Is Gawker's "Apple Tablet Scavenger Hunt" illegal? Probably.

Is Gawker's "Apple Tablet Scavenger Hunt" illegal? Probably.

Is Gawker's "Apple Tablet Scavenger Hunt" illegal? Probably.

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Jan. 15 2010 11:54 AM

Is Gawker's "Apple Tablet Scavenger Hunt" Illegal?

Apple is threatening to sue over Valleywag's tablet stunt. It's got a pretty good case.

Nick Denton. Click image to expand.
Nick Denton

Gawker—whose founder, Nick Denton, recently chided his minions for thinking "way too much before publishing," and which is fighting off a copyright lawsuit after posting extended excerpts of a celebrity trio's "naked threesome" video—is once again testing the limits of journalistic ethics and the law.

The fun started Tuesday, when Gawker's Silicon Valley gossip site, Valleywag, announced what it called the "Apple Tablet Scavenger Hunt," offering cash prizes for information about the much-anticipated new Apple device, reportedly set for public unveiling Jan. 27. Valleywag said it had "had enough of trying to follow all the speculation" about the product and set out a "menu" describing what it would pay for info, ranging from $10,000 for "bona fide pictures" to $100,000 for anyone who could physically deliver the tablet to the editors and "let us play with one for an hour."

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The famously, obsessively secretive, "super, super paranoid" Apple is not playing along. Wednesday it had one of its outside lawyers fire off a cease-and-desist letter to Gawker's editor-in-chief, demanding that he cancel the scavenger hunt. The letter, from Orrick, Herrington & Sutcliffe's Michael Spillner, accuses the site of "inducing a misappropriation of trade secrets in violation of California trade secret law" and "inducing breach of contract," and threatens legal action against Gawker and "anyone who makes an illegal submission to you in response to the offer."

Is Apple just huffing and puffing, hoping that Gawker folds without a fight? Or does it actually have a case against the site for engaging in what might be described as a form of corporate espionage? And does the First Amendment give Gawker the right to report by a paid, crowd-sourced "scavenger hunt"?

The First Amendment guarantees journalists the right to print just about anything they want. But one thing it doesn't do is give reporters a free pass to break laws that the rest of us have to obey. And that's true even if obeying them would impede their newsgathering activities. Scribes on the crime beat can't speed to the scene of a shooting and park in a handicapped spot to make sure they get the story first. Investigative reporters can't trespass onto company property or steal documents to expose wrongdoing. As the Supreme Court first put it in 1937, and re-affirmed in 1991, "The publisher of a newspaper has no special immunity from the application of general laws. He has no special privilege to invade the rights and liberties of others."

So Apple's allegations that Gawker violated trade-secret law and induced others to breach their confidentiality agreements with the company can't simply be dismissed with a facile invocation of the First Amendment. While trade secrets and similar legal doctrines are seldom wielded against journalists, there's no reason that they can't be.

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The most famous invocation of the tort of inducing breach of contract (sometimes called "tortious interference with contract") in the journalism context involved Jeffrey Wigand, the Brown & Williamson tobacco executive turned whistleblower immortalized in the movie The Insider. Wigand spilled the beans on Big Tobacco to 60 Minutes, but, as the film portrays it, weak-kneed CBS lawyers and execs cut the juicy parts from his interview, fearful that B&W would sue the media giant for interfering with the nondisclosure agreement between Wigand and his employer.

While CBS was raked over the coals by other journalists for its perceived caving to corporate pressure, knowledgeable media lawyers knew that B&W's threats were legally viable. CBS' outside counsel P. Cameron De Vore reminded the New York Times that the Supreme Court "has not recently provided any First Amendment protection for news gathering." And prominent First Amendment attorney David Kohler defended CBS' actions, writing in the Wall Street Journal that "[d]etails are now emerging to support the notion that the requisite inducement to breach [Wigand's NDA with B&W] may well have existed," exposing CBS to potential liability. (CBS later aired the whole interview after details were disclosed elsewhere, and B&W never sued.)

What about trade secrets? Broadly worded laws prohibit "misappropriation" of companies' information (including plans for future products) that has value because it is not generally known to the public, and which the firm takes reasonable efforts to keep secret. While it's rare, trade-secret laws can be invoked against bloggers. A decade ago, the Ford Motor Co. had had it with a guy named Robert Lane, who encouraged Ford employees to leak him sensitive information, which he then posted to his Web sites. Ford sued to get the purloined documents and photos removed from Lane's sites, and the court found that Lane's solicitation of employees to breach their confidentiality obligations meant that "Lane is likely to have violated the Michigan Uniform Trade Secrets Act."

Despite that finding, the court in the Lane case refused to order the removal of the information on First Amendment grounds. But Gawker might not be so fortunate. If Apple sued Gawker in California, whose law Spillner's letter cited, Gawker may not have the First Amendment right to publish whatever material it receives from scavenger hunt participants. In a 2003 case called DVD Copy Control Association v. Bunner, the California Supreme Court held that once a court determines that a defendant has violated trade-secret law, an injunction against publication does not violate the First Amendment.

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And I will not be at all surprised if Apple does drag Gawker into court. Back in 2004, the company brought suit against several (unknown) individuals it believed leaked to bloggers information about a much lower-profile product than the tablet: "a FireWire audio interface for GarageBand, codenamed 'Asteroid.' " While the case did not end well for Apple—it resulted in an appellate decision that bloggers are protected by California's reporter shield law—it demonstrates the extraordinary lengths the company will go to combat leaks of what it considers proprietary information.

But does Gawker's scavenger hunt actually "induce" violations of trade-secrets law? It may well. Apple's efforts to maintain secrecy about its future products are well known—and in case it wasn't clear to Gawker before, Spillner's letter reminds the site that "[a]nyone who might have access to" the information Gawker seeks about the tablet "would be bound under the strictest contractual obligations not to disclose [it] to third parties." Gawker says it "encourage[s] [participants] to stay within the bounds of the law," but Apple will argue Gawker knows full well that anyone who sends in pictures or schematics of the tablet will likely have breached their confidentiality obligations. And Gawker's promise that "[w]e'll go to spycraft-level lengths to prevent anything being traced back to" leakers can be seen as evidence that it's fully aware those leakers are doing something that would get them in big trouble with their employers.

OK, but Gawker is just a renegade site with a legal death wish. And the issues raised by its scavenger hunt need not concern mainstream journalists, who would never engage in such stunts. Right? Right? Not so fast. While Gawker's approach is unconventional, it's not so clear that it's different in kind from what business reporters at mainstream publications do every day: convince employees to leak information their employers want to remain secret. Take, for example, this Wall Street Journal story on ... the Apple tablet, which, citing "people briefed by the company," reported details including its March release date, its "10 to 11-inch touch screen," and that "Apple was working on two different material finishes for the device." Isn't it likely that those "people briefed by the company" were under those same "strictest contractual obligations" noted by Apple's lawyer? And while it's true that the Journal doesn't pay leakers, the laws cited by Spillner aren't limited to situations where the defendant offers money as inducement. (Of course, if the leak was authorized by Apple, then no trade-secret laws were violated, and no NDA breached.)

Mainstream journalists may not be comfortable putting it this way, but they routinely ask their sources to break the law or violate some legal duty by coughing up information some contract or statute obliges them to keep secret. Gawker calls it a "scavenger hunt"; others call it "reporting." Perhaps what's most surprising is that it doesn't lead to more lawsuits.