Cops Seize Gizmodo Editor's Computer After Apple iPhone Leak

April 26, 2010— -- A blogger who wrote about the famously leaked next-generation iPhone was forced to turn computers and other gadgets over to police, the tech blog Gizmodo said on its site today.

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

After the phone was left behind in a bar by an Apple engineer, Gizmodo said it paid $5,000 to the person who found the phone.

According to Gizmodo, California's Rapid Enforcement Allied Computer Team entered editor Jason Chen's home Friday night and seized four computers and two servers. Chen said he was not present when they arrived.

When called by ABCNews.com, a REACT spokesman deferred comment to the San Mateo County district attorney's office. A spokesman for the office did not immediately respond to a request for comment.

Gaby Darbyshire, Chief Operating Officer of Gawker Media LLC, which owns Gizmodo, said the search warrant to remove the computers was invalid under the California Penal Code.

"Under both state and federal law, a search warrant may not be validly issued to confiscate the property of a journalist," she wrote in a letter in response to the police.

Citing the relevant section of the California Penal Code and a 2006 case concluding that journalistic protections apply to online media, she added, "it is abundantly clear that under the law a search warrant to remove the items was invalid."

"In these circumstances, we expect the immediate return of the materials that you confiscated from Mr. Chen," she wrote.

In an account of the event also posted on Gizmodo, Chen said that when he and his wife came home from dinner Friday night, they saw that the garage door was half-open. When he tried to proceed inside, he said, officers told him they had a warrant and had been there for a few hours. Chen said the only damage done was to the front door, which they "bashed" open.

Last week, Gizmodo set tongues wagging when it published its scoop on the leaked next generation iPhone.

Gizmodo Bought Prototype for $5K

Apple is well-known for cultivating a culture of secrecy, so when Gizmodo was approached by an unidentified individual who said an Apple employee on the next barstool left the prototype on the bar, Chen said he and his fellow editors had their doubts.

The person who claims to have found the device apparently tried to return it to the patron who left it behind, but was unsuccessful, Gizmodo editorial director Brian Lam told ABC News.

So the finder sold it to Gizmodo, Lam said. Lam said Gizmodo offered to return it to Apple. "I told them, all they have to do to get it back is claim it -- on record.''

There's the rub. To claim the phone and get it back, Apple would need to confirm that it was a true Apple prototype.

To leave it in the hands of an outsider could give up highly valuable trade secrets and marketing strategies Apple would not want exposed.

And so began a delicate dance between one of the most powerful tech companies in the world and one of the most popular tech websites that cover the industry.

Gizmodo said the the prototype iPhone was working when found and was switched on in the bar. It said the mobile Facebook app was logged in to the account of Gray Powell, an Apple software engineer whose last post on the social networking site was "I underestimated how good German beer is."

Police Search Gizmodo Editor Who Wrote About New iPhone

By the time Gizmodo blogger Chen got the device in his hands, Apple had remotely disabled it. This level of connectivity lent credence to the authenticity of the device.

Another intriguing clue was the custom-made case, designed seemingly to disguise the unreleased tech treasure as an older iPhone model. The device apparently left behind in the bar is more angular than the latest available iPhone model, and while the face of the device remains virtually unchanged, the square corners and aluminum edges are new.

The case used to house the device was the case for the older iPhone 3GS -- the perfect camouflage, techies gleefully pointed out. Brian Tong, editor for CNet, said, "This may not be the final design for the next iPhone, but the fact that they built a fake case to make it look like the earlier iPhone, that says a lot."

ABC News got an opportunity to examine the reputed new prototype in Chen's Fremont, Calif., home office. It felt decidedly different from previous iPhones, more industrial and less rounded.

iPhone's Innards Verified Its Origin

The phone had a camera on the back with what looked like a flash for taking pictures at night. The lens for the back camera was bigger than the lens on the existing iPhone 3GS, which seemed to infer improved optics for better photo quality.

On the top of the phone was a second microphone, possibly for noise cancellation. The front of the phone also sported a camera. This second camera on the front could indicate the possibility of video-conferencing for the next iPhone.

Gizmodo's Chen took the entire phone apart to see if he could verify its origin. "Once I opened it up, I was completely sure it was an Apple product," he said. He explained that the case could have easily been mocked up by a machinist trying to create a fake, but the internal parts, says Chen, were perfectly crafted.

But Chen said that even after dissecting the device, piece by delicate piece, he still could not tell whether the prototype could run on cellular networks other than AT&T, Apple's exclusive nationwide carrier.

But last Monday night, Gizmodo received a leter that confirmed its surpicions. The letter came from Apple's senior counsel.

"It has come to our attention that Gizmodo is in possession of a device that belongs to Apple," it said. "This letter constitutes a formal request that you return the device to Apple. Please let me know where to pick up the unit."

Gizmodo ultimately returned the device, with a final request from Lam: "I hope you take it easy on the kid who lost it. I don't think he loves anything more than Apple."