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Thursday, August 30, 2007, 08:00 am PT (11:00 am ET)

Associated Press delves into legalities of iPhone unlocking

With several iPhone unlocking methods gaining traction over the past week, the Associated Press has done some investigating into the legalities of the matter and is reporting that unlocking the phone for one's personal use appears to be legal.

On the other hand, hackers who contrive such unlocking solutions with the intent to profit from them are likely to face legal problems. At least one of the companies hoping to make money by unlocking iPhones told the AP that it is hesitating after calls from lawyers representing AT&T, the exclusive U.S. wireless provider for iPhone.

"Whether people can make profits from software that hacks the iPhone is going to depend very much on exactly what was done to develop that software and what does that software do," said Bart Showalter, head of the Intellectual Property practice group at law firm Baker Botts in Dallas.

Uniquephones.com, an outfit based in Northern Ireland, says nearly half a million people have expressed interest in its $25 iPhone unlocking solution. The firm had planned to release the software earlier this month but is now seeking legal advice after having received some 'friendly advice' from AT&T's attorneys.

Another firm, iphonesimfree.com, has said it plans to release its own iPhone unlocking software in a few days. Meanwhile, 17-year-old George Hotz managed to unlock his iPhone all by himself last week, using both software and hardware modifications. He then attempted to sell the unlocked phone on eBay but ended the auction after fake bids apparently sent the price to $100 million.

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

According to the AP, The Copyright Office of the Library of Congress last year issued a statement that unlocking cell phones for one's own use, for instance to place calls with a different carrier, was not a violation of copyright under the Digital Millennium Copyright Act.

However, the AP added in its report that 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.

Further details are available in the AP's thorough report on the matter.