Gizmodo editor escapes charges in leaked iPhone prototype case

4. Gizmodo-gate (or things not to do with your prototype iPhone) Are a few million page views on your site worth threats of criminal prosecution and an acknowledgment that you have no qualms with the questionable practice of checkbook journalism? At Gizmodo's parent company, Gawker Media, the answer is, "Hell yes!" Here's the story: So a young Apple engineer walks into a California bar with a nifty new phone and loses track of the darn thing. The phone, a prototype of the iPhone 4, ends up with a college student who recognizes the handset for what it is--not something you want to be losing track of in a bar. Now most folks would have handed the phone to the bartender. But what does our young student do? He allegedly sells the phone to Gizmodo, which, in turn, publishes lots of photos of it. Problem is, someone may have broken the law, said authorities in San Mateo County, where Apple reported the phone stolen. That was more than six months ago. The police even raided the home of one of Gizmodo's editors (who then wisely hired his own lawyer), while the student's laptop and other property was seized. What happens next? That's a fine question. Apple CEO Steve Jobs said he doesn't want to let this slide. The DA's office in San Mateo County hasn't said much of anything. And Gawker czar Nick Denton continues to crow about his great scoop. We're still waiting for the other shoe to drop in this ugly tale.
Gizmodo editor escapes charges in leaked iPhone prototype case
Jason Chen

(CBS/AP) - Prosecutors said Wednesday that they will not bring charges against a tech blogger who bought an Apple iPhone prototype after it was found at a bar in March 2010 in a case that ignited a First Amendment debate.

Charges were not filed against's Jason Chen or other employees thanks to California's shield law, which protects the confidentiality of journalists' sources, San Mateo County Assistant District Attorney Morley Pitt said.

"The difficulty we faced is that Mr. Chen and Gizmodo were primarily, in their view, engaged in a journalistic endeavor to conduct an investigation into the phone and type of phone it was, and they were protected by the shield law," said Pitt.

"We concluded it is a very gray area. They do have a potential claim and this was not the case with which we were going to push the envelope."

Chen reportedly bought the prototype from two men who found it after an Apple Inc. employee left it in a Redwood City bar. After the website posted images of the prototype, Chen's house was raided and his computer seized.

The website and other media organizations objected, saying the raid was illegal because state law prohibits the seizure of unpublished notes from journalists.

"We feel there was not a crime to begin with and still believe that, and are pleased the DA's office has an appropriate respect for the First Amendment," said Thomas J. Nolan Jr., a lawyer for Chen.

Prosecutors did, however, file misdemeanor charges against Brian Hogan, 22, and Sage Wallower, 28, the two men who found and sold the device.

Hogan was charged with one count of misappropriation of lost property; Wallower with misappropriation of lost property, and possession of stolen property. Each faces a maximum of a year in county jail, plus fines and probation.

"Clearly the phone was left in the bar, and clearly Mr. Hogan took the phone and knew what he had," Pitt said. "Shortly after that he made the wrong choice, and instead of returning the phone to the owner or to Apple he turned to a friend of his and concocted the scheme to sell the phone to Gizmodo."

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April 27, 2010 - Gizmodo Editor Jason Chen's House Raided: Felony Charges to Follow iPhone Scoop?