An Analysis of the David Boies Sony Letter to Media Companies Part 2

As a follow up to my previous post, I now want to get into a liability analysis relating to the type of claims Sony could advance against media companies.  Though not addressed in the letter itself, liability is highly questionable because of robust First Amendment defenses that may be deployed by publishers in this case.  Sony and its executives could deploy a couple of conceivable legal claims in their fight against publishers.  First, there could be claims for violations of California’s Uniform Trade Secrets Act.  This Act ascribes liability to parties that disclose trade secrets information.  This requires that the disclosed Sony information actually constitute a trade secret.  In California, data can qualify as a trade secret if it derives economic value by virtue of being not generally known to the public.  Secondly, the owner of the trade secrets, in this case Sony, must have maintained reasonable efforts to keep the data secret.

Sony would likely have major difficulty qualifying much of the released data as trade secrets.  Thus far, the published data does not contain information that derives independent economic value by virtue of being a secret.  Much of the reported disclosed data is in the category of industry gossip and insults.  Similarly, data such as executive salaries lacks economic value.  Movie release date information and production expenses like actor salaries and profit participation likely would hold economic value by virtue of its secrecy.  However, Sony’s knowingly deficient data protection efforts may ensure that it fails to satisfy the element of reasonable efforts to maintain secrecy.  As a trade secrets litigator, I think Sony would be fighting an uphill battle on such claims.

Another possible liability trap for publishers would be suits for public disclosure of private facts.  This claim gets thorny with many nuanced elements.  Most importantly for publishers of Sony data breach stories, there are powerful defenses to such claims.  For starters, only individuals may advance such claims.  Therefore, Sony as a corporation cannot advance a public disclosure lawsuit.  Secondly, the newsworthiness doctrine provides publishers with a powerful defense even if the claim otherwise qualifies for relief.  If the information is determined to be of public interest, no claim will succeed.  With respect to conversations and information regarding high level executives and well known entertainers, the bar is pretty low for newsworthiness.  See Campbell v. Seabury Press, 614 F.2d 395, 397 (5th Cir. 1980).  For rank and file Sony employees, those individuals may well have claims against publishers if private information is published.  This data would include health information, compensation and social security numbers.  So far, internet publishers have steered clear of publishing such information with good reason.  See Virgil v. Time, Inc., 527 F.2d 1122, 1129 (9th Cir. 1975).

Finally, Sony’s stern warning may ultimately be nutrilized by savvy reporting by simply linking to information online.  Generally, liability will not lie for trade secrets or public disclosure of private facts when the reporter has sourced the information from a publicly available source like a court filing or webpage.  Further protection can be achieved by linking to source material.  In several lines of defamation and intellectual property cases, liability has been avoided by linking to offending material rather than republishing it.  See Vazquez v. Buhl, 2014 WL 1795574 (Conn. App. Ct. May 13, 2014).