On February 6, 2008, Julius Baer Bank and Trust Company, a Cayman Islands banking entity, filed suit in federal court in California against Wikileaks, which is developing an "uncensorable Wikipedia for untraceable mass document leaking and analysis." Two days later, the bank and its Swiss parent company filed an ex parte application for a temporary restraining order seeking to enjoin Wikileaks from publishing or distributing copies of documents the plaintiffs claim contain "stolen or otherwise wrongfully obtained confidential and protected bank files and records."

On February 15, 2008, the court issued what it captioned as an "Order Granting Permanent Injunction." This order, which appears to be the result of a stipulation between the plaintiffs and Dynadot, Wikileaks' domain name registrar and web host, required that Dynadot immediately disable the entire wikileaks.org domain name and account and remove all DNS hosting records.

Later that same day, the court issued an Amended Temporary Restraining Order that enjoins Wikileaks and and "all others who receive notice of this order" from "displaying, posting, publishing, distributing, or linking to . . . all documents and information originating from [the plaintiffs' banks] which are internal non-public company documents and/or which contains private client or customer bank records."

As of February 28, 2008, the Wikileaks.org domain is still down, but the organization issued a press release through one of its mirror sites:

Transparency group Wikileaks forcibly censored at ex-parte Californian hearing -- ordered to print blank pages -- 'wikileaks.org' name forcibly deleted from Californian domain registrar -- the best justice Cayman Islands money launderers can buy?

When the transparency group Wikileaks was censored in China last year, no-one was too surprised. After all, the Chinese government also censors the Paris based Reporters Sans Frontiers and New York Based Human Rights Watch. And when Wikileaks published the secret censorship lists of Thailand's military Junta, no-one was too surprised when people in that country had to go to extra lengths to read the site. But on Friday the 15th, February 2008, in the home of the free and the land of the brave, and a constitution which states "Congress shall make no law... abridging the freedom of speech, or of the press", the Wikileaks.org press was shutdown.

On February 28, Julius Baer issued a press release stating:

It is not and has never been Julius Baer's intention to stifle anyone's right to free speech. Indeed, Julius Baer has specifically made no attempt to remove material on the website which refers to the organization but which does not include information personal to its customers. However, Julius Baer denies the authenticity of this material and wholly rejects the serious and defamatory allegations which it contains.

Updates:

The court has scheduled a hearing on the injunction for February 29, 2008 at 9:00AM.

2/26/08 - Coalition of media companies filed an Amici Curiae brief primarily addressing the issue of prior restraints

2/26/08 - ACLU and Electronic Frontier Foundation filed a motion to intervene

2/26/08 - Public Citizen and the California First Amendment Coalition filed a motion to intervene that argues that the court did not have jurisdiction in the case, and therefore had no power to issue the injunctions

2/28/08 - Plaintiffs filed opposition to the motions by Amici and potential intervenors

2/28/08 - John Shipton, the owner of the wikileaks.org domain, filed a Notice of Intent to Appear and Joinder in Motions & Oppositions of Amici/Intervenors

2/28/08 - Daniel Mathews, a user of the site who was served with the TRO by the plaintiffs, filed a Memorandum in Opposition to TRO, Preliminary Injunction, and Permanent Injunction

2/29/08 - Court held hearing on the TRO; judge vacated the Permanent Injunction against Dynadot and tentatively denied the motion for a preliminary injunction.

2/29/08 - Court issued Order Denying Motion For Preliminary Injunction; Dissolving Permanent Injunction; and Setting Briefing and Hearing Schedule

3/5/08 - Plaintiff banks filed a notice of dismissal, without prejudice, as to all parties

NXIVM provides a course manual for the paid subscribers of its exclusive and expensive seminar training program, "Executive Success." The course manual contains a copyright notice on almost every page and all seminar participants sign non-disclosure agreements, purporting to bar them from releasing the manual or the proprietary techniques learned in the seminars to others.

Rick Ross runs nonprofit websites, www.rickross.com and www.cultnews.com, in connection with his work as a for-profit "cult de-programmer." The websites provide information to the public about cults and other controversial groups. Ross obtained a copy of NXIVM's course manual from fellow defendant, Stephanie Franco, a one-time NXIVM participant. Ross commissioned two self-styled experts, Paul Martin and John Hochman, to write reports analyzing and critiquing the course manual. The reports quoted sections of the manual in support of their analyses and criticisms and were published on Ross's websites. The reports also made statements that, according to NXIVM, misled readers into believing that the Executive Success program is a "cult." The websites also included Executive Success on a list of organizations designated as "cults."

NXIVM sued Ross and various co-defendants for copyright infringement, trademark disparagement under federal law, interference with contractual relations, and product disparagement. On the basis of the copyright claim, NXIVM moved for a preliminary injunction to require that Ross remove the copyrighted information from his websites. The United States District Court for the Northern District of New York denied the preliminary injunction, finding that NXIVM had no likelihood of success on the merits of its claim because the defendants' use of quotations from the course manual constituted fair use. On appeal, the Second Circuit Court of Appeals affirmed, finding that the websites' use of quotations from the manual to support their critical analyses of the seminars was transformative, and that this outweighed the concurrent commercial purpose of Ross's use (in connection with his for-profit business as a de-programmer of cult victims) and his (assumed) bad faith in obtaining the manuscript in violation of NXIVM's non-disclosure agreement. The court also held that the defendants' use of portions of 17 pages out of a 500-page manual was not unreasonable in light of their purpose, and that any damage to the market for NXIVM's work was a result of criticism (which weighs in favor or fair use), not substitution (which weighs against fair use). NXIVM Corp. v. Ross Institute, 364 F.3d 471 (2nd Cir. 2004) (Second Circuit website version attached). The Supreme Court denied certiorari. NXIVM Corp. v. Ross Institute, 543 U.S. 1000 (2004).

The case was then transferred to New Jersey on 03/07/2006 (Case No. 06-CV-01051). NXIVM amended its complaint, apparently dropping its trademark claim and adding a trade secrets claim. Morris and Rochelle Sutton moved to dismiss the product disparagement, interference with contractual relations, tortious interference with contractual relations, and copyright infringement counts of the amended complaint. The court dismissed the product disparagement claim, holding that the challenged statements were statements of opinion protected by the First Amendment. It dismissed the tortious interference claims on the same grounds, holding that, where a claim for tortious interference with contractual relations or prospective economic advantage implicates constitutionally protected speech, the constitutional privilege for statements of opinions applies. The court also dismissed the vicarious copyright infringement claims against the Suttons, finding that they had no right or ability to control the statements published on the websites. See NXIVM Corp. v. Sutton, No. 06-CV-1051 (D.N.J. June 27, 2007).

Update:

2/13/2008 - A number of defendants moved to strike NXIVM's pleadings and for sanctions as a result of discovery disputes.

2/23/2008 - NXIVM filed a memorandum in opposition to the motions to strike.

5/9/2008 - Court denied the motions to strike, but awarded attorneys' fees to defendants for discovery costs.

4/09/2009 - NXIVM  filed suit with similar claims against the defendants in the Western District Court of New York (2009 WL 1524800). NXIVM also added Lollytogs, a children's clothing supplier, as a defendant. All defendants have moved to dismiss. The Suttons in their motion to dismiss point out that by refiling this complaint in New York, NXIVM is forum-shopping. The court has not yet ruled on these motions.

On December 13, 2004, Apple filed suit against unknown defendants for misappropriation and publication of trade secrets in connection with reports about its "Asteroid" product (a FireWire audio interface for Apple's GarageBand) that appeared on Apple-related news sites, PowerPage, AppleInsider, and ThinkSecret. Apple sought and obtained permission to issue subpoenas to PowerPage, AppleInsider, ThinkSecret, and PowerPage's email service provider, Nfox.com and Karl Kraft, requesting documents relating to the identity of the news site's confidential sources.

On February 14, 2005, Jason O'Grady (from PowerPage), Monish Bhatia (hosting service provider for AppleInsider), and "Kasper Jade" (AppleInsider) moved for a protective order to prevent the discovery sought by Apple on grounds that their sources and unpublished information were protected under the reporter's shield embodied in Article I, section 2(b) of the California Constitution and California Evidence Code 1070 and the reporter's privilege under the First Amendment to the United States Constitution. they also argued that the subpoenas issued against Nfox and Kraft could not be enforced without violating the Stored Communications Act (18 U.S.C. sec. 2702(a)(1)).

The state district court denied defendants' motion to quash the subpoenas. In O'Grady v. Superior Court, 139 Cal.App.4th 1423 (Cal. Ct. App. 2006), the Court of Appeals quashed the subpoenas, holding that the federal Stored Communications Act barred enforcement of the subpoena served on PowerPage's email service provider, and that discovery of unpublished information or confidential sources from the news sites would violate California's reporter's shield provision and the First Amendment.

Apple announced that it would not appeal the ruling, and voluntarily withdrew the lawsuit in January 2007.

This case is related to Apple Computer, Inc. v. DePlume, No. 1-05-CV-33341 (Cal. Super. Ct. Jan. 04, 2005). Please see CMLP's database entry for more information on the status of that lawsuit.