By John Gruber
Square Reader SDK lets you use Square hardware to take payments in your app.
The first question is, how did the phone leave Apple’s campus?
Starting a few weeks ago, some number of iPhone engineers who, because of the nature of their work were already familiar with the details of Apple’s next-generation iPhone, were authorized to begin using late pre-production units outside Apple’s campus. Effectively, they became permitted to use these phones as their daily carry iPhones. Strict provisos govern such units. They must remain in cases designed to render them indistinguishable, at a glance, from an (encased) iPhone 3G/3GS. Such units are not allowed to be demonstrated or revealed to anyone. Not friends, not spouses.
According to Gizmodo, one of the barcodes attached to the unit read “N90_DVT_GE4X_0493”. According to several sources (of mine) familiar with the project, “N90” is Apple’s codename for the fourth-generation GSM iPhone, slated for release this June or July. “DVT” stands for “design verification test”, an Apple production milestone. The DVT milestone is very late in the game; based on this, I now believe that this unit very closely, if not exactly, resembles what Apple plans to release.
Why did Apple, so secretive about unreleased products, allow these units to be used off-campus? There’s simply no other way to test a phone. Even if maintaining the maximum feasible degree of secrecy, dozens of near-final units go into field testing a few months in advance of production. (This is true for Apple products other than phones as well, but I believe the practice is more widespread with the iPhone due to the nature of cellular network testing.)
The same was true for the 3GS a year ago, and the 3G the year before that. The original iPhone was announced six months before it went on sale; in the interim between the January announcement and its debut in stores at the end of June, limited numbers of them were used for field testing.1
A phone that is allowed to leave campus is a phone that can be lost or stolen. A phone that is lost or stolen can wind up in the wrong hands. And we all know Murphy’s Law. For all we know, this is not the first such prototype iPhone to have gone missing. It’s just the first to have wound up in the wrong hands.
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.
If the owner is unknown or has not claimed the property, the person saving or finding the property shall, if the property is of the value of one hundred dollars ($100) or more, within a reasonable time turn the property over to the police department of the city or city and county, if found therein, or to the sheriff’s department of the county if found outside of city limits, and shall make an affidavit, stating when and where he or she found or saved the property, particularly describing it.
Yes, I’m quoting both criminal and civil statutes. But the plain meaning is clear. Those who found the phone on a bar stool, if that’s truly how they came into possession of it, could return the phone to its owner or they could turn it over to the police. To keep it for three weeks and then sell it makes them guilty of theft.
Here is an interesting case, discussing and upholding California Penal Code 485 in the Sixth Circuit on April 7, 2010. It’s long, but here’s one good bit from it:
The only mental state mentioned in Penal Code section 485 is the perpetrator’s “knowledge.” The crime is defined in terms of two acts, one omission, and one mental state. The perpetrator commits this offense if he or she (1) finds lost property (an act), (2) appropriates it (an act), (3) fails to make “reasonable and just efforts” to find the owner and restore the property to the owner (an omission), and (4) does so with knowledge of the true owner or means of inquiry as to the true owner (a mental state). Nowhere in the statutory definition of the offense is there any suggestion that the perpetrator must harbor any additional specific intent.
Now, in practical terms, these fellows had another option. Speaking from personal experience as one who has spent a fair number of hours in bars, there is a universal protocol for dealing with misplaced or forgotten personal items left behind by fellow patrons. Wallets, keys, phones, purses. Whatever. If you see something like that on the floor, or forgotten on a table, you pick it up and hand it to the bartender. If you realize you’ve lost something, you ask the bartender. Everyone knows this.
This option arguably does not comply with the letter of California law, insofar as the bartender is not the owner and is not the police. But no one has been or ever will be prosecuted for handing a lost item to the employees of the establishment where the item was found. Effectively you’re turning the bartender into the finder of the item.
And, in this particular case, had these individuals done so, the phone would have gotten back to its rightful owner, who, in the days after losing it, called the bar repeatedly to ask whether it had been turned in. Even if it didn’t occur to the “finders” of this phone to turn it over to the bartender the night it was lost, all they had to do, at any point during the three weeks before they sold it to Gizmodo, was take it back to the bar, or just call the bar and ask whether the guy who lost it had called to claim it.
Here is the story about their purported attempt to return the phone, as reported by Jesus Diaz at Gizmodo:
During that time, he played with it. It seemed like a normal iPhone. “I thought it was just an iPhone 3GS,” he told me in a telephone interview. “It just looked like one. I tried the camera, but it crashed three times.” The iPhone didn’t seem to have any special features, just two bar codes stuck on its back: 8800601pex1 and N90_DVT_GE4X_0493. Next to the volume keys there was another sticker: iPhone SWE-L200221. Apart from that, just six pages of applications. One of them was Facebook.
From the Facebook app, they obtained the name of the Apple engineer who lost the phone.
Thinking about returning the phone the next day, he left. When he woke up after the hazy night, the phone was dead. Bricked remotely, through MobileMe, the service Apple provides to track and wipe out lost iPhones. It was only then that he realized that there was something strange that iPhone. The exterior didn’t feel right and there was a camera on the front. After tinkering with it, he managed to open the fake 3GS.
Note that you are not permitted by law to disassemble found items.
There it was, a shiny thing, completely different from everything that came before.
He reached for a phone and called a lot of Apple numbers and tried to find someone who was at least willing to transfer his call to the right person, but no luck. No one took him seriously and all he got for his troubles was a ticket number.
He thought that eventually the ticket would move up high enough and that he would receive a call back, but his phone never rang. What should he be expected to do then? Walk into an Apple store and give the shiny, new device to a 20-year-old who might just end up selling it on eBay?
Admittedly, it would be very hard to get someone on the phone at Apple who would know what a device such as this one is. Apple, like most large companies, deliberately makes it difficult for consumers to reach (non-retail) employees. There is no lost prototype hotline.
But they could have simply put the phone in a bubble wrap envelope and mailed it to 1 Infinite Loop. Apple’s mailing address is right on their web site. And they had the name of the engineer who lost the phone. It defies belief that calling Apple’s public phone numbers constitutes “reasonable and just efforts to find the owner and to restore the property to him”, as required both by law and by common sense.
Take it back to the bar. Drop it in the mail. Send a message using Facebook to the engineer who lost it. Or, why not take it to an Apple Store? That’s a circuitous route, but this bit from Gizmodo’s report:
Walk into an Apple store and give the shiny, new device to a 20-year-old who might just end up selling it on eBay?
is how thieves think — that everyone else is as dishonest as they are. Taking it to an Apple Store, asking for a manager, and handing it over would have put the phone back in Apple’s hands.
Even if you take their account at face value, it is clear the individuals who sold this unit to Gizmodo made no serious attempt to return the phone.
Thus, even if the phone originally came into their hands by being lost, once they made no “reasonable and just” effort to return it and instead began trying to sell it, it became stolen.
Consider, too, every coincidence that we’re asked to believe in this tale. What are the odds that the person who happened to be sitting next to the Apple engineer who lost such a phone would recognize it as something other than an existing consumer iPhone? It was snapped into a 3G/3GS-sized case. The screen is higher resolution, yes, but how many random people in a bar — even in Silicon Valley — would notice that? And they knew it might be worth thousands of dollars if offered to a site such as Gizmodo.
In my book, anyone who did this with a phone left on a bar stool would be just as likely to, say, take it out of someone’s jacket pocket if they noticed its unusual nature while the engineer was using it at the bar — which we know the engineer did, given that he updated his Facebook page that evening with a comment regarding the quality of the beer he was drinking. There is no reason to take anything thieves claim at face value, particularly when it’s all been filtered through Gizmodo, which has a decided interest in painting a picture where they didn’t realize they were purchasing stolen property.
(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. However, if the district attorney or the grand jury determines that this action would be in the interests of justice, the district attorney or the grand jury, as the case may be, may, if the value of the property does not exceed nine hundred fifty dollars ($950), specify in the accusatory pleading that the offense shall be a misdemeanor, punishable only by imprisonment in a county jail not exceeding one year.
Given that Gizmodo claims to have paid $5,000 for the device, the latter half (regarding property worth less than $950) does not apply. Those who sold the phone to Gizmodo clearly obtained it in a manner constituting theft, whether they truly found it on a bar stool in the first place or otherwise. There can be no doubt that Gizmodo took possession of the phone, given that they’ve published photos and videos of editor Jason Chen holding it.
So the question here is whether Gizmodo knew the phone was stolen.
First, Gizmodo coyly suggests that they themselves were satisfied with the sellers’ tale of trying, and — alas! — failing, to return the phone to Apple by calling consumer-facing phone numbers. Regardless if the sellers truly believe that to have been a good faith effort to return the phone, would Gizmodo’s editors have us believe that they themselves believed that Apple had no interest in recovering this unit?
Gizmodo’s primary defense against claims that they knowingly purchased stolen property is that they didn’t know whether the unit was truly an actual Apple prototype until after they obtained it and examined it. When posting Apple’s written request to have the unit returned to them, Gizmodo editorial director Brian Lam also posted what he claimed to be his 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 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 except, well, beer.
Note that I’ve quoted the original version of Lam’s purported response to Apple, a copy of which I saved, and which is archived publicly here at Cult of Mac. On Gizmodo’s web site, this response was edited (after I specifically noted Lam’s use of the word “stolen”, such that it now reads:
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.
The gibberish in brackets (punctuation and capitalization sic) was added, and the knife-twisting kick-in-the-balls quip about beer was removed. Keep in mind that this isn’t the editing of a weblog post — it’s the editing of what Lam and Gizmodo claim is the response they sent to Apple’s senior VP and chief legal counsel Bruce Sewell.
Again, their defense, as best I can put it, is that only upon receipt of the letter from Sewell did they “definitely know it’s not some knockoff” and “really is Apple’s”. Curious, this supposed uncertainty, considering they published their photographs and videos of the device 12 hours earlier with the quite certain headline “This Is Apple’s Next iPhone”.
Now, it’s worth noting that criminal charges are at the discretion of the District Attorney, not Apple. Apple can choose to file a civil lawsuit on its own, but a criminal suit can only be filed by the DA.
If criminal charges are made, and they include charging the editors of Gizmodo with the purchase and receipt of stolen property, they can make whatever arguments they want in their defense. But Gizmodo certainly knew that if it was, in fact, an Apple prototype, that it did not belong to the individuals who were selling it, and that Apple would want it back. Yes, it could have been a hoax, but that defense could be (and, I’m guessing, is) made by anyone prosecuted for purchasing stolen property of this nature.
Imagine, say, that someone offered to sell you a unique and notable piece of stolen artwork. You pay them and take the item. You are subsequently arrested and charged with buying stolen property. What do you think your chances are of being acquitted on the grounds that you didn’t know for certain whether the item was a forgery at the time you paid for it?
Further, upon receipt of the phone, Gizmodo inspected it for “about a week” before they began publishing their photos of the device. Whatever their questions regarding its legitimacy at the outset, it didn’t take them six days to figure out it was real. In the meantime, they kept it secret and did not return it to or notify Apple.
I have two issues regarding Gizmodo’s actions regarding this story.
First, I’m fascinated by their apparently cavalier attitude regarding the legal implications of their actions. I’m not offended by their decision to obtain this unit and publish everything they were able to ascertain regarding it. It simply boggles my mind the stakes they have effectively wagered that Apple will not pursue this legally.
Second, publishing the name, photographs, and personal information of the Apple engineer who lost the phone is irrelevant to the story. It was the dick move to end all dick moves. Gizmodo is, ostensibly, a gadget site. The interest of their readers in this saga regards the phone. Publishing his name did not clarify in the least bit how they obtained the phone. The people whose identities I’d like to know are those who obtained and then sold the phone, not the guy from Apple who lost it. There is no interest served by outing him other than taking sociopathic glee in making a public spectacle of someone who made a very serious but honest mistake.
This, I’m deeply offended by.
I don’t know what Apple would do with prototypes for a new iPhone that had a radically new industrial design, such that they couldn’t be disguised as an existing consumer iPhone using a case. ↩︎