Psystar Offers Weak Response to Apple Discovery Motion

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Unauthorized Mac clone maker Psystar responded to Apple's motion to compel the company to produce financial records by saying the limited documents it provided accounts for everything they have. Psystar also said that is has already agreed to provide someone that can testify about the company's finances since its CEO was apparently lacking basic company information.

Apple filed its motion to compel with the court after what it saw as a disappointing deposition hearing with Psystar's CEO, Rudy Pedraza. Mr. Pedraza, according to Apple, "stated approximately 90 times during the deposition that he did not know or recall answers to basic questions about Psystar's sales, its general costs and profits, its costs and profits by product line, [and] how it determines prices and profit margins."

Psystar, however, contended that since it isn't as big a company as Apple, it doesn't have the resources available for highly detailed accounting. The company also claimed that Apple has received more detailed information from third-party subpoenas, so it shouldn't need to provide additional data.

"Psystar's arguments have several problems.  First, I am as certain as I can be that, when Apple noticed Psystar's deposition, it notified Psystar to supply a person who could testify as to Psystar's finances," said an anonymous attorney familiar with the case. "Moreover, as CEO, Mr. Pedraza, would be expected to know at least the basics of Psystar's finances. Psystar's failing to provide a person who was knowledgeable about Psystar's finances is a violation that entitles Apple to the costs of the future deposition caused by that violation."

The company also said that Apple hasn't been responsive to the discovery requests it has made -- a claim that Judge Alsup will likely see as irrelevant since one party's failure to respond to discovery requests doesn't alleviate the other side's responsibility to comply.

While Psystar has responded to Apple's motion, the court won't likely look favorably on the company's actions. The attorney familiar with the case added "The bottom line is that I think Judge Alsup will read Psystar the riot act by ordering Psystar to respond to Apple's discovery requests by a date certain and will award Apple the costs of having to take another deposition."

Comments

ChoMomma

Actually the reason they cannot disclose their finances in depth is that they are run by a group of men from Nigeria and are entirely financed by 100 Million dollars in money they moved off shore via several thousand people they emailed and shared a portion with.

or it could be Dell.

geoduck

The idea that"since it isn’t as big a company as Apple, it doesn’t have the resources available for highly detailed accounting” is absurd on the face of it. As an incorporated company they HAVE to keep records. Apple isn’t looking for every last penny. This isn’t an audit. All Apple wants is where the millions they are paying for their legal defense is coming from. Sales? They HAVE to have a record of what they’ve earned from sales. Outside doner? Fine but they HAVE to list any money from grants. With what they’ve said so far they couldn’t even file their taxes. And that IS a criminal act.

Lee Dronick

“Psystar, however, contended that since it isn’t as big a company as Apple, it doesn’t have the resources available for highly detailed accounting.”

I am sure the IRS and the Florida Department of Revenue would have something to say about that.

MOSiX Man

Well, at this point, if Apple doesn’t succeed in closing down Psystar, it looks like the Federal government just got a public invitation to take care of the job. You gotta’ wonder how, if the Psystar execs are legit businesspersons, they didn’t see this as a really bad idea.

B9robot

The end of Psystar is near, thank god! With this stupid response from them, there’s really something wrong with this company. No financial records can only mean one thing, there as shady as everyone already thought!

BurmaYank

IMHO, Psystar is actually just another well-endowed Micro$oft dirty-tricks front organization designed to harass and litigationally abuse another one of Window$‘s mortal enemies.

Just like M$‘s notorious bankrolling of SCO-Caldera’s suicidally foolish litiginous assault of one of M$‘s arch-enemies, Linux (vis a vis IBM), was apparently designed to do, the obviously deep-pocketed support by Psystar’s mysterious benefactor is now enabling the besieging of M$‘s other arch-enemy, MacOS X (vis a vis Apple), by Psystar’s equally suicidally foolish harassment and litiginous abuse.

Lee Dronick

IMHO, Psystar is actually just another well-endowed Micro$oft dirty-tricks front organization designed to harass and litigationally abuse another one of Window$?s mortal enemies.

I really don’t think MicroSoft is behind Psystar. My bet would be on a PC maker.

geoduck

I would agree with Sir Harry
This has the oder of utter Dellidity.

I suspect though that whomever is bankrolling this has to be thinking about bailing out. Admitting to a crime (leaving any tax problems aside, just running an incorporated company that sells nationwide and not keeping proper financial records will in and of itself get you in legal hot water), in open court as a defense to prevent the exposure of your records is about as stupid as it gets.

Whoever they are, they have to be wondering if they bet of the Dumb and Dumber Computer Company.

vuong pham

I heard that this company is a front for Dell..
Imagine if Dell could crack the OS X /Apple hardware thing..
Man… the amount of crappy hardware to run OS X would be over the top!!

I mean sure prices would drop.. but so would quality control.

xmattingly

I would agree with Sir Harry
This has the oder of utter Dellidity.

Ditto on that. I just can’t shake the fact that in recent times, Dell had romanced the idea of licensing OS X, and toyed with putting Linux on some of their boxes. They’ve been looking pretty hard at alternatives to their sinking partnership with Microsoft, so from what I’ve read they would seem a highly likely suspect. If Dell were discovered as the backer, that’d be enormous scandal, wouldn’t it?

JulesLt

It would be incredibly stupid of Dell, in that they would need absolute watertight assurance this could never possibly be traced back.

My guess is that it’s actually being backed by someone with a background in vexatious legal settlements - i.e. Dell’s aim would be to open up OS X to Dell hardware, whereas I suspect the aim here has always been to get Apple to settle or buy out.

The other key point, I imagine, is showing whether Psystar is actually running as a profitable business at all (while there is nothing to stop you running a business at no profit or a loss, it would indicate that the purpose of Psystar is not to sell computers, but as a front for litigation).

Nookster

The other key point, I imagine, is showing whether Psystar is actually running as a profitable business at all (while there is nothing to stop you running a business at no profit or a loss, it would indicate that the purpose of Psystar is not to sell computers, but as a front for litigation).

Makes sense, this case has been repeatedly shoved in faces since day one.

That said, whatever happens to Psystar now is becoming increasingly irrelevant in the grand scheme of things, people are now aware of EFi- X, osx86project and others, and filtering the knowledge down to the everyone else.

Your average non-techy person can now make a Hackintosh with nothing more than a retail disc and a Google search. The cat has almost leapt right out that bag.

zewazir

Your average non-techy person can now make a Hackintosh with nothing more than a retail disc and a Google search. The cat has almost leapt right out that bag.

I do not think Apple ever had the intent of preventing Hackintoshes built by individuals, or they would have gone after the sites that assist/promote it a long time ago. While it looks like it’s getting easier to do, I doubt it will ever become all that common. Macintosh is about the whole product - hardware compatibility, etc., not just the OS.

Setting up a business to make a profit by selling Hackintoshes is a whole nuther kettle of fish.

geoduck

Personally I have a suspicion that the Hacintosh thing is about to end. Apple has gotten a bunch of chip expertise in the last year.  I suspect, though I have absolutely no evidence to back this up, that soon Apple will start including chips that will be required for OS-X to run. They’ll start putting them in now and then OS 10.7 will require them.

Lee Dronick

Personally I have a suspicion that the Hacintosh thing is about to end. Apple has gotten a bunch of chip expertise in the last year.? I suspect, though I have absolutely no evidence to back this up, that soon Apple will start including chips that will be required for OS-X to run. They?ll start putting them in now and then OS 10.7 will require them.

I concur and have brought that up in the past, here and on some other blogs. I suppose a clever person could reverse engineer the code for a work-around, but Apple may make sure that the hacker is real clever.

JulesLt

The clever thing to do would be to develop custom hardware that makes OS X run far better when present (i.e. unique video acceleration hardware) - they could, after all, have modified OS X as is to make it far less flexible in terms of how it supports hardware - chopped out the abstraction layer and replaced it with specific code compiled only for their known combinations of hardware - which would not stop OSx86 hacks, but make them far harder than the current task of driver replacement.

The evidence is that Apple are willing to ignore/tolerate OSx86, because I would figure it serves much the same role as pirate copies of Word did in the early days. (i.e. each one helped deprive Word Perfect and Lotus of market share).

azarkon

Corporate attorneys coach their clients to be as obsequious as possible in depositions.  When asked a questions such as “how much money have you made from sales of the open computer” it would be ok for the CEO to answer “I don’t recall” if he knew that it was about (for example) 750k if he didn’t remember how many dollars and cents were tacked on to the end.  There’s no legal requirement that people study before being deposed.  Blame the expensive lawyers, that’s their game

Lee Dronick

When asked a questions such as ?how much money have you made from sales of the open computer? it would be ok for the CEO to answer ?I don?t recall? if he knew that it was about (for example) 750k if he didn?t remember how many dollars and cents were tacked on to the end.?

That is why Apple asked for the financial documents; Apple’s lawyer can say “Perhaps this will refresh your memory” and present him with the numbers and have him read into the record.

Nookster

I do not think Apple ever had the intent of preventing Hackintoshes built by individuals, or they would have gone after the sites that assist/promote it a long time ago. While it looks like it?s getting easier to do, I doubt it will ever become all that common. Macintosh is about the whole product - hardware compatibility, etc., not just the OS.

Setting up a business to make a profit by selling Hackintoshes is a whole nuther kettle of fish.

Never said they would, I doubt they wouldn’t be stupid enough to overtly try, it would be as successful as Metallica Versus Napster.

My point is that high profile cases like this promote awareness, lots of it. I don’t particularly care about the viability of Psystar’s business, like most people I suspect. What this has done, is enlighten lots more people about what you can do with intel hardware and a Leopard disc nowadays.

Macintosh is whatever you put OS X on, my ?179 netbook behaves identically to my Mac Pro in that respect, very nice it is too.

Spork Fuzz

Calling Psystar names just because they wish to compete with Apple is a fallacy. Of course they want to be able to compete with Apple?who wouldn?t? Competition is a great thing; it keeps manufacturers on their toes, making better equipment, and finding ways to do it more efficiently.

Kudos to Psystar for doing whatever they can to stay in business, and I feel sorry for all you people that critique them for wanting to do that. I want Apple to disclose their financial information when asked. Because they?re a public corporation, you can look up some of the numbers yourself?the rest is proprietary company data to them, and nobody says that they have to share anything.

Lee Dronick

Kudos to Psystar for doing whatever they can to stay in business, and I feel sorry for all you people that critique them for wanting to do that.

They can stay in business as far as I am concerned, if they are not selling MacClones.

MasterBlaster

They still have not even contacted PearC in Germany.  Looks like they have the law on their side and Apple look silly because they did not bother trying to understand the local market.

Intel Mac’s - it’s just a PC clone now.

James T

“The clever thing to do would be to develop custom hardware that makes OS X run far better when present” - The problem is that the Hack coders are often as clever (if not better) than the Apple coders and any such restriction would be navigated around in hours.

Lee Dronick

Well here come the Psystar spin doctors.

JulesLt

James - I think you may have misunderstood my comment. I was suggesting that rather than locking OS X down with custom chips (and negating the hardware abstraction layer all modern OS use) a better approach would be continuing to allow OS X to run on generic x86 hardware - which would be required to support existing Macs anyway. . . . but adding support for custom hardware that improves it (in the same way that GPU acceleration kicks in on newer Macs, or Altivec instructions could be used on G5 machines).

I don’t have any grand ideas what this hardware could be - highly power efficient ARM co-processors, perhaps, or some kind of FPGA - but the key point is that it should have a reason to exist. You’re absolutely right that any kind of authentication chip would soon be worked around in seconds.

I also think that Apple aren’t really interested in locking it down - they don’t bother with serial numbers in OS X, they’re abandoned them on iWork, and they didn’t bother using TPM on Intel systems (despite initial claims).

Another option that I’ve previously mooted is that Apple move wholly away from selling OS X by retail at all, which would deprive PearC and Psystar of their legitimately purchased OS X retail installation disks. Upgrade sales could be handled online, meaning that you’d need to have an OS X machine to upgrade.

This wouldn’t anyone who torrented a copy, but it would affect anyone trying to sell a clone with a pre-installed O/S. (Unfortunately, it would also affect a lot of OSx86 people, many of whom are actually Mac owners who just enjoy the challenge of getting it working on other hardware, like Netbooks, etc).

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