to leaked information and leave irrelevant statements about free speech out of it.

Wavemaker:Beats me... (Below threshold)


Beats me what he means. Regarding his first sentence, I think the word "how" is missing between "about" and "journalists" -- if so, it's at least understandable English. Regarding his last two sentences, I understand all the words, but the thoughts they contain are jibberish to me.

Tom Hanna:

The first amendment states, in part: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof, or abridging the freedom of speech, or of the press, ..."

Please tell us all, in plain English, why you think "every citizen is entitiled to free speech" but "only journalists are 'entitled' to freedom of the press".

Can the government censor what I write, or prohibit me from writing, if I'm just a private citizen and don't call myself a "journalist"? Do I have to keep a "journal" to be able to freely write what I please? Do I have to make a living by writing for publication to be able to write what I please?

You stated that this is "by definition". Whose definition? Your definition?

MikeG, the Constitutional c... (Below threshold)
Cousin Dave:

MikeG, the Constitutional clause you cited allows Congress to pass laws allowing for different types of intellectual property. (And there are some oddball ones, such as the "phonogram patent" that covers sound recordings.) I'm not up on the details, but I know that there are laws that specifically allow for and protect trade secrets.

And actually, right now the law is perverse in that it has created incentives for keeping innovations as trade secrets, and disincentives for patentening them. Trade secrets are protected from the moment that they are created, and the innovator need not go through any legal process. The government puts effort into enforcing trade secret protections. Patents, on the other hand, can take years to obtain and have a lifetime limited by the date the innovation was first noted (which may be years before it results in a viable product). Enforcement of patents is entirely up to the patent owner -- the government won't lift a finger to prosecute a patent infringer -- and non-wealthy patent holders can't affort to defend their pantents against well-heeled infringers. (And, failing to "sufficiently" enforce a patent can result in the patent falling into the public domain.) Add to that the difficulty of enforcement against overseas infringers in countries that do not recognize U.S. patents (most Third World countries have laws that allow or even encourage native drug manufacturers to infringe on U.S. drug patents), and you can see that the risk incurred in disclosing the information in order to obtain a patent is seldom worth the reward.

And, just to defend CrowScape here a bit: Any lawyers here, feel free to correct me if I'm wrong, but I believe it is a general principle that if two laws are in conflict, and they both have the same level of jurisdiction (e.g., both are U.S. Code), then the one that was enacted later takes precedence. I'll admit I don't know how this would apply to the Constitution, since I've never heard of a Constitutional case based on such an argument. (The only Constitutional precedence issue I know of was the amendment [21st] that repealed Prohibition, and in that case it says so specifically in the text.) CrowScape, what you have to remember is that the Bill of Rights, aka the first ten amendments, were all enacted simultaneously, so there is no temporal relationship implied by the numbering. If, say, part of the First Amendment were held by a court to be contradicted by the Fourteenth Amendment, it might be different.






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