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A suit filed in San Francisco Superior Court could decide whether a reporter’s news sources are a publisher’s trade secrets or belong to the journalist. The determination could have far-reaching implications for media companies, as well as for journalists who move from one publication to another. Paperloop.com Inc. filed its complaint Aug. 8 against three journalists and a competitor in the forest products information business. Paperloop, a San Francisco-based company, alleged that the three journalists — Ola Jane Gow, James McLaren and Diane Keaton — engaged in unfair business competition and misappropriation of trade secrets by publishing information learned from sources they cultivated while working for publications of its parent company, Miller Freeman Inc. The company further alleged that the information was published by defendant Forestweb Inc., a Los Angeles-based forest industry news competitor who hired the three journalists away. “Paperloop reporters have access to sources within the industry who trust Paperloop reporters and are willing to give their insight and hard data related to such information,” said the complaint drafted by Laurence Weiss, a partner in the San Francisco office of Heller Ehrman White & McAuliffe. But in a motion to strike, Forestweb’s attorneys asserted that Paperloop’s litigation was not aimed so much at the three journalists but rather is a SLAPP suit intended to hinder a competing publisher. Neil Shapiro characterized the Paperloop suit as an attempt to silence or chill the defendants’ exercise of their rights of free speech. Shapiro, a McCutchen, Doyle, Brown & Enersen partner in San Francisco, said that plaintiffs’ main motivations in Strategic Lawsuits Against Public Participation (SLAPP) is not to win but to silence a competitor. He said SLAPP suits may “masquerade as ordinary lawsuits” but in reality “are generally meritless suits” that block the exercise of First Amendment free speech. His motion said that a trust develops between a forest industry news source and the reporter, not between the source and the publication. “If a reporter leaves one news organization and joins another, the relationship stays with the reporter unless the source decides otherwise,” Shapiro wrote. Weiss could not be reached for comment Monday. According to the complaint, Paperloop.com Inc. v. Gow, Paperloop was formed in January 2000 as a joint venture between Pegasus Capital Advisors and Miller Freeman. Paperloop’s newsletter, Pulp and Paper Week, provides market analyses of price trends, corporate consolidations, product shortages, inventories and other insider information. “Such sources are employees of pulp and paper companies who would not normally divulge the information to a reporter for fear of reprisals by their employer,” Weiss’ complaint said. “If a competitor were to enter the market with information as to Paperloop’s sources, it would unfairly benefit from the tremendous time and effort necessary to develop relationships with the sources.” Paperloop’s complaint asks for a permanent injunction to prevent the journalists from contacting sources previously developed, and for unspecified damages and attorneys’ fees. In his motion to strike, Shapiro accused Paperloop of seeking to stifle Forestweb’s competitive ability to print industry news. “The timing of this lawsuit coincides with Forestweb’s decision to launch a new publication, PriceBeat, that competes with Paperloop.com Inc.’s Pulp and Paper Week,” his court papers assert. A hearing on the motion to strike has been scheduled for Sept. 5 before Law and Motion Judge A. James Robertson II.

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