Lawsuit Between Apple and Psystar Moves Toward Settlement 242
An anonymous reader writes "Psystar and Apple have agreed to alternative dispute resolution to keep the public eye away from their disagreements, and to reduce legal costs. This will eliminate any rulings that would set a precedent over Psystar's claim that Apple is violating anti-trust laws by tying Mac OS X to only their hardware and thus creating a monopoly. This could result in a profit for Psystar's business, but eliminate their line of open-computing Mac-compatible PCs. On the other hand, what's to stop a similar company from doing the same thing?"
Comment removed (Score:5, Insightful)
That's a shame (Score:4, Insightful)
It would have been interesting to see the outcome in court, but like the rhetorical question at the end states, I doubt they'll be the last to try.
Apple can do no evil (Score:2, Insightful)
Re:That's a shame (Score:5, Insightful)
I do think that the legal question "How much anti-competition is allowed in an EULA" is an interesting one, but that it is better fought between two well funded parties. It might end up in a Supreme Court appeal.
Re:It would be a monopoly... (Score:5, Insightful)
If Apple felt that there was no merit to Pystars claims then why obscure things? Does having a gentle legal dept. sound like Apple? It's far more likely that Apple is going to solve this problem with a check-book than with a lawsuit.
Re:What's to stop Apple? (Score:2, Insightful)
See above. Really, it's not nearly so nice in the real world. Apple has what, USD 20 B (big ones) in cash floating around. Pystar is lucky if they haven't maxed out their VISA card.
Re:What's to stop Apple? (Score:3, Insightful)
Re:What's to stop Apple? (Score:3, Insightful)
Re:What's to stop Apple? (Score:2, Insightful)
citation needed.
Re:That's a shame (Score:5, Insightful)
I think that both parties will benefit by a quiet deal that allows Psystar to sell their boxes; paying Apple a nice "per copy" price for OS-X. Apple does not want to litigate the "monopoly" argument; Psystar does not want to litigate "Breech of OS-X EULA". The nice think of a settlement is that it does not bind Apple to make the same deal with another white box maker.
There is no way that Psystar will get a license to ship with MacOS X. They have been pissing on Apple's shoes; so there will be no business between them. Apple has already replied to Psystar's idiotic "monopoly" arguments, citing about a dozen cases that say absolutely clearly a single product of a company cannot possibly constitute a meaningful "market", and therefore Apple cannot have a meaningful monopoly in the non-existing market of "MacOS X compatible computers".
This arbitration is something that the court can force on the companies; it cannot force them to agree on anything in arbitration.
Re:What's to stop Apple? (Score:2, Insightful)
The amount of money they have is only partly relevant. If I had $20 billion, I couldn't make it legal for me to murder anyone. There is the extent that what is right is right and what is wrong is wrong. (That said, there are a lot of shady and even illegal things one could to with $20bn if one were willing to do so... like various rulings I have seen in the past.)
But their having money isn't the sole factor influencing the result. If that were the case, drug, alcohol, tobacco and firearms companies would have won every time they were sued.
Re:What's to stop Apple? (Score:5, Insightful)
If your case is strong enough, you will win. There are a lot of arguments against Apple, especially the anti-trust one. The right to produce a competing product is fairly important in a free market.
Who says Psystar doesn't have the right to produce a competing product? Apple doesn't deny Psystar's right to a competing product. They just deny Psystar's right to take MacOS X and install it on their computers in clear breach of the EULA, and they have precedent (Xerox' plain paper photocopiers) that even a clear monopoly is under no obligation at all to help its competitors.
Psystar can compete by installing Windows XP, or Windows Vista, or Linux, or they can buy up the remains of BeOS or AmigaOS. Or write their own operating system from scratch. If they wanted MacOS X, they should have offered more than Apple's $400 million when NeXT was for sale. They can even download Darwin and build a GUI on top of that. It's their business, they should come up with their own ideas to compete.
Re:It would be a monopoly... (Score:3, Insightful)
They don't advertise it as an apple. They advertise it as being able of running OSX.
This would be like honda putting the vette motor in then saying "Buy our new S2000, now with a corvette motor."
While the monopoly stuff probably does not have legs the illegal tying claims may.
Who marked this "Insightful" (Score:2, Insightful)
A) Ford doesn't sell naked engines to car builders, pro or hobbyist. Apple doesn't sell their naked OS to computer builders, pro or hobbyist.
B) Neither Apple nor Ford are legally compelled to sell their "parts" separate from the whole.
C) Both Apple and Ford sell "upgrade parts" for existing owners of their products
D) While they done ENCOURAGE IT - they also don't stop people from using those parts for "off script" use, except...
They will stop ANYONE from using their company name or product names to sell a product made from their parts.
Developers (and Slashdotters) love to frame it as if Apple is stopping EVERYONE from using their OS however they want, conveniently ignoring the fact that that Apple only goes after builders who try to sell their computs as "Macs", "Mac clones", or as "running OS X".
Trademark Clue: If you don't protect it every single time, you can lose your right to the mark. Examples include: aspirin, linoleum, leotard, and Lasik.
Examples of hard-fought trademarks: Kleenex, Xerox, and Rollerblades.
A Mac is a specific model of computer from a single maker with an operating system written specifically for it (as opposed to a generic machine with an outsourced OS).
Re:Who marked this "Insightful" (Score:5, Insightful)
A. you can buy ford crate engines, you can buy boxed copies of OSX
B. No, but preventing you from using the parts in something else is illegal.
C. They both sell parts that can be used for any purpose. First sale prevents them from limiting the uses of the item.
D. They can't stop you.
Re:What's to stop Apple? (Score:1, Insightful)
The anti-trust thing is a red herring, Apple do not have sufficient market share for anti-trust laws to apply. The only real argument I've seen is the first-sale issue. If that turns out to be valid, I expect Apple will simply stop selling boxed copies of OS X and move to on-line OS upgrades which can only be performed from a Mac. With no way to buy OS X if you don't already have a Mac you wouldn't be able to legally get a copy even if it would be legal to run it on non-Apple hardware.
How would one install OS X on a machine one has wiped it from?
Re:It would be a monopoly... (Score:4, Insightful)
I don't think Apple are really interested in paying out Psystar. Unless the resolution send a clear message that Apple does not tolerate Mac clones and will pursue their manufacturers/sellers to the bitter and expensive end, nothing will prevent a "StarPsy" form popping up again in a few months, hoping to either make a mint selling "open computers", or at worst to get a cool few millions form the mothership.
Re:What's to stop Apple? (Score:4, Insightful)
They're doing pretty good, even tobacco has managed to hang in there. Given the moral issues the big AG lawsuits brought up the tobacco companies should be dead and buried by now and nicotine should be a DEA class II drug (along with alcohol, but I won't get started on that one now.
I'd like my pony now, please.
Re:What's to stop Apple? (Score:5, Insightful)
But there are lots of competing products. The OS market is currently dominated by Microsoft (who has been adjudged to have a monopoly), and in which there are several alternatives, some of them free. The market for hardware is rich and diverse, with multiple providers for just about any hardware component you can think of. How does tying the hardware to the software give Apple any more market share in either market? It' doesn't.
Anti-trust law specifically forbids using a monopoly in one area to increase your market in another. But in which area does Apple have a monopoly? Neither. No monopoly means no anti-trust violations.
I thought Apple sucks (Score:4, Insightful)
The ridiculous thing is that building a mac clone would be about half as hard as building the IBM clone. No one needs to work under clean room condition to make sure that the multiple phalanxes of IBM lawyers do not win the first born child of the cloners. No one needs to write a OS from scratch. All that is needed is an appropriate *nix subsystem, with a virtual machine that can run either windows and a Mac OS UI clone simultaneously. The technology is out there, all we need is some innovative company to do it.
Instead what we get is some kids hacking and selling POS hardware hoping they can get a little more than the razor thin margins currently awarded to the PC OEM. The reason we have not seen an innovative PC in 10 years is that there is no money in it. MS virtually destroyed the system builder, and now they are the only ones making money. The only hope for an innovative PC, besides Apple, is the market of competing virtual machine on top of commodity hardware. Whatever OS can run on top of it. This will break the cycle of single vendor malaise that lead to the crap Vista.
I am all for Apple to lose it's 'monopoly' of Mac OS X on Apple hardware. I am all for MS to be forced to stop 'illegally' tying an OS to a certain machine. But this is not going happen by putting out crappy machines running the same old crappy software. It will happen by a system builder designing a new kind of GPC. of course, the problem is will the market want it. Such a machine would require a significant amount of engineering, which would have to be recouped by a higher margin, which means a PC that costs more than $500, without a high level OS.
Re:Apple can do no evil (Score:3, Insightful)
Get over yourself. People always think they hold some kind of oppressed viewpoint around here, when it is often just selective memory.
Everyone bitches about almost *everything* on Slashdot because angry people are far more likely to hit that Submit button. (This very post is a great example of this fact.)
Re:What's to stop Apple? (Score:5, Insightful)
Even if Apple had a say 80% market share - still I don't think anti-trust laws should (could? I don't know this law in detail) apply. They have a business, a successful one, producing hardware and software. What is stopping them selling the software for their hardware only? This is not anti-competitive as anyone can build a computer and write an O/S by themselves.
Anti-trust laws, as applied against Microsoft, are for leveraging ones existing monopoly to gain entry into other markets. It would be a hard sell for a judge to convince Apple is doing that by setting up a business model (sell hardware with software tied together) and then gaining a great success with it. Only if Apple would have this market share and then starts e.g. blocking competing web browsers from their systems, now that would be an issue for anti-trust laws.
The only thing Psystar may have a case with is the first-sale doctrine: that a seller can not restrict what a buyer is doing with a product. Now there is the clash with copyrights, however afaik that means the buyer can re-sell the copy they bought (on CD or what-ever medium), but is not allowed to make copies of it. Installation on a computer is by nature making a copy of it, complicating the matter. I have no idea how copyright law provides for this kind of copy - one way or another it should be legal, or each software package should include a license allowing such copying for installation.
Complicated matter, but it is certainly not anti-trust matter. It's copyright and first-sale doctrine matter.
Re:Apple can do no evil (Score:3, Insightful)
Trust me, affording it isn't a problem. I just find Apple products uninteresting and many of the fanboyish customers irritating. Actually having a Macbook somewhere in public and running the risk of some Apple-loving jackass try to talk to me about it isn't worth it. As if that establishes some common ground or the basis for a conversation. The fact that two people buy the same crap does not actually make them part of a "community" that has any value. Perhaps if people didn't actually build their sense of self-worth by buying crap, the economy wouldn't actually be in the toilet at this point.
Both side benefit from an out-of-court settlement (Score:5, Insightful)
Apple has strong controls over their OS because they remember what happened the last time they allowed clones. The clones were poorly made and executed the old Mac OS rather poorly. This hurt Apple's overall reputation.
Psystar doesn't have a right to modify Mac OS X and put it on their machines. Apple has full rights to stop them. Psystar could make a machine that could take a modified version of Mac OS X. They just wouldn't be allowed to put this modified version on their machine.
My feeling is that Apple will allow Psystar to live as long as they stop selling machines with Mac OS X on them. Apple really doesn't care too much about the small market share they might lose to Psystar. Most likely, the people buying these clones wouldn't have bought a Mac anyway. If these people then want to spend $125 and get Mac OS X to work on Psystar, that's their prerogative and Apple won't stop them.
What Apple wants to avoid is the average user saying "Why should I spend $1200 on a iMac when I can by a Psystar for only $500?". Even worse, Apple doesn't want these same users saying, "Man, I bought this Psystar system, and Mac OX sucks! It keep crashing, and it is slow. I don't know why people think Apple is so hot. Their stuff stinks!".
Always remember: Apple is a hardware company that builds high quality hardware. They only make software in order to sell that hardware in the best light. Apple chose the premium market because they rather make $200 on each sale rather than sell five times as many machines, but only make $40 on each one.
Apple doesn't want some clone coming along and ruining their reputation. As far as Apple is concerned, Psystar can live as long as they don't mess with Apple's reputation.
Re:What's to stop Apple? (Score:5, Insightful)
Antitrust
Yes, Apple's argument is that the "market for Mac OS PCs" does not really exist, just as nobody else has the right to market Pepsi's soft drink, or sell BMWs, or force DuPont to license cellophane to them. The DuPont case went to the supreme Court in 1956:
"In a civil action under  4 of the Sherman Act, the Government charged that appellee had monopolized interstate commerce in cellophane in violation of  2 of the Act. During the relevant period, appellee produced almost 75% of the cellophane sold in the United States; but cellophane constituted less than 20% of all flexible packaging materials sold in the United States. The trial court found that the relevant market for determining the extent of appellee's market control was the market for flexible packaging materials, and that competition from other materials in that market prevented appellee from possessing monopoly powers in its sales of cellophane. Accordingly, it dismissed the complaint."
Apple's brief notes: "Psystarâ(TM)s effort to define a single-brand relevant market contravenes well-known principles of antitrust law. Relevant markets generally cannot be limited to a single manufacturerâ(TM)s products. As the Supreme Court recognized in the United States v. E.I. DuPont de Nemours & Co., 351 U.S. 377, 76 S.Ct. 994 (1956), the âpower that, let us say, automobile or soft-drink manufacturers have over their trademarked products is not the power that makes an illegal monopoly. Illegal power must be appraised in terms of the competitive market for the product.'"
"Most recently, in Spahr, supra, the court rejected almost identical allegations as those made here. Plaintiff claimed that Leeginâ(TM)s brand of womenâ(TM)s accessories, called the 'Brighton' brand, was a separate market because the products are unique, they are marketed as 'one of a kind,' customers would not consider other accessories as 'suitable substitutes,' and there was an 'inelasticity of demand' for these products. 2008 WL 3914461, at pp. 3, 8. Applying the Supreme Courtâ(TM)s decision in Twombly, the District Court dismissed the complaint without leave to amend because its definition of the relevant market was implausible 'from the face of the complaintâ¦.' Id., at 8."
forced licensing
Another thing to consider: if you think Apple should be forced to license the Mac OS in the way Psystar is claiming, it follows that you also must agree with Pystar's claim that Linux and Windows are so far inferior to the Mac to the point where they can't complete, therefore creating a distinct market. I believe these claims are ridiculous. Anyone who doesn't should go on record admitting that everything else in the industry is a joke compared to the Mac. That is a line of reasoning which I will be happy to use in future arguments where the opposite is claimed. One can't have it both ways.
"The right of a manufacturer to exercise independent discretion with whom he will deal."
"Ultimately," Apple's filing states, "Psystar seeks to force Apple to license its software to competitors, like Psystar, so they can use Mac OS to create Mac 'clones.' Psystar undeniably can sell, and is selling, its Open Computers running Windows or Linux in direct competition with Appleâ(TM)s Mac. Nevertheless, it also wants to sell computers running Appleâ(TM)s Mac OS in direct competition with Appleâ(TM)s Mac. However, one of the bedrock principles of antitrust law is that a manufacturerâ(TM)s unilateral decision concerning how to distribute its product and with whom it will deal cannot violate the Sherman Act:"
The Sherman Act "does not restrict the long recognized right of a trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal. And, of course, he may announce in advance the circumstances under which he will refuse to sell."
Myth 10: RIMâ(TM)s BlackBerry Will Contain iPhone Expansion [roughlydrafted.com]
Re:What's to stop Apple? (Score:2, Insightful)
Re:Both side benefit from an out-of-court settleme (Score:3, Insightful)
I don't think Apple's biggest problem with the Mac clones of the mid '90s was the tarnished reputation of Mac OS. A much, much bigger problem was something that you also point out in your comment - most people chose cheaper, not better. The prices of the clones did severely undercut the prices of "genuine" Macs and as result Apple's sales practically disappeared. And you are correct - the same would happen today, too.
Couple of reasons: (Score:4, Insightful)
1. Because Google set themselves up for criticism by having a much-publicised motto of Don't be evil [google.com].
2. Because the idea that even Mac-fans regard Apple as saints is a total straw man. Mac fans love the products (provided they have Firewire and matte screens) - but only the most deluded would deny Apple's well-established record of playing hardball and looking after number one (go ask Apple corp, Microsoft, the firms which licensed Mac OS 9, would-be producers of Apple II clones etc.) Heck, nobody can progress beyond Junior Acolyte in the Church of Jobs unless their blog has been anointed by a DMCA takedown from the Holy One. Go look on a Mac fan site like macrumors.com sometime (they even have a convenient front-page tally of how many negative comments have been made about each posting, so you won't have to read endless speculation about what colour the jack plug on the next iPod is going to be).
3. Because Apple doesn't have a monopoly - if Steve Jobs screws your pooch, you are free to walk out of the Apple store and buy a Windows or Linux machine. If he screws too many pooches, Apple will go bust. OTOH, lots of people find themselves forced to use or upgrade Microsoft products because of their market dominance, and Microsoft can sell products like Vista and Office 07 that nobody actually wants.
4. Finally, just some of the recent articles from /. that seem to have escaped your notice:
Users Rage Over Missing FireWire On New MacBooks
iPhone Antitrust and Computer Fraud Claims Upheld
iPhone Tethering App Released, Killed In 2 Hours
Inside Apple's iPhone SDK Gag Order
iPhone SDK and Free Software Don't Match
Woz Dumps on MacBook Air, iPhone, AppleTV
Apple Bans iPhone App For Competing With Mail.app
Apple Laptop Upgrades Costing 200% More Than Dells
Now, is it just me, but could some of those be regarded as just a teeny bit crictical of Apple?
This is a good thing (Score:2, Insightful)
You guys realize, if Apple loses, they'll lock down their OS much more than it is already, and use the DMCA to shut down hobbyists who try to circumvent it?
Here's hoping Psystar loses so we don't have to deal with shitty macs out in the wild and so that we don't have to get into fisticuffs with Apple over DRM.
Re:Apple can do no evil (Score:1, Insightful)
"The fact that two people buy the same crap does not actually make them part of a "community" that has any value."
I see, so does the same thing apply to Linux? I would say that the community is worth a multiple of the work the company puts into it. That multiple is the work that non-company people put into it. Apple seems fairly active on their own forums (afaict), and the fact that their fanboys reciprocate that work may make them annoying, but it doesn't diminish the worth of the community.
To bring in a Linux example, Canonical has given us a great, user-friendly Linux distribution, and has blessed a number of community projects (Ubuntuforums.org, UbuntuStudio, Ubuntu CE/ME/SE). Their communities are vibrant: IRC help is very useful, and UbuntuForums.org has a bunch of very smart people working on helping others.
Running a non-Windows OS is a common basis for a conversation, as it happens to me with Linux a few times a week. The fact that Apple fanboys do it doesn't mean that Apple's products are any worse (for that reason alone - they may still be worse) than Canonical's.
People don't build their sense of self-worth by buying crap, they build their self-worth on being different somehow. If they are more shiny than their neighbor, they feel good about themselves. You see this everyday with Mac, Linux, BSD, Christians, Muslims, Americans, Europeans, etc. Sometimes these things cost money, but as everybody on Slashdot knows, the best things in life are free, eg: Linux and love.
Don't get me wrong, I could see how you would get annoyed at Apple fanboys (I don't), but just because some/most of their fanboys are annoying, it doesn't detract from the worth of their product or their community.
Disclaimer: I own an Apple iPod 60 GB Video from back in the day, and I want (but can't afford) an iPhone. I have rarely been in conversations based on the fact that I use an iPod or an Apple product alone.
Re:Apple can do no evil (Score:5, Insightful)
To prove my point, I get modded down as flamebait. This is halarious.
To disprove your point: Skip the tags and read the comments in the "Android Kill Switch" thread. Then head on over to any iPhone related thread and read the Apple bitching there.
Apple gets beat up all the time, here. Settle down.
Re:What's to stop Apple? (Score:5, Insightful)
If I had $20 billion, I couldn't make it legal for me to murder anyone.
Dude, you really don't pay that much attention to politics, do you?
Re:Apple can do no evil (Score:3, Insightful)
Don't flatter yourself. Even if I am a Mac user seeing another one in the street doesn't automatically mean I expect to have anything else in common. This whole "Mac fanboy" stereotype is a myth, I'm pretty sure. And it's getting very, very old to boot.
Re:Apple can do no evil (Score:1, Insightful)
I'm the original AC who called you out and your position is pretty reasonable. I pretty much agree. I just think automatically ruling out affinity based on product-based activity (essentially ownership) is somewhat limiting.
For example, the other day I was in a coffee shop and some random guy asked me about my (Apple) laptop, being himself an aficionado. We probably don't have a dozen things in common, but it was pleasant to have a 3-minute conversation about what Apple was going to announce last Tuesday.
I do a lot of computing--developing digital workflows, running server software, writing random scripts, etc.--and to be honest I *wish* I had someone to talk to about it. It's why I visit Slashdot.
I don't have anything to share with any thousands of Mac users, but an occasional, "Hey, how do you like your machine?" is almost always an unintrusive way to find out more.
War Chest My Ass (Score:3, Insightful)
OTOH, this seems like an absolutely brilliant legal scheme:
1) Build $PRODUCT based on $SOMEONE_ELSE's software.
2) Sue $SOMEONE_ELSE when they try to shut you down.
3) Settle out-of-court for millions.
Worst case, you lose and can't sell $PRODUCT anymore. Best case, you win and you enjoy ripping off $SOMEONE_ELSE's hard work for your gain. Plenty of people to go up against too; Tivo, almost any phone manufacturer, etc.
Enough with the hypocrisy already. (Score:3, Insightful)
When you purchase or download software you are bound by the license agreement regardless of whether that license is GPL or some other license. The ELUA for OS X is readily available outside of the packaging online for anyone to read prior to purchasing an OS X "upgrade" box. The fact that the installer does not check for a previous install is irrelevant.
If the GPL is to be considered a defendable in court, then so must the ELUA of OS X or windows. Nobody is forcing you to use a particular OS and nobody is entitled to software on their own terms.
Challenge to licensing (Score:2, Insightful)
Does Microsoft have the right to charge more money to consumers who buy a copy of Windows, rather than OEM's? What about the price differential between "Upgrade" licenses and "Retail" licenses? Microsoft presently offers both Upgrade and retail licenses - Apple only offers upgrade licenses. Licenses can dictate whatever terms they want, as long as those terms don't violate the law. Is Psystar's lawsuit going to mean we can finally buy software, rather than licensing it? I doubt it.
Someone already is challenging Apple's (And Microsoft's, and Sun's, and Adobe's, etc.) licenses.
It's called the
GPL [gnu.org].