November 18th's The Defenders episode "Whitten v. Fenlee" combines law and magic in a classic way. Penn Jillette and a number of other magicians guest star on the episode that includes a story about a blogger who reveals the secret to a leading Vegas magician's (Justin Willman) signature illusion. What's particularly interesting about this episode is the misdirection and sleight of hand that Pete Kaczmarek engages in, first in attempting to convince the court that the Nevada shield statute should apply to bloggers (which is good lawyering) and second that his surprise witness is really discussing whether a particular illusion is a trade secret, when he's actually discussing whether or not it has been published or not (maybe this illusion is the cups and balls played with legal theories and the viewers).
Magician Colin Pettigrew claims that blogger Aron Ayles violated Nevada's Trade Secrets Act.
NRS 600A.030 Definitions. As used in this chapter, unless the context otherwise requires:
1. “Improper means” includes, without limitation:
(a) Theft;
(b) Bribery;
(c) Misrepresentation;
(d) Willful breach or willful inducement of a breach of a duty to maintain secrecy;
(e) Willful breach or willful inducement of a breach of a duty imposed by common law, statute, contract, license, protective order or other court or administrative order; and
(f) Espionage through electronic or other means.
2. “Misappropriation” means:
(a) Acquisition of the trade secret of another by a person by improper means;
(b) 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
(c) Disclosure or use of a trade secret of another without express or implied consent by a person who:
(1) Used improper means to acquire knowledge of the trade secret;
(2) At the time of disclosure or use, knew or had reason to know that his or her knowledge of the trade secret was:
(I) Derived from or through a person who had used improper means to acquire it;
(II) Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or
(III) Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or
(3) 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.
3. “Owner” means the person who holds legal or equitable title to a trade secret.
4. “Person” means a natural person, corporation, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision or agency, or any other legal or commercial entity.
5. “Trade secret” means information, including, without limitation, a formula, pattern, compilation, program, device, method, technique, product, system, process, design, prototype, procedure, computer programming instruction or code that:
(a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by the public or any other persons who can obtain commercial or economic value from its disclosure or use; and
(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
NRS 600A.055 Misappropriation and posting or dissemination on Internet: Effect. A trade secret that is misappropriated and posted, displayed or otherwise disseminated on the Internet shall be deemed to remain a trade secret as defined in NRS 600A.030 and not to have “ceased to exist” for the purposes of subsection 1 of NRS 600A.040 if:
1. The owner, within a reasonable time after discovering that the trade secret has been misappropriated and posted, displayed or otherwise disseminated on the Internet, obtains an injunction or order issued by a court requiring that the trade secret be removed from the Internet; and
2. The trade secret is removed from the Internet within a reasonable time after the injunction or order requiring removal of the trade secret is issued by the court.
Ayres tells Pete that a source gave him the information and refuses to reveal that person's identity. Nevada's shield law does not list internet or other media specifically and the legislature has not updated the statute since the seventies.
NRS 49.275 News media. No reporter, former reporter or editorial employee of any newspaper, periodical or press association or employee of any radio or television station may be required to disclose any published or unpublished information obtained or prepared by such person in such person’s professional capacity in gathering, receiving or processing information for communication to the public, or the source of any information procured or obtained by such person, in any legal proceedings, trial or investigation:
1. Before any court, grand jury, coroner’s inquest, jury or any officer thereof.
2. Before the Legislature or any committee thereof.
3. Before any department, agency or commission of the State.
4. Before any local governing body or committee thereof, or any officer of a local government.
When Pete says that "Nevada's shield law is one of the most liberal in the country," he seems to be quoting language from the Diaz case (2000). "Diaz v. Eighth Judicial Dist. Court, 116 Nev. 88, 94 (Nev. 2000). “Nevada's news shield statute is one of the most liberal in the country. The statute confers upon journalists an absolute privilege from disclosure of their sources and information in any proceeding.” That assessment may have been true ten years ago, but other states have surpassed Nevada since, including California, which has an Evidence Code Section (1070(a)) that reads
A publisher, editor, reporter, or other person connected with or employed upon a newspaper, magazine, or other periodical publication, or by a press association or wire service, or any person who has been so connected or employed, cannot be adjudged in
contempt by a judicial, legislative, administrative body, or any other body having the power to issue subpoenas, for refusing to disclose, in any proceeding as defined in Section 901, the source of any information procured while so connected or employed for publication in a newspaper, magazine or other periodical publication, or for refusing to disclose any unpublished information obtained or prepared in gathering, receiving or processing of information for communication to the public.
(b) Nor can a radio or television news reporter or other person connected with or employed by a radio or television station, or any person who has been so connected or employed, be so adjudged in contempt for refusing to disclose the source of any information procured while so connected or employed for news or news commentary purposes on radio or television, or for refusing to disclose any unpublished information obtained or prepared in gathering, receiving
or processing of information for communication to the public.
(c) As used in this section, "unpublished information" includes information not disseminated to the public by the person from whom disclosure is sought, whether or not related information has been disseminated and includes, but is not limited to, all notes, outtakes, photographs, tapes or other data of whatever sort not itself disseminated to the public through a medium of communication, whether or not published information based upon or related to such material has been disseminated.
The California Constitution also protects reporters. In O'Grady v. Superior Court, a California Court of Appeals ruled that the California shield applied to bloggers. The issue? Quashing of a subpoena issued to a website publisher to compel disclosure of a source in order to reveal information relevant to the publication of trade secrets. You betcha.
Admittedly, members of the California press have added constitutional protection not available to Nevada media. But Pete's attempt to present his client as a reporter entitled to the reporter's privilege was just silly because the New York Times asserts that it is moving into the online world. What kind of an argument is that? However, obviously, the legal arguments aren't the point. The point is getting to the fun of presenting Penn Jillette as Reuben Charters, the mysterious source who provided Ayles with information about Pettigrew's trick. The issue is whether Pettigrew's trick is original, therefore protectible as a trade secret, or simply a variation of an illusion generally known in the profession. Charters, both as a witness and as a expert in magic, testifies that it is a variation of a trick that he, Charters, knows Pettigrew learned from a rare book on magic Charters showed him when Pettigrew was a boy. Charters later sold Pettigrew the book. What's not clear to me is whether Charters (and Pete) are discussing the issue of what is generally known to magicians (those in the trade) with what information is available in a rare book (the origin of the illusion). Whether or not Pete can find magicians willing to testify to the origins of the illusion (and the magicians he interviews won't so testify) is one thing. The magicians he talks to assume that the trick is original because they don't know that it isn't, and this lack of knowledge is a problem legally. Since knowledge of the illusion, and thus knowledge of the illusion in the trade is lacking, showing that it is not a trade secret is going to be difficult. Once the magicians Pete speaks to acknowledge that they think the Pettigrew illusion is original, where is he going to find a group of magicians who think it is not?
Knowledge of the illusion is another issue. However, what remains unclear to me is whether Pettigrew performs the illusion as the rare book describes it or whether he actually adds to the illusion, thus creating something new. If he performs it as described, and that is the illusion other (theoretical, as yet undiscovered) magicians are familiar with, then it's not a trade secret, whether or not other magicians know about the rare book. If, however, he adds something new to the illusion that is published in the book, then he may have something that, it seems to me, is potentially protectible. What Charters has done is explain to Ayres how Pettigrew does the trick based on the illusion as explained in the book (or, if he has seen Pettigrew's new illusion, he has explained that). If this explanation corresponds to how Pettrigrew still does it, then of course Pettigrew hasn't essentially changed the "doing" of the trick and it explains why Pettigrew is so miffed. The bells and whistles Pettigrew has added are just that. Charters seems to be saying that Pettigrew is only performing the illusion as published in the book; thus it is not a trade secret, and the judge so finds. But I'm still troubled by the fact that the magicians Pete interviews do not know of the illusion. If the illusion is unknown in the trade generally, then it seems to me it's a trade secret. That Reuben knows of the illusion doesn't change matters. He is only one person who knows. That doesn't seem to me to be enough to change the status of the illusion from protectible to not protectible as a trade secret, given the facts that we have here.
What is a trade secret? As the Nevada statute states, it is "something known only in the particular business in which it is used. It is not requisite that only the proprietor of the business know it. He may, without losing his protection, communicate it to employees involved in its use. He may likewise communicate it to others pledged to secrecy. Others may also know of it independently, as, for example, when they have discovered the process or formula by independent invention and are keeping it secret. Nevertheless, a substantial element of secrecy must exist, so that, except by the use of improper means, there would be difficulty in acquiring the information. An exact definition of a trade secret is not possible." See also the definition given in the Nevada statute above. Would Ayles have learned of the secret by "improper means" (Charters) and disclosed it? (Charters didn't learn it by improper means--he learned it from the book which he owned at one time, but he has sold it to Pettigrew). Charters knows the secret and has told Ayles. Is Charters under a duty not to disclose it? Probably not. Here we would get into the entire discussion over exposure. By the way, the exposure issue is, or ought to be, fun for anyone who knows anything more than a little about Penn Jillette, since he and his long-time partner Teller have made a career out of educating the public concerning well-known magic tricks. I'm certain they don't reveal the ones that really are trade secrets.
But I'll stop here, since some of the facts in the episode are lacking, and the show is really about putting Penn front and center, and not a lecture about IP law. Let's move on to another issue. While Pete asks questions of Charters that give the impression that Charters is testifying as an expert witness, Charters cannot possibly be testifying as one. Expert witnesses cannot simply turn up on the spur of the moment. Counsel vet them, and opposing counsel also have the opportunity to examine them. Charters is actually testifying as Ayles' source, although he has interesting information to provide as a person who knows about the history of secular magic. In addition, he is a surprise witness--therefore again, not an expert witness. Opposing counsel should have to time and the opportunity to prepare questions to ask Charters about his prior association with Pettigrew, and his motive in revealing the trick to Ayles. He certainly seems to have an axe to grind. Charters' language about Pettigrew's small-mindedness and comment about all magicians "standing on the shoulders of giants" (especially amusing coming from the 6 foot five inch Jillette) smacks of a certain amount of anger toward Pettigrew. Pettigrew's attorney is entitled to investigate.
Now, his prior association with Pettigrew and his opinion that Pettigrew has behaved badly probably won't mean that Ayles loses. But Pettigrew's lawyer should at least have a chance to inquire. Finally, the terminology that the judge uses in dismissing the case seems a tad odd. What's at issue seems to be a subpoena, even though the judge has denied the motion to dismiss. Shouldn't the judge be quashing the subpoena, since the source himself reveals his identity? Therefore there is no more need for Ayles to reveal his source. But he doesn't actually do that. Ultimately, it may not matter, since the underlying cause of action is the action for the disclosure of a trade secret and the judge dismisses that.
I'm also not overly thrilled with Nick's magic trick in the final scene, in which he "disappears" Pettigrew's bill for tickets to his show. The implication is that Nick doesn't want to pay for the tickets. Is he suggesting that since Pettigrew lost the action, the tickets should be free? That they should be part of Pete's fee? Why? Is Nick suggesting that somehow his action is morally equivalent to Pettigrew's in "stealing" the illusion from the book he bought from Reuben Charters? But that analogy falls flat. Pettigrew stole nothing, and all he tried to do was argue in court that the illusion he found, and presumably improved upon was a trade secret. He lost. If none of that is true, that is for his adversary to bring out in court. As I suggest above, perhaps the case could have gone the other way. Nick argues a couple of times in the episode that he doesn't like the practice of exposure--of disclosing how magic tricks are done. That's fine. That's his position. Does he take the position that depriving others of their wages or fees is legal or ethical? And even if he thinks it's ethical or legal to do so as far Pettigrew is concerned, what about with regard to the people who work for or with him?
The performance is separate from the lawsuit, and Nick knows perfectly well that lawsuits are not about morality. As far as we know, tickets to the performance were not part of any outside settlement and the judge said nothing about tickets to the performance. Why should Nick not pay for them? "Vanishing" them makes Nick look devious and well, like a thief, and reinforces the idea that lawyers work magic to create results that are unfair. Unless Pettigrew originally promised free tickets, he has every right to expect that Nick and Pete pay for the tickets. They don't ordinarily work for free, although many lawyers do pro bono work simply as a commitment to the profession. Why should Colin Pettigrew?
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