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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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The EULA is only valid if the terms within it are in line with the law. Apple can write down anything they want, but if their terms are promoting anti-competitive practices then that part of the EULA is void. If someone buys a company's product A you cant force them to buy the same company's product B in order to use it. EULA or not, that is not allowed here in the US.

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You DON'T know what the EULA is before you purchase it

LOL ;) There's something new out called the Internet. All of Apples agreements are clearly posted on their web site. They are also available in nearly ever imaginable language. You'll notice that it CLEARLY says "Be certain to read the applicable agreement carefully before you install the software or set up the product." You can also get a copy of any of Apples software agreements from Apple BEFORE you buy it by simply contacting Apple directly. Imagine that. The one for OS X clearly states "You agree not to install, use or run the Apple Software on any non-Apple-labeled computer...". There it is in black and white - and you didn't have to buy the software to read it. Weird.

 

So aside from the fact that everything that you said was blatantly false, let's imagine that you bought the software, read the agreement, but didn't think it was fair after you read it. No problem-mo. Apples got you covered there too. Simply return the software where you bought it for a quick refund and go on about your life. They even state this fact beofre the rest of the agreement, and I quote "IF YOU DO NOT AGREE TO THE TERMS OF THE LICENSE, YOU MAY RETURN THE APPLE SOFTWARE TO THE PLACE WHERE YOU OBTAINED IT FOR A REFUND."

 

So, simply put, if you agree to their terms then you are allowed to use the software. If you don't agree to their terms that's cool too, simply return the software for a refund. Either way, Apple in no way, shape, or form is forcing anyone to use their software. They state this agreement upfront before you spend one penny on their software, and even if you read the agreement after you've bought it you are still protected, because they'll still give you a full refund. I don't see where the judge is going to see anything wrong with what they've done. They give you a choice that falls within the law. Just because you don't like the choice doesn't mean it's unfair or illegal. That's life, deal with it.

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Remember all, the EULA only says you must put a label referring to Apple on the computer in order to install OSX. That's easy. It doesn't say you can't install on a PC. Just that the PC must be Apple "labelled." :blink:

 

Yea, no one forces me to use OSX. Agreed. No one forces me not to use it either. I wonder if people realise that. Apple never complained to me. Just a few stragglers here thinking they understand the law. They have a point of view. And everone is entitled to their own point of view. It's a democracy. A free society. Think what you like. But there are no forces either way. It's up to your conscience. Mine is clear. I do it, because "I think" I'm right. Prove me wrong, and I'll adopt your point of view.

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Remember all, the EULA only says you must put a label referring to Apple on the computer in order to install OSX.

LOL :P For those who haven't graduated from high-school or that that don't understand simple English, the agreement states "This License allows you to install, use and run one (1) copy of the Apple Software on a single Apple-labeled computer" as in labeled by Apple, not self labeled :blink: Amazing that some people need to have this point explained.

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as in labeled by Apple, not self labeled :thumbsup_anim:

 

That's one possible interpretation, sure. I don't deny that Apple can label the computer for the user.

 

But, the important observation here is what it doesn't say. It doesn't say "Apple Branded."

 

That would be unambiguous. So, why did they pick the particular phrase "Apple labeled"? Huh?

 

That's because they were covering their bets. So that they "could" sell the OSX software independently and provide labels just like Microsoft does to label your PC.

 

See? There's a logic to their madness.

 

If I were an Apple Legal advisor, who reviewed the EULA before Apple released it, and I wanted the EULA "to mean" what you think it means, I would say very clearly the following:

 

"This software can be installed on one and only one computer at a time, and that computer must be one branded by Apple Inc."

 

Simple. And clear.

 

Why did Apple use "fuzzy" language, like "allows" the user to install, but doesn't mention any "restriction" etc..? See?

 

Only restriction is in the "imagination" of the consumer.

 

Apple doesn't say it.

 

Because they want to be flexible, and "enable that feature" in the future when they decide to approve installing OSX on PCs. They won't have to go back and rewrite the EULA. They'll just tell everybody what the "new official interpretaion of the existing EULA is" and that they intended it to be so all along.

 

That's the plan. Apple has already decided that some time in the future they will approve of this activity.

 

They just don't want to let everybody know about it right now.

 

The flexibility is built into the EULA for "a reason."

 

Those guys are smart.

 

But, it takes "more than a high school eductation" to understand the complexity of the sentence structure.

 

:rolleyes:

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Ok, there was a question on the front page about what I think. Well, here is what I think. I think that you all spend 50 bucks on a game for an Xbox 360 or PS3 and yet you dont {censored} about not being able to run the XBox 360 game on your PS3, ok, SOME of you do. But this is the same type of thing. When a company restricts something people make an EMULATOR.

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That's one possible interpretation, sure.

It's not an 'interpretation' :thumbsup_anim: It is written in clear-simple-legalese. Apparently you've never read a legal document. Thank God the judge in this case doesn't have the same deficiency :rolleyes:

 

I think that you all spend 50 bucks on a game for an Xbox 360 or PS3 and yet you dont {censored} about not being able to run the XBox 360 game on your PS3

Good point :D

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It's not an 'interpretation' :D It is written in clear-simple-legalese. Apparently you've never read a legal document. Thank God the judge in this case doesn't have the same deficiency :(

 

What judge? Have you never noticed than one judge can and often does overturn the decision of another judge?

 

Which judge did you talk to?

 

Everything is subject to interpretation.

 

And, more importantly, if you write an EULA, or any law for that matter, that only a judge can understand, then the people don't have to follow that law at all.

 

Why do you think that the court calls on ordinary citizens to play the role of jury?

 

They don't have any special "legal training" requirement to sit and listen to the pontifications of the legal dudes. :D

 

Yet, they decide "guilty" or "not guilty".

 

If your legalese confuses the people, then when the people sit in the jury, who do you think they will side with?

 

Personally, I've considered that Apple's legal team may have included this "fuzzy language" for another reason. No one can actually take them to court for "tying." :P

 

They can always swing the argument around, and claim that nowhere in the EULA did they ever restrict the consumer to "Apple Brand" hardware.

 

See?

 

Very clever.

 

You can't take Apple to court for the known illegal anti-competitive practice of "tying."

 

Because the EULA doesn't clearly say that you must install OSX on an APPLE BRANDED Computer.

 

So, Psystar couldn't sue Apple, until Apple itself tried to sue Psystar, thus showing their hand.

 

That's why Psystar's case is so important.

 

It forces Apple to go to court and "reveal the true intention behind the vaguely worded EULA."

 

Apple's legal dept worded the EULA, so that the average consumer would think he couldn't install OSX on a PC,

while not actually putting the restriction into clear unambiguous language, leaving Apple a backdoor to escape

such acusation of tying should anyone in fact try to take Apple to court over that same EULA.

 

:D

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Ok, there was a question on the front page about what I think. Well, here is what I think. I think that you all spend 50 bucks on a game for an Xbox 360 or PS3 and yet you dont {censored} about not being able to run the XBox 360 game on your PS3, ok, SOME of you do. But this is the same type of thing. When a company restricts something people make an EMULATOR.

Thats really not the same at all. I cant run my ps3 games on a 360 because code built for the Cell cant run on the Xenon. Its just not physically possible. Your flawed logic would apply back in the PPC days of macs, but not now. A mac is quite literally the exact same thing as a PC, just with a TPM chip that serves no purpose other than restriction. A ps3 is not even close to the same thing as a 360.

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A mac is quite literally the exact same thing as a PC, just with a TPM chip that serves no purpose other than restriction.

Not true. You've obviously never owned a Mac computer. First of all TPM is used INDUSTRY wide, not just by Apple. If you want to restrict Apple from using it - then first tell Dell not to use it, or even Intel :) Any encryption-enabled app can use a TPM. On a Mac TPM keeps the encryption keys hidden in its hardware so that hackers can't tamper with them. This is a good thing. You have NO concept of what a mac is, just like you don't have any concept of what its TPM is used for. Looks like you got all of your 'education' on this topic from the Internet. Try again.

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Not true. You've obviously never owned a Mac computer. First of all TPM is used INDUSTRY wide, not just by Apple. If you want to restrict Apple from using it - then first tell Dell not to use it, or even Intel ;) Any encryption-enabled app can use a TPM. On a Mac TPM keeps the encryption keys hidden in its hardware so that hackers can't tamper with them. This is a good thing. You have NO concept of what a mac is, just like you don't have any concept of what its TPM is used for. Looks like you got all of your 'education' on this topic from the Internet. Try again.

Way to get all pissy.

I didnt say that other companies dont use TPM. All i said was that Apple's TPM chip is the only difference between a mac and a pc. And it is. Steve Jobs himself said they use off-the-shelf parts to build their computers. TPM chips arent a bad thing unless they are used for a bad purpose such as apple ant-competitive hardware restrictions. So why dont you stop jumping to conclusions about what i do or do not know.

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All i said was that Apple's TPM chip is the only difference between a mac and a pc.

NOT true. See below.

 

Steve Jobs himself said they use off-the-shelf parts to build their computers.

You must be republican since you seem to like to cherry pick and take everything out of context so well. Apple doesn't make processors, true. Apple doesn't make hard drives, true. Apple doesn't make memory, that's true too. They buy those parts from specific hardware companies. What Apple does do however is they ENGINEER AND DESIGN their products motherboards to meet a set quality standard. Every other product that is used in a Mac must meet those same set standards. This does not happen in a PC :( Try going to newegg and buy a Mac mini motherboard, it's not going to happen so there goes your 'off the shelf' theory. Anyone who has ever been in a products design (any product) knows that it's how that product is engineered that makes ALL of the difference in its quality. A fact you have never learned. So sure Macs and PC's both use resistors and capacitors, etc. but that's NOT the point, and that doesn't make them both the same.

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Do you seriously believe the difference between a mac and pc is the same as the difference between a 360 and ps3?

My pc has the ability to run OSX code. The only limitation keeping me from *legally* running osx on my home-built pc is coming from apple. In order to use leo they are forcing me to buy a mac computer. This is anti-competitive whether you want to admit it to yourself or not.

Can we drop the personal comments though, you are really just making yourself look like an ass.

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This is anti-competitive

Since it does not meet the requirements of being anti-competitive, it cannot be anti-competitive. The judge in this case will decide that matter, not you. Until then feel free to contact psystar with your views ;) If you truly want to learn about TPM and Macs then this is a good place to start. Enjoy. Obviously you'll see that everything you said thus far (half truths) has been wrong. If Pystar tried to build a Playstation 3 clone and market it as a Pystar Playstation 3 - see how long it would take for Sony to bring lawyers to their door. Apple develops, builds, markets, and sells their own products. Why is it that some people feel that Apple is the only company that should give up their rights to their own intellectual property? People just want to cash in on Apples hard work.

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Correct me if I am wrong, but didn't Microsoft get in trouble for making companies use their software with their OS...or something like that (I remember their was a huge law suit, but that was a long time ago)??...well what I don't get isn't that the same thing Mac is doing, by forcing someone to use their hardware to run their OS.

 

Also my next question is, is Psystar buying legal copies of the OS? If so, how is that stealing intelligent property?

 

I am honestly more fed up with Apple than I am with Microsoft...Apple has to be one of the biggest hypocritical companies out there. I am not asking for them to constantly upgrade their OS to work perfectly on every piece of hardware, but what is the big deal about letting someone installing their OS on a pc, as long as we paid for the OS...obviously they know that they could lose money from fewer hardware sales...but wouldn't their OS sells increase 10 fold?

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Correct me if I am wrong, but didn't Microsoft get in trouble for making companies use their software with their OS...or something like that

Not the same thing. MS (among other things) charged companies for their OS whether a computer was sold with it or not.

 

wouldn't their OS sells increase 10 fold?

No, but piracy would increase. Software is easy to pirate, hardware is not.

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If Pystar tried to build a Playstation 3 clone and market it as a Pystar Playstation 3 - see how long it would take for Sony to bring lawyers to their door. Apple develops, builds, markets, and sells their own products. Why is it that some people feel that Apple is the only company that should give up their rights to their own intellectual property? People just want to cash in on Apples hard work.

Nope. In order to run the PS3 games you need the PS3 OS from sony which they do not sell. Apple, however, makes osx a completely separate product from the mac computers. Take off your apple-goggles and look at this logically. It doesnt matter if apples products are made at a higher quality, they are still tying together two separate products which forces the consumer to buy both products even if he/she only necessarily wants to use one of them.

 

Im done debating this with you. You cant see past you apple fanboyism so its pointless.

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Apple, however, makes osx a completely separate product from the mac computers.

And how would you want Apple to integrate OS X for their own computers, put it on a chip? :D They CLEARLY make OS X for THEIR OWN products. The fact that it's available on a DVD is moot. Apple OS X updates are designed from the ground up to work with supported Apple equipment. For your information Apple is not the only company doing this. Try running Irix on a non-SGI workstation :) Regardless of your unrealistic sense of entitlement, Apple doesn’t owe the world OS X. It's THIER product, designed, and built with millions and millions of their own development dollars. Why should any other company now swoop in and steal what they've worked so hard on? It’s not anti-competitive, you are completely free to go and buy any other Windows, Linux, Unix, etc computer that you want. So OS X ‘looks’ for certain hardware when installed, big deal, so does vista and XP ;)

 

It doesnt matter if apples products are made at a higher quality, they are still tying together two separate products which forces the consumer to buy both products even if he/she only necessarily wants to use one of them.

But that is NOT your decision to make now is it? You didn't design and build OS X. You don't get to choose how either of those products should be used or marketed, Apple does. One day when you grow up and try to start your own company with your own products, paid for with your own money, you might understand why protecting your product(s) is completely legal and even necessary in the business world.

 

You cant see past you apple fanboyism so its pointless.

So you paint yourself in a corner because you have no facts to stand on, and that makes someone else a fanboy? LOL. What a joke :D

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Just to point out here, not sure if it has been said already.

 

But I think everyone here is forgetting that courts ruled that MS couldn't Make there own hardware & there own OS, so why is it okay for Apple to do so?

The key issue being that Apple has limited the OS to there platform, if not this puts them into the same bracket as MS, which in turn, there would be no more OS X.

Keeping my eye on this to see what happens.

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Thats really not the same at all. I cant run my ps3 games on a 360 because code built for the Cell cant run on the Xenon.

A moot point at best. If it were possible? Lets say it was possible to play a 360 game on PS3 and vice versa. Lets say they both shared the same processor and all you had to do is a little "tweaking" to the game to get it to load. Do you have the right to do so? Moreover should Microsoft now support PS3 games on their console? Metal Gear is an exclusive title to PS3. In this case are Sony and Konami being "anti-competitive" for not releasing an Xbox version? I mean all it takes is a few hacks and I can play it on my 360..

 

Just because you can do something, doesn't mean you deserve to or have the right to it.

 

Do you seriously believe the difference between a mac and pc is the same as the difference between a 360 and ps3?

My pc has the ability to run OSX code.

When Macs were PPC machines was Apple more or less "anti-competitive" then they are now? I don't get why the hardware has any bearing on the case of Apple being "anti-competitive". In the days of the PPC, if you wanted to run Mac OS, you needed a Mac, although there were Mac clones before. This isn't the first time Mac OS has run on non-Apple hardware and yet for the first time it's a serious issue.

 

I keep seeing a reoccurring sentiment in all of these posts. People think that just because they can do something, they deserve to.

Nope. In order to run the PS3 games you need the PS3 OS from sony which they do not sell. Apple, however, makes osx a completely separate product from the mac computers. Take off your apple-goggles and look at this logically. It doesnt matter if apples products are made at a higher quality, they are still tying together two separate products which forces the consumer to buy both products even if he/she only necessarily wants to use one of them.

Apple in fact doesn't sell Mac OS as a separate product. They sell an upgrade to the OS that comes preloaded on your Mac. Just because you can leave an Apple store holding a box containing Leopard doesn't mean you suddenly have the right to install it on whatever you want. The fact that the Leopard comes on a DVD is a moot point. The only reason it does is for consumer ease. Apple could easily institute a download only approach or sell a DVD that only contains the parts of Mac OS that have changed. Yet this all only further alienates and hurts their real customers.

 

Just because you want something, doesn't mean you deserve it. People have been wanting to run Mac OS on non-Apple hardware for years. Most of them because they can't afford a real Mac. Some of them because they want to use some bit of hardware that isn't supported by Mac OS anyway. In reality there is no real reason for not buying a real Mac IMO except for the cost. People want Mac Pro performance for half the cost. Well you can't always have what you want can you?

 

But I think everyone here is forgetting that courts ruled that MS couldn't Make there own hardware & there own OS, so why is it okay for Apple to do so?

Microsoft never made hardware. Incorrect. If Microsoft suddenly created it's own hardware and said you can only use Vista on that hardware, they could legally do so.

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NOT true. See below.

You must be republican since you seem to like to cherry pick and take everything out of context so well. Apple doesn't make processors, true. Apple doesn't make hard drives, true. Apple doesn't make memory, that's true too. They buy those parts from specific hardware companies. What Apple does do however is they ENGINEER AND DESIGN their products motherboards to meet a set quality standard. Every other product that is used in a Mac must meet those same set standards. This does not happen in a PC :thumbsup_anim: Try going to newegg and buy a Mac mini motherboard, it's not going to happen so there goes your 'off the shelf' theory. Anyone who has ever been in a products design (any product) knows that it's how that product is engineered that makes ALL of the difference in its quality. A fact you have never learned. So sure Macs and PC's both use resistors and capacitors, etc. but that's NOT the point, and that doesn't make them both the same.

 

 

WOW!!!

 

Talk about cherry picking.

 

True democrats don;t cherry pick. Just ask bill clinton. Ask him the definition of oral sex.

Hell, if I was EVER to use that very same logic on my wife, yeah, I would be forever speaking with a higher pitched voice.

 

Next time, limit your idiotic comments to the topic at hand and stay off the partisan kool aid

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Microsoft never made hardware. Incorrect. If Microsoft suddenly created it's own hardware and said you can only use Vista on that hardware, they could legally do so.

 

I know MS never Made Hardware!! My god, did you just see what you wanted to see in the Post?

I think you need to look at my POST again. MS did try to make HArdware for there Platform in early early 90's ( even maybe Late 80's ) bub, Get your facts straight before you try to point out that somebody is wrong.

Supreme courts ruled before they could even made 1 parts though.

Major thing that separates MS from APPLE

MS would still run on all PC's and ( MS Hardware ), but courts said this would give MS an unfair advantage.

 

Just to point out here, not sure if it has been said already.

 

The key issue being that Apple has limited the OS to there platform, if not this puts them into the same bracket as MS, which in turn, there would be no more OS X.

Or no more Apple, Highly doubtful.

 

Even if they win the Lawsuit, Apple will never support other platform because of this reason.

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