How Renting, Not Owning an iPhone Could Have Saved Gizmodo: Expert

Jason Chen

The Gizmodo iPhone saga is notoriously tough to figure out—our Choose Your Own Adventure story and flowchart were designed to show exactly how murky these legal waters are. There are a lot of theories floating around, many of which have all the legal authority of a 4chan diploma. To figure out what's what, I talked with Lawrence J. Siskind, a former special counsel to President Ronald Reagan and partner in the San Francisco law firm Harvey Siskind LLP, which specializes in trade secrets.

Lawrence SiskindThis first thing to clear up once and for all is that no matter how much we in the media love to discuss blogging vs. journalism, the law does not make a distinction. Whether the shield law applies has nothing to do with the format of a writer's publication—Siskind confirmed that without hesitation. "That's pretty clearly established in California," he said. "Whether he's on a blog or a print publication, the California shield law applies." Lawrence cited a 2006 case quite similar to this one, O'Grady vs. Superior Court, in which that specific issue (which also involved Apple!) was resolved.

But the shield law in particular makes a clear distinction between receiving goods and receiving information. Information is protected, regardless of how it was obtained, but goods are not. Says Lawrence, "We're talking about accepting an actual device, a cellphone. If you look at it as an object, as someone's phone, then Jason Chen and the publication are trafficking in stolen goods. But if you look at it not as a phone but as a collection of information about Apple and Apple's marketing plan, it becomes newsworthy and thus protected. That's what makes this case so interesting."

If the phone is treated as an object and not information, Gizmodo could be in trouble. Lawrence says that Apple would be in a very strong position to argue that Gizmodo had ample reason to suspect the phone was stolen or illegally obtained.

Was there another way for Gizmodo to have handled the phone and avoided this entire mess? Yes, there was, and it's a tactic used by many news organizations. Think of this next-gen iPhone as a celebrity sex tape for gadget nerds. If you're Star magazine, you don't buy the sex tape, you pay to watch it, take a few saucy screen grabs. So instead of purchasing the phone itself, Gizmodo should have simply purchased access to the phone. This may seem like a small distinction, but according to Siskind, it would have made all the difference, and the San Mateo County DA would be essentially unable to prosecute. "In that case, it would be clear that what they were getting was information. The California shield law protects that information from either a subpoena or a warrant. Apple would be in a tough position here."

In other words, if Gizmodo (and by extension Gawker) had not been quite so greedy, they wouldn't be in this mess. Engadget, meanwhile, took the more established route of buying just the photos and not the device. Gizmodo could still have purchased the ability to videotape and dismantle the device without getting into legal hot water, as long as they returned it to their anonymous source after—in a perfect world, they'd have done that before they acctually published their story. They had the phone for a week, after all.

If anyone should understand that tactic, it's Gawker Media's Nick Denton, who's actually bought celebrity sex (kinda) tapes before. But hindsight won't save Denton a dime at this point, so it's back to the investigation itself—which was an oddly sloppy affair. The DA was forced to pause the investigation immediately, as Gawker Media invoked the journalist protection shield law. Siskind says that pausing the investigation in this way is definitely unusual, probably due to the fact that "the search and seizure was over-broad." The DA (and Apple, though hopefully they had nothing to do with the investigation by this point), "quickly realized that this was a PR disaster for them." Especially since just about all the information they needed, like the name of the person who sold the iPhone to Gizmodo, could easily have been traced without breaking down anyone's door.

The biggest question: Where is this all going? Siskind thinks it's more likely to fade away than anything else, and says a court case is extremely unlikely. "Legally, I don't think it's going to go much farther," he says. "I think it'll just wither away. What's done is done, and Apple didn't really lose anything that vital. The publicity is both good and bad for Apple, but if Apple pursues the case much further, they're going to look like a grumpy old man. I think they've gotten as much mileage out of it as they're going to."


Lawrence J. Siskind is founding partner of Harvey Siskind LLP, a San
Francisco law firm specializing in trade secret and other intellectual
property law issues.


Dan Nosowitz, the author of this post, can be followed on Twitter, corresponded with via email, and stalked in San Francisco (no link for that one—you'll have to do the legwork yourself).

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  • Fill Fill

    I was chatting with some others about this. I think it basically come down to the fact that the kid and Chen both knew the phone wasn't theirs. It's like my neighbor negotiating with somebody on letting them take my car for a spin. They both know they have no authority to take my car, so I would think any reasonable judge or jury would find any silly agreement or paperwork between the two to be irrelevant. It doesn't matter how they describe a theft or its conditions, it's still stealing.

    It will be interesting to see what happens to the kid and Chen. They both come across as being desperate and reassuring each other that it's OK to trade a 'lost' piece of property for cash. The kid shouldn't have been asking for money (I mean, shesh, $5k is going to seem like nothing after all this is over), and Chen shouldn't have offered to give it. The clincher is that the kid apparently was promised by Chen that he would try to find the owner and give the phone back. That pretty much proves that the exchange was truly a sale and Chen was taking ownership.

    But, IANAL!

    (BTW- I refer to the 21 year old guy who found the found as 'kid' here not to be disrespectful but to avoid using his name. I think it's unfortunate that Wired (I think it was?) published his name and picture.)

  • Jason Parry

    This is what I was trying to say on your horribly biased 'choose your own adventure' chart. Investigation of the crime involving the physical good isnt under journalist shield and im glad you guys figured this out. If that was true then you commit any crime as a journalist/blogger and that isnt the case.

  • Brian Gillespie

    I think Mr. Suskind is wrong. Apple will sue the hell out of Gizmodo to discourage this type of behavior in the future. They're just waiting for the police to do the legwork.