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Designer Skin LLC v. S & L Vitamins, Inc., et al.
Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

Apple Computer v. Doe 1, et al.

Case No. 1-04-CV-032178 (Superior Ct., Ca., March 11, 2005), writ of mandamus granted, court directed to quash subpoena and issue protective order, 139 Cal. App. 4th 1423, 2006 WL 142685 (Cal. App., 6th Dist., May 26, 2006)

Apple Allowed To Proceed With Subpoena Seeking Blogger's Source

Court denies bloggers' motion for a protective order, which sought to quash a subpoena served by plaintiff Apple Computer, Inc. ("Apple") on Nfox, the e-mail service provider for the blog PowerPage.  The subpoena sought materials, including e-mails, that would permit Apple to identify the individual(s) who transmitted trade secret information about an Apple product to PowerPage, which information PowerPage subsequently published on its blog/website.  The Court held that the bloggers were not entitled to such relief under California's 'Shield Law,' as that statute only protects journalists from being found in contempt for failing to produce information, and does not support a motion to quash.  Similarly, such relief could not be grounded on the privilege afforded journalists under the First Amendment, as this privilege cannot be used to prevent the disclosure of information related to criminal activity such as that at issue here, the disclosure of trade secrets.  Because Apple had made a prima facie case that a crime had occurred, it was entitled to the requested discovery.

Subpoena Seeks Identity Of Individuals Who Provided Trade Secret Information To Blog

Information concerning a new Apple product, including a detailed drawing and technical specifications, was posted on the blog/website PowerPage.  Claiming this information constituted its trade secrets, Apple commenced suit against various John Doe defendants, individuals allegedly involved in improperly disclosing these trade secrets.  To assist in identifying these individuals, Apple served a subpoena on Nfox.  Nfox provides e-mail service to the PowerPage blog.  The subpoena sought, inter alia, e-mails that would permit Apple to identify the John Doe defendants who transmitted the trade secret information to PowerPage.  Nfox did not object to the subpoena.

Protection Not Available To Bloggers Under California's "Shield Law"

The operators of PowerPage and other bloggers moved to quash the subpoena.  The Court denied their motion, and directed Nfox to comply with the subpoena.

Claiming they were journalists, the bloggers sought to quash the subpoena under California's "Shield Law," California Evidence Code §§1070(a) and (b).  The Court rejected this claim, holding that that statute did not provide a basis to quash a subpoena.  As stated by the Court, the "Shield Law" "affords only limited protection.  It does not create a privilege for news people, rather it provides an immunity from being adjudged in contempt."

Protection Not Available Under First Amendment 

Nor, held the Court, did the protections afforded journalists under the First Amendment entitle the bloggers to quash the subpoena at issue.  Such protections are not absolute.  Rather, "journalists cannot refuse to disclose information when it relates to a crime."  Here, the Court found that Apple had made a prima facie case that a crime had been committed - namely a violation of California Penal Code §499(c) which prohibits the theft of trade secrets.  Apple's showing included a series of slides labeled "Apple Need-to-Know Confidential," which the Court found were the source of the information in question, as well as other materials reviewed in camera by the Court.  Based on this prima facie showing, the Court held that Apple was entitled to the discovery it sought as to the identity of the individual(s) involved in improperly disclosing those materials, notwithstanding any privileges afforded the bloggers under the First Amendment.  The Court found support for its determination in the fact that "the California Legislature has not carved out any exception to [the] statutes [prohibiting disclosure of trade secrets] for journalists, bloggers or any one else."

The Court also found support for its determination in the balancing test articulated by the California Supreme Court in Mitchell v. Superior Court, 37 Cal. 3d 268 (1984).  Mitchell set forth a five part test to be used to balance the competing interests of civil discovery, on the one hand, and a reporter's First Amendment privilege, on the other.  Under this test, Courts examine: (1) the nature of the litigation and whether the reporter is a party; (2) whether the requested discovery goes to the heart of plaintiff's claim; (3) whether other sources of the information sought have been exhausted; (4) the public good served by protecting the misappropriation of trade secrets; and (5) in the context of a defamation case, whether plaintiff can make a prima facie showing of falsity.

Applying this test, the balance favored granting Apple the requested discovery - it went to the heart of Apple's claim, as it sought the identity of the defendants it wished to pursue; one or more of the bloggers possibly may become defendants in Apple's suit; Apple had exhausted alternative means of obtaining this information without success, and Apple had made a prima facie showing that its trade secrets had been misappropriated.

Public Interest Not Served By Bloggers' Disclosure

The Court accordingly denied the bloggers' motion to quash.  In reaching this result, the Court rejected the bloggers' argument that prohibiting disclosure in the circumstances of this case furthered the public interest.  Said the Court:

At the hearing the Court specifically asked what public interest was served by publishing private, proprietary product information that was ostensibly stolen and turned over to those with no business reason for getting it.  Movants' response was to again reiterate the self-evident interest of the public in Apple, rather than justifying why citizens have a right to know the private and secret information of a business entity, be it Apple, H-P, a law firm, a newspaper, Coca-Cola, a restaurant, or any one else.  Unlike the whistleblower who discloses a health, safety or welfare hazard affecting all, or the government employee who reveals mismanagement or worse by our public officials, the movants are doing nothing more than feeding the public's insatiable desire for information. 

*          *          *

What underlies this decision is the publishing of information that at this early stage of the litigation fits squarely within the definition of trade secret.  The right to keep and maintain proprietary information as such is a right which the California legislature and courts have long affirmed and which is essential to the future of technology and innovation generally.  The Court sees no reason to abandon that right even if it were to assume, arguendo, movants are "journalists" as they claim they are.

It should be noted that the Court did not rule on whether the bloggers were in fact journalists entitled to the protections of either California's "Shield Law" or the First Amendment.

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