Trade Secrets

Julius Baer Bank and Trust v. Wikileaks

Date: 

02/06/2008

Threat Type: 

Lawsuit

Party Receiving Legal Threat: 

Wikileaks; Dynadot LLC, Does 1-10

Type of Party: 

Large Organization

Type of Party: 

Organization

Court Type: 

Federal

Court Name: 

United States District Court for the Northern District of California

Case Number: 

3:08-cv-00824-JSW

Legal Counsel: 

Garret D. Murai (for Dynadot); Thomas R. Burke, Davis Wright Tremaine LLP (for media amici); Karl Olson, Levy, Ram & Olson LLP (for intervenor Public Citizen and California First Amendment Coalition); Ann Brick, American Civil Liberties Union (for i

Publication Medium: 

Wiki

Relevant Documents: 

Status: 

Concluded

Disposition: 

Injunction Denied
Injunction Issued
Withdrawn

Description: 

On February 6, 2008, Julius Baer Bank and Trust Company, a Cayman Islands banking entity, filed suit in federal court in California against Wikileaks, which is developing an "uncensorable Wikipedia for untraceable mass document leaking and analysis." Two days later, the bank and its Swiss parent company filed an ex parte application for a temporary restraining order seeking to enjoin Wikileaks from publishing or distributing copies of documents the plaintiffs claim contain "stolen or otherwise wrongfully obtained confidential and protected bank files and records."

On February 15, 2008, the court issued what it captioned as an "Order Granting Permanent Injunction." This order, which appears to be the result of a stipulation between the plaintiffs and Dynadot, Wikileaks' domain name registrar and web host, required that Dynadot immediately disable the entire wikileaks.org domain name and account and remove all DNS hosting records.

Later that same day, the court issued an Amended Temporary Restraining Order that enjoins Wikileaks and and "all others who receive notice of this order" from "displaying, posting, publishing, distributing, or linking to . . . all documents and information originating from [the plaintiffs' banks] which are internal non-public company documents and/or which contains private client or customer bank records."

As of February 28, 2008, the Wikileaks.org domain is still down, but the organization issued a press release through one of its mirror sites:

Transparency group Wikileaks forcibly censored at ex-parte Californian hearing -- ordered to print blank pages -- 'wikileaks.org' name forcibly deleted from Californian domain registrar -- the best justice Cayman Islands money launderers can buy?

When the transparency group Wikileaks was censored in China last year, no-one was too surprised. After all, the Chinese government also censors the Paris based Reporters Sans Frontiers and New York Based Human Rights Watch. And when Wikileaks published the secret censorship lists of Thailand's military Junta, no-one was too surprised when people in that country had to go to extra lengths to read the site. But on Friday the 15th, February 2008, in the home of the free and the land of the brave, and a constitution which states "Congress shall make no law... abridging the freedom of speech, or of the press", the Wikileaks.org press was shutdown.

On February 28, Julius Baer issued a press release stating:

It is not and has never been Julius Baer's intention to stifle anyone's right to free speech. Indeed, Julius Baer has specifically made no attempt to remove material on the website which refers to the organization but which does not include information personal to its customers. However, Julius Baer denies the authenticity of this material and wholly rejects the serious and defamatory allegations which it contains.

Updates:

The court has scheduled a hearing on the injunction for February 29, 2008 at 9:00AM.

2/26/08 - Coalition of media companies filed an Amici Curiae brief primarily addressing the issue of prior restraints

2/26/08 - ACLU and Electronic Frontier Foundation filed a motion to intervene

2/26/08 - Public Citizen and the California First Amendment Coalition filed a motion to intervene that argues that the court did not have jurisdiction in the case, and therefore had no power to issue the injunctions

2/28/08 - Plaintiffs filed opposition to the motions by Amici and potential intervenors

2/28/08 - John Shipton, the owner of the wikileaks.org domain, filed a Notice of Intent to Appear and Joinder in Motions & Oppositions of Amici/Intervenors

2/28/08 - Daniel Mathews, a user of the site who was served with the TRO by the plaintiffs, filed a Memorandum in Opposition to TRO, Preliminary Injunction, and Permanent Injunction

2/29/08 - Court held hearing on the TRO; judge vacated the Permanent Injunction against Dynadot and tentatively denied the motion for a preliminary injunction.

2/29/08 - Court issued Order Denying Motion For Preliminary Injunction; Dissolving Permanent Injunction; and Setting Briefing and Hearing Schedule

3/5/08 - Plaintiff banks filed a notice of dismissal, without prejudice, as to all parties

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Think Secret to Cease Operations as Part of Settlement With Apple

TechCrunch is reporting that Apple and Think Secret have settled their longstanding trade secrets dispute. Here's the kicker: under the terms of the agreement, Think Secret will cease operations. Think Secret issued a statement:

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Dendrite International v. Does

Date: 

05/24/2000

Threat Type: 

Lawsuit

Party Issuing Legal Threat: 

Dendrite International, Inc.

Party Receiving Legal Threat: 

Does 1-14

Type of Party: 

Organization

Type of Party: 

Individual

Court Type: 

State

Court Name: 

Superior Court of New Jersey, Chancery Division; Superior Court of New Jersey, Appellate Division

Case Number: 

MRS C-129-00 (Superior Court); A-2774-00T3 (Appellate)

Legal Counsel: 

Eugene G. Reynolds, Wacks, Mullen & Kartzman LLC (Defendant/Respondent John Doe No. 3); Paul Alan Levy, Public Citizen (Amici Curiae); J. S. Salyer, ACLU (Amici Curiae)

Publication Medium: 

Forum

Relevant Documents: 

Status: 

Concluded

Disposition: 

Subpoena Quashed

Description: 

Dendrite International, a company that developed and serviced software for the pharmaceutical industry, brought a John Doe lawsuit in New Jersey state court against fourteen unnamed defendants for critical messages they posted on Yahoo! message boards. Dendrite claimed the messages were defamatory and revealed trade secrets, and they sought permission from the court to take discovery from Yahoo regarding the identity of certain of the anonymous posters.

The trial court allowed Dendrite to conduct limited discovery to find out the identities of John Does 1 and 2, who were current or former employees of the company, but rejected its request for an order compelling Yahoo to identify John Doe 3.

Dendrite appealed, and the New Jersey appellate court affirmed the lower court's ruling. In its opinion, the court set out guidelines for lower courts to follow when faced with a request for an order compelling an ISP to reveal the identity of an anonymous Internet poster. The court developed a five-part test: (1) the plaintiff must make efforts to notify the anonymous poster and allow a reasonable time for him/her to respond; (2) the plaintiff must identify the exact statements made by the poster; (3) the complaint must set forth a prima facie cause of action; (4) the plaintiff must bring forth sufficient evidence for each element of its claim; and (5) the court must balance the defendant's First Amendment right of anonymous free speech against the strength of the prima facie case presented and the necessity for the disclosure of the anonymous defendant's identity.

Applying the standard to the facts of the case, the appellate court held that Dendrite had failed to produce sufficient evidence for each element of its defamation claim, because it had not produced evidence of harm resulting from John Doe 3's statements.

Jurisdiction: 

CMLP Notes: 

alison editing

Content Type: 

Subject Area: 

Chilly Weekend: Black Friday Prequel and Public Domain Music Scores

If it's fall, these must be cease-and-desists for Black Friday ads. This year, they seem to be coming earlier than ever, as Wal-Mart sends pre-notifications against future posting. I put my analysis into a Chilling Effects Weather Report

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Not Every Cease-And-Desist Letter is a DMCA Takedown Notice

Today, the Chilling Effects Clearinghouse posted a cease-and-desist letter from MediaDefender to gpio.org complaining that MediaDefender's leaked emails had been posted to the site. The operator of the site, which subsequently moved to http://mediadefender-defenders.com (but not because of the letter), also posted the letter and his reply. His reply quite effectively points out that he and his server are in Norway and thus "it appears that your legal grounds for throwing letters at me claiming this-or-that is shaky enough that you might want to relocate."

This exchange reminded me of an article in Ars Technica a few weeks back discussing the reactions of peer-to-peer site operators to similar letters from MediaDefender. I meant to post on this article at the time, but forgot about it until today. The gist of the story is that some peer-to-peer site operators received cease-and-desist letters from MediaDefender and responded with blistering comments ridiculing the MediaDefender lawyers for their impoverished understanding of U.S. copyright law. For example:

[isoHunt's] formal response to SMR&H is filled with caustic wit and considerable legal expertise. "If Mr. Gerber is truly as experienced in IP law as his bio claims he is," asks the isoHunt administrator in his response, "why is it that he is incapable of composing a DMCA takedown notice as per USC Title 17 Section 512?" The isoHunt administrator explains that Gerber failed to adequately specify the allegedly infringing content as required by law. The administrator also helpfully provides a link to a valid sample complaint so that SMR&H will be less likely to send the improper information in their second attempt. The following is an excerpt of the isoHunt administrator's response:

"This e-mail serves as a counter notification under USC Title 17 Section 512(c)(3)(A)(iii) that you have failed to properly identifying links to content that allegedly infringes your copyright/trademark/rights (or, in this case, has something to do with really embarrassing trade secrets *and* employee social security numbers) AND you have failed to address your e-mail to the appropriate agent, namely copyright@isohunt.com, so I invite you and your clients to take a long walk off a short pier, since you and/or your clients might actually manage to NOT get something that simple wrong."

In closing, the isoHunt administrator says that the he will comply with the request if it is properly submitted. "Despite us being located in Canada, if you do actually figure out how to compose a valid DMCA notice, we will honor it," he concedes, "just as soon as we're done laughing at you."

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NXIVM Corp. v. Ross

Date: 

08/06/2003

Threat Type: 

Lawsuit

Party Issuing Legal Threat: 

NXIVM Corporation

Party Receiving Legal Threat: 

Rick Ross; The Ross Institute; Stephanie Franco; Morris Sutton; Rochelle Sutton; Paul Martin; Wellspring Retreat, Inc.

Type of Party: 

Organization

Type of Party: 

Individual
Organization

Court Type: 

Federal

Court Name: 

United States District Court for the Northern District of New York; United States District Court for the District of New Jersey

Case Number: 

1:03CV00976 (New York); 06-CV-1051 (New Jersey)

Legal Counsel: 

Peter Skolnik, Thomas Steven Dolan, Michael A. Norwick, Sarah Blaine, Anthony Sylvester

Publication Medium: 

Website

Relevant Documents: 

Status: 

Pending

Disposition: 

Dismissed (partial)
Injunction Denied

Description: 

NXIVM provides a course manual for the paid subscribers of its exclusive and expensive seminar training program, "Executive Success." The course manual contains a copyright notice on almost every page and all seminar participants sign non-disclosure agreements, purporting to bar them from releasing the manual or the proprietary techniques learned in the seminars to others.

Rick Ross runs nonprofit websites, www.rickross.com and www.cultnews.com, in connection with his work as a for-profit "cult de-programmer." The websites provide information to the public about cults and other controversial groups. Ross obtained a copy of NXIVM's course manual from fellow defendant, Stephanie Franco, a one-time NXIVM participant. Ross commissioned two self-styled experts, Paul Martin and John Hochman, to write reports analyzing and critiquing the course manual. The reports quoted sections of the manual in support of their analyses and criticisms and were published on Ross's websites. The reports also made statements that, according to NXIVM, misled readers into believing that the Executive Success program is a "cult." The websites also included Executive Success on a list of organizations designated as "cults."

NXIVM sued Ross and various co-defendants for copyright infringement, trademark disparagement under federal law, interference with contractual relations, and product disparagement. On the basis of the copyright claim, NXIVM moved for a preliminary injunction to require that Ross remove the copyrighted information from his websites. The United States District Court for the Northern District of New York denied the preliminary injunction, finding that NXIVM had no likelihood of success on the merits of its claim because the defendants' use of quotations from the course manual constituted fair use. On appeal, the Second Circuit Court of Appeals affirmed, finding that the websites' use of quotations from the manual to support their critical analyses of the seminars was transformative, and that this outweighed the concurrent commercial purpose of Ross's use (in connection with his for-profit business as a de-programmer of cult victims) and his (assumed) bad faith in obtaining the manuscript in violation of NXIVM's non-disclosure agreement. The court also held that the defendants' use of portions of 17 pages out of a 500-page manual was not unreasonable in light of their purpose, and that any damage to the market for NXIVM's work was a result of criticism (which weighs in favor or fair use), not substitution (which weighs against fair use). NXIVM Corp. v. Ross Institute, 364 F.3d 471 (2nd Cir. 2004) (Second Circuit website version attached). The Supreme Court denied certiorari. NXIVM Corp. v. Ross Institute, 543 U.S. 1000 (2004).

The case was then transferred to New Jersey on 03/07/2006 (Case No. 06-CV-01051). NXIVM amended its complaint, apparently dropping its trademark claim and adding a trade secrets claim. Morris and Rochelle Sutton moved to dismiss the product disparagement, interference with contractual relations, tortious interference with contractual relations, and copyright infringement counts of the amended complaint. The court dismissed the product disparagement claim, holding that the challenged statements were statements of opinion protected by the First Amendment. It dismissed the tortious interference claims on the same grounds, holding that, where a claim for tortious interference with contractual relations or prospective economic advantage implicates constitutionally protected speech, the constitutional privilege for statements of opinions applies. The court also dismissed the vicarious copyright infringement claims against the Suttons, finding that they had no right or ability to control the statements published on the websites. See NXIVM Corp. v. Sutton, No. 06-CV-1051 (D.N.J. June 27, 2007).

Update:

2/13/2008 - A number of defendants moved to strike NXIVM's pleadings and for sanctions as a result of discovery disputes.

2/23/2008 - NXIVM filed a memorandum in opposition to the motions to strike.

5/9/2008 - Court denied the motions to strike, but awarded attorneys' fees to defendants for discovery costs.

4/09/2009 - NXIVM  filed suit with similar claims against the defendants in the Western District Court of New York (2009 WL 1524800). NXIVM also added Lollytogs, a children's clothing supplier, as a defendant. All defendants have moved to dismiss. The Suttons in their motion to dismiss point out that by refiling this complaint in New York, NXIVM is forum-shopping. The court has not yet ruled on these motions.

Jurisdiction: 

CMLP Notes: 

 

Status updated on 6/6/2008 (AAB)

Updated 6/24/09 AVM - I added information about the essentially identical action NXIVM filed in new york. I decided not to make a new entry because I feel it would be redundant. 

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Software Development and Investment v. Wall

Date: 

08/11/2005

Threat Type: 

Lawsuit

Party Issuing Legal Threat: 

Software Development and Investment of Nevada

Party Receiving Legal Threat: 

Aaron Wall; John Does

Type of Party: 

Organization

Type of Party: 

Individual

Court Type: 

Federal
State

Court Name: 

District Court, Clark County, Nevada; United States District Court for the District of Nevada

Case Number: 

05-A-508400-C (State); 2:05-CV-01109-RLH-LRL (Federal)

Legal Counsel: 

Ariel Stern, R. Douglas Kurdziel

Publication Medium: 

Blog

Relevant Documents: 

Status: 

Concluded

Disposition: 

Dismissed (total)

Description: 

In August 2005, Software Development and Investment of Nevada ("Software Development"), a Nevada corporation in the business of "internet advertising and internet placement optimization" under the name Traffic-Power.com, sued Aaron Wall and an unknown number of anonymous users of Wall's blog for libel and misappropriation of trade secrets. At the time of the suit, Wall was a Pennsylvania resident and a blogger who wrote about search engine optimization on his blog, "SEO Book.com."

According to Software Development's complaint in Nevada state court, a number of unknown persons disseminated information about its marketing strategy and solicitation procedures over the internet. These unknown persons allegedly posted this proprietary information on Wall's blog and other "publicly available areas of the internet."

The complaint also alleged that Wall and his anonymous co-defendants published false and defamatory statements about it and its business over the internet. The complaint did not specify any statements, but an opinion from the federal district court during the litigation identified the following statements that Software Development contended were defamatory:

  • a statement that Software Development is among a group of people that Wall considered "fraudsters and hucksters";
  • a statement that Software Development's website had been "banned by the search engines";
  • a statement that Software Development used "idiotic high pressure salesmen" to sell its "shit services";
  • a statement that Software Development's services "suck";
  • a statement that people who buy Software Development's services get "screwed"; and
  • a statement that Wall would "need to shower at least 6 times a day" if he worked for "a company as dirty" as Software Development.

Wall also allegedly linked to other sites that made disparaging comments about Software Development. Software Dev. & Inv. v. Wall, No. 2:05-cv-01109, slip op., at 2 (D. Nev. Feb. 13, 2006).

In September 2005, Wall removed the lawsuit to federal court. He later moved to dismiss, and the federal court dismissed the action in February 2006, holding that it had no personal jurisdiction over Wall. Software Dev. & Inv. v. Wall, No. 2:05-cv-01109, slip op. (D. Nev. Feb. 13, 2006).

In its order, the court concluded, among other things, that Wall's blog was "passive" despite the ability of reader's to post comments. Id. at 3. The determination of a website's "passive" or "active" character is important in the legal analysis because the more "active" a site is with respect to a state's citizens, the more justification there is for that state to assert personal jurisdiction over it. The court also concluded that there was no evidence that Wall had "expressly aimed the offensive communications at the Sate of Nevada, knowing that the communications would cause harm to Plaintiff in Nevada." Id. at 7. The court never reached the CDA 230 issue.

In its order dismissing the case, the court gave Software Development permission to file an amended complaint, but Software Development did not do so, and the case was dismissed for want of prosecution in June 2007.

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Apple v. Does

Date: 

12/13/2004

Threat Type: 

Lawsuit

Party Issuing Legal Threat: 

Apple Computer, Inc.

Party Receiving Legal Threat: 

John Does

Type of Party: 

Large Organization

Type of Party: 

Individual

Court Type: 

State

Court Name: 

California Superior Court, Santa Clara County

Case Number: 

1-04-CV-032178

Legal Counsel: 

Kurt B. Opsahl, Kevin S. Bankston - Electronic Frontier Foundation, Thomas E. Moore III - Tomlinson Zisko LLP, Richard R. Wiebe - Law Office of Richard R. Wiebe

Publication Medium: 

Website

Relevant Documents: 

Status: 

Concluded

Disposition: 

Subpoena Quashed
Withdrawn

Description: 

On December 13, 2004, Apple filed suit against unknown defendants for misappropriation and publication of trade secrets in connection with reports about its "Asteroid" product (a FireWire audio interface for Apple's GarageBand) that appeared on Apple-related news sites, PowerPage, AppleInsider, and ThinkSecret. Apple sought and obtained permission to issue subpoenas to PowerPage, AppleInsider, ThinkSecret, and PowerPage's email service provider, Nfox.com and Karl Kraft, requesting documents relating to the identity of the news site's confidential sources.

On February 14, 2005, Jason O'Grady (from PowerPage), Monish Bhatia (hosting service provider for AppleInsider), and "Kasper Jade" (AppleInsider) moved for a protective order to prevent the discovery sought by Apple on grounds that their sources and unpublished information were protected under the reporter's shield embodied in Article I, section 2(b) of the California Constitution and California Evidence Code 1070 and the reporter's privilege under the First Amendment to the United States Constitution. they also argued that the subpoenas issued against Nfox and Kraft could not be enforced without violating the Stored Communications Act (18 U.S.C. sec. 2702(a)(1)).

The state district court denied defendants' motion to quash the subpoenas. In O'Grady v. Superior Court, 139 Cal.App.4th 1423 (Cal. Ct. App. 2006), the Court of Appeals quashed the subpoenas, holding that the federal Stored Communications Act barred enforcement of the subpoena served on PowerPage's email service provider, and that discovery of unpublished information or confidential sources from the news sites would violate California's reporter's shield provision and the First Amendment.

Apple announced that it would not appeal the ruling, and voluntarily withdrew the lawsuit in January 2007.

This case is related to Apple Computer, Inc. v. DePlume, No. 1-05-CV-33341 (Cal. Super. Ct. Jan. 04, 2005). Please see CMLP's database entry for more information on the status of that lawsuit.

Jurisdiction: 

CMLP Notes: 

from a review of the O'Grady opinion, it looks like there was a threatening letter or two sent by Apple in this case -- to-do: see if this is true and create entry(ies) for letter(s).

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Subject Area: 

Apple v. DePlume

Date: 

01/04/2005

Threat Type: 

Lawsuit

Party Issuing Legal Threat: 

Apple Computer, Inc.

Party Receiving Legal Threat: 

Nicholas Ciarelli (aka Nick DePlume); DePlume Organization, LLC

Type of Party: 

Large Organization

Type of Party: 

Individual
Organization

Court Type: 

State

Court Name: 

California Superior Court, Santa Clara County

Case Number: 

1-05-CV-033341

Legal Counsel: 

Terry Gross

Publication Medium: 

Blog

Relevant Documents: 

Status: 

Concluded

Disposition: 

Settled (total)

Description: 

DePlume's blog, Think Secret, published a report about a new $500 monitor-less iMac, new iWork software, and the price and features of the Mac Mini days before MacWorld 2005. In January 2005, Apple sued DePlume and his company for misappropriation of trade secrets, seeking an injunction to bar publication of its proprietary information, money damages, and discovery of the identity of DePlume's sources. Apple's claim was unusual because DePlume was not an Apple employee and was not bound by any confidentiality agreement. Apple argued that DePlume should nevertheless be held liable because he encouraged leaks of confidential information through an anonymous email system and a voice-mail tip line.

On March 4, 2005, DePlume filed a motion to strike the complaint pursuant to California's anti-SLAPP statute (Cal. Code Civ. Proc. § 425.16). The motion remained pending for years, but the court did not issue a decision on it.

In December 2007, Think Secret announced that the parties had settled the case. Under the agreement, the full terms of which are confidential, ThinkSecret agreed to cease operations. DePlume never revealed his sources.

Related case:

Apple also sought disclosure of documents and information from Think Secret in a case relating to its "Asteroid" product. Apple initially obtained permission to issue a subpoena requiring Think Secret to produce documents identifying its confidential sources for reports about the "Asteroid" product. This subpoena was quashed in O'Grady v. Superior Court, 139 Cal.App.4th 1423 (Cal. Ct. App. 2006), in which the court held that various Apple-related news sites could block disclosure of their anonymous sources and unpublished information based on California's reporter's shield provision and the First Amendment to the US Constitution. (Please see the CMLP datatabase entry on the Apple v. Does case). 

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Dell Tells Site to Take Down Posting, Then Admits Goof

Well, Dell Computer is learning about the web. See the confession at Consumerist, in which the company admits its mistake in demanding that the site take down a posting about its kiosk sales operation. Some things do change.

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