Apple finally sues unauthorized clone maker Psystar

[AppleInsider]

Apple Inc. is fed up with a small Florida-based firm that has been selling its own brand of computers running hacked versions of the Mac OS X operating system and has finally slapped the company with a lawsuit.

The Mac maker filed a formal complaint in the U.S. District Court for the Northern District of California on July 3rd, just one day after Psystar began distributing a modified version of the Mac OS X 10.5.4 Leopard update to customers who had previously purchased one of its unauthorized Mac systems.

While details of the suit are unclear at this time, AppleInsider has learned that Apple and its counsel at Townsend and Townsend and Crew LLP filed the suit on grounds of copyright infringement.

In April, Psystar made headlines when it announced a $400 desktop dubbed OpenMac (later renamed Open Computer) which was described as "a low-cost high-performance computing platform" based on the ongoing OSX86Project -- a hacker-based initiative aimed at maintaining a version of the Mac OS X operating system for everyday PCs.

A representative for the company, identified only as Robert, would later go on record and challenge Apple to bring formal charges against his firm, arguing that the Mac OS X end-user license agreement, which prohibits third-party installations of Mac OS X on non-Apple hardware, stands in violation of antitrust laws.

"What if Microsoft said you could only install Windows on Dell computers?," he said. "What if Honda said that, after you buy their car, you could only drive it on the roads they said you could?"

With Apple remaining largely silent on the matter, Psystar last month continued to taunt the Mac maker by aggressively staking its claim as the lone company outside of Apple selling Mac OS X systems, unveiling a pair of Xserve-like rackmount computers unofficially based on Mac OS X Leopard Server.

As part of its unauthorized Mac clone business, Psystar has promised to provide customers with altered versions of Mac OS X system updates for its Open Computing products shortly after Apple releases official versions for its own systems.

[ View this article at AppleInsider.com ]

[Rot'nApple]

What took Apple so long?

[Xian Zhu Xuande]

Originally Posted by Rot'nApple

What took Apple so long?

I was thinking the same thing. Perhaps Apple sees this as a very sensitive issue and wanted to make sure their approach to crushing it was brutally efficient. It will be interesting to see what kind of example they make out of these guys. I don't usually care for lawsuits, but I'm glad Apple has finally gotten around to this -- what Psystar is doing is just plain wrong.

[ltcommander.data]

Psystar's argument is most likely flawed. I don't believe Apple really sells it's OS as a separate product like Microsoft, but rather as an upgrade to software that is included on Apple hardware when you buy an Apple computer. If Apple loses you'd think Microsoft, Sony, and Nintendo would be guilty of not offering their XBox, PS3 or Wii OS on each other's consoles.

[noirdesir]

This makes perfect sense. Allowing clones to upgrade to newer OS versions was always going to be tricky point as Apple could introduce new checks with every new OS version. From the wording of the article it sounds as Pystar got round this issue by modifying a version of 10.5.4.

Now Apple can sue for 'selling' a modified version of the OS, that is most likely easier than sueing over selling Apple-compatible hardware.

[AlphaAnt]

Originally Posted by Rot'nApple

What took Apple so long?

I think the line was drawn when Psystar modified the code for the OS update and distributed it. That seems like the most obvious violation, the proverbial camel's back-breaking straw.

[pasdeignan]

Originally Posted by ltcommander.data

Psystar's argument is most likely flawed. I don't believe Apple really sells it's OS as a separate product like Microsoft, but rather as an upgrade to software that is included on Apple hardware when you buy an Apple computer. If Apple loses you'd think Microsoft, Sony, and Nintendo would be guilty of not offering their XBox, PS3 or Wii OS on each other's consoles.

I can't say that I agree with this entirely. From a distribution point of view, you couldn't put the XBOX code on the Wii or PS3 or vice versa (without extensive re-coding). Here, the software is mostly compatible with all modern x86 hardware (extra driver support often needed). There is no denying that Psystar infringed on Apple's copyright, but their claim that such copyright opposes anti-trust laws is definitely arguable. This could be a very interesting case to follow. The other issue is that if Apple wins, does it mean that they have a right to sue everyone who bought the Open Computer since they broke the copyright as well?

[macFanDave]

Originally Posted by Rot'nApple

What took Apple so long?

You want the infringer to make some money from stealing so you can take it from them -- three times! Had Apple stopped them on Day One, the amount of damage would be based on the revenue of that day, but after a few months, the suit is timely enough, but now Psystar has presumably sold a significant number of rip-off clones, so Apple will get a lot more money if they win.

[melevittfl]

Originally Posted by ltcommander.data

Psystar's argument is most likely flawed. I don't believe Apple really sells it's OS as a separate product like Microsoft, but rather as an upgrade to software that is included on Apple hardware when you buy an Apple computer.

Hmm, well I went into a local store when and picked up a box labelled "Mac OS X". I went to a cash register and gave the store some money in exchange for the box. That seems like a sale to me.

I think Paystar is within their rights as long as they are not modifying OS X.

Apple can put whatever it wants to in it's so-called "license agreement", but that doesn't make it legally binding.

See this case for an example: http://arstechnica.com/news.ars/post...-software.html

[dopplerd]

I'm not surprised that Apple waited this long. I have suspected that they did not want to challenge Psystar on a EULA violation due to the consequences of a judge invalidating the exclusivity clause in the EULA. Apple waited for Pystar to take copyrighted code, modify it, and distribute it. This is a whole different ball of wax and is based on established copyright law not the Apple drafted EULA that may not hold up in court.

Psystar is now dead. Apple will prevail and at a minimum prevent future distribution of Apple updates which makes a Psystar machine much less appealing. Most likely Apple will end up forcing liquidation of the company.

[JoeDRC]

Originally Posted by melevittfl

Hmm, well I went into a local store when and picked up a box labelled "Mac OS X". I went to a cash register and gave the store some money in exchange for the box. That seems like a sale to me.

I think Paystar is within their rights as long as they are not modifying OS X.

Apple can put whatever it wants to in it's so-called "license agreement", but that doesn't make it legally binding.

I think when you click "I Accept" When prompted with the terms and conditions of the license agreement you enter a legally binding contract.

[minderbinder]

""What if Microsoft said you could only install Windows on Dell computers?," he said. "What if Honda said that, after you buy their car, you could only drive it on the roads they said you could?""

What if they did? Most companies could certainly do just that (although it would be pretty much impossible to enforce it with end users). If the demand was too draconian, customers wouldn't buy the product, if the product was good enough to be worth the compromise, people would buy it, as they do with apple. In the case of MS they probably couldn't do it because they are considered a monopoly.

Antitrust is an absolutely ridiculous argument and one sure to lose - it only applies in the case of a monopoly, which apple has virtually the opposite of with less than 10% computer market share.

I'm surprised Apple didn't do this sooner, although early on I expect they thought Psystar was so incompetent that they might crash and burn on their own pretty quickly.

Originally Posted by melevittfl

Hmm, well I went into a local store when and picked up a box labelled "Mac OS X". I went to a cash register and gave the store some money in exchange for the box. That seems like a sale to me.

I think Paystar is within their rights as long as they are not modifying OS X.

You do realize they ARE modifying OSX, right?

[pixelcruncher]

This is a very interesting case regarding the rights of a corporation vs the rights of the consumer, and I am actually really anxious to hear well thought out arguments on both sides. Too bad Psystar doesn't strike me as the kind of company that can mount a well-financed legal battle. I wouldn't be surprised if this guy tries representing himself.

[ltcommander.data]

Originally Posted by melevittfl

Hmm, well I went into a local store when and picked up a box labelled "Mac OS X". I went to a cash register and gave the store some money in exchange for the box. That seems like a sale to me.

I think Paystar is within their rights as long as they are not modifying OS X.

Apple can put whatever it wants to in it's so-called "license agreement", but that doesn't make it legally binding.

See this case for an example: http://arstechnica.com/news.ars/post...-software.html

I wasn't really questioning whether a transaction takes place, but more the type of product it is. It could be that all retail box Apple OS are really an "upgrade" to existing Apple software/hardware, rather than retail Microsoft OS which are available as stand-alone products for new-builds or in upgrade form. I haven't taken a close look at Apple's license agreement lately, but I would think that it stipulates the need to already own previous Apple hardware/software just like Microsoft's Upgrade license agreement would presumably include a clause that you have to already own a previous Windows version to upgrade.

And yes, based on that article, if Psystar only sells you an unopened package then the license agreement doesn't apply to them. If they installed it for you though, the license agreement would probably apply.

[Hutcho]

Look at all the apple fan boys in here. What apple is doing is in no way good for the consumer. They are just trying to protect their business of selling overpriced hardware to their customers.

[Wiggin]

Originally Posted by dopplerd

I'm not surprised that Apple waited this long. I have suspected that they did not want to challenge Psystar on a EULA violation due to the consequences of a judge invalidating the exclusivity clause in the EULA. Apple waited for Pystar to take copyrighted code, modify it, and distribute it. This is a whole different ball of wax and is based on established copyright law not the Apple drafted EULA that may not hold up in court.

Psystar is now dead. Apple will prevail and at a minimum prevent future distribution of Apple updates which makes a Psystar machine much less appealing. Most likely Apple will end up forcing liquidation of the company.

This is what I thought all along. Apple wouldn't want to risk having a judge or jury finding against them on the EULA. The odds would have been with Apple, but there was enough gray area that it wasn't worth the risk. If Apple lost that argument you'd then have a flood of new companies start to sell their own Mac hardware.

But modifying and redistributing copyrighted software is a much more clear-cut case so the risk is lower. And if you win a judgement large enough to put them financially out of existence you've acheived the same result. Psystar declares bankruptcy, customers don't get their machines or their money back; and everyone learns a valuable lesson.

[backtomac]

Originally Posted by minderbinder

[B]

I'm surprised Apple didn't do this sooner, although early on I expect they thought Psystar was so incompetent that they might crash and burn on their own pretty quickly.

The more computers that Psystar sells, the bigger the potential judgement in Apple's favor should they win.

I think Apple waited because they want a judgement of damages large enough to put them out of business.

That way they don't go through this again.

Oops, Dopplerd beat me to it. Hey don't sue me!

[studiomusic]

Originally Posted by Hutcho

Look at all the apple fan boys in here. What apple is doing is in no way good for the consumer. They are just trying to protect their business of selling overpriced hardware to their customers.

So don't fall into their 'trap' and buy things from them???

[Tummy]

I hope they realize that there is no point in fighting Apple in court. Apple has the resources to drag this out forever and they will just go broke defending it. The best they can do is try and reach a settlement and restart the business doing something else.

[Zaphodsplanet]

To those of you who think Psystar has a case what in the hell is wrong with your brains.

This is NOTHING LIKE Microsoft!!!!

With the exception of Powermac.... Apple has always sold there OS as a package deal.... you buy their OS to run on their computers.

Psystar has no leg to stand on here legally....morally... or Ethically!!!!!

They are STEALING an OS they have NO RIGHT TO RESELL!!!!! aka... they are CRIMINALS!!!

There's NO GREY AREA here.... it's Black and White.... and most of all... IT'S WRONG.

Those of you that believe Psystar has the RIGHT to use Apple's Property must be suffering from the worst form of Liberalism/Progressivism .... a true mental disorder....

You know I've got a Visa Card.... now give me your wallet so I can use your Visa card.... since I've got a visa card I must have the right to use your visa card??? Right???? It's not much different then that.

Apple Built their OS... and THEY OWN IT... anyone who thinks otherwise seriously needs to re-educate themselves....

Psystar is about to be History... and They deserve it for STEALING property that isn't theirs to use.

Duh!!!!

[eAi]

Apple has to make sure they win this. Otherwise, they've both got a competitor and opened the door to other companies doing the same thing.

This case will have the short-term benefit of throwing some FUD at psystar which might make people wary of buying a soon-to-be-unsupported computer from them.

[MotherBrain]

I almost thought they were going to let this slide. I kept wondering when they were going to release the hounds...

This is going to be a pretty monumental factor in determining the future of Apple, Macs, and OS X. If Psystar is givin the green light, which IMO I don't think they will, Psystar won't be the only cloner, there will be others.

[minderbinder]

Originally Posted by pixelcruncher

This is a very interesting case regarding the rights of a corporation vs the rights of the consumer, and I am actually really anxious to hear well thought out arguments on both sides.

The rights of the consumer have exactly zero to do with this. This is a corporation suing another corporation that is modifying and reselling their copyrighted material.

[Zaphodsplanet]

Originally Posted by Hutcho

Look at all the apple fan boys in here. What apple is doing is in no way good for the consumer. They are just trying to protect their business of selling overpriced hardware to their customers.

Dude... you are a FOOL.... Apple is in business to make money. Not to give you crap for free. If you come up with a good idea and want to make a living off it you might discover this is a good thing and what has made the USA so prosperous. If you think their computers are too expensive then go buy a POS windows machine and do whatever. Apple, Mercedes, Chevy... or whatever the company has the right to sell their products at the highest price they think they can get. If they price it too high then their products won't sell and they'll loose their asses. If they price them too low then they are idiots who loose millions serving people like you. If they get what they can then they make a profit... and can reinvest it to come up with the next cool thing.... like the iPhone.... and I totally love mine!!!! I was happy to pay $399 for it too.....

[Zaphodsplanet]

Originally Posted by minderbinder

The rights of the consumer have exactly zero to do with this. This is a corporation suing another corporation that is modifying and reselling their copyrighted material.

I couldn't agree with you more Mindbinder....

[rhett121]

Who said Pystar is actually paying Apple for the copies of OSX it is then hacking and redistributing? I would think that would be pretty easy to discover. If they are in fact using the ONE disk they bought, hacked and resold to many customers, I would think they would be in deep doo no matter what. I find it difficult to believe they are actually buying these copies of OSX since they obviously have no concept of moral nor legal right in the first place.

[minderbinder]

Originally Posted by rhett121

Who said Pystar is actually paying Apple for the copies of OSX it is then hacking and redistributing? I would think that would be pretty easy to discover. If they are in fact using the ONE disk they bought, hacked and resold to many customers, I would think they would be in deep doo no matter what. I find it difficult to believe they are actually buying these copies of OSX since they obviously have no concept of moral nor legal right in the first place.

They ARE buying a copy of OSX for every machine they sell with it installed, they give it to the customer with the machine. That doesn't get them off the hook though.

[irnchriz]

Originally Posted by melevittfl

Hmm, well I went into a local store when and picked up a box labelled "Mac OS X". I went to a cash register and gave the store some money in exchange for the box. That seems like a sale to me.

I think Paystar is within their rights as long as they are not modifying OS X.

Apple can put whatever it wants to in it's so-called "license agreement", but that doesn't make it legally binding.

See this case for an example: http://arstechnica.com/news.ars/post...-software.html

Well in that case they are screwed as you cant install it without modifying it.

Also, if you think about it, all of the OS X releases are upgrades. Upgrades for your previous version. Software upgrades for your Mac hardware. There is not a more expensive version for stand alone machines, just upgrades for existing systems.

[Chris_CA]

[QUOTE=Zaphodsplanet;1278968]With the exception of Powermac.... Apple has always sold there OS as a package deal.... you buy their OS to run on their computers.[QUOTE]
What is Powermac?

They are STEALING an OS they have NO RIGHT TO RESELL!!!!! aka... they are CRIMINALS!!!

Where do you get the idea they were stealing anything?
I belive the user even gets the original box the OS came in when purchased by Psystar.

Psystar is about to be History... and They deserve it for STEALING property that isn't theirs to use.

What was stolen?

Duh!!!!

Agreed!

Yes, they will very likely lose and go out of business but if you were Apple's lawyer, they would definitely win!

[minderbinder]

I don't know if "stealing" is the right word.

They are violating apple's software license, and they are selling a modified version of Apple's OS without permission.

[Leonard]

Originally Posted by Hutcho

Look at all the apple fan boys in here. What apple is doing is in no way good for the consumer. They are just trying to protect their business of selling overpriced hardware to their customers.

Actually what Psystar is doing can be quite detrimental to the consumer. Apple could introduce various software protection like other over-protective software companies, they could introduce various software/hardware protection schemes, or they could increase the cost of MacOS X. Apple has been very soft on software protection of their MacOS and very reasonable on the cost of MacOS updates. I very much do not want to see Apple resorting to software protection schemes like some of the other software companies.

As well, a few of us would disagree that their hardware is overpriced, they may be missing a prosumer tower, but sales figures seem to indicate most of their hardware is reasonably priced, or sales would not be increasing.

[Magic_Al]

Technically every boxed copy of Mac OS X is an upgrade to the Mac OS license included with a Mac computer. Just because Microsoft sells Windows with a stand-alone license, Apple is not obligated to do the same.

[ros3ntan]

they filed a complaint one day after psystar distributed their first computers. Apple did not wait. its just the process takes a very long time in the justice department.

For the matter of antitrust, there is none. Coke has the option of not revealing their secret formula. Same with Apple. They have the option of not sharing their OS because its in the agreement and its their competitive advantage. Thats why there is such a thing called GNU license. thats why linux is open and no one sues.

EULA, thats why microsoft can by law sue someone for sharing their windows with another if they agree to use only one computer. Just so u know, when u buy microsoft's windows, you buy a license. depending on which version, but for the consumer, its usually for one computer. That agreement is similar to apple.

[zinfella]

Originally Posted by Rot'nApple

What took Apple so long?

What's the hurry? Apple will take down this guy in the time and manner of their choosing, and when they're done, he'll lose all interest in a repeat performance. That serves as a warning to others who might contemplate similar actions. IOW, Apple is going to make an example of Psystar, and well they should.

[ros3ntan]

[QUOTE=Chris_CA;1278994][QUOTE=Zaphodsplanet;1278968]With the exception of Powermac.... Apple has always sold there OS as a package deal.... you buy their OS to run on their computers.

What is Powermac?


Where do you get the idea they were stealing anything?
I belive the user even gets the original box the OS came in when purchased by Psystar.


What was stolen?


Agreed!

Yes, they will very likely lose and go out of business but if you were Apple's lawyer, they would definitely win!

i think you should reread EULA. It is the same as downloading songs from p2p. u are using those materials without the consent of the owner of the copyright.

and that would be categories as stealing. just because it is still in the original box doesnt prove anything. Again, u are using those materials without the consent of the owner of the copyright.

[ros3ntan]

Originally Posted by Hutcho

Look at all the apple fan boys in here. What apple is doing is in no way good for the consumer. They are just trying to protect their business of selling overpriced hardware to their customers.

i think u should go court and learn the term copyright. i now its stupid but its what motivates people to innovate. And besides, it is never the intention of Apple to sell cheap computers. Its like telling ferrari's to lower their price. i mean toyota can do the job as well as ferrari, taking people to destination and at a cheaper cost. i dont see u complaining to them.

Apple never said guarantee lower price!!! Apple is no Wal Mart.

[aaarrrgggh]

I would have rather seen EULAs invalidated, as they are truly wrong. But, Psystar is screwed here now that they are re-distributing updates. That is an easy line in the sand-- they were fools to even consider doing it.

[wizard69]

I'm in agreement with many here that Apple waited so long simply to be able to base their case on something that they have a good chance of winning. That would be the modification of Mac OS/X. Even that is not a given because so much of OS/X is open source. I expect the case to get very detailed if Psystar gets any sort of legal backing.

As to the issue of Psystar's morality in this case, if such can even be attributed to a company, I don't see them on any lower legal plane that Apple itself. Lets face it there is a lot of open source software in MAC OS/X, one of the reasons I switched to Apple, so the issues become very complex very quickly. Like what exactly did Psystar modify and where did the code come from. Was the modification made solely for compatibility and interoperability reasons?

As for Psystar's claim of anti trust violations they may have grounds there as Apple has an absolute lock on PC's running Mac OS/X. Which comes back to possibly why Apple has focused their suit on a very narrow issue of copyright infringement.

I think the biggest problem here is that unless the principals of Psystar have a big bank account they will need outside help to win against Apple. People need to realize that just because Apple does something doesn't mean it is something that will stand up in court. Further one can make a very good argument that Apples trust like behaviour is actually worst than Microsoft's.

Dave

[ros3ntan]

Originally Posted by aaarrrgggh

I would have rather seen EULAs invalidated, as they are truly wrong. But, Psystar is screwed here now that they are re-distributing updates. That is an easy line in the sand-- they were fools to even consider doing it.

i dont think u mean that. China is a country with almost no EULA. It means everything goes cheaper because other people can copy and redistribute your creation.

Like i said before

NO EULA MEANS NO MOTIVATION TO INNOVATE

[macFanDave]

Originally Posted by JoeDRC

I think when you click "I Accept" When prompted with the terms and conditions of the license agreement you enter a legally binding contract.

What if you are a minor or if you are mentally incompetent? These are two groups of people that can not legally enter into contracts.

EULA's are known as being just about the most anti-consumer contracts ever. I don't know of any major lawsuits concerning them, but it seems to me that the way they are written and "signed" could be successfully challenged in court. Back in the old days, you had to at least scroll down through the entire EULA to get to the Accept part. Now, you can accept after looking at very few lines.