Psystar to Court: Just Say We’re Legit

| News

Psystar is asking a Florida Court to say that its unauthorized Mac clone making business is legit and to force Apple to keep quiet about the whole deal. Apple and Psystar have been fighting in court in California, and now in Florida, over whether or not the little PC maker can hack Mac OS X and install it on PCs without Apple's permission.

In an updated complaint filed in Florida, Psystar said "A declaration by this Court of the legal rights of Apple and Psystar with respect to Psystar computers running Mac OS X Snow Leopard would clarify, to put it bluntly, the legality of Psystar's business -- and would remove the substantial negative effect on Psystar's business of continued uncertainty and legal wrangling between Apple and Psystar."

The two companies have been battling in U.S. District Court in Northern California for months over whether or not Psystar can make and sell Mac clones without Apple's consent. Psystar filed a case in Florida about two months ago that targets installing Snow Leopard on PCs while claiming the California case relates only to Leopard -- the version of Mac OS X that Apple isn't selling any more.

According to Computerworld, Psystar is alleging Apple is violating antitrust laws by saying it's illegal for the company to buy Mac OS X discs and install the OS on non-Mac hardware, and that Apple's complaints are damaging its reputation.

Psystar's filing claims that Apple's actions "have damaged and will damage Psystar in its business and property because they deny Psystar business that otherwise would go to Psystar by creating doubt about the legality of Psystar computers running Mac OS X Snow Leopard."

Psystar is asking for an injunction that stops Apple from implying that it is doing anything outside the law -- which by no small coincidence is the point the two companies are fighting over in court.

The Florida-based PC maker also contended that its recent release of Rebel EFI, its product that lets anyone install Mac OS X on a PC, is legal by claiming they are simply writing applications for the OS just like any other developer.

"Just as Microsoft writes Word to run with Mac OS X and Google writes its Web browser Chrome to run with Mac OS X, Psystar writes its software to run with Mac OS X Snow Leopard," Psystar said. "In fact, the part of Mac OS X Snow Leopard that Psystar interacts with is within the open-source portion of Mac OS X and makes use of features of Mac OS X Snow Leopard designed to allow software developers to extend Mac OS X Snow Leopard to work with different hardware."

Despite Psystar's argument, Apple's end user license agreement states that Mac OS X is to be installed and run only on actual Macintosh hardware. Whether or not Psystar can convince the Federal Courts in California and Florida that it is acting within the law remains to be seen, but the likelihood that a Judge will tell Apple it is blocked from discussing a key point in both cases seems slim.

Sign Up for the Newsletter

Join the TMO Express Daily Newsletter to get the latest Mac headlines in your e-mail every weekday.

27 Comments Leave Your Own

Jeff Gamet

I shouldn’t be surprised by Psystar’s latest move, yet I am. No doubt they will continue to throw everything they can at the legal system in hopes that something sticks. And I have to ask again: Where is the money coming from to fund parallel legal battles on both coasts? That’s amazingly expensive, I can’t imagine Psystar has the cash to pay.

mathue

Didn’t the CA court already negate the anti-trust argument?

Joe

How do you think a decision in favor of Psystar would affect all the OEM Windows disks out there (i.e. a Windows OEM install disc from Dell can only be installed on a dell box)?

jragosta

“How do you think a decision in favor of Psystar would affect all the OEM Windows disks out there (i.e. a Windows OEM install disc from Dell can only be installed on a dell box)?”

It would affect a lot more than that. It might affect the entire concept of OEM pricing. Microsoft would lose the ability to specify a disk as OEM only. Customers could buy an OEM disk for a new computer if they wish. Upgrade pricing would also become unenforceable - You could buy an upgrade software package and use it on new equipment if the court rules that EULAs are unenforceable and that the purchaser can do whatever he wants with the software. Finally, it could jeopardize the entire antivirus software strategy if the court rules that once you’ve bought the software, you have the right to use it indefinitely regardless of license restrictions, the AV vendors might be forced to provide free updates forever.

This would be an unmitigated disaster for software vendors. They really should all be loudly supporting Apple.

jfbiii

Something about your AV point doesn’t sound right, to me. AV vendors would simply not publish self-updating software. You’d by a virus definition library and be able to use it continuously forever. But it wouldn’t include updates of virus libraries. LIbraries would be purchased separately for use by the AV software. AV companies would simply change their subscription model to reflect the different topography of the marketplace.

Bosco (Brad Hutchings)

This whole kerfuffle simply boils down to whether Apple can invoke the DMCA when it doesn’t even provide any kind of lock on the software. Apple has chosen to go with standards such as EFI to give it a cost advantage. The downside for Apple of some of these open platforms is that they are expensive to lock down vis a vis the Mac OS and still leave open for other OSes, which is an absolute requirement for the markets where Apple plays. Think of Boot Camp.

Apple would be far more effective securing its hardware monopoly by getting this out of court and starving Psystar’s supply of legitimate upgrade licenses. Apple would be better off changing its warranty terms for its software to nullify the warranty if run on non-Apple machines and denying automatic updates to non-Apple hardware.

My interest in how this pans out is more than just as an Apple fan and customer. I’m about to ship a software product that will be deployed best with small appliance-type computers. We’re looking at 3 options right now: (1) a VIA box for about $450/unit, (2) building our own Mini-ITX box with latest Intel board supporting HDMI out ($300/unit), and (3) Mac Minis ($600/unit). The VIA boxes have Windows XP, if we built our own, we’d use Ubuntu, and the Macs run Mac OS X. The product looks better and runs faster on Mac OS X, especially due to how text rendering and double buffering of windows are built in. But if I want to get this to customers at a price point under $800, it’s damned tough. If we could install Mac OS X on the homebrew Intel mini-ITX boxes, even at $100/unit, that would be a no-brainer and would be money in Apple’s pocket. It would in no way cannibalize sales of Apple’s hardware products. I strongly suspect that many more who are hackintoshing these days fall into the same boat rather than the end-user boat.

daemon

Auto-reload is horrible.

Brian

“It would in no way cannibalize sales of Apple?s hardware ”  Uh, what about the mini’s you would be passing on?

Brian

Apple just needs to jack the upgrade prices, and actually use the coupons you get for system software with each Mac (or are those only on boxed copies of OS X?)

Anyhow, they could easily ensure that hardware purchasers get a great discount and making the full install cost a mint, just like Microsoft does.

Have you ever priced Windoze as a stand alone boxed copy?  It’s insanely expensive.

Tiger

Psystar worries about Apple damaging THEIR business? Good Lord, how arrogant. They are the ones trying to piggy back off Apple’s good name and in the process damaging Apple’s business.

The beat down needs to come soon from the judge. This has gone on way too long. And full disclosure of the principals involved should be a requisite.

Bosco (Brad Hutchings)

@Brian, To make my price point, we’re not buying new Minis anyway grin. We are seriously considering offering a competitive price for used systems, but that could be a hassle and a disaster. If I could get working used x86 Minis with power supplies for $350 per working system, I’d pull the trigger on that and add Snow Leopard for $30. I wonder if the gray area on Snow Leopard upgrades from 10.4 would land me in Apple Legal’s crosshairs grin.

jragosta

So the bottom line is that you’re willing to break any rules, give your customers junk, or steal intellectual property in order to lower your price.

Just like Psystar. Hmmmm….

The fact is that you WERE considering Mac Minis and decided that making Hackintoshes would be cheaper. That means it IS costing Apple business. If you weren’t violating the EULA, you’d be buying Minis.

Bosco (Brad Hutchings)

Excuse me. Where in the EULA does it say that you can only install Snow Leopard on a Mac running 10.5? They do direct their sales process so that 10.4 users are encouraged to by the Box Set, but web accounts (and I haven’t personally verified) suggest that the EULA isn’t clear. Did Apple issue any statement correcting columnist Walt Mossberg, who suggested that users who didn’t need the latest iLife and iWork apps could do just that?

I am not talking about installing Mac OS X on non-Mac hardware. But if it were legit or Apple’s EULA prohibiting such action were found unenforceable, I’d do just that in a New York minute for this application. As for price sensitivity, $29 would be a steal for that and $100 would be a no-brainer. My job isn’t to make a bunch of money for Apple selling through a product that is a little too much for the application.

jragosta

http://store.apple.com/us/product/MC223Z/A?fnode=MTY1NDAzOA&mco=MTA4MzMwOTc

“Snow Leopard is an upgrade for Leopard users”

Which part of that don’t you understand?

Bosco (Brad Hutchings)

Grrrr. That is sales guidance, not the EULA. Please tell me you understand the difference. This is emblematic of the problem Apple finds itself in with Psystar. There is legal and market confusion that Apple promotes and benefits from, and then they claim it’s all black and white in court. Again, see Mossberg’s column, where he notes that Apple concedes that the $29 upgrade will work on Tiger.

It’s as if Apple were hosting a private party in the middle of a public park. They bring in hookers with Ph.D.s in chemistry and engineering for the guests to enjoy. They have Morton’s cater it. There is an endless supply of Santana DVX champaign. And when some uninvited guest wanders in and mingles, they call the cops.

jragosta

That has got to be one of the stupidest arguments I’ve ever heard (even aside from the ridiculous, nonsensical example relating a party with hookers to offering to sell you an upgrade version of software).

Apple makes it clear BEFORE YOU BUY THE PRODUCT that it is an upgrade disk and what the terms are. You choose to buy the disk on those terms.

Whether it is spelled out in the EULA or not (I’m betting that there’s something that covers it, anyway), you are committing fraud if you buy something that Apple offers as an upgrade and then use it differently.

Not to mention, of course, that if you want to stick with the EULA, it very clearly says that it can only be used on Apple Macintosh computers, so you can’t do it legally, anyway.

Bosco (Brad Hutchings)

It’s not a stupid argument. I’m just that brilliant and inciteful (sic). When the Psystar case turns out to not be the slam dunk you all think it’s supposed to be and it turns out there is no deep pocketed Dr. Evil type behind this company, you’ll come begging Bosco to explain this to you again. Or, you could just pay attention now.

If you carefully re-read what I wrote, you will find that in the current environment, I would consider putting $29 Snow Leopard on used Intel Minis for the project we’re doing. I’d do that after consulting the EULA to make sure it is as confusing and unclear as reported. I would only consider making Hackintoshes if particular parts of Apple’s EULA were found to be unenforceable by the court. So please do not label me a cheater or a dishonorable guy here. If I can’t legally use Snow Leopard, we’ll do the Intel mini ITX homebrews with Ubuntu or the VIA media boxes with XP. Customers will do minimal setup on the system once and forget about it. REAL Studio lets me build for all three platforms.

The dirty little secret of EULAs that many of you IANAL and IANAD (developer) types fail to grasp is that most of us developers from commercial to open source do not want our EULAs tested in court, ever! We especially don’t want the whole concept of shrink wrap or click agree licenses examined by a court in such a way that would clear up their enforceability one way or another for all time because there’s a good chance a reasonable court might be skittish about granting blanket enforcement! We prefer the uncertainty of enforceability to a reality where we have to get signed contracts from each and every customer in order to ensure enforceability. If you stick three IP lawyers in a room with any EULA longer than your run of the mill BSD license, at least one of them will find some provision in the EULA that they think would fail in court. We play these license shenanegans because they are the custom of our industry and our customers kind of expect that. Where we do have tested legal protection is via the DMCA. A big problem Apple has is that it is not protecting its software with a “lock” under provisions of the DMCA. See this guide to building a Hackintosh to see that there are no locks being picked! All you have to do to get Snow Leopard to install on non Mac hardware is convince the hardware to behave enough like a Mac. That gets to the heart of the party metaphor. Apple wants to make this super easy for its users of its hardware and rely on EULA provisions to keep others out of its party. A court could very well find that tenuous.

sluggo

excerpt from Snow Leopard EULA

“C. Leopard Upgrade Licenses. If you have purchased an Upgrade for Mac OS X Leopard license, then subject to the terms and conditions of this License, you are granted a limited nonexclusive license to install, use and run one (1) copy of the Apple Software on a single Apple-branded computer as long as that computer has a properly licensed copy of Mac OS X Leopard already installed on it. If you have purchased a Family Pack Upgrade for Mac OS X Leopard license, then subject to the terms and conditions of this License, you are granted a limited non-exclusive license to install, use and run one (1) copy of the Apple Software on up to a maximum of five (5) Apple-branded computers at a time as long as those computers are located in the same household (as defined above), are used by persons who occupy that same household, and each such computer has a properly licensed copy of Mac OS X Leopard already installed on it. The Family Pack Upgrade for Mac OS X Leopard License does not extend to business or commercial users.”

Pretty clear!

Tiger

Not to mention that if you go here: http://www.apple.com/macosx/what-is-macosx/

And click System Requirements, it tells you exactly that SL is an upgrade for Leopard users and that Tiger users need to purchase the box set.

REQUIREMENTS is pretty clear.

Joe Anonymous

“Not to mention that if you go here: http://www.apple.com/macosx/what-is-macosx/
And click System Requirements, it tells you exactly that SL is an upgrade for Leopard users and that Tiger users need to purchase the box set.
REQUIREMENTS is pretty clear.”

I’ve come to the conclusion that no matter what Apple does, some people are going to rationalize their theft of Apple’s intellectual property. Apple could put “this is only an upgrade” in flashing lights on the box and “do NOT use this on anything other than a genuine Macintosh computer” spelled out on the ceiling with laser beams and these people would respond “But Apple didn’t have a guy at the checkout line to whack me on the head with a baseball bat so they must really think it’s OK” or “that only applies to other people, but my third cousin has a hangnail, so I’m a special case”.

Some people will just never learn to be honest or ethical, I guess.

Bosco (Brad Hutchings)

I?ve come to the conclusion that no matter what Apple does, some people are going to rationalize their theft of Apple?s intellectual property.

If you’re just gonna sit their and call out people’s ethics without giving careful consideration to competing ethical issues in the case, you’re gonna end up being shocked and disappointed when the Psystar case doesn’t go 100% Apple’s way.

Right, wrong, or indifferent, what Apple is doing with the Snow Leopard EULA is setting up a variable pricing scheme, wherein it delivers the same binary product to two classes of customers who are expected by Apple to self-select into the “correct” class (as Apple defines it), and excludes paying customers who would install on non-Apple labeled hardware. Absolutely nobody in this discussion (nor presumably at Psystar) is talking about making copies of the software which are clear violations of copyright law by installing unpaid copies on Apple or non-Apple hardware. I think (and there are many IP lawyers who would agree) that there is, at the very least, a legitimate question over whether Apple should be allowed to have a court enforce a variable pricing and exclusion scheme that uses only the terms of a shrink wrap EULA and absolutely no technical restrictions preventing people from buying a less expensive version than Apple says they are entitled to use or using the software on non-Mac hardware.

Dr. Eric Vornoff

there is, at the very least, a legitimate question over whether Apple should be allowed to have a court enforce a variable pricing and exclusion scheme that uses only the terms of a shrink wrap EULA and absolutely no technical restrictions preventing people from buying a less expensive version

In other words, because Apple did not make the Snow Leopard installation process detect and enforce that it was only being installed on an existing Leopard OS image, they give up the right to restrict the terms of its usage? So “if the software doesn’t prevent me from violating the terms of the EULA, then it must be okay.” It will indeed be interesting to see if any judge agrees with that legal theory.

James

@Bosco - I don’t think there’s any way around the fact that it’s just not something the EULA permits.

No disrespect intended, but I don’t find anything wrong with that fact; if entrepreneurs want to create a business like this, they could code their own OS just like the company in question did (you sound like a tech guy. Surely you recall this is precisely what hardware vendors did back in the pre-Windows era. An extreme statement perhaps concerning a modern OS, but you get the point). And though now I’m addressing IP in a broader sense, how does this sort of behavior contribute to anything but a company’s bank account? It’s just damn lazy if you ask me, but perhaps I’m old school in not feeling entitled to piggy back on the hard work of other people.

Chris

It’s not an ‘agreement’ when one party has total and absolute control over it. When one party has total and mutually exclusive control over a so-called ‘contract’, it is a policy rather than an agreement. It is not a court of law’s job to enforce policies. A court of law enforces the law and agreements. The policy itself would not stand up to the scrutiny of Apple’s history of licensing shenanigans and Clayton 3. Intent matters more than a perceived violation of an artificial ‘contract’ between two parties.

Voice

Here’s the deal.  According to copyright law itself, I do not require a license to install/use a piece of software if I own a copy.  The license can say anything it wants.  That doesn’t mean I have to agree to the license in order to use the software.

Bosco (Brad Hutchings)

@Chris—I’d be surprised in Clayton 3 applied. A court could say that Apple’s EULA term about installing on Apple hardware is unenforceable, but the court probably wouldn’t compel Apple to make its OS compatible with 3rd party hardware. That’s pretty much what the court would have to do to prevent “tying”.

@Voice—Mostly true, and practically speaking, if you’re an individual, you’ll never get sued for your private behavior. Businesses, especially as the get big, are more lucrative targets.

“Shrinkage”, if you like the term, is built into every digital goods business model. You’d like a spread of price points that gets the most out of users that are willing to pay more and gets more people into the game, especially if you have a non-copyable service offering (like MobileMe) that you can get some of your customers to buy. I actually think that the medium term trend with Apple will be to make Mac OS X basically free and mostly available for all kinds of devices while building up the service channels (iTunes Store, etc.). Or if they don’t, Google is already starting the trend with Android. Psystar is just the first of hundreds of distractions.

Johnny

What if Microsoft detected bootcamp on Mac hardware and refused to run?  What if Microsoft had a EULA that said this software is not allowed to run on Mac hardware?

All you Apple heads would cry foul!

Except when Apple does it Psystar it is ok?

This is just a case of hardware bundling, which is an illegal monopolistic trade practice.  I dont care if it is masquerading as a DMCA issue—its not—it is straight forward and deliberate hardware bundling.

Log-in to comment