Why George Hotz could face jail time - Macenstein

Why George Hotz could face jail time

Posted by Dr. Macenstein

george Hotz

Everyone’s favorite hacker of the week, George Hotz, has enjoyed 13 of his 15 minutes of fame this week, appearing on news shows and conducting media interviews about his successful iPhone hack, and good for him. Let’s just hope his last 2 minutes are not spent in a courtroom.

As a fellow New Jerseyian, I am proud that first person to waste 2 months of their life attempting to unlock the iPhone came from the Garden State. However, I worry that George might be tempting the “lawyers that be” with each of his somewhat smug-sounding interviews.

In one such interview, George made it clear that he feels his unlocking of the iPhone is protected under an exemption made to the Digital Millennium Copyright Act in 2006 which says it is legal to unlock a cellphone’s firmware for the purpose of personal use. However, recently the story broke that George has traded his unlocked iPhone to a Kentucky-based mobile phone company in exchange for a Nissan 350Z, and 3 brand new locked iPhones.

So now that George has given his unlocked iPhone to someone else (and gained a couple thousand dollars worth of compensation) it stands to reason he is no longer “personally using it”. Odds are if they felt like it, AT&T (and more likely Apple, since they’re the ones who likely wrote the firmware) could go after George, arguing that his motivation for unlocking the iPhone was to make money and gain notoriety, not for personal use. And they’d have a pretty good case.

Now, as for whether either company wants to make an example of George is the question. George comes across as a likable enough fellow รขโ‚ฌโ€œ an enthusiastic tech geek who was not willing to get a haircut before appearing on national TV. Apple probably wouldn’t bother to go after him, as unlocking iPhones can only sell more of them, but AT&T might. Their lawyers have already begun attempting to stop other iPhone unlocking companies from selling their solutions online. Hopefully George’s 17-year-old status and the fact he is starting his freshman year at college will soften AT&T’s heart and let him off the hook. After all, AT&T knew the iPhone’s unlocking was bound to happen eventually. Yet at the same time, AT&T, from all reports, invested quite a bit of time and money in landing the iPhone as an exclusive to AT&T’s service, and we could be talking about real financial losses, both in subscribers and stock prices, which could potentially spur AT&T to unleash the hounds. Even more than the cost of a Nissan 350Z.

And come to think of it, Apple may lose out too on unlocked iPhones. While they were able to trick negotiate a revenue sharing deal with AT&T, they are still attempting to do so with the carriers over in Europe and Asia. Odds are, if it is known the iPhone can be made to work on any carrier, Apple will have a harder time trying to negotiate a similar deal with foreign carriers.

As I said, George seems like a good kid, and while I do not wish jail time or lawyer’s fees on George, from what I can tell, it appears he is a Windows user who quotes the movie Galaxy Quest. So while prison seems a bit much, maybe I wouldn’t be against his receiving a stern letter from AT&T or Apple, just to freak him out a bit.

10 Responses to “Why George Hotz could face jail time”
  1. Terrin says:

    I have an idea. Why don’t you go read the DMCA and tell me where in the referred to exception it says you cannot make money unlocking a phone? I will tell you where: nowhere. Still it is a worthwhile exercise to actually read what you are talking about for yourself.

  2. Terrin says:

    Actually Terrin, it DOES say that you can unlock a cell phone only for *personal* use. As the article mentions, he unlocked the iPhone for monetary gain… which is NOT personal use which would then make him liable for harm he had done.

    More to the point though, your post makes you sound like an asshat.

  3. Richard says:

    I am given to understand that it is permissible for a business to perform a firmware unlock on phones for customers as has been done for quite some time prior to the DMCA “exemption” and which is now considered to be “in the clear.”

  4. bride of macenstein says:

    At&t and/or Apple should hire this kid to help them stop others from hacking their products.

  5. zahadum says:

    hmm, let’s try posting with javascript turned ON ….

    1) how did you get the impression he was a windoze users (other than he won an INTEL sponsored science fair prize)?

    2) i forget that you used to be the editor of the Harvard Law Review, so naturally i am deeply impressed with your trenchant legal analysis – NOT!

    firstly, the “sole” purpose language is much better understood as being related to the operational intent (ie telecommunications interconnect) … as opposed to the financial intent.

    this aspect of the law clearly aims to make it legal for an owner of terminal equipment to use attach to a telecom network as it was designed to operate – ie to place cell phone calls using standardized telecom protocols (which are themselves regulator by a federal regulator).

    this aspect of the law is not aimed at protecting a business model (ie enforcing a contract).

    it is rather a technical measure aimed at ensuring transparency: namely that sellers can not inequitably restrict the compatibility of a device meant to work in an open marketplace – a network by definition is based upon portability & modularity.

    moreover, if the esteemed author of the blog had bothered to read any of the coverage of this subject by those far better informed than hs obviously is, then he would have seen that this interoperation of the “purpose” language – operational vs financial – does in fact have a strong precedent: to wit, the us supreme court disallowing the attempt by Big Three auto manufacturers to force customers to purchase (after-market) car radios only from the Big Three.

    secondly, in tehse kinds of hacks there is no intellectual property being sold or stolen. What is being RESTORED is the ability of terminal equipment to function on a public network.

    In other words the dmca law is entirely unclear about whether a business model or a service can be be itself copyrighted — there is no actual ‘intellectual property’ at stake in a service (only profits are at stake – which is outside the direct purview of the dmca, which is about protecting property not services).

    In conclusion, there may be other grounds upon which to criticize this lad – including his unfortunate use of windoze – but his putative crominal liability under the dmca is NOT one of them.

    ‘Doctor’ macenstein needs to get his law school 101 basics right before making wild speculations – or else Fake Steve Jobs might just have to revoke his blogging license on account of malpractice ๐Ÿ™‚

  6. zahadum,

    I admire your irrational anger and smugness and will attempt to answer your questions as best I can.

    1), In multiple video interview clips of Mr. Hotz, they show B-Roll of him running software on multiple Windows PCs. I admit I then took the liberty of assuming he used the Windows computers he was filmed using.

    2) Yes, I admit to being fired from my position at the HLR after it was discovered I have no law degree, and I also admit I am not familiar with the DMCA’s intricacies. However, as I linked in my article, I based my assertions on those of the tech site Engadget and THEIR lawyers, who outlined a case could be made to go after anyone hacking the iPhone.

    I think if someone who is not well versed in this area of the law (such as myself) reads an opinion on a tech-related issue approved by one of the more knowledgeable and repected tech blogs and their tech-savvy legal council, it is safe to say they did their due diligence. I am not sure of your law background, but it appears your argument is based on the idea that the issue is unclear in this instance, not that the issue is resolved in favor of Mr. Hotz.

    To that end, I think it is entirely possible that both AT&T and Apple would have merit should they bring about a case. Whether or not they would win is another matter.

    -The Doc

  7. liala says:

    he’s 17, not legal. so haha to all of you!

  8. Constable Odo says:

    No way. They don’t put genius Caucasian teenagers in jail. Smart guys like him only get community service at the place of his own choosing. Polishing cars at the Mercedes dealer or a massage boy at the local female modeling agency’s poolside. The Feds might hire him to track down other iPhone hackers for a nice fat salary.

    Nope, sorry. But unless he kills five people and doesn’t show remorse, he’ll never see the inside of a jail, unless he’s given an all expenses paid tour of Alcatraz. Jails are reserved mainly for minority races.

  9. Jo says:

    A little off-topic I know, but even as a Mac user, I am sick to the pit of my stomach of people spelling Windows: ‘Windoze.’

    Yeah it’s a crappy operating system, but get over it and grow up. ๐Ÿ˜›

  10. Ethan says:

    ++ to Jo’s comment.

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