iPhone 4 case could see Gizmodo in the dock

The saga of the prototype Apple iPhone 4G found in a Redwood City bar has now turned into a tortuous debate on the nuances of Californian law.

And now that the identity of the person who “found” it is known to police, things just got a whole lot more tricky.

To recap, the lost/stolen/”relocated” iPhone – delete as you see fit – was left behind on a bar stool by an Apple engineer after a drunken birthday celebration.

After allegedly attempting to contact Apple, the lucky/hapless finder of the device then sold it to Gizmodo for a sum now disclosed as $5,000.

All of which leads us to legal question one: was the phone “stolen”?

Lost property and theft
Under Article 2080 of the California Civil Code, the finder of an item of lost property must contact its owner, if known, within “reasonable time”, or surrender the item to the police. Any attempt to appropriate the property or dispose of it as your own –selling it to a technology blog, say – could constitute theft under Section 485 of the California Penal Code. Suffice to say that things look bad for the finder.

Trade secrets
Now for the possibility of charges being brought against the finder under the Economic Espionage Act of 1996, which makes it an offence to steal trade secrets. Debate has raged over this point, with some commentators pointing out that the use of the prototype in a public place made it difficult for the device to be regarded as a trade secret – though this has been disputed by legal tech blogger Jonathan Balleran.

Gizmodo search warrant
Gawker Media, Gizmodo’s owner, disputes the validity of the warrant used by officers from California’s Rapid Enforcement Allied Computer Team to break in to Chen’s house and seize equipment.

Gawker’s chief operating officer Gaby Darbyshire outlined the company’s case in a rejoinder to the police action reported on the blog. Until the validity of the warrant has been confirmed, law enforcement officers say they will not examine any of the goods seized.

So is it valid? Darbyshire claimed Chen was protected by Section 1524(g) of California’s Penal Code. This provides that warrants cannot be issued to obtain items described in Section 1070 of the California Evidence Code - the so-called ‘shield law’ that protects journalists from having to reveal their sources to the state.

Legal defence organisation the Electronic Frontier Foundation takes Gawker’s side, although others, including Law professor Orin S Kerr, are not so sure.

Gawker’s defence
Whether Gawker has a leg to stand on here depends on two things. The first is easily dealt with. Gawker cites the fact that Chen returned to discover police raiding his home at 9.45pm, when the warrant did not permit a night-time raid. Unfortunately for Chen, the crucial cut-off time according to California Penal Code 1533 is 10pm.

The second hangs on whether Gizmodo editor Jason Chen is a “journalist” as described in the Code. Gawker's Darbyshire thinks so. “Jason is a journalist who works full time for our company,” she wrote in her letter to the authorities. But on that point, there's been a veritable torrent of debate from leading editors, summarised here.

What now?
Whatever the ins and outs of that last point, California’s shield law cannot protect Gizmodo’s editor if the police were looking for evidence that he himself has committed at felony. And given that police have confirmed that the finder of the iPhone has been found and interviewed, it appears that police weren’t looking for clues as to the finder’s identity, but evidence that Gizmodo had knowingly received stolen goods. If, as appears likely, the mislaid iPhone is regarded as stolen under Section 485, the big question is whether Gizmodo knew that when it paid $5,000 for it. Under Section 496 of the California Penal Code, the price of that mistake could be time in jail.