Apple accuses Psystar of hiding behind bankruptcy

[AppleInsider]

Not quite content to just let Psystar sit in bankruptcy, Apple has filed a motion to have its case against Psystar continue and claims the unauthorized Mac clone maker is using its impoverished state as a shield against having to account for its supposedly illegal activity.

The filing, submitted this week in a Florida Southern District Bankruptcy Court, directly asserts that Psystar's bankruptcy was conveniently timed to "insulate" the small PC assembler with a stay of proceedings before it would have to explain its inner workings in a deposition and in the midst of a discovery phase where it had reportedly been asked to produce phantom evidence about its finances. Allowing the stay would let Psystar continue to sell its clones uninterrupted regardless of whether or not the act is illegal, Apple says.

The Cupertino, California firm goes so far as to draw parallels between Psystar and the fate of infamous software house SCO Group. Known for using lawsuits against Linux-dependent companies over UNIX rights disputes as part of its business model in later years, it's linked to Psystar through its approach to bankruptcy: when it lost its lawsuit against Novell and was ordered to pay money on UNIX licensing, SCO purportedly used bankruptcy and the resulting stay as a defensive measure to fend off the requests for money. Novell eventually had the stay lifted -- a precedent which Apple is keen to take advantage of in its own case.

Moreover, Apple argues that allowing its lawsuit to proceed would be a simple practical matter. Since Psystar's business is built around selling Mac clones, it can't exit bankruptcy properly only to risk being found to have violated a valid Mac OS X license agreement; it would just shut down again. Sorting out the legality of the clone producer's current business would mean it could try reorganization under an "alternative business model" that would keep it in the clear if and when bankruptcy ends.

Psystar hasn't publicly responded to the motion but, in the meantime, can't entirely escape Apple's demands in court. It now lists Apple as a creditor that it owes $75,000 for "Litigation Pending." But whether this is to cover an unspecified legal cost, purchases, or something else entirely is just as much of an unknown as whether Psystar will have shelter under its insolvency for much longer.

[Sk8MusicLife64]

I agree.

[sflocal]

Sounds like Apple is really wants to tighten the noose. Regardless what Psystar fanboys think or whine about, I hope that noose tightens up, skin turns blue and a double-knot made out of it. I really want to know what/who is backing Psystar.

Nothing would make me feel better than watch what is basically a thief crash and burn. I hope this doesn't turn into a years-long SCO fiasco.

[Talon8472]

I love it. End this debate by a direct example of the law once and for all. Hopefully this will prevent abuse / misuse of Apple's IP, especially in business settings. Go Apple!

[ascii]

It's a good point - if you break the law, you can't get out of it just by saying you're bankrupt. You still must answer for your deed.

[floccus]

I wonder if there's an implied danger to Apple if Psystar was allowed to exit bankruptcy doing the same thing they're currently being sued for. It would mean that a judge had already implicitly said that what they were doing was legal enough that they can keep doing it after reorganizing. Of course, one would think that any bankruptcy judge would examine Psystar's planned post-bankruptcy business model and see that if they plan to keep selling computers with questionable legality that its in the best interest of both parties to settle the matter now by allowing the suit to proceed.

[rbonner]

Psystar lists "1 year warranry and support" on their website for the Mac clone. Besides being misspelled in the graphic, wondering how they can promise this.

[MacTripper]

I know I'll sound like the devils advocate here...

...but it's really all Apple's fault.

If you don't want your OS pirated, you have to tie it to hardware somehow (and not make it a pain for users).

They know this, but are trying to play 'whack a mole' and are losing fast, the clones are mushrooming all around the world at a even faster pace.

Unless this is all part of a plan, a plan to kill their own hardware sales that is.

[dasein]

Originally Posted by MacTripper

They know this, but are trying to play 'whack a mole' and are losing fast, the clones are mushrooming all around the world at a even faster pace.

Unless this is all part of a plan, a plan to kill their own hardware sales that is.

I think they want to know who's bankrolling these enterprises. The money involved in this incident is chump change.

[sflocal]

Originally Posted by MacTripper

I know I'll sound like the devils advocate here...

...but it's really all Apple's fault.

If you don't want your OS pirated, you have to tie it to hardware somehow (and not make it a pain for users).

They know this, but are trying to play 'whack a mole' and are losing fast, the clones are mushrooming all around the world at a even faster pace.

Unless this is all part of a plan, a plan to kill their own hardware sales that is.

Blame Apple for the misdeeds of another entity? Psystar should be made an example just so that a precedent can be made. Steal another company's IP and you will be made to pay for your crime.

That alone won't prevent outfits to shout out their crusade against companies like Apple and "stick it to the man". Even if Apple wins here in the U.S., it still won't prevent others in other countries from claiming they are immune from whatever happens in the U.S.

So perhaps with the introduction of Snow Leopard, Apple will introduce some kind of feature that will lock out invalid installs. How they will do it is unknown. If they are up to something, of course they will not advertise it until someone tries to do an illegal install.

As usual, it always comes down to a handful of idiots that ruin it for the rest of the group. Psystar is looking to make a quick buck off of another company's work and screw what it may do to the rest of the community. Absolutely selfish bastards.

[Talon8472]

Originally Posted by sflocal

Blame Apple for the misdeeds of another entity? Psystar should be made an example just so that a precedent can be made. Steal another company's IP and you will be made to pay for your crime.

That alone won't prevent outfits to shout out their crusade against companies like Apple and "stick it to the man". Even if Apple wins here in the U.S., it still won't prevent others in other countries from claiming they are immune from whatever happens in the U.S.

So perhaps with the introduction of Snow Leopard, Apple will introduce some kind of feature that will lock out invalid installs. How they will do it is unknown. If they are up to something, of course they will not advertise it until someone tries to do an illegal install.

As usual, it always comes down to a handful of idiots that ruin it for the rest of the group. Psystar is looking to make a quick buck off of another company's work and screw what it may do to the rest of the community. Absolutely selfish bastards.

Well, it seems to be getting harder and harder. Tiger is more widely cracked and supported than Leopard was on PC. I'm assuming SL will be even harder to maintain than Leopard is. Not saying its impossible or can't be done, its just takes a more advanced user.

[SpamSandwich]

Go for broke, Apple! Place a lien on Psystar's property, hold the president personally liable for various illegal activities and sic the government on 'em for violating the DMCA. Go for the jugular!

[mdriftmeyer]

Originally Posted by MacTripper

I know I'll sound like the devils advocate here...

...but it's really all Apple's fault.

If you don't want your OS pirated, you have to tie it to hardware somehow (and not make it a pain for users).

They know this, but are trying to play 'whack a mole' and are losing fast, the clones are mushrooming all around the world at a even faster pace.

Unless this is all part of a plan, a plan to kill their own hardware sales that is.

You're not playing devil's advocate. You're just being a contrarian. You haven't shown how you're playing the position of devil's advocate to this motion.

[slacker00]

Completely agree with Apple pursuing this. And I'm very interested in finding out who is backing Psystar...would love to see them burn for wrongful deeds..

[Maximara]

Originally Posted by ascii

It's a good point - if you break the law, you can't get out of it just by saying you're bankrupt. You still must answer for your deed.

I was hoping that Apple would be able to claim that Psystar was trying to use the bankruptcy as a unjust shield. That Psystar claimed Apple as a creditor for "Litigation Pending" for $75,000 when the they haven't even got to the point of Apple winning much less how much they owe Apple is ridiculous. Not specifying just what that $75,000 if for is even more insane.

The longer this goes on the more ludicrous it gets, Remember since copyright law was involve Apple could get treble damages so if Psystar think it only owes $75,000 the possibly of Apple actually getting a $225,000 award rears its head.

Furthermore I would ask how can a company seeking bankruptcy put a number with no explanation as to where it comes from much less what exactly it is as one of its liabilities and expect the bankruptcy court accept it. Without proof this number might as well come off a Ouija board or out of a Tarot deck and when it comes to its finances Psystar has not shown eagerness to produce those records.

[MacTripper]

Originally Posted by sflocal

Psystar should be made an example just so that a precedent can be made. Steal another company's IP and you will be made to pay for your crime.

That's all well and good, except for the fact of other companies setting up shop in countries with little IP respecting laws. RussiaMac anyone? How about a PearPC?

http://news.zdnet.com/2100-9595_22-304057.html

Or just overwhelming Apple with more pop-up clones until their legal dept. goes bust.

The RIAA already went this route and that's why we have iTunes.

Apple needs to tie OS X to hardware and that will be that.

[sflocal]

Originally Posted by MacTripper

That's all well and good, except for the fact of other companies setting up shop in countries with little IP respecting laws. RussiaMac anyone? How about a PearPC?

http://news.zdnet.com/2100-9595_22-304057.html

Or just overwhelming Apple with more pop-up clones until their legal dept. goes bust.

The RIAA already went this route and that's why we have iTunes.

Apple needs to tie OS X to hardware and that will be that.

I did mention in my previous post about other countries ignoring IP laws. I'm curious if Apple does tie Snow Leopard to hardware what people will come out of the woodwork and scream "monopolistic behavior".

[macnyc]

Originally Posted by MacTripper

That's all well and good, except for the fact of other companies setting up shop in countries with little IP respecting laws. RussiaMac anyone? How about a PearPC?

http://news.zdnet.com/2100-9595_22-304057.html

Or just overwhelming Apple with more pop-up clones until their legal dept. goes bust.

The RIAA already went this route and that's why we have iTunes.

Apple needs to tie OS X to hardware and that will be that.

Your argument is nonsense... Microsoft is still in business despite the millions of illegal copies of windows.

[Quadra 610]

Apple has the wherewithal to pursue every last one of these fly-by-night clone makers for years.

And by the looks of it, it should be easy, since they don't seem to be making any money anyway. Here today, gone tomorrow.

[MacFinder]

Apple was always trying to protect the MacOS from those illegal actions. Since Apple II.
You can find more information using Google. So, they have just cracked this defense.

But there are some rumors that Apple,
tired with Psystar and other clone makers and just those guys who have installed Hackintosh,
is developing the excellent protection right now for Snow Leopard.
Also, if you'll investigate some sites like RussianMac's,
there's an interesting warning: "there's no guarantee that you'll be able to install the newer versions of MacOS"

I hope that those clone makers will just stay with v10.5,
and not touch the newer versions,
and after several years it would be very hard to sell the "not-too-up-to-date" system" .

[surferfromuk]

I don't know if this is me but I read from this that if you buy a Pisstar clone that they are not paying Apple for the copy of OSX they purportedly ship with your computer, and which means your basically complicit in some sort of theft...

Anyway, anyone with half a brain or any kind of integrity implicitly knows pisstar is a bunch of crooks. Basically, Birds of a feather flock together....pisstar clone on your desktop ? - probably full of stolen s/w as well...

[Chase R]

I love it... Kicking Psystar while there down.

I wouldn't do it any differently.

[brucep]

Originally Posted by MacFinder

Apple was always trying to protect the MacOS from those illegal actions. Since Apple II.
You can find more information using Google. So, they have just cracked this defense.

But there are some rumors that Apple,
tired with Psystar and other clone makers and just those guys who have installed Hackintosh,
is developing the excellent protection right now for Snow Leopard.
Also, if you'll investigate some sites like RussianMac's,
there's an interesting warning: "there's no guarantee that you'll be able to install the newer versions of MacOS"

I hope that those clone makers will just stay with v10.5,
and not touch the newer versions,
and after several years it would be very hard to sell the "not-too-up-to-date" system" .

I enjoy your posts dude.THIS one has you on the fence, and also on either side of the fence.
That's ok.

That special machine killing phone bricking software surprise wlll not be used against these traitors.

It will be a timed 22 month set-up. Millions of people will be drawn in. People will become lazy and complacent. and then .... mactripp dude .. Can you finish this. Do you see where i am going?

I wonder if me saying it will ruin it ?

i await you

[piot]

Originally Posted by MacTripper

...but it's really all Apple's fault.

If you don't want your OS pirated, you have to tie it to hardware.

Brilliant!

So when someone breaks into your house.... it''s your fault .... because you didn't put a padlock on the door.

[TBell]

When somebody files Bankruptcy two government entities are involved. One is the US Trustee's Office, which is a wing of the Department of Justice. Two the Court. It is possible for somebody to file Bankruptcy and never meet his, her, or it's judge. The Judge is only involved if there is a dispute.

There is no implied danger here. Bankruptcy judges only deal with Bankruptcy questions. Further, they don't look to much at the business model either. They only decide whether the reorganization of debt requested by the Debtor is appropriate if a creditor (e.g. Apple) challenges the requested relief.

Originally Posted by floccus

I wonder if there's an implied danger to Apple if Psystar was allowed to exit bankruptcy doing the same thing they're currently being sued for. It would mean that a judge had already implicitly said that what they were doing was legal enough that they can keep doing it after reorganizing. Of course, one would think that any bankruptcy judge would examine Psystar's planned post-bankruptcy business model and see that if they plan to keep selling computers with questionable legality that its in the best interest of both parties to settle the matter now by allowing the suit to proceed.

[TBell]

You probably don't know a lot about Bankruptcy. When companies file Bankruptcy they fill out a Petition. The Petition requires a company to list the name, address, and amount owed to any creditor. It also requires them to list creditors as secured, priority (e.g. tax debt), or unsecured. It doesn't require the debt to be specifically identified. The purpose is to give the Creditor notice of the filing. Presumably the creditor knows what the amount is for.

Originally Posted by Maximara

Not specifying just what that $75,000 if for is even more insane.

[TBell]

No according to him, it is his fault because he didn't bolt all of his belongings to the house. I don't want somebody to blame me for somebody robbing me blind so I am going to buy all those bolts right now.

Originally Posted by piot

Brilliant!

So when someone breaks into your house.... it''s your fault .... because you didn't put a padlock on the door.

[MacTripper]

Originally Posted by macnyc

Your argument is nonsense... Microsoft is still in business despite the millions of illegal copies of windows.

Billions, you forgot about the Chinese.

But you don't see Microsoft suing all of them do you?

It's because M$ is a software company and covering the entire market is their objective to prevent competition.

M$ only takes action where and when they can, when it makes legal and financial sense, when a result will benefit them profit wise or else it's a waste of time and money.

If a government of billions of people don't cooperate, what the hell can you do? Invade them?

[RBR]

Originally Posted by ascii

It's a good point - if you break the law, you can't get out of it just by saying you're bankrupt. You still must answer for your deed.

You misperceive the nature of a bankruptcy proceeding.

A reorganization under protection of the court is not a "get out of jail free card". It merely means that all pending litigation is stayed during the pendency of the proceeding or until such time as the bankruptcy court may issue an order allowing any particular case to proceed.

The bankruptcy court has the authority to adjudicate claims against the debtor whether they be disputed (as in pending or prospective litigation) or not.

It is not a requirement that the bankruptcy judge grant Apple's motion, though he could if he determined that it would be appropriate. Frankly, it is common practice to enter bankruptcy to have claims adjudicated without the protracted expenses of conventional litigation.

One of the things that Apple stands to lose if its claim is adjudicated in bankruptcy court is the ability to abuse the legal process (and Pystar) for the purpose of crushing them whether their claim is victorious or not.

In any event, the bankruptcy court is perfectly capable of sorting things out.

[GCS]

Originally Posted by MacTripper

Billions, you forgot about the Chinese.

But you don't see Microsoft suing all of them do you?

It's because M$ is a software company and covering the entire market is their objective to prevent competition.

M$ only takes action where and when they can, when it makes legal and financial sense, when a result will benefit them profit wise or else it's a waste of time and money.

If a government of billions of people don't cooperate, what the hell can you do? Invade them?

And if they own 40% of your country, what good will it do to invade them?

[DanaCameron]

Originally Posted by sflocal

I'm curious if Apple does tie Snow Leopard to hardware what people will come out of the woodwork and scream "monopolistic behavior".

I don't pretend to understand all the intricacies of IP law, but Mac OS X is Apple's software product, designed specifically to work with several products in Apple's hardware line—Apple justifies this control as its way of ensuring the consistently-high quality of the end-to-end user experience (caveat venditor). Apple owns it all and should have the right to dictate how it all works together.

I think Apple should tie Snow Leopard and beyond to its hardware (doing the same retroactively with older Mac OSes wherever possible as well) and make it as difficult as technically possible for thieves around the world to steal its IP and taint the Apple brand by distorting the user experience.

[Quadra 610]

Originally Posted by sflocal

I did mention in my previous post about other countries ignoring IP laws. I'm curious if Apple does tie Snow Leopard to hardware what people will come out of the woodwork and scream "monopolistic behavior".

OS X is already tied to Apple's hardware. Or am I misunderstanding your post?

The issue of Apple being a monopoly has alreadty been put to bed legally several times in the US, both with respect to OS X on Macs and with respect to iPods/iTunes. I believe this was also resolved with the EU.

Not only is Apple not a monopoly abuser (which is always the real issue), but they aren't even a monopoly, and currently have not met any legal definition of it in the US.

[MacTripper]

Originally Posted by sflocal

I did mention in my previous post about other countries ignoring IP laws. I'm curious if Apple does tie Snow Leopard to hardware what people will come out of the woodwork and scream "monopolistic behavior".

I can see that happening eventually as the public becomes more and more aware that Mac's are just generic Intel PC's now with a different OS.

Apple is still riding high on it's old public perception that they are completely different computers, like they were under PPC.

The longer Apple takes to do the hardware tie-in, the powerful more the "monopolistic behavior" screaming will be and even get the attention of lawmakers to stop them.

Apple made a violent switch to Intel processors just a year after praising IBM and the new PowerMac G5 and the future.

http://www.youtube.com/watch?v=tnEbPm8mATQ

So I don't see what's stopping Apple from making a violent shift to Windows as their primary OS if the overseas clones in IP law lax countries become so overwhelming and unstoppable that it's killing Apple hardware sales.

What's stopping people in the US, Apple's primary market, from buying from German based PearPC?

Nothing right? Now multiply that clone company by thousands and watch traffic dry up at the Apple Stores in a hurry.

That's what I see as happening. Clones kill, and I can't believe Apple allowed it to happen to them again.

[RBR]

[QUOTE=DanaCameron;1432344 <from the title> How can anyone accuse Apple of monopolistic behavior?[/QUOTE]

It is easy to do because Apple is a vertically integrated monopoly.

Before you get in a lather, that is only a part of the question involved in "the clone wars". The determinative issue is whether Apple is a legal vertically integrated monopoly. So far the decisions have said yes.

Will that change? Who knows? Ultimately, the answer may depend upon the jurisdiction in which the case is decided.

[Maximara]

Originally Posted by MacTripper

That's all well and good, except for the fact of other companies setting up shop in countries with little IP respecting laws. RussiaMac anyone? How about a PearPC?

http://news.zdnet.com/2100-9595_22-304057.html

Given the import duties it makes no sense to get a RussiaMac never mind Russia has not been know for quality.

import duties also apply to the PearC (the PearPC that is a dead PowerPC emulator whose last stable update was back in 2005) and Apple need only slap the EULA on Snow Leopard's box and the fig leaf crap PearC is using will be gone and like the formal clone makers of old they will quickly with and die as they will no longer have the strange German legal fig leaf to hide behind.

Besides I have a copy of Leopard and right on the box it states "Use of this product is subject to acceptance of the software license agreements included in this package" and on other side it states under requirements: "Mac computer with...' and I assume these same passage are in German for the German version. So the fig leaf PearC is using may not be there in the first place as the Mac ECLU is right on the the freaking box.

[Robin Huber]

Anyone want to hazard a guess as to who might be bankrolling Psystar? Would it be a big, established company, or some venture capitalist testing the waters for a larger cloning effort apart from Psystar? Was Psystar a legitimate start-up at the outset who then got co-opted, or a stalking horse from the get go? Anyone?

[RBR]

Originally Posted by Robin Huber

Anyone want to hazard a guess as to who might be bankrolling Psystar? Would it be a big, established company, or some venture capitalist testing the waters for a larger cloning effort apart from Psystar? Was Psystar a legitimate start-up at the outset who then got co-opted, or a stalking horse from the get go? Anyone?

Does it matter? The issues are the same.

[MacTripper]

Originally Posted by Maximara

Given the import duties it makes no sense to get a RussiaMac never mind Russia has not been know for quality.

import duties also apply to the PearC (the PearPC that is a dead PowerPC emulator whose last stable update was back in 2005) and Apple need only slap the EULA on Snow Leopard's box and the fig leaf crap PearC is using will be gone and like the formal clone makers of old they will quickly with and die as they will no longer have the strange German legal fig leaf to hide behind.

Besides I have a copy of Leopard and right on the box it states "Use of this product is subject to acceptance of the software license agreements included in this package" and on other side it states under requirements: "Mac computer with...' and I assume these same passage are in German for the German version. So the fig leaf PearC is using may not be there in the first place as the Mac ECLU is right on the the freaking box.

It's just a matter of time before a major Mac cloner comes up with a fool proof plan and the bucks to gain lots of attention to rob Apple of significant hardware sales.

Heck a Mac cloner can start with 15" matte screen notebook similar to the Macbook Pro and gain considerable sales straight off!

[Dr Millmoss]

Originally Posted by RBR

It is easy to do because Apple is a vertically integrated monopoly.

Before you get in a lather, that is only a part of the question involved in "the clone wars". The determinative issue is whether Apple is a legal vertically integrated monopoly. So far the decisions have said yes.

Will that change? Who knows? Ultimately, the answer may depend upon the jurisdiction in which the case is decided.

Please specify the decisions where it has been determined that Apple is a "vertically integrated monopoly."

[DanaCameron]

Originally Posted by MacTripper

Mac's are just generic Intel PC's now with a different OS.

I don't see it this way. Macs may run on Intel processors, but they offer an entirely different user experience than PCs, and are far from generic.

Originally Posted by MacTripper

Apple is still riding high on it's old public perception that they are completely different computers, like they were under PPC.

I think there's a difference in perception. Under PPC/before Mac OS X/before Steve Jobs' return, Apple suffered (rightfully in some ways) with being perceived as "other." What little was known or presumed about Apple products was largely misconception and/or bad word of mouth. Apple had some serious problems a few years ago and was putting out some bad products. Many of those issues have been resolved with the switch to Intel, the transition to Mac OS X and the infusion of real vision with the return of Steve Jobs. Now, I think, the perception of Apple is, or is at least increasingly becoming, that of a "viable alternative."

Originally Posted by MacTripper

I don't see what's stopping Apple from making a violent shift to Windows as their primary OS if the overseas clones in IP law lax countries become so overwhelming and unstoppable that it's killing Apple hardware sales.

I don't understand what you mean. Are you suggesting that Apple should stop developing Mac OS X and only build hardware solutions with Microsoft Windows pre-installed?

Originally Posted by MacTripper

What's stopping people in the US, Apple's primary market, from buying from German based PearPC? Nothing right?

I'd argue quality, user expectation and customer satisfaction. I've lived in Europe, and based on my impressions, I'd say IP laws are more stringent here in the US because consumers demand more from the products they buy and expect the manufacturers of those products to stand behind them. The successful companies creating successful products protect themselves, and are protected by, (hopefully comprehensive) IP legislation.

Most people in the US aren't going to be drawn to foreign PC manufacturers in general (we're spoiled for choice domestically as it is), and, more specifically, I doubt they'd be drawn to a foreign Apple clone. Apple is too well known (and increasingly more respected) here in the US and many (if not most) people in the US tend to regard knock-off products as cheap imitations.

Originally Posted by MacTripper

Now multiply that clone company by thousands and watch traffic dry up at the Apple Stores in a hurry. That's what I see as happening. Clones kill, and I can't believe Apple allowed it to happen to them again.

Ten years ago, when beige boxes were all the rage, Power Computing, Motorola and others produced some clones with similar aesthetics to the boring hardware Apple was producing under Gil Amelio. In fact, those clones, in some cases, were better (i.e., more powerful or reliable) than Apple's products at the time. That's no longer the case.

Today's would-be clone manufacturers would be hard pressed to approach the design and build quality of Apple's current lineup (particularly Apple's unibody MacBook enclosures). Their uninspired metal boxes simply can't compete with Jonathan Ive or Apple's R&D and production budgets. Add to that the solid reliability, power and tight integration of Mac OS X to that hardware and you find a formula that most people in the US recognize as brand quality they can trust.

Clones are certainly a threat to Apple's (and AAPL's) interests and brand. Apple seems to be doing exactly what they need to do to not let the would-be clone makers get away with anything and I hope they succeed. In any event, I don't think clones (or the threat of them) will kill Apple.