As a threshold matter, we would first have to determine whether Apple’s iCloud digital storage system is a “product” or a “service.” For the record, the answer to this key question is not obvious to us. Neither is it obvious to us whether this threshold issue poses a matter of law or a question of fact. (This second-order question is important because if we define this issue as a factual one, then a jury would get to decide this second-order question, not a judge.) Assuming, then, that a plaintiff’s lawyer could persuade a judge or jury that the iCloud system is a product, we would next have to determine whether this system was defectively designed or whether Apple provided adequate warnings of the dangers of using the iCloud system. But how do we determine whether iCloud was defectively designed or lacked adequate warnings? Let’s take the design defect issue first. 

One way of deciding whether a product was defectively designed is through the consumer expectation test. That is, what would an ordinary user of Apple’s iCloud system have expected in terms of privacy and the risk of hacking. Another method of deciding this issue is to ask whether Apple could have adopted a safer or reasonable alternative design for protecting iCloud accounts. (By the way, according to Sam Biddle, who writes for Valleywag (our favorite Sillicon Valley news and gossip website), the answer to this question is probably yes.)

Now, let’s consider the lack of warning issue. Generally speaking, manufacturers are not required to warn against open and obvious defects, so one possible legal issue here is whether the risk of hackers breaking into people’s private iCloud accounts poses an open or obvious danger, which seems like a close question to us.

So, returning to our original question, Is Apple’s iCloud a defective product Apple, of course, says no:

We [i.e. Apple] wanted to provide an update to our investigation into the theft of photos of certain celebrities. When we learned of the theft, we were outraged and immediately mobilized Apple’s engineers to discover the source. Our customers’ privacy and security are of utmost importance to us. After more than 40 hours of investigation, we have discovered that certain celebrity accounts were compromised by a very targeted attack on user names, passwords and security questions, a practice that has become all too common on the Internet. None of the cases we have investigated has resulted from any breach in any of Apple’s systems … We are continuing to work with law enforcement to help identify the criminals involved. To protect against this type of attack, we advise all users to always use a strong password and enable two-step verification. Both of these are addressed on our website at http://support.apple.com/kb/ht4232.

So, should Apple be off the legal products liability hook? (For what it’s worth, Oliver Wendell Holmes once wrote in his beautiful essay on “The Path of the Law” that “the prophecies of what the courts will do in fact, and nothing more pretentious, are what I mean by the law.” So, we are asking you to make a prediction, not write a legal brief.)

Addendum (Sept. 6, 2014): Apple now says it will add new security measures to protect its iCloud system. Is this an admission of liability?

 Does this apply to trial lawyers too?