Ford Motor Company, Plaintiff,
v.
Robert Lane d/b/a Warner Publications, Defendant.
Case No. 99-74205
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN, SOUTHERN DIVISION
September 7, 1999, Decided
September 7, 1999, Filed
DISPOSITION: Ford's motion for preliminary injunction is
GRANTED IN PART AND
DENIED IN PART.
COUNSEL: For FORD MOTOR COMPANY, Plaintiff: Ernie L. Brooks,
Robert C. Tuttle, Frank
A. Angileri, Brooks & Kushman, Southfield, MI.
JUDGES: Nancy G. Edmunds, U.S. District Judge.
OPINION BY: Nancy G. Edmunds
OPINION: ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S
MOTION FOR PRELIMINARY INJUNCTION
Thirty years ago, on September 2, 1969, computer scientists at
UCLA introduced a
system which allowed one computer to speak to another. The birth
of the Internet,
inauspicious at the time, presaged a revolution in worldwide
communications. In the
realm of law, we are only beginning to grapple with the impact
of the communications
revolution, and this case represents just one part of one skirmish
-- a clash between our
commitment to the freedom of speech and the press, and our dedication
to the
protection of commercial innovation and intellectual property.
In this case, the battle is
won by the First Amendment.
This matter is before the Court on Plaintiff's Motion for a Preliminary
Injunction. n1
Although Defendant has stipulated to certain provisions of the
injunction, including a
prohibition on the infringing publication of copyrighted
materials, Defendant
challenges the provision which would enjoin him from using,
copying, or disclosing any
internal document of Ford Motor Company (including information
contained therein).
Plaintiff also seeks to enjoin Defendant from using Ford's logo
on his website. For the
reasons set forth below, this Court finds that, although Ford
has presented substantial
evidence to support its claim that Lane violated the Michigan
Uniform Trade Secrets Act,
an injunction restraining Defendant's publication of Ford's
trade secrets would constitute
an invalid prior restraint of free speech in violation of the
First Amendment. Thus,
Plaintiffs motion for a preliminary injunction enjoining Defendant's
use, copying, or
disclosing of Plaintiffs internal documents is DENIED.
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n1 A Temporary Restraining Order was issued by the presiding
judge, in this Court's
absence, on August 25, 1999.
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I. Facts
Plaintiff, Ford Motor Company, is an internationally-known automobile
manufacturer. Ford
closely guards its strategic, marketing, and product development
plans. These
plans are "trade secrets," which include program structures
and vehicle cycle plans,
engineering data, profitability and pricing data, and blueprints
for manufacturing vehicles
and their parts. Also, Ford owns numerous copyrights in material
"made for hire" under
the Copyright Act. In addition, Ford owns over 100 trademark
registrations for the name
"FORD," including the widely recognized stylized version of
the name "FORD" (cursive
font) and the "FORD OVAL" mark (cursive font inside a blue oval).
The FORD mark has
been in use since 1895.
Defendant, Robert Lane, is a student. Doing business as Warner
Publications, he
publishes a website with the domain name "blueovalnews.com,"
formerly
"fordworldnews.com." The website publishes information about
Ford and its products on
the Internet, and has featured the Ford blue oval mark. Affidavit
of Nancy Oatley, Ex. A.
Some time prior to the events at issue in this case, Lane applied
for and received
authorization to access Ford's press release website. Transcript
of Aug. 30, 1999 hearing
at 36 [hereinafter cited as "Tr. at ].
In the fall of 1998, Ford became aware of Lane's website,
which then operated
under the domain name fordworldnews.com. Ford objected to Lane's
use of the name
"Ford" as part of the domain name and blocked Lane's access
to Ford's press release
website. In response, Lane wrote Ford a letter, dated October
30, 1998, in which Lane
advised Ford that he possessed several "sensitive" photographs,
including one of the
upcoming Ford Thunderbird, which purportedly were provided to
Lane by one of Ford's
employees. Affidavit of Donald Aiken, Ex. B. The photos allegedly
showed pictures of
Ford products that were confidential and had not been released
to the public. In a letter
dated November 3, 1998, Lane threatened to publish materials
on his website that Ford
would find "disturbing." Id., Ex C. In both letters, Lane threatened
to encourage Ford
employees to disclose confidential information. Id., Ex B &
C. Ford met with Lane and
requested that Lane obtain Ford's approval prior to posting
any Ford documents on the
Internet. Lane agreed to do so. Tr. at 20.
Lane later changed his mind. On July 13, 1998, Lane posted an
article on his website
discussing and quoting from confidential documents that Lane
received from an
anonymous source relating to quality issues concerning the Ford
Mustang Cobra engine.
Tr. at 39-41, Defendant's Ex. 2. On July 27, 1999, Lane published
information from
another document that Lane received from an anonymous source,
a document entitled
"Powertrain Council Strategy & Focus." This was an internal
Ford memo containing Ford's
strategies relating to fuel economy, vehicle emissions through
the year 2010, and
powertrain technology advances. See Tr. at 43. Lane also published
a Ford engineering
blueprint on his site, and stated that he planned to offer other
blueprints for sale.
Affidavit of Nancy Oatley, Ex. J. In addition, Lane stated that
he possessed other
confidential Ford documents. When Ford advised Lane that the
Company intended to file
a lawsuit and to seek an injunction against him, Lane responded
by posting
approximately forty Ford documents online, including materials
with high competitive
sensitivity. Ford's Motion for Preliminary Injunction, Ex. A.
Lane testified that he did not know the identity of anyone who
provided him with the
confidential Ford information that he wrote about and posted
verbatim on his website.
n2 These anonymous sources, likely former and current Ford employees,
gave Ford
documents to Lane by delivering them to his house or to his
truck or by using the U.S.
mail. Tr. at 47. Lane was aware of the confidential nature of
the Ford documents that he
published. Tr. at 17-20 & 57-58; Affidavit of Daniel Stock.
Ford representatives informed
Lane that Ford employees are bound by a confidentiality agreement.
n3 Tr. at 18-19.
Lane testified that, with respect to some of the documents,
he knew that the Ford
employees who gave them to him were breaching their duty to
Ford. Tr. at 18. Further,
many of the documents were marked "confidential," "property
of Ford," "proprietary," or
"copyright protected." Tr. at 17; Affidavit of Richard Baker
(power train document marked
"confidential"). In addition, Lane acknowledged the confidential
nature of the Ford
documents when he wrote on his website, "Ford must take steps
to make sure that from
the design state until the time of market -- their products
undergo the utmost of
secrecy. The whole reason behind all of this secrecy? To maintain
a competitive
advantage." Affidavit of Nancy Oatley, Ex. L.
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n2 Lane also received confidential information which was distributed
at a meeting of the
Ford Team Mustang on June 18, 1999. Lane testified that he was
invited to the meeting
by a member of the Southeast Michigan Mustang Owner's Association,
an organization
composed of Mustang vehicle owners that is not affiliated with
Ford. Lane wrote on his
website that he "crashed" the meeting. In any event, it is undisputed
that no one from
Ford invited Lane to attend the Team Mustang meeting. Lane published
the confidential
agenda that he obtained from the Ford Team Mustang meeting.
Affidavit of Nancy
Oatley, Ex. H.
n3 The standard employment agreement signed by Ford employees
provides, "I recognize
and agree that papers, records and plans generated by me or
others for my employer are
my employer's property and I am not to make any unauthorized
disclosure or retain
copies of them." Motion for Temporary Restraining Order, Ex.
2. Ford employees are also
bound by Ford Directive C-I 10 which provides:
Ford develops and acquires substantial
amounts of information and makes that
information available to its employees
for use in their work. This information,
which may be embodied in documents,
electronic data or other forms, is a
valuable asset and belongs to Ford Unauthorized
disclosure of Ford's
information can damage Ford's competitive
position and reputation. In no case
should an employee make such unauthorized
disclosure, use it for their
personal benefit, or keep it beyond
their term of employment without express
permission.
Id., Ex. 1. Ford's Standards of Corporate Conduct manual also
states, "Every employee is
obligated to maintain the confidentiality of Ford's business
information. This obligation
survives even after your employment with Ford ends... ." Id.,
Ex 3.
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Because of Lane's publishing activities, on August 25, 1999,
Ford Motor Company filed a
Complaint and a Motion for a Temporary Restraining Order against
him. The Complaint
alleges copyright infringement, statutory conversion, intentional
interference with
contractual relations, misappropriation of trade secrets, misappropriation,
trademark
infringement, and unfair competition. Ford alleges that Lane
posted copyrighted
material, and that Lane's use of the Ford logo gives the impression
that Ford sponsors or
authorizes Lane's website. Ford also alleges that Lane solicited
and received trade
secrets that were misappropriated; that is, Ford employees gave
the trade secrets to
Lane in breach of their confidentiality agreements with Ford.
On August 25, 1999, the Court issued a Temporary Restraining
Order, which provides as
follows:
Robert Lane . . . [is] enjoined and ordered as follows:
A. Defendant is restrained from destroying,
despoiling or electronically deleting
or erasing documents in his possession
originated by or for Ford Motor
Company.
B. Defendant is ordered to file with
the Court, and serve upon Ford Motor
Company, within ten (10) days, a sworn
statement (1) identifying [*9] with
particularity all documents within his
possession, custody or control which were
originated by or for Ford Motor Company,
(2) the source (by name or
description) of each document, and (3)
provide details as to how defendant
Robert Lane acquired each document.
C. Defendant is restrained from (1) using,
copying or disclosing any internal
document of Ford Motor Company (including
the information contained therein),
(2) committing any acts of infringement
of Ford Motor Company's copyrights,
including unpublished works known by
defendant Robert Lane to have been
prepared by a Ford Motor Company employee
within the scope of his or her
employment, or specially ordered or
commissioned by Ford Motor Company, if
not an employee, (3) interfering with
Ford's contractual relationship with its
employees by soliciting Ford employees
to provide Ford trade secrets or other
confidential information.
(emphasis added). The Court deleted from Ford's proposed temporary
restraining order
language restraining Lane from "using any of Ford Motor Company's
trademarks ("Ford,"
the "Ford Oval" mark, the "Blue Oval" design mark, and the "Blue
Oval" word mark) in a
manner likely to cause confusion, mistake or deception
as to the Ford Motor
Company's affiliation, connection, or association with defendant
Robert Lane." The Court
also ordered the Defendant to show cause why the Temporary Restraining
Order should
not be entered as a preliminary injunction. Ford subsequently
filed a motion seeking
such relief.
Lane filed a response to the order to show cause and to Ford's
motion for preliminary
injunction. In the response, Lane agreed to the entry of the
preliminary injunction in the
same form as the temporary restraining order, except with respect
to section C1,
highlighted above.
II. Standard for Preliminary Injunction
The availability of injunctive relief is a procedural question
that is governed by federal
law. Southern Milk Sales, Inc. v. Martin, 924 F.2d 98 (6th Cir.
1991). The Sixth Circuit has
held that a court generally must consider four factors in deciding
whether to issue a TRO
or preliminary injunction:
(1) whether the movant has shown a strong
or substantial likelihood of success
on the merits;
(2) whether the movant has demonstrated
irreparable injury;
(3) whether the issuance of a preliminary
injunction would cause substantial
[*11] harm to others; and
(4) whether the public interest is served
by the issuance of an injunction.
Rock and Roll Hall of Fame v. Gentile Productions, 134 F.3d
749, 753 (6th Cir. 1998); see
also Parker v. United States Dept. of Agriculture, 879 F.2d
1362, 1367 (6th Cir. 1989). In
cases involving prior restraint of pure speech, however, the
Court is directed to consider
whether publication "threaten[s] an interest more fundamental
than the First
Amendment itself and to forego the prerequisites from the realm
of "everyday resolution
of civil disputes governed by the Federal Rules." Procter &
Gamble Co. v. Bankers Trust
Co., 78 F.3d 219, 227 (6th Cir. 1996). Only if a plaintiff can
meet this substantially
higher standard can a court issue an injunction prohibiting
publication of pure speech. Id.
III. Analysis
A. Misappropriation of Trade Secrets and the Prior Restraint Doctrine
Our legislatures have passed trade secret laws to encourage both
business ethics and
innovation. Such laws enable businesses to enter into good faith
transactions, form
stable relationships, and share confidential information,
[*12] which in turn assists in
product development. Also, trade secret laws encourage research
and development by
supplementing the patent system and supporting innovators who
seek to retain the
value of their discoveries. Further, trade secret laws punish
industrial espionage and
deny competitors an advantage they have obtained by unfair means.
See Kewanee Oil
Co. v. Bicron Corp., 416 U.S. 470, 481-82, 40 L. Ed. 2d 315,
94 S. Ct. 1879 (1974).
Count IV of Ford's Complaint alleges that Lane violated the Michigan
Uniform Trade
Secrets Act, Mich. Comp. Laws Ann. § 445.1901-1910 (the
"Act"). The Act provides that
actual or threatened misappropriation of trade secrets n4 may
be enjoined. Id. §
445.1903(1). Section 445.1902(b) of the Act defines "misappropriation"
as:
(i) Acquisition of a trade secret of
another by a person who knows or has
reason to know that the trade secret
was acquired by improper means, or
(ii) Disclosure or use of a trade secret
of another without express or implied
consent by a person who did I or more
of the following:
(A) Used improper
means n5 to acquire knowledge of the trade
secret.
(B) At the time
of disclosure [*13] or use, knew or had reason to
know that his
or her knowledge of the trade secret was derived from
or through a
person who had utilized improper means to acquire it,
acquired under
circumstances giving rise to a duty to maintain its
secrecy or limit
its use, or derived from or through a person who owed
a duty to the
person to maintain its secrecy or limit its use.
(C) Before a
material change of his or her position, knew or had
reason to know
that it was a trade secret and that knowledge of it
had been acquired
by accident or mistake.
Id. § 445.1902(b) (emphasis added). Ford alleges that Lane
violated section
1902(b)(ii)(A) & (B) because at the time Lane published
Ford's trade secrets he used
improper means to acquire knowledge of the trade secret, or
he knew or had reason to
know that his knowledge of the trade secret was derived from
or through a person who
had utilized improper means to acquire it, acquired it under
circumstances giving rise to
a duty to maintain its secrecy or limit its use, or it derived
from or through a person who
owed a duty to the person to maintain its secrecy or limit its
use. For example, under
the Act Lane misappropriated trade secrets if, when he
published the trade
secrets, he had reason to know that the employees who provided
him with the trade
secrets were in breach of their duty to Ford not to disclose
the information.
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n4 The Act defines "trade secret" to mean "information, including
a formula, pattern,
compilation, program, device, method, technique, or process,
that is both of the
following: (i) Derives independent economic value, actual or
potential, from not being
generally known to and not being readily ascertainable by proper
means by, other
persons who can obtain economic value from its disclosure or
use. (ii) Is the subject of
efforts that are reasonable under the circumstances to maintain
its secrecy." Mich.
Comp. Laws Ann. § 445.1902(d).
n5 The Act defines "improper means" to include "theft, bribery,
misrepresentation,
breach, or inducement of a breach of a duty to maintain secrecy
or espionage through
electronic or other means." MCLA § 445.1902(a).
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Although Ford has presented evidence to establish that Lane is
likely to have
violated the Michigan Uniform Trade Secrets Act, the Act's authorization
of an injunction
violates the prior restraint doctrine and the First Amendment
as applied under these
circumstances. n6
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n6 The Michigan Uniform Trade Secrets Act is not unconstitutional
on its face, as an
injunction may issue against one who plans to reveal a trade
secret in violation of an
employment contract or in breach of a fiduciary duty. Use of
trade secrets in violation of
a confidentiality agreement or in breach of a fiduciary duty
is not protected by the First
Amendment. Cherne Industrial, Inc. v. Grounds & Assoc.,
Inc., 278 N.W.2d 81, 94 (Minn.
1979); American Motors Corp. v. Huffstutler, 61 Ohio St. 3d
343, 575 N.E.2d 116, 120
(Ohio 1991). See Snepp v. United States, 444 U.S. 507, 62 L.
Ed. 2d 704, 100 S. Ct. 763
(1980) (where former CIA agent was bound by confidentiality
agreement, Court affirmed
injunction against agent's publication of nonclassified material
without prior CIA
approval and imposed constructive trust on proceeds derived
from publication); Cohen v.
Cowles Media Co., 501 U.S. 663, 115 L. Ed. 2d 586, 111 S. Ct.
2513 (1991) (First
Amendment bar on punishment of speech did not prohibit confidential
source from
recovering damages for publisher's breach of confidentiality
agreement in violation of law
regarding promissory estoppel). Note also that the Act permits
monetary recovery. Mich.
Comp. Laws Ann. § 445.1904.
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The First Amendment protects freedom of speech and freedom of
the press by providing,
"Congress shall make no law . . . abridging the freedom of speech,
or of the press. . . . "
n7 The First Amendment applies to speech on the Internet. Reno
v. American Civil
Liberties Union, 521 U.S. 844, 117 S. Ct. 2329, 138 L. Ed. 2d
874 (1997). The primary
purpose of the guarantee of freedom of the press is to prevent
prior restraints on
publication. Near v. Minnesota, 283 U.S. 697, 713, 75 L. Ed.
1357, 51 S. Ct. 625 (1931).
Even a temporary restraint on pure speech is improper absent
the "most compelling
circumstances." In the Matter of Providence Journal Co., 820
F.2d 1342, 1351 (1st Cir.
1986).
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n7 The First Amendment applies to the States via the Fourteenth
Amendment. Near v.
Minnesota, 283 U.S. 697, 707, 75 L. Ed. 1357, 51 S. Ct. 625
(1931).
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In the seminal case on prior restraints, Near v. Minnesota, the
defendant was the
publisher of "The Saturday Press," a newspaper containing anti-semitic
articles
which were critical of local officials. Applying a state statute
which authorized an
injunction of "malicious, scandalous, and defamatory" publications,
the district court
issued a permanent injunction against the defendant. The state
supreme court affirmed
the injunction, and the publisher appealed to the U.S. Supreme
Court. The Court
reversed, finding that the state statute violated freedom of
the press because it was the
"essence of censorship." 283 U.S. at 713. The Near Court explained
that prior restraints
may be issued only in rare and extraordinary circumstances,
such as when necessary to
prevent the publication of troop movements during time of war,
to prevent the
publication of obscene material, and to prevent the overthrow
of the government.
Id. at 716.
Although the prohibition against prior
restraints is by no means absolute, the
gagging of publication has been considered
acceptable only in "exceptional
cases." Even where questions of allegedly
urgent national security, or
competing constitutional interests,
are concerned, we have imposed this "most
extraordinary remedy" only where
the evil that would result from the
reportage is both great and certain
and cannot be militated by less intrusive
measures.
CBS v. Davis, 510 U.S. 1315, 1317, 127 L. Ed. 2d 358, 114 S.
Ct. 912 (1994).
The broad parameters of the prior restraint doctrine were further
explained in the
Pentagon Papers case, New York Times Co. v. United States, 403
U.S. 713, 29 L. Ed. 2d
822, 91 S. Ct. 2140 (1971). There, the federal government sought
to enjoin The New
York Times and The Washington Post from publishing a classified
study on U.S.
policy-making in Vietnam. The Vietnam conflict was ongoing,
and the government argued
that the publication of the classified information might damage
the national interest.
The Court observed that, because any prior restraint on speech
is presumptively invalid
under the First Amendment, the government bore a heavy burden
of showing a
justification for the restraint. Finding that the government
had not met its burden, the
Court denied the injunction. Id. at 714. n8 The government failed
to demonstrate that
the injury to the national interest was both great and certain
to occur. 403 U.S. at 730
(Stewart, J., concurring); 403 U.S. at 731 (White, J., concurring).
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n8 The Supreme Court decided New York Times in nine separated
opinions, by a six to
three majority: Justices Black and Douglas maintained that prior
restraints could never
be valid; Justices Brennan, White, Stewart, and Marshall maintained
that there could be
prior restraints in some cases, but not in the one at hand;
Justices Burger, Harlan, and
Blackmun dissented, arguing that a prior restraint of the publication
of classified
material was valid.
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The Sixth Circuit has recently applied the prior restraint doctrine
to overturn an
injunction against the publication of trade secrets and other
confidential material in
Procter & Gamble Co. v. Bankers Trust Co., 78 F.3d 219 (6th
Cir. 1996). Procter & Gamble
and Bankers Trust were parties to civil litigation and had stipulated
to the entry of a
protective order, which prohibited disclosure of trade secrets
and other confidential
documents obtained during the discovery process. A journalist
from Business
Week magazine obtained some of those documents. Procter &
Gamble and Bankers Trust
sought an injunction prohibiting Business Week from publishing
or disclosing any
information contained in the documents. The district court held
an evidentiary hearing
and found that Business Week had knowingly violated the protective
order by obtaining
the documents. The district court therefore enjoined Business
Week from using the
confidential materials it had obtained unlawfully.
Business Week appealed. In reversing the district court, the
Sixth Circuit held that
Business Week's planned publication of the documents did not
constitute a grave threat
to a critical government interest or to a constitutional right
sufficient to justify a prior
restraint. To justify a prior restraint on pure speech, "publication
must threaten an
interest more fundamental than the First Amendment itself."
Id. at 227. n9 The court
found that Procter & Gamble and Bankers Trusts' commercial
interest in the confidential
documents was insufficient to justify an injunction. "The private
litigants' interest in
protecting their vanity or their commercial self interest simply
does not qualify as
grounds for imposing a prior restraint." 78 F.3d at 225. Further,
the court held that
Business Week's allegedly improper conduct in obtaining the
documents did not justify
imposing a prior restraint, n10 and that the district court
was misguided when it inquired
into the issue, stating, "The [district] court inquired painstakingly
into how Business
Week obtained the documents and whether or not its personnel
had been aware that
they were sealed. While these might be appropriate lines of
inquiry for a contempt
proceeding or a criminal prosecution, they are not appropriate
bases for issuing a prior
restraint." Id.
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n9 Ford has also argued that Lane's publication of Ford documents
on his website is II
commercial speech,'' because he stated that he was planning
to offer Ford blueprints for
sale, he advised Ford that he was going to convert "blueovalnews.com"
to a fee-paid
subscription website, and he had a link which stated "advertise
on us." Affidavits of
Nancy Oatley and Donald Aiken. The Supreme Court has held that
the Constitution
accords less protection to commercial speech than to other constitutionally
safeguarded
forms of expression. Bolger v. Youngs Drug Products Corp., 463
U.S. 60, 77 L. Ed. 2d
469, 103 S. Ct. 2875(1983). The factors cited by Ford, however,
do not convert Lane's
website into commercial speech, the core notion of which is
"speech which does 'no more
than propose a commercial transaction."' Id. at 66. With reference
to the factors cited in
Bolger, Id. at 66-67, there was no evidence submitted of advertising
ever actually done
on the website, no evidence submitted of a specific product
offered for sale, and no
evidence submitted that Lane's motivation in publishing his
website was in fact
economic.
n10 In some circumstances, the Supreme Court has held that the
conduct of the
publisher is a relevant consideration when considering whether
to uphold First
Amendment rights. "The right to speak and publish does not carry
with it the
unrestrained right to gather information." Seattle Times Co.
v. Rhinehart, 467 U.S. 20,
32, 81 L. Ed. 2d 17, 104 S. Ct. 2199 (1984) (citing Zemel v.
Rusk, 381 U.S. 1, 16-17, 14
L. Ed. 2d 179, 85 S. Ct. 1271 (1965)). See also Cohen v. Cowles
Media Co., 501 U.S.
663, 115 L. Ed. 2d 586, 111 S. Ct. 2513 (1991).
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Although there are distinctions one can draw between the case
brought by Ford and the
existing precedent on prior restraint, those distinctions are
defeated by the strength of
the First Amendment. While it may be true that Ford's trade
secrets here are more
competitive in nature and more carefully protected than those
at issue in Procter &
Gamble, they are certainly not more volatile than those at issue
in the Pentagon Papers
case. While it may be true that publication on the Internet
is subject to fewer
editorial restraints than The New York Times, Business Week,
or The Washington Post,
the material here is not more inflammatory than the anti-semitic
tabloid at issue in
Near. And while the reach and power of the Internet raises serious
legal implications,
nothing in our jurisprudence suggests that the First Amendment
is circumscribed by the
size of the publisher or his audience.
The more troubling aspect of this case is whether Lane utilized
the power of the Internet
to extort concessions or privileges from Ford, by threatening
to sell blueprints or other
confidential documents. It is apparent from Lane's October 30,
1998 letter that he
threatened Ford with the release of sensitive photographs when
Ford first blocked his
access to Ford's press release website, and that Lane raised
the stakes and published
more highly confidential documents in response to Ford's announcement
of legal action.
He also threatened in the October 30 letter to solicit trade
secret material from Ford
employees, although no evidence was submitted to establish that
he actually did so,
and Lane has since testified that he does not know the identity
of anyone who provided
him with documents. Finally, although the documents
he published in July, having
to do with problems in Mustang engines and with Ford's approach
to emission standards,
do address issues of public concern, the documents published
more recently appear to be
design and product information more useful to Ford's competitors
-- published for the
purpose of flexing First Amendment muscle. Although the Sixth
Circuit in Procter &
Gamble has held that a defendant's improper conduct in obtaining
confidential
information does not justify a prior restraint, the legal system
may yet provide redress
through criminal prosecution, if such is found to be warranted
by the underlying facts.
With respect to this proceeding, however, this Court is bound
by existing precedent, and,
under the broad holdings of the Pentagon Papers case and Procter
& Gamble, may not
enjoin Lane's publication of Ford's trade secrets and other
internal documents. In the
absence of a confidentiality agreement or fiduciary duty between
the parties, Ford's
commercial interest in its trade secrets and Lane's alleged
improper conduct in obtaining
the trade secrets are not grounds for issuing a prior restraint.
Procter & Gamble, 78 F.3d
at 225. Accordingly, Ford's request for preliminary injunction
of Lane's using,
copying, or disclosing Ford's internal documents must be DENIED.
B. Trademark Infringement
Ford also seeks a preliminary injunction against Lane's use of
its logo and trademark,
which were prominently featured on Lane's website. Recent editions
of
blueovalnews.com do not utilize any Ford trademarks or logos,
even though Lane was
not enjoined from using them by the Temporary Restraining Order.
Since Lane appears to
have voluntarily desisted from using Ford's trademarks, Ford's
motion for a preliminary
injunction on this issue is DENIED WITHOUT PREJUDICE as moot.
IV. Conclusion
The last century has seen substantial advances in communications,
of which the Internet
is only the most recent development. Each new medium, as it
was introduced, changed
the balance of power in the constitutional equation involving
the First Amendment. Every
advance in mass communication has enhanced the immediate and
widespread
dissemination of information, often resulting in great potential
for immediate and
irreparable harm. With the Internet, significant leverage is
gained by the gadfly, who has
no editor looking over his shoulder and no professional
ethics to constrain him.
Technology blurs the traditional identities of David and Goliath.
Notwithstanding such
technological changes, however, the Courts have steadfastly
held that the First
Amendment does not permit the prior restraint of speech by way
of injunction, even in
circumstances where the disclosure threatens vital economic
interests.
Being fully advised in the premises, having read the pleadings,
taken testimony and
heard the arguments of counsel, and for the reasons set forth
above, the Court hereby
orders as follows:
The August 25, 1999 Temporary Restraining Order is DISSOLVED.
Ford's motion for preliminary injunction is GRANTED IN PART AND
DENIED IN PART.
1) Ford's request for preliminary injunction
of Lane's using, copying, or
disclosing Ford's internal documents
is DENIED, and Ford's request for a
preliminary injunction against Lane's
use of Ford's trademarks and logo is
DENIED WITHOUT PREJUDICE as moot.
2) The other aspects of Ford's request
for a preliminary injunction are GRANTED
since Lane stipulated to the entry of
a preliminary injunction as follows:
A. Lane is restrained
from destroying, despoiling [*27] or
electronically
deleting or erasing documents in his possession
originated by
or for Ford Motor Company.
B. Lane is restrained
from (1) committing any acts of infringement of
Ford's copyrights,
including unpublished works known by Lane to have
been prepared
by a Ford employee within the scope of his or her
employment,
or specially ordered or commissioned by Ford, if not an
employee; and
(2) interfering with Ford's contractual relationship with
its employees
by soliciting Ford employees to provide Ford trade
secrets or other
confidential information.
3) Lane is still obligated to comply
with that part of the August 25, 1999
Temporary Restraining Order which required
him to file with the Court, and
serve upon Ford, within ten days, a
sworn statement (1) identifying with
particularity all documents within his
possession, custody or control which were
originated by or for Ford, (2) identifying
the source (by name or description) of
each document, and (3) providing details
as to how Lane acquired each
document.
Nancy G. Edmunds
U. S. District Judge
Dated: September 7, 1999