Apple Believes Deep Pockets Behind Psystar

Apple, Inc. suspects that there are deep pockets behind the Psystar Corporation, and it wants to know who they are, according to Apple's amended complaint. The company will do that in the discovery process leading up to trial in order to find out if there are external forces trying to undermine Apple's intellectual property rights.

Section 18 of the amended complaint says:


18. On information and belief, persons other than Psystar are involved in Psystar’s unlawful and improper activities described in this Amended Complaint. The true names or capacities, whether individual, corporate, or otherwise, of these persons are unknown to Apple. Consequently they are referred to herein as John Does 1 through 10 (collectively the “John Doe Defendants”). On information and belief, the John Doe Defendants are various individuals and/or corporations who have infringed Apple’s intellectual property rights, breached or induced the breach of Apple’s license agreements and violated state and common law unfair competition laws. Apple will seek leave to amend this complaint to show the unknown John Doe Defendants’ true names and capacities when they are ascertained.


An attorney who has been following this case, and wishes to remain anonymous, told TMO some time ago that the difficult case that Psystar faces seemed to be at odds with reasonably available funds by such a small company to pay their attorneys. The significant legal fees that Psystar is piling up leads one to suspect that they do, in fact, have a benefactor, he surmised.

Previously, it was reported that that Apple has also hit Psystar with a claim of Digital Millennium Copyright Act (DMCA) violations. The attorney told TMO that this could open Psystar and its principals to criminal liability as the course of discovery may force Psystar to disclose evidence that will make a criminal case under the DMCA.

Apple has piled even more grief onto Psystar, perhaps in an attempt to demoralize the opponent. In the early part of the legal process, Psystar may have been under the impression that this was a strictly civil legal conflict born of some strongly held beliefs on their part. With good legal work and some luck, they might have assumed that a favorable outcome was within reach.

In Apple's amended complaint, the company has raised the stakes considerably by leveraging off the admissions and arguments that Psystar has already made, essentially leading Psystar down a perilous path, and then using Psystar's own admissions to present an enormously scary profile: Psystar suffers a preliminary injunction, must pay actual damages, statutory damages, has trafficked in unlawful DMCA circumvention devices, and could be criminally liable. Note the interesting use of the word "trafficked" which has connotations favorable to Apple.

A Worrisome Outcome

Criminal violations of the DMCA puts the officers of Psystar at risk since the evidence so far points to Psystar engaging in conscious violations in order to profit from Apple's prior work. Moreover, there is the specter of the scandal emerging from the possible discovery that there may be benefactors who are funding this effort. The realization that those benefactors, whose direct liability is unknown, have exploited the Psystar officers for their own benefit must be causing a severe loss of sleep and some acid reflux by those who founded Psystar.

In the early days, when Psystar first started shipping the Mac clones, Apple took its time filing a lawsuit, leaving many to wonder if Psystar was on to something. Now, eight months later, it's becoming clear that Psystar is getting more than it bargained for and that Mr. James G. Gilliland, Jr. and his team at Apple are poised to utterly destroy the upstart Psystar.

Mr. Gilliland has played a strong card at the 11th hour. If there are, in fact, secret benefactors who wish to avoid exposure, they will surely, at this point, withdraw funding and force Psystar to settle immediately, agreeing to most if not all of Apple's terms.

Apple's lifeblood was at stake. The apparent, imminent crushing Psystar has been an illuminating lesson in copyright law and brilliant legal maneuvering.