Wednesday, April 28, 2010

Lost iPhone saga: "Initially it's just a theft investigation."

The worldview of IPBiz commenter James Katt on the "lost" iPhone seems to be coming true. Declan McCullagh writes at CNET of the search/computer seizure at gizmodo editor Chen's home:

Stephen Wagstaffe, chief deputy district attorney in San Mateo County, CA: "My prosecutor who is handling it considered this issue right off the bat when it was being brought into him and had some good reasons why he and the judge felt the warrant was properly issued." (...) "Initially it's just a theft investigation. But ultimately could it lead to more? That's going to depend on what they learn. That's why they would like to be able to look at the computer and interview everybody that they can so they can determine the extent of what's involved."

The iPhone saga may add an interesting dimension to trade secret law. In the Uniform Trade Secrets Act, a trade secret

(i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

How the Apple person came to have, and to lose, the 4G prototype iPhone in a Redwood City bar will be in an issue as to "reasonable efforts," of relevance to the fate of the trade secret.

Then, we have the intersection of "trade secret" with the law of lost property. Assuming the "first finder" and gizmodo were aware of the iPhone's status as a prototype, and further aware of its true owner, then, at the least, this looks like theft under California law (and the buying of stolen property). But how much does that get amplified when the stolen property is a trade secret? An interesting IP case.

See also story at PCMag: Police Know Who Found the Prototype iPhone

Text from gwabble which may be of relevance to "trade secret" issue:

One day, [Apple engineer Gray Powell] left the Apple iPhone 4 disguised in an iPhone 3GS case on a bar stool, so that nobody will notice that it’s the latest iPhone that was not yet released to the public.

A stranger inside the bar played with it, never realizing that it was more powerful and more advanced than the current 3GS. After a few minutes, he noticed that the phone was superior to the standard Apple iPhone 3GS.

Apple apparently “killed” the iPhone 4 remotely and the passer-by is understood to have called the Apple switchboard to contact Mr Powell. When that failed, the passer-by then sold it to technology blog Gizmodo.

Previous IPBiz posts:

Apple's missing iPhone: First Amendment vs. lost property


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