Psystar Attorney on Apple Victory: “This Is Far From Over”

| Analysis

Don Quixote?Apple may have won yet another legal victory over would-be unauthorized Mac clone maker Psystar last week, but the attorney representing the firm said in an interview Monday the case was, “far from over.”

The comments came in the aftermath of Psystar losing an appeal to a case won by Apple in 2009 that resulted in Psystar being barred from selling PCs with Mac OS X installed or in any way facilitating other people in installing Apple’s operating system on non-Apple hardware.

A three judge panel of the U.S. Court of Appeals, Ninth Circuit, issued a ruling on Wednesday, September 28th (read TMO’s full coverage for more information) that upheld a district judge’s 2009 ruling that found Psystar guilty of violating Apple’s copyrights.

Be that as it may, K.A.D. Camera of the Houston firm Camera & Sibley LLP, the firm representing Psystar in the case, told Computerworld, “This is far from over. There is at least one more round, perhaps two.”

As we reported last week, the attorney is considering requesting an en banc review of the three judge panel’s ruling. If granted, the full bench of judges would look over the homework of the three judges looking for errors. Mr. Camera said that he is also considering petitioning the U.S. Supreme Court, the last stop in the U.S. legal system.

“We haven’t decided yet,” he told the magazine.

Why would he do so? After losing at every stage in this contest, why would Mr. Camera continue to represent a bankrupt company in a case that, if he won, would mean than no company could legally protect a whole widget computer solution?

Why, because this fight is larger than just li’l ol’ Psystar.

“The principal issue in the case is Apple’s limiting Mac OS X to its own hardware,” Mr. Camera said. “But this is more than only Psystar. It could determine whether the likes of Dell can sell machines that run OS X.”

Never mind that the retail price of OS X is heavily subsidized by the profits Apple makes on its hardware, and never mind that Apple’s right to compete in an open market place by offering a proprietary whole widget solution would be severely compromised if Psystar were to win.

Conspiracy theorists have long bandied about the notion that Psystar’s court case was being financed by outside pockets. Apple itself suggested in court documents that such might be the case, and Mr. Camera’s comment above will likely be seized upon by proponents of such theories as further evidence of some kind of nefarious scheme.

To that effect, Computerworld asked Mr. Camera if there were other parties involved in the case, a question he declined to answer, saying, “I can’t answer that question, but I am not representing Dell.”

Some could accept that as an adequate denial, while others may consider it even more grist for the rumor mill. Your mileage may vary, as well.

We said above that Psystar has lost at every turn in this long running case, but there is one area where the company has seemingly scored a victory, even if it is Pyrrhic in nature. We reported last week that Apple had requested that documents from the case be sealed, claiming that proprietary information was revealed in some of them.

The three judge panel rejected the request, stipulating that Judge William Alsup had, “fail[ed] to articulate the rationale underlying its decision to seal.” (Note that the documents remain sealed currently).

Mr. Camera said this ruling from the Court of Appeals was, “significant because Apple has tried to keep secret how it limits [Mac OS X] to its hardware, even though that information is in the public domain.”

iStockPhoto.com contributed to some images in this article.

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Comments

Bosco (Brad Hutchings)

Well, one Microwave Communications, Inc. filed an anti-trust lawsuit against AT&T and changed telecom for the absolute better a decade later. Mr Camera probably is driven by similar delusions. I do find it a little strange that Apple and its fans can appeal to its business model as the reason why a user can’t take an OTS install disk and run it on non-Apple hardware. Because for the most part, that just worked in the Snow Leopard days. At some level, Apple just isn’t paying for the convenience it offered. If they wanted SL protected from unauthorized installs, they needed to do more to protect it.

The real question that the Supreme’s could answer is whether the courts can be used to enforce tying arrangements that take choice away from consumers. There’s really nothing different here than if Apple offered DRM-free music in an industry standard format that could only be used on its branded music players. They were offering an operating system that installed and worked on an industry standard architecture consistent with longtime custom in the industry, yet Apple made no effort to physically protect against such installations and insisted that its software could only be installed on Apple branded systems.

As to whether Dell or anyone else is funding Camera. So what? You guys don’t have a problem with Florian Mueller having acted as a Microsoft astroturfer in the SCO lawsuit days, and don’t seem terribly interested in who’s paying him to spin everything against Google today.

b9bot

Apple has the legal right to license it’s software and protect its property from outright thieves such as Psystar. Psystar has been proven guilty in a court of law at least 3 times. Obviously Camera can’t seem to get the message that what he attempted to do was make money off of Apple’s intellectual property without licensing it properly. Then take it a step farther and try to sell a hardware device to go around Apple’s attempts to keep the Rom code that OSX needs for booting. Apple’s interest is selling there hardware with there software as a whole widget. Which is something that they can warranty and service. Putting OSX software in a cloned PC with unknown hardware is not supportable and causes to many variables.
Apple goes out of there way to make the whole widget because of this and does not want to get into Microsofts situation of trying to fix or compromise its software so some cheap PC part will be compatible even though it may run like crap! Consumers have a choice, buy a PC with Windows or buy a Mac with OSX. That’s your choice and since Apple developed its technology for Macs and not PC’s, that’s why every court has denied Mr. Camera, and the Supreme court will also side with Apple in the end as well.

AppleRocks

What?s up with this joker, Bosco, and his obsession with Apple hate? It?s like a festering boil of resentments and envy. Every success that Apple earns must keep him awake stewing in anger. Does it sit in its basement bedroom rental plotting its next attack? Doesn?t he have a TV so he can watch reality shows like the Paris Hilton wonder? So much time on his hands and nothing else to do. My my. Such loneliness and despair almost makes one feel sorry for him.
He?s the best deal when one visits this site. Glad I found it.

Lee Dronick

To that effect, Computerworld asked Mr. Camera if there were other parties involved in the case, a question he declined to answer, saying, ?I can?t answer that question, but I am not representing Dell.?

Some could accept that as an adequate denial, while others may consider it even more grist for the rumor mill. Your mileage may vary, as well.

If someone is the deep pocket I doubt that the money is coming directly from their coffers. That would be too easy to discover so there would be a number of companies and bank accounts in the money trail. Also as I mentioned in a previous article maybe the money won’t change hands until the legal options are completely exhausted.

RonMacGuy

LOL AppleRocks. Funny stuff.

No Bryan, I didn’t log in as AppleRocks!!  Really!!

grin

wab95

Love the graphic, Bryan. I can visualise Psystar at the base of this windmill, pointed lance in hand, in a quest worthy of the Don’s name.

I can’t tell whether the quest is Quixotic, Black Knight’ish, conspiratorial, comical or just plain stupid, but it is entertaining.

Take Camera’s response to the ‘any other parties involved’ question, “...I am not representing Dell”. Really? Who said anything about them? One wonders how he would have responded had Computerworld followed on with, ‘Then who is?’. It reminds me of when my kids were small, if I found one after hours in the kitchen and enquired as to why, I might get an answer like, ‘I wasn’t eating the chocolates!’.  Methinks Camera?s response less than candid, and he doth protest too much.

As for the

?The principal issue in the case is Apple?s limiting Mac OS X to its own hardware,?

statement, where even to begin with this?

For the sake of the industry, and I hope that it’s not the case, but should it emerge that a hidden hand is pulling Psystar’s strings, that hand’s owner will be exposed as a first class heel.

Lee Dronick

Take Camera?s response to the ?any other parties involved? question, ?...I am not representing Dell?. Really? Who said anything about them?

That may or may not have been a Freudian slip. Dell comes to my mind as someone who would like to see OSX be legally sold on cheap boxes. Michael Dell said that a few years ago, though any money behind the lawsuit could certainly come from a consortium or clone makers. On the other hand the Camera & Sibley law firm and Dell are both Texas businesses so Camera may have just used a local reference.

NEALC5

The “longtime custom in the industry” of building hardware and running any OS on it (or rather, Windows)is not the model for everyone.  There ARE benefits to a proprietary model, and Apple gives people that choice.  Don’t like it, buy or build a generic PC and run Windows, Linux or write your own OS in assembly language. Want to run OS X on it? Then ask Apple for a license. If they don’t want to give you a license, that’s their right and their business.

Imagine if I started as a new manufacturer of hybrid cars.  I find that the program and OS on the Toyota Prius control computer is the best out there, and I want to use it.  So I simply copy the ROM from the control computer, and load it onto the generic control hardware, and use it for my new hybrid, without Toyota’s permission or license.  Is that legal? Of course not. Is it stealing? You bet.  Would Toyota sue me? Absolutely.  So why doesn’t Apple have the same protection? They do..which is why Psystar keeps losing.

Bosco (Brad Hutchings)

NEALC5, what I’m saying is a little more subtle. It’s that Apple failed to do anything to prevent people from taking its $29 SL upgrade disk and doing a full install of SL on a compatible non-Apple machine, of which there were many. Even Microsoft requires the user or OEM to enter a serial number and sync up with a registration server. Now, Apple’s way may be easier for its legitimate customers, but there are costs to being easy which Apple simply doesn’t want to absorb, instead putting them onto the courts once it decides to enforce its license.

I once called the Psystar guys something like “a small group of retards in Florida”, and I think that pretty much describes them in particular and their complete bumbling of what could have been a very interesting test case about the enforceability of some Software License Agreement terms. Lets take Apple’s prohibition against installing on non-Apple hardware to an extreme. What if Apple included a Nestl? Crunch bar with each OS CD, but stipulated that you may not eat the candy bar. They then sue anyone who does for $10K a pop. They can write whatever terms they want into their SLAs. But terms should be excluded from enforcement if the supplier makes it too easy and tempting for customers to break them.

There are a couple other terms in recent Apple SLAs that are just beyond belief. In the original Apple TV’s SLA, users were allowed to modify the open source software components on the device, but were not allowed to resell, loan, lease, or otherwise transfer the device to another person if it contained modified software. That’s way beyond common industry practice of voiding warranties. Should that kind of SLA term be enforceable?

Another example with SL is a change to the speech generation license. For more than 20 years, there was no prohibition against incorporating generated speech into multimedia presentations. In fact, Apple actively encouraged the practice on many occasions. The SL license disallowed that practice. At the time of SL’s release, I was developing and supporting software which let kids make picture story books and share them in print, on the web, etc. One feature we had was exporting a movie with the computer reading the book. We even had speech hints so authors could tune around funny pronunciations. So Apple goes and changes this. What do I tell my customers? Don’t upgrade to SL? Do I tell them anything? Do I take the feature out on the Mac version and leave it in on Windows?

The point is that there are many ways that Apple tries to enforce what it thinks its business model is through the SLA, and not by technical means which might inconvenience customers. It then relies on the courts to enforce these terms rather than assuming the costs itself of keeping most customers in line. You don’t have to be Ralph Nader to think there is a bit of unfairness in that approach, and root for a little bit of scrutiny of it.

NEALC5

@ Bosco - So what you are saying is that Apple should build in better copy protections into the OS software, so that people wouldn’t be able to do what Psystar did? Let’s put DRM back into the downloaded music files then, so that people who want to share files on-line won’t be able to.

Part of Apple’s appeal is the lack of all the serial number and licence key BS (at least for Apple software…lots of commercial software still has license keys). I like Apple’s approach better. 

Apple doesn’t use the courts instead of “assuming the costs itself of keeping most customers in line”.  The courts are not free to use.  Apple is paying big bucks for lawyers. Apple doesn’t sue the hobbyist who might build a Hackintosh for fun.  They’re only suing people who try to make $ off of Apple’s intellectual property, without paying for it.

Apple protects their “experience” above all else.  So if you modify an Apple TV, and sell/give it to someone else, it doesn’t give the new owner the same “experience”.  Maybe thats ok, and Apple won’t sue an individual who does that.  But make a business out of it, and sell 100’s of them, and now Apple will take notice. I agree that the SLA gives them the “right” to prevent you from giving a modified Apple TV to a friend, and that seems wrong to me. But I understand what they are trying to achieve.

Bosco (Brad Hutchings)

NEALC5, Actually, with Lion, Apple basically has incorporated some basic OS copy protection by tying the OS to the App Store, at least originally before they offered the Flash drive upgrade. Also, while most music sold today over the Internet today is DRM free, it is often tagged or watermarked with purchaser information to discourage illicit sharing.

I’m glad you see the Apple TV SLA term as seemingly wrong. It currently precludes anyone from buying up these obsolete devices, installing Linux on them, and selling them for use as lightweight servers or digital signage or whatever. The device is as much of a computer in every way as, for example, a Mac Mini (excepting the limited RAM, CPU. etc.). And yet purely because of a shrink-wrap license which does not even need to be clicked to purchase the device (See Softman v. Adobe), users are precluded from wiping the disk, installing Linux and leasing, renting, reselling, etc.

Nemo

Sir Harry, and this is to Bosco too:  It is tortious for third party who is a stranger to a lawsuit to finance any person who is a party to that lawsuit.  To finance a party to a lawsuit, you either must have some legally proctectable interest in that party, e.g., some sufficient ownership interest, or you are a lawyer who is financing the case on contingency.  If the third party has no such interest, it/he is committing the ancient tort of Champerty and Maintenance.  It has always been the case that the law disfavors and punishes a third party, who is a stranger to a lawsuit, who meddles in that lawsuit by providing material support to any party so that party can prosecute its claims or defenses.  Even where you have a legally protectable interest in the subject matter of the lawsuit, you protect that interest by moving the court to join the lawsuit as a party, not by financing another party.

Also, the court has broad equitable powers to prohibit and punish a third party who is meddling in a lawsuit.

So if Apple can discover any third-party source of funding for Psystar’s lawsuit and if that party does not have a sufficient interest in Psystar, then Apple will be able to seek damages under the tort of Champerty and Maintenance and move the court for an injunction that enjoins the interloping third party from further involving itself in the lawsuit.  Apple could also seek restitution from Psystar of all the funds that it received from the interfering third party and have its choice of damages at law or restitution at equity, whichever remedy provided it the more complete and effective remedy. 

Bosco:  Once again let’s get the facts and the law right.  Even if Apple had done nothing to provide technical measures to prevent copying of OS X, as Judge Alsup made clear in his judgment, Psystar would still have infringed Apple copyright and, thus, be fully liable for copyright infringement.  The law of copyright fully protects a copyrighted work, and the holder of the copyright need do no more than rely on its copyright for the legal protection that it alone provides.  Apple, therefore, was fully entitle to an injunction and damages for copyright infringement alone, even if it had not employed technical measures to prevent copying and modification of OS X.

But now we need to get facts straight.  Apple did provide technical measure to prevent copying of OS X.  In violation of the Digital Mellinium Copyright Act (DMCA), Psystar circumvented those measures so that OS X would run on its generic hardware.  Judge Alsup, in the district court, observed that Apple had employed technical protections to prevent copying that were legally adequate to invoke the DMCA, and Circuit Judge Mary Schroeder, writing for the Ninth Circuit, affirmed that and all other aspects of Judge Alsup’s judgment as being correct as to the law and the facts, except for his decision to seal the record with respect to Apple’s technical protection measures, and even there, she remanded the case for Judge Alsup for him to either provide sufficient reasons for sealing the record or dissolve his order sealing the record.  So Bosco you are wrong as a matter of fact and law, because Apple did employ technical protections to prevent copying OS X and the running of OS X on anything other than its Apple trademarked hardware that were sufficient to invoke the DMCA when Psystar circumvented them.

Your other error of fact is that there is no provision in any of Apple’s SLAs that prohibit any person from modifying open-source software.  However, you need to be aware that some open-source licenses, such as BSD, allow a party to make proprietary modifications to software that is licensed pursuant to it, so that the creator of such proprietary modifications can fully protect his modification pursuant to copyright and, where appropriate, patent.

Finally, where Apple reserves the right to alter its license so that the modified license prohibits something that the prior, superseded license permitted that is perfectly legal and moral, where Apple expressly sets forth such reservations of rights in its license.  Your problem, Bosco, is that you didn’t have your lawyer review Apple’s licensing, which any business person should always do, so that you either requested Apple license your project without reservation or accepted the risk that Apple might change its license.  After all, the licensed software was Apple’s property, not your property or your client’s property.

Now, that we’ve corrected your errors, Bosco, there isn’t anything left of your arguments and objections.

Bosco (Brad Hutchings)

Nemo, on the DMCA issue, you’re confusing what Psystar actually did versus how they could have accomplished their goal had they been careful.

And Nemo, we paid for a bit of licensed legal practitioner advice on a range of issues around the public performance of the voices in 10.6, from contributory infringement to educational use to safe harbor provisions for hosting to offloading the problem onto YouTube. You’re right. Apple is entitled to put whatever they want in their SLAs and change 20 years of direction they’ve given their market partners at will. And people affected by it are entitled to call bullsh*t and shed light on their practices.

Lee Dronick

Sir Harry, and this is to Bosco too:? It is tortious for third party who is a stranger to a lawsuit to finance any person who is a party to that lawsuit.?

I know that, I knew that, but I am sure that happens because laws are broken.

Nemo

I am sorry that you loss, because Apple changed its licensing, but you should have had a lawyer review Apple’s license, not simply the issue of public performance.  I would have advised that you not proceed with your project, unless and until we could get the appropriate license from Apple.

And Bosco, courts don’t engage is speculative or advisory judgment about what Psystar could have done.  Speculative matters are beyond the jurisdiction of courts, which are restricted to deciding actual and instant controversies.  The only exception is declaratory judgment, and even that requires a instant dispute between parties, where the court is being asked to determine the law or the parties’ respective rights or both.  So what Psystar could have done is legally irrelevant.  Judge Alsup could only deal with what Psystar did do, and he dealt with Psystar with dispatch.

Bosco (Brad Hutchings)

Nemo, the project was already shipping. The service was already running. Files produced with the software running on 10.5, which did not have the exclusion in the SLA were byte for byte consistent with files produced with the software running on 10.6. The SLA change was simply a d*ck move. Period.

The two potential problems for us were identified as:
(1) if we explicitly claimed support or compatibility with 10.6 and customers used the software to produce the public performances, we might be on the hook (remotely) for contributory infringement, but would certainly be in a bad place with our customers for not educating them on the issue.
(2) if we hosted these public performances, and they were created with 10.6, we would not benefit from safe harbor because we had a hand in creation. A sticky question was whether we could accept submissions from 10.6 users, automatically resubmit to our system from a 10.5 system, then publicly perform that.

Talking with Apple… Forget about it. There were many public complaints about this from developers that went basically unanswered. We settled on an interesting approach, which was to keep Mac compatibility but strongly recommend our customers that were purchasing fleets of computers to run the software go with Windows netbooks. Bonus was that they could pay us more for software and services on the same budget.

BTW, Nemo, this change is the SLA and how it affected us and our users was like if Apple changed the SLA to Keynote saying you can’t make a public performance of movies exported by it. It’s the same thing. Apple software takes an input, makes an output. By using the Apple process, users give Apple control over the output. Forget SLAs, that’s just lame.

John Dingler, artist

Examining the litigator’s MO might be useful to move closer to determining Camera’s backer. China is infiltrating the US’s retail markets (Witness the 99 Cent store whose products are 99% Chinese), just as Psystar wants to infiltrate the Mac market; China has a new-found wealth, just as we suspect Psystar has; China is an aggressive copier, just as Psystar is attempting to be. China is tenacious, being in the game for the long haul, just like Psystar is. Only a strong foreign gov. such as China would not be afraid of any legal consequences should the scheme be discovered, while established computer companies surely would.

So I say that it is not likely that any particular company such as Dell or MS who would be financing its Herculean litigation in court, but a nation, China is.

The thought of China, with the Communist Party’s full weight behind Psystar’s aggression is farfetched, sure, but not as far fetched as big banks’ shenanigans before we were convinced they existed. Surely the Psy-chological profile fits together as elegantly as an iProduct.

If this turns out to be true, we Apple enthusiasts have no fear from Apple’s speculated loss of edge in innovation and survivability after it has conquered all competitors because this new competitor in the political/IP sphere would keep it in innovation mode for more years than the few years expected from Cook’s successful, post-Jobsian administration as CEO.a

Nemo

Bosco:  What do you want?  Given the issues that you described, supra, and Apple’s licensing, I would have advised you not to invest in developing the project, unless you were prepared to deal with the copyright risks and the risks that Apple would alter its license to prohibit what you wanted to do. 

I would also have advised that we approach Apple for a license.  If Apple had refuse to even discuss the matter, that would have let you know a lot in itself. 

After that, the decision to take the risk or not take it would have been up to you.  I would have advised against it and recommended that you find a different technical solution, which is apparently what you did.  You found an alternative solution, and Apple is selling Macs like hotcakes.  It sounds like a win-win for you both.

John Dingler, artist

You seem to be saying, by my analogy, that it’s OK for b9bot want to steal property from your house as long as the door is not locked, just closed, and that “No Traspassing,” “Traspassers will be Prosecuted,” and “Beware of Dog” signs should mean nothing to should he want to enter and take what he wishes.

If this is true, then just tell him so.

Bosco (Brad Hutchings)

For starters, Nemo, the project was already implemented, working, and shipped. The hosting service was already online, author or generated speech already integrated. What changed was Apple’s license, and it would change for our customers who either upgraded the OS or bought new Apple equipment.

And BTW, we were using APIs as intended and promoted for 20 years by Apple, and not restricted in any way for SL (or even Lion). This SLA imposed a new restriction of what our customers could do with files they generated with our software, and to what extent we could help them do those things.

It’s just a really good example about how SLAs can be perfectly legal and probably enforceable, but still contain things that are terrible for customers and probably accomplish nothing for the licensor. When they’re used to prop up a business model that arguably/probably wouldn’t survive without an enforceable SLA, especially with terms that are not traditional in the industry or for the company, we ought to be wary.

Terrin

Apple isn’t complaining about people using a legally acquired full install copy of OSX for hackintosh purposes. If it were, Apple would probably lose. That is a clear instance of fair use.

Apple is complaining about a company using its copyrighted material to undermine Apple’s business model so the company can make a profit at Apple’s expense. That is a clear copyright violation.

Why would Apple want to lock down its OS in DRM when it all about user experience. It’s license protects it.

NEALC5, what I?m saying is a little more subtle. It?s that Apple failed to do anything to prevent people from taking its $29 SL upgrade disk and doing a full install of SL on a compatible non-Apple machine, of which there were many. Even Microsoft requires the user or OEM to enter a serial number and sync up with a registration server. Now, Apple?s way may be easier for its legitimate customers, but there are costs to being easy which Apple simply doesn?t want to absorb, instead putting them onto the courts once it decides to enforce its license.

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