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Psystar Antitrust Claim Against Apple Dismissed

Posted by kdawson on Wed Nov 19, 2008 06:40 AM
from the oh-give-me-a-clone dept.
CNet has a report that a federal judge has dismissed Psystar's antitrust suit against Apple. Observers had said that the counter-suit embodied the Mac clone-maker's best chance of prevailing and staying in business. We've been following Psystar and the dueling lawsuits since the beginning.
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[+] Apple: Psystar Offers $399 "OpenMac" Computer 615 comments
mytrip writes to tell us that Psystar has announced a new line of Intel-based computers that promise to run an unmodified version of Mac OS X "Leopard". Unfortunately almost immediately after the launch their website went down and as of this story remains unaccessible. "Astute readers may well hear this news and ask themselves if it doesn't sound like a Mac clone, something whose time came -- during Gil Amelio's tenure at Apple -- and went shortly after current CEO Steve Jobs assumed the helm at the company. [...] It definitely defies the EULA for Mac OS X, which specifies that the purchaser of a legal copy of Leopard is entitled to install the operating system on an Apple-branded computer. If you buy the $399 OpenMac, you can check the EULA yourself if you also buy the pre-install option, as the company includes a retail copy of Leopard with your purchase."
[+] Apple Files Suit Against Psystar 805 comments
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.
[+] Psystar Will Countersue Apple 1084 comments
An anonymous reader sends us to CNet for news that Apple clone maker Pystar plans to countersue Apple. We discussed Apple's suit last month. "Mac clone maker Psystar plans to file its answer to Apple's copyright infringement lawsuit Tuesday as well as a countersuit of its own, alleging that Apple engages in anticompetitive business practices. Miami-based Psystar... will sue Apple under two federal laws designed to discourage monopolies and cartels, the Sherman Antitrust Act and the Clayton Antitrust Act, saying Apple's tying of the Mac OS to Apple-labeled hardware is 'an anticompetitive restraint of trade,' according to [an] attorney... Psystar is requesting that the court find Apple's EULA void, and is asking for unspecified damages."
[+] Psystar Case Reveals Poor Email Archiving At Apple 123 comments
Ian Lamont writes "Buried in the court filings of the recently concluded Psystar antitrust suit against Apple is a document that discussed Apple's corporate policy regarding employee email. Apparently, Apple has no company-wide policy for archiving, saving, or deleting email. This could potentially run afoul of e-discovery requirements, which have tripped up other companies that have been unable to produce emails and other electronic files in court. A lawyer quoted in the article (but not involved in the case) called Apple's retention policy 'negligent.' However, the issue did not help Psystar's lawsuit against Apple — a judge dismissed the case earlier this week."
[+] Mac Clone Maker Psystar Files For Bankruptcy 366 comments
StikyPad was one of several readers letting us know that Psystar has filed for Chapter 11 bankruptcy protection. We've discussed the Mac clone maker's battles with Apple extensively. The company apparently has over $250,000US in debt, and states that it cannot turn a profit in the current economy. "The Chapter 11 filing will temporarily suspend Apple's copyright infringement suit against Psystar, which is currently before the US District Court of Northern California. But once the bankruptcy protection is sorted out, the copyright case will resume." And PC Mag is reporting that, on the other side of the Atlantic, two new clone companies are just getting started. Like PsyStar, FreedomPC and RussianMac promise to deliver PCs with OS X preloaded.
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  • by wild_quinine (998562) on Wednesday November 19 2008, @07:05AM (#25815389)
    I never understood what these guys were trying to do. It was clear from the off that they would be legally defeated at every single last turn. Blam.

    You see, whether or not you agree or disagree with the legal standing of this EULA, or that EULA... whether or not you have a position on all this stuff, whether or not you agree that the law needs to be codified more properly for modern times, changed to fit the needs of the public... whatever you think there are just simply weaker cases which need to be tested first.

    These guys marched straight into the castle stronghold without a hope in hell, and pissed on the kings chips.

    We all stood back watching, saying to ourselves... well, this won't go anywhere. This was stupid. These guys are going to get slaughtered.

    And lo! It was stupid, it didn't go anywhere, and they just got it handed to them.

    • by Andy_R (114137) on Wednesday November 19 2008, @07:12AM (#25815409) Homepage Journal

      They took a gamble on how a very vague law would be interpreted by a judge. If they won, then they would have been sitting on a goldmine, having lost they will still have the paycheques they they took home each month. There was a lot of upside for hardly any downside.

      • Re: (Score:3, Insightful)

        This would be akin to Microsoft having...

        Judge actually ruled that this is pretty much the exact opposite of 'This would be akin to Microsoft...'

        This particular ruling isn't about the EULA aspect of the case, it's about the (alleged) monopoly abuse. Psystar's argument was that Apple had a monopoly in the market for computers running OS X, and therefore had to abide by the much stricter laws on what a company can and cannot do if it gets into a monopoly position. The judge said that 'computers running OS X'

        • Re: (Score:3, Informative)

          The judge said that 'computers running OS X' isn't the applicable 'market' in this case, he defined the applicable market as 'computers running any OS', therefore Apple only have a minority of the market, and Psystar is wrong. In that market, Microsoft do have a big enough OS market share to be defined as a monopoly.

          However, the other part of the Sherman Act (illegal tying) was still not addressed. From
          http://en.wikipedia.org/wiki/Tying_(commerce) [wikipedia.org]

          Some kinds of tying, especially by contract, have historical

          • by GaryPatterson (852699) on Wednesday November 19 2008, @07:04PM (#25825581)

            You quoted only part of the text, and missed the critical bit.

            Certain tying arrangements are illegal in the United States under both the Sherman Antitrust Act, and Section 3 of the Clayton Act. A tying arrangement is defined as "an agreement by a party to sell one product but only on the condition that the buyer also purchases a different (or tied) product, or at least agrees he will not purchase the product from any other supplier." Tying may be the action of several companies as well as the work of just one firm. Success on a tying claim typically requires proof of four elements:
            (1) two separate products or services are involved;
            (2) the purchase of the tying product is conditioned on the additional purchase of the tied product;
            (3) the seller has sufficient market power in the market for the tying product;
            (4) a not insubstantial amount of interstate commerce in the tied product market is affected.

            Look at point 3 - "sufficient market power."

            Apple do *not* have sufficient market power (which is usually triggered by monopoly status) and therefore are not subject to laws against tying.

            Monopoly status (or 'sufficient market power') triggers a whole raft of conditions which are not an issue before that point.

      • by MrMickS (568778) on Wednesday November 19 2008, @09:15AM (#25816089) Homepage Journal

        Apple isn't denying Pystar business by suing them on grounds of copyright violation, they are denying you the right to purchase hardware supported by another vendor to run an operating system of your choosing.

        So when it sends reports following crashes where do they go? Apple.

        When someone files feedback or some such where does that go? Apple.

        When something doesn't work as expected who gets the blame? Apple.

        Apple gets bad rep and no financial recompense from Psystar's business model. Why is this something that should be allowed?

        • by TheRaven64 (641858) on Wednesday November 19 2008, @09:26AM (#25816193) Homepage Journal

          Apple gets bad rep and no financial recompense from Psystar's business model

          Unless you count the $129/sale from the boxed copy of OS X that Pystar include as a financial recompense...

          • by nine-times (778537) <nine.times@gmail.com> on Wednesday November 19 2008, @10:58AM (#25817393) Homepage

            And it is some level of financial recompense, but it doesn't address the question of whether it's fair recompense. The $129 number is a price subsidized by the purchase of a Mac. That's essentially the "upgrade" price. We don't know what the fully retail price of OSX would be if Apple were licensing it for use on non-Apple computers, because Apple doesn't offer those licensing terms to anyone.

            It may be that, if Apple chose to license OSX for generic PCs, they would charge $500 or $1000 per copy. We don't know.

            So in light of that, it's not clear that the $129 is sufficient for Psystar to say, "But we bought copies of OSX fair and square!"

        • Re: (Score:3, Insightful)

          Except that Microsoft does say that with the Xbox and Xbox 360. They have 2 different platforms with 2 different lisencing strategies for their hardware. Windows is lisenced to anyone and everyone for an exorbinant fee, while the Xbox OS is not lisenced to anyone and used only for running hardware assembled and sold by Microsoft.

          Microsoft doesn't sell the "Xbox OS" as a separate product. Apple does sell OS X independently of their hardware.

          • by crmarvin42 (652893) on Wednesday November 19 2008, @10:15AM (#25816709)

            your MS Xbox analogy fails.

            No it doesn't. they are both Operating Systems for running specific hardware designs. Their is only one Xbox 360 design, but if I were to go out and purchase all of the parts necessary, assemble the system, and get my hands on a copy of the OS from some hacker I could conceivably install the Xbox 360 OS on reference hardware and do the equivalent of what Pystar is doing. It would be no less illegal based on the EULA and copywrite law as it is written and enforced at the moment. That it would be more difficult to procure a copy of the installable OS doesn't invalidate my analogy.

            If anything your "Bad Car Analogy" is worse than the one I used because tires are sold and not licensed as software is. I don't particularly like that software is licensed instead of sold but that's the state of things at the moment.

  • by Anonymous Coward on Wednesday November 19 2008, @08:36AM (#25815835)

    Psystar is not modifying the OS. Check the details! They are not running a cracked or modified version of OSX on their systems. What they have done is created the EFI backbone so that will allow the OS will install run nativly on it. This is no different from when IBM made their machines, and people reverse-engineered the bios to make clones.

    All apple has to get them on is that the OSX license stipulates that it MUST BE INSTALLED ON APPLE HARDWARE. This is EXACTLY the same if Microsoft turned around and said that windows can only be used on specific intel motherboard and cpu, and that only microsoft can decree what hardware is allowed to be used with it.

    These guys are going to have a rough time of it, but I home that they succeed. Apple should not be the only hardware manufacturer allowed to run OS-X, no more than microsoft should be allowed to decree that windows is not allowed to run on AMD and Gigabyte.

    We should be allowed a choice!

    • by itsdapead (734413) on Wednesday November 19 2008, @12:27PM (#25818945)

      This is EXACTLY the same if Microsoft turned around and said that windows can only be used on specific intel motherboard and cpu, and that only microsoft can decree what hardware is allowed to be used with it.

      So, rather like the terms under which the vast majority of Windows licenses are sold, then?

      Most new PCs come with an OEM version of Windows with a license that specifically restricts its use to the computer with which it was sold. Most "boxed" versions of Windows sold to consumers are "upgrades" which require that you have an existing copy. My employer has a Windows "site license" which entitles it to install any version of windows on its PCs but (last time I looked) only if they originally came with OEM Windows.

      The only "get out" is that Microsoft will sell you a "Full Retail" version for 2-3 times the price of the OEM/Upgrade versions which most customers buy. If Apple do lose the court case (flap, oink), one work-around might be to hike the price of OSX to, say, $500-$1000 (not without precedent for certified Unix with a full dev kit) and offer an "upgrade" to existing OS X license holders (i.e. anyone with a Mac) for $130. If someone challenges that it would set some interesting precedents for Microsoft...

      We should be allowed a choice!

      Remember that when you go to buy a netbook (like the EEE) or OLPC and find that the Borg have been round and now, somehow, the Linux versions are now (a) more expensive and (b) not in stock. Funny that. Now if Apple tried that, everybody would flame them...

    • by dssstrkl (900534) on Wednesday November 19 2008, @07:15AM (#25815423)
      What's the problem with Apple making money using FOSS? Its not like they don't write their own code or contribute very strongly back to the community?
    • by 91degrees (207121) on Wednesday November 19 2008, @07:19AM (#25815441) Journal
      Though I disagree with Apple profiting off OSS which they did not initially create

      Why not? Most tech companies do this in some way.
    • by Anonymous Coward on Wednesday November 19 2008, @08:09AM (#25815683)

      They're not profiting off the Free & Open Source Software that they did not initially create. You can download that bit for free, no profit for Apple. Free of charge, completely.

      What they're profiting from is the non-OSS part that they did create (or bought the rights to, in the case of the NeXT created segment) and the integration of the F/OSS that they use with their OS. That's their work and not covered by F/OSS licenses.

    • by gstoddart (321705) on Wednesday November 19 2008, @10:31AM (#25816909) Homepage

      Though I disagree with Apple profitting off OSS which they did not initially create.

      They started with BSD code. Which is released under a BSD license which expressly allows this. What's the problem? You are free to make money off that stuff too if you like.

      You can do that with Apache stuff too. Some OSS licenses expressly allow you to use their stuff as a basis for your own stuff. This is a good thing.

      Cheers

    • Re: (Score:3, Insightful)

      by Anonymous Coward
      wtf!!! stop using subject as part of the post. you see, there is the subject, which is, you know, the subject, as in "what you are going to talk about", and then the post, the place to write down your idea. stop fucking with data and metadata.
        • Re: (Score:3, Interesting)

          Security updates are free, but if I wanted fancy multiple desktops I'd have to pay to update to 10.5, and that doesn't sound very free to me. I was living okay without multiple desktops sure, but with Ubuntu I got them for free, and I am now in fact using them.

          The OSX security updates also were usually quite tardy as Mr AC points out just above me. Took them months to get a patch out for that big DNS bug a few months ago for example.

          Ubuntu has become a fairly polished OS. If I had an nVidia graphics card th

        • Re: (Score:3, Informative)

          doesnt negate the fact that its true. The only product Apple puts out right now thats not really that competitive is the Mini, but otherwise the rest of the line is very competitive. The difference is in buying a Mac you buy things that for some people they dont need or want. But then thats the Apple difference, you know your machine is going to be supported for years (Still running Tiger on 10 year old systems) when some Vista "Capable" models where barely that out of the gate.