I could start this post, “So a guy walked into a bar.” But, in this case, the real story began when that guy walked out of the bar — and left a top-secret prototype of Apple’s next-generation iPhone behind.
The Apple software engineer, identified as Gray Powell by the technology blogging website Gizmodo.com, had been testing the new phone, carrying it around in a case that kept it disguised as a standard iPhone 3GS. On March 18, while celebrating his birthday at a beer garden, Powell reportedly used the phone to update his Facebook page, and then left it on a bar stool.
According to Gizmodo’s account, several beer-garden patrons debated whose phone it was before eventually coming to the conclusion that its owner must have already left. The person who ended up with the phone saw that there was a Facebook account open, providing him with the owner’s name. He figured he’d get around to returning the phone the next day.
But, by the next day, the phone had been remotely shut off, the display reduced to a blank screen. In the light of day, the phone looked a bit funny. After a bit of prodding, the case popped off, revealing the phone’s true identity.
That’s when the person who had brought home the phone called Apple. The customer service representatives he spoke with had not been told about the missing prototype and dismissed his story. Eventually, the phone was sold to Gizmodo, which is owned by Gawker Media LLC, for $5,000. Although the phone’s software was disabled, Gizmodo dissected the device and posted pictures of its insides, along with conjecture about how the differences in hardware might translate into functional changes from earlier models.
Gizmodo had plenty of evidence that the phone had come from Apple, including the fact that it had the word Apple written on it in three separate places. But the site had no definite proof of the phone’s authenticity until Apple sent a letter asking for it back. Brian Lam, the site’s editorial director, immediately put Apple in touch with the editor who had the phone to arrange a hand-off.
If the story had ended there, its lesson would have been simple: Don’t carry a top-secret next-generation iPhone with you when you head out drinking. But the story didn’t there, and the rest of the tale is much more disturbing.
Four days after Apple recovered the phone from Gizmodo editor Jason Chen, Chen’s home was ransacked by police. Members of the Rapid Enforcement Allied Computer Team (REACT) task force broke down Chen’s door and seized several computers, hard drives and documents, allegedly looking for evidence about the “theft” of the prototype.
But according to Gizmodo’s version of the story, with its substantial documentation, there never was any theft. Under California law, a person who takes charge of lost property must inform the owner within a reasonable period of time, if the owner is known. But, until Gizmodo received Apple’s letter, it could not be certain that the phone belonged to Apple. Lam promptly made arrangements for the phone’s return once Apple claimed it. Prior to receiving the letter from Apple, Gizmodo had contacted Gray Powell to inform him that they had the device. This is not the way thieves generally operate.
If it was not even clear that a crime had occurred, why did police obtain a search warrant and enter a private citizen’s home? And how did they convince a judge to sign that warrant?
An article in The Los Angeles Times reported that, even before this incident, there were doubts about the independence of police units, like REACT, which investigate high technology crimes. These units often rely on large technology companies for equipment, training, and even, in some cases, funding. In one example mentioned by the newspaper, Intel Corp. made a $100,000 donation to the police department of Hillsboro, Ore. The donation was used to pay the full annual salary of one of the officers on the seven-person computer crimes team.
Steve Meister, a former Los Angeles County deputy district attorney called REACT “the iPolice.” He commented, “This whole thing appears, rightly or wrongly, to be law enforcement doing the bidding of a private company.”
Meister’s “iPolice” nickname almost sounds hip and cool. An old coot like me would come up with something harsher, like the iPhone Gestapo.
While law enforcement may not have had much justification for entering Chen’s home, Apple certainly had plenty of reasons why it might have wanted that house turned upside down. The company is clearly not happy about the leak, which may lead other companies to copy aspects of its new design. The fact that Apple has not yet sued Gizmodo is probably all the evidence we need to know that the company has no legal basis for challenging the website. After all, there is no law stopping anyone from photographing and distributing pictures of things found lying around in bars. Gizmodo had not entered into any sort of confidentiality agreement with Apple.
It seems reasonable to infer that Apple convinced REACT to ransack Chen’s house to ensure that Chen would not publish any further information about the new iPhone. It’s hard to publish anything when your computers and hard drives are all in police custody.
Gizmodo is challenging the search warrant, claiming that Chen is covered by California’s shield laws, which protect journalists from having their notes seized. In a letter to law enforcement, Gaby Berbyshire, Chief Operating Officer of Gawker Media, cited section 1524(g) of the California Penal Code. The law states that “a publisher, editor, reporter, or other person connected with or employed upon a newspaper, magazine or other periodical publication, or by a press association or wire service” need not disclose information “obtained or prepared in gathering, receiving or processing of information for communication to the public.”
Law enforcement may contend that Chen is not protected by shield laws because Gizmodo is a blogging site, rather than a traditional “periodical publication.” As I wrote last October, this question of whether bloggers are “journalists” simply underlines the basic problem with shield laws. The constitution provides no basis for creating a specific class of people, such as journalists, whose rights are given greater protection than the rights of others. All individuals who want to expose corruption in the government, or to give eager technology aficionados a sneak peek at a new product, should have equal rights to do so, whether they plan to publish their findings in The New York Times or on a Facebook page.
But in Chen’s case, no special journalists-only protections should have been needed. The ordinary rights of an ordinary citizen ought to have sufficed to stop police from raiding the home of a man accused of maybe having had something to do with something that, from all outward appearances, was not criminal in the first place.
It is, of course, possible that Gizmodo’s account is a self-serving fiction, fabricating everything from the bar scene to phone’s amiable return. Perhaps Chen is a mountain climber in his spare time and scaled Apple’s walls to grab the phone, dodging motion detectors and security cameras. But it seems more likely that police were goaded into serving the interests of a powerful company at the expense of a private citizen’s personal rights.
I hope the courts impose sanctions if the search warrant was fraudulently issued. That might help teach law enforcement officers to consider the self-interest of complainants to avoid being manipulated into violating the rights of law-abiding citizens.
And I hope Apple learns to take better care of its stuff.
Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book,
Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book
The High Achiever’s Guide To Wealth.
Posted by Larry M. Elkin, CPA, CFP®
I could start this post, “So a guy walked into a bar.” But, in this case, the real story began when that guy walked out of the bar — and left a top-secret prototype of Apple’s next-generation iPhone behind.
The Apple software engineer, identified as Gray Powell by the technology blogging website Gizmodo.com, had been testing the new phone, carrying it around in a case that kept it disguised as a standard iPhone 3GS. On March 18, while celebrating his birthday at a beer garden, Powell reportedly used the phone to update his Facebook page, and then left it on a bar stool.
According to Gizmodo’s account, several beer-garden patrons debated whose phone it was before eventually coming to the conclusion that its owner must have already left. The person who ended up with the phone saw that there was a Facebook account open, providing him with the owner’s name. He figured he’d get around to returning the phone the next day.
But, by the next day, the phone had been remotely shut off, the display reduced to a blank screen. In the light of day, the phone looked a bit funny. After a bit of prodding, the case popped off, revealing the phone’s true identity.
That’s when the person who had brought home the phone called Apple. The customer service representatives he spoke with had not been told about the missing prototype and dismissed his story. Eventually, the phone was sold to Gizmodo, which is owned by Gawker Media LLC, for $5,000. Although the phone’s software was disabled, Gizmodo dissected the device and posted pictures of its insides, along with conjecture about how the differences in hardware might translate into functional changes from earlier models.
Gizmodo had plenty of evidence that the phone had come from Apple, including the fact that it had the word Apple written on it in three separate places. But the site had no definite proof of the phone’s authenticity until Apple sent a letter asking for it back. Brian Lam, the site’s editorial director, immediately put Apple in touch with the editor who had the phone to arrange a hand-off.
If the story had ended there, its lesson would have been simple: Don’t carry a top-secret next-generation iPhone with you when you head out drinking. But the story didn’t there, and the rest of the tale is much more disturbing.
Four days after Apple recovered the phone from Gizmodo editor Jason Chen, Chen’s home was ransacked by police. Members of the Rapid Enforcement Allied Computer Team (REACT) task force broke down Chen’s door and seized several computers, hard drives and documents, allegedly looking for evidence about the “theft” of the prototype.
But according to Gizmodo’s version of the story, with its substantial documentation, there never was any theft. Under California law, a person who takes charge of lost property must inform the owner within a reasonable period of time, if the owner is known. But, until Gizmodo received Apple’s letter, it could not be certain that the phone belonged to Apple. Lam promptly made arrangements for the phone’s return once Apple claimed it. Prior to receiving the letter from Apple, Gizmodo had contacted Gray Powell to inform him that they had the device. This is not the way thieves generally operate.
If it was not even clear that a crime had occurred, why did police obtain a search warrant and enter a private citizen’s home? And how did they convince a judge to sign that warrant?
An article in The Los Angeles Times reported that, even before this incident, there were doubts about the independence of police units, like REACT, which investigate high technology crimes. These units often rely on large technology companies for equipment, training, and even, in some cases, funding. In one example mentioned by the newspaper, Intel Corp. made a $100,000 donation to the police department of Hillsboro, Ore. The donation was used to pay the full annual salary of one of the officers on the seven-person computer crimes team.
Steve Meister, a former Los Angeles County deputy district attorney called REACT “the iPolice.” He commented, “This whole thing appears, rightly or wrongly, to be law enforcement doing the bidding of a private company.”
Meister’s “iPolice” nickname almost sounds hip and cool. An old coot like me would come up with something harsher, like the iPhone Gestapo.
While law enforcement may not have had much justification for entering Chen’s home, Apple certainly had plenty of reasons why it might have wanted that house turned upside down. The company is clearly not happy about the leak, which may lead other companies to copy aspects of its new design. The fact that Apple has not yet sued Gizmodo is probably all the evidence we need to know that the company has no legal basis for challenging the website. After all, there is no law stopping anyone from photographing and distributing pictures of things found lying around in bars. Gizmodo had not entered into any sort of confidentiality agreement with Apple.
It seems reasonable to infer that Apple convinced REACT to ransack Chen’s house to ensure that Chen would not publish any further information about the new iPhone. It’s hard to publish anything when your computers and hard drives are all in police custody.
Gizmodo is challenging the search warrant, claiming that Chen is covered by California’s shield laws, which protect journalists from having their notes seized. In a letter to law enforcement, Gaby Berbyshire, Chief Operating Officer of Gawker Media, cited section 1524(g) of the California Penal Code. The law states that “a publisher, editor, reporter, or other person connected with or employed upon a newspaper, magazine or other periodical publication, or by a press association or wire service” need not disclose information “obtained or prepared in gathering, receiving or processing of information for communication to the public.”
Law enforcement may contend that Chen is not protected by shield laws because Gizmodo is a blogging site, rather than a traditional “periodical publication.” As I wrote last October, this question of whether bloggers are “journalists” simply underlines the basic problem with shield laws. The constitution provides no basis for creating a specific class of people, such as journalists, whose rights are given greater protection than the rights of others. All individuals who want to expose corruption in the government, or to give eager technology aficionados a sneak peek at a new product, should have equal rights to do so, whether they plan to publish their findings in The New York Times or on a Facebook page.
But in Chen’s case, no special journalists-only protections should have been needed. The ordinary rights of an ordinary citizen ought to have sufficed to stop police from raiding the home of a man accused of maybe having had something to do with something that, from all outward appearances, was not criminal in the first place.
It is, of course, possible that Gizmodo’s account is a self-serving fiction, fabricating everything from the bar scene to phone’s amiable return. Perhaps Chen is a mountain climber in his spare time and scaled Apple’s walls to grab the phone, dodging motion detectors and security cameras. But it seems more likely that police were goaded into serving the interests of a powerful company at the expense of a private citizen’s personal rights.
I hope the courts impose sanctions if the search warrant was fraudulently issued. That might help teach law enforcement officers to consider the self-interest of complainants to avoid being manipulated into violating the rights of law-abiding citizens.
And I hope Apple learns to take better care of its stuff.
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