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Apple Files Suit Against Psystar 805

Posted by kdawson
from the grind-exceeding-fine dept.
Reader The other A.N. Other, among others, alerts us to the news that Apple has filed suit against Psystar, the unauthorized clonemaker. (We've been discussing Psystar from the start.) The suit alleges violation of Apple's shrink wrap license and trademarks, and also copyright infringement. News of the lawsuit, filed on July 3, first surfaced on a legal blog. There's speculation that the case has been sealed.
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Apple Files Suit Against Psystar

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  • by adder (3667) on Tuesday July 15, 2008 @01:26PM (#24200293)

    ...that it took Apple this long to get the legal ball rolling on this!

  • by BUL2294 (1081735) on Tuesday July 15, 2008 @01:32PM (#24200413)

    1. Create a line of Mac clones.
    2. Sell them to an unwitting public.
    3. Have Apple file suit.
    4. Pay bonuses to all the execs.
    5. Declare bankruptcy.
    6. Shut down all operations.

    Guess what... Everyone who bought a Psystar is left totally unsupported (which includes the all-important security hole fixes) and the execs made a bundle... Now, could Apple go after the execs personally for copyright infringement or (the soon-to-be-defunct) Psystar? Ironically, there was no consumer fraud here--businesses go under all the time and anyone who bought a Psystar would have had to know that Apple wouldn't support them...

  • by moosesocks (264553) on Tuesday July 15, 2008 @01:33PM (#24200435) Homepage

    Their current lineup is fairly competitively priced.

    Go ahead and spec out a similar machine from Dell, HP, or Lenovo. When comparing apples to apples (heh), they might not necessarily be the best deal around, but are certainly competitive, and definitely not a ripoff.

  • by east coast (590680) on Tuesday July 15, 2008 @01:36PM (#24200467)
    I was thinking the same thing, but Apple might have waited until they were sure they could win the suit.

    Or had to.

    Had this clone company flopped Apple could have walked away without ever lifting a finger. Now Steve Jobs has to pull the same kind of antics that Microsoft was endlessly bashed for.

    After all, Apple likes to play it off like the cool slacker who has everything just work out in the end. It's going to look bad if they need to kick some ass to keep their coveted spot in the home computing world. It's going to make for a great Mac Vs. PC commercial, I'm sure.
  • by saterdaies (842986) on Tuesday July 15, 2008 @01:42PM (#24200599)

    I really hope this goes to trial and a judge rules on it. Partly because I think the judge would rule that Apple can't do what they're trying to do with their EULA, but even if the judge sides with them, it's still a clarification of the law.

    I don't like existing in the murky world of armchair people positing what is and isn't legal. Plus, if it goes Psystar's way, I doubt it would be too long before larger manufacturers got on board. Once something becomes legal, corporations want all over it (well, I guess that applies to profitable things).

  • Re:No surprise (Score:5, Interesting)

    by drspliff (652992) <harry.roberts@NOSPAM.midnight-labs.org> on Tuesday July 15, 2008 @01:42PM (#24200615)

    It takes a lot of preparation for them to reach this point and file proceedings, consider:

      * exec hears about it, if it were Microsoft chairs would be thrown
      * passed to the legal team to see if Apple have a case
      * legal sign off
      * paralegals do the groundwork, scrutinizing the EULA etc.
      * ...
      * ...
      * case is filed in court?

    In the past I've tried bringing legal action for trademark infringement, and the whole process just to get things started can take months and months especially if you're in a large organization with N-layers of forms & approvals required for anything like this.

  • by timster (32400) on Tuesday July 15, 2008 @01:55PM (#24200895)

    Nah, they are a software company. The truth is that they can't be profitable selling Mac OSX at $150 a copy to compete with Windows, because they need a large developer team to keep pace with Microsoft and they have fewer unit sales.

    So if Microsoft spends $1 billion on development, Apple probably needs to spend at least $500 million to keep up. Microsoft can distribute that cost among 20 million users at $50 each, charge $100 and make half profit. If Apple has 2 million users that comes out to $250 per user spent on development. (These aren't intended to be real numbers, just an approximation of the magnitude of the respective numbers).

    Very few people would spend $500 on a boxed OSX so it's necessary to bundle with hardware that's intentionally kept unique, and lower-end models are limited in certain ways as a form of price discrimination. The uniqueness is part of the package, but it's also a way to obfuscate direct price comparisons.

    Apple sells OSX UPGRADES at a reasonable price, but there's no way you'd catch them selling an "OEM" version anywhere close to $200 -- there'd be no ROI.

    This is the only strategy a commercial OS vendor could resonably hope to use in a Microsoft-dominated market.

  • by frission (676318) on Tuesday July 15, 2008 @02:00PM (#24200991) Homepage
    There's a little more to it now. It sounds more like they're suing because they took the Leopard update, opened it up, modified files in it, and re-released it for themselves. I think they're considering that a copyright infringement.
  • by revscat (35618) on Tuesday July 15, 2008 @02:01PM (#24201005) Journal

    And finally, how successful would OS/X be if Apple sold it as software for any platform, Microsoft-style? It would be earth-shakingly successful, probably garnering 50% marketshare within one year. And probably making 10x more money than they do now.

    They tried that before. It didn't work out too well. Also, you're wrong.

    One of the strengths of OS X is that it runs on a limited, well-understood suite of hardware. Bugs are easier to fix, components are easier to tweak, and new features are more easily added. I do not, and never have, believed that Apple would be well served by opening up OS X. It's a tightly run ship (for the most part), and opening it up to all hardware would serve neither Apple nor end users.

  • by cbreaker (561297) on Tuesday July 15, 2008 @02:02PM (#24201023) Journal

    Apple has done worse in their day. They're more ruthless than most corporations when it comes to things like this.

    Somehow, it seems to go unnoticed..

    I guess people forgot how they squashed the Mac clone market a decade ago by deciding to no longer license the ROM needed to run MacOS and thus putting many OEM companies out of business in one fell swoop.

  • Re:a boy can dream (Score:5, Interesting)

    by jtroutman (121577) on Tuesday July 15, 2008 @02:09PM (#24201151)

    Actually, they do. Look at what just happened to Dell. Their EULA stated that you had to agree to arbitration, but a judge ruled that it was invalid. Just because a company writes something down on a piece of paper and sticks that piece of paper into a product that you buy, doesn't make it necessarily enforceable.

  • by mabhatter654 (561290) on Tuesday July 15, 2008 @02:13PM (#24201243)

    Unless you try to Dual-Boot with BeOS... for free.. then their OEM EULA prohibits them from putting non-windows OSes in the boot screen or even SHOWING the user an icon to set up dual booting. That's what Fujitsu and Toshiba found out when BeOS wanted to be put on systems for free... and why no major player will sell dual-boot systems with the Linux pre-installed.

    "You're welcome to sell any computer you want that has Windows on it, as long as you hand over the Windows license with the computer."

    Correction If you sell Windows, you're ONLY allowed to sell Windows or even advertise Windows on those machines. (see above) You can sell machines with other OSes, but Microsoft want's (wanted) license fees for EVERY computer you sold (until it was declared illegal). So Microsoft is much WORSE... After all, only Apple sells Macs, they are not compelling any other company to do their bidding.

  • by Schlage (195535) on Tuesday July 15, 2008 @02:14PM (#24201251)
    Althought the previous post didn't put it in the most objective manner, I hardly think that the post should be modded "Flamebait." A bit direct, perhaps, and obviously writing from a very decided point of view, but I've seen much less objective and more objectionably phrased comments rated "Insightful" or "Informative." The bottom line is that whoever rated this "Flamebait" disagreed and wants the comment discredited. Too bad I don't have mod points right now.

    To avoid just commenting on someone else's rating, I have to say that I agree that much of what Apple sells with its Macintosh is the Apple 'mystique.' Jobs is a great marketer and a great packager of product, whether that packagin comes in the form of industrial design (iPod), eye-candy (much of the OS X interface), or the intangible psuedo-elitism of owning an Apple Macintosh.

    I don't have an axe to grind against Apple, I've used their products far longer than I have any of the IBM/Microsoft related lines (starting with the Apple II), but the parent is dead on when he labels Jobs as one of the great showmen of our times. And don't tell me that the Mac vs. PC ads are designed as fair, objective comparisons, because they're not, they're ads and they're meant to persuade people to buy Macs and regard the Apple brand well, pure and simple.
  • by onecheapgeek (964280) on Tuesday July 15, 2008 @02:14PM (#24201257) Journal
    Digidyne v. Data General. No requiring hardware to legally use software. It even involved a company which sold clones of Data General's. Precedent is on Psystar's side. http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=US&vol=473&invol=908&friend=nytimes [findlaw.com]
  • by Raineer (1002750) on Tuesday July 15, 2008 @02:22PM (#24201397)
    And everyone knows IBM *SHOULD* have done the same, why does Apple get lambasted for it...just because people don't like Stevie?
  • by 99BottlesOfBeerInMyF (813746) on Tuesday July 15, 2008 @02:29PM (#24201517)

    Now Steve Jobs has to pull the same kind of antics that Microsoft was endlessly bashed for.

    MS is mostly bashed for their illegal business practices, especially antitrust abuse. Apple enforcing onerous terms of the license for a product they own the copyright on is something else entirely. Sadly, from what I can see the best thing for consumers (who want OS X) that can come out of this is Pystar losing. Otherwise, Apple will become more like MS, being forced to add DRM and license keys to restrict installation, which will suck for those of us who prefer not messing with that crap.

  • by sl3xd (111641) * on Tuesday July 15, 2008 @02:37PM (#24201661) Journal

    There's already precedent, and it doesn't go well for psystar:

    There were legal mac clones at one point in time. When Jobs came back onboard, they released a new version of the OS whose license specified that you couldn't run it on unauthorized hardware (and to be authorized, the clone makers had a very high royalty to pay). The companies who went out of business due to that had just as much at stake as psystar. They didn't win then, and psystar isn't going to win now.

    Sorry, boys, but you have to follow the terms of the license.

    Frankly, I don't see how (from a legal POV) much difference between Apple's license only allowing you to run on Apple hardware, versus the GPL3's anti-tivoization clause.

  • by bigstrat2003 (1058574) * on Tuesday July 15, 2008 @02:38PM (#24201681)

    First of all, I never said "fanboi", I said "fanboy". Second, if you don't like it, I'm sorry, but that is the main reason for Apple's success, along with excellent marketing. They absolutely do not offer any real advantage (for their computers, their peripherals aren't bad) over the competition, do so at a much higher price, yet manage to sell their product. The fact that they sell only a small percent of systems out there only strengthens the case for the argument that fanboys are their primary demographic.

    We don't even have to look at their products themselves to determine the mass numbers of fanboys out there. Like I said, the iPhone. It is a damn cool piece of hardware, and I give Apple props for making it. Before it came out, however, what was the buzz? We heard, every other day or so, how the iPhone was a revolution in mobile phone technology and would completely change the way we use phones. It wasn't, it hasn't, and it isn't going to. The iPhone is an excellent evolution of the phones that came before it, but it isn't the best, most revolutionary thing since sliced bread.

    The over-hyped status of the iPhone proves, all by itself (and, I might add, isn't the only example), how many drooling fanboys Apple has for customers. Not all, perhaps, but a very large number indeed.

  • by geminidomino (614729) * on Tuesday July 15, 2008 @02:39PM (#24201709) Journal

    Styling too often has negative value (eg, the Mac mini doesn't even provide enough power from USB to charge an iPod Shuffle).

    Is that true? I thought there was a standard for USB2. 5V or so.

    Not doubting you, just mind-boggled.

  • by Draek (916851) on Tuesday July 15, 2008 @02:42PM (#24201743)

    Because people don't feel as bad when they feel they've wasted $10 than when they feel they've wasted $1000, so of course Apple consumers won't admit to their dissatisfaction as easily as, say, Dell customers. Yes, even to themselves.

  • by yuna49 (905461) on Tuesday July 15, 2008 @02:53PM (#24201955)

    The link points not to any decision, but to a dissent by Byron White objecting to the Supreme Court's decision not to hear on the case on appeal. The Court never explains why it chooses not hear a case, but Justices can publish a dissent from that decision if they feel it's warranted. There is no precedent established here, at least in the sense of a Supreme Court ruling.

    Moreover, if you read White's dissent, he points out that tying agreements are not always per se illegal and can in some cases be pro-competitive. If anything his dissent, and the fact that the Court did not take on the Data General case, tells me that the law here is sufficiently murky that the relevance of this decision to the Apple/Psystar case is debatable.

    Do you really think that, if the law is as clear-cut as you think, Apple would be undertaking this litigation? My guess is that Apple's attorneys believe that the DG case does not provide a sufficient precedent to decide automatically in favor of Psystar. We'll see if the courts agree.

  • by XorNand (517466) * on Tuesday July 15, 2008 @03:01PM (#24202083)
    $4M might be a tax dodge. I might even be willing to consider $40M to be a tax dodge. But when you start talking tens of *billions*, I somehow doubt that taxes are even on Bill's mental radar. Oh, I'm sure he's aware of his tax liability in the abstract and has a team of accountants handling the details. But when you have enough money to literally change the world, your ambitions extend beyond trying to hide a few bucks from the government.
  • by onecheapgeek (964280) on Tuesday July 15, 2008 @03:03PM (#24202135) Journal

    That is correct, but the Appeals Court's decision falls on Psystar's side. While this is by no means definitive in the case in question, it is a legal precedent at the federal level, and it relates directly to the matter at hand.

  • by Sandbags (964742) on Tuesday July 15, 2008 @03:11PM (#24202277) Journal

    So you think Microsoft takes good care of all it's unsatisfied customers, do you?

    Where Apple has made a culture of people expecting a positive experience, and plays down the few (less than 3%) who have issues, Microsoft has spent a decade building a culture where people expect the issues, and don't complain simple because' well, it just sux anyway, and what choice do we have"

    They do admit failure, regularly. They just don't do it instantly, because unlike others, they like to not only confirm the issue, and go the extra step to find the solution before it speads all over the web that there's an issue, but they actually research how the fault happened in the first place, and work internally to make sure it doesn't happen again.

    You obviously don';t read Mac's technicla forums, or work with their engineers very often. Identified problems are solved quickly and accurately. New issues are kept under covers until there's a solution. What a lot of press who are pro-microsoft do is tattle about every time there's an issue that's NOT a bug, but a design choice apple made, that they try to keep quiet.

    Microsoft has been doing alot worse lately covering up actual conversations about how they screwed the public with this "vista ready" garbage. They've not only ignored customer complaints, and hundreds of bugs (with dozens of key problems that are still unresolved like copy speeds), but they're also turning their backs on the vendors, and lying about conversations with ISVs and hardware companies.

    Apple is not perfect, they have faults in design and implementation, as well as code, but overall, their ability to react to solveable problems is amazing, and their low frequency of serious issues that go unresolved is industry leading.

  • by Dekortage (697532) on Tuesday July 15, 2008 @03:14PM (#24202333) Homepage

    If it's all marketing then why does Apple have the highest consumer satisfaction rates in the entire industry?

    Here's an interesting factoid from the 1990s for you. Of all the auto brands in the General Motors family, Pontiac had the highest standards of production quality, while Cadillac had the lowest. And yet Pontiac had the lowest satisfaction ratings, while Cadillac had the highest.

    My point is that "highest satisfaction" may have nothing to do with actual production quality, but with consumer perception of the product. And I say this as someone who prefers Macs to other systems (the same way I prefer New Balance sneakers to other shoes: because it fits me better).

  • by HardCase (14757) on Tuesday July 15, 2008 @03:14PM (#24202347)

    How much money is the OSX86 project generating? And what hardware are they selling?

  • by Sandbags (964742) on Tuesday July 15, 2008 @03:29PM (#24202591) Journal

    Let me poot it this way. On blogspot, a systems security company ran a series of articles called "Mad as Hell" where they took a large portion of their user base, switched them to Macs for 6 months, and did an exhaustive TCO analysis (on a side note, macs came out to be much cheaper to operate, almost by half, than cheaper windows boxes once security, man hours, and more came into play, he had a nice spreadsheet you could plug your own numbers into as well if your rates differed).

    The point I'm making here is there were several key (read VOCAL) employees that tried to refuse to use a mac. After 6 months, those same employees BOUGHT the mac they were using from the company, and REFUSED to switch back to a PC.

    I've been a mac user since 1984 (and apple user since 1980). Every mac I or my family has owned is still working today, except an iMac G4 that got fried by lightning) including a Lisa bought in 84 and an original imac 128K in 85. Sure, we've had HDDs and power suplies blow out, and they've been repaired, but since every component in a mac is basiccaly the same as a PC, except the motherboard of which I have NEVER had one fail (including the hundred or so macs in an advertising firm I ran IT for).

    Saying that people are too proud to complain about their high dollar purchases? Let me tell you, people who buy expensive stuff are VERY vocal about it's issues. They expect it to work, work well, and never die. Try asking a tech at a mercedes dealership... I'd like to see some of your references showing how this psychological phenomenon was measured...

    besides, most macs, feature to feayture, are CHEAPER than equivolent Dell systems. Sure, you can't get a Mac for $499, but lets be honest, you can't get a real PC for that either. (A PC that doesn't meet the minimum requirements to run the OS pre-installed on it does not countas a real PC)

    I dare you, go to Dell's site, configure matching systems to an iMac, Powerbook Pro, and Mini. The Dell One is about $150 more expensive than an iMac, their gaming notebooks (keep in mind the pro has a very high performance graphics engine and is intended to play Wow and run virtual machines, it's not a toy) are $300-500 more expensive than the mac pro, even their SFF desktop is more than $100 more than a mini. You can get a basic notebook for about $100 less than a standard macbook, with part to part equivolent perfornamce, but the Dell is more than a ound heavier if you do, or more expensive if you go lighter. Nothing Dell has compares to the Air.

  • by erroneus (253617) on Tuesday July 15, 2008 @04:21PM (#24203497) Homepage

    You were modded as Funny, but I would have gone with 'Insightful.'

    I use, support and even endorse Apple computers for certain people and applications. I'm not an Apple basher. But some realities regarding the success of Apple are that it is eerily similar to Starbuck's Coffee and H2 and H3 Hummer vehicles. People just want to be seen with them. They want to be associated with all of the images associated with what they think these products represent. For those who value brand recognition, these brands all represent the height of cool and awesome. (Well, Hummer isn't as cool as it was at first with fuel prices being what they are now.) But really... It's the summer time at the moment and the last time I visited a Starbuck's shop, there were no fewer than three users of laptops there and while one of them appear to be "an author" (he did have on a black, long-sleeve pull-over... I didn't see the grey jacket with brown patches on the sleeves though... so I figured he was a writer or that he thinks he is and needs to do it in a Coffee shop.) the other two were doing something approaching nothing where one was playing freecell and the other simply never touched the keyboard or even looked at the screen.

    At the moment, I'm in Japan and there are Starbuck's shops here as well, but not quite for the same reasons. I don't see as many beatnicks and have yet to see a single laptop computer there. (I do see laptops at McDonald's quite often, however, and they even provide power outlets at many of their seats! Turns out there are many students who go there to do their homework... actual work and purpose.)

    I'm not saying Japanese people are any less shallow than US people. In fact, I would argue that Japanese see more value in brand recognition than the general populace of the US. I'm just saying for the targets of certain markets in the US, the following does indeed seem to be without practical basis... they are attempting to buy lifestyle and have yet to figure out they cannot.

  • by BUL2294 (1081735) on Tuesday July 15, 2008 @05:53PM (#24204981)

    And just because Apple is suing these guys, and is probably willing to spend more money bankrupting them than Psystar's owners have ever seen in their lives, does not necessarily mean that Psystar is in the wrong, or that any of what they have been doing is deceptive, unethical, or illegal.

    I never said that Psystar was in the wrong. Think of it this way... If I wanted to make a quick buck off of someone else's namesake, I'd do what I outlined in my OP--found a company, make a product that pisses off a bigger company (but in a way that I can only face civil and not criminal prosecution), rake in some profits, get sued, pay out dividends/bonuses--blowing out all our cash, and go under using corporate/investor & bankruptcy laws to shield my now-plentiful personal assets from my "sound investment". In such a scenario, every asset the company still had would be riddled with debt leaving creditors fighting with the suing party for the scraps...

    In the mean time, my shareholders/high-ranking employees and I made a cool couple-hundred-grand in "dividends", "salary", and "bonuses"; my customers got their products (no threat of criminal prosecution for not delivering, warranty claims can't happen due to bankruptcy, etc.); and multiple parties are fighting over the scraps--the 20 PCs, 5 laser printers, 15 phones, the cubicle walls, and some pens & Post-It notes.

  • by LearnToSpell (694184) on Tuesday July 15, 2008 @06:56PM (#24205825) Homepage
    Got some links for that? Not that I'm doubting you, but if I believed everything I read on Slashdot...
  • by mrraven (129238) on Tuesday July 15, 2008 @07:37PM (#24206245)

    I have a G5 tower and an itouch now and have had a classic and an LCIII in the past and they are pretty much OK. OTH I was pretty bummed when my 1200 dollar iBook only lasted a couple of years due to the infamous logic board problem:

    http://www.applefritter.com/node/10193 [applefritter.com]

    I also had the original SATA drive fail on my G5 tower and it makes the infamous power supply beep, beep, beep, sound...

    While I think OS X is the best OS going I've never had those sorts of hardware problems on a P.C. I'd love to be able to LEGALLY put OS X on cheap and cheerful p.c. hardware, I know it won't happen but I do think it would be better and cheaper.

  • by toddestan (632714) on Tuesday July 15, 2008 @09:38PM (#24207495)

    I've been a mac user since 1984 (and apple user since 1980). Every mac I or my family has owned is still working today, except an iMac G4 that got fried by lightning) including a Lisa bought in 84 and an original imac 128K in 85. Sure, we've had HDDs and power suplies blow out, and they've been repaired, but since every component in a mac is basiccaly the same as a PC, except the motherboard of which I have NEVER had one fail (including the hundred or so macs in an advertising firm I ran IT for).

    I've never had a PC fail. Sure, the harddrive craps out occasionally, and sometimes the power supply blows, but once it's repaired it's as good as new! Who are you kidding? At least when a power supply dies in a PC, I have a pretty good chance of finding a replacement without cannabalizing another Mac or paying Apple's replacement prices.

    Besides, I find it extremely hard to believe that you've never had a logic board (that's Mac for motherboard) fail. Seems like the most common problem I've seen with Macs, and they are notoriously unreliable in the low end notebooks (Macbooks/iBooks).

    I dare you, go to Dell's site, configure matching systems to an iMac, Powerbook Pro, and Mini.

    I dare you to go to Dell (or pick any random PC manufacturer), find a model, then price out the closest equilivent Mac. Unless you limit yourself to the small subset of PC hardware that is most like the Mac hardware (such as niche products like the Dell One), you'll find that PC is almost always cheaper.

  • by toddestan (632714) on Tuesday July 15, 2008 @09:42PM (#24207513)

    Another fun fact is that the Chevy/Geo Prism always got lower ratings than the Toyota Corolla, despite them being the same car with the exception of some exterior plastic cladding.

  • by Draek (916851) on Tuesday July 15, 2008 @11:32PM (#24208271)

    And everyone knows IBM *SHOULD* have done the same, why does Apple get lambasted for it...just because people don't like Stevie?

    No, it's because everybody knows IBM *SHOULDN'T* have done the same, but rather, figure out how to profit from an open platform, since trying to stick to their monopolistic practices is what almost drove them to bankrupcy the first time around. Kinda sorta like your favorite fruity-flavored company, huh.

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