Unless you’ve been a cave lately, you’re aware that Gizmodo purchased a prototype next-gen iPhone (for a rumored price of $10,000) from someone who purportedly found the phone on the floor of a bar in San Jose or Redwood City, California (depending on which source you believe).
Aside from all of the cool new tech stuffed into the phone, a number of folks have piped up with questions about the legality of what Gizmodo did. Rather than regurgitate Giz’s findings about the prototype phone (which you can read here), I thought I would take a deeper look into some of those questions about the legal issues involved with Gizmodo’s actions and the purported finder of the phone.
Before I jump into these issues, please understand that nothing stated herein should be construed as legal advice, but rather is provided for information purposes only. The actual facts and circumstances under which the phone was discovered are taken at face value, and any minor changes to the facts could greatly affect the outcome of the legal analysis.
So, what are the presumed facts as we’ve been told?
A guy that works at Apple (the “Loser” – because he lost the iPhone and not really because he’s a loser) is testing a prototype of the new iPhone that hasn’t been announced yet. Maybe he drops the iPhone while at a bar and loses it. I’ll forego the conspiracy theories that the phone was planted in a conspicuous location so that it would be found and generate immeasurable press for Apple. So, someone (the “Finder”) finds the phone and discovers that it’s not your average iPhone.
At some point after the Finder finds the iPhone, someone at Apple flips the remote kill switch on the iPhone and it is rendered useless.
The Finder then takes some photos of the iPhone and forwards them along to engadget and Gizmodo. Gizmodo obtains possession of the iPhone from the Finders for a rumored fee of $10,000.
Gizmodo then probes and dismantles the iPhone. Gizmodo publishes its findings on the web.
Lost or Stolen?
The is what courts would call a question of fact. Apple says it was stolen, according to John Gruber. Gizmodo says it was lost.
The proof of whether it was lost or stolen would be determined based on the testimony of the Loser and Finder. This evidence could affect whether the Finder and Gizmodo are subject to civil or criminal action under California law. If stolen, the Finder could be charged with Theft under California Penal Code Section 484 and Gizmodo could subject Receiving Stolen Property under California Penal Code Section 496.
While the charge of Receiving Stolen Property is certainly subject to a defense that the person receiving the property had no knowledge that it was stolen, Gruber’s comments about Gizmodo playing coy seem very relevant in light of Penal Code Section 496, below.
(a) 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.
Cal. Pen. Code § 496 (emphasis added). Also note that a “person” in California includes a business or entity.
But what if it’s lost? A question to whether criminal liability attaches for “lost” property depends on whether the Finder obtained it in a manner constitutes theft (as highlighted above).
Obligations of for the finders of lost property are found in California Civil Code Section 2080, which require that the Finder “shall, within a reasonable time, inform the owner, if known, and make restitution without compensation, except a reasonable charge for saving and taking care of the property.” Cal. Civ. Code § 2080.
So, we can see there is a heavy burden taken on by the person who finds property of another. But how big is that burden? Does it mean they have stolen the property if they don’t seek out the owner to return the property?
Take a look at California Penal Code 485 for an answer to this question:
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.
Cal. Pen. Code § 485 (emphasis added).
Clearly, in this case, the owner is known, or can be presumed, to be Apple. To posit otherwise, based on the circumstances of the find and unveiling of the product, would be a tough argument to make.
Reading California Penal Code 496 in conjunction with California Penal Code 485 seems clear that both the Finder and Gizmodo could end up in some really hot water over the “found” iPhone.
In any event, I believe that Apple has a pretty strong case to “consider[] the unit stolen” as John Gruber puts it.
I’m not point fingers at Gizmodo just because I’ve got a tech blog and want to win the Internet over them (which I’m fully aware ain’t gonna happen). I didn’t know the answer going into this post, but I was asking the question just the same as many of you.
However, after a plain reading of these core statutes dealing with lost property, theft and receiving stolen property, I think that the Finder and Giz could land themselves in pretty hot water over this issue.
I think that the Finder’s criminal liability is pretty open and shut. I think that his/her actions constitute theft under California Penal Code 485. Whether Giz would be liable under California Penal Code 496 for Receiving Stolen Property depends on just how far that the law imputes “knowledge” to Gizmodo’s actions. My gut would be that if Giz really did pay $10k for the “found” phone, that knowledge could be imputed pretty far. I would imagine that there are past cases in California that deal with this issue; however, I haven’t gone to the trouble of digging them up.
The question remains though as to whether Apple would press charges. While the state doesn’t necessarily need a victim of a crime to agree to press charges, that is typically the way that criminal cases proceed – particularly when we are dealing with property crimes. The jury is still out on that question though (pardon the pun).
At the very least, I would expect press invites to be harder to obtain if you’re Giz staff in the near future. Apple has a way of playing hardball in their own right, so who knows what ways Jobs & Co. will come up with the snub the Giz.
