Psystar claims Apple asking for non-existent, redundant info

[AppleInsider]

Mac clone maker Psystar has shot back at accusations that it was withholding important information in Apple's lawsuit against it, arguing that it's being asked to invent documents that don't exist or which are no longer necessary.

Filed earlier this week, the response letter rejects out of hand Apple's complaints that Psystar hasn't produced formal financial statements indicating its worth. Instead, it contends that many of the documents for balance, profit-and-loss, or other characteristics of its finances simply don't (and don't need to) exist.

The Florida PC assembler insists that has never produced any monthly, quarterly or yearly statements and rebuffs Apple's notion that drafts exist of a financial projection meant to garner early funding; although a final document was made for the venture capitalists who made the investment, Psystar claims that it never made long-term backups of the work-in-progress documents. Psystar chief Rudy Pedraza is already on record as having said this, the defense attorneys say.

Further going on the defensive, the company adds that it has produced statements, invoices and other documents whenever Apple has requested them and they were available. However, it adds that "some documents" were lost when Psystar moved to its current workspace and doesn't say what these might have been. The company also positions itself as more efficient than Apple and says that it doesn't create paper copies from electronic documents when they don't have a reason to be.

Accordingly, the clone designer says it has done all it can to follow federal rules and goes so far as to imply that Apple is trying to bully it out of court despite Psystar's attempts to follow the letter of the law.

"Unlike Apple, Psystar is a small start-up company with limited resources," the response letter reads. "Psystar has, due to Apple's discovery tactics, focused much of those resources on litigation... because Apple wants a document to exist does not make it so."

In providing the response, the fledgling company is fighting a battle of survival just to survive the discovery phase, where both parties in the case need to collect as much legally allowable evidence as possible ahead of the formal trial due to start in November. A successful claim by Apple of obstruction could derail Psystar's defense before it ever has an opportunity to present its case in court.

[Dr Millmoss]

My first reaction is this sounds like undiluted hogwash. My second reaction is that there's probably some truth to Psystar's claim that they're run by a bunch of amateurs.

[lkrupp]

I'm enjoying watching this dog and pony show develop. A business that doesn't bother to keep financial information regarding its operations, expenses, and profits? I'll bet the IRS will find this interesting as well.

[solipsism]

Originally Posted by AppleInsider

The company also positions itself as more efficient than Apple and says that it doesn't create paper copies from electronic documents when they don't have a reason to be.

If only there was a way to electronically send files to people. Some sort of an electronic mail, if you will.

[g3pro]

Apple will go to just about any length to prevent competition.

Truly sad. Apple has sunk to new lows.

[Mr Macintosh]

Originally Posted by solipsism

If only there was a way to electronically send files to people. Some sort of an electronic mail, if you will.

Careful, you might be treading on someone copyright or better yet, asking to be taken to court due to patent violations...



My two cents of attempted humor...

[jlanganki]

Apple should just give away Mac OS X and charge you $1 every time your computer boots up, regardless of what hardware it's running on. This is fair for everyone.

[steviet02]

Originally Posted by solipsism

If only there was a way to electronically send files to people. Some sort of an electronic mail, if you will.

Just in case you didn't fully understand what he meant... If you have only an email and delete it without printing it out then its gone. I'm not saying it doesn't sound fishy but your comment made it sound like they had the email, when it's clear they are saying it was 'lost in the move'.

[Blah64]

Wow. These guy are proving to be more than just liars.

They are BIG FAT BLATANT liars!

But I guess they're in good company. If microsoft execs like Bill Gates can lie under oath (http://bwads.businessweek.com/micros...s/up81102a.htm), then why not some irrelevant little clone-maker!

[jmadlena]

Originally Posted by g3pro

Apple will go to just about any length to prevent competition.

Truly sad. Apple has sunk to new lows.

I agree. It is unfair for a company that has invested millions and millions of dollars into the research, development, testing, and distribution of their own property to try and keep the competition from profiting off of it. Since Psystar is such a small company, they should be allowed to profit from Apple's investment.

/idiocy

If Psystar thinks they can do better, then they should develop their own operating system and hardware. Then we'll see if they can undercut Apple on price, and outperform Apple on quality and quantity.

[solipsism]

Originally Posted by steviet02

Just in case you didn't fully understand what he meant... If you have only an email and delete it without printing it out then its gone. I'm not saying it doesn't sound fishy but your comment made it sound like they had the email, when it's clear they are saying it was 'lost in the move'.

1) If they are in any way touting that they are more efficient then I can make a joke.

2) You are required by laws to keep such documents. To think that the actually what little financial papers they had is highly suspect. I doubt this move will fly with the courts.

[Quadra 610]

Originally Posted by g3pro

Apple will go to just about any length to prevent competition.

Truly sad. Apple has sunk to new lows.

What competition???

A "small startup company with limited resources" that is consistently violating Apple's Intellectual Property. This isn't about the EULA, it's about Apple's rights under Intellectual Property law. Intellectual property is not the same as physical property. Buying OS X does not give the user the automatic right to do with it what they wish, especially not making modifications to Apple's property and then reselling it at a profit while running a business behind it.

There is no such thing as "competition" when it's Apple's software. And by law they have a right to lock their own property down to their own hardware. And they do this for valid reasons.

Psystar is engaged in theft. And these missing documents, which also seems to include invoices for their alleged purchases of OS X, also suggests the possiblity they have, and are currently engaging in piracy.

[Maximara]

Originally Posted by Dr Millmoss

My first reaction is this sounds like undiluted hogwash. My second reaction is that there's probably some truth to Psystar's claim that they're run by a bunch of amateurs.

My feeling is Psystar knows their case is a lost cause of the highest order and is in delay mode. As an accountant I know that the "documents for balance, profit-and-loss, or other characteristics of its finances simply don't (and don't need to) exist" is total garbage and would be one of the first things the IRS would want to see if they audited these guys.

In a way it is a pity that the False Claims Act (Lincoln’s law) is so limited in situations like as being able to sue on behalf of the IRS would shut this latest nonsense down in a heartbeat.

[cylack]

Big corporations should not be allowed to dictate what we can do once we make a purchase.

I'm sure all the Apple fanboys here would be cool if Sony made you agree to a "license" that said if you purchase a DVD movie made by Sony Pictures Entertainment, then you have to play it only on a Sony DVD player. Same argument goes with music.

I've used Apple computers since the Apple IIGS and they've always been overpriced on the hardware side.

[anilsudhakaran]

Originally Posted by g3pro

Apple will go to just about any length to prevent competition.

Truly sad. Apple has sunk to new lows.

Looks like someone from the Osama, sorry Obama team is here.

[Maximara]

Originally Posted by Quadra 610

What competition???

A "small startup company with limited resources" that is consistently violating Apple's Intellectual Property. This isn't about the EULA, it's about Apple's rights under Intellectual Property law. Intellectual property is not the same as physical property. Buying OS X does not give the user the automatic right to do with it what they wish, especially not making modifications to Apple's property and the reselling it a profit while running a business behind it.

There is no such thing as "competition" when it's Apple's software. And by law they have a right to lock their own property down to their own hardware.

Psystar is engaged in theft. And these missing documents, which also seems to include invoices for their alleged purchases of OS X, also suggests the possiblity they have, and are currently engaging in piracy.

It would be the same if somebody wrote a XBox 360, Nintendo's Wii or PS3 emulator to run games on regular PCs--the companies that own those consoles would be over the guy who did such a thing so fast it would make Sonic look like a freaking snail.

The more I look at the whole Psystar thing the more I think Apple's idea that they may be a stalking horse is might be close to the mark. Judge William Alsup already declared back in Nov 2008 that Apple did NOT violate the Sherman Antitrust Act, Clayton Act, or Cartwright Act so Psystar's anti-trust and monopoly claims regarding Apple have already been declared bogus.

[Dr Millmoss]

Originally Posted by Maximara

My feeling is Psystar knows their case is a lost cause of the highest order and is in delay mode. As an accountant I know that the "documents for balance, profit-and-loss, or other characteristics of its finances simply don't (and don't need to) exist" is total garbage and would be one of the first things the IRS would want to see if they audited these guys.

Even in a small general partnership like mine, our accountant demands more from us every single tax year than Psystar seems to have at hand. I'm sort of surprised to hear them claim that no such documents exist or are required, and in same breath, refer to their venture capitalists. Everybody who'd put their money on the line without demanding a regular P&L at least, please raise your hands, because I have a very nice bridge I'd like to sell you.

[Adjei]

Originally Posted by cylack

Big corporations should not be allowed to dictate what we can do once we make a purchase.

I'm sure all the Apple fanboys here would be cool if Sony made you agree to a "license" that said if you purchase a DVD movie made by Sony Pictures Entertainment, then you have to play it only on a Sony DVD player. Same argument goes with music.

I've used Apple computers since the Apple IIGS and they've always been overpriced on the hardware side.

Damn some of you are real idiots.

[Woodyjpn]

Originally Posted by cylack

Big corporations should not be allowed to dictate what we can do once we make a purchase.

if you purchase a DVD movie made by Sony Pictures Entertainment, then you have to play it only on a Sony DVD player. Same argument goes with music.

No, but you have aright to specify that it won't play on a different platform - say, Sony makes a BlueRay movie, but just because I want to play it on a regular DVD doesn't give me the right to play it. I can't use BlueRay tchnology to make my own player because I'm violating their rights. So, if I still want to play that particular movie I have to make sure I have the right hardware. At the present the only company that LEGALY makes the right hardware for Mac OS is Apple, and all other ones who make or would like to make, or especially profit from that kind of hardware, have to get a permission from Apple.

[Quadra 610]

Originally Posted by cylack

Big corporations should not be allowed to dictate what we can do once we make a purchase.

You mean make modifications to your product, then resell it at a profit as part of a business with you getting nothing for it?? Intellecutal Property is not the same as physical property.

Intellectual Proprety law exists for a reason, and a lot of people are able to make a living thanks to its existence.

The intellectual property laws in the United States provide the owners of intellectual property with discretion to license the right to use that property or to make or sell products that embody the intellectual property.

There are limitations and restrictions on that to a certain degree, but what is essentially being argued by some of the Pro-Psystar people here is that Apple shouldn't have any intellectual property rights with respect to OS X to begin with once a sale is made, which is a fallacious argument.

[Maximara]

Originally Posted by cylack

Big corporations should not be allowed to dictate what we can do once we make a purchase.

I'm sure all the Apple fanboys here would be cool if Sony made you agree to a "license" that said if you purchase a DVD movie made by Sony Pictures Entertainment, then you have to play it only on a Sony DVD player. Same argument goes with music.

I've used Apple computers since the Apple IIGS and they've always been overpriced on the hardware side.

Newsflash Big corporations DO dictate what we can do once we make a purchase. Blizzard and its World of Warcraft is one such example and the incompatibility of console games with each other is another. Like it or not these are their rights.

Besides compared to good quality hardware with the same specs a mac is not much more expensive than a PC. Sure you can get a cheaper PC but you will pay for it in terms of hassle and strange problems that take time (ie money) to fix.

Nevermind that for all intents and purposes Microsoft has created a Trust something Apple has NEVER done.

[Dr Millmoss]

I wonder how many posts we'd have in thread if they were on-topic. About five?

Just a thought.

[echosonic]

Originally Posted by Dr Millmoss

Even in a small general partnership like mine, our accountant demands more from us every single tax year than Psystar seems to have at hand. I'm sort of surprised to hear them claim that no such documents exist or are required, and in same breath, refer to their venture capitalists. Everybody who'd put their money on the line without demanding a regular P&L at least, please raise your hands, because I have a very nice bridge I'd like to sell you.

That's because they DO exist, and Psystar does not want to reveal them. There is no way, and I mean NO EFFING WAY that if that company obtained one single dime from an actual VC Firm that those docs don't exist.

This will probably lead to the obstruction judgement Apple is seeking.

Those who think what Apple does is akin to Sony selling a DVD that you're only permitted to watch on a SONY DVD player are retarded. Seriously. Drain the water off your heads and go back to school.

[clickmyface]

Originally Posted by cylack

Big corporations should not be allowed to dictate what we can do once we make a purchase.

I'm sure all the Apple fanboys here would be cool if Sony made you agree to a "license" that said if you purchase a DVD movie made by Sony Pictures Entertainment, then you have to play it only on a Sony DVD player. Same argument goes with music.

I've used Apple computers since the Apple IIGS and they've always been overpriced on the hardware side.

Hahahahahahahahahahahahahaha.

Sony is one of the original group of companies who created DVDs - owning vital patents - and currently receives license fees for anyone who wants to make DVD and DVD related products (such as DVD players.)

If you make a DVD or DVD player, you must enter into a legal licensing permission agreement with Sony (and other companies) to do so. That agreement includes paying them.

Apple has no agreement with Pystar, nor did Pystar attempt to obtain one. Apple either owns (by their own invention) or licenses every single aspect of OS X.

[Quadra 610]

Originally Posted by Dr Millmoss

I wonder how many posts we'd have in thread if they were on-topic. About five?

Just a thought.

Ok, on-topic

If Psystar is in possession of copies of OS X, which they are, then not being able to produce invoices for them, as a legitimate business, is a serious problem. that opens the door to all kinds of possible wrongdoing by Psystar, including piracy (can a self-stated small startup like Psystar even afford the costs of OS X across the board in the absence of any licensing agreement?)

Apparently, these invoices are among the documents they are unable to produce for some reason.

If "we lost them in the move" doesn't sound galactically disingenuous, I don't know what does.

[steviet02]

Originally Posted by solipsism

1) If they are in any way touting that they are more efficient then I can make a joke.

2) You are required by laws to keep such documents. To think that the actually what little financial papers they had is highly suspect. I doubt this move will fly with the courts.

Oh was that a joke? In that case

Like I said it's fishy.

[Dr Millmoss]

Originally Posted by Quadra 610

If "we lost them in the move" doesn't sound galactically disingenuous, I don't know what does.

It's better than "my dog ate them."

Well, not much better.

[Maximara]

Originally Posted by Dr Millmoss

Even in a small general partnership like mine, our accountant demands more from us every single tax year than Psystar seems to have at hand. I'm sort of surprised to hear them claim that no such documents exist or are required, and in same breath, refer to their venture capitalists. Everybody who'd put their money on the line without demanding a regular P&L at least, please raise your hands, because I have a very nice bridge I'd like to sell you.

Exactly, Psystar reminds me of the story of the donkey in the lion's skin; the moment he opened his mouth to say something you knew for sure he was an ass.

Even by basic accounting practices Psystar's claims are insane. How on earth could you know how well your company was doing if you cannot document things like balance and profit-and-loss?? Better yet how in the world could you file a valid tax form, or the required tax paperwork some of that has to filed quarterly or even monthly?!?

To explain why they have refused to give Apple the documents it requested Psystar seems to basically be claiming it can't prove its own tax forms. What here they or their legal council thinking? Better yet were they thinking?!?

[irnchriz]

Originally Posted by g3pro

Apple will go to just about any length to prevent competition.

Truly sad. Apple has sunk to new lows.

Competition????

Apple makes Personal computers, Servers, Digital media players and mobile phones.

On a global scale Apple has Microsoft, HP, Dell, Lenovo, IBM, Sony etc etc etc as competition. Apple does not need some little company coming in and screwing with their business. Psystar are not competition, they are being used to change Apples business model. Just remember Apple, although having a recognised brand, holds less than 5% of the world PC market.

[irnchriz]

Originally Posted by cylack

Big corporations should not be allowed to dictate what we can do once we make a purchase.

I'm sure all the Apple fanboys here would be cool if Sony made you agree to a "license" that said if you purchase a DVD movie made by Sony Pictures Entertainment, then you have to play it only on a Sony DVD player. Same argument goes with music.

I've used Apple computers since the Apple IIGS and they've always been overpriced on the hardware side.

erm..

What has this got to do with Psystar??

Mac OS is supplied on Mac computers and sold separately as an OS upgrade for existing Mac computers.

Psystar has been purchasing (ok, apparently purchasing, but they lost the receipts) Mac OS and installing it on their own hardware and selling it as their own product with Mac OS installed. Not only are they violating the EULA and the Mac OS license they are hacking the OS to install it on their own hardware.

Now, if you want to buy a copy of Mac OS and install it on your own PC thats fine, but as soon as you try to sell it.... thats the problem.

[jpellino]

The financials Apple asked for and the ones Psystar claims they presented are different instruments. They should be able to produce any and all of them if there is a CFO or someone remotely resembling one who took so much as a community college accounting class. Aside from the fact that on the face of these reports, they are laying themselves open to all sorts of Sarbanes-Oxley violations, this company is apparently being run by 12 year olds.

[xwiredtva]

According to FL state law, IRS Federal Law, ALL Companies are required to keep and hold ALL financial data for a period of NO LESS than 7 years. Any accounting software worth half a lick, hell even quickfail AKA QuickBooks can track and provide electronic documents... There running OS X right? Ever hear of print to PDF. Quickbooks Simple Start is free, yes it's Windows only but they make junkboxes with pirated versions of OS X what makes you think they are not running pirated versions from Microsoft.

IRS Red Alert, Flags up, and because this is court related, they have now broken 3 laws all of which are punishable by time, money, and time.

Good luck fighting the fruit, nobody makes it out fresh.

[Mr. H]

These comments from Psystar are astonishing. Just when you thought they couldn't become any more of a joke, they do something like this.

[fraklinc]

Psystar is just digging them self into deeper trouble, you can't just run a business and not keep any financial records, lol. Now is not just Apple that they got to worry about but am pretty sure the IRS is gonna jump in also. You can't just go and buy $100K in computer parts and not have any record or where you got the money from. If anyone from Psystar is listening, do yourself a favor STFU and just let your lawyers do the talking or you will regret every word you say.

[Virgil-TB2]

Originally Posted by Dr Millmoss

Even in a small general partnership like mine, our accountant demands more from us every single tax year than Psystar seems to have at hand. I'm sort of surprised to hear them claim that no such documents exist or are required, and in same breath, refer to their venture capitalists. Everybody who'd put their money on the line without demanding a regular P&L at least, please raise your hands, because I have a very nice bridge I'd like to sell you.

I think you've hit the nail on the proverbial head here.

It's hard to square the "we're just little guys and don't keep those kind of records" stuff with the "we don't want to reveal the exact structure of the financing we received from venture capitalists" stuff.

Either they are a small company or they are funded by some scary venture capitalists. You can't have both. Unless their Aunty May gave them the money and they are just *calling* her a "venture capitalist" this makes no sense at all.

[applestockholder]

It has been alleged that Psystar may not be a real company, but some outfit financed by a third party interested in testing the law regarding Psystar's actions - i.e. selling Mac computers that aren't Apple Macs.
Well if they get their supplies (hardware, boxes of legitimately purchased OS X) shipped to them by their 'benefactor', of course there would be no financial records. Their prices are low enough to seriously doubt that it is not a loss operation if it were a real business. How could you pay $129 for the OS, and all the hardware and still sell the things at $599 (their currently cheapest model, with somewhat impressive specs for $470 worth of hardware). Maybe iSupply can do a tear down, and I doubt Psystar can build it for the tear down price as they are a 2 bit shop in the US. Unless they are getting Hardware care packages form Hell or some such place...http://forums.appleinsider.com/images/smilies/irked.gif
My 2 cents

[iPeon]

Originally Posted by g3pro

Apple will go to just about any length to prevent competition.

Truly sad. Apple has sunk to new lows.

Like fishing much?

[Halvri]

Originally Posted by cylack

Big corporations should not be allowed to dictate what we can do once we make a purchase.

I'm sure all the Apple fanboys here would be cool if Sony made you agree to a "license" that said if you purchase a DVD movie made by Sony Pictures Entertainment, then you have to play it only on a Sony DVD player. Same argument goes with music.

I've used Apple computers since the Apple IIGS and they've always been overpriced on the hardware side.

You do realize that when you buy a Blu-Ray player, part of your cost is the licensing fee Sony charges manufacturers for use of it technology. So, in a manner of speaking, you are basically playing those movies only on Sony tech, as that's all they're licensed to work on.

Here's the thing, even in the most extreme case that you mention, as a consumer, you have the choice to either accept Sony's terms of licensing or deny them and see the company flourish or flounder as a result.

Big corporations have the exact same rights that people have, one of which is the right to protect their property (in this case, intellectual property). Were that not the case, there would be nothing stopping you from taking Kelly Clarkson's newest hit single, changing a few lyrics, and reselling it as an entirely different song.

The same paradigm exists in this instance: if you don't accept Apple's terms, then you have every right in the world to choose and use a Windows or a Linux based computer. However, iTunes had DRM for the longest time because of the music industry, not because of Apple.

You're looking at this from entirely the the wrong perspective.

[anantksundaram]

Originally Posted by anilsudhakaran

Looks like someone from the Osama, sorry Obama team is here.

Huh?!

[Robin Huber]

Originally Posted by cylack

Big corporations should not be allowed to dictate what we can do once we make a purchase.

I'm sure all the Apple fanboys here would be cool if Sony made you agree to a "license" that said if you purchase a DVD movie made by Sony Pictures Entertainment, then you have to play it only on a Sony DVD player. Same argument goes with music.

I've used Apple computers since the Apple IIGS and they've always been overpriced on the hardware side.

A more apt analogy would be that someone thinks they have the right to do some minor editing on the movie then turn around and sell copies of it on eBay as their movie.