Earlier this week I discussed the circumstances surrounding Gizmodo paying $5,000 for a prototype of a next generation iPhone that was lost in a bar. As I noted in my earlier post, most of the Gizmodo articles say that the iPhone was “lost,” but after Apple sent Gizmodo a formal demand for the return of the iPhone, Gizmodo’s Brian Lam said to Apple: “Just so you
know, we didn’t know this was stolen when we bought it.”
Stolen? I don’t practice law in California, but (non-attorney) John Gruber said on a podcast this week that he believes that this iPhone is “stolen” under California law, citing California Penal Code Section 485. That provision states:
One who finds lost property under circumstances which give him knowledge of or means of inquiry as to the true owner, and who appropriates such property to his own use, or to the use of another person not entitled thereto, without first making reasonable and just efforts to find the owner and to restore the property to him, is guilty of theft.
You can imagine the argument that the person who found this iPhone in a bar knew who the true owner was and, by deciding to sell it for $5,000, appropriated the property without first making “reasonable and just efforts” to return the iPhone and, therefore, is guilty of theft.
What about Gizmodo? Well, take a look at California Penal Code Section 496(a), which provides in part:
Every person who buys or receives any property that has been stolen or that has been obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, or aids in concealing, selling, or withholding any property from the owner, knowing the property to be so stolen or obtained, shall be punished by imprisonment in a state prison, or in a county jail for not more than one year.
If the person who obtained the iPhone in the bar is guilty of violating § 485, then that means that the iPhone was “obtained in any manner constituting theft.” Gizmodo bought that property for $5,000, so it would seem that it could be found guilty under § 496(a) … if Gizmodo knew the property “to be so stolen or obtained”.
Did Gizmodo know that the prototype iPhone was stolen? Gizmodo says that it learned that this iPhone was really an Apple product once it opened up the iPhone, but didn’t learn that the owner was an Apple employee until the afternoon of Monday, April 19, 2010. Here is what Gizmodo currently says on its website, and note that much of this language — I believe the part that Gizmodo is now placing in italics — was added or changed in this post after it first went up on the Gizmodo website at 8:10 p.m. on the 19th:
Gizmodo got it for $5,000 in cash. At the time, we didn’t know if it
was the real thing or not. It didn’t even get past the Apple logo screen.
Once we saw it inside and out, however, there was no doubt about it. It
was the real thing, so we started to work on documenting it before
returning it to Apple. We had the phone, but we didn’t know the owner.
Later, we learnt about this story, but we didn’t know for sure it was [the Apple employee]’s phone until today, when we contacted him via his phone.
Gizmodo talked to Apple on Monday afternoon, so it appears that Gizmodo is taking the position that it didn’t “know” that this iPhone was stolen from an Apple employee until the afternoon of April 19th, and soon after that Gizmodo talked to Apple and made plans to return the iPhone. But if Gizmodo learned days earlier, when it took apart the iPhone, that it was a real Apple device, and depending upon what Gizmodo was told before it paid $5,000 for the device in the first place, you can imagine the argument that Gizmodo had the requisite knowledge before April 19th.
So did the person who found the iPhone in the bar break the law? Did Gizmodo break the law? I don’t know, and none of us can know, without knowing all of the facts. Indeed, the only facts that we have at this point are the facts
disclosed by Gizmodo on its website, and as noted above, Gizmodo has at
least once updated its post to change or add different facts.
Presumably there is another side to this story, and we are not hearing
it. Moreover, I don’t even know the law because I don’t practice criminal law in California. There may be other applicable statutes that I am not considering. If any California lawyers see something that I am missing, please let me know and I will update this post.
Apple now has the iPhone back in its possession. Jason Chen of Gizmodo revealed on the Adam Carolla podcast that someone from Apple legal — perhaps Bruce Sewell himself? — came to Chen’s house on Monday night and picked it up. Even if the law was broken, we don’t know whether Apple would press charges or pursue any civil remedies. I can envision Apple deciding that it doesn’t make sense to go after a journalist, even though paying for stolen property may be different from a journalist paying for information or photographs.
If you want additional perspectives on all of this, be sure to check out this post on Technovia by Ian Betteridge and this post by John Gruber on Daring Fireball. Neither are attorneys, but both seem to have a good handle on the legal issues, and Gruber has some unique insights on the facts.
[UPDATE 4/24/10: CNET reports that local police are investigating to determine whether a crime was committed.]
[UPDATE 4/26/10: Gizmodo reports that on Friday, April 23, police seized the computers at the home of Gizmodo editor Jason Chen, the person who obtained the “lost” prototype iPhone for Gizmodo after the company paid $5,000 for it. Gizmodo reports that it wants to invoke the Journalist Shield Law. John Gruber’s commentary on this is: “Journalist
shield laws are about journalists being able to protect sources who
may have committed crimes. They’re not a license for journalists to
commit crimes themselves. Gawker is making an argument that is beside
the point. They’re arguing, ‘Hey,
bloggers are journalists.’ The state of California is arguing ‘Hey, you
committed a felony.'”]
Let’s see if Gizmodo will be liveblogging the next Apple event…