Legality of Gizmodo's Next-Generation iPhone Acquisition Examined

[SpectatorHere]

Except of course for the laws of the state of California that expressly define the duties of someone who finds lost property. (CA CIVIL § 2080 - 2082) and the relevant part of the penal code that defines failing to make those reasonable efforts as a theft (CAL. PEN. CODE § 485). The situation is not as open to interpretation as you might think. In California the founder has no rights to the property valued at over $250 until after it is held by the police for 90 days and then an advertisement is run in a local newspaper for an additional 7 days:



Are you suggesting the finder complied with all of these relevant laws?

But consider that we don't even know that Apple has best title, or that they didn't intend to abandon title by leaking the phone. Assuming Apple had best title and right to possession, and they honestly lost the property, then you can get to the question if Gizmodo was a buyer in good faith. What if the finder said it was given to him, or he had waited 90 days, or he found it in international waters? I'm being absurd to make the point of how difficult it would ever be to prove anything in this case. ....Which is to say there is no case in my opinion.

 

[richman555]

Judge Judy would certainly find these guys guilty. Time to pay up Gizmodo!

 

[mccldwll]

amoral children

It's amazing some here made it out of school, at any level, given their reasoning abilities and grasp of facts. The phone was not lost. Again. It wasn't lost. It was set down on a stool in an establishment and the owner forgot to pick it up upon leaving. That's not lost. Women do it with purses all the time. That doesn't give someone the right to take it. Therefore, it wasn't "found". It was taken. Misappropriated. Grabbed and concealed. Stolen. The person who did so had absolutely no right to even touch it, beyond handing it over to the bartender. None. That's it. And Gawker knew that crook (yes crook) had no right to it, or he wouldn't be selling it. And Gawker wouldn't be paying $5,000 for it. End of story..............except for the perp walk, prosecution, and jail time for the thief and Gawker criminals.

 

[Seward Johnson]

What?

Multiple crimes were committed. Crimes the government can prosecute for... This is not only a civil matter, or really primarily a civil matter. At this point the biggest issues are criminal ones, completely in the wheelhouse of the government.

If someone steals my car, does the government have no standing to prosecute the thief?



Depends on the local laws, but if you watch that show pawn stars, they have to hold all merchandise they buy for 30 days so the police can check it for stolen property.

Pawn shops can be punished for knowingly purchasing stolen property, which is clearly what Gizmodo did here. A legitimate pawn shop would not have touched that prototype with a 10 foot pole.

The laws for Pawn Shops are much more strict. They have to try to verify ownership of the object and take the passport number or other similar identifying information of the seller. Most of these shops don't and many are knowing participants in the fencing trade.

 

[claus1225]

impromptu

Here is my take on this whole fiasco.

No one should be blamed or sued or fired.

1. For Apple, most people seemed to like the updated version and I'm sure it will sell like crazy in 2 months. So what's the problem? this is analogous to movie co-stars dating before the movie release. It will only drive up the revenue. Furthermore, this incident pretty much overshadowed all the HP slate and new droid news.

2. For Gizmodo, it is hypocritical to read their discovery with such enthusiasm and then criticize their approach. Would anyone actually prefer that they did not the iphone 4 pictures? (whether you like the updated version or not) This is analogous to tabloid news. They exist because we want them to exist. To criticize them is like criticizing yourself.

3. For Gray Powell, c.f. 1. Let those who have never misplaced their belongings cast the the first stone. There are far greater sins than losing a prototype iphone after drinking German beer on your birthday.

And yes, I liked the updated version.

 

[highspeed772]

Companies might be more honest then you think

This is why the guy is dumb. Besides being a criminal, I suspect he could have gotten a lot more money from Nokia or some other company that makes cellphones/mobile devices, than a tech web site.

http://www.foxnews.com/story/0,2933,202439,00.html

I bet he would have had a hard time selling that phone to any legitimate competitor of apple.

 

[reden]

Not to mention they have a guy named Jesus working for them

Woah really dude? You went there? Nice.

 

[voidptr]

This is why the guy is dumb. Besides being a criminal, I suspect he could have gotten a lot more money from Nokia or some other company that makes cellphones/mobile devices, than a tech web site.

Unlikely. Any company with any sort of ethics or drive for self preservation wouldn't go near that thing. Apple would bring down the wrath of God upon them when it got found out, and any knowledge they gained from it would be poisoned fruit.

 

[Seward Johnson]

In fact, there's a good chance given all the facts that Gizmodo knew what they were buying even though the seller may have not... As long as the seller isn't the one who asked for $5000. Something tells me Gizmodo wasn't dumb enough to just come right out and offer them $5000, though, if the seller had no idea what they had on their hands... they could have sent an anonymous guy and offered a couple hundred bucks. But no, the transaction suggests both parties knew what was being exchanged.

Of course the seller knew what he had in his hands - he went to GIZMODO to sell it. You don't try to sell a used phone to a website that deals in rumors of new products. You would only try to sell it to Gizmodo if you thought it was not yet released. And Gizmodo wouldn't have offered five cents for someone's first generation iPhone brought to them by the seller.

 

[Takeo]

Personally... I would never give it to the bar owner. I would want to make sure it got back to it's owner. There should have been enough info on the phone (unless it was passcode locked) to get in touch with the owner before it got wiped. If that failed... I might give it to the bar... but I'm not sure I would trust them with such a pricey bit of lost and found.

 

[voicegy]

Nice outline, Avatar74

... my comments have zilch to do with Apple's side of this. They have everything to do with Gizmodo being a disreputable bunch of amateurs who got popular the way many things get popular... because the masses are not too intellectually demanding.<...>

That's not fanboy-speak... that's just objective fact. (Apple's) entitled to protect their intellectual property, as is Microsoft, as is Tom Dick and Harry Record Company... or any mom and pop operation.

I don't want to take up space with quoting this posters' ENTIRE post - but I wanted to remark that I actually logged in (first time in a long time) just for the opportunity to state that his was one of the most concise, clear and even-keeled remarks about this whole 'left-in-a-bar-stolen-sold-omygoditsthenewiPhone' story I've ever had the pleasure of reading. A treasure among trash - thanks for posting that.

 

[Robert M.]

This is why the guy is dumb. Besides being a criminal, I suspect he could have gotten a lot more money from Nokia or some other company that makes cellphones/mobile devices, than a tech web site.

If he would have tried to sell this thing to Nokia or HTC, he'd be in jail!!

Maybe Palm would have bought it since they're already failing...nah, even they wouldn't buy it! It would be corporate suicide! Haha

 

[Seward Johnson]

It's just sad that there even needs to be a legal debate on this, and shows just how screwed up our legal system (or society in general) is.

. . .

I guess there's right, there's wrong, and there's what legal professors say about it. I suppose it all depends on what your definition of the word "is" is.

The overabundance of lawyers will be the downfall of civilization - where common sense is utterly obviated by the parsing of words.

I have to disagree with you on the legal professors comment and on the overabundance of lawyers. Clearly, with many folks here saying that "possession is 9/10ths of the law" and thinking that the "finder" did nothing wrong, there is an abundant need for lawyers and law professors.

 

[AlexisV]

'Advertising' it on a popular website actually seems to be a very effective way of reuniting owner and phone.

Which is how it turned out.

 

[lewisdorigo]

Personally... I would never give it to the bar owner. I would want to make sure it got back to it's owner. There should have been enough info on the phone (unless it was passcode locked) to get in touch with the owner before it got wiped. If that failed... I might give it to the bar... but I'm not sure I would trust them with such a pricey bit of lost and found.

It wasn't passcode locked. The person who found it went into a facebook app, which was logged into the account of the person who lost/misplaced the phone. The person who found it was able to give the name of the person to Gizmodo.

 

[mixel]

I can't imagine going after Gizmodo would help Apple's public image much.. I can see why they'd want to though. If Gizmodo's account of events is even remotely accurate they've been incredibly dumb.

I feel sorry for the guy who left it lying around.. Oops. I hope he's doing ok. (or if he's fine with taking so much flak if the conspiracy theorists are right about the controlled leak thing.)

I like lifehacker, io9 and Kotaku.. People tarring the whole of Gawker network with the same brush - it's not exactly fair. Giz have made bad choices before, but it doesn't reflect on the other blogs writers.

 

[Seward Johnson]

The law in *California* is pretty clear about this type of situation, but ... it really does require a complaint by the injured party (Apple). Apple has now formally stated that it owns the device, and as far as I know, received it back.

No. It does NOT require a complaint by the injured party. Gizmodo published (and admitted to) all of the relevant facts. It is actually the DA's duty to investigate and, if the facts line up (which will involve Apple testimony), to prosecute. The "injured party" in criminal law is the State. It is never a criminal case of "Apple v. Thief", but rather "The People of the State of California v. Thief".

 

[trrosen]

Actually, the thief didn't return the stolen property. He sold it. The buyer returned the stolen property. After dismantling and milking it for every page hit possible, of course.

It should also be noted that "dismantling and milking it for every page hit possible" is conversion by law and is the same as theft. Its like leasing out a building you don't own.

 

[pdjudd]

The law in *California* is pretty clear about this type of situation, but ... it really does require a complaint by the injured party (Apple). Apple has now formally stated that it owns the device, and as far as I know, received it back.

I have read nothing in the California Penal code that requires this, it seems that as long as it is classified as “lost” the onus is on the finder to make the effort to return the product found. If they (the finder) fail to do this or takes actions that are intended to deprive the owner of something they are entitled to (such as selling said product to Gizmodo), it automatically is classified as theft.

Now a theft by active taking (ie mugging) would need to have a police report, but that is a different kind of theft.

I have seen no requirement that a police report has to be filed - the finder is not fulfilling his responsibilities under the law.

If you can find a statute that requires a police report being filed, please point it out, but every legal citation that I have seen applies to the finder and not the looser and in this case the looser is acting under the presumption that the item he lost will be returned. It stays that way until the finder acts improperly.

ETA: What seward says.

 

[Cartaphilus]

I think we might have an interesting conversation in the jury room. Assuming the California Civil Code requirements of turning lost goods to the authorities don't apply to a criminal case and it is just a matter of what a judge or a properly-charged jury thinks is reasonable and just, there would probably be a wide range of opinions, especially if it's a jury panel drawn from posters on MacRumors.

As a juror the question I'd ask myself is what someone who had a good faith desire to see the phone returned would have done, and then compare the defendant's behavior to that standard. I would think that at least leaving your phone number with the bar manager would be the least anyone would do before taking the phone out of the bar. Asking the bartender if the occupant of the stool paid by credit card, or if he were a regular known to the staff would be another indication the finder had the right intention. Posting a notice in the bar, tracking down the owner from data on the phone, checking in at the bar the next day, calling the police/sheriff, any of those things would make me feel better about the defendant. I don't expect the finder to file an interpleader, but as a juror I'd need to hear more than a few phone calls lobbed into a switchboard.

On the other hand, selling the phone (especially for $5,000) makes me think that the predicament of the poor owner was not uppermost in this fellow's mind. I'd be interested in any admissible character testimony too. My experience is that honest people have a history of behaving with integrity, and that dirtbags tend to have been dirtbags for a long time; one's reputation for truth and veracity is important to me.

Of course, whether the Apple employee or Apple should have lost the phone would be no more important to me than if a defendant in a house burglary case claimed the house were filled with valuables and left unlocked with no alarm. Similarly, Apple's remote wiping of the phone, or not using some locator technology are not factors that I believe would influence a reasonable person to believe that no further attempt need be made to return the phone.

Clearly, though, other members of my imaginary jury might have competing points of view. There is the "finders keepers" school of thought, as well as the hoary precedent that "99% of MacRumors posters are thieves", and the interesting observation that because "the government has no interest in the matter" no criminal charge may be made--all points of view that have been expressed in these very forums. So as I say, it would be an interesting deliberation.

But as I sit here today unencumbered by any evidence beyond internet posts, and not yet having the opportunity to consider the reasoned opinions of others, I'm voting a pretty firm guilty.

 

[SpectatorHere]

Ownership is complex

I think the problem is that lawyers, like me, and those with some legal background recognize just how complicated this stuff gets. Talking turkey, Apple didn't have anything stolen, at best, they were deprived of the right of physical possession for a few weeks. Apple always retained best title and right to possession. Apple never even lost the most important rights, the IP....which will allow them to sell a bazillion of these. The finder is not going to be prosecuted. What I think most of you are arguing about is what other commentators have pointed out is under the law of trade secrets. I haven't studied trade secrets since law school, but I find it difficult to imagine that Gizmodo had any obligation or duty to Apple to keep it's secret iPhone 4 secret once Apple left their phone in a bar.

 

[pdjudd]

I like lifehacker, io9 and Kotaku.. People tarring the whole of Gawker network with the same brush - it's not exactly fair. Giz have made bad choices before, but it doesn't reflect on the other blogs writers.

Sorry, Gawker is fully responsible as the owner of Gizmodo and as such are the responsibility of their employees, especially after it appears that their CEO endorses what happened and has not come clean on the entire event. Gawkers lawyers approved of this. Nobody is talking about lifehacker or anybody else - this is purely on the hands of Gizmodo and the corporate entity of Gawker.

 

[Seward Johnson]

But consider that we don't even know that Apple has best title, or that they didn't intend to abandon title by leaking the phone.

Sorry - abandonment is intentionally leaving the property by the garbage at the side of the road, not leaving it in a bar. Putting aside the science fiction conspiracy theories (which would never have to be proven in the negative), clearly, we know from what's been published that the guy who lost it was frantically calling the bar to find the phone.

 

[Robert M.]

This blog sums up my feelings perfectly.

http://www.betanews.com/joewilcox/article/Apple-should-sue-Gizmodo-over-stolen-iPhone-prototype/1271731283

 

[marksman]

Unlikely. Any company with any sort of ethics or drive for self preservation wouldn't go near that thing. Apple would bring down the wrath of God upon them when it got found out, and any knowledge they gained from it would be poisoned fruit.

I am saying in the scheme of things he could have gotten more. This thread and the existence of Gizmodo prove that morals and ethics are not the top most in everyone's behavior choices.

I certainly would not support his decision, I believe the guy is a criminal, I just think he might have done better to some competitor. We know corporate espionage goes on at some point, so I assume he could have gotten more money if he had tried.

I would hope that he would be reported, like the Pepsi/Coke example above. I am under the impression Engadget was made this offer too and turned it down, but I wonder if they did get offered it why they chose not to contact Apple. Perhaps they did.