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To Lock Or Unlock? That Is The Legal Limbo Question Of The Day

Rather than unlock iPhones for a fee, iPhoneSIMfree has decided to sell its services wholesale to so-called resellers for $1,800, who can then unlock up to 50 iPhones. But what legal pitfalls await both reseller and purchaser?

The question is an important one for those thinking about hacking the AT&T tethers out of the iPhone. While it was hoped that the iPhoneSIMfree group, which created a software solution that unlocks the iPhone, would give the software away, the reality is not so friendly.

Instead of selling it directly to people longing for a free iPhone, iPhoneSIMfree is selling the software in 50-license batches for $1,800. That breaks down to $36 per license. I doubt too many people will shell out $1,800 to unlock just one iPhone, so any additional iPhones that person unlocks with the remaining 49 licenses would by default make them resellers of the licenses. Ars Technica posted a story today outlining the dangers of unlocking iPhones. Interested parties would do well to take a look.

It said:

Anyone can still run afoul of the DMCA by selling unlocking software or engaging in its distribution in any way, because the Register of Copyrights didn't bother to provide protection for those distributing unlocking tools.

With iPhoneSIMfree's "reseller" program," the company is asking you to become part of a distribution scheme. It's a very gray area, legally speaking, because a "reseller" in this instance is engaging in distribution by definition, even if no net profits are involved.

The bottom line is that there's a lot of murkiness and clouds here. Apple and AT&T have not responded publicly to this new scheme. AT&T has, however, sent a number of legal notices to those claiming to have unlocked the iPhone. The question is, will it knock on your door if you choose to buy into this plan from iPhoneSIMfree?

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