TELECOM Digest OnLine - Sorted: Teen Web Editor Drives Apple to Court Action

Teen Web Editor Drives Apple to Court Action

(no name) ((no email))
14 Jan 2005 09:16:32 -0800

CAMBRIDGE, Mass. -- Nicholas M. Ciarelli was not even old enough to
shave when he started getting under Apple Computer Inc.'s skin.

As a 13-year-old middle-schooler, the New Woodstock, N.Y., native
built a Web site in 1998 and began publishing insider news and rumors
about Apple, using the alias Nick dePlume.</p>

Three years later, was first to report that the
company would debut a G4 version of the PowerBook laptop series. The
product launched soon thereafter, along with ThinkSecret's reputation
among Apple's legendarily zealous fans, generating millions of page
views per month.

But after a series of letters warning the Web site to stop publishing
proprietary information, Apple decided enough was enough. When
Ciarelli scored yet another scoop in late December, by predicting the
arrival of a new software package and a sub-$500 computer rolled
out at this week's MacWorld Conference and Expo in San Francisco, the
computer maker filed a lawsuit accusing him of illegally
misappropriating trade secrets.

Ciarelli, now a 19-year-old Harvard University freshman, is part of a
legion of Internet news gatherers whose influence is expanding as
concern grows in some quarters about their accountability and
journalistic standards. With the easy anonymity offered by online
posting of tips and digital photographs, Web sites run by product
buffs have caused headaches, and generated valuable buzz, for
companies in many industries -- including automobile and cell phone
manufacturers -- by leaking product information.</p>

Ciarelli said he originally chose a pseudonym because he doubted many
people would take a teenager seriously. He was publicly unmasked as
ThinkSecret's editor in chief by the Harvard Crimson newspaper, which
reported on the lawsuit this week.

"I talk to sources, follow up on leads and get details confirmed,"
said Ciarelli, a somewhat atypical technology savant who knows little
about computer programming. "I believe that like other reporters I am
protected by the First Amendment."

Apple, based in Cupertino, Calif., sees things differently:
"Defendants' knowing misappropriation and disclosure of Apple's trade
secrets constitutes a violation of California law and has caused
irreparable harm to Apple," states its legal complaint, which was
filed in California's Santa Clara County Superior Court.

A spokesman for the company, whose fortunes have been boosted this
year by sales of its iPod digital music player, declined to comment on
the case beyond a written statement. "Apple's DNA is innovation, and
the protection of our trade secrets is crucial to our success," the
company said in the statement.

Close followers of the company said Apple is unique among computer
makers for the slew of fan Web sites that track its every move and
compete for scoops. Though opinions of their quality varied -- some
reports are wildly off-base -- many industry insiders monitor the
sites regularly.

In part, that's because Apple chief executive Steve Jobs has a
reputation for secrecy. The company's complaint against is part of a larger legal assault on breaches of
confidentiality. It's doubtful Apple knew it was targeting a
teenager. The complaint names only dePlume and states that his "true
name and identity" cannot be confirmed, though in earlier
correspondence it referred to Ciarelli as the site's editor in chief.

The suit alleges that induced tipsters to break
non-disclosure agreements.

"This case raises legal issues and marketing issues for these
companies because the providers of this information are their fans,
people they don't want to antagonize, even though they may not want
these things published right away," said Andrew Beckerman-Rodau, who
runs the intellectual property program at Boston's Suffolk University
Law School.

But while lawsuits against online publications are rare, he said, the
Uniform Trade Secrets Act, versions of which have been adopted by
about 45 states, including California, prevents third parties from
exposing information knowingly obtained from sources bound by
confidentiality agreements.

"Just because you don't have a relationship with the company doesn't
necessarily immunize you, if you publish what you reasonably should
have known was a trade secret," Beckerman-Rodau said. "The First
Amendment has been asserted more and more against intellectual
property rights, but it's not faring well. Most courts haven't
accepted it."

Ciarelli said he became an Apple enthusiast when his parents, a school
administrator and a music teacher, brought home a Macintosh Classic
more than a decade ago. He owns a PowerMac G5 desktop computer and a
PowerMac G4 laptop.

"Sites like mine are good for Apple because they generate interest in
its products," he said in an interview on the Harvard campus. "At this
point, I really don't think I am doing anything wrong."

He said that he has yet to retain a lawyer, and
that he has 30 days to respond to Apple's complaint, which calls for
damages and the forfeiture of "gains, profits, and advantages" and
asks for a jury trial.

The company he established when the site was launched, the dePlume
Organization LLC, is registered in New York. It lacks the money to
defend a case against a major corporation, he said.

So far, the front page story in the Crimson has earned him little
fame. "It's reading week," he said, referring to the study period
before final exams. "People are too busy sleeping and studying for

The response has been more forthcoming on dozens of Apple and
technology-related Internet sites, where discussion of the case has
raged for days.

"I fear this is just an attempt by a big business to spread fear and
intimidate Web sites," said a correspondent on O'Grady's PowerPage., which is a takeoff on Apple's former marketing slogan
"Think Different," has a stripped-down, mostly text-based design; it
features a number of advertisements placed by technology companies.

The ads "pay for the Web hosting and have helped with a little of my
tuition," Ciarelli said.

A visitor who clicks on a box labeled "Got Dirt?" is taken to an
e-mail form, below a note that reads in part, "Think Secret
appreciates your news tips and insider information." There is also a
phone number listed for tips.

Tim Bajarin, president of the Silicon Valley high-tech research and
consulting firm Creative Strategies, said the real target of the suit
is whoever has been breaking non-disclosure agreements by leaking

"Apple is after the source," Bajarin said.

On that subject, Ciarelli is circumspect, though he denies speculation
that a friend or family member works for Apple. "I employ the same
legal techniques as other journalists," he said.

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