Wal-Mart's Circular Reasoning

"Black Friday," the day after Thanksgiving, is traditionally a very big day for retailers. For many stores, it is the start of a holiday shopping season that will put them in the black, or with a profit.

Wal-Mart has been annoyed that its Black Friday sales circulars are often leaked days and even weeks ahead of time by websites. This year, the retailing behemoth is trying to launch a preemptive strike by making legal threats. But the company may want to consider past attempts by big corporations to plug the leaky sieve that is the internet.

Wal-Mart has sent legal notices to a number of websites, including Black Friday 2007, condemning the practice of posting the leaked materials as a violation of "copyright and other laws," contending that the descriptions of sales are "proprietary and commercially valuable information."

Is the harm done by releasing pricing information early (yes, it's free publicity, but it tips off competitors) so great that it is worth the bad PR of a goliath picking on little websites? More important, does Wal-Mart even have a case?

According to the notices sent by Baker Hostetler, the law firm representing Wal-Mart: "The circulars and advertisements, as well as related documents, are also protected by copyright and related laws. Therefore, any unauthorized reproduction, publication, or distribution of the information or materials (e.g. via website) prior to Wal-Mart's authorized release date violates Wal-Mart's rights."

A copyright, according to the U.S. Copyright Office, is "a form of protection provided by the laws of the United States to the authors of 'original works of authorship,' including literary, dramatic, musical, artistic, and certain other intellectual works."

A list of facts by itself, because it lacks a creative component, is generally something that cannot have a copyright. Take the phonebook, for example (Feist Publications v. Rural Telephone Service).

So that would seem to apply to a list of items and prices like this.

But where a website is presenting a reproduction of Wal-Mart's advertising circular like this one from last year, that would appear to be an example of copyright infringement.

What about when a website posts a link back to Wal-Mart's website, as Dealtaker.com does here?

Isn't that similar to posting directions to a store?

But to "prepare derivative works based upon the work" is a form of copyright violation. Dealtaker's webpage might be considered a work based on Wal-Mart's webpage.

And beyond copyrights: Can a website legally make confidential information public?

'Proprietary and valuable' information, like pricing, is called a trade secret. Under U.S. patent law it's illegal to publicly reveal confidential information you get from anyone (such as an employee) who you could reasonably be expect was violating non-disclosure agreement by telling you.

But should the information come to you from an outside party, legal "trade secret" status may be lost, and WalMart is out of luck.

And then, of course, there is the First Amendment.

In 1999, Ford Motor brought suit against the website blueovalnews.com for posting confidential documents from Ford that the site had obtained anonymously

Ford lost.

In April 2004, Apple took legal action against a group of websites that were announcing anonymously obtained, confidential information to the public about yet-to-be-released Apple products. In May 2006 an appeals court ruled against Apple, saying that the websites were protected under reporters' shield laws.

The laws regarding journalism and trade secrets are still relatively unclear, much less the definition of what constitutes a journalist. But 'shield laws' protecting journalists who reveal "confidential information" exist in 33 states, and a Federal one is moving through Congress.

Wal-Mart is talking tough, but may not want to forge ahead with legal action. So it may still be worthwhile for shoppers to keep checking the spoiler websites in the weeks to come. Shop till they drop?

Liz Gunnison