Police ID Person Who Found New iPhone Police, Apple track down person who found prototype of new iPhone, reports say.

April 28, 2010 -- The case of the leaked Apple iPhone continues to unfold.

Police have identified the person who found the prototype of the new iPhone after it was left behind at a bar by an Apple engineer, according to local reports. But authorities haven't said if the same person sold the phone to tech blog Gizmodo for $5,000.

Last week, the Internet went wild when Gizmodo published an exclusive story about a prototype of the next generation of Apple's iPhone -- scheduled for release this summer.

But earlier this week, the site revealed that Friday police entered the home of Jason Chen, a Gizmodo editor who wrote about the next-generation iPhone, to seize computers and other gadgets.

No One Charged With Crime, District Attorney's Office Says

Investigators have identified and interviewed the person who picked up the prototype phone after Apple engineer Gray Powell left it at a Redwood City, Calif., bar March 18, the San Jose Business Journal said Tuesday.

"We're still not saying it's a crime," San Mateo County Chief Deputy District Attorney Steve Wagstaffe told the Journal. "The investigation has contacted as many segments of the people involved in this situation, including the person who took the phone from the German restaurant. The police know who he is and they have talked to him."

Wagstaffe said Powell and outside counsel for Apple contacted the district attorney's office Wednesday or Thursday of last week to report a theft and ask for an investigation, the Journal said. Then they were referred to the Rapid Enforcement and Allied Computer Team, or REACT, the high-tech crime task force that ultimately confiscated computers from Gizmodo's Chen.

In response to the police seizure, Gawker Media LLC, Gizmodo's parent company, wrote a letter invoking the California shield law for journalists and said the search warrant to enter Chen's home was invalid.

Wagstaffe said the investigation is on hold until it's determined whether those protections apply in this case.

Wired: Apple May Have Tracked Down Finder of the iPhone

Representatives of Apple may have also visited the person who found the famous iPhone, Wired magazine reported Tuesday night.

"Someone came to [the finder's] house and knocked on his door," a source, who spoke on condition of anonymity, told Wired.com. The person said a roommate answered the door but wouldn't let them enter the room.

The source said that the person who found the phone tried to notify Apple and the owner, but failed. The person then tried to contact the press to confirm its authenticity and locate the owner, the source said.

"The idea wasn't to find out who was going to pay the most, it was, who's going to confirm this?" the source told Wired, adding that the $5,000 agreement with Gawker was for exclusivity only. Gizmodo was supposed to help return the phone to the owner or return it to the person who found the phone, the source said.

Wired also said that it received an e-mail from a tipster in March who offered access to the device, but Wired did not follow-up after the tipster made "a thinly veiled request for money."

Web Reacts to Fallout from Gizmodo's Scoop

The whole drama has sent off a lively debate online, triggering arguments as to whether bloggers are journalists, whether Gizmodo's actions were illegal or merely unethical and whether Apple orchestrated the whole to-do as an elaborate marketing ploy.

In an interview with Wired, Jennifer Granick, civil liberties director at the Electronic Frontier Foundation, said the federal Privacy Protection Act, which prohibits the government from seizing materials from journalists and others who possess them for the purpose of communicating to the public, also protects Chen.

But L.A. Times technology blogger Dwight Silverman isn't sure journalistic shield laws apply:

"As a journalist, I think shield laws are important for protecting sources. And yes, I consider bloggers who actively report and provide information to the public on a regular basis to be practicing journalism," Silverman wrote in a blog post this morning. "But California's shield law, which is part of its Constitution, is designed to protect the sources of journalists -- it's not blanket immunity for crimes committed by journalists. If the legal system determines that Gizmodo broke laws by its purchase of the 'lost' iPhone, that action isn't protected."

Mashable framed the issue as a core test for the future of media. "The entire saga has brought a slew of legal, moral and ethical issues that could impact the future of blogging and journalism. It depends on how the legal and criminal issues play out," Mashable's Ben Parr wrote.

Mashable commenter Elly challenged, "Give me one good reason why online journalists shouldn't have the same rights as print journalists."

L.A. Times commentator Steve C. wrote, "Let's turn it around. What if instead of a phone, it was a document left behind exposing collusion and possible crimes by senior management at a corporation? The document is "owned" by the corporation. If the finder of the document asks the L.A. Times for a finder's fee, what would they do? Would it be wrong? It's a gray area."

However, many online commenters say regardless of whether bloggers are journalists, Chen lost his right to be considered a journalist the minute he paid for what could have been stolen property.

"Jason Chen is no journalist. He may write for a website, but journalism implies a kind of morality," L.A. Times commenter Brian B. wrote.

A commenter at Digg, which has so far clocked 1007 comments on the story about the police raid, similarly shed few tears for Chen.

"I have to say that I have no sympathy for this guy. He took what he knew was a product that was secret and meant millions if not billions of dollars and posted it all over the Internet. I am glad he did it, but it was still irresponsible and dumb. I know the excitement of it all might have caused some bad judgment, but this guy was a moron if he thought Apple was not gonna make an example out of him," wrote lukewind.

Others say the entire thing may have been orchestrated by Apple to stimulate buzz and publicity for its next hotly anticipated version of the iPhone. ABC News reader calico_jack73 wrote, "I'm really thinking this was all planned by Apple to hype the iPhone."

But Hawks5999 commented on Mashable, "If it's a marketing ploy, it's being done wrong. It's making people look negatively at Apple in a way they otherwise wouldn't have."