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I agree, that Gizmodo acted wrong and should be punished. They bought stolen goods, period.

The problem is that them hiding behind a shield law isn't totally nuts. What if someone leaked them something that was actually in the public interest--something important for people to know, but that could still be considered a trade secret. We certainly don't want the courts deciding what's "important" news and what isn't, do we? If not then how do we protect one without the other?

We already protect one and not the other. If the seller had only provided Gizmodo with the information they published (photos, teardowns, etc.) instead of the phone itself, Gizmodo probably wouldn't be in any legal trouble and the seller's identity would likely be protected by the shield laws.

Yeah I think they were pretty dumb to disclose all of the details of the story, they should have just taken it apart, taken their pictures, given it back to the seller and washed their hands of it. Telling everyone how they got it, who it came from, how much they paid etc is only going to get them into trouble.

On the other hand, with the police knocking down his door, at least it's totally clear it wasn't a fake

Wasn't that the whole point to disclose this story in such an extent? The drama -and clicks- generated by exposing where the phone came from, how they obtained it, how much they paid, the engineer's full name and all other small details were the reason why this story got so much attention.

No amount of "leaked pictures by an anonymous source" posts could compete with laying down a perfect controversy as Gizmodo did with this story.

Holy crap, Lazlo Nibble..

Been a long time since knowing you on System Exclusive.

They bought stolen goods, period.

Sorry, at which point did the theft occur?

When the guy who found the phone didn't turn the lost phone in at the bar or a police station.

California law says that if you find lost goods and appropriate them for your own use (e.g. selling it to a news site for five grand), it's theft. The proper response would have been to make an honest effort to get ahold of Apple and/or Gray Powell directly (e.g. call the company switchboard), and, failing that, turn it in to the police.

Instead, he sold it for a profit to a company (Gizmodo) who believed that it was real. Misappropriation = theft.

It is interesting that everyone always points to this california law, and the key word thrown around is misappropriation, though, according to wikipedia, misappropriation is meant to mean something like:

"failure to care for property you were entrusted with"

If the phone was returned, in order, to Apple - maybe it was in a contract he signed with Gizmodo, I don't think misappropriation occurred here as the found phone was eventually returned.

I'm not saying that Gizmodo is in perfect legal standing, but if this case wasn't so high profile, it would have already been dropped by now.

> according to wikipedia

I don't mean to sound glib, but I'm fairly certain that wikipedia is not an expert on California legal codes.

Nor are most Hacker News posters. At least Wikipedia cites sources. :)

Very true... but most HN posters at least have some sort of identity that they like to protect. And karma helps too... With wikipedia you can never be sure that someone doesn't have an axe to grind. At least it's usually obvious here. :)

So then... Jason Chen must be the guy who sold the phone to Gizmodo. Correct?

buying stolen goods is a crime

They are trying to find the guy who sold it to Jason Chen. Hence the search warrant not the arrest warrant.

I agree with you. But, although I haven't studied this event all that carefully, there is a difference between corporate espionage or some sort of malicious attempt at blatantly undermining Apple -- and the way Gizmodo presented their story, afaik. Gizmodo almost seemed to poke fun at the weird circumstances of the prototype being left behind (the photos of the bar and all that). Did they reveal any trade secrets about Apple (the phone being turned off remotely and all)? Maybe, perhaps they're at fault for that.

But making fun of a company, satire, should be protected by journalistic rights. Should, for instance, the Daily Show be prosecuted if they go after an interview and someone at the pentagon accidentally reveals classified information? It could be argued that Gizmodo knew the phone had 'fallen off the back of a truck' so to speak -- but their story seemed as much about the falling off of the back of the truck as the item itself.

At what point is there some (perhaps small) burden of responsibility on the people who messed up and lost the prototype? It doesn't seem like complete justice that suddenly Apple gets to come down hard with laws that aren't exactly clearly adjudicated yet. I mean if there were precedent -- if it were clearly known that anytime you come across a prototype, you run the risk of being prosecuted for not returning it to the company immediately, then OK, Gizmodo would be at fault. Maybe there is and I just don't know.

I get the sense that Apple has decided not to fault Gary Powell because that would be sort of a ridiculous move (see Steve Wozniak's thoughts at gizmodo). But that doesn't necessarily give them the right to take out their frustrations on Gizmodo. An engineer made a mistake. If anything, it's added publicity. Move on.

They'd probably be mostly OK if they had just shown the exterior of the thing - it (or something very similar) has appeared in photographs on the internet before, I believe.

But the teardown showing the internals? That's got to be of significant interest to competing manufacturers.

I see, good point. Yeah, I didn't see the article where they profiled the phone like it had been released.

I'd be shocked if there was not precedent dealing with exactly this kind of stuff. This is hardly the first time a person in the press has paid for the inside scoop on a trade secret. Ignorance of the case law does not make a person (or corporation) innocent.

Actually, if somebody interviewed by the Daily Show "accidentally" dropped some classified info for $5k, I'm pretty sure the Daily Show would be held culpable.

> trigger any thoughts about trade secrets

What? I don't think not returning the device immediately when Apple asked for it was right, but Gizmodo aren't obligated to protect Apple's trade secrets. Nobody is but Apple. Do you want every rumor site to be shut down?

Arguably they are, under the Uniform trade Secrets Act (which is CA law):

"... (b) Misappropriation" means: ... (2) Disclosure or use of a trade secret of another without express or implied consent by a person who: ... (C) Before a material change of his or her position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.

In detail - http://news.ycombinator.com/item?id=1286907

Interesting & upmodded. I didn't know that knowledge acquired by accident was protected from disclosure by those to whom the info has been revealed. Consider me educated.

I find it pretty despicable they made no honest attempt to get the prototype back to Apple. Until they posted actual information they could've returned it to Apple and I'm sure Apple would've reimbursed them the $5K for the phone and possibly given them future preference for the good deed.

This is "Finder's keepers, loser's weepers" hiding behind freedom of press. It isn't by any means in the territory of whistle blowing. And you certainly don't have to steal in order to post an opinion. Suppose I find someone's credit card and I want to laugh at the silliness of the design on the card, do I really need to post pictures of the card along with the 16 digit number, expiration date, and security number before giving it back to them and hiding behind "Freedom of the Press"?

> I find it pretty despicable they made no honest attempt to get the prototype back to Apple.

Apparently they did, and were ignored. Nobody has come up with anything that refutes this so far.

I look at it as: someone made an innocent mistake losing a phone, someone found a phone and called a company, Apple's bureaucracy fucked up and didn't respond as soon as it should have.

Wonder if sjobs@apple.com with attached pictures would've worked. An honest effort isn't "Oh, we called and employee # 1034434393 was clueless." It's on par with a lost wallet. They had all the information.

Unless you diligently read "the letters from steve jobs", you probably wouldn't even know he answers emails.

Though, I upvote you, because all this time, I thought it was steve.jobs@apple.com :/

Googling for "Steve Jobs email" turns up a huge number of references.

My memory could be off but wasn't it the guy who found the device and sold it to Apple that supposedly made the effort to return it?

> sold it to Apple

Did you mean Gizmodo? Or am I completely out of the loop on this one?

nope… you're right. I mistyped that.

If that were true, then how did they so easily contact the guy who lost it and out him after the original post detailing the phone? Conceivably they could have called him before they printed the story about him.

"Apparently they did"

Nope. He had Gray Powell's information but didn't contact him. He took it from the bar and then didn't check back, despite that being the obvious first place it would be looked for. He didn't take it to the police, despite that being both common sense and the law.

Instead, he claims he tried calling a public apple number or two and then sold it.

From what I've been told it was Gizmodo who pieced together Gray Powells identity. The finder knew part of the info, Gizmodo did some detective work to find the rest.

Again, I'm not quite sure the californian police care items left by drunk people in public places.

How do trade secrets even enter into this? They're planning on selling these phones all over the world. How could just possession of one be regarded as violating trade secrets?

Because in hardware IP travels with the machine. Opening one, potentially reverse-engineering it, or even just looking at it revealed quite a bit of information (for exemple the famous forward-facing camera, that we were waiting for on the 3GS last year), which were trade secrets of Apple until they were publicly revealed by Gizmodo. That's clearly against the law.

It's a trade secret until Apple announces it. Obviously business plans become public eventually, the secret portion is before it becomes public.

I kind of agree. The trade secrets would be, (maybe) the design (which was leaked by Engadget a day earlier), and the added features (a front facing camera??).

Maybe the California DA didn't know the next iPhone had a front-facing camera, but anyone who would have read the Gizmodo story probably did.

Plus, Gruber told us: http://daringfireball.net/linked/2010/03/29/wsj

"And learn that 'checkbook journalism' just flat-out doesn't count. Even when they're paying people for interviews, instead of buying hot goods."

Why is this?

'inducing a misappropriation of trade secrets' - see reprint at http://gawker.com/5448177/update-apple-wins-the-first-prize-...

I think he was mostly referring to 'Even when they're paying people for interviews, instead of buying hot goods' with his question. That escapes the bounds of the current news item and makes a blanket statement about general practices. 'Paying for interviews' is can't easily be grouped in with 'inducing a misappropriation of trade secrets' without really broadening the net that you're casting.

True. I was referring to the specific context of pay as an inducement to break confidentiality agreements, as opposed to paying to interview a famous actor or something like People magazine.

So what about photos of a new car prototypes? There are a bunch of magazines devoted to those.

Or reviews of to-be-released movies?

Or photos of celebs in public?

Not terribly happy about companies using the Police to break down doors to manage their PR.

If Car & Driver bought a Ferrari prototype from someone who clearly wasn't its legal owner, then ran a big front-page teardown story on the car with a snarky sidebar about how stupid it was for Ferrari to "lose" it, do you really think the resulting police raid would just be "Ferrari managing their PR"?

Car makers disguise their field test prototypes with bras, dazzle paint, fake body panels, etc.

http://www.carandsuv.co.nz/wp-content/uploads/2009/12/Vauxha...

...just like Apple did with the Fake 3G skin.

reviews to-be-released movies

well might you ask. In this case, an unreleased movie made its way through a longer chain of people, eventually ending up on bittorrent...for which the uploader did ~5 months in jail and >1 year of supervised release: http://www.justice.gov/criminal/cybercrime/valenteCharge.htm

Not an identical situation, of course...but not so very different either. Apparently the sentence was reasonably light on the basis that there was no profit involved. Adding $ into the equation usually changes things for the worse in a case like this.

I don't think a celeb in public would fall within the gambit of trade secret protection, unless you mean the latest lactic surgery technique the celeb sports.