Apple's Jobs to Gizmodo: Return iPhone prototype
Steve Jobs asked technology blog Gizmodo.com to return a secret iPhone prototype that Apple Inc. says was stolen after a company engineer lost it in a bar, according to court documents released May 14.
The lost iPhone is being investigated as a possible trade- secret theft, according to California state court documents made public after media organizations including Bloomberg News asked they be unsealed. Apple reported the device stolen last month.
The legal wrangling is over a product that, at $13 billion, accounted for more than 30 percent of 2009 sales for Apple, which closely guards details about unreleased products. An Apple lawyer said publicity about the "invaluable" prototype was "immensely damaging to Apple" because it would hinder iPhone sales, according to an April 23 affidavit by Detective Matthew Broad of the San Mateo County Sherriff's Office.
"I want to get this phone back to you ASAP and I want to not hurt your sales when the products themselves deserve love," Gizmodo editor Brian Lam said in an e-mail to Jobs, Apple's chief executive officer. "But I have to get this story of the missing prototype out and how it was returned to Apple with some acknowledgment it is Apple's."
He was writing in response to Jobs, who contacted Gizmodo on about April 19 seeking the return of the prototype after the blog dissected it and posted pictures detailing its features. Lam said he would return the phone if Apple provided him with confirmation that it belonged to the company, according to Broad's unsealed affidavit.
"By publishing details about the phone and its features, sales of current Apple products are hurt," Broad said, recounting a conversation with Apple lawyer George Riley of O'Melveny & Myers LLP. "Riley could not provide an estimated loss, but he believed it was huge."
Gizmodo posted a copy of a letter from Apple's General Counsel Bruce Sewell, dated April 19, asking for return of "a device that belongs to Apple." Gizmodo said it gave back the prototype to Cupertino, California-based Apple that day. Sewell picked up the prototype at the home of Gizmodo editor Jason Chen, according to Broad.
Gizmodo, which is owned by Gawker Media, said it purchased the phone for $5,000 after it was found at a bar in the San Francisco suburb of Redwood City. The phone was lost on March 25 by Apple engineer Gray Powell, according to the affidavit.
Judge Clifford V. Cretan in Redwood City ruled May 14 against the San Mateo County District Attorney's office, which argued that unsealing the documents will reveal identities of potential witnesses and compromise the investigation. Media organizations argued they should have access to the documents based on constitutionally protected free-speech rights.
The case is In Re Sealed Search Warrant Records, 2010-0034, San Mateo County Superior Court (Redwood City, California).