Ford Motor Co. v. Lane
27 Media L. Rep. (BNA) 2297, 52 U.S.P.Q. 2d (BNA) 1345, 67 F.Supp.2d 745 (1999)
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Rule of Law:
An injunction preventing a third party from publishing trade secrets constitutes an unconstitutional prior restraint on free speech in violation of the First Amendment, even if the information was unlawfully obtained, as a company's commercial interests are not sufficiently compelling to overcome the heavy presumption against such restraints.
Facts:
- Robert Lane operated a website named 'blueovalnews.com' which published information about Ford Motor Company.
- Lane received confidential internal documents, including trade secrets and engineering blueprints, from anonymous sources, who were likely Ford employees.
- Lane was aware that the documents were confidential and proprietary, and he acknowledged that the employees providing them were breaching their duty of confidentiality to Ford.
- In October 1998, after Ford blocked his access to its press website, Lane threatened to publish sensitive materials and encourage employees to disclose more confidential information.
- Lane proceeded to post articles on his website that quoted from and disclosed confidential Ford documents concerning product quality, future powertrain strategies, and vehicle emissions.
- In response to Ford's notification of an impending lawsuit, Lane published approximately forty additional confidential Ford documents on his website.
Procedural Posture:
- Ford Motor Company filed a Complaint and a Motion for a Temporary Restraining Order against Robert Lane in the United States District Court.
- The complaint alleged multiple counts, including misappropriation of trade secrets, copyright infringement, and trademark infringement.
- On August 25, 1999, the district court granted Ford's motion and issued a Temporary Restraining Order (TRO), which enjoined Lane from, among other things, using, copying, or disclosing any internal Ford document.
- The court ordered Lane to show cause why the TRO should not be converted into a preliminary injunction.
- Ford subsequently filed a motion for a preliminary injunction to extend the restraints for the duration of the litigation.
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Issue:
Does a court-ordered injunction preventing a third party, who is not bound by any confidentiality agreement, from publishing misappropriated trade secrets constitute an invalid prior restraint on speech in violation of the First Amendment?
Opinions:
Majority - Edmunds, District Judge
Yes. A court-ordered injunction to prevent the publication of trade secrets is an unconstitutional prior restraint on speech under the First Amendment. The court reasoned that any prior restraint on speech bears a heavy presumption against its constitutional validity and is only permissible in exceptional cases, such as to prevent the publication of troop movements in wartime, as established in precedents like Near v. Minnesota and New York Times Co. v. United States. Citing the Sixth Circuit's decision in Procter & Gamble Co. v. Bankers Trust Co., the court held that a private company's commercial interest in protecting its trade secrets does not qualify as an interest 'more fundamental than the First Amendment itself' and is therefore insufficient to justify a prior restraint. The court concluded that even if Lane's conduct in obtaining the documents was improper, that conduct is not a basis for issuing a prior restraint, especially where there is no confidentiality agreement or fiduciary duty between the publisher and the company.
Analysis:
This decision reinforces the high bar for imposing a prior restraint on speech, extending the doctrine's powerful protections to individual publishers on the internet. It clarifies that commercial interests, such as the protection of trade secrets, will almost always be subordinate to First Amendment freedoms, even when the speech involves unlawfully obtained information. The ruling signals that companies victimized by trade secret leaks must pursue remedies other than enjoining publication by third parties, such as suing the employees who leaked the information or seeking post-publication monetary damages from the publisher. This case demonstrates the application of traditional First Amendment principles to the digital age, affirming that the medium of publication does not diminish the constitutional protection against censorship.
