>>We have too many lawyers on the panel. This isn't a legal conference so let me go to Paul and go and broaden the question to what David purposed in the beginning which is the tension between IP and journalism, trade secret holders want to keep stuff, journalists don't. What's going to happen?
>>Paul Saffo: Sure, well also I, in the interest of total disclosure I actually hold two law degrees and admitted in New York and California but I'm on an inactive status. The thing I look at this and it's, you know, the backdrop here we don't know what's really going to happen on this case. The dice are still in the air. We don't even know all the facts. Did the guy lose it in the bar or did something else happen? So, we're going to happen to wait and hear all of that but what we do know is that bad precedent is created by the exercise of poor judgment and this event happened because a studied exercise in poor judgment. Whoever, originally had the phone was colosally stupid and Gizmodo was so busy doing what they were doing for the reasons that are obvious to all of us that they exercised bad judgment, I mean, anybody who's lived in Silicon Valley for 15 minutes knows don't tick off Apple and don't make it personal with Steve, you will regret it and then there is the additional dimension of the social benefit, you know, if this was the Pentagon papers, these people would be viewed more sympathetically by the public but for Christ sake this was a phone. If the kid had waited three months he could of bought one today for $199. You know, it's almost akin to contrast the two women who were dragged across the Korean border, who were journalist trying to collect information and the hapless American Berkeley grad, I'm glad to say Berkeley grad not Stanford who decided to wonder into Iran and, you know, the journalist who crossed into Korea got huge sympathy and Bill Clinton personally offered to fly out to get them out of there. The kids are still cooling their heals in Iran with their mom visiting from time-to-time because everybody looks at the journalist and said, gosh darn it, this was a good benefit and they looked at the kids from Berkeley and they say what a bunch of dumb bunnies and I think that this is a case where there were a lot of dumb bunnies teaming up together and, you know, the lesson for us as journalists working on the outside edge is one, make sure you are not on the edge of the herd where you get special attention from someone and then the second one is it maybe new media but Christ sake common sense still applies.
>>Jennifer Granick: I'm so surprised to hear you say that, though Paul, because think about what a dull world it would be if everybody followed your advice, I mean, don't cover Apple cause Steve doesn't like it.
>>Paul Saffo: I didn't say don't cover Apple, I said, you know, if you were going to do this story hand it to Wikileaks and let them publish it in Iceland and then...
>>And lawyer up, have your counsel.
>>Make sure Steve doesn't know your name. I mean, look, and Jennifer can attest to this, too. There's been a number of instances in the past where Apple and Steve have gotten ticked off because not just the Does case but other cases involving other more traditional media or more traditional online media that have gotten information about what Apple was going to do before Apple wanted it out and has threatened any number of times lawsuits to stop publication and information and where there was absolutely no doubt that the information was combined totally in a totally above board manner. So, you can't really practice journalism in the valley under the, you know, don't tick Steve off rule, I mean, don't get caught. The don't be stupid rule is a good rule. I mean, that's really, I mean, I think at the end of the day it's practice good journalism and if they would have practiced a little better journalism they probably wouldn't be in the above they're in today, although, not necessarily because it's again it's not the paying for the phone that necessarily got them, that's when all the journalists stand up, it's like they paid $5,000, we wouldn't pay for this, in fact, we did a panel at Stanford about a month ago and we had an answer from Wired.com on and they were offered the phone and as soon as they were told there was money involved they said we're not interested. So, ask it what if no money had been involved? Oh, yeah, you'd be looking at a lawsuit. And that doesn't necessarily change the criminal legal analysis.
>>But it does change the public perception.
>>Absolutely. The exchange of money gives it a very different odor. If this was a straight, you know, deep throat, Watergate story and there were hidden heroes here I think that people would view if much more sympathetically.
>>I think when we're if we are talking about odor, you can't miss the odor of a police force which is funded and trained by Apple and other high tech companies in the valley that then goes and gets a search warrant where they don't disclose to the judge that the person whose house they're searching is the editor of a news outlet that reports on this company and then they go into his house and they take all his stuff including, you know, all his notes from all his other cases and or all of his other articles and all the other stuff that he filed his, you know, you can look at what was seized in his house, I mean, that has an odor to it.
>>And let me build on that Jennifer because you're absolutely right. I happen to live in the county, San Mateo, it's the second smallest county in the state of California after San Francisco. This is an HO scale county and it's a special task force here in the valley that's trained and just itching to do something so it ends up being this conspiracy of dunces where, you know, the police department is all hot to do something and they're handed a big case and it just sets the stage for overreaction.
>>Let me say that we did invite the prosecutor for San Mateo County who cancelled a week ago saying that he had to be in court but in his defense but since he's not here I'll say that San Mateo County, the prosecutors that went to the judge to get the search warrant, they're not members of REACT, no formal affiliation. Santa Clare is different.
>>I'm talking about the character of the search not the fact that the search happened.
>>Well, but you had to, prosecutors had to go to a judge who's not a member REACT either and so it's, there are some checks and balances.
>>Jennifer Granick: Yes, but is the police organization is the acronym for the police organization that's funded by the Silicon Valley company, right? I mean when you said REACT.
>>I don't know that funding is the right phrase but I can only go so far in my attempt to side with the defense since they didn't show up.
>>Well, I'm not the defense so fortunately I don't represent Apple of unfortunately perhaps is the case but, again, though, I think we're actually getting a little bit away from the big topic. The big topic is, you know, IP versus, you know, the person have the right that journalist have to investigate things. Of course, when I was a baby lawyer there would have been no interest at all in what the next iPhone was going to be, I mean, the world has, of course, changed dramatically as a result of technology and it's kind of pathetic when even a 60 year old guy like me has, you know, has two Blackberries and a cell phone and an iPhone in his pocket when he wonders around but, so, these have all become a more integral part of our lives and yet at the same time intellectual property value has gone immensely greater than it was 30 years ago as well and really the challenge here is, you know, protecting the pure monetary value of knowing two weeks ahead of time some secret information about the iPhone to competitors like HTC and Motorola and stuff who are all going to make phones that are going to be just like the new iPhone in about 90 days or 120 days cause they're busily, as soon as they get the first one they take it apart they say, ah, I'm going to make....
>>So, you're saying that the publication by Gizmodo gave Apple's competitors a few months advance notice and this is billions of dollars in the marketplace?
>>Exactly right.
>>I would actually argue there is no competitive advantage by leaking the phone out early. That, you know, this gain today is fleeing into the future. You know if you're going to chase Apple getting three months or six months advance notice on what their next phone is isn't going to save your corporate rear end. You gotta figure out what the next move it after. One thing I would add is the most amazing thing about this case if you'd been in this valley 15 years ago or earlier, it never would have happened because Apple is the original case of the only ship that leaks from the top. It was incapable of keeping secrets. So, what's amazing is they've actually kept secrets long enough and it's become North Korea of Silicon Valley.
>>There's a certain irony because when Steve Jobs left Apple way back when we sued him on behalf of Apple so he has remembered that lesson I suspect all these years and how all that has played out but, again, that's neither here nor there. There's incredible and I do disagree actually, as soon as you know something like there are a lot of companies who make huge fortunes by being second.
>>Yes.
>>The fight is to be second.
>>Like Microsoft.
>>But it's interesting now on the search warrant affidavit that was not, the search warrant talks about how law enforcement met with Apple, they met with Apple's GC, they met with Apple's outside counsel, Steve Jobs got involved, it was very high-level stuff, they didn't actually make that argument. The argument they made was when people here were coming out with the 4G phone, dah, they're going to stop buying the 3G phone and there are two reasons that didn't make any sense to me. I don't think it's true empirically that the people are going to, that if a website like Gizmodo and other tech sites publish this information that the general public is going to stop buying 3G phones or it's going to distinguish between the two and the sale of the 4G phones seems to me at probably at a higher price point is going to dwarf whatever losses there would be from the sale of the 3G phone. So, their argument as to why they were being damaged didn't make internal sense to me and you would have thought that law enforcement would asked a few more, I was a little perturbed when I read the affidavit that law enforcement hadn't asked a few harder questions. They just seemed to take Apple's word for it all including Apple's going so far as to saying maybe the phone had actually been stolen from the bar, that the employee hadn't lost it on his birthday when he was at the bar so it seemed more plausible.
>>So, can you reply briefly then Paul?
>>Paul Saffo: Yeah, because, well, I think timing is crucial on the secondary issues but it was interesting. I read the affidavit as well with some interest. I mean, the police department, they're not marketing experts and they're not tech experts so whatever argument you're going to make they're just going to have to accept to a certain extent that obviously somebody like me I just wait for the price to go down when the 4G phone comes out by 3G ones. I figure the technology is somewhere where I can understand it at that point the other, the omni. Again, though, we are talking a value proposition and it's not just Apple I think any other company in the valley that has a consumer orientated product that when it's released, Apple's the best at releasing things but still all of them have to be concerned about their secrets. I've been through that route for clients and I will tell you that on the level of the client level they're not doing this for fun and they're not doing it as just an exercise to see if they have power or not. They're doing it because they're worried about the value of the company.
>>If you reframe this, you know, this is about innovation and journalism in a moment of creative destruction, we all know in Silicon Valley there is such a thing as good innovation and bad innovation and whatever the facts of this case maybe, Gizmodo and there ilk are guilty of very bad journalistic innovation here. There would have been a much better way to get this story out but they were in such a hell bent rush to get it out there that they did it in a very unimaginative way and it left them wide open for all sorts of headaches. You can take any two people in this room, give you 30 minutes and you would have figured out a better way to break this story and give people the information they need to know because you would have been much more innovative. It's shocking that Gizmodo was this uninnovative.
>>Jennifer Granick: Well, I think what was said earlier about how the money changing hands wasn't a factor really, isn't a factor in what the underlying potential complaint about Gizmodo's behavior was is important there, I mean, they were going to get in trouble for this regardless of whether they paid the money or not because Apple didn't want the information out there and while I'm sympathetic to the idea that Apple has a right to try and control its trade secrets, there are entities that Apple has the right to control and that entity is their employee. The entity does not include reporters who come upon the information whether they pay for it or not as long as they weren't the ones who solicited the misappropriation of it and it certainly doesn't include us, the members of the public who are interested in knowing this information whether it's information about the iPhone G4 or it's what in the Pentagon papers or it's in another legal case, you know, illegally recorded conversation between two public officials that happens to also be newsworthy, once the information gets into the hands of the journalists as long as the journalist didn't, you know, solicit the wrongful taking of it, that information if it's of public interest, gets published and we get to learn about it and there maybe prices to pay, people may suffer because of it, people may lose elections, maybe Apple loses a little bit of money, whatever it is, that is what freedom of information is all about and, so, Apple can do things but once Apple messes up and they give the phone to the drunk guy whose birthday it is and he loses it in the bathroom and it gets in the hands of Gizmodo, that's it, we get to learn about that stuff.
>>Yeah, I mean, there's actually case law in California saying....
>>But, you know, I just, would your view of it be different whether Gizmodo made serious mistakes or if they hadn't paid considering that the criminal liability doesn't turn on you?
>>No, the payment has no affect on this to me.
>>So, from your standpoint they were wrong to write this story at all??
>>No, it was just so excruciatingly obvious how they went about doing this story. There would have been a much more elegant way to do this. I mean, if I said to you...
>>You don't disassemble the phone? I'm just trying to get to understand what you're saying.
>>You know, maybe just have things appear on billboards. I don't know. I haven't given a lot of thought but if I would say 10 years from now we look back and we remember 2010 and I say "Innovation journalism, pick one of the two?" Which one do you think is going to be the one remember Wikileaks or Gizmodo's leak of this? It just doesn't pass the test of innovative, you know, it's a bunch of people rushing a story out to get page views and...
>>And it's something like 5 million of them for one story, not bad.
>>I mean, sure, and that's fine but that's just looks like a business. That doesn't look innovative to me.
>>Jennifer Granick: Well, I don't know, I'm not sure that that actually would make sense. In a way I think that more innovative risk taking enterprise like Wikileaks attracks more negative attention from the power that be than something that's clearly an established media organization leak offer, right. I mean, who's more, if you're just talking about public perception and riskiness and that kind of general sense...
>>And we cheer on Wikileaks and then we kind of go, Gizmodo if you know there in the marketplace.
>>The other problem with Wikileaks is because they are the people involved with Wikileaks are not in the country the situation we had two years ago was you had a judge who once again you had a situation where a powerful interest goes into court and there's nobody there on the side of the media in that instance Wikileaks to oppose the original order because the people involved where out of the country and could not, you know, they filed a lawsuit on February 6th, on February 8th there was a PRO hearing and people, we wound up representing the owner of the domain name Wikileaks.org who is in Kenya and, you know, there was no way that they could get in front of the judge in time and say to the judge, you know, there's interests at stake here that are not just the bank's interest and its confidential documents. I mean, those documents were posted by a whistle blower who thought that they showed that the bank was helping US citizens evade taxes in a way that violated US law.
>>But this isn't that terrible of a thing. Let's say that the domain name suffix for the top level domain suffix for Kenya's ".ke" then Wikileaks ".ke" has the documents and they stay online and people have to go there instead of ".org". This isn't a big deal.
>>Well, no, it was a big deal from the, if the judge's order had been followed to the letter, the documents would have come down entirely off the web.
>>And how do you [inaudible] Kenya server provider?
>>They weren't initially on a Kenya, I'm not going to get into all of the specifics cause I'm not suppose to about who was involved in all of that but I'll just say that it was not on any servers in Kenya at the time and that's not really, the point is here that in this situation it's too easy for, with the Wikileaks type of situation or with websites generally, it's often going to be difficult for them to get into court to oppose an order like this and you're going to have an order that's issued almost by default because it's unopposed and our system in adversarial system it depends on both sides showing up to counter balance each other and if the judge is only hearing one side, is not hearing that Jason Chen is a journalist, is not hearing that there is a federal Privacy Protection Act that prevents search warrants against journalist except in limited circumstances in the Gizmodo case. Is not hearing in the Wikileaks' case about the First Amendment restrictions on prior restraints on the press; is not connecting the dots that Wikileaks is actually a media outlet. So, to me that's a real worrying trend and I don't have a solution for it except for the technology seems to be the solution. The trend is judges are issuing these orders without having the system working and so you have these orders being issued that say take these documents off the internet. The technological innovation is that you can't get them off the internet. Well, as a practical matter they pop up other places and so the orders...
>>In this regard I'm a deep pessimist. All the technologies and freedom that emerged in the 90s are becoming technologies of control, you know, it always happens, you have a revolution, the revolutionaries squirt out ahead of the establishment and then the establishment catches up. The fact that Apple could get a criminal, you know, get this thing going on the criminal side is an indicator of that and the only solution is to keep for the forces of good to keep fleeing into the future just as fast as we can and hope that the lawyers run the rearguard action, you know, just to slow the bad guys down long enough that people can keep innovating.
>>I'm not sure since the lawyers I think were just described as the bad guys as the same time that they're the good buys but, you know.
>>There are lawyers for the media and for everyone else but, again, actually as we just described, of course, all these cases ultimately the court has made a resolution and most of them are acceptable to all of you. Is that not correct?
>>Well, I think this is an example where I think the law was disregarded. There is state law that says that you can't get search warrants for this type of information and yet the search warrant was issued. So, that was a mistake and his house got raided, all this stuff got seized, you know, sensitive information of an innocent nature intermingled with information about this incident. That's wrong, right. Whatever ends up happening in the case that should not have happened.
>>Well, but there are remedies that sort that thing out though, so, I just think, you know, again, I'm usually the one trying to stop the flow because there are trade secrets involved and, of course, it gives me a perhaps a jaundice view. The flip side is that I know well as did Apple's lawyers that when they do this that there are going to be risks downstream. If they make a mistake, give wrong information that there are all sorts of remedies against them. Simple remedies and ultimately criminal remedies if they actually lied which I think everything is pretty artfully drafted so I don't think we have to, although we get that far along the way but there are remedies that individuals have to deal with these problems all setup as part of the law so I think that, from my perspective, and again it's that of the establishment that we have built in protections that resolve these things if they do happen. If there are excesses, you know, that's what lawsuits are for and do happen.
>>Yeah, I mean, I think the concern is to use an overused phrase the chilling effect that a search warrant like that can have on the next person who comes into possession of entirely lawful, entirely above board, no questions that they have the right to have it but information that they know somebody is going to be ticked off about them having and what may happen to them. I mean, I have not talked to the Apple lawyers, I have not talked to Apple about this, it would not surprise me, however, if one of the motivating factors and I've actually represented entities on intellectual property cases where we've looked at our range of remedies and there's a pro and con discussion you have about what relief you go seek. It wouldn't surprise me at all if they didn't have a discussion in this case that in weighing the pros and cons they want to send a message. I mean, you know, they can't, the injunction is no longer an affective remedy for the reasons we said, the stuff will not come down off the internet, it will pop up somewhere else and so they're trying to send a message, so we have criminal charges we send a message.
