Tue Sep 25, 2007 3:16 pm

Well, I don't believe that what we are witnessing here is some major stern signal from Apple that they will refuse warranty. What I do believe, though, is that these two days showed once again how Apple is masterful at marketing their devices. In other words, all this is just for publicity.

Apple told us nothing surprising yesterday. They said: "if you modify it, don't come crying back to us if somehow it breaks; we can't possibly support every modification out there". In fact, some anecdotal evidence indicates that Apple stores have been accepting iPhones with third-party apps (the real ones, not just the web 2.0 stuff) for warranty repair/replacement. Then, the next day (today), Phill Shiller goes and says that they are not exactly going to try on purpose to disable phones that were unlocked against the company policy; it is just that the hack must go so deep in the firmware that all bets are off and there is a chance it might happen. If it does, the warranty won't cover it. He almost suggests to undo the hack if one needs warranty repair.

In the end, Apple said nothing new or out of the ordinary. And Magnuson-Moss will be quite a stretch here; it's not like you're installing a third-party stereo in your car. It's more like installing nitrous turbo-charger and then, when your engine block cracks, you bring it in for warranty repair.

It is possible, though, that Magnusson-Moss will give plenty of fuel to all those trial lawyers who see class-action money in it. In the end, it shouldn't affect anyone, and definitely not Apple.

Tue Sep 25, 2007 5:08 pm

I take issue with Mr. Price's conclusions that Apple has violated Magnuson-Moss by stating that procedures for unlocking SIM void the iPhone's warranty. Magnuson-Moss is 15 U.S.C. §§ 2301 et seq. The relevant sections are 15 U.S.C §§ 2302(c), 2304(c). Section 2303(c) provides that:

"No warrantor of a consumer product may condition his written or implied warranty of such product on the consumer’s using, in connection with such product, any article or service (other than article or service provided without charge under the terms of the warranty) which is identified by brand, trade, or corporate name; except that the prohibition of this subsection may be waived by the Commission if—

(1) the warrantor satisfies the Commission that the warranted product will function properly only if the article or service so identified is used in connection with the warranted product, and

(2) the Commission finds that such a waiver is in the public interest.

The Commission shall identify in the Federal Register, and permit public comment on, all applications for waiver of the prohibition of this subsection, and shall publish in the Federal Register its disposition of any such application, including the reasons therefor."

Section 2304(c) provides: "The performance of the duties under subsection (a) of this section shall not be required of the warrantor if he can show that the defect, malfunction, or failure of any warranted consumer product to conform with a written warranty, was caused by damage (not resulting from defect or malfunction) while in the possession of the consumer, or unreasonable use (including failure to provide reasonable and necessary maintenance)."

It should be noted first that Apple has publicly stated that it has not designed its updates to the iPhone to either break or damage the iPhone, so, if Apple is to be believed, that issue is off the table.

In construing that Apple would be liable for violation of section 2303(c), Mr. Price has misconstrued the "in connection with such product" language of §2303(c). That language covers auxiliary products that are used with the iPhone, such as headsets, docking stations, etc., not products or services that modify the iPhone itself. Concluding, as Mr. Price does, that the "in connection with" language would also include software that modifies the operation and/or structure of the iPhone's internal software, even its base-band software, is a conclusion not supported by any case law that I am aware of. In other words, Magnuson-Moss only applies to Apple's warranty of its version of the iPhone; it does not extend Apple's warranty of the iPhone to any version of the iPhone created by third-party modifications. The apt analogy, if we are to risk reasoning by analogy, is that a car maker can't condition his warranty on what brand of gasoline a car owner uses, provided the gas meets the car's operating specifications, but a car maker can void the warranty where an owner modifies the car's engine. The car maker only warrants its engine, not the engine that results from the owner's modifications. "In connection with" would cover spark plugs, oil, other fluids, repair parts, etc, that meet the car's written specs and that are part of the car's normal operation and maintenance, not modification for racing stock cars.

In this case, it seems that the SIM unlocking procedures are more analogous to tampering with a car's engine, rather than using a particular kind of gas. The "in connection with language" covers auxiliary products that are used with the iPhone, not the alteration of the iPhone's internal code.

Even if for the purposes of argument, we accept Mr. Price's extraordinary construction of 2303(c), Apple still might not have violated Magnuson-Moss. Apple could apply to the FTC to waive 2303(c) on the grounds that the IPhone will only work properly with its software intact. Section 2303(c)(1)-(2). This would be an issue of fact that can't be decided here. But I opine that this moot point would never be reached, because, as argued, supra, the "in connection with" language applies only to auxiliary products that don't alter the structure and designed-for operation of the iPhone's software.

Pursuant to 2304(c), supra, Apple would be relieved of its duties under its warranties, if it could show that the defect, failure, and/or malfunction was caused by damage (not resulting from the defect, failure, or malfunction) while in the consumer's possession or that the defect, failure, or malfunction occurred because of the consumer's unreasonable use of the iPhone. Well, the SIM unlock certainly occurs while the iPhone is in possession of the consumer as a result of the consumer's own actions. And, if that is not enough, the installation of the SIM unlock is unreasonable use of the iPhone, because it violates the very terms of the license and contract whereby a consumer is permitted to purchase and use the iPhone. Thus, it seems that Apple will have a strong, if not dispositive case, for saying that the several SIM unlocks void the iPhone's warranty.

Finally, Mr. Price's conclusion that those who have used SIM unlocking procedures can approach the court with clean hands is in error. To the extent that the iPhone's software, even its base-band software is protected by copyright, patent, or both, modifying that software without permission constitutes infringement of Apple's copyrights, its patents, or both. Infringement is a wrongful invasion of another's property rights, and those who are liable for it do not have clean hands. Also, to the extent that there is any infringement of the iPhone's software or violation of the Terms of Service covering the iPhone, the DMCA would apply with full force, because the Librarian of Congress (LOC) does not have any authority to waive the DMCA where there is an infringing use of another's IP, and AT&T has almost certainly modified its Terms Of Service to expressly deny consumers the right to modify the iPhone's software.

Tue Sep 25, 2007 11:29 pm

And the Bosco Award for this thread goes to.... Phredd with a Ph. Phreakin hilarious dude!

Wed Sep 26, 2007 5:40 am

this is bull. the real analogy would be if i were to take a non-blendtec blender, chuck an iphone in it, and keep the power running until the motor overheats and breaks, and then take the blender back and insist it be repaired... with waffle fries. for free.