We haven’t discussed the lost iPhone 4G from Apple for a while now, mostly because there was nothing new to report. Now that the 10-page search warrant affidavit has been made available to the public, we finally have a much more complete picture of what exactly went down.
The story so far
When we last discussed this issue on the front page, the story was more or less still something like this: guy offers an iPhone he found at a bar to Gizmodo, after unsuccessfully trying to return it to Apple. Gizmodo paid 5000 USD, confirmed it was real, took it apart (bad!), and returned it to Apple upon first request within a week. If this version of the story had been the true one, then I wouldn’t feel compelled to write about again. I mean, yeah, there’s some questionable stuff in this version (especially the taking apart), but for the most part, I really, really couldn’t care less.
Especially since I believe trade secrets are a bunch of nonsense and should not be defined by law. But alas.
As it turns out, the story is slightly more complicated than that; in fact, it borders on the idiotic. Apple employee Gray Powell indeed lost the iPhone at a bar while out drinking, and it was indeed found by Brian Hogan. He then told his room mate Katherine Martinson he found the phone, and was trying to offer it to various news outlets for a sum of money. Since Hogan connected the found phone to Martinson’s laptop, she was afraid Apple might be able to trace her.
As such, she contacted Apple’s director of information security, Rick Orloff, and told him the story. The police got involved quickly, and prepared to search Hogan’s house. Not soon after, Martinson called the police, explaining to them that Hogan and another room mate, Thomas Warner, were busy hiding evidence.
This is where it gets even crazier. The police eventually got hold of Hogan at his parents’ house, and after Hogan contacted Warner, they together led the police to the various pieces of evidence scattered around; a desktop computer in a church, the lost phone’s serial number sticker at a gas station, and a USB drive in a bush somewhere. Crazy stuff.
And as far as destroying evidence goes, it’s pretty pathetic.
The affidavit also sheds light on Apple’s involvement and the role Gizmodo played – and it doesn’t paint a pretty picture for Gizmodo. Apparently, Gizmodo offered 10000 USD for the phone, 5000 of which was paid upfront; Hogan would receive the other half in July if Apple announced the new iPhone.
After Gizmodo published the scoop, Steve Jobs himself contacted the gadget blog’s editor Brian Lam, asking him to return the phone. Lam refused to do so unless Apple provided them with a written confirmation the the phone was indeed the real thing. “Right now, we have nothing to lose,” Lam wrote to Jobs, “The thing is, Apple PR has been cold to us lately. It affected my ability to do my job right at iPad launch. So we had to go outside and find our stories like this one, very aggressively.”
Ethics
When this story first broke, I found the response from the police completely out of proportion, and despite the fact that the affidavit revealed that the behaviour of both the original finder as well as Gizmodo were a lot more questionable than they first appeared, I still believe the police overreacted, and I still believe that the finder and the Gizmodo editors are judged far too harshly, especially within Apple circles.
Let’s get one thing straight: the epic fail that enabled all this lies with Apple, and Apple alone. They decided to allow prototypes to leave the premises, at which point they cease to be trade secrets (at least, that’s what common sense dictates), and then, it was an Apple employee who took this prototype to a bar, where he lost it.
The affidavit also details that Apple claims the lost phone is invaluable, and that publication of the device was immensely damaging. “People that would have otherwise purchased a currently existing Apple product would wait for the next item to be released, thereby hurting overall sales and negatively effecting Apple’s earnings,” Apple attorney George Riley said.
“If these trade secrets are revealed, competitors can anticipate and counter Apple’s business strategy, and Apple loses control over the timing and publicity for its product launches,” Apple further added in a brief.
As I said, common sense would dictate this device, out in the public (in a bar where alcohol is served, of all places) can hardly be called a trade secret. If it is really as invaluable as Apple claims, then you would think they would guard it better. But hey, common sense and law have about as much in common as polka-dot dresses and toilet seats.
Is the behaviour of the original finder ethically questionable? It sure is. Is Gizmodo’s behaviour ethically questionable? Yeah, pretty much. However, does all this warrant massive police intervention, especially in a country where heavy crime rates are far above that of every other western nation?
You decide. I’d say that the time the police wasted by looking for a phone would be far better spent solving, I don’t know, a murder or something. Yes, these guys made mistakes and broke the law, but in the end, this is just a phone. The device is returned, nobody got hurt, nobody died, and Apple will still sell a massive boatload of these phones come summer.
Can we please get on with life?
Perhaps when Apple/Jobs contacted the police, they realized that the only way to prevent Jobs from murdering someone was to go get the phone pronto…
Thus, maybe they did their job after all?
I’d mark this up as funny, but I already posted. And dammit you beat me!
Let’s get one thing straight: the epic fail that enabled all this lies with Apple, and Apple alone. They decided to allow prototypes to leave the premises
While I disagree with you about most of your opinion in this case, I fully agree with you on this. STUPID. VERY VERY STUPID.
at which point they cease to be trade secrets
No. And no I don’t think common sense dictates that either.
I found the response from the police completely out of proportion
Lam refused to do so unless Apple provided them with a written confirmation the the phone was indeed the real thing
He then told his room mate Katherine Martinson he found the phone, and was trying to offer it to various news outlets for a sum of money.
Hogan and another room mate, Thomas Warner, were busy hiding evidence… as far as destroying evidence goes
—-
I think the police response was fine.
How do you propose testing a device in the field on different cell tower connections without the prototype leaving the campus?
You test the components internally and use equipment to simulate interference, moderate the signal strength, etc.
All of this should, technically, be able to be tested in a laboratory.
That never really accounts for real world usage. No amount of lab testing can. Using it in the field on a daily basis is the only real way to test. Now what Apple should have done is soldered it to Powell’s hip, like a chastity belt but with a phone attached. Though in retrospect that can probably create issues with the wireless signal.
Exactly. I work for a GSM carrier ( small, private company), and there is no substitute for trying the unit in the field. So the premise that Apple failed because they allowed someone to test it doesn’t make sense to me. And after reading about the whole ugly story, I’m inclined to give Apple a break on this one.
Field testing is the only way to really test something, simulations can only go so far. Motor vehicle manufacturers have upcoming models in the field long before they are released, often running gear is disguised under the skin of a previous model, and sometimes they use camouflage stickers to hide their designs. If they didn’t still class them as trade secrets why would they go to these ends to keep them hidden?
But of course, this is Apple vs <insert whoever here>, so it will always be Apple’s fault, right Thom?
So they refused to hand back someone else’s property unless that party did something – check the definition of extortion – and the police reacted too harshly? Hmmm ok.
So attempted extortion is ok as long as it fits those criteria? Where do we draw the line then?
But those motor companies wouldn’t expect their test drivers to park the next-gen prototypes in a crowded parking lot while they drink booze on Saturday night.
Someone who gets it! Unicorn points for you.
No, they let them drive freely on our own Autobahns. Sometimes too freely…
See http://www.worldcarfans.com/110042725877/2012-mercedes-m-class-prot…
As usual, you are twisting my words. I come to expect no less of you, but still, it’s getting old.
I didn’t say anywhere that “it’s ok”. All I said was that the police overreacted. Do you know the definition of to overreact? It’s like this, basically: the police should put more manpower in a murder case than in a burglary. The police should put more effort into solving a burglary than into someone who lost his phone at a bar.
I know class justice is perfectly acceptable in the US, and that most US citizens have no problems with the police caring more about those with money than about those without, but I come from a more civilised and more developed nation, with only a fraction of the US’ (heavy) crime rates. As such, I’d say that doing something about the abundant amount of heavy crime in the US (drug trafficking, murder, severe violence, rape) is far more important to US society than retrieving a damn phone which some employee who failed miserably at his job left in a bar while out drinking.
But hey, I guess you find the police protecting Apple more important than the police actually doing something that benefits society.
Yes, a crime took place here. Yes, something should be done about that. However, I’d say that a country with such severe crime problems has more important matters to attend to than a stolen phone.
See but thats just your opinion. How do you know how much resources the Police have? How do you know how much resources are currently allocated to murder investigations or other issues which you deem more important? How do you know what the police deems important? Couldn’t citizens losing jobs because Apple moved away from the area be just as an important? You don’t actually know. Overreaction is relative and subjective, we don’t know the full scope of resources available to that area, we don’t know what kind of man power hey have to spare. We don’t even know if they haven’t done this before, we are only hearing about because it has Apple’s name attached and “journalists” like you keep writing about it without doing any form of research, any form of reasonable amount of real journalism to get the story right.
Bullshit. A Thief is a Thief is a Thief no matter what they steal or how they steal it, or justify stealing it
Quite Frankly it’s past time that some of the “editors” and “journalists” at some tech web sites were rounded up and tossed into a freaking jail cell especially when they start talking and acting like they are somehow above the law.
What I’m wondering is if it was even legal for to connect it to the network. I remember it didn’t have FCC approval. After the FUD about jailbroken iphones being dangerous for cellphone towers Apple themselves disregard the safety regulations in place to prevent someone accidentally taking the network down.
Funny!
I think a lab can account for quite a bit when it is in regarding to electromagnetic signalling and interference, but I understand the real world offers other challenges. Still, this is an incomplete model. The casing is not what the final would be, the components may not even be ordered the same way, so what point is there in taking it out into the “real world” if you cannot even be sure the final packaging won’t make a difference in the signal and function as well?
I remember the clean rooms at DEC and then at a Medical Hardware company I worked at. They did an AWFUL lot of testing at those locations, virtually finalizing all design before it even went out into the world for testing, so-to-speak.
I think it was foolish to let a prototype that was not even at the point of final packaging design out into the real world. Careless, really.
“Is the behaviour of the original finder ethically questionable? It sure is. Is Gizmodo’s behaviour ethically questionable? Yeah, pretty much.”
But its still Apple’s fault, ain’t that right Thom?
According to Thom buying and selling someone else’s property is only ethically questionable. Destroying evidence and lying is only ethically questionable.
Oh and according to Thom trade secrets are nonsense even though they can be worth millions to a company.
I stopped taking you seriously about three months ago. You’re the kind of person who’d side with BP if they were to claim their spilled oil constitutes a trade secret and sued the press for reporting on it.
I stopped taking you seriously about three months ago. You’re the kind of person who’d side with BP if they were to claim their spilled oil constitutes a trade secret and sued the press for reporting on it.
Willfully slowing investigation, destroying and hiding evidence, selling illegal goods, extortion.. That’s plenty of reasons for police to take action. Sure, they could’ve done with less than a full platoon, but the reason why they acted so heavy-handed was because there was already clear evidence of those involved trying to tamper with evidence and as such police had to act fast.
Maybe you should take me seriously because unlike you I predicted that this was about money from the start and that there was never an attempt to return the phone to its rightful owner.
Steve Jobs even personally asked him to return the phone which is something very fews CEOs would do and yet Gizmodo demanded a written statement in return which is extortion.
However in all this you still want to remain indignant and diminish the actions of Gizmodo which were clearly illegal.
If you really hate Apple then you should do something productive like supporting alternatives instead of supporting some blogger who acted like a complete idiot.
There are various parties who were less than ethical, however they wouldn’t even have had the chance if it wasn’t for Apple’s gross negligence.
So lets put it another way, if I leave my front door wide open and then get burgled, then my issuance doesn’t cover replacements as the burglary is classed as my fault (I gave an opportunist an easy target).
This doesn’t change the fact that the burglar broke the law but had I not left the door wide open, there wouldn’t have been a burglary in the first place.
So yes, other people may have broken the law (or at the very least, acted completely immorally) – however Apple are completely to blame due to their gross negligence.
As always, blame the victim. Thom, do you also blame women being outside if they’re kidnapped and raped? How could they be so stupid, right?
Apple put too much trust in their employee it seems… Stupid Apple.
Apple sounds like the third reich lol people SCARED TO DEATH of them and even turning in freinds family and neigbors that DARED do something that might anger Apple
Hardly. But corporate espionage is considered a bad crime in a country where capitalism is the life blood.
Thom your arrogance seems to know no bounds. You state “I still believe the police overreacted, and I still believe that the finder and the Gizmodo editors are judged far too harshly, especially within Apple circles.” Ok, so follow this logic. You go to a beer garden, leave for the evening, someone finds your wallet, sees an Amex Gold Card with your name on it. Rather than giving it to the establishment and reporting lost, or evening googling your name since it is on the credit card, they say “screw him, he shouldn’t have lost the card.”
They sell your card to a seedy underground type who clones the card, and through sleuthing gets details of your life and steals your identity. You cant even borrow a dollar now, your credit is shot and your identity is now on the open market and the original person who found your card is $5k richer. Your fault right? Period point blank. You were the idiot for losing it right?
In your example, someone’s entire life would be destroyed. You seriously believe something like that is akin to Apple losing a god damn phone? What kind of warped view of the world is that?
But even here I’d say that the police should put more manpower into solving a murder or rape than solving your hypothetical example. How would you feel if the police assigned only four officers to solve your daughter’s murder, while at the same time employing an entire squad to find Apple’s stolen phone?
Maybe you should read about crime in the US sometime.
Crime rates vary wildly by state and county and there is no reason to assume that in a wealthy county the police officers could have been working a murder case.
Because of the value of the phone this was a felony case which is why he got his door kicked in. Exchanging expensive stolen property like jewelry or cars will result in search and seizure. They are not going to knock on your door and politely ask if you have stolen anything recently.
I think what you are missing is the FACT that the “police” that you are referring to has a specific unit for addressing computer crimes and such. The same way that there is a Miami Vice and Special Victims Unit, etc. So its not like the San Mateo PD put an APB out on the lost phone and all other crimes went abandoned. You’re a bright guy, you know thats a garbage assumption you made.
As far as no one’s life being ruined, think about this. While you may see Apple as Steve Jobs, his turtle necks and 4 or 5 guys, there are families out there who income is a result of the sales of iPhones, etc. And the “harmless” posting of a video that rips a device apart and shows its guts to spectators and competitors alike could cost a company millions. In severe cases, it could mean the company would have to resort to layoffs and guess who’s life is ruined? What about Gray Powell? His name and face were published to world and joked about as nothing more than a punchline in this drama. So who gets affected Thom? Real people, with real lives, so what this makes this event a tragedy, Thom, plain and simple, a tragedy.
Grow up, self-moderate, Thom, where do I report offensive language usage, especially for someone that works on this site? (It isn’t your site, despite your actions indicating you apparently believe otherwise)…
The most logical reason that you seem to get the idea that trade secrets/IP isn’t anything that’s of any real value is that you’ve had no experience with ever creating any that was potentially damaging if it was lost to you: it’s worthless to you, because you’ve never done anything that would ever warrant any sort of protection, because your career (thus far) has had no commercial value. If these are your views, that trade secrets and related stuff has no value, unless you go into business for yourself, if people find you keeping assuming and treating such things as without any meaningful value, if they know that about you, you can be reasonably sure you’ll never be entrusted with anything of value. Somehow, if you ever do manage to create something that would cost you if it were lost, you’d most likely be changing your tune, though I wouldn’t expect you to agree with that statement now.
The whole concept of IP and trade secrets, etc. and their protection and laws related to that came into existence precisely because it is often of such great value: it isn’t something that merely was arbitrarily decided sometime in the past “Hey, let’s do this, just to make life more difficult, to protect stuff of no value!” like your attitude would seem to indicate you believe.
http://en.wikipedia.org/wiki/Osborne_effect
Did a lot of the general public guess that Apple would have some particular set of features in the next iPhone? Yes. Did they have a confirmation that they would be there? No, well, not before Gizmodo happened. Time revealed and what’s revealed can make a huge difference, and worth far more than the loss of any given prototype in terms of hardware/software costs to produce/prototype, due to market forces, as companies can lose a hell of a lot of money if the public (or enough of their potential customers) decide to hold off until the next model comes out, and there’s existing inventory of the old product that can’t be sold as a result. Mind you, this doesn’t even address the issue of competitors having sure knowledge of what’s coming out: that’s another issue itself.
Maybe you’re right about the value of their supposed trade secret. But: Should the weight of police response really be decided in linear proportion to the amount of money involved?
Isn’t the point of the police to uphold law and order for the public good? Apple is probably going to survive the loss of a few million dollars. And what we might call the public as such hasn’t really been harmed. And it seems pretty clear that it’s not really a big time criminal that’s on the loose. He is not going to end up stealing more and more stuff from random people (okay, maybe if the police ends up destroying his life and forces him into a life of crime…)
As such, the response does indeed seem out of proportion. Even simple burglary, be it at a company or a private house, should be more important than this, as we may then have a serial criminal on our hands. Who may actually pose a danger to the general public if left on the loose.
I don’t see why Thom is so focused on theft of trade secrets. There was a physical device that was sold, taken apart, and damaged. I agree that making a case on trade secrets and loss of income should be difficult . . . those are murky things to try to prove. But I think there is a simple, physical case of theft at the core where most reasonable people would say “they broke the law.”
You can categorically chalk this entire thing up as one big f*ck up.
Everyone was guilty of f’ing something up along the way.
Gray screwed up taking a prototype phone to field test in a bar were he proceeded to get drunk.
Hogan screwed up not giving the phone to the bartender, trying to sell it, and by attempting to destroy evidence.
Gizmodo screwed up by taking possession of the phone when they knew it was hot.
Apple screwed up by claiming ignorance of a new phone when they should have known as soon as Gray reported it missing.
San Mateo sheriffs and DA screwed up by raiding the home of Chen AFTER he has already returned the phone back to Apple and Apple had already been informed of who had it before Chen bought it.
One big giant f*ck up.
Edited 2010-05-19 20:46 UTC