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What Is the Difference Between Lost and Stolen Property?

When an Apple employee loses a top-secret iPhone, is the guy who finds it guilty of "theft"?

By
Adam Freedman
July 6, 2012

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Today’s topic: Raiders of the Lost iPhone! 

And now, your daily dose of legalese: This article does not create an attorney-client relationship with any listener. In other words, although I am a lawyer, I’m not your lawyer.  In fact, we barely know each other. If you need personalized legal advice, contact an attorney in your community.

Apple Versus Gizmodo

I’ve been getting a lot of questions about the recent incident in which a prototype fourth-generation iPhone was lost by an Apple engineer and made its way into the hands of Tech blog Gizmodo. So many questions, in fact, that I’m devoting two full articles to the various legal issues involved in the tale of the now-famous lost iPhone

In today’s article, I’m going to explore whether the phone was technically “stolen” under the law. In my next article I’ll look at whether Gizmodo can get into trouble for having published details about the iPhone, or whether the First Amendment protects them. 

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What Is the Difference Between “Stolen” and “Found”?

Readers Mervin, Mike H. and Mike C. all want to know whether there’s any truth to the accusation that the lost iPhone was “stolen” by the person who found it. After all, what about “finders keepers, losers weepers?”

It’s a great question. The quick answer is that both Gizmodo and the student who originally found the iPhone could face civil or criminal charges based on their conduct. But they also have some plausible defenses, which I’ll explain in a moment.

The iPhone Saga: The Story So Far

First, a quick recap of the iPhone saga. On March 18, 2010, Apple engineer Gray Powell went to a German-style “beer garden” in Redwood City, California and, after downing a few steins, exited the bar but without the next-generation iPhone he had been carrying. The phone was found by a college student named Brian Hogan who eventually sold it to Gizmodo, which proceeded to post a detailed review of the device, complete with photos and technical specifications. Next thing you know, Silicon Valley cops launch an investigation, including a search of the home of Gizmodo editor Jason Chen. 

Is “Finders Keepers” Legal?

No matter what they say in the schoolyard, “finders keepers” is not the law.

Before we get to Gizmodo’s conduct, we have to ask whether the college student Brian Hogan did anything wrong, to which the answer is: quite possibly, yes. It turns out that those kids who taunted you with cries of “finders keepers” had it all wrong. Under common law, a person doesn’t relinquish title to his personal property merely because he loses or mislays it. Generally, the person who finds the property is required to hand it over to the rightful owner, provided he makes himself known within a reasonable time. 

Given this legal background, one can understand why train stations have always had “lost and found” departments rather than “hey, would you like to buy some used luggage” departments.  That’s also why, when you rush back into a restaurant to collect the umbrella, or wallet--or, indeed, the cell phone--that you left behind, you expect the item to be returned to you.

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