Psystar Brings on New Legal Team in Battle Against Apple

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Psystar, the company Apple is suing for building and selling unauthorized Mac clones, dumped the legal team of Carr & Farrell in favor of Camara & Sibley and David V. Welker. Camara & Sibley are well know for defending Jamie Thomas-Rasset against the RIAA in a trial that went poorly for her since she was ultimately hit with a US$1.92 million judgement.

Judge Alsup, the Judge overseeing Apple's case against Psystar in northern California, granted Psystar's request to replace Carr & Farrell with Camara & Sibley on July 16. Camara & Sibley, along with their local representative, David V Welker, agreed to take on the case even though it has already progressed well into the discovery stage.

An expert familiar with the lawfirm told The Mac Observer "Camara & Sibley is most famous for the dubious distinction of representing Jamie Thomas-Rasset, where they took a $220,000.00 judgment, rejected the Plaintiff RIAA's offer to settle for a few thousand dollars, and transformed that state of affairs into a $1.92 million judgment against Mrs. Thomas-Rasset at her second trial."

Apple filed a lawsuit against Psystar in northern California claiming the company was violating the Mac OS X licensing agreement with end users, and that it was violating the Digital Millennium Copyright Act with the steps it used to install the Mac operating system on PCs. Psystar asserted that it should be allowed to build and sell PCs with Mac OS X pre-installed and that Apple is overstepping its bounds by blocking companies from selling Mac clones.

The case in California stalled temporarily when Psystar filed for bankruptcy protection in Florida due in part to its extensive legal bills. According to Psystar's filing the company owed Carr & Farrell nearly $88,500.

The Florida court granted Apple's request to lift the automatic stay on its California case, and shortly after Psystar moved to drop its bankruptcy saying it couldn't deal with the two cases at the same time. The Florida court hasn't yet agreed to drop the bankruptcy filing.

It's unclear why Camara & Sibley agreed to take on Psystar, especially since the firm knows that the company has already failed to pay its bills to Carr & Farrell, or why Psystar brought this specific legal team on board knowing how they fared on behalf of Mrs. Thomas-Rasset against the RIAA.

Apple and Psystar are due to appear before a Magistrate Judge on July 30 to discuss the possibility of a settlement in the case, but there is no guarantee the two sides will reach an agreement on that date or before their scheduled trial on January 11, 2010.

 

Comments

tcsdoc

“It’s unclear why Camara & Sibley agreed to take on Psystar, especially since the firm knows that the company has already failed to pay its bills to Carr & Farrell, or why Psystar brought this specific legal team on board knowing how they fared on behalf of Mrs. Thomas-Rasset against the RIAA.”

Duh!  These are the same idiots who believed they could make clones right under Apple’s nose.  Need any other reasons for hiring ‘losers’?

Lee Dronick

Is this a delay tactic?

Nemo

No, it’s not a delaying tactic.  First, Psystar in its request for permission to substitute counsel stated that the substitution will not delay the proceedings.  Second, I doubt that Judge Alsup would brook any dealy, especially after that stunt that Psystar pulled in bankruptcy court.  And third—though this wasn’t mentioned in the request for substitution, I am sure that it came up when Judge Alsup asked why Carr & Ferrell was leaving, which lawyers aren’t susposed to do, unless there are good grounds for withdrawing, one which is that your client isn’t paying you—that your lawyers are withdrawing because you stiffed them on their fees isn’t grounds for delay.

Lee Dronick

Thanks Nemo

vasic

My guess is that the new legal team offered to represent without any upfront fees, hoping to collect from the judgement later. After the notorious loss, they may want to get in on a case where a win would be a major coup. In a way, it’s their Hail Mary pass. If they lose this one, they may as well shut the doors, but a win would put them back in business.

Macbookwatch

My guess is that the new legal team offered to represent without any upfront fees, hoping to collect from the judgement later. After the notorious loss, they may want to get in on a case where a win would be a major coup. In a way, it?s their Hail Mary pass. If they lose this one, they may as well shut the doors, but a win would put them back in business.


Does Psystar have a counter suit? If so then what are they suing for besides legal fees. I guess I don’t see the hail mary pass? The only benefit I see is a win could mean big publicity.

Bosco (Brad Hutchings)

Does Psystar have a counter suit? If so then what are they suing for besides legal fees. I guess I don?t see the hail mary pass? The only benefit I see is a win could mean big publicity.

That’s a very general benefit. One area of law that is surprisingly underlitigated is EULA enforceability. That’s what this case comes down to. From a public policy perspective, many believe that it just shouldn’t be easy for a company like Apple to exclude competition. Look at the iPhone. They exclude anyone they don’t like for whatever reason from the App Store. And so, in the past, you had the South Park app denied. And now, you have apps with Internet content unable to get lower than “mature” ratings. But it’s not easy for them to be exclusive. They had to develop and have to support a completely proprietary platform.

With the Mac, Apple wants to have its cake and eat it too. It wants to run on commodity hardware and standard firmware (EFI). But it also wants its OS tied to its branded hardware. It doesn’t want an activation step on its consumer OS. And it wants to enforce the exclusivity through a EULA.

I’d call this a routine 12 yard out route rather than a Hail Mary. It could very easily attract some high powered briefs from interested third parties. It could finally start reigning in the ridiculousness of EULAs, from length to restrictive terms. It could also clarify that active protocols, such as server activation, are more binding than opening shrinkwrap. With even a partial win in Apple v. Psystar, Camara & Sibley would be the firm of choice in this area.

B9robot

Bosco, Apple has patents, and the EULA, it has rights to its own property and has the right to license it or NOT. Go ahead and try and build a car with the Ford name on it and see how far you get before you end up in court. There is absolutely no difference in this case whether or not Eula’s have been tried or not.

There should also be a judgement against Psystar for the fake bankruptcy move. That was only a poor delay tactic which didn’t work!

Bosco (Brad Hutchings)

Sorry, B9robot. Psystar is not building computers with the Apple name on them. They are building computers with Mac OS X preinstalled. They have purchased the licenses legitimately. The question at hand boils down to whether the Apple EULA can prevent them from installing the software on non Apple labeled hardware. The EULA certainly attempts to do that.

Let’s say the EULA granted Apple a non-exclusive right to republish anything you created while using the software. There’s a good chance if that went to court that such a term would be deemed unenforceable or even generally against public policy interests. Can we at least agree that there might be some terms in a EULA that a court might hold as unenforceable or invalid? If so, you might see that while Psystar is in a tough corner, this is not a slam dunk for Apple, and in fact, going to trial poses significant risk to Apple.

Nemo

Bosco, you’ve really gone off the tracks.  Apple is the author of OS X and, as such, has a copyright in it, which it has registered with the Library of Congress.  That gives Apple the full rights granted a copyright holder pursuant to 17 U.S.C. ?106, among which are the exclusive rights to make copies of OS X, distribute OS X, and make derivative works based on OS X.  It is commonly understood that those rights permit a copyright holder to establish a licensed class of the particular medium, here computers, that have the exclusive right to contain the copyrighted work, here OS X.  If copyrights didn’t do that, they would fail in the congressionally mandate (17 U.S.C. ?106) and constitutionally authorized (Art. I, Sec. 8, U.S. Const.) purpose of creating legal monopolies based on those exclusive rights for the benefit copyright holders.  Thus, Apple can establish a class of Apple-labeled computers that have the exclusive right to run and copy OS X, just as Philip Roth, the novelist, can establish a particular class of books, let’s say from Little Brown & Co., that have the exclusive right to contain his work. 

Does that give Little Brown a monopoly in Philip Roth’s work?  Of course it does, but that is what copyrights are, the right to establish a legal monopoly in the copyrighted work and an exclusive class of a particular medium or media that has the exclusive right to contain copies of the copyrighted work.  So Apple, as the copyright holder for OS X, has set forth an exclusive license, the EULA, that provides only Apple-labeled computers can run copies of OS X.  The only limits that the law had placed on this right are where there is market power in a relevant market and that power is being used to hinder, not a competitor, but competition itself. 

Well, Judge Alsup has already ruled that Psystar’s attempt to defined the market as Apple-labeled computers or computers capable of running OS X wasn’t a plausible definition of a relevant market.  And Psystar didn’t even try to put forward the sensibly defined markets of either X-86 computer or operating systems, because it knew that under all acceptable definitions of market power, it would never be able to prove that Apple, with a 3.5 to 4.0% share worldwide and 8.5% in the U.S., has market power, much less that it had abused that power to hinder competition.  So without market power as a basis for proscribing Apple’s clear rights under copyright, Psystar came up with this little litigated doctrine of copyright misuse to argue that by restricting OS X to its Apple-labeled computers, Apple is exceeding the rights granted pursuant to 17 U.S.C. ?106. 

But of course, Apple, by restricting OS X to its own Apple-labeled computers, is operating well within the rights granted to it under copyright (Id.), to wit, it is restricting copies to instances of its licensed media.  That such restrictions create an exclusive classes of a medium ( particular licensed computers, particular licensed DVDs and/or CDs), which can copy and run OS X to the exclusion of other members of that same medium, is what copyrights do wherever they exist and is how copyright establishes a rights in copyright holders that allows them to benefit from their copyrights.  If any court were to holder otherwise, it would make copyright a nullity, and, if this nonsense were extended to patents, they too would be a nullity.  When the fact that Congress clearly did not in the Copyright Act intend to do a vain thing but intended to grant copyright holders rights that permit them to establish licensed classes of media that have the exclusive right to contain the copyrighted work and that Congress’ authority to create such copyrights is expressly granted to it in Art. 1, Sec. 8 of the United States Constitution, it would, I think, be reversible error, and I think quickly reversible error, for any U.S. court to hold that, absent the existence and abuse of market power, Apple may not, as a matter of law, exercise its rights pursuant to 17 U.S.C. ?106 to restrict copying, use, and distribution of OS X to Apple-labeled devices.

That is why I don’t expect amicus briefs supporting Psystar from any person, who has valuable intellectual property that he or it needs to protect.  Perhaps Dell, which doesn’t have any intellectual property that’s worth anything, or the neo-socialist of copyright law will file amicus briefs, but I wouldn’t expect anything different from any of that group.

aardman

Suppose I buy spare engines from BMW, put them in a chassis of my own design, and then advertise my cars for sale as “Powered by BMW”.  Can I do this without BMW’s consent?

I don’t think so.  Isn’t this what Psystar is doing?

vasic

Tundraboy:

Your analogy isn’t exactly on the mark, since that BMW engine isn’t protected by copyright. As a matter of fact, many aircraft home builders use car engines in their homebuilt aircraft (VW is very popular, as well as Subaru). Admittedly, they don’t sell these (nor do they advertise them) as “VW-Powered” or “Subaru-Powered”. The point is, the law doesn’t prohibit anyone from using any car engine and installing it in another car, whereas it is against the EULA to use Mac OS X disc and install it on a non-Apple PC.

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