Two Sides to Black Friday Scoop Disputes

Thanksgiving is approaching, where we all take a day out of our busy lives to pause, thank the Deity who occupies that space in our lives that we reserve for such a Being for all of the blessings that we have been given, and then gorge ourselves silly. With that out of the way, we turn immediately to "Black Friday," where hundreds of thousands of us arise from our tryptophanically-aided slumbers at obscenely-early hours to stand in long, winding, dark, cold lines in front of one of our nation's Massive Retail Giants so that we can be assured of acquiring even more of said blessings.

Sociological commentary aside, what makes Black Friday interesting from a legal perspective is the annual dust-ups between a growing collection of Scrappy Websites on the one side, and Massive Retail Giants on the other, over the unauthorized disclosure of what the Massive Retail Giants are going to selling at Ridiculously Low Prices that Friday morning. Some examples of what's out there are here, here, and here.

The Scrappy Website TechCrunch has posted a fairly typical cease-and-desist letter, this one from a law firm representing Wal-Mart, demanding that TechCrunch take down what is claimed to be a preview of a Sam's Club Black Friday ad that appears on its CrunchGear site.

(The posting of the letter, by the way, is a fairly typical tactic -- the lesson being that if you're going to write a cease-and-desist letter to a Scrappy Website, there's a better than 50-50 chance it's going to end up being posted for all to see. So triple-proofread that letter and try to make sure it doesn't sound too snarky. And you might want to leave off your direct email address and contact numbers.)

The letter presents a good opportunity to review the usual bases of Massive Retail Giant claims against Scrappy Websites that post these scoops. These claims can be summarized as follows:

1. Unauthorized disclosure of trade secrets (i.e., information about what is going to be on sale and what the sale prices will be);

2. Copyright infringement (where the Scrappy Website has posted images of the Black Friday circular)

And just in case the offending Scrappy Website can be considered a "service provider" under the Digital Millennium Copyright Act, the letter includes a DMCA takedown notice that is designed to drain the Scrappy Website's safe harbor. Very thorough.

Of course many of the Scrappy Websites that receive these notices routinely pooh-pooh the Massive Retail Giants' threats, post the cease-and-desist letters, and brazenly continue to display the offending ads. The fans of the Scrappy Websites then fill the sites with nasty commentary poking fun at the Massive Retail Giants for trying to push the Scrappy Websites around. "This information is going to be public anyway," they snort, "so why try to stop it now?"

That's an easy gut-reaction position to take. But there are two sides to any argument, and I can see a couple of legitimate reasons why the Massive Retail Giants are concerned about these early disclosures.

First, some of these early leaks are just wrong. The TechCrunch post is one example. It originally claimed that Wal-Mart was going to be selling a Nintendo Wii package at an extraordinarily attractive price, and it posted a copy of an ad that appeared to back that up. Some days later, however, it issued a correction to the price; the package price may actually be considerably higher (almost double, as a matter of fact). Wal-Mart has a legitimate concern that its customers will see the first (low) price on the TechCrunch website but not the second (high) one, show up on Black Friday expecting to pay the cheaper price, and be disappointed. No retailer likes its customers to be disappointed.

Second, there is no doubt some competitive maneuvering going on here. Each Massive Retail Giant wants to lure as many customers as it can to its stores on Black Friday, and is tailoring its ads as best as it can to accomplish that goal. Leaked ads give the competition both the information and the time to react and devise offers that may be more attractive to consumers. Each consumer can only wait in a single long, winding, dark, cold line, and each Massive Retail Giant wants the longest, windiest, darkest, coldest lines to be the ones in front of its stores.

On the other hand, to protect information as a trade secret it must be treated as a trade secret. If any of these spats ever made their way to court, the Massive Retail Giants would need to show that the information they were claiming to protect had been treated internally and externally as trade secrets, guarded by non-disclosure agreements, locked rooms, and password-protected computer files.

As for the copyright infringement claim, it is frankly hard to argue against that at least from a technical perspective. That said, I wonder whether the Massive Retail Giants have registered any of those advertising fliers with the Copyright Office. Given that they make no money off of the sale of the advertising circulars, statutory damages and the potential for attorneys' fees would probably be the best they could hope for.