"Stealth mode" isn't just for start-ups or new products. For Apple, it's a way of life.
Very few technology executives guard trade secrets as determinedly as Apple CEO Steve Jobs. In a sector noted for paranoia, he stands out for his willingness to file suit against anyone disseminating information that he believes belongs solely to his company. Journalists, Apple developers, even teenagers; it doesn't matter. Apple has sued them all for exposing trade secrets.
That's why if Apple chooses to pursue a civil suit against Gawker Media, parent company of the gadget blog Gizmodo, it would unlikely surprise anyone who knows Apple's history.
In April 2010, Gizmodo published photos, video, and a story detailing the then-unreleased iPhone 4 after obtaining a prototype of the handset from college student Brian Hogan and his friend Sage Wallower. More than 18 months later, the pair have been charged in California's San Mateo County with misdemeanor theft, and they are due to be arraigned in Redwood City on Thursday. Hogan has acknowledged finding the phone in a Redwood City, Calif., bar, which was mistakenly left there by an Apple engineer who was testing the device. Later, Hogan and Wallower allegedly tried to start a bidding war among tech-news sites and eventually sold the iPhone to Gizmodo editors for at least $5,000.
It's hard to believe that Apple cares much about Hogan or Wallower, a couple of twenty-somethings who came into possession of the phone by chance. Their only value to Apple may be this: if the pair are found guilty of theft then Apple could be in a stronger position should it decide to sue Gawker for violating trade secret laws, say legal experts. A conviction of Hogan and Wallower would enable Apple to walk into court and tell a Silicon Valley jury that Gizmodo injured the company by purchasing property stolen from Apple and used that acquisition to undermine Apple's ability to market the phone (to read analysis about what kind of case Apple might have should it sue, see this story).
No doubt that Apple values its trade secrets, but by pursuing this case, the company risks alienating the public. Remember, Apple was once supposed to be the counter-culture choice and now, the company is a colossus. For a brief time this year, Apple could boast a bigger bank account than the U.S. treasury.
Forget casting commercials with geeky-hipster Justin Long as Mac. The way Apple is now, it might be more fitting if 6-foot-5 "Conan the Barbarian" star Jason Momoa stormed out as Mac and elbow chopped PC.
Ah, but sticks and stones...Jobs has shown he's not afraid to make unpopular decisions. He has signaled he won't back down when it comes to protecting his company. "I'd rather quit," he told an audience at the D conference last year.
But it gets trickier if the two 20-somethings charged in l'affaire iPhone are acquitted. Would Apple still roll in the legal muck with Gawker more than 18 months after the blog published its prototype iPhone story and after authorities in San Mateo declined to press criminal charges against anyone from Gawker or Gizmodo for buying the phone?
Consider Apple's history:
In December 2004, Apple sued Think Secret, an Apple blog founded in 1999 by 13-year-old Nicholas Ciarelli. Think Secret had reported that Apple would soon release a new Mac, which turned out to be the Mac Mini, as well as new software, which turned out to be an updated version of iWork. The teen got the story right and was rewarded with a lawsuit.
Apple argued that whoever was leaking the information to Think Secret had violated trade secret law. Just prior to that, Apple sued two men who the company claimed distributed prerelease versions of Mac OS X over the Internet and also filed a separate action against unnamed John Does to find out who leaked details to two other blogs about a then unreleased music device connected to GarageBand. Most of the cases were settled and with regard to Think Secret, the blog was forced to shut down.
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"Apple kills Think Secret" wrote Wired. Someone else wrote Apple is a "mean bully." An online petition to save Think Secret was circulated. Former CNET columnist Charles Cooper penned in March 2005 "watching Steve Jobs operate over the years...I still don't know whether to applaud or boo." Cooper called the decision to sue journalists for reporting the news "bizarre."
So, Apple is unlikely to have many qualms over suing Gawker Media, which is, it's safe to say, a far less sympathetic entity than a prodigy blogger. Gawker Media operates a blog network, which includes sites such as Gizmodo (tech), Deadspin (sports), Fleshbot (porn) and Gawker, the company's flagship celebrity news and gossip site. The blogs are noted for their ability to break news and generate controversy. Gawker founder Nick Denton seems to revel in tweaking big corporations and celebrities and blasting critics. The company is also known for its willingness to pay for information.
Denton hasn't appeared to flinch once during the prototype iPhone controversy, but Gawker also now has other legal troubles. The company was named as a defendant in a $40 million libel suit filed by Tammy Tousignant, the one-time personal flight attendant of former California Gov. Arnold Schwarzenegger.
She accuses Gawker, the National Enquirer, and the Daily Mail of defaming her by claiming she had an illegitimate son by Schwarzenegger. Tousignant has reportedly produced DNA tests that she says proves her son was not fathered by Schwarzenegger. This is unlike Schwarzenegger's former house keeper who did have a child with the former politician and actor.
Sure, Apple could walk away from this fight. But we don't think its likely. Whatever happens, count on Denton writing about every blow.