Where Apple Went Wrong With the iPhone Leak

No doubt, Gizmodo has turned the tech news cycle on its head this week with its exclusive on the iPhone 4G. Everybody from MSNBC to Good Morning America, and even the ladies on The View are talking about what is arguably the biggest leak in consumer technology history.

What has ensued beyond just the basic story of 27-year-old Apple developer Gray Powell's now infamous drunken night now has turned to Gizmodo's culpability in the morass. Some bloggers have gone as far as to publicly call for Apple to sue the publication, but doesn't Cupertino share some of the blame for this mess?

In the simplest terms, yes. As a journalist who has covered Apple for much of the last half-decade, I have to say I am absolutely shocked that this would have even happened. For a company that prides itself on its secrecy--writing on Apple can be much like walking blindfolded into a maze--this is a stunning lapse in judgment.

First off, it is beyond comprehension to me that the company would allow a lower-level employee to walk off One Infinite Loop with a prototype in hand on a personal jaunt. I could understand if he or she was on the clock and out for lunch, but this was purely on Mr. Powell's personal time. As somebody who has lost their phone/wallet/keys one too many times after a night out imbibing with the friends, I know unfortunately how easy it is.

As Ian Bettenridge points out, this almost singlehandedly kills any trade secret case that Apple may try to press. According to US law (see U.S.C 1839 3(a)), in order for it to be prosecutable under trade secret law, "the owner thereof has taken reasonable measures to keep such information secret."

Taking it to a bar using it in a public place where it can be seen no longer keeps it secret. The case used to hide the thing looks so rough from the pictures that it is almost obvious that there's something up with it. All around a poor job by Apple to keep it under wraps.

Second, failing to report the device as stolen with the proper authorities was another mistake. If the company wants to press a case on stolen property, you can't without a police report. To my knowledge and research, no such report exists. I'd venture to guess that if it was discussed, it was not done because news of the police report would have certainly made it to the press.

(With all due respect to Daring Fireball's John Gruber who's been on top of this story like a hawk covering all sides, even if your sources say they considered it stolen, they sure weren't acting like it.)

I'd argue the primary culpability, if any, sides with the finder from all that I have read in the case law. The courts have been very reluctant to prosecute the press over confidential leaks in all but the most egregious cases, and this by far seems to not meet that level. There is just too much to prove on Apple's part to make any case against Gizmodo worth it.

Apple can take a lot away from this incident--including reviewing its policies on taking prototype equipment off of Apple premises (shocked there apparently is one outside of their highest executives!). But the worst thing it could do is turn around and make this a bigger issue with lawsuits, which are sure to only make the company look bad.

This isn't the ThinkSecret case. This time, the whole world is watching.

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