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Teen Who Cracked iPhone Trades it For Car and Job, As Potential Lawsuit Looms

When a 17-year-old cracked the iPhone so it would work on more than just AT&T’s network, tech junkies talked about it as though he had cured cancer. Hotz has now traded his hacked iPhone for a new car and a job, but some now say a legal battle is looming.

Digital Journal — Starting college as a mini celebrity is not a bad thing. Especially if you are George Hotz, the teen who cracked Apple’s iPhone along with four friends so it would work on other wireless networks.

When Apple launched the iPhone, they locked it to AT&T’s network, forcing consumers to sign a deal with the telco if they wanted Apple’s uber-cool mobile. When the phone was launched, tech insiders knew it would only be a matter of time until someone cracked it.

Little did Apple and AT&T know they would get pwned by a teenager. The New Jersey teen unlocked the device to work on T-Mobile’s network and he posted instructions showing others how to do it on his blog. He also listed tools needed, including a soldering gun, fine pitch wire, a case opener and an unlock switch.

And that is when the media frenzy hit.

He already has his own Wikipedia entry, he is getting TV interviews with big networks, and he caught the attention of Terry Daidone, the founder of CertiCell, a company that sells cell phone parts and reconditioned used cell phone batteries.

Spotting Hotz’s talent (as well as the wonderful marketing opportunity to ride on his coat tails through media coverage), Daidone contacted Hotz and offered him a trade: In exchange for his unlocked iPhone, he would give the teen three brand new iPhones and a new car.

“I traded it for a sweet Nissan 350Z and 3 8GB iPhones,” Hotz said in one of his blog posts.

“I wish I had time right now to unlock iPhones for people, but even with this method it’ll take me two hours per phone, and I’m leaving [for college] so soon,” Hotz wrote in a postmortem on his blog. “I will continue to post to this blog, and I will continue to work with the iPhone, but not on a software unlock.”

In addition to the car and three new iPhones, Hotz said he will be doing consulting work for CertiCell and another company called Puremobile.

“My project for now is a GPS for the iPhone that uses triangluation from the cell phone towers,” he said in a blog post. “I believe the towers are public record and you can use an AT command to get signal strength.”

Now, the only thing that remains to be seen is how the industry will react to Hotz’s iPhone hack. Ecommercetimes.com is already suggesting that lawsuits could be looming.

While it’s not yet clear if any laws have been broken, some say the iPhone is protected by the Digital Millennium Copyright Act (DMCA).

“It is not surprising that yet another techie has deciphered the codes, keyed the locks and otherwise unleashed the mysteries within the latest bottle,” Raymond Van Dyke, a technology attorney in Washington, told MacNewsWorld. “It is inevitable, but that does not, however, make it right. The DMCA and other statutes against decryption could have been violated by these actions, which although seemingly innocent could have serious economic consequences.”

The unclear issue still, is whether the DMCA covers cellphone hacking.

“The copyright office ruled that if you want to unlock a phone, you can do it without violating copyright,” Jonathan Kramer, principal attorney at the Kramer Telecom Law Firm, told MacNewsWorld.

The legal blade that is being swung throughout the industry now, however, is the fact that unlocking a phone for personal use is different than posting instructions on how to do it on the Internet. Kramer says that could be the legal problem for Hotz.

“I think he is ripe to be sued, because there’s a principle in law that if you don’t protect your rights, you may effectively waive them,” Kramer explained. “I think Apple and AT&T will want to make sure people don’t play around with their software. The one thing that may help Hotz is that he is not a publicly appealing bad guy.”

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