The test case for bloggers and journalism shields; Update: REACT’s history of interventions on behalf of members
posted at 3:35 pm on April 27, 2010 by Ed Morrissey
Eight days ago, Gizmodo published a review of Apple’s next generation of iPhone, based on a sample that was reportedly “lost in a bar.” The website apparently paid the source who allegedly found it a tidy sum of money to provide it to Jason Chen, who wrote an extensive review, including a video demonstration of the device. Apple demanded the return of the prototype, and Gizmodo complied. However, on Friday night, California law enforcement authorities raided Chen’s home. They took four computers, two servers, and other assorted equipment from his home, initially without him being present, as an investigation into the theft of the device that had already been returned to Apple, in order to discover the thief and/or source for Gizmodo.
California, however, has a shield law that specifically protects journalists from these kinds of raids. Does the shield apply to New Media journalists? Simon Owens examined the issue at Bloggasm:
According to a letter written by Gawker Media’s Chief Operating Officer Gaby Darbyshire, Gawker believes that Chen should be protected by both state and national journalism shield laws. “Jason is a journalist who works full time for our company,” Darbyshire wrote. “Abundant examples of his work are available on the web. He works from home, which is his de facto newsroom, and all equipment used by him there is used for the purposes of his employment with us.”
Immediately upon reading this I began contacting editors from well-known online news networks, many of whom employ bloggers. It didn’t surprise me at all that most of them agreed that Chen should be legally considered a journalist, but some were more cautious when opining on whether the journalism shield laws should apply in this case. After all, Gizmodo didn’t just interview an anonymous source, it purchased an iPhone that many considered to be stolen, making a few of my sources wonder if it had crossed a delicate line between journalism and theft.
There are two issues here, one involving Gizmodo itself and the other involving the processes of journalism. Let’s take the latter first. Investigative journalism often involves exposing secrets and information people don’t want publicized. Usually, media outlets don’t purchase that information, although it’s not entirely unknown, either. Without the ability to protect sources of that material, the only information that would come to light would be press releases.
Simon interviewed me for this piece and asked me specifically about protecting sources:
But should Chen be considered a journalist? Yes, Morrissey said, noting that Gawker blogs regularly break stories and conduct original reporting. But though he argued that journalism shield laws should apply to most leaks, he also said there should be some exceptions when it comes to national security. “Certainly there has to be parameters on everybody, not just on bloggers, but on mainstream news journalists about what they can and can’t use that shield for, but it seems to me just based on what I’ve seen that this is a very strange overreaction on the part of California.”
I asked Morrissey if this could determine whether anonymous sources would continue to feel comfortable leaking stories to bloggers if it’s determined that the online journalists aren’t shielded by such laws. He agreed with this notion, recounting a story that he broke that involved a scandal in Canada. “Fortunately I wasn’t in Canadian jurisdiction at the time, but part of the reason that person came to me is because that person was pretty sure I’d protect his or her identity and I was out of the reach of the Canadian authorities,” he explained.
The person who leaked me that information broke the law in Canada in doing so. Its release at Captain’s Quarters created a massive increase in interest in the Adscam scandal, which eventually led to the end of the Liberal government in Canada, which had good reason to want it kept quiet for as long as possible. Anonymous sourcing can certainly be abused and readers need to know that when reading articles based on that sourcing, but it can also be tremendously valuable, especially when it comes to holding governments and businesses accountable.
The next question would be whether Chen qualifies as a journalist, which is a trickier question. Obviously, the need for news about the next iPhone release isn’t as pressing as government corruption, but both still qualify as journalism. Chen was doing original reporting in technology, not creating a derivative work, which should be enough to qualify him for the California shield protection — or if not, then no one really qualifies for it. The wisdom of such shield laws may be debatable, but the fact is that it exists in California, and it exists explicitly to prevent what happened to Chen.
Finally, the proportionality of California’s response should be called into question, if nothing else. Chen didn’t possess the device at the time of the raid, a fact known to law enforcement. Chen had returned it to Apple when requested to do so, having used it to write an article for Gizmodo, a legitimate New Media enterprise. If the state wanted the information on Chen’s computers, they should have asked him for it first, and then addressed the situation in court with Chen in attendance to determine the legality of such a request. No reasonable person could have concluded that Chen was some sort of major fence of stolen property, requiring a raid that bears more resemblance to busts of drug traffickers than a tech blogger. The entire incident looks like a highly questionable overreaction by California state authorities — and one has to wonder how much influence Apple had on that decision.
Be sure to read the other reactions that Simon collected, and take the poll:
Update: Yahoo has more on Apple’s involvement in the raid:
The California criminal investigation into the case of the errant Apple G4 iPhone that Gizmodo.com unveiled before legions of curious Internet readers last week is noteworthy in its potential to make new media law. But it’s also striking for another reason: The raid that San Mateo area cops conducted last week on the house of Gizmodo editor Jason Chen came at the behest of a special multi-agency task force that was commissioned to work with the computer industry to tackle high-tech crimes. And Apple Inc. sits on the task force’s steering committee.
On Friday, members of the Rapid Enforcement Allied Computer Team (REACT) Task Force entered Chen’s home and seized four computers and two servers as evidence in a felony investigation. REACT is a partnership of 17 local, state, and federal law-enforcement agencies headquartered in Santa Clara County, founded in 1997 to address “new types of crime directly tied to [California's] increasingly computer-oriented economy and widespread use of the Internet,” according to the task force’s website. …
Gizmodo says it paid $5,000 for the prototype 4G iPhone from someone who found it sitting untended on a bar stool in a Silicon Valley beer garden. Stephen Wagstaffe, the chief deputy district attorney in the San Mateo District Attorney’s office, told Yahoo! News that the search warrant on Chen’s home was executed by members of the REACT Task Force in the course of investigating a “possible theft,” but he didn’t say whether the target was Gizmodo or the anonymous tipster who found the phone. In either case, it’s hard to imagine — even if you grant that a theft may have occurred under California law, which requires people who come across lost items to make a good-faith effort to return them to their owner — how the loss of a single phone in a bar merits the involvement of an elite task force of local, state, and federal authorities devoted to “reducing the incidence of high technology crime through the apprehension of the professional organizers of large-scale criminal activities,” as the REACT website motto characterizes its mission.
The REACT effort has been deployed on behalf of steering committee members before this, too:
According to the San Jose Business Journal, other steering committee members include Cisco Systems, Microsoft, and Adobe. This isn’t the first criminal investigation REACT has conducted in which a steering-committee member was a victim: In 2006, REACT broke up a counterfeiting ring that was selling pirated copies of Norton Antivirus, which is produced by steering-committee member Symantec. REACT has also launched piracy investigations in response to requests from Microsoft and Adobe.
Which prompts the question: does REACT actually investigate anything outside of its members’ priorities?
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Ronnie,
Have you even seen pictures of the thing? It’s downright obvious that it is not a current or past iPhone.
EWTHeckman on April 27, 2010 at 4:44 PM
So, per the update, Apple sits on the steering committee of the computer crime LE task force whose rapid response team swung into heavy-handed action? Well, we may have found the “influence” which led to the “massive overreaction”.
novaculus on April 27, 2010 at 4:45 PM
No, that’s why most signs say “ticketed and towed”.
Ronnie on April 27, 2010 at 4:50 PM
That’s what I thought.
Gizmodo overeached on this one, the guy should get slapped w/ what the CA law allows.
This REACT should not be able to have this much power.
If someone murdered my family, the response would probably not be half as quick as this was.
That is outrageous.The new iPhone technology garnering this much security & power through the use of the justice system is pathetic.
Badger40 on April 27, 2010 at 4:51 PM
I see new and different phones coming out every day, so I might just assume it was something I hadn’t seen yet. Personally, my first thought certainly would not be top-secret prototype – perhaps mostly because I know how unlikely it is for something like that to be out in public. But let’s say he did think it was downright obvious. Then he’s a bit of a techie and considering that he was not too far from Apple Corporate, he knew exactly where it belonged – and it wasn’t AppleCare.
Ronnie on April 27, 2010 at 4:56 PM
Tim Burton,
I have no idea. I’d be shocked if taking the latest and greatest gadgets out for a night on the town was a standard R&D practice at Apple. Maybe it is, but I doubt it.
Do you really believe that Apple would be so careless and blase with billions of dollars worth of intellectual property and trade secrets?
To me it is more likely that someone took the iPhone from the lab without permission and delivered it to another individual who claimed to have “found it at a bar”. That individual then sold it to Gizmodo after first having made some half-hearted attempt to satisfy the “reasonable” requirements of the law and avoid being charged with recieving stolen property.
That’s my theory. Given the reaction of the state authorities, there certainly appears to be more to this story than meets the eye.
Mike Honcho on April 27, 2010 at 4:57 PM
Even if they didn’t know it was a prototype, they did know that it “belonged” to Gray Powell: both Gizmodo and the person who found it. Not only that, they knew how to reach him via his Facebook account. Neither party had any excuse to not contact him and return it.
mcg on April 27, 2010 at 4:58 PM
Let’s do word substitution. Crime Stoppers / Gizmodo.
Crime Stoppers offers a reward for any lost or stolen Apple property so that they can return it to the correct owner.
Crime Stoppers paid $5k for the lost property.
Crime Stoppers called the owner of the lost property, interviewed him and made arrangements to return the property.
Crime Stoppers returned the lost property.
Police raid Crime Stoppers and seize all their electronic equipment, knowing that the property that was lost had already been returned.
barnone on April 27, 2010 at 5:00 PM
Mike, there are enough independent news reports that corroborate the lost phone story that the burden to prove an alternative thesis is on you. The owner of the bar corroborates that Gray Powell called frantically over the next 24 hours hoping it had been tuned it. Gray’s father has even been interviewed.
mcg on April 27, 2010 at 5:00 PM
To me, this has nothing to do with journalism, and not because he is a blogger. He knowlingly published the details of a company’s protected work product.
I wonder if he, or any other journalist, would like it if his workproduct was “lost” and published by some other site without payment. Would he then sue or press charges?
MississippiMom on April 27, 2010 at 5:00 PM
barnone: did Crime Stoppers disassemble the phone and display its internal contents on a widely read web site?
mcg on April 27, 2010 at 5:01 PM
You forgot one important step in your story:
Crime Stoppers releases all details of top secret workproduct on internet.
That makes a difference.
MississippiMom on April 27, 2010 at 5:02 PM
While drunk, a man who found the iphone and made a questionable decision to return it to the owner, rather than turn it into the bar’s staff. The next morning sober he then began attempting to return it to the owner. After several tries, including leaving contact information, and waiting a month, he concluded that the previous owner abandoned it. Thus freeing him to use it as a hocky puck, or sell it to an interested party.
Jason Chen a blogger at Gizmodo purchased said iphone and blogged at Gizmode. His report on it embarrassed Apple.
Apple then demands the iphone back, and it is returned.
Apple obviously have way to much influence with the California state authorities.
If there is going to be journalism shield laws, they should apply to Jason Chen in this case.
Slowburn on April 27, 2010 at 5:02 PM
By the way, folks, this phone was lost on March 18th. The original finder learned rather quickly that it belonged (in some sense) to Gray Powell. He could have contacted Gray, he could have simply left it with the bartender instead. He did not. He shopped it around to gadget blogs, and Gizmodo pulled the trigger. Then Gizmodo held onto it under wraps for a week, and even disassembled it. They made no serious attempt to return it until after they had assembled their full story and Apple contacted them.
The point is, this is not a story that unfolded over the course of days; it has been about 5 weeks now.
mcg on April 27, 2010 at 5:04 PM
Ronnie,
The claims I’ve seen say that he called several different Apple numbers, not just AppleCare.
Mike,
Cell phones are the type of product that are notoriously sensitive to real world conditions. (It’s amazing how many things can mess up a cell phone signal.) It’s not unreasonable to think that any cell phone manufacturer—not just Apple—would have to test prototypes outside of the lab in real world conditions.
EWTHeckman on April 27, 2010 at 5:07 PM
Huh? Doesn’t this go into the category of corporate espionage? Journalists have no more right to deal in stolen property than anyone else.
It may be that California has gone overboard in searching Chen’s house and computers, but, while it can be argued that he is indeed a “journalist” I don’t see how Chen can be defended for buying the IPhone prototype and writing about it.
Buy Danish on April 27, 2010 at 5:08 PM
Claims by a reporter who talked to Chen who talked to some guy aren’t holding a lot of weight with me. I’ll believe it when I see phone records and listen to those recorded Applecare calls. Personally, I don’t believe he called anyone. Good Samaritans don’t turn around and ask $5,000 from a web site they’re well aware will be leaking confidential information.
Ronnie on April 27, 2010 at 5:18 PM
I agree with you both. I intentionally left that part out. But the product was not stolen. The reward was paid. The product was returned. AND THEN the police seized the computers.
At the point that there was no lost property to recover, there was no need for this type of search warrant. The only reason to seize the computers was to search for information. That should have been done with a subpeona.
barnone on April 27, 2010 at 5:18 PM
If you find a lost Nokia phone in a bar, do you call Nokia?
What normal person, having seen this information, would decide the next day to call… AppleCare?
mcg on April 27, 2010 at 5:20 PM
@barnone: I’d make a slight but important distinction: the reason to seize the computers was to obtain evidence. If that evidence is on the computers, then you seize the computers. You don’t ask a criminal suspect, “Hey, I want you to give me all the incriminating evidence you have.”
mcg on April 27, 2010 at 5:21 PM
If Apple persists, let them know you’ll boycott their products until they back off.
Jimbo3 on April 27, 2010 at 5:22 PM
Ronnie – Chen interviewed the guy who lost the phone.
barnone on April 27, 2010 at 5:22 PM
@Jimbo3: this is a felony investigation. It’s not Apple’s to start (REACT conspiracy theories notwithstanding), and it’s not theirs to stop. Victims don’t have to press charges in felony investigations.
mcg on April 27, 2010 at 5:23 PM
And the crime was? Returning stolen property? (but looking at it real close before returning it?)
barnone on April 27, 2010 at 5:24 PM
God help me. I am on the same side as Jimbo3?
I recant all my previous statements.
I must have a brain tumor.
I appologize for all previous posts on this topic.
barnone on April 27, 2010 at 5:26 PM
@barnone: purchasing stolen property. And they didn’t just “look real close”, they disassembled it.
The point is, the stated purpose of the search was to gather evidence of the commission of a felony. Even if we disagree that a felony was committed, the judge decided they had probably cause that one was.
mcg on April 27, 2010 at 5:26 PM
He should have given it back to Apple. It wasn’t his, he speculated that it was a prototype – they should have done the right thing and given it back. I don’t have a problem with a criminal investigation in this case
golfballs03 on April 27, 2010 at 5:27 PM
Let’s say the next Harry Potter book is lost in a bar. You find it and sell it to the website myhoneyharry.com and they publish 90% of it online. Then the wesbite returns the entire book to JK whatshername.
Are you telling me that JK and her publisher can only ask the website to provide info on how they obtained that protected work product? I’m pretty sure they would be able to seize the info with a proper warrant.
This type of activity is not what the journalism shield laws are meant to protect. Protecting the identity of a source who is providing important public information is not the same as publishing protected work product for all the world to see.
MississippiMom on April 27, 2010 at 5:33 PM
Doing unto others in this case would mean handing the phone to the bartender. If the Apple lawyers don’t get them, karma surely will.
mike_NC9 on April 27, 2010 at 5:33 PM
Must be nice to have your own private police, huh?
mojo on April 27, 2010 at 5:34 PM
I work at Apple. You can approach the front desk. True, you can’t get beyond the reception area but you can get into the building and drop something off.
skree on April 27, 2010 at 5:35 PM
Actually that is exactly what you must do when the suspect is a journalist.
The federal Privacy Protection Act prohibits the government from seizing materials from journalists and others who possess material for the purpose of communicating to the public. The government cannot seize material from the journalist even if it’s investigating whether the person who possesses the material committed a crime.
Instead, investigators need to obtain a subpoena, which would allow the reporter or media outlet to challenge the request and segregate information that is not relevant to the investigation.
Read More http://www.wired.com/threatlevel/2010/04/iphone-raid/#ixzz0mL4fgGwx
The issue is not whether this guy is guilty of a crime or not, that is for the police to decide. The question is whether or not the warrant was legal. As far as I can tell, according to CA state and federal law it was an unlawful search and seizure.
EconomicPirate on April 27, 2010 at 5:39 PM
Who said anything about the police “being there?” As I mentioned, the laws and consequences, including registered tow truck operators must follow a process of notification to the rightful owner, through DMV, police, etc.
Whilst on a 2 week vacation, someone apparantly tried to steal my car and failed. Private towing company towed my car. When I got home from vacation – I looked for my car and though “geez I swear I parked it here”. When I got to my mail – there was a notice from the police, with all of the tow companies records and contact info to retrieve my vehicle. I was also legally parked.
When someone is towed – they must be notified, starting with the towing company, with or withour cops.
Its pretty straight forward and I noticed Timmy disappeared from the thread due to ignorance and blatant bullshitting about laws and what he “knows”
Read his “restaurant story”…
Odie1941 on April 27, 2010 at 5:39 PM
And O.J.’s looking for the real killer. Like I said, I’ll hold out for actual evidence – not a second or third-hand statement from someone with a legal stake in the matter.
Ronnie on April 27, 2010 at 5:40 PM
Ronnie,
Of course, I would expect Gizmodo to try to make themselves look good. But so far, we have only their story plus a little bit of outside information. Therefore, all we can do is ask, “Is the story reasonable?” and “Is there anything else we know that undercuts or supports the story?”
The story, as told by Gizmodo is internally consistent and reasonable, right up until the part where they said “We took it apart to make sure it belonged to Apple.” That part doesn’t fit the reasonable test, IMHO.
What we do know from additional sources is that the phone was lost by the engineer in a bar, he called the bar to try to find it, the guy who found it had it for a month, and there is one confirmed call to Apple.
While he may have made only one call to Apple, I think it’s reasonable to think that most people would have tried a number of different numbers until they had at least some reason to think Apple would call him back.
The external confirmation of the engineer losing it the bar and calling to find it confirms the “found it in a bar” portion of the story. The month of elapsed time plus the logged call indicates that the guy who found it made at least some effort to return the phone, even if there is room for skepticism about how hard he tried.
In other words, the story is consistent with outside evidence, and there are no publicly available counterclaims about what happened, therefore, the story deserves the benefit of the doubt until there’s good reason to doubt it.
EWTHeckman on April 27, 2010 at 5:42 PM
Duh, the Finder called Apple because the “owner’s” Facebook came up onscreen when he woke the phone and he KNEW it belonged to an Apple employee.
PJ Emeritus on April 27, 2010 at 5:43 PM
@EconomicPirate: I hear you, but there is a fair amount of dispute on that point.
mcg on April 27, 2010 at 5:43 PM
–I’m not sure it was stolen. The Apple employee left it in a bar (by the way, did the bar have a rather typical sign saying that “we’re not responsible for missplaced property”).
Here’s what I think is the applicable CA statue (Section 485 of the CA penal code): One who finds lost property under circumstances which give him knowledge of or means of inquiry as to the true owner, and who appropriates such property to his own use, or to the use of another
person not entitled thereto, without first making reasonable and just efforts to find the owner and to restore the property to him, is guilty of theft.
Jimbo3 on April 27, 2010 at 5:47 PM
–Apple can always decide to waive the charges.
Jimbo3 on April 27, 2010 at 5:48 PM
mcg, you stopped too soon. At that point in the narrative, the guy who found the phone still thought it was a standard iPhone.
But the next morning, when he was sober and in the light of day, it was obvious that the phone was in a plastic shell that made it look like a standard iPhone to a casual observer, but once the shell was removed, it was obviously not a current or past iPhone.
Furthermore, since the iPhone had been bricked, making the engineer’s phone number unavailable, it’s reasonable to try to call Apple about what is most likely to be a prototype phone. I wouldn’t start with AppleCare, but if I got blown off as some sort of a hoaxster at other more obvious numbers, I probably would have wound up calling AppleCare too.
EWTHeckman on April 27, 2010 at 5:49 PM
I would argue that the journalist himself was engaging in criminal activity and that is why his computers were seized. He, and Gizmodo, knowinly revealed trade secrets, and that is against the law.
Read here.
MississippiMom on April 27, 2010 at 5:51 PM
@Jimbo3: It is not necessarily Apple’s decision. They can decline to press charges, but the state can still file them independently.
mcg on April 27, 2010 at 5:51 PM
Why would you need multiple numbers? I’d have looked up Apple Corporate in the phone book or just walked down the street. The guy knew exactly what he had and where it came from. That’s why he called Gizmo.
Ronnie on April 27, 2010 at 5:52 PM
–I agree, but if Apple decided not to cooperate or to provide evidence, they wouldn’t have much of a case.
Jimbo3 on April 27, 2010 at 5:52 PM
@EWTHeckman: yeah, I did not mean to deceive by truncating it. But I still don’t see why that justifies not contacting Gray Powell himself. Sure, there was a drunken haze, but he apparently remembered his story well enough to share it with Gizmodo. And he didn’t need Gray’s phone number; he had found him on Facebook. One message to his Facebook account and this would have been resolved.
mcg on April 27, 2010 at 5:52 PM
Jimbo3 on April 27, 2010 at 5:47 PM
Lost or stolen property goes out the window when dealing with known trade secrets.
California goes farther in protecting trade secrets.
See Cal. Civ. Code § 3426
MississippiMom on April 27, 2010 at 5:53 PM
–And I can still boycott Apple products and ask others to do so not matter what happens.
Jimbo3 on April 27, 2010 at 5:53 PM
@Jimbo3: What do you mean? What evidence could Apple withhold at this point? Assuming it played out just as everyone believes so far, I don’t see what Apple could contribute in the form of evidence. They’ve already acknowledged that the device belonged to them.
mcg on April 27, 2010 at 5:54 PM
@Jimbo3: fair enough on the boycott.
mcg on April 27, 2010 at 5:54 PM
The way the tech journalism community is arguing this, Jason Chen could have shot a guy dead, and the police wouldn’t have had any right to search his house for evidence of the murder as long as Chen had written a blog post about the murder on Gizmodo.
That’s not how it works.
The Lone Platypus on April 27, 2010 at 5:56 PM
By the way there is some strange filtering going on here. I know I’m posting a lot right now, but some of my posts are being dropped, and there’s no apparent rhyme or reason to it. In fact, one of them I tried posting twice; it told me it was a duplicate, but it still never displayed it.
mcg on April 27, 2010 at 5:57 PM
All Apple will gain from this is another mountain of bad PR. Since they already own the Andes range of bad PR, it probably doesn’t matter much to them.
ElectricPhase on April 27, 2010 at 5:58 PM
@ElectricPhase: yeah, just look how much their stock has suffered as a result of all of that previous bad PR :)
mcg on April 27, 2010 at 5:59 PM
And their sources not related to this case should also get thrown under the bus? Shield laws are not meant to protect journalists from prosecution of crimes that they commit. They are meant to protect private information that has no relevance to the investigation.
You are 100% correct, this is all about trade secrets and private property; but it works both ways. Just as it is unreasonable for the police to raid and seize all of the computers and electronic equipment from Apple R&D and have access to all of those trade secrets if one employee happens to commit a crime, the trade secrets of Gizmodo not related to this case should also be protected.
As far as I can tell the law is clear. They should have subpoenaed the relevant info from Gizmodo and Chen, not commit a nightime raid.
EconomicPirate on April 27, 2010 at 5:59 PM
Regarding REACT and their supposed “overreaction” for a REACT-connected company: The argument is irrelevant. If John Doe commits a crime, it’s not going go be much of a legal defense that he found himself arrested faster than usual by the local police because the guy he shot was the mayor’s son.
The Lone Platypus on April 27, 2010 at 6:00 PM
Correction time on my part: outside counsel for Apple did indeed request that a theft investigation take place. I wasn’t certain they had initiated it at all, but I am wrong. They’ve also found the original finder, apparently. here is the story
mcg on April 27, 2010 at 6:01 PM
“Gizmodo, this is the SFPD. We would like you to surrender all information that would support a felony charge against you in this case. Thanks.”
mcg on April 27, 2010 at 6:02 PM
Exactly.
ElectricPhase on April 27, 2010 at 6:03 PM
@
-Can’t they decide not to provide further sworn testimony?
–Mississippi Mom, here’s that statute. I wonder whether it really was a trade secret (because the efforts taken to protect it weren’t reasonable in the circumstances, as shown by the loss of the device). I also wonder what Apples “actual loss” would be.
3426.1. As used in this title, unless the context requires
otherwise:
(a) “Improper means” includes theft, bribery, misrepresentation,
breach or inducement of a breach of a duty to maintain secrecy, or
espionage through electronic or other means. Reverse engineering or
independent derivation alone shall not be considered improper means.
(b) “Misappropriation” means:
(1) Acquisition of a trade secret of another by a person who knows
or has reason to know that the trade secret was acquired by improper
means; or
(2) Disclosure or use of a trade secret of another without express
or implied consent by a person who:
(A) Used improper means to acquire knowledge of the trade secret;
or
(B) At the time of disclosure or use, knew or had reason to know
that his or her knowledge of the trade secret was:
(i) Derived from or through a person who had utilized improper
means to acquire it;
(ii) Acquired under circumstances giving rise to a duty to
maintain its secrecy or limit its use; or
(iii) Derived from or through a person who owed a duty to the
person seeking relief to maintain its secrecy or limit its use; or
(C) Before a material change of his or her position, knew or had
reason to know that it was a trade secret and that knowledge of it
had been acquired by accident or mistake.
(c) “Person” means a natural person, corporation, business trust,
estate, trust, partnership, limited liability company, association,
joint venture, government, governmental subdivision or agency, or any
other legal or commercial entity.
(d) “Trade secret” means information, including a formula,
pattern, compilation, program, device, method, technique, or process,
that:
(1) Derives independent economic value, actual or potential, from
not being generally known to the public or to other persons who can
obtain economic value from its disclosure or use; and
(2) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
3426.2. (a) Actual or threatened misappropriation may be enjoined.
Upon application to the court, an injunction shall be terminated when
the trade secret has ceased to exist, but the injunction may be
continued for an additional period of time in order to eliminate
commercial advantage that otherwise would be derived from the
misappropriation.
(b) If the court determines that it would be unreasonable to
prohibit future use, an injunction may condition future use upon
payment of a reasonable royalty for no longer than the period of time
the use could have been prohibited.
(c) In appropriate circumstances, affirmative acts to protect a
trade secret may be compelled by court order.
3426.3. (a) A complainant may recover damages for the actual loss
caused by misappropriation. A complainant also may recover for the
unjust enrichment caused by misappropriation that is not taken into
account in computing damages for actual loss.
(b) If neither damages nor unjust enrichment caused by
misappropriation are provable, the court may order payment of a
reasonable royalty for no longer than the period of time the use
could have been prohibited.
(c) If willful and malicious misappropriation exists, the court
may award exemplary damages in an amount not exceeding twice any
award made under subdivision (a) or (b).
3426.4. If a claim of misappropriation is made in bad faith, a
motion to terminate an injunction is made or resisted in bad faith,
or willful and malicious misappropriation exists, the court may award
reasonable attorney’s fees and costs to the prevailing party.
Recoverable costs hereunder shall include a reasonable sum to cover
the services of expert witnesses, who are not regular employees of
any party, actually incurred and reasonably necessary in either, or
both, preparation for trial or arbitration, or during trial or
arbitration, of the case by the prevailing party.
3426.5. In an action under this title, a court shall preserve the
secrecy of an alleged trade secret by reasonable means, which may
include granting protective orders in connection with discovery
proceedings, holding in-camera hearings, sealing the records of the
action, and ordering any person involved in the litigation not to
disclose an alleged trade secret without prior court approval.
3426.6. An action for misappropriation must be brought within three
years after the misappropriation is discovered or by the exercise of
reasonable diligence should have been discovered. For the purposes
of this section, a continuing misappropriation constitutes a single
claim.
3426.7. (a) Except as otherwise expressly provided, this title does
not supersede any statute relating to misappropriation of a trade
secret, or any statute otherwise regulating trade secrets.
(b) This title does not affect (1) contractual remedies, whether
or not based upon misappropriation of a trade secret, (2) other civil
remedies that are not based upon misappropriation of a trade secret,
or (3) criminal remedies, whether or not based upon misappropriation
of a trade secret.
(c) This title does not affect the disclosure of a record by a
state or local agency under the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code). Any determination as to whether the
disclosure of a record under the California Public Records Act
constitutes a misappropriation of a trade secret and the rights and
remedies with respect thereto shall be made pursuant to the law in
effect before the operative date of this title.
3426.8. This title shall be applied and construed to effectuate its
general purpose to make uniform the law with respect to the subject
of this title among states enacting it.
3426.9. If any provision of this title or its application to any
person or circumstances is held invalid, the invalidity does not
affect other provisions or applications of the title which can be
given effect without the invalid provision or application, and to
this end the provisions of this title are severable.
3426.10. This title does not apply to misappropriation occurring
prior to January 1, 1985. If a continuing misappropriation otherwise
covered by this title began before January 1, 1985, this title does
not apply to the part of the misappropriation occurring before that
date. This title does apply to the part of the misappropriation
occurring on or after that date unless the appropriation was not a
misappropriation under the law in effect before the operative date of
this title.
3426.11. Notwithstanding subdivision (b) of Section 47, in any
legislative or judicial proceeding, or in any other official
proceeding authorized by law, or in the initiation or course of any
other proceeding authorized by law and reviewable pursuant to Chapter
2 (commencing with Section 1084) of Title 1 of Part 3 of the Code of
Civil Procedure, the voluntary, intentional disclosure of trade
secret information, unauthorized by its owner, to a competitor or
potential competitor of the owner of the trade secret information or
the agent or representative of such a competitor or potential
competitor is not privileged and is not a privileged communication
for purposes of Part 2 (commencing with Section 43) of Division 1.
This section does not in any manner limit, restrict, impair, or
otherwise modify either the application of the other subdivisions of
Section 47 to the conduct to which this section applies or the court’
s authority to control, order, or permit access to evidence in any
case before it.
Nothing in this section shall be construed to limit, restrict, or
otherwise impair, the capacity of persons employed by public entities
to report improper government activity, as defined in Section 10542
of the Government Code, or the capacity of private persons to report
improper activities of a private business.
Jimbo3 on April 27, 2010 at 6:03 PM
Until and unless the local authorities start leaking Gizmodo’s private trade secrets, I don’t see the relevance here. (And the name of someone that committed a felony by selling them stolen goods isn’t a trade secret.)
The Lone Platypus on April 27, 2010 at 6:04 PM
@Jimbo:
Sure. But I can’t see what more they could provide that would help establish guilt or innocence.
mcg on April 27, 2010 at 6:04 PM
Apple asked for ‘lost’ iPhone criminal probe
Short story: the authorities have talked to the person who took the phone from the restaurant; Gray Powell and an Apple counsel called the DA’s office to ask for an investigation.
mcg on April 27, 2010 at 6:06 PM
Yeah, I would have called Apple Corporate first. But remember, he claimed he was blown off at several different numbers, which would have included the most obvious numbers, like Apple Corporate.
What makes you think this guy lived a reasonable distance from Apple headquarters and that any normal person would have bothered with the effort, especially if he was expecting Apple to call back?
About a month ago I found a blueprint laying in my driveway that had obviously been blown off a vehicle. It was a lot easier for me to call the place that produced it than to take it to them, even though they’re located only about a mile down the road.
Just to be clear, I’m not saying that this guy did everything he could to return the phone. He clearly should have made more effort. But he also did more than just whisper “Is this anyone’s phone?” into his hat from the corner of Nowhere Street and Boonie Road in the middle of a huge thunderstorm.
As for selling it to someone else, anyone else, I wouldn’t have done that, not even after waiting a month for Apple to return my call.
EWTHeckman on April 27, 2010 at 6:09 PM
Hence the next sentence in the post you quoted:
The government cannot seize material from the journalist even if it’s investigating whether the person who possesses the material committed a crime.
I am pretty sure that Gizmodo and Chen committed a crime. However, that does not give the government the right to commit an unlawful search and seizure.
The only arguments I am seeing in this post are related to the innocence of the suspects. In my opinion that is an argument that can go nowhere as we dont have nearly enough information about what happened (and neither did the police as per the seizure). Once thing I do think is clear is that the police took a lot of equipment that is essential for Chen to make a living in the manner he has chosen and overstepped their bounds in doing so.
EconomicPirate on April 27, 2010 at 6:10 PM
@EconomicPirate, I keep trying to post a link to an article disputing your claim that the search was improper, but for some reason it won’t post. It is over on News.com, and the title is “Journalist shield law may not halt iPhone probe.”
mcg on April 27, 2010 at 6:13 PM
That is the law. It is as simple as those four words. That is the law. You might think it is a stupid law, but it is the law. Given what is going on in Washington I would think that some of you might think that this isnt the best time to allow the government to be overstepping its bounds. Maybe not.
All hail unlimited government???
EconomicPirate on April 27, 2010 at 6:15 PM
Here’s the problem, as I posted earlier.
His ability to work from home as a journalist is what Gizmodo is claiming, hence the seizure (as of now – legally signed by a judge) of those items.
If a junk yard is accused and lawfully searched for illegal chop shopping, I am pretty sure the assets to seize would be the junkyard, cars and property itself – not the owners vacation home in Gulf Shores.
Odie1941 on April 27, 2010 at 6:16 PM
@EconomicPirate, it looks like we cross-posted. Again, your interpretation of the law is not unanimous. Looks like you’re up against Eugene Volokh, for instance.
mcg on April 27, 2010 at 6:17 PM
mcg, According to the story, the guy played with the phone a bit before he went to bed. That’s when he saw Gray’s name. In the morning the phone had been bricked and he noticed that it was a prototype. Which number do you think would have been easier to find? Gray’s? Or Apple’s? (Would it be possible to even contact him via Facebook without already being a friend? I’m not sure on this.) IMHO, calling Apple under those conditions would seem to be the simplest, most reliable way to get it back where it apparently belonged.
EWTHeckman on April 27, 2010 at 6:17 PM
This is a horribly written article Ed. You argue that California should have asked Chen for the information on his computers. Do you live in the real world? You ask for digital information and the suspect goes home and deletes it and wipes his hard drive multiple times and you get NOTHING. Thats not how it works in the real world. Also, the entire notion that some journalism law allows journalists to commit crimes as long as they promise to write about them is moronic. So you believe that Jason Chen should be protected if he decided to break into Apple headquarters and steal a prototype and then wrote a big expose on it? That is moronic reasoning. Gizmodo broke multiple California laws by purchasing stolen property, and they should be held accountable.
thphilli on April 27, 2010 at 6:19 PM
Pretty sure he could have wrote in the FB friend request “hey – I found your iPhone at a bar the other day”, which would have taken 10 seconds and am pretty sure would have gotten a response from Grey…
Odie1941 on April 27, 2010 at 6:19 PM
@EWTHeckman: I’m content to leave our disagreement where it stands, but come on man, who doesn’t have a Facebook account these days? :-) ha ha
mcg on April 27, 2010 at 6:20 PM
And on the funny side of things:
Dilbert has fun with the iPhone prototype
EWTHeckman on April 27, 2010 at 6:23 PM
mcg, I have one, but I don’t check it often enough for it to be a reliable method to contact me.
EWTHeckman on April 27, 2010 at 6:24 PM
@EconomicPirate, I keep trying to post a link to an article disputing your claim that the search was improper, but for some reason it won’t post. It is over on News.com, and the title is “Journalist shield law may not halt iPhone probe.”
mcg on April 27, 2010 at 6:13 PM
I just wrote a post with the link and it didnt post either. To make a long post short, the article does not dispute my point. I am in full agreement with the article that the shield law does not protect Chen from criminal prosecution. It does however bar the government from seizing the items in the manner in which they did.
Do you have a link to Eugene Volokhs analysis?
EconomicPirate on April 27, 2010 at 6:28 PM
He drinks at a bar where Apple engineers drink.
Ronnie on April 27, 2010 at 6:28 PM
Ronnie,
How far away is that bar from Apple? How far away from the bar (and Apple) does the guy who found the phone live?
BTW, did you see the article about Apple asking for the probe? It says that the police have already talked to the guy that found the phone and that nobody has been charged with a crime (yet). If they never do charge him, then I would say that confirms the original story Gizmodo told us. Of course, if he does get charged, then we’ll probably learn where the story was inaccurate.
I do think it’s odd that Apple asked for a theft investigation after the phone was returned.
EWTHeckman on April 27, 2010 at 6:37 PM
Who knows and who cares. If they were legally formed and funded, in conjunction with law enforcement… I don’t expect them to run DUI checks, in the same way SWAT doesn’t descend on jaywalkers. Or Vice Cops concentrating on e-crimes.
And last time I checked – underfunded law enforcement is a huge problem in state/local budgets.
Odie1941 on April 27, 2010 at 6:41 PM
My guess is the “finder” knows the “loser” and this was actually an orchestrated leak for profit. It’s the only credible possibility.
(The bar was in Redwood City – not far at all – maybe 15 minutes.)
Ronnie on April 27, 2010 at 6:42 PM
http://maps.google.com/maps?oe=UTF-8&gfns=1&um=1&ie=UTF-8&cid=0,0,4765382597852367258&fb=1&hq=Gourmet+Haus+Staudt&hnear=Redwood+City,+CA&gl=us&daddr=2615+Broadway+Street,+Redwood+City,+CA+94063-1532&geocode=16826961690509907220,37.486262,-122.233555&ei=5WfXS-39FpC2swOz6OGFBg&sa=X&oi=local_result&ct=directions-to&resnum=1&ved=0CAkQngIwAA
It really is not that far at all.
EconomicPirate on April 27, 2010 at 6:43 PM
That link doesnt give the full directions. This one does: http://maps.google.com/maps?f=d&source=s_d&saddr=2615+Broadway+Street,+Redwood+City,+CA+94063-1532&daddr=1+Infinite+Loop,+Cupertino,+CA&hl=en&geocode=Fbb-OwIdLd22-A;FcKiOQIdkPW5-Cmx7hHctrWPgDFyFf-fxnt5aA&gl=us&mra=ls&sll=37.409145,-122.132045&sspn=0.227438,0.528374&ie=UTF8&t=h&z=12&layer=c&pw=2
EconomicPirate on April 27, 2010 at 6:46 PM
This point is irrelevant. If you find property and move it 1,000 miles, that’s your problem.
Ronnie on April 27, 2010 at 6:51 PM
I just checked MapQuest. The bar is 23 minutes from 1 Infinite Loop. That’s far enough that I certainly wouldn’t make the trek without calling first.
Now how far does the guy who found the phone live from Apple? Or work from Apple? We don’t have the faintest idea. It could easily be further from Apple.
Alright, I gotta call B.S. It is not the only credible possibility. It’s perfectly credible that the engineer did have the kind of brain fart that’s typical when drunk, and truly left the phone on the stool by accident.
You’re theory is certainly possible, but a full month delay before selling it to Gizmodo (plus the finder actually calling Apple), makes the “lost theory” more likely (IMHO) than the “collusion theory”. If it was planned, the phone should have been turned around within a week. Holding on to it longer just means wasted time and the chance of Apple reporting it stolen and the police tracking it down. (Remember, the phone is a transmitter which should make its location trackable through AT&T.)
EWTHeckman on April 27, 2010 at 7:02 PM
Again, I call B.S. The point is how much effort would someone put out to return a phone if they can just make a phone call, which he did.
EWTHeckman on April 27, 2010 at 7:03 PM
The notion of journalism shield laws is absurd in a country with the First Amendment, unless, of course, those laws apply to anyone who publishes anything.
While journalists and traditional publishers would like us to believe that they have special privileges under the First Amendment, those privileges are not restricted to “journalists” or “publishers” but rather they are rights that belong to all Americans.
I defy anyone to explain how someone who publishes is not the same thing as someone who publishes.
I don’t have to work for a recognized newspaper or website to have the protections of the First Amendment. Likewise, if there are journalism shield laws, they should apply to anyone who publishes, not just folks who work for traditional media companies.
rokemronnie on April 27, 2010 at 7:05 PM
He’s no innocent victim. Was it a drunken brain fart when he violated company policy and took it from Apple? And where are you getting the info that he was drunk anyway?
And again, I don’t care how far away he lived. If he transported it 1,000 miles away, that’s his problem. When he found it, he was 20 miles away from its owner, and he knew it. It’s doesn’t take a month to drive 20 miles, and if he didn’t want that responsibility then he shouldn’t have removed it from where he found it.
Ronnie on April 27, 2010 at 7:11 PM
Apple Care is not the best one to call if you found an iPhone especially one you think is a prototype. Point is, the Finder knew the Apple Engineer who lost it through his Facebook and Flicker account. He found it in a bar regularly frequented by Apple employees. Hell, 23-35 minutes to the Apple Campus is a no brainer. The finder had options but he got greedy, he initially contacted Engadget but the people from Engadget was advised by their in house lawyers to don’t do it. So Gizmodo accepted the offer and paid 5000 dollars for it and the idiot Chen not only boasted about, he also had the gall to have his picture taken with the lost device and disassembled it and posted the videos and photos for all the world to see. Daring Apple to do something about it.
Well Apple legal wrote the letter that asked them to return it which he did. There was one big problem for Mr Chen, the idiot implicated himself through his blog several times and there is no way in hell that Apple legal will not notice that nor would the San Mateo DA could miss that. I agree he is a journalist, but he and his company are in a whole or hurt when this all said and done.
DinobotPrime on April 27, 2010 at 7:13 PM
Seriously? You would find a phone, take it 1,000 miles away and then demand that the owner come get it? Dude, if it’s such an extreme effort, leave it where you found it – 20 miles away from its owner.
Ronnie on April 27, 2010 at 7:14 PM
I already address this in a comment where I responded to both you and Mike. Look at the reply to Mike. Also, remember that the phone had been camouflaged so it could be taken out in public.
Grey said he went there to celebrate his 27th birthday and the beer had more impact than he expected. He was drunk.
He did not know who owned it when he picked it up. The story we’ve been told is that he thought it was a normal phone that belonged to the guy he had been sitting next to, and he got his name off the phone when he got home. He didn’t figure out that it belonged to Apple until the next morning.
Now, which is SIMPLER? Call Apple? Or drive there? (Remember, it was a 46 minute round trip from the bar to Apple, and it easily could have been much more.) I don’t know about you, but I am damn reluctant to drive that kind of distance until I’m sure that it won’t be a wasted trip.
EWTHeckman on April 27, 2010 at 7:22 PM
Who said anything about taking it 1,000 miles away? Leave the straw men where they belong; out in the cornfield.
Make a phone call, then return it when you’ve made the arrangements about how to do it!
EWTHeckman on April 27, 2010 at 7:24 PM
That whole story is at least second-hand of course, since we haven’t heard from the source, but even if true, it’s preposterous. You find a phone in a bar, you know the name of the guy who left it, you know exactly where he works, you call Apple and ask for that guy. And at some point over the next MONTH, you drop it off at Apple or mail it to them COD. Anything less then that is not a reasonable effort to locate the owner before you sell it, and if you’re not willing to make even that simple effort, you have no business removing that phone from where you fount it.
Ronnie on April 27, 2010 at 7:30 PM
Straw man? You asked how far away he lived. I said I don’t care if it’s 1,000 miles away. Make it a million miles. Or make it 2 feet. I don’t care. It’s irrelevant. If he’s not willing to transport it back, then he shouldn’t transport it away. Give it to the bar owner. It was found on his property. Or give it to the police. Or leave it there. He has no right to complain about the effort if he does anything else.
Ronnie on April 27, 2010 at 7:34 PM
Exactly, that’s what raised my suspicions about the guy who “found” it, if indeed it was merely found and not actively lifted from the bar or the guy’s pocket by a sleight-of-hand artist who’d been following a targeted Apple prototype-testing staffer around just waiting for the perfect opportunity to help him “lose” that valuable phone.
The guy who “finds” it just happens to be able to recognize it as a prototype, just happens to realize it’s worth big bucks to a third party & offers something he knows belongs to someone else to Gizmodo for cash rather than get it back to the guy he knows lost it?
I’m sure as hell not buying that story. And whoever it was who paid this guy off isn’t a journalist, he’s what they call in those old crime flicks a “fence”. The morality of all this stinks to high heaven. The National Enquirer has higher ethical standards than that.
leilani on April 27, 2010 at 7:52 PM
The arguments around here can be simply breathtaking.
No theft can be proved. If Apple’s idiot admits to “leaving the phone in a bar,” then he LOST it. That is not theft. It’s merely stupid. If Gizmodo’s “informant” merely “found” it, that is not theft. Doesn’t matter if he “should have known” who the rightful owner is; there’s no law that says you have to take all these steps to return lost items, especially when the so-called rightful owner is making no effort to locate said item by advertising, posting “I’m Lost, help me get home” banners, etc. Now, if Gizmodo is offered an interesting item without knowing exactly where it came from, that’s “stupid,” but yet again, that isn’t theft. Sure, the “right” or “moral” thing to do is try to return the item, but you generally don’t go around arresting people for not going the extra mile to reunite a boy and his phone. Apple finally asked for their toy (did they advertise that they’d lost it? Well, no, officer, they didn’t) and once they did, it was promptly returned. Again, no theft.
That should be the end of it. Instead, we get the news that Apple is using some obscure Rapid Enforcement Allied Computer Team (REACT) Task Force (is this a real police unit?) to teach the Gizmoids a lesson. No probable cause, since there was no crime. No reason whatsoever for legal intervention. Plenty of reason for a really, really good lawsuit.
I predict that the settlement will more than cover the 5G’s that the Gizmoids put up in the first place.
n0doz on April 27, 2010 at 7:59 PM
Many journalists agree with you.
The Race Card on April 27, 2010 at 8:08 PM
No, n0doz, what is breathtaking is your astounding ignorance of the law. “Finder’s keepers losers weepers” is fine elementary school talk, but it is not an accurate reflection of the law. Heck, there’s enough actual California law quoted here that you wouldn’t even need to go to Google to search for the reasons you’re wrong.
mcg on April 27, 2010 at 8:30 PM
Firstly, the San Mateo County DA is no lightweight. He would never issue a warrant without an idea that the case had merits. The DA’s rarely blows it with frivolity.
Secondly, technology is serious business around here. It’s worth billions. You have no idea what it’s like to live in the Valley where you have to be careful about what you say at lunch. Why are corp. cafeterias so popular here? Because you minimize contact with those outside the company. Your security badge will often have no company info on it in case you lose it.
Gizmodo was worried about that device being shopped to someone else. They could have bought it, returned it to Apple in exchange for exclusivity. But, they hung on to it for 5 weeks. That doesn’t sound like good intentions.
norcalgal on April 27, 2010 at 8:40 PM
@EconomicPirate: no, I don’t have a link to Volokh’s analysis. But I don’t see how you can say the news.com article agrees with your point. It seems to be interpreting Volokh as saying that the search was valid under certain conditions.
mcg on April 27, 2010 at 8:43 PM
Oh my: Apple May Have Traced iPhone to Finder’s Address
mcg on April 27, 2010 at 8:45 PM
Have you seen pictures of it? It’s pretty obviously not a current or past iPhone (except maybe to someone who’s tech phobic).
n0doz,
Actually, in California, there is. Probably most other states too. And even if there isn’t, doing your best to return it is the right thing to do.
Ronnie,
Perhaps you missed the comment where I said the guy who found the phone should have made more effort to return it. My position is simply that, A) we cannot assume things for which we do not have evidence (For example, assuming that this was planned. It could have been, but without evidence we have to go with innocent until proven guilty.) and B) if the story is accurate, he may not be a criminal because he at least made some efforts to return it, but he is an idiot for not doing what he could have done to get it returned.
Is that really so unreasonable?
EWTHeckman on April 27, 2010 at 8:53 PM
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