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Psystar counter-sues Apple for anti-competitive business practices


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Source (CNET)

PALO ALTO, Calif.--Mac clone maker Psystar plans to file its answer to Apple's copyright infringement lawsuit Tuesday as well as a countersuit of its own, alleging that Apple engages in anticompetitive business practices. Miami-based Psystar, owned by Rudy Pedraza, will sue Apple under two federal laws designed to discourage monopolies and cartels, the Sherman Antitrust Act and the Clayton Antitrust Act, saying Apple's tying of the Mac OS to Apple-labeled hardware is "an anticompetitive restrain of trade," according to attorney Colby Springer of antitrust specialists Carr & Ferrell. Psystar is requesting that the court find Apple's EULA void, and is asking for unspecified damages.

 

Springer said his firm has not filed any suits with the Federal Trade Commission or any other government agencies.

 

The answer and countersuit will be filed Tuesday afternoon in U.S. District Court for Northern California.

 

Pedraza attended a press conference his lawyers called to present how Psystar will defend its its OpenComputer Mac clone, which has been for sale online since April.

 

Psystar's attorneys are calling Apple's allegations of Psystar's copyright infringement "misinformed and mischaracterized." Psystar argues that its OpenComputer product is shipped with a fully licensed, unmodified copy of Mac OS X, and that the company has simply "leveraged open source-licensed code including Apple's OS" to enable a PC to run the Mac operating system.

 

Pedraza says he wants to make Apple's Mac OS "more accessible" by offering it on less expensive hardware than Apple.

 

"My goal is to provide an alternative, not to free the Mac OS," said Pedraza. "What we want to do is to provide an alternative, an option...It's not that people don't want to use Mac OS, many people are open to the idea, but they're not used to spending an exorbitant amount of money on something that is essentially generic hardware."

 

Apple will have 30 days to respond to Pystar's counter claim, and so far has declined to comment on the case.

 

Other legal experts say Psystar faces a tough legal challenge in proving Apple has engaged in antitrust behavior by loading its software on its own hardware and thereby allegedly harming consumers and competitors. Psystar's ability to prevail on the issue of having the latitude to load Apple's OS on its own hardware, given it has a licensing agreement with the company, may prove an easier road to hoe, legal experts note.

 

A newcomer to the PC scene, Psystar caused a stir when it first went online selling white box Macs earlier this year. The site went down hours after it opened for business because the company was overwhelmed with orders for the OpenComputer, originally called the OpenMac, which was then changed to its current name. And the site went down several more times as its payment-processing company pulled its services from the Psystar site. Psystar managed to stay shrouded in a bit of mystery for a while, until intrepid gadget blog readers joined the press in fleshing out some details about the company.

 

Psystar eventually got back online with a new payment-processing service, and it continues to take orders for the OpenComputer and OpenPro Computer. When Apple finally did file suit against Psystar in July, it surprised nearly no one--except perhaps Pedraza. He said he had no contact with Apple before legal papers were filed against his company. Customarily, there is some sort of communication between companies before lawsuits are filed.

 

For now, Pedraza says it will be "business as usual" at company headquarters. Though he said there was a "slight" downward dip in sales once Apple filed its suit, he plans to go ahead with making servers, and soon, a mobile product, which he said will be "like a notebook." But he refused to offer more detail.

 

More to come...

 

CNET News' Dawn Kawamoto contributed to this story.

Pretty big news for OSx86 perhaps as an outcome of this we will be fully 'legal' and not in violation of Apple's restrictive EULA. Rudy Pedraza is right on the money when he claims that people are open towards using OS 10, but don't want to pay Apple's ridiculous price premiums on normal (and often out of date) hardware. Personally I'm going to have to side with Psystar on this one as I feel that Apple's current EULA for Mac OS 10 is absurd: You pay $125 for software, and then can only install it on certain machines?

 

How do you guys think?


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Laws are like contracts that is decided upon by many people not just one that cannot be considered an Opinon

 

Exactly true. Many Hackint0shes decided upon what to accept and what to reject in the Apple EULA. :)

 

The Psystar case will just confirm or deny these views. More likely if Psystar loses, it'll just mean delay for the OSX on PC being made official.

 

Hackint0shes won't go away. Ever.

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@jaes i meant that in the way that you are not big enough for your decision to matter and your not

 

and i dont think that apple asumes the hack will go away but rather that it would be come small enough to deal with instead of companies like pystar exist

 

there is billon and one ways to take OSX outta your hands in the future

 

seeing as how i thikn apple own the rights to the arm cpu and that cpu could be advanced some you could be looking at a future much like the ppc if the OSx86 comunnity doesnt stiffle itself just a bit

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Apple themselves opened the flood gates by using intel technology. Now the IT community are pushing the boundries of what it possible one company being Pystar and now Apple does not like what it is seeing. OSX has now begun to move out of the hands of Apple and into others (OEM's and other small startup's) and Apple want to control this 'my software, i will say what happens to it'.

 

Some posters use Printer and inks examples, what about the car industry as an example. You purchase a bulk standard car from your local dealer. You then go down the road to the custom shop and get a turbo fitted, new supension shocks, 15inch wheels to 19inch, single pipe to twin pipe exhaust..the list could continue. Do the car manufacturers say 'HEY!! you cant do that to our product'. No they dont. What they say is 'You can modify it but you loose all warranty and manufacturer support if you go ahead and make mods to it'. Basically, you screw it up, dont come back crying to us. You dont see Ford or Chrysler constantly taking Custom Car shops to court because they dont want 'Extras' fitted to there cars.

 

The same principle should be appiled to OSX (the stand-alone versions you see in shops). If you purchase it, you can apply it to whatever you want but if you screw up, dont come crying to us, you knew the risks you were taking. But they dont, they want to control it and that is what has got people annoyed.

 

If Apple didnt want OSX to be used on anything BUT a mac they should'nt have allowed the stand-alone version to be sold, it's that simple, no if and but's. Apple brought the problem onto themselves and now they are trying to get out of it by going after forward thinking companies who are doing things that people feel Apple should be doing themselves.

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@jaes i meant that in the way that you are not big enough for your decision to matter and your not

 

It's not about how big you are. It's about what you know and what you can do with that knowledge.

 

No matter how big Apple is, it can never stop the guy who "knows" how to install OSX on a PC.

 

That's all that matters.

 

and i dont think that apple asumes the hack will go away but rather that it would be come small enough to deal with instead of companies like pystar exist

 

cos like Psystar are trailblazers..that's all...many will follow.

 

It's the natural process for the "product cycle."

 

All products end with the "commodity phase."

 

When a product enters the commodity phase, competition comes in from all quarters, and profit margin drops.

 

OSX is entering commodity phase.

 

there is billon and one ways to take OSX outta your hands in the future

 

Can't. All Apple can do is develop something else. Steve is good at that. But, OSX will be on PCs for ever. I can still run DOS. Microsoft left DOS ages ago. But many people still love and swear by DOS, and they keep developing it in different flavors: FreeDOS, DRDOS, etc..

 

FreeDOS is good, for example, for developers who need a bootable OS that fits on a simple floppy etc..to run "Restore and Repair" software programs to fix problems on PCs..etc...

 

DOS is still useful, and still used, and it's 2008.

 

 

 

seeing as how i thikn apple own the rights to the arm cpu and that cpu could be advanced some you could be looking at a future much like the ppc if the OSx86 comunnity doesnt stiffle itself just a bit

 

Well, it is interesting that Apple bought a "chip manuf company", maybe they are planning to put something like OSX into a "bios type chip" and make it all hardware. :blink:

 

That will make it tough for Hackint0shes of the future.

 

But, still, OSX of today will still run on PCs.

 

People will figure out ways to continue to use it, regardless of what Steve does with future OSX.

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@jaes .. .thats not the point you can still run DPOS but what good is it any more and thats where they will stop people from using it you think iit will be really all that good for yuo and a few others who cant dev anything good for it to be running it on thier boxes while apple and the rest of the world keeps advancing

 

there is no point ot fighting a fight that believe me you will not win

 

apple will own these guys in court if they dont just own the company before the week is up

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Do the car manufacturers say 'HEY!! you cant do that to our product'.

Actually that's not true! There are many car products that have dealer only availability. Many others that are licensed from them from 3rd party aftermarket parts manufactures. But even if there weren't your analogy would still be wrong, as they are not intellectual property.

 

apple will own these guys in court if they dont just own the company before the week is up

I have personally dealt with Apples legal team and I can promise you that this will take a LOT longer than a week to get resolved.

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@Maxintosh ... very true but every legal case is different but apple does take good time working stuff out i would think mainly to make sure they never have to deffend themsleves this way again

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More likely if Psystar loses, it'll just mean delay for the OSX on PC being made official.

Sadly, for business reasons, I don't think that day will ever come. However that doesn't mean that Apple won't one day come out with their own PC operating system that competes against windows. That would be a good compromise.

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Yeah that would be a great compromise, especially since it could be based off of OS X, but if memory severs me right then I think Apple and MS have an 'agreement' or 'understanding' that Apple will not compete in this area.

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@slacker25 and Maxintosh :

 

I do not agree with you both.

By now, imo, it's obvious that apple will release this OS for any kind of machines in a next future.

Why do you think they switched to intel - apart from the poor performances of the IBM procos ?

It's just a matter of time...

 

Why ? because of that : http://arstechnica.com/articles/culture/op...marketshare.ars

 

Let's call it evolution...

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Possible... But take a look @ ubuntu... It works on any kind of machine, it's stable and so on.

If Apple decide to go on the OS market, they have three options :

 

the ubuntu way (open)

 

the windoz way (arg ! would be the worst)

 

and the third party way : "Ok, you can install it on whatever you want but no tech support about the harware" (logic, when we think about it...)

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ubuntu stable not is the sence that OSX is and linux all though stable as in vs windloze is not for the faint at heart it is as it is cause there are people willing ot tweak it not people that are wanting a complete os

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it's obvious that apple will release this OS for any kind of machines in a next future.

First you need to learn some Apple history. Many companies have tried similar things but have failed, why? Because there is a lot more involved than just selling their software for PC use. In case you didn't know, dell sells a lot of computers. They are crappy computers to be sure, but at their low price point they sell a lot of them. Dell begged Apple to let them sell an Apple clone, but Apple said no. Why? Because it would end up hurting Apple more then helping Apple. Bottom line, if psystar wins it will ruin Apple, and the court will NOT allow that. Read and learn:

 

The idea of Apple releasing Mac OS X to run on industry standard PCs seems to make a lot of sense on the surface. After all, wouldn't Apple be better off selling tens of millions copies of software, rather than around 6 million Macs every year?

 

The obvious problem is that retail copies of Mac OS X would come at the expense of Mac hardware sales. Apple not only earns a higher manufacturing profit on its Macs compared to most PC makers, but it also makes a retail profit on all Macs sold through its online and retail stores.

 

In addition, Mac hardware sales are accompanied by software sales, retail accessories, and service plans such as AppleCare and .Mac, all of which generate far more profit than a software box.

 

Why would Apple give up its entire business, which is outpacing the rest of the industry in both growth and profits, to become a software vendor dependent on the whim of other hardware makers?

 

Converting into a software company was something NeXT already tried. It didn't work back then, and the failure of Linux on the desktop today--a free product--suggests that there isn't money to be made in trying to sell a retail desktop operating system for PCs.

 

Other failures from OS/2 to BeOS could also be cited. The only reason Microsoft makes money selling Windows is because it has the market locked up; it sells OEM copies of Windows in high volume at very low cost--in the ballpark of $30 a copy.

 

If Microsoft were selling a large number of retail copies of Windows at around $300, it would not be reporting that 80% of its Windows revenues come from those ultra cheap OEM licenses.

 

Apple is simply much better off riding its increasing wave of hardware sales. If there were any need to continue arguing the point, it could be pointed out that much of the value in Apple's offerings come from hardware and software integration.

 

When running Mac OS X on a PC, there is no support for features unique to Apple hardware, such as two finger clicking and scrolling; features such as Firewire Target Mode don't work either. The retail profits on software would be quickly eaten up by increased PC support costs and efforts to support a far wider range of drivers.

 

Apple is unlikely to ever offer Mac OS X to Dell and HP for the same reason that NeXTSTEP was originally paired with custom hardware: it makes it much easier to ensure things work flawlessly. The failure of NeXT's own attempts to become a software company have been inherited by Apple as a historical warning. Apple itself also took a stab at licensing to cloners, with disastrous results.

 

Further, recent efforts by Microsoft to duplicate its Windows monopoly in the field of handheld computing, music players, tablet PCs, and related initiatives have all been a failure.

 

Palm's efforts to license the Palm OS to Sony, for use in the Clie PDAs, did not work out well either. Microsoft's fortunes from Windows were a lucky fluke resulting from the mistakes of IBM and later PC hardware makers.

 

Apple not only has no window of opportunity to successfully enter the generic PC operating system race, but has no interest in doing so. A unique OS gives Apple a product that is very difficult to copy; this applies not only to the Mac, but now also to the iPhone, an apparently the Apple TV, too.

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@Maxintosh ... thanks again for putting words that ive repeated in 50x different ways into better words yet again... my hats off to you ... but yet i dont thiknk anyone here will still yet get it

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Bottom line, if psystar wins it will ruin Apple, and the court will NOT allow that. Read and learn:

 

Nope. In the old days Apple was just a computer company. Today, Apple is a diversified high-tech company, e.g. they make telephones and music boxes. Apple can't be ruined by the likes of Psystar.

 

Apple is stronger than you think.

 

Besides, this is just about OSX. A mere piece of software. That software doesn't even bring in significant revenues.

 

To think that people putting OSX on PCs will cut sales of MACs is simply missing the point.

 

OSX on PCs will establish Apple's OS as a major player along with Windows and Linux, and more applications will be developed for it, which will drive sales of both MACs and PCs.

 

Right now, Apple has a "niche product." It has a "fan club." The user base is so small that every blip shows up on the radar, and Apple screams "growth."

 

Easy it is to grow from a very small base.

 

Apple makes a good product. It's slick looking. It's got more apps available today than ever before, it's going to get more users regardless.

 

But, it will never get the mass user base that Windows has, unless it adops a more open policy like Windows has.

 

Microsoft did not "get lucky." It was Bill's open policy to let the user "tinker" with the IBM/DOS/Windows system, to add boards to the box, to add drivers and make any kind of software they wanted, that drove the acceptance and adoption of the Windows/PC platform.

 

The IBM PC was an "open hardware box" from the very beginning.

 

So it was adaptable to any purpose the user could concieve of.

 

Currently, Apple's MAC box is a closed system. You can't tinker and change things. You have to "wait on Apple" to see the light, and for them to provide you with the solutions in their own timeframe.

 

Apple wants to tell the user what he should do with the computer.

 

Microsoft just looks around to see what the user is already doing with the computer and then simply put that into windows.

 

Microsoft products are consumer driven, while Apple's products are driven by Steve and his top engineers. ^_^

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this is just about OSX. A mere piece of software. That software doesn't even bring in significant revenues.

No, it's not about OS X, it's about everything ELSE connected to it that DOES bring in $$$, like the additional iLife, iWork, etc. software sales, the additional computer accessories sales, and service plans such as AppleCare and .Mac. OS X is just the first domino. A domino that Apple (rightly) wants to have complete control over. From Apples point of view if a FREE software like Linux can't make a dent in MS market share, then why would selling a OS (like OS X) do any better? Your mistake in logic is that you think that Apple wants a mass user base, and to a certain extent they do, but NOT at the expense of damaging the rest of the company.

 

Apple wants to tell the user what he should do with the computer.

Wrong again. Steve Jobs has repeated said that he envisions where the company should be (forward thinking) and then makes it happen. Big difference.

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@jaes ... why does the companies history change .. it does not they can change the name of it from apple computers to apple inc its still apple and history does show many ways they will handle such things like this

 

Ok so it is a small fan base .. but it will become large fan base and lets see you think there is what likea trillion virus' for windows cause the crators of those virus just love winbloze

 

maybe its bettter to start a revoltion in inovation and keep em coming and loving the stuff they make so that they dont hate it and start this trent of lets see if we can break it more

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There is something I'd like to know :

 

Apple's economic good health is only due to the Ipod market they won with an affordable/simple/pretty object that push all the rest of the products they sell.

They won the north american market, the european one resists a bit more but, in fine, it still have a marge to progress.

But what's next ? The Ipod sells are beginning to slow down... because of the penetration in US - around 70%, I read... They need a fresh new approach... and the only way to pass thru this very dangerous point is to sell new things... but what ? this tablet PC stuff that will cost an arm and a leg ?

Today, Apple's investors want the profits mane to continue without a glitch on the same way. So... What's next ?

 

It's simply a question... cause I'd really like to know your points of view (all) on that situation.

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The Ipod sells are beginning to slow down

I'm not sure where you're getting your misinformation from but iPod sales are still very strong and laptop sales are also very strong. Some of the features patented for the iTablet are simply amazing, so they will get the asking price for it, whatever that might be. In case you haven't noticed whenever Apple first comes out with a new product they charge a lot for it, and then lower it afterward. This is smart thinking on their part (make hay while the sun shines). What Apple really needs, that they haven't shown any interest in is a mid-sized desktop. They've (sadly) all but abandoned the Mac mini, and the Mac Pro is way to costly for the average person. If they were smart they'd come out with a high end Mac Mini Pro version. The form factor is already made, and it would be VERY easy for them to do, but so far all you hear is the sound of crickets.

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Wrong again. Steve Jobs has repeated said that he envisions where the company should be (forward thinking) and then makes it happen. Big difference.
Wow, that's some pretty strong KoolAid you're drinking there, partner. This board needs a "Self-Confessed 110% Fanboy" forum to segregate the KoolAod drinkers from those of us outside the Steve Jobs Reality Distortion Field. Some of the nonsense you're spewing is incredible. Straight out of the Apple marketing department.
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The Ipods Did well cause there was already very growing market for mp3 players and devices of the like

 

I personally think the current prices are fair and i do think the mid range mac mini or mac pro type mid tower idea would be great cause im not tool that believes things suck just cause i cant afford them

and jobs will most likly do something like th9is in the future and people think they dont see what products they are asking for .. they do they just dont always see the right oppertunity to market something as such but with more growth you will see stuff like that mid range system pop up and price drops as well the more market they take

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