Apple asked for police investigation search warrant reveals; Court releases wrong documents?

invisibleSHIELD case for iPad“Apple pressed local police to investigate the loss of a next-generation iPhone a day after Gizmodo published photographs, telling investigators that the prototype was so valuable, a price could not be placed on it, according to court documents made public Friday,” Declan McCullagh reports for CNET.

“During the meeting with law enforcement, Apple attorney George Riley told detectives that the publication of evidence of the iPhone prototype by Gizmodo–part of Gawker Media–was immensely damaging,” McCullagh reports. “‘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,’ Riley said, according to an affidavit prepared by a police detective made public on Friday.”

McCullagh reports, “Apple CEO Steve Jobs personally contacted Gizmodo editor Brian Lam to request the prototype’s return the day the story was published on April 19, but Lam refused to do so, unless the company provided ‘confirmation that it is real, from Apple, officially,’ according to an e-mail message that was also made public.”

Full article here.

Yoni Heisler writes for NetworkWorld that Gizmodo editorial director Brian Lam’s email to Steve Jobs “sounds a lot like extortion to me.”

Here’s the email Lam sent to Jobs, as released by the San Mateo County Superior Court:

Hey Steve, this email chain is off the record on my side.

I understand the position you’re in, and I want to help, but it conflicts with my own responsibilities to give the phone back without any confirmation that its real, from apple, officially.

Something like that – from you or apple legal – is a big story, that would make up for giving the phone back right away. If the phone disappears without a story to explain why it went away, and the proof it went to apple, it hurts our business. And our reputation. People will say this is a coordinated leak, etc.

I get that it would hurt sales to say this is the next iphone. I have no interest in hurting sales. That does nothing to help Gizmodo or me.

Maybe Apple can say it’s a lost phone, but not one that you’ve confirmed for production – that it is merely a test unit of sorts. Otherwise, it just falls to apple legal, which serves the same purpose of confirmation. I don’t want that, either.

Gizmodo lives and dies like many small companies do. We don’t have access, or when we do, we get it taken away. When we get a chance to break a story, we have to go with it, or we perish. I know you like waltand pogue, and like working with them, but I think Gizmodo has more in common with old Apple than those guys do. So I hope you understand where I’m coming from.

Right now, we have nothing to lose. 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, aggressively.

I want to get this phone back to you ASAP. And I want to not hurt your sales when the products themselves deserve love. But I have to get the story of the missing prototype out, and how it was returned to apple, with some acknowledgement it is Apple’s

And I want to work closer with Apple, too. I’m not asking for more access – we can do our jobs with or without it – but again, this is the only way we can survive while being out of things. That’s my position on things.

B

Jim Goldman reports for CNBC, “In a stunning twist to the ongoing drama surrounding the Apple iPhone prototype, the San Mateo County Court unsealed the wrong documents earlier today connected to this case.”

“An attorney representing several media outlets had petitioned the court to release the search warrant connected to blogger Jason Chen and the seizure of his home computers and other technology,” Goldman reports.

“Instead, court authorities released the search warrant connected to suspect Brian Hogan and not the document related to Chen,” Goldman reports.

Full article here.

MacDailyNews Take: What an unbelievable gaffe by the San Mateo County Court!

That said, any company would be in the right to request an investigation as to how their property, lost or otherwise, ended up dissected, photographed, videotaped, and posted online. Microsoft, Google, Adobe… any company.

Of course, we all know when new iPhones come out because we pay attention. Most people do not. (Look around, that much should be painfully obvious; heck, look at the San Mateo County Court). These exceedingly blissful people would have purchased their iPhones in April, May, and even June – as they have done for each of the last two years. And they would have been very happy with their iPhones, too. But, this year, with images and news of the next-gen iPhone splashed everywhere (TV, radio, online, etc.), who could have missed that a new iPhone was coming soon? Jon Stewart had his misplaced commentary on it, Rush Limbaugh explained it thoroughly to his 20 million or so listeners; the story of the next-gen iPhone with the front-facing camera, etc. was absolutely everywhere!

It’d be interesting if Apple would try to put a dollar value on their losses, although that might be a bit like “the stimulus saved X number of jobs.” We’re not saying it did or didn’t, just pointing out that, as with “lost iPhone sales,” arriving at an actual verifiable figure is impossible. However, if Apple actually could prove some legally acceptable figure, it seems to us that the damages could exceed the value of Gizmodo.com or Gawker Media itself.

Apple might decide not go that route due to possible negative PR consequences, but stranger things have happened. Plus, how could the act of pursuing justice be convincingly spun negative against Apple? It seems to us, knowing what we know so far, that an anti-Apple spin would only work only if the facts were to be totally ignored.

Are the Gizmodo/Gawker parties involved criminals or just poorly-raised (the lack of morals and ethics gave it away) bumblers?

Of course, since this story broke, we’ve asked ourselves what would have happened if somebody wanted to sell us what we thought had a very good chance of being an iPhone prototype. After we shat ourselves with excitement, we’re pretty sure (not having been in the situation, we can’t say for sure, and hindsight is 20/20) we would have asked a lawyer if we could pay for it and then give it straight back to Apple with an invoice to cover our expenditure. We’d have preferred to do that instead of just telling to seller to get lost. That would have stopped the next potential buyer from making a costly mistake for themselves and for Apple. It would have been the right thing to do, don’t you think? It’s Apple’s prototype. Of course, we’re not Gizmodo. We don’t pay for stories and it’s pretty obvious that we love Apple. We might not love everything they do, but we love the company. Plus, let’s face it, there’s a good chance Apple would love us back for buying the thing and returning it to them; we’re not angels (visions of early review units and front row keynote seats ad infinitum dance in our heads). And, yes, we probably would have slipped in some details here and there about what we “thought” (really, knew) the next iPhone would offer – let’s face it, we wouldn’t have been able to help ourselves. But, nobody would ever know for sure if we knew what the heck we were talking about, if our sources were any good (let’s face it, we have some sources sometimes), it wouldn’t have made The Daily Show, The Rush Limbaugh Show, ABC World News, etc. No harm, no foul, right?

Anyway, back to reality: Should Gizmodo/Gawker be punished for buying that prototype and then photographing, videotaping, and publishing information about it? Does what they did run afoul of California law(s)? Did Brian Lam attempt to blackmail Steve Jobs? Does federal industrial espionage law (Economic Espionage Act of 1996) apply?

[UPDATE: 8:10pm EDT: Added the “what do we think we would have done” in response to readers’ emails asking us just that.)

62 Comments

  1. The more Apple presses legal action the more it is in the news and damages iPhone sales today. They should have held off till after the release to take them to court.

    Learning curves suck for all.

  2. Apple needs to pursue these felons HARD. Slam that hammer down on each disgusting unethical illegal immoral nose-rubbing slimeball that participated in this parade of felonies.

  3. Chen’s argument to Jobs is not entirely unreasonable outside of the context of purchasing stolen property. But he must realize that Apple won’t do anything that effectively opens up a “market” for prototypes. And Chen’s request for Apple’s tacit cerification of his story is tantamount to paying ransom for the prototype.

    I can’t believe that he actually thought Apple would take that deal. On the other hand, he did seem to think he had “nothing to lose”. Wrong!

  4. “This email chain is off the record on my side…”

    LOL@Chen thinking he was in a position to negotiate with SJ after purchasing stolen property. There’s a reason why Engadget wouldn’t touch this thing.

    Gawker counsel: I hope you guys are reading this. You fscking SUCK.

  5. @Jersey_Trader

    I believe Apple had to file a criminal complaint immediately, or the criminal case would suffer greatly. That’s why “Apple asked police to investigate the loss of a next-generation iPhone a day after Gizmodo published photographs”.

    I expect Apple is waiting until after the next iPhone is released before filing their civil case against Gawker Media. And at that time, Gawker is SCREWED!

    There was never any real attempt made to return the lost phone, which makes it stolen property according to California law. The value of the phone (anywhere between $600 and ‘priceless’) definitely classifies it as grand theft. Then Gawker pays $5,000 for stolen goods. Every other news site (Wired, Engadget, maybe more) were offered the phone, but they knew it was trouble. Only Gawker was stupid enough to purchase stolen property and then stupid enough to take it apart and post photos and videos on their site.

    Then when Steve asked for their phone back, Gawker was stupid enough to send that ridiculous email trying to justify their actions to Steve. Brian Lam asked for “some acknowledgement it is Apple’s. And I want to work closer with Apple, too.”
    Is he NUCKING FUTS?

    He’s going to get his wish. He’s going to get work very closely with Apple. Well, with their ATTORNEYS. Gawker Media has signed their own death certificate.

  6. The funniest part of the whole thing is, that it’s very obvious by Gizmodo’s email to Jobs, that nobody (NOBODY) in their whole outfit ever talked to a lawyer about any of their potential actions.

    In other words, they we’re acting from their gut rather than from their heads. All I know, is if I was in business like them and something like a potential “next iPhone” was revealed to me my first comment would have been, “let me to talk to our lawyer(s) first and we’ll get back to your.” Or, I would have at least had the conversation with a lawyer before so, that I’d have known how to proceed if the occasion presented it self. These guys are pure amateurs and they’re now basically begging for mercy for their stupidity. They won’t “fry” but the will pay, pay big. Idiots!

  7. By the time June is finished Apple will be able to put a dollar figure on the damage. They have years of sales figure now and growth trends for every day of the year. They will be able calculate any dip in sales since the brouhaha of imbroglio began. Those will be laid at the feet of Gizmodo.

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