Commentary--Apple Wins Right to Pursue Subpoena for PowerPage's Email from Nfox.com in Search of Company Leak(s)

In a self-described narrow ruling that came out Friday afternoon, California Superior Court Judge James Kleinberg ruled that Apple may pursue its subpoena of PowerPage's email from PowerPage's ISP, Nfox.com, by ruling against the protective order sought by Jason O'Grady of PowerPage, Monish Bhatia of MacNN and Kasper Jade of AppleInsider who sought to quash Apple's subpoena.

Apple filed suit against up to 25 John Doe's on December 13, 2004, for violating a company confidentiality agreement by leaking information on a product under development, a so-called breakout box code-named "Asteroid". PowerPage and AppleInsider had posted verbatim information from a confidential Apple briefing document on the product. Apple was authorized to subpoena copies of PowerPage's email, maintained by ISP Nfox.com, seeking to find out whom among Apple's employees leaked the information. O'Grady, Bhatia and Jade then filed for a protective order to quash the subpoena based on California's so-called "shield law" protecting journalists from being found in contempt for refusing to reveal their sources under qualifying circumstances.

In ruling against the protective order, Judge Kleinberg side-stepped the burning issue of whether or not O'Grady, Bhatia and Jade are, in fact, bona fide journalists. He wrote,

"But even if the movants are journalists, this is not the equivalent of a free pass. The journalist's privilege is not absolute. For example, journalists cannot refuse to disclose information when it relates to a crime."

He then weighed the public interest in Apple's rights under the Uniform Trade Secrets Act and in the web sites' rights under the shield law using the five-part "Mitchell Test" and found greater public interest on Apple's side noting,

"...an interested public [in Apple's forthcoming products] is not the same as the public interest [like disclosures of wrongdoing by a whistleblower]."

He nailed their coffin shut by noting that O'Grady, Bhatia and Jade had failed to even address what public interest there is in disclosing Apple's ostensibly stolen trade secrets as specifically requested by the court.

What happens next? Possibly an appeal by O'Grady, Bhatia and Jade. They have seven days to file one. If there is no appeal or the appeal is lost, Apple will be free to serve its subpoena on Nfox.com and to do so with other subpoena's directly on Powerpage, MacNN and AppleInsider. Will Apple do this? Some have appealed to Apple to cease (see this Mercury News article) but it's hard to believe that Apple would quit after having gone this far. It's looking like a leaker's days at Apple may be numbered.

What negative effect does this ruling have on journalists who use the internet as their medium? Since Judge Kleinberg avoided the real journalist issue, there is no effect that we can see. The ruling is consistent with advice on this topic that we received years ago. That is the main reason why we have always thought that rumor web sites were making things up, much like a palm or crystal ball reader, for entertainment.

Of course, we feel sincere compassion for Jason O'Grady, Monish Bhatia and Kasper Jade. As fellow members of the Mac press corps, we know two of them personally, maybe all three since Kasper Jade is a pseudonym. Their stress must be enormous and it will have a lasting effect on them even if they ultimately prevail. We can only hope that the stress is lifted by some means as quickly as possible. [Bill Fox]