July 15, 2008 11:19 AM PDT

Apple suit: Psystar's Mac clones must be recalled

Apple's list of grievances against Mac clone maker Psystar spans 16 pages, but, in the end, its argument boils down to the one expected. Psystar, Apple says, had no right to do what it did, and should be stopped and forced to pay.

Psystar's Open Computer, as seen shortly after its unboxing at CNET.

(Credit: CNET News)

In its lawsuit, a copy of which was seen by CNET News courtesy of our colleagues at ZDNet, Apple alleges copyright infringement, inducement of copyright infringement, trademark infringement, as well as a couple of other legal claims. It seeks any profits earned by Psystar from its Open Computer, triple damages for willful acts, a permanent injunction against the sale of the product, as well as recall of those units already sold.

"Apple licenses the use of its Macintosh operating system software for use only on Apple-labeled hardware," the Mac maker says in the suit (click here for PDF) adding that the only way to get a full version of the Mac OS is on a new machine. The boxed software product, it says, is only an upgrade version, valid only for upgrading an existing, Apple-branded Macintosh.

Apple argues that by selling the Open Computer in conjunction with a copy of the Mac OS, Psystar both infringed on Apple's copyright and induced purchasers to also violate Apple's copyright.

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The infringement, Apple says, "is and continues to be intentional, willful, and in conscious disregard of Apple's rights." It also alleges that its use of Apple's trademarks "is likely, if not certain, to deceive or cause confusion or mistake" over whether there is a connection between Apple and Psystar.

A Psystar employee told CNET News on Tuesday that no one was available to comment on Apple's suit.

However, Apple charges that Psystar owners and managers have admitted in public statements their knowledge of the existence of Apple's software license agreement and its terms.

Because the infringements were willful, Apple says it is entitled to triple damages.

A status conference in the case is set for October.

Mark A. Goldstein, a lawyer with the Westlake Village, Ca.-based SoCal IP Law Group, said Apple's case appears to be a "slam dunk."

"In view of the Grokster ruling, it's hard to see any viable argument (for Psystar)," he said.

"If Psystar only sold hardware without an OS or only with Ubuntu or MS XP, then the case would be wholly different," he said. "They could assert that there are substantial non-infringing uses. That is, a hardware maker/reseller should be able to sell a computer that can run multiple operating systems."

"That they are selling Apple OS leaves them open for direct and contributory copyright infringement," Goldstein added.

John Ferrell, chairman of the intellectual property practice at Carr & Ferrell, also wondered what legal theory Psystar will used to defend their cloning of the Mac.

"Using copies of Apple's operating system to build Apple look-alikes was thought to have been clearly settled in the 1983 landmark copyright decision that put the last of the significant Apple clone makers, Franklin Computer, out of the Apple business," he said in an e-mail interview. "Apple's Macintosh products are protected by a wide range of intellectual property assets including copyrights, patents, and trademarks. It's no (coincidence) that there have been no successful Macintosh 'me-too' manufacturers in the past quarter of a century."

Ferrell added that One Infinite Loop, the road that stretches through Apple's headquarters, "is littered with the wrecked business plans of companies that have tried to copy and sell Apple look-alikes."

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Add a Comment (Log in or register) 219 comments (Showing first 20 comments)
by humanssssss July 15, 2008 11:50 AM PDT
Infringe on copyright. That's hogwash, it's not like Psystar goes into the operating system and modify it in drastic ways.

Infringe on trademark. Psystar didn't call the computer Apple. What trademark? Apple should lose its trademark because Apple is a dictionary word. I wish someone will sue Apple so it loses its trademark that way it can't go after anyone for Apple trademark infringement. Apple will have to change its name or allow other companies to use Apple as its name, this will cause it to lose A LOT of money. If I have money, I'm going to do that.

Steve Jobs need to go to jail. He kept on suing people left and right. Karma is going to come to you batch.
Reply to this comment View all 6 replies
by Renegade Knight July 15, 2008 11:54 AM PDT
Overall it's mostly hot air. However it will test the waters in the shrink wrap lisence agreement. For example can the maker of a hammer lisence it's use with the restriction of only hitting nails and never cracking walnuts?

Outside of software products have uses beyond their intent and those uses are considered reasonable. A screwdriver to open a can of paint for example.

Personally I hope Apple loses. If they win (and the merit of that is absed on the "ugrade" nature of the product vs. a full copy which apparently you can't buy) I hope it's limited entirly to the OS so Psystar can send out XP and some instructions on how the owner can add versitility to their computer by installing the Mac OS should they have it laying around.
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by althebear972 July 15, 2008 12:13 PM PDT
Microsoft should write their TOS agreements to prevent Windows from running on Apple computers too. Why does Apple think it's OK to encourage that practise, and yet, when another company does the same thing, Apple gets a hissy-fit.

It's funny how people trash MS when Apple is the same or worse.
Reply to this comment View all 6 replies
by sshtdifferentday July 15, 2008 12:14 PM PDT
Unfortunately it looks like apple holds the whole deck. The license for all the Apple OS software states its an upgrade that can only be used on an Apple, Inc. made computer. If you don't follow those instructions you are violating the EULA. In addition, since Psystar does not have a license from Apple to put its OS on its machines, it is using the Apple, Mac, OS X, (whatever cat they are up to now) trademarks illegally to further their company's sales. That is copyright infringement.

Slam dunk for apple.
Reply to this comment View all 5 replies
by sinaloghavi July 15, 2008 12:37 PM PDT
I don't think they sold a whole lot of them since they ran into problems within 24 hours of launch. If so triple damage shouldn't be much!

sina loghavi
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by SmBizMan July 15, 2008 12:41 PM PDT
I secretly wish that someone from MS is fronting the money for this company, to draw attention to the wayward ways that Apple really does business.

Apple's licenses are socialist version of software.
Reply to this comment View all 4 replies
by montecristo1 July 15, 2008 12:42 PM PDT
Infringement on trademark? Entitled to tripled damages? Come on Apple, you should know a thing or two about infringement... you released a product nationwide knowing you didn't own the rights to the name...the iphone. That's right, Cisco owns iphone trademark. What about HTC Touch smartphone? HTC has registered "Touch" as a worldwide trademark. That didn't stop you naming your product the iTouch. Apple doesn't consider other companies when they infringed on their trademarks, but if you do to theirs...lawsuit! Here is more: Apple has been sued for patent infringement over the iPhone's visual voice mail feature;Apple sued over vague user interface patent ;Apple "knowingly infringed on copyrights", including the copyright of an artistic photographer and a song written in 1979;Apple sued over alleged iTunes patent infringement;Cisco sues Apple over iPhone name;Apple sued over iPhone Caller ID for Patent Infringement;Apple sued over iPhone touch-screen kybd... What most people are unaware is that Apple likes to settle out of court very quietly. It did so with Cisco. And with the sale of the iphone, ipod, and the itouch it seems they make a profit even if they settled the case. Apple should work with Psystar in giving them licences. Stop with the whining about copyright infringements! Like they say, when you point a finger at someone else- you have three pointing back at you.
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by Perry_Clease July 15, 2008 12:42 PM PDT
"Microsoft should write their TOS agreements to prevent Windows from running on Apple computers too. "

Yes, because using Apple's Boot Camp hurts the sale of MicroSoft's PC sales.
Reply to this comment View all 5 replies
by montecristo1 July 15, 2008 12:44 PM PDT
Infringement on trademark? Entitled to tripled damages? Come on Apple, you should know a thing or two about infringement... you released a product nationwide knowing you didn't own the rights to the name...the iphone. That's right, Cisco owns iphone trademark. What about HTC Touch smartphone? HTC has registered "Touch" as a worldwide trademark. That didn't stop you naming your product the iTouch. Apple doesn't consider other companies when they infringed on their trademarks, but if you do to theirs...lawsuit! Here is more: Apple has been sued for patent infringement over the iPhone's visual voice mail feature;Apple sued over vague user interface patent ;Apple "knowingly infringed on copyrights", including the copyright of an artistic photographer and a song written in 1979;Apple sued over alleged iTunes patent infringement;Cisco sues Apple over iPhone name;Apple sued over iPhone Caller ID for Patent Infringement;Apple sued over iPhone touch-screen kybd... What most people are unaware is that Apple likes to settle out of court very quietly. It did so with Cisco. And with the sale of the iphone, ipod, and the itouch it seems they make a profit even if they settled the case. Apple should work with Psystar in giving them licences. Stop with the whining about copyright infringements! Like they say, when you point a finger at someone else- you have three pointing back at you.
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by Penguinisto July 15, 2008 12:46 PM PDT
Damn... the nuclear option. I sincerely doubt they'll get anywhere outside of (possibly) the software updates issue.

OTOH, Given the relative sizes, it'll likely turn out that Psystar will probably go bankrupt before the outcome arrives.

As for recalling them? Heh... fat chance.

/P
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by ballssalty July 15, 2008 12:52 PM PDT
All Pystar had to do was not install the OS but provide instructions on doing so while providing both the computer and the OS. Therefore it is not violating any trademarks or copyrights. If they did that they would win this case. But if they are opening up the software and installing it on the system using a copy that is upgrade only, then they've got a problem.
Reply to this comment
by ballssalty July 15, 2008 12:52 PM PDT
All Psystar had to do was not install the OS but provide instructions on doing so while providing both the computer and the OS. Therefore it is not violating any trademarks or copyrights. If they did that they would win this case. But if they are opening up the software and installing it on the system using a copy that is upgrade only, then they've got a problem.
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by stalexone July 15, 2008 12:53 PM PDT
So is Psystar simply running a store in which the computer is sold on one hand and the software separately (uninstalled)? What they should have done is completely decouple the sale of one from the other (just like walking into any store) and let the user figure out that Open Computer really means open computer". They should have not advertised that OS X WOULD work on the open computer. They should have offered no support. To be really safe, they should have disallowed the sale of OS X even in the same shopping cart as the Open Computer (or placed them on separate invoices). They took none of these precautionary measures, got cocky, and are now screwed. On the other hand, it is Apple's fault if their "Upgrade" product actually installs on a machine with a blank hard drive. That is stupid, misleading, and basically shows extreme negligence...so they do not have this one "in the bag" as much as they'd like. By not following standards long established by other OS companies re: the Upgrade process, Apple is also clearly at fault....aiding and abetting the unlawful act. For example, I could go out and buy a computer that (by accident) allows me to install OS X (as it COULD have all 100% compatible OS X components). I'd be breaking the law by installing OSX but wouldn't know it. Would Apple have a case? I don't think so. But in Psystar's situation, they made it known that this system could run OS X and that is therefore a problem for their case.
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by fokkwp July 15, 2008 1:01 PM PDT
And of course Apple Music initially sued Apple Computer when they first stole their name, and that went on a long time. I assume Apple waited to see if Psystar would crash and burn, then probably tried to throw them off with a system update. I bet Apple would have preferred the lesson to be "Only Apple knows how to make a Mac" rather than "Apple has bigger lawyers than anyone else ("Sue Different" tm)."
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by v0dkacomradwe July 15, 2008 1:07 PM PDT
This is just a repeat of the decades old Apple-compatible saga (remember "Franklin", "Orange" et al?) from which Apple apparently learned NOTHING. Apple stifled openness and innovation on the personal computer then, and they are doing it now, in spite of making "appearances" that they are "not that kind of company". Then there's the urban myth that Bill Gates Let me tell you, I LOVED buying a decked-out Apple ][http://GS for $3,500 shortly after it came out and used to be a HUGE Apple fan starting with the Apple 1's...only about 1 year later after I bought that |http://GS for $3,500 shortly after it came out and used to be a HUGE Apple fan starting with the Apple 1's...only about 1 year later after I bought that ][GS Apple officially terminated support for that ][GS and said they were promoting some crap called the "Mac" (and they were crap for a long time after it came out...they still are far as I am concerned). I hear the same thing happened with the Lisa and Apple /// they pushed SO hard to sell...and then turned their backs on. I will never forget those stunts and you shouldn't either! "But wait!!", the Apple fanboys and girls cry out! "Apple is supposed my anti-Microsoft, they encourage openness, and innovation...they are my anti-monopoly, my saviour in an otherwise mega capitalist society where I should feel safe to curl up next to my StarBucks extra crappy latte, my Mac Airhead and iPid Ninny" Yup Apple is sooo great...that's why they turned to Intel-based hardware and gave up their OEM Mac hardware garbage (it really was garbage!), got rid of the crappy OS known as OS9 (and its predecessors) to go to a Linux-based kernel in OS10, welded their iPhones shut, put crappy batteries in them forcing them to be taken in for service (what we're too stupid to change batteries?!), failed to make iPhones activate when you bought them, ah I could go on...what's the point?). The point is that Apple is a company that has managed to survive on a wing and a prayer, whose success is based on flashy trends rather than measurable, sustained success over decades like other major technology companies yes Microsoft included! When the iPod, iPhone, and Macintosh are no longer the "in thing" to have or better and cheaper alternatives come out (which is already happening)...you will see Apple retreat back into the darkness again like it did until several years ago but still somehow manage to eke out a living. This is WHY Apple MUST defend their short-term gains and fight those such as Psystar, because God forbid there are other smart people and companies in the world who might make a better, faster, and cheaper widget out there...and Apple must smash them all! Gee, until now I thought the Apple folks always blamed the Microsoft folks for being this way? How ironic. In the meantime, PCs in all their forms from various vendors with Windows or Linux with TONS of software will be sitting there, continually improving over time as it always has...without Apple's help.
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by markur69 July 15, 2008 1:14 PM PDT
Looks like someone has overloaded or pulled plug on Psystar's domain... I was ont he forum earlier reporting about this and now I can't get in. Stay strong boys. Apple needs to be taught a lesson. I like Apple's software and system, but hell if I will be bullied by someone who has become way to corporate!
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by ittesi259 July 15, 2008 1:17 PM PDT
Apple didn't claim EULA in it filing....it claimed copyright. And since Psystar is actually ALTERING the software (and I don't mean via some stupid bootloader, but actually modifying OS software patches to force them to work on their hardware) that is indeed a copyright violation.

Plus its also deceptive to a customer to tell them they have Mac OS X (which is true out of the box) but after software updates they do not have the exact same code as a person using an Apple Computer.
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by trevorbsmith July 15, 2008 1:19 PM PDT
The people who are suggesting that Psystar can get away with what it has done are mistaken about the law. Copyright law gives someone ownership of software. That doesn't mean just one copy of it, it means every copy of it, EVEN IF Psystar makes those copies themselves. That's the whole point of it.

Psystar cannot sell copies of Mac OS X unless Apple gives them permission. To do so is to sell someone else's property and (presumably) make a profit from it. The alternative is that they only "gave away" Mac OS X and "sold" the computer. This is still illegal because in that case they would be giving away someone else's (Apple Inc.'s) property.
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by Perry_Clease July 15, 2008 1:20 PM PDT
"Looks like someone has overloaded or pulled plug on Psystar's domain"

It was down earlier today and then back up later. It may be a technical problem, they seemed to have the same problem back when they first started violating Apple's EULA
Reply to this comment
by mlinder69 July 15, 2008 1:29 PM PDT
Regardless of how you feel about the laws, how apple does business is exactly why I would never buy a thing from them, they suck far worse than MS every thought about.
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