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Tuesday, April 20, 2010

Next-Generation IP Exam Question Found Sitting on Barstool

I've been following this story for a few days; it recently took the jump from interesting to full-on fascinating. An Apple engineer was drinking in a Silicon Valley bar, where he left a prototype unit for a future iPhone sitting on a barstool. Among other details, it has a much higher-resolution screen and a second camera facing the front (useful for videoconferencing?). Another patron found the phone, started fiddling with it, and realized it wasn't a standard iPhone. The finder claims to have contacted Apple offering to return it but gotten lost in customer-support bureaucracy.

Here's where it gets fun. Engadget, a "gadget blog" that reviews and reports on forthcoming consumer electronics, ran some blurry photos of the unit, prompting blogospheric speculation on whether they were real. Eventually, however, it became an "open secret" that Gizmodo, a competing gadget blog with a history of paying for scoops, had acquired the unit for $5,000. Apple had remotely disabled the phone's software at that point, but Gizmodo did a careful teardown of the phone's hardware, confirming various changes from the current version of the iPhone via reverse engineering.

Yesterday, Apple's general counsel sent a letter to Gizmodo as a "formal request that you return the device to Apple." Gizmodo's emailed response:

Happy to have you pick this thing up. Was burning a hole in our pockets. Just so you know, we didn't know this was stolen [as they might have claimed. meaning, real and truly from Apple. It was found, and to be of unproven origin] when we bought it. Now that we definitely know it's not some knockoff, and it really is Apple's, I'm happy to see it returned to its rightful owner.

Now the Apple blogosphere is abuzz with debate over whether Gizmodo is a criminal receiver of stolen goods, Gizmodo's careful silence on how precisely the phone reached them, and the ethics of publishing the name of the unlucky Apple employee who lost it. On the legal side, I can see trade secret misappropriation, lost property, First Amendment, employment law, and privacy issues, and that's just off the top of my head. What say you?

Posted by James Grimmelmann on April 20, 2010 at 07:31 AM | Permalink

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Trade secret theft? Hard to argue that Apple put up the necessary walls to keep it the phone a secret when they sent their employee out in public with it - presumably he used it to make calls, take pictures, etc. (Or were you thinking that the employee could be on the hook?)

There's also the speculation that it was a controlled leak. Massive free press, buzz buildup and focus testing several months before launch. Seems pretty reasonable to me - that letter from the GC could easily have been delivered with a lawsuit attached.

Posted by: Blake Reid | Apr 20, 2010 9:59:16 AM

I read the "reasonable efforts" cases generally to favor Apple here. I'm assuming, per what I know of Apple's practices, that its employees are under stringent NDA requirements. If so, then allowing the employee to carry the device around in public wouldn't waive trade secret protection as to the hardware details inside; those certainly would't be visible on inspection.

The controlled leak story strikes me as factually implausible here; this isn't how Apple's controlled leaks work.

Posted by: James Grimmelmann | Apr 21, 2010 4:44:17 PM

Let's add criminal procedure and press shield laws to the list.

Posted by: James Grimmelmann | Apr 26, 2010 6:23:21 PM

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