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Think Secret -- Possible Scenarios

Think Secret announced its closing today after settling with Apple. And although no one knows what really went down, Don Reisinger offers some ideas of how it might have happened.

For those of us who have been lucky enough to make a career out of writing about this wacky world of technology, we know (generally) what the limits are and how far we can go before a company will find fault in what we did or come at us for something we wrote.

Most times, those boundaries will be crossed when a writer makes intentionally loaded remarks about the company or she leaks material that shouldn't have been leaked, thus creating an issue where "trade secrets" are made available to the public at large. And while neither may seem too egregious, the latter has sent Think Secret -- a popular Apple rumors site -- into oblivion.

In case you haven't been following the case, Apple sued Think Secret and its owner Nick Ciarelli in 2005 for posting Apple trade secrets on the website. In a statement to CNET back in 2005, Apple said that the company's "DNA is innovation, and the protection of our trade secrets is crucial to our success."

"Apple has filed a civil complaint against the owner of and unnamed individuals who we believe stole Apple's trade secrets," Apple said in its statement. "We believe that Think Secret solicited information about unreleased Apple products from these individuals, who violated their confidentiality agreements with Apple by providing details that were later posted on the Internet."

Amazingly, after two years of legal jockeying between the organizations, Ciarelli has announced that he will close shop due to a settlement reached between the companies.

"I'm pleased to have reached this amicable settlement," Ciarelli said in a statement. "And will now be able to move forward with my college studies and broader journalistic pursuits."

And while this creates a dangerous precedent for all future Mac rumor sites, what really happened here? Obviously both companies have very little to say about the matter and neither will divulge the true terms of the settlement, so we're all left guessing. But if you ask me, it could have gone down in two ways.

Scenario 1: The Almighty Dollar

In the statement on Think Secret, the site's publisher claims an "amicable settlement" was reached that's a "positive solution" for both sides. Later on, Ciarelli told Engadget via email that he was "very satisfied with the settlement."

And while none of these statements are the smoking gun we're looking for, what would really make Ciarelli happy? Simply put, we just don't know.

But if you ask me, it could have gone something like this: Apple's high-powered lawyers called up Ciarelli asking for his sources. After refusing through his lawyers, the company had to make a decision. Should it go to court just to stop leaks that date back two years or should it find a way to make this guy go away? After about 5 seconds of deliberation, they probably called Ciarelli up and said, "Look, here's the deal. We'll pay you this sum of cash as long as you agree to shut your site down so we won't have to worry about leaks anymore."

The company has tons of cash in the bank, a portion of which surely must have been tempting. After all, the benefits would be two-fold -- he could save his sources by not divulging their names and he could walk away with some cash. And let's face it, if he didn't accept the offer, Apple would have surely mobilized their lawyers and made his life miserable.

Scenario 2: Fear

Of course, there is one other scenario here. Instead of using money as a bargaining chip, what if Apple used its power to scare Ciarelli into an agreement? Once again, we have no idea how it happened, but what if something like this went down?

Apple and its lawyers are discussing how to handle this situation and how to make sure it never happens again. The company has no intention of sending this guy some cash and regardless of whether or not its case is tenuous, it knows that it has the best lawyers at its disposal and can probably win the case through attrition more than anything else.

Armed with that knowledge, they call up Ciarelli and ask for the sources. After saying no a bunch of times, they arm up and say, "OK, listen. We won't ask for your sources, but we want you to shut down. If you don't, we're taking you to court and you'll be forced to pay far too much for far too little."

Backed into a corner, Ciarelli has no other alternative and accepts the agreement, content that he didn't need to give up his valuable sources.

Regardless of how it went down, Think Secret's closing sets a dangerous precedent going forward. Armed with an open and shut case, Apple can go to any rumors site it wants and bully them into closing. After all, who can stop a massive company if all you're doing is relying on advertising revenue every month to pay the bills?

Let's just hope that doesn't happen.