IPhone Hackers Could Face Legal Battle

George Hotz, 17, talks about an iPhone that he has unlocked and is using on T-Mobile's network, in this Aug. 24, 2007 file photo in New York. Hackers have figured out how to unleash Apple's vaunted iPhone from the AT&T network, but experts say people hoping to make cash out of the procedure may face legal problems. (AP Photo/Jeff Christensen, file) (Jeff Christensen - AP)

Some carriers provide the unlock codes on request when a subscriber's contract expires, but that doesn't apply to the iPhone, and in any case, the phone only went on sale two months ago, while the minimum contract length is two years.

Another Web site, iphonesimfree.com, has said it plans to release iPhone unlocking software in a few days.

The Copyright Office of the Library of Congress last year issued a statement that unlocking cell phones was not a violation of copyright under the Digital Millennium Copyright Act. That law has been used to go after software that copies DVDs.

But Tracfone Wireless LLC, a Florida-based company selling phones that use prepaid plans, won an injunction in February against a couple who bought its phones in large numbers and resold them unlocked.

The U.S. District Court in Orlando found that the DMCA exception did not apply to those unlocking a phone with the intent to resell it.

Bruce Sunstein, a patent lawyer with Boston-based Bromberg & Sunstein, said unlocking software could well stand up to a legal challenge.

"They're aiding and abetting something that's completely legal ... the exemption the Copyright Office created does not state that it applies only to the user," Sunstein said.

George Hotz, a 17-year-old in New Jersey who managed to unlock his iPhone last week, using both software and hardware modifications, tried to sell it on eBay but ended the auction after apparently fake bids send the price to $100 million.

Instead, Hotz traded the unlocked phone for "a sweet Nissan 350Z" and three iPhones, according to his blog.

Hotz made the deal with Terry Daidone, co-founder of CertiCell, a cell phone repair company in Louisville, Ky.

In a statement on his Web site, Daidone said he was "keenly interested" in having the teenager help his engineers modify phones, but does not have any plans to commercialize Hotz's unlocking procedure.

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On the Net:

http://www.apple.com/iphone