UPDATE: Will Apple sue over stolen iPhone prototype?

One question is dominating my inbox today:

Will Apple sue over stolen iPhone prototype?

Yesterday tech site Gizmodopublished a story detailing the inner workings of a prototype of the next-generation iPhone. Details as to how Gizmodo got their hands on this device were sketchy at the time, but now it seems clear that the prototype was lost at a bar in California, that device was then stolen by another individual (and I use this word deliberately given that taking something that belongs to someone else - lost or otherwise - is still stealing), and then Gizmodo paid to get access to said stolen property and carried out a teardown of the device. Gizmodo then profited from gaining access to the stolen property.

Joe Wilcox, writing for Betanews, has done the digging through the Californian penal code to uncover the section relevant to this issue:

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.

Think about this another way for a moment. What if I wanted to benchmark a particular graphics card, one that I didn't have access to. What if I knew you had one and I decided to "borrow" yours. Would you be happy with that? Probably not. And just because the injured party here is Apple doesn't change things. This prototype iPhone is quite clearly Apple's property because it's not a device that's on sale. And quite clearly no one else has any "rights" to be able to sell Gizmodo one unless that someone happens to be Apple. Put that another way, Gizmodo bought something that is clearly must have known it shouldn't have bought.

Apple has requested the return of the device, and I think that Gizmodo's reply is telling:

Bruce, thanks. Here's Jason Chen, who has the iPhone. And here's his address. You two should coordinate a time.

[Blah Blah Blah Address]

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.

P.S. I hope you take it easy on the kid who lost it. I don't think he loves anything more than Apple.

This "it was lot, now it's found, we didn't know it was stolen" stuff is pretty weak.

Now, let's put ethics on one side for a moment (after all, not everyone is bound by the same code) and remember that Apple is a highly litigious company that will "release the legal hounds" at the drop of a hat. Given the acquisition of this prototype device was clearly illegal, it seems that Gizmodo was playing with fire.

So will Apple sue?

My guess, we haven't heard the last of this yet. Apple may take the legal route and request the information be taken down (rather pointless), may sue for damages (which could be significant, and would certainly send a clear message to others who might "find" hardware in the future. Or Apple might be get more creative. Whatever happens, I find it hard to imagine that Apple will just let this go.

Thoughts?

[UPDATE: Several readers have asked me for my personal opinion regarding Gizmodo's handling of the next-gen iPhone scoop. I'll try to be as concise as possible:

- I have nothing personally against Gizmodo or the Gawker network, in fact, I think it's admirable that Nick Denton and the gang have managed to build the network they've build.

- I'm kinda surprised as to Gizmodo's handling of this matter. First off, the whole endeavor takes Giz and the gang out onto some very thin legal advice. It takes about 30 seconds on Google for the most naive person to figure out that this sort of venture (paying for something that's been found/stolen) is highly dodgy. This is without starting to think about what trade secrets laws this breaks.

- Rewarding criminals (and make no mistake, the person who took/found this iPhone is a criminal as defined by the Californian penal code) sets a very dangerous precedent. If you're in the game for rewarding one type of criminal behavior, that's a very slippery slope.

- Gizmodo's use of weasel words, and the idea that this handset was "lost" and now "found" is disingenuous. Reframing the issue doesn't make it right ... or legal.

-  This story makes tech journalism seem like a sleazy cesspool. Enough people already think that shady deals, "cash for write-ups" and so on are common-place, and a major tech site engaging in criminal activity is fuel for the flame. Speaking personally, I get approaches on a daily basis that might make good stories but that I reject on ethical grounds. Sometimes not running a story is the right thing.]