If the proposed federal shield were already law, Steve Job (r)could have used the courts, not cash, to silence the blogger Nick Ciarell (l).

After a three-year legal fight Apple has silenced a product-rumor web site called Think Secret. A Wired News article suggests that the site’s founder, 22-year-old Harvard student Nick Ciarelli, sold the site to Apple, which shut it down. It is not clear from the article whether Ciarelli has not to start a new Apple rumor site (that would require a non-compete clause). Ciarelli told Wired:

“It’s great to put this behind us. It’s great that we got a settlement that satisfies both parties.”

My interest in this story relates to the proposed federal shield law that Congress is expected to take up when it returns to session in January. Wired reports that Apple sured Ciarelli:

“for posting Apple trade secrets and encouraging and inducing persons to provide product information in breach of agreements.”

The proposed shield law — the Free Flow of Information Act of 2007 –  specifically directs the courts to compel disclosure of an anonymous source “to identify a person who has disclosed a trade secret.” (See text of law and use the find function to look for “trade secret.”)

Poor Steve Jobs! If only this sham of a shield were on the books, Apple lawyers would have been able to obtain a court order to shut down the Think Secret site years ago.

And lucky Nick Ciarelli. Had the sham shield been law, he would not be so satified with his settlement

At some point journalists will read the Free Flow of Information Act and realize that it’s the kind of a shield only secretive Steve Jobs could love.

he new law makes very clear that a company