Why Is Apple's iPhone Prototype Entitled To More Justice?

No doubt, counterfeiting deserves policing. And that's a big part of my point: Gawker posting pictures of a prototype iPhone that Apple lost in the wild isn't counterfeiting. Why, then, should REACT give the case such a high priority to the Gawker case -- and use such aggressive measures -- when it could be out dealing with, as you say, the "quarter-billion dollars a year in lost revenue" from counterfeiting?

The analogy you give about my firm is close, but let's make it exactly on point. Let's presume I have some major class action against Apple and, weeks before a major brief is due, I leave a copy of it on the train and some intrepid blogger posts the whole thing, thereby giving Apple a window into my strategy.

Would this be embarrassing? Of course. Would it prejudice my clients? It could.

Would the police care? Of course not.

The police would tell me that, if I had a problem with it, I should sue the guy. End of story. And, indeed, as I wrote before, if Apple wants to sort out its legal remedies, there is a civil justice system ready and waiting for it.

What's so disturbing here is the aggressive response by criminal law enforcement authorities. If you or me or thousands of other technology companies had complained to the police about an identical incident, we would've been told to seek remedies elsewhere. Apple, however, got the full lawful power of the state and then some in the form of an overly broad and potentially illegal seizure of a journalists' computers.

That's a problem, and its one that deserves some degree of explanation from REACT.

No more than we must conclude two HN comments from different posters represent yCombinator's corporate viewpoint.

That's not similar, because we are not representatives of HN. Government employees using their authority do represent the government.

Which government? We have thousands of them in US, in case you hadn't noticed. My point is that 'the state' is not a monolithic entity, and the comparison of two different crimes in different jurisdictions in different decades doesn't mean anything very much.

I'll try and keep this short, so we don't waste time in a dead thread (but you're welcome to email if you like).

1. I agree the trade secret is questionable. But an employee having it off-campus isn't a release into the wild. Gizmodo even wrote an article about how well it was disguised, calling it '[a] very ingenious solution to protect future designs from lookeyloos'. It's hard to argue Apple intentionally abandoned their IP; and although the exterior shell was removable, the finder did not disassemble the device within. So when Gizmodo got it, the only information 'in the wild' - which was published by Engadget, who were also offered the device - was its external appearance.

2. Gawker paid $5000, by their own admission. Clearly they considered the likely provenance of the phone to have commercial value, and I think that part is legitimate - the loss of a prototype by a famously secretive firm is newsworthy for both consumers and stockholders, who have an interest in the integrity of the firm's IP. Gawker certainly has no obligation to help Apple keep their reputation for security intact.

Arguably it was stolen under CA law, arguably that put Gawker in a position of receiving, knowing that it could not be legally saleable under the circumstances. And arguably they took the phone with the intent of returning it to Apple, and what they paid for was the story of how it was lost and found, making it newsworthy as above.

Where I part ways with Gawker is in what occurred next. Believing it was likely a prototype they could easily infer that it belonged to Apple; and being experienced tech journalists, they certainly knew how to get of hold of someone senior there, describe the device and its attached ID labels, and confirm its authenticity. A quick look at California's Uniform Trade Secrets Act would have apprised them that a prototype device is itself a trade secret, and that they did have a duty of care, under subparagraph (b)(2)(C) of the UTSA: ['Misappropriation' means .. disclosure or use .. by someone who] Before a material change of his or her position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.

So - loss of protoype phone, not a secret. External appearance of same - also not a secret, Engadget has republished the finder's own photos. Acquisition of device - defensible, even with money involved. So far, so good. Take all the pictures you want, call Apple, confirm and return, publish and be damned. Prior restraint is a barrier to any injunctions from Apple, as shown by Ford Motor Co. v Lane.

But this is not what happened. Instead, Gawker, acting as Chen's employers, 'dissected' (their word) the device, up to the point of Chen losing confidence in his ability to reassemble it, and published the results.

Now this seems to me like a clear violation of not only the UTSA (creating civil liability) but the Economic Espionage Act of 1996, specifically title 18, § 1832. I suggest that Gawker converted possession of a prototype device, destined for an existing global market, into advertising revenue based on readership, knowing that publication of the device's internal construction would injure Apple by benefiting competitors and counterfeiters.

I think they have violated this law in multiple ways, and possibly violated laws against receiving and fraud (for misrepresentation of fact to the finder/seller and employees about their liability under civil and criminal law).

3. Yes, I think Gawker's published version of events is prima facie evidence of a crime and that the federal statute cited provides for a very broad search. To my mind the only question is how far up Gawker's chain of command the responsibility goes.

4. How do we know? Gawker parlays its audience into sometimes exclusive access to products, services and information in the various industries it covers. They have actively solicited confidential commercial information for cash, relying on their journalistic privilege to protect them. Is it not possible that they, or one of their staff, would share a trade secret for some quid pro quo, given their professed lack of ethical inhibitions?

Yes, it is indeed an aggressive approach by the police. But skilled technologists have been known to destroy digital evidence, and Gawker blogs have published a articles on topics like concealment or permanent deletion of digital information...as recently as last month. And no, I'm not sure I would trust a promise to voluntarily abstain from doing so.