Legality of Gizmodo's Next-Generation iPhone Acquisition Examined

[tbrinkma]

But finding the wallet is not theft.

We aren't debating the sale of the phone..... it's that there are a constant, lemming-like flow of FB's saying that the initial acquisition of the phone was theft. It wasn't. Nobody here seems to have the IQ to be able to differentiate between the events.

No, *finding* the phone wasn't theft. Leaving the bar with the phone wasn't theft either, *IF* he had actually intended to return it to the owner. However, failure to make a reasonable effort to return the item to its rightful owner *IS* (under CA state law) theft. The finder made it plainly obvious that he hadn't taken reasonable efforts to return it when, despite the fact that he *KNEW* the identity of the owner, he *SOLD* it to someone else!

Theft is the act of depriving the rightful owner of property the possession/use of said property. The finder did exactly that when he sold the phone to Gizmodo. Gizmodo is guilty of knowingly buying stolen property. They paid $5000 for it, *after* the findertold them it wasn't his. Heck, the finder even told them whose property it *was*, but they bought it anyway.

 

[redkamel]

yeah right

Let me walk you through why there was not a reasonable attempt to return the device.

A) So the finder though he had a real, legit prototype iphone on his hands. There is no other way to argue, really
1. He used the iphone OS
2. He found it near apple HQ
3. It had a 30 pin dock connector etc

Sure he could play dumb, but he also believed it enough to try and sell it.

B) Now that you have something that you think is a prototype, and was just lost, you would like to try and return it. Keep in mind that any person that can figure out what this phone is and contact gizmodo/gawker also is smart enough to know that a prototype iphone is worth a lot of money, and that its top secret

C) A reasonable attempt is based on the value of the item. I am not a lawyer, but I doubt I am stretching the meaning of the word here. He didn't make one phone call to customer service to try and return, say, a laptop charger. Or even to say the serial number of a phone worth a few 100 dollars. One phone call to CS is reasonable for something like that. But if you have something you think is top secret, containing trade secrets, and the center of a huge marketing campaign AND the flagship product AND it was just lost last night, one phone call is not a reasonable attempt to return it. Its basically a CYA move.

"Sure officer, I found a bag of with 500K in it! I looked around to see if anyone lost it! But no one was there! I tried to return it!"

The barest of attempts was made to return a valuable item. Thats the bottom line. I mean, I can't think of how you could do less and still say you tried to return something.

 

[ten-oak-druid]

gizmodo knew the owner. Yet they intended to keep it take it apart (risking possible damage to it).

criminal

 

[LagunaSol]

Also, the person who found the device may have transferred possession of the found product to Gizmodo, if they promised him to do everything to return it to the original owner. Like when you find something, but are unable to either return it to the legal owner or (local) police. In this case you can transfer possession, in good faith, without ever being caught for stealing, and can, say your mom, do the work for you.

Wow, I've seen some messed up theories and rationalization on this thread, but I think this takes the cake.

"So, if you'll give me $5,000 for this device that does not belong to me, even though I know who it does belong to, I trust you'll do the right thing on my behalf?"

Unbelievable.

P.S. he didn't "transfer possession" in the innocuous way you imply. He sold it. There was no "good faith" involved at any point by anyone in this debacle, according to Gizmodo's very detailed recap.

 

[ten-oak-druid]

If gizmodo didn't know who the owner of this phone is, then I have one question: Who do they pay to take these things apart for them?

Because you can't be in their business and not know who the phone belongs to.

The person who found the phone must have either known who owned it. Otherwise, how did Gizmodo find out about it?

 

[ten-oak-druid]

On the other hand Apple might have dropped it on purpose.

 

[ct2k7]

On the other hand Apple might have dropped it on purpose.

What, and risk SEC on their case?

 

[ten-oak-druid]

What, and risk SEC on their case?

would be tough to prove

 

[pdjudd]

On the other hand Apple might have dropped it on purpose.

Why risk it falling into the wrong hand and lose control of a device that is not on the market? Nobody seriously does that with a product like the iPhone - Apple doesn't have a reason to.

 

[ten-oak-druid]

Why risk it falling into the wrong hand and lose control of a device that is not on the market? Nobody seriously does that with a product like the iPhone - Apple doesn't have a reason to.

It will be taken apart later this year when it goes to market.

And the reason would be PR - get the people talking about it. It's in the news - free advertising.

 

[ten-oak-druid]

I'm guessing it uses Verizon's network.

If it used ATT, he wouldn't have gotten over $2k.

 

[pdjudd]

It will be taken apart later this year when it goes to market.

That isn't a justification to leak physical devices.

And the reason would be PR - get the people talking about it. It's in the news - free advertising.

Think about this for a minute. Appe can get press at the drop of a hat o at any venue it wishes under exactly their terms just by announcing a keynote. Guarenteed press. Deliberately dropping a phone is the exact antithis of the type of control that Apple is most known for. Apple is not going to abandon a tried and true practice of getting press attention just to get a couple month lead. They do not need to do this - what happened is the exact opposite - of control - it's chaos.

 

[ct2k7]

would be tough to prove

Having an investigation is bad enough, Apple's board has already been fined before.

 

[ten-oak-druid]

That isn't a justification to leak physical devices.


Think about this for a minute. Appe can get press at the drop of a hat o at any venue it wishes under exactly their terms just by announcing a keynote. Guarenteed press. Deliberately dropping a phone is the exact antithis of the type of control that Apple is most known for. Apple is not going to abandon a tried and true practice of getting press attention just to get a couple month lead. They do not need to do this - what happened is the exact opposite - of control - it's chaos.

Lots of people are talking about it now. It was Letterman's top ten list last night.

 

[pdjudd]

Lots of people are talking about it now. It was Letterman's top ten list last night.

Letterman is a comedian. Forgive me if I don't take much stock in his top ten lists.

 

[Seward Johnson]

The story is good, as is the debate...
...but what's the liability to return a device to its owner in California? Is there a law that says not making a good faith effort is theft?

I mean, sure, the article talks about how if you are going to buy a Rolex and the seller offers it for $200, the buyer is supposed to take reasonable steps to ensure its not stolen.

Gizmodo paid $5000 for it (which makes it highly likely they had a reasonable belief the device was from Apple and not for retail sale, and made the exact acquisition circumstances unclear...)

Gizmodo came up with a pretty solid cover story that explained it was left by the employee, and the exact circumstances of how the individual attempted to notify Apple, but...alas! They won't take it back
(Note that this smells to high heaven- but Gizmodo's post on how they asked the seller and how the seller replied seems pretty airtight. And read it before you judge. It was vague enough to cover their asses).

The bigger issue... We talk about Gizmodo's responsibility to make sure the device was not stolen.

Under California Law, is a device considered stolen if one does not make a reasonable effort to return it? What's the maximum extent of the liability of the seller to attempt to return the device?

Assuming it's legally stolen seems like a HUGE leap to me. Unless a lawyer has already considered my thoughts- I'd like to read a legal opinion on it.

Not a huge leap at all. The civil statute says that you can't keep lost property - you MUST turn over anything valued at over $100 to the police within a reasonable period of time. The only way you avoid this obligation is if you choose NOT to take the lost property into your possession. The "finder" elected to do so. He could have given it immediately to the bar - and then they would have the obligation. He definitely didn't turn it over to the police - he kept it and showed the absolute intent that he wanted it to be his by selling it. If he sold it for $399, he might be facing a misdemeanor, but he established the felony value of $400 or more by selling it for $5,000. Keeping it and selling it violate one penal code listed above; acquiring it as Gizmodo did appears to violate another.

Maximum liability is a year in jail under the applicable California statutes - although it might have been less if he didn't value it at $5,000. If he kept it and thought it a regular sub-$399 phone, he would have been liable for a misdemeanor charge.

 

[BitDrive]

On the other hand Apple might have dropped it on purpose.

as I stated earlier... Really???? People actually believe this! Wow!

After millions spent in development, design and testing? They want a proprietary product practically handed to their biggest "starving" competitors on a silver platter two months before launch? It changes all marketing strategies for the competitors, it affects Apple's inventory estimates, and gives the guy next door a two month window to improve his product and even exceed the about to be released iphone.

Seriously crazy to think this is PR.... wow :-(

 

[Seward Johnson]

finders keepers, losers weepers

Apple had a GREAT financial quarter, they'll get over it. Hard to believe that Apple would be so reckless with a new phone anyway.

.... ish happens

Yes, Apple is rich. You could use your same argument to excuse someone who shoplifts an iPad from an Apple Store. Doesn't make the argument right.

 

[cycling56]

Left by Steve

It was probably a plant by Steve himself to get everyone started with all different kinds of rumors, and its working.

 

[rstansby]

Nick Denton of Gawker Media, Gizmodo's parent company, claims that the authenticity of the device was in question until they had purchased and disassembled it, and notes that they intended to return the device to Apple if it was verified to be an Apple product.

BS, as others have said they paid $5k because they knew it was real.

And the guy who took it didn't give it to the restaurant owners because he thought it was real, or at very least wanted to steal cell phone access from the true owner.

 

[MadeTheSwitch]

Now the same paranoid company with 100 security doors lets someone walk into a bar with a super secret prototype? Even if someone really managed to get outside the campus with the device without permission he would have ben extremely careful. And why would anyone take such a risk for a device that does not even boot up?

Hard to believe...

First off, they HAVE to let their phones out into the wild. The only way to TEST them in the field is to BE in the field.

Secondly, someone might not be careful in a BAR if they have been DRINKING.

Finally, the device worked before Apple sent the wipe code. So not sure what you are referring to when you say it didn't boot up.

 

[LagunaSol]

Finally, the device worked before Apple sent the wipe code. So not sure what you are referring to when you say it didn't boot up.

New feature prediction for iPhone OS 4.1 - the ability to send a message to a missing phone that can't be removed from the screen, while wiping all remaining data in the process.

Something along the lines of "Give us back our @$*#! phone or face the wrath of The Jobs. Remain where you are. We will be there directly to pick it up."

Or better yet, self-destruct capabilities?

 

[Master Chief]

Wow, I've seen some messed up theories and rationalization on this thread, but I think this takes the cake.

"So, if you'll give me $5,000 for this device that does not belong to me, even though I know who it does belong to, I trust you'll do the right thing on my behalf?"

Unbelievable.

I personally won't trust you nor anyone else here with any Apple prototype, but one could argue that Gizmodo staff should be trustworthy. Especially when they promised to do the "right thing and return the item after examination".

And yes, you can ask $5,000 [or more] as bail, before you transfer possession of any product, to make sure that said product is returned to the rightful owner. You only have to put this on paper and return the bail in time. Piece of a cake

P.S. he didn't "transfer possession" in the innocuous way you imply. He sold it. There was no "good faith" involved at any point by anyone in this debacle, according to Gizmodo's very detailed recap.

I can't really comment on this since I wasn't there, but I gave simple examples on how someone can "transfer possession" without any legal trouble for the finder.

 

[LagunaSol]

And yes, you can ask $5,000 [or more] as bail, before you transfer possession of any product, to make sure that said product is returned to the rightful owner. You only have to put this on paper and return the bail in time. Piece of a cake

Yeah, I'm sure that's what happened.

 

[tbrinkma]

Again, this seems like common sense and easy steps...but is that the case legally?

Well, as several postings of the applicable bit of California State Code have detailed, one of the things you are legally obligated to do with a found item worth more than $100 (if you can't personally return it to the owner) is turn it in to the police, who will wait *90 days* for the rightful owner to come claim it.

Given that this whole thing has taken place in the span of about a month (30 days), it's pretty clear that he didn't do that.