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Police raid Gizmodo editor’s home over prototype iPhone

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By Charles Starrett

Contributing Editor
Published: Tuesday, April 27, 2010
News Categories: iPhone

Police entered the home of Gizmodo editor Jason Chen late Friday evening, seizing a variety of computers, servers, and other electronic items as evidence possibly “used as the means of committing a felony,” related to the recent prototype iPhone incident. Chen was responsible for the posting of details relating to a prototype fourth-generation iPhone that the site reportedly purchased for $5,000 from an unknown party who supposedly “found” the phone at a Redwood City bar, after it was “lost” by an Apple engineer. Gaby Darbyshire, COO of Gizmodo owner Gawker Media, has claimed the search warrant was invalid due to a California law protecting journalists, however, there has been speculation that Gizmodo’s purchase of the phone may have itself been illegal, with the seller guilty of theft for failure to return the phone to its rightful owner, and Gizmodo of purchasing and receiving stolen property. While it is likely that Apple had contacted the authorities about the lost prototype device, the company could not have been directly responsible for the raid on Chen’s home.

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Comments

1

Ah, lovely intimidation. Execute a potentially illegal warrant and take every single computer related gadget from an obvious gadget freak and tie it all up as “evidence” for months. Thereby forcing him and his wife to have to replace their hardware and kiss all their family photos, financial records, etc., goodbye, possibly forever the way our system works, for what, posting photos of a lost cell phone?

Just because the lost cell phone is of interest to the public, being an iPhone prototype, there’s no honest justification for this nonsense unless the police are going to start executing multi-officer raids on every single person suspected of having (or having had, as in this case) someone’s cell phone. If corporations are persons, as our illustrious Supreme Court seems hellbent on enshrining, then let them receive the same treatment you or I would have gotten for a lost cell phone: a polite request to come down to the station on our time to file a report that would have promptly been ignored for all time unless the serial number showed up in a recovered stolen property report from an unrelated seizure and was flagged by the computer system.

Posted by Code Monkey in Midstate New York on April 27, 2010 at 6:23 AM (PDT)

2

Ignoring the whole stolen/lost iPhone prototype controversy, Gizmodo and Gawker deserve whatever bad karma might come their way for their shameful outing of that Apple engineer.  What goes around, comes around.

Posted by Dyvim on April 27, 2010 at 6:26 AM (PDT)

3

I’m so glad that this is happening, they honestly deserve It!!!!! Go Apple!!!

Posted by TJ on April 27, 2010 at 6:48 AM (PDT)

4

Santa Clara county must be heaven on earth.  The police have the time and resources to prosecute imaginary crimes on behalf of ultra-rich,  narcissistic corporations.  I wonder how many real offenses took place while Detective Broad was protecting us from Mr. Chen and his band of cell phone thieves?

Posted by BCJ on April 27, 2010 at 7:24 AM (PDT)

5

Ok people. Above all else, Gizmodo “buying” this device WAS a crime. It was not the finders to sell, which makes it theft as soon as he accepted money for it. He had options that would have been morally right. As I understand it, anyone can get to the front entrance at 1 Infinity Loop. Take the phone in and give it to the receptionist and tell them whose phone it is.

Unfortunately, this upstanding individual decided to make a buck on someone else misfortune. And once Giz paid that bounty, they were in receipt of stolen property. There really is no moral high ground here. No one has made the right move starting with the engineer that left the darned thing behind. Apple could easily end this by just asking Santa Clara County to drop the case and admitting it was an error on their end that started the whole thing. But in their defense, this is a chance to show the “blogosphere” that there is a line that must not be crossed in running down a juicy story.

Gizmodo was in the wrong. Period. They did not help themselves by outing the poor soul that lost the iPhone. Without that shameless detail, Giz may have maintained some sort of sympathy from the public. It seems they have lost that marginal edge though.

Posted by Mitch on April 27, 2010 at 7:46 AM (PDT)

6

I enjoy Code Monkey’s posts and often agree with them, but this time I have to take issue: The device in question isn’t just a cell phone. It’s pretty clearly a prototype embodying a company’s trade secrets, and (leaving aside the question of whether Apple acted reasonably to protect its trade secrets in this case) any cell phone that was worth at least $5,000 to Gizmodo/Gawker wasn’t an ordinary phone. Further, it’s pretty obvious that when Gizmodo purchased the phone, they had a pretty good idea that it belonged to Apple. To me it looks like the notion that Gizmodo purchased and received stolen goods, as defined under California law, holds more than a few drops of water.

Whether or not the search warrant to seize Jason Chen’s computers was valid is a separate and important question, and I hope this case ultimately clarifies that. I realize the law has many twists and turns, but it’s hard for me to accept, in the words of the Macalope, that “buyung stolen merchandise is fine as long as you write a story about it.”

It may turn out that Gizmodo/Gawker/Denton/Chen didn’t do anything illegal, but I think it’s well worth the California courts’ time to look into this mess.

Posted by orgel in Falls Church, VA on April 27, 2010 at 7:56 AM (PDT)

7

The assumption is that Gizmodo is guilty of knowingly “purchasing” stolen goods, and that is simply not the case. Sure, they believed there was good enough reason to suspect the phone in question was genuine that it was worth a $5,000 bounty, but they also knew they could be dropping $5,000 bucks down the metaphorical toilet when their internal inspection revealed a nicely constructed fake.

People are reconstructing events with perfect hindsight (and convenient partial amnesia). The general consensus prior to Gizmodo “outing” the engineer’s details was it was a fake, then when they “outed” the engineer, the general consensus became that it was a deliberate plant to generate buzz, it was *only* when Apple formerly requested their property back and Gizmodo complied that this prototype took on concrete reality in the minds of most and like 1+1=2, along came the outraged cries, “HOW DARE GIZMODO PURCHASE APPLE’S STOLEN PROPERTY! WAAAH WAAAH WAAAH!!!”

As for trade secrets, pffft… You drop it in a bar it’s not a trade secret any more, deal with it.

Posted by Code Monkey in Midstate New York on April 27, 2010 at 8:10 AM (PDT)

8

^“formally requested…”, not formerly, whoops…

Posted by Code Monkey in Midstate New York on April 27, 2010 at 8:11 AM (PDT)

9

you reap what you sow.

Posted by Petraeus Prime on April 27, 2010 at 10:25 AM (PDT)

10

So Gizmodo was merely hoping to purchase stolen goods? And that makes the purchase okay? Because they were taking a risk? Because they wrote and published a story about it?

As far as outing the Apple engineer, I don’t think that’s very nice of Gizmodo, but I don’t see how it has any relevance at all to the case. My initial reaction was “If that thing is real, then Giz purchased stolen goods.”

I’m just not sure about the trade-secret thing. “Pfft” may turn out to be the right answer, but my understanding is that California law is more favorable to the “secret-holder” than is generally the case elsewhere.

Posted by orgel in Falls Church, VA on April 27, 2010 at 10:25 AM (PDT)

11

Outing the Apple engineer has no bearing on any criminal case (might have bearing in a civil case he might choose to bring against Gizmodo/Gawker), but it was a d*** move and really beyond the pale for anyone posing as a “journalist”.  So, if criminal charges do proceed against Gizmodo, I’ll enjoy a little schadenfreude and figure they have it coming.

Posted by Dyvim on April 27, 2010 at 11:35 AM (PDT)

12

Though i dont like to say it, Gizmodo deserve this though a full blown raid might be going a tad far in my opinion. They should have known what they were getting into before they handed over 5k for the phone, it astounds me how idiotically gizmodo have handled the whole affair.

Posted by Johnathan on April 27, 2010 at 12:39 PM (PDT)

13

@Code Monkey:

Hindsight has nothing to do with the facts. Giz paid $5k for a device that they, if nothing else, hoped would be a genuine iPhone prototype. Otherwise they would have saved the cash. I know that kind of money may not be much in the long run, but there is a thing called “intent” that plays predominantly in the laws of our states and country as a whole. Giz paid $5k with the “intent” of receiving an iPhone prototype. This prototype was not owned by the seller. And they knew that, as stated by there own articles (so that wipes your “knowingly” defense). Therefore he had no right to sell it and Giz had no legal right to purchase it. I am sure Gawker has a team of lawyers at their fingertips. A simple phone call to that legal team would/should have resulted in a “do not touch with a ten foot pole” reply.

I come from a family of journalists and newspaper people. I understand that sometimes you have to weigh the legality of your actions with the merits of the story. Giz stepped outside of the stated laws to get what they knew was a “super scoop” on Apple. They were wrong. They knew they were crossing a line and stepped over regardless. They will now see some consequences.

On the other hand, what could Giz have done for themselves by simply contacting Apple and returning the device? I think it is fair to say that Apple would have been more than grateful. That is a great chit to have in your pocket.

As for the release of the engineers name. This is not a legal issue at this point. It could be a civil matter in the future, but I seriously doubt it. It was just a dirty move by Gizmodo. I realize they were just trying to add validity to the story, but they could have done that without an actual name. As another poster stated, this was a “d*** move”. It may not have hurt them legally, but it hurts them in the court of public opinion. Which, for a tech blog, can cost them substantial readership and advertising dollars. That will ultimately do more damage than any menial legal ramifications they may see.

Posted by Mitch on April 28, 2010 at 5:38 AM (PDT)

14

It seems likely to me that Giz broke the law but I’ll leave that to the police/lawyers to sort.  However, the smarmy, juvenile way that they went about the whole thing is very disappointing.  The whole series reads like it was written by 6 year olds giving each other high fives for egging their reclusive old neighbor’s house.  It’s a non-accomplishment; they didn’t ‘take down’ Apple and the over-inflated sense of self-aggrandizement exemplified by these posts was both unwarranted and distasteful to read.  I visit the site daily, often multiple times, but the presentation of this ‘find’ was just very poorly done and only made infinitely worse by outing the engineer as many others have pointed out.

I find it also interesting that they have blocked all user comments on the stories related to the seizure.  Since user’s comments can have no bearing on the legal case, I wonder if they just don’t want to read the growing chorus of people that disagree with them (their heavy-handed posting approval process notwithstanding).  From what I’ve been reading, the majority of posters feel they are getting what they deserve.  I guess they can dish it out…

Posted by db on April 28, 2010 at 7:59 AM (PDT)

15

As a criminal defense lawyer, and media consultant on criminal law, I have to correct some of the commenters.

First, releasing the engineer’s name isn’t illegal, and Gawker media wasn’t the first to do it. If anything, the guy’s job was saved by having the world know his name - otherwise he’d be just another Apple employee fired for violating the terms of his non-disclosure agreement and the whims of Steve Jobs and his crazy product secrecy schemes.

Second, the phone wasn’t stolen property. Period. It was lost property, which Apple had, to that point, not claimed to be theirs. This despite a couple of attempts to contact Apple. And even then it’s not clear that it belonged to Apple, as opposed to being the personal property of some other corporation or person.

And third, if the phone was legitimately lost in a bar, as opposed to being stolen by someone who knew it to be a legitimate Apple prototype, then no one’s guilty of stealing trade secrets. Period.

By all accounts, at the point Chen and his friends got the phone, it did no more than a Chinese knockoff would do, and it looked similar to other imitation iPhones they’d bought and disassembled. Apple refused to comment about the matter, so the Gawker guys had to disassemble it to be better able to surmise that it was real, and all they could do then was write that they believed it was genuine. Only then did Apple contact them and ask for the return of the property. Which they promptly returned.

Under the facts that we know, the only crime that I can imagine alleging is that Chen and Gawker Media, and/or someone else between the finding of the phone in the bar and the sale to Gawker, knew that Apple legitimately owned it and wanted it back and they refused to return it. No one’s claiming that.

The only way this is a crime is if the person who found the phone knew that it was Apple’s and they wanted it back, which would be tough if there wasn’t ownership information available on the phone, and he decided to sell it to Chen and Gawker Media rather than turning it over to Apple, or he solicited Apple employees and/or contractors to illegally leak trade secrets to him for sale to others. Or some other actual crime. If these possible communications were made via e-mail, there might be evidence of knowledge and intent that might support a case against someone, and even then maybe someone other than Chen. But on what we know now, there’s no crime to prosecute.

Posted by xahtep on April 28, 2010 at 12:46 PM (PDT)

16

#15, if you’re really a criminal defense lawyer—posting anonymously, no less—it should be apparent that there are so many unknown facts right now that rendering any definitive “only if” statements is really premature. Moreover, it looks as though you’re contorting some of the supposedly known information, emphasis on the words “supposedly known” as media accounts and statements from criminal suspects aren’t always reliable.

An example: the “if there wasn’t ownership information available on the phone” thing is a real stretch, given that the engineer’s name was allegedly discovered in the Facebook application a month before the photos of the disassembled iPhone were posted on the Internet. That timeframe appears to follow from the claim that the phone was remotely wiped right after it was discovered to be missing, and was perused not by Gizmodo, but by the finder, who proceeded not to contact the person whose name he discovered on the device. This finder also somehow knew to make a connection between that person and Apple as a company, allegedly going so far as to contact Apple itself regarding the discovery. The finder seemed to believe that the product was Apple’s and the person’s whose name was discovered.

Yet, after discovering that name, the finder allegedly proceeded to offer to sell the device to four publications, one of which paid for it in the belief that it was an unreleased Apple product. To suggest that it was purchased as a $5,000 knockoff strains credulity. The actual determination of each person’s mens rea here is going to be critical, but there shouldn’t be any doubt that the people outside Apple had every reason to believe they were looking at a prototype next-generation iPhone.

Even on the bare allegations listed above, there are potential crimes here. It will indeed be interesting to see whether they’re charged or not.

Posted by Jeremy Horwitz in East Amherst, NY, USA on April 28, 2010 at 2:01 PM (PDT)

17

I’m inclined to agree with Jeremy Horwitz.

From what I’ve read, there’s sufficient indication that the “finder” did know both the name of the phone’s owner and that it was likely an Apple prototype (for one, that’s how he shopped it to Wired and others.)

It’s interesting to note that his attempts at making “reasonable and just efforts to find the owner and to restore the property to him” included solely a couple calls to Apple’s technical support line.

You’d think a reasonable person in possession of the supposed name of the phone’s owner and his connection to Apple might, I dunno,call Apple local office and ask for the man? Or call the Apple campus and let them know you think you have something that belongs to them? Or maybe turn it over to the restaurant/bar’s management (Apple reportedly called several times looking for the device.)

Instead, this guy makes a call to technical support in who knows where and then tries to start a bidding war among tech blogs/magazines.

In short, that phone went from being a lost item to stolen, arguably, the minute the finder walked out with it and certainly the instant he started soliciting bids.

Posted by J Joyce on April 28, 2010 at 7:54 PM (PDT)

18

I still say there is a giant hole in the “they had to know it was stolen property” argument, and it goes all the way back to the school yard: finder’s keepers, losers weepers.

I’m not a lawyer, nor have had reason to familiarize myself intimately with lost property statutes state by state, but the example of California defining stolen property as lost property you don’t turn into the police if you cannot find the owner on your own if it’s worth above a certain dollar threshold does not, at least to me, seem intuitive or right.

In other words, sure, I get that there is a legalistic argument that the prototype qualified as stolen goods (and it had nothing to do with walking out of the bar with it nor trying to sell it), it was merely that the phone is arguably worth more than $500 and the finder did not turn it into the police once his phone calls to Apple bore no fruit (heh).

But that’s a legal definition that is hardly standard (to the best of my knowledge). To my understanding, most states have laws that define how long someone can lay claim to lost property regardless of where it winds up, but I have never heard of a law that transforms lost property into stolen property just because you don’t turn it into the police. Instead, people should turn in lost property because it’s the right thing to do, but no law compels them to do so, and there is some period of time that must pass before they can claim the found property as their own (and should the owner find out about its location during this period, they get to reclaim it, but after the period, tough luck).

Plus, what everyone here seems to be ignoring is the only matter those outside of these little tech blogs are covering at all: whether Gizmodo qualifies as journalism or not. If Gizmodo qualifies as journalism then no matter how distasteful you may find their tactics than, to paraphrase some of my opponents on this matter, yes, the fact they wrote a story about it DOES make it all right.

So, keep on with the pro-Apple, anti-Gizmodo chest thumping, I’ll get my popcorn, and when either no charges are brought or they’re dropped after the journalism challenge, I will be feeling smug(ger than usual wink)

Posted by Code Monkey in Midstate New York on April 29, 2010 at 3:27 AM (PDT)

19

“the fact they wrote a story about it DOES make it all right”

Are you mad? That very statement opens up “journalists” to do anything illegal in pursuit of a story. If the iPhone is stolen property under California law (and many of us see how this is possible, but do not seem to know the exact statute), than Gizmodo is guilty of receiving stolen goods. Period. They paid a bounty of $5k for an item that was legally not the sellers to sell. And based on their own reports, they knew this from early on.

Your twisted logic would open the doors to reporters having a permanent get out of jail free card. If a reporter had to sell drugs to get a story…that is OK? Anderson Cooper had to kill someone so that he could write a story about murder…fine by us? A local student writing for his high school paper steals and hocks his classmates iPods to do a story on personal security and seedy pawn shops…way to go? Just ridiculous! Journalists have the freedom of speech and a limited ability to protect a source. Other than that, they can not trample the law and call it journalistic freedom.

Regardless what your OPINION is, none of us have all the facts. We can not truly say exactly what happened. That is what an investigation and trial are for. And in this case, a judge had enough reason to sign a warrant for the search and seizure of Mr. Chen’s domicile/computers.

And none of this has anything to do with “pro-Apple, anti-Gizmodo chest thumping”. I do not care one way or the other. If the law comes back and says that “lost is lost, sorry Steve”, than so be it. Apple just screwed the pooch. But if this goes the way many of us believe (and that is BELIEVE in the law, not Apple), than Gizmodo should be held accountable. Steve Jobs may have quite a bit of pull in Santa Clara, but he is not a legislator. He can not write a law saying that his “lost” property is magically “stolen” property when he deems it convenient.

Posted by Mitch on April 29, 2010 at 4:28 AM (PDT)

20

“He can not write a law saying that his “lost” property is magically “stolen” property when he deems it convenient.”

And yet, that’s exactly what the law does say. The phone was left by a drunken Apple engineer. It was picked up by a patron who thought it belonged to someone in their party. When it turned out it didn’t, they made a few phone calls to Apple, and when that didn’t work, they offered to let a number of tech magazines/websites have the phone for a bounty.

At what point did that become stolen property, because I must have missed the part where the finder pick pocketed the drunken Apple engineer or broke into the Cupertino offices, stole it, then implanted false memories in the Apple engineer that he drunkenly forgot it at a bar.

Stolen, at least to my non-lawyer way of looking at the world, means it was actually stolen, not transformed into “legally stolen” according to some legislator’s whim. Picking it up off a bar stool at the end of the night isn’t theft under the law. And had the value of the phone been below $500, even holding onto it after trying to return it would not have magically changed it into stolen property under the law. So, where exactly is the theft? Because there’s a law? Whoopee, I am not impressed. Laws are only sometimes correct, more often than not they’re arbitrary and/or tools of oppression/protection on behalf of the powerful elite, as is this law.

* As for your crazy twisting of my words and events, suffice it to say you’re wrong and making more straw men than a scarecrow factory in China. If what Chen did was journalism, then no warrant could be issued on this matter. Without a warrant, they’d have no evidence, and this whole thing would already be over. Besides, he didn’t kill someone, he didn’t steal anything, he didn’t sell drugs (which ought to be legal anyhow), no, he published a story about a phone someone found and paid the finder a bounty. Since I can all but guarantee you they’ll never be able to prove with or without the illegal warrant that the phone itself was sold (Chen & Gizmodo’s turning over the phone immediately upon formal request from Apple without any challenge on their part makes it very hard to argue they believed they’d purchased it outright), at most they’re going to have is a journalist receiving stolen property of indeterminate value, which will hopefully be dropped once all their “evidence” is thrown out.

Plain and simple, this is about powerful corporations using the legal system to intimidate, and anyone who sees it merely as a matter of somebody wrongly receiving stolen property is naive at the least.

When you consider the many, many ways both the finder and Gizmodo could have exploited this find (keeping mum and buying all the AAPL stock you could comes to mind as one much better idea), and the worst thing they did was a non-destructive inspection of the external and internal components and sharing it with the world, it’s going to be a long and convoluted road to prove all the malfeasance being attributed to them.

Posted by Code Monkey in Midstate New York on April 29, 2010 at 6:50 AM (PDT)

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