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Police Seize Computers Over Next Generation iPhone Prototype

     

engine

11:55 am on Apr 27, 2010 (gmt 0)

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Police Sieze Computers Over Next Generation iPhone Prototype [news.bbc.co.uk]
Police in California have seized computers belonging to the editor of a gadget blog which was involved in the purchase of an iPhone prototype.

Gizmodo had admitted it paid $5,000 to an unnamed individual for the next generation device, which was reportedly left in a bar by an Apple employee.

Editor Jason Chen published photographs and videos of the phone last week.

Gizmodo may have violated a California law covering the appropriation of stolen property for personal benefit.

BillyS

12:22 pm on Apr 27, 2010 (gmt 0)

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Looks like Apple is out for blood. I'm sure they'll have no problem crushing this guy.

StoutFiles

12:33 pm on Apr 27, 2010 (gmt 0)

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Gizmodo may have violated a California law covering the appropriation of stolen property for personal benefit.


"May have"? This guy is screwed if Apple goes all out on him.

timster

12:41 pm on Apr 27, 2010 (gmt 0)

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Receiving stolen property is going to be a crime just about wherever you go, whether it's Apple's phone or anyone else's. I don't know what that guy was thinking; the First Amendment doesn't exempt you from property laws.

iThink

12:51 pm on Apr 27, 2010 (gmt 0)

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Looks like Apple is out for blood.


They sure are.

Apple's quest for secrecy has already costed a life. An employee of Apple's contract manufacturer in China committed suicide last year after he was harassed over a missing prototype of this same 4th generation iPhone.

[online.wsj.com...]

This Gizmodo guy must thank his stars because he is still alive.

BillyS

1:28 pm on Apr 27, 2010 (gmt 0)

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It's an interesting read about how the phone was lost. It looks like an engineer celebrating his birthday was out drinking.

I'm sure by now Apple has destroyed the tape recording of the conversation that took place when someone called Apple to return the bricked phone.

If this was big, bad Microsoft, I think the story would be closer to Bully Crushes Little Guy.

StoutFiles

1:42 pm on Apr 27, 2010 (gmt 0)

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It looks like an engineer celebrating his birthday was out drinking.


Probably the only reason he wasn't fired is because his name was released and it'd be a big PR hit to fire him now based on a mistake he made. I assume they'll quietly deal with him later on.

Apple's quest for secrecy has already costed a life.


Apple had nothing to do with someone's own choice to end their life.

whoisgregg

2:14 pm on Apr 27, 2010 (gmt 0)

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I'm sure by now Apple has destroyed the tape recording of the conversation that took place when someone called Apple to return the bricked phone.

Since it was Apple who contacted the police regarding this alleged theft and evidence of such a call would appear on the caller's phone records, I truly doubt that Apple would destroy the evidence on their end.

johnser

2:18 pm on Apr 27, 2010 (gmt 0)

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If I found a new gadget on the street, took some pics of it, and posted it on my blog, would that be "theft"?

If I then sold it to someone (not being able to trace the owner), are they receiving stolen goods?

No doubt I'll be proven wrong by the lawyers in the house but no judge in my non-US jurisdiction would classify above as "theft"

"left in a bar" does not equal "theft" - regardless of what Apple claim. Or are there some facts I'm missing?

Jaafar

2:29 pm on Apr 27, 2010 (gmt 0)

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I agree johnser.

Receiving stolen property is going to be a crime just about wherever you go, whether it's Apple's phone or anyone else's. I don't know what that guy was thinking; the First Amendment doesn't exempt you from property laws.


Stolen? AFAIK, the prototype has not been stolen but lost. For Apple to reclaim it, they have to prove that the phone belongs to them in no uncertain terms.

Demaestro

2:32 pm on Apr 27, 2010 (gmt 0)

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Someone lost the phone, so when was it stolen?

Apple claimed the property as theirs and asked that it be returned and Giz returned the property.

So if I have this straight, I lost my phone in a bar, someone can find it and hand it over to someone else. I contact that person and ask for my phone and they give it to me, then I charge them with theft.... huh?

I remember the day when if you lost something in a bar and it got returned to you... you said thank you.

mcavic

2:36 pm on Apr 27, 2010 (gmt 0)

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"left in a bar" does not equal "theft"

If he had taken it and kept it for his own personal use, he might be able to make a "finders keepers" argument. But the problem is that he sold it for $5,000. The only person who would pay that amount is someone with the intention of extracting Apple's secrets from it.

That being said, the phone never should have been in the bar in the first place.

StoutFiles

2:48 pm on Apr 27, 2010 (gmt 0)

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When they took apart the phone, they chose NOT to take off the casings that would show the juicy information like the processor being used. Why? Because they needed to be able to rebuild the phone and return it to Apple. They knew from Day 1 it was Apple's phone and chose to profit off the classified information while still being able to give back Apple a working phone hoping that would absolve them from any legal problems. Yeah, not so much.

Also, this depends on your definition of "stolen". If I go to a bar, find a phone there, not try to locate the owner or give it to the staff there should the owner return, and then try to sell it...yeah, I would call that stealing. Do you all agree you would not be happy if you walked away from your phone for 10 minutes and someone called "finders keepers"?

wheel

3:24 pm on Apr 27, 2010 (gmt 0)

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Note that the person that found the phone is NOT the person who the police/apple are going ape on.

Guy loses phone in bar. Another guy picks it up. Tech blog buys the phone - and immediately tries twice to contact apple to return it. While they have the phone (since apple ignored their repeated requests to return it) they did a blog post.

When word leaks out, Apple asks for the phone back. The blogger immediately returns it.

If you think this is about theft, you're way off base. This is Apple playing heavy with a blogger who leaked info they didn't like. If you think it's about 'theft' they should go after they guy in the bar who picked it up. But they're going after the blogger. This is about the blog post, not theft.


The blogger tried to return the phone twice - and when Apple finally agreed to accept it back, the blogger immediately returned it. How's that 'theft' by anything other than a big stretch? And why does apple care about the theft - they've got their phone back? The answer of course, is that it's not about theft. It's about the blog post. And Apple's just using nasty tactics to preserve their secrecy - after the cat's out of the bag.

Bad apple.

Eurydice

3:32 pm on Apr 27, 2010 (gmt 0)

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No, it's not "finders keepers". In nearly every developed country, laws protect the owner: if you find something, you are morally obligated to return it. Gizmodo didn't merely return it: they opened up a prototype and released all of the details.

The search warrant is just step one. Apple will press for criminal charges. Chen is very likely facing jail.

Step two: The finder will be identified (that was the point of the search warrants.) He too will be arrested and faces jail time. He'd better save his $5,000 for legal fees.

Step three: Civil charges against Chen. Apple will sue him for damages. If Apple gets a successful criminal conviction, Apple can sue him in civil court.

Step four: A lawsuit against Gizmodo. This is an iPhone, with sales in the hundreds of millions of dollars. So the lawsuit could easily ask for $50-100m in damages. It'll never go to trial; Apple will sue and Gawker will settle: turn over their assets and shut down.

Gawker and Gizmodo are dead.

Steve Jobs is an Old Testament God. Scorched earth. Plow the fields and sow it with salt. Put them all to the sword. Rain fire and brimstone on their heads.

Philosopher

3:43 pm on Apr 27, 2010 (gmt 0)

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The investigation has already been put on hold as there is a very real possibility that the warrant was illegal as stated by lawyers from both Gawker Media, the parent company of Gizmodo and lawyers from the EFF (Electronic Frontier Foundation).

incrediBILL

3:45 pm on Apr 27, 2010 (gmt 0)

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It's possible a judge might throw it out simply because it was lost.

However, the guy that found it did fence it like stolen property for $5K, yet the new owner immediately returned it upon request.

The question in my mind is whether Gizmodo would get nailed for corporate espionage, not theft, since they knew the value of the device, paid for the device, then publicly reverse engineered it for all their competitors to see.

The upside here is Apple got a massive amount of free press, you just can't pay for this stuff.

The downside is Apple is now going to get a massive amount of bad press by persecuting an iFan and additionally, we now know the new Android releases [webmasterworld.com] this summer will technically surpass this new iPhone.

Lastly, since when did a reported committing an actual crime to obtain information get to wrap themselves in the first amendment?

If that were the case reporters could just run amok breaking into cars and houses just to have something to write about so stop hiding, you paid a fence for the goods and deliberately set out to damage Apple, intent is everything.

[edited by: incrediBILL at 3:48 pm (utc) on Apr 27, 2010]

mcavic

3:45 pm on Apr 27, 2010 (gmt 0)

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If you think this is about theft, you're way off base. This is Apple playing heavy with a blogger who leaked info they didn't like.

Absolutely, it's about theft of intellectual property, which is potentially a more serious crime than theft of physical property.

A while back there was a case where a Coke employee sold secrets to Pepsi, or vice-versa. The judge threw the book at her, saying that that kind of treachery is absolutely not acceptable. This isn't quite the same case, but it demonstrates how serious corporate secrecy is.

[edited by: mcavic at 3:46 pm (utc) on Apr 27, 2010]

IanKelley

3:46 pm on Apr 27, 2010 (gmt 0)

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Bad apple.


Agreed, if I know WW, wheel's post above is going to get skimmed over and people will continue talking about how this guy is screwed and deserves it.

Having read the blog entry when it was first posted I believe that they did try to return the phone. In which case I don't see how you could consider it theft.

Apple is a PR nightmare lately. They should have given the guy a great big check for the free advertising and left it at that. The blog entry didn't give away anything important, it was just enough to get iPhone fans excited, and even if it had, they have only themselves and their employee to blame.

StoutFiles

3:51 pm on Apr 27, 2010 (gmt 0)

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I remember the day when if you lost something in a bar and it got returned to you... you said thank you.


What if your phone had classified work information in it that was shown to everyone on the internet as a front page news story? Then returned to you...you'd say thank you? Apple doesn't care about the stupid phone being returned, they care about the public and other companies knowing the details of their phone before they were ready to display it. I will be less excited when the iPhone releases now...I already know half the details about it.

They're going to make a public example of Chen so other people don't repeat this with future Apple products. This could have been worse then it was. When Chen gets the wrath of Apple people will think twice about releasing Apple business secrets.

The upside here is Apple got a massive amount of free press, you just can't pay for this stuff.


Apple could easily hand over their phone to any tech site on their own terms and get massive amounts of free press. Half the press was about Apple looking stupid for letting their employees go drinking with one of their most important products.

There won't be any negative PR for going after Chen...he showed off company secrets for financial gain. He had to know he was rolling the dice with that information.

[edited by: StoutFiles at 4:02 pm (utc) on Apr 27, 2010]

g1smd

3:56 pm on Apr 27, 2010 (gmt 0)

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If Apple had supplied the blogger with a phone and the blogger signed an NDA, then Apple would have a case.

In this case, however, it is Apple (or at least an employee) that *lost* the unit. In this case the blogger is entitled to write whatever they like about the unit, in much the same way they might discuss the contents of some sandwiches also left on the table in that bar.

On another note, has anyone seen a UA string in their server logs that might identify any of these units on test?


Coke employee


Key word: Employee. In the Apple case, the person is NOT an employee.

Demaestro

4:01 pm on Apr 27, 2010 (gmt 0)

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What if your phone had classified work information in it that was shown to everyone on the internet as a front page news story? Then returned to you...you'd say thank you?


One companies classified is just another person's new story. Since when does a freelance journalist have to oblige a company's policy or secrets?

Going with your logic a reporter should be arrested for theft and receiving stolen goods if they open and report that tobacco companies knew that cigarettes are bad for you and cause cancer but hid it, using leaked internal memos and documents.

That is not a place I want to live.

A while back there was a case where a Coke employee sold secrets to Pepsi, or vice-versa.


Selling secrets to competition for internal use is miles apart from selling it to a reporter who does a PUBLIC story on it.

BillyS

4:14 pm on Apr 27, 2010 (gmt 0)

WebmasterWorld Senior Member billys is a WebmasterWorld Top Contributor of All Time 10+ Year Member



Absolutely, it's about theft of intellectual property, which is a more serious crime than theft of physical property.

Huh? Aren't they going to sell the phone to people?
The phone has a better screen and camera - was that completely unexpected? Are Apple's competitors going to change their plans based on that secret?

gmac17

4:23 pm on Apr 27, 2010 (gmt 0)

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It is certainly an interesting turn to the story, and one that short term may bring plenty of press to Apple but one that long term pushes them closer to being a "big greedy company" in the eyes of consumers.

Imagine if this was MSFT and the seattle police had raided the offices of some blogger. I'm pretty sure a lot of people would not be defending them like they are apple.

StoutFiles

4:23 pm on Apr 27, 2010 (gmt 0)

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Huh? Aren't they going to sell the phone to people?
The phone has a better screen and camera - was that completely unexpected? Are Apples competitors going to change their plans based on that secret?


It's about setting an example. Gizmodo profited from the release of Apple's company secrets. What's to stop people from trying this in the future? "People, if you get your hands on an Apple product, people will pay a high price for it! Websites, if you show off an unreleased Apple product, tons of news sites will link to you and you'll bank off of it!"

They're just looking for any excuse to make an example of Chen.

LifeinAsia

4:32 pm on Apr 27, 2010 (gmt 0)

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I have trouble calling the phone stolen. If someone broke into Apple HQ and physically stole the prototype, yes, I would consider that theft. If someone lifted the phone out of the guy's jacket, yes, I would consider that theft. But picking up an abandoned phone in a bar? Hard to call it theft. Especially after (apparently) trying to return it.

"People, if you get your hands on an Apple product, people will pay a high price for it! Websites, if you show off an unreleased Apple product, tons of news sites will link to you and you'll bank off of it!"
Replace "Apple product" with any famous person and you have the paparazzi creed. It's not an exact analogy, but pretty close.

StoutFiles

4:39 pm on Apr 27, 2010 (gmt 0)

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Especially after (apparently) trying to return it.


So Gizmodo paid 5,000 dollars for the phone with the intention of returning it without making a profit off it?

Zamboni

4:46 pm on Apr 27, 2010 (gmt 0)

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The most interesting part of the case could be whether bloggers are considered Journalists for shield law protection and what is a Journalist? Am I a Journalist for posting this message?


The investigation has already been put on hold as there is a very real possibility that the warrant was illegal as stated by lawyers from both Gawker Media, the parent company of Gizmodo and lawyers from the EFF (Electronic Frontier Foundation).

IanKelley

4:59 pm on Apr 27, 2010 (gmt 0)

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What if your phone had classified work information in it that was shown to everyone on the internet as a front page news story?


After they had called and tried to return it?

So Gizmodo paid 5,000 dollars for the phone with the intention of returning it without making a profit off it?


I predict the calls did in fact happen, and there are records.

Of course the call system, and general lack of personal investment by employees, at large corporations pretty much guarantees they got snubbed. Personally I'd enjoy the irony.

Demaestro

5:15 pm on Apr 27, 2010 (gmt 0)

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It's about setting an example. Gizmodo profited from the release of Apple's company secrets. What's to stop people from trying this in the future?


Newspapers and reporters profited from the release of tobacco companies' secrets. They received leaked internal memos and published them.

You want them arrested? You want them stopped? Do you honestly believe that reporting a company secret equals theft? Honestly?

You want companies arresting reporters for reporting and *gasp* profiting from reporting company secrets? You think this is good?

That is some seriously scary stuff.
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