Remember back in March of 2010 when that mysterious prototype iPhone was found in a bar that fueled the speculation of what the new iPhone 4 was going to look like? For those that don’t remember, an Apple employee charged with the task of testing a fully functional iPhone in the ‘real world’ spent his birthday at a local bar, ended up drinking too much and left the prototype phone at the bar only to be found by another patron. It was this guy and his friend that pitched the sale to Gizmodo.com’s Jason Chen.

Shortly after Jason took possession of the device, he blasted out blog posts including pictures and videos showing off the new device and only speculating what could possibly be inside. It was then that one of the largest tech exclusives took off. It became world news for 2 reasons. 1. Everyone was waiting to hear about any little detail they could find regarding a new iPhone and 2. Apple NEVER gives sneak peaks or media previews. They make their announcements to the world while everyone is watching.

Originally after the news broke, everyone was up in arms about who could have done this, was the device stolen, was Jason Chen’s possession of it illegal, etc. After a year of investigations, Jason Chen will not have any charges filed against him. Apparently, as a journalist, he is covered by the shield laws that basically protects a journalist’s 1st amendment rights as a reporter.

At the time authorities had seized Jason’s computers and notes related to the unfolding event, although it’s widely believed that this seizure was illegal because they ended up taking unpublished notes from a reporter—another gray area of the shield law.

Prosecutors claim that although they potentially have a case with charging Jason Chen, they are opting not to pursue due to the many gray areas that could upset a final verdict. The two individuals responsible for finding and selling the device to Gizmodo are not so lucky. Brian Hogan and Sage Wallower are both getting slapped with misdemeanor charges. 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.

My two cents

This truly is a gray area because I believe that all parties knew what they had. Even without it being an iPhone prototype, they all had to have known they were doing business with stolen property, but as the prosecutors knew, it might be impossible to prove that Jason Chen knew that. Adding to that, the “illegal” search and seizure and you no longer have an open and shut case.

Either way, none of this really matters anymore. Apple got the phone back and it appeared that none of the leaks damaged any sales. In fact, that kind of press might have actually helped sales.