Comments on: Apple sues clone maker Psystar

The suit was filed July 3 in federal court. The real question, what took Apple's lawyers this long to take action.

[humanssssss]

@sanenazok

If the EULA states that it will kill you if you don't continue to pay for the product after the first purchase, and consumers who just "I Agree" without reading would be binded to the license?

This argument of yours is voided because the law would prohibit such provisions to be enforceable.

The only legal position Apple has is the DMCA. The DMCA in a nutshell allows the manufacturer to sue anyone selling a derivative of their device by circumventing its protection. This is hard to prove in court because Apple financially gain from the purchase of Leopard. When a company financially gain from a purchase and sue the consumer of said product for monetary damage, the court would side with the purchaser of the product.

[Vegaman_Dan]

Here's a sticking point to that- Psystar is paying full retail price for the OS. That means there is no more money for Apple to be making from that sale of the OS. There is no financial damages.

Now you might try to argue that people buying such equipment are only buying the OS instead of a full $2-3K system from Apple, but that's called competition, not theft.

This is going to be an interesting one to watch. In any result, Apple comes off looking very bad to consumers and that's not the group you want to upset.

[ittesi259]

Apple can claim financial harm in the fact that customers who have never owned an Apple computer would have to buy an Apple computer to run their OS. Because this is not happening, Apple is being harmed from the loss of hardware sales.

[sanenazok]

Exaggerations galore!

Sure a contract that promises to kill you would not be enforceable, but commonplace terms are OK. Contracts are extremely hard to void, especially since PsyStar KNEW what they were doing was against the contract. It's not like PsyStar was unaware of Apple's terms they willingly broke them. Sorry, companies can enforce their own terms on the product licenses, including limits on changes to the product or limits on use of the product. Clickwrap licenses and limits on sales are so common and uncontroversial that this EULA challenge will go nowhere fast.

[The_Decider]

Clicking a button on an installer is not the same thing as signing a legal contract

[sanenazok]

Actually, clicking on "I agree" is the same as signing a paper contract. That's what Clinton's digital signature act was about. Geez, think what would happen if it wasn't: every time you bought software, the maker would force you to print out, sign, and mail to them the signed EULA. Stupid, stupid waste of time and money.

[The_Decider]

Sanenzok,

There is a huge difference between setting up and using a digital signature and clicking a "I agree" button. It is not even close to the same thing.

[Vegaman_Dan]

And all the company has to do is simply include a sealed copy of OS X with the platform. They can even tell you exactly how to install it on the hardware itself. Apple allows you to buy OS X separate of a computer- they have no right to say what you do with it after it has been sold. Since the EULA is for the end user and not for any retailers in between, Apple is completely without any case in this situation.

Should be a good test of the EULA though. I'm kind of surprised Apple is doing anything now since it is very likely that they will lose this, which opens up the flood gates. This seems like a bad move on Apple's part. It would be cheaper and safer to simply by the company out.

[Penguinisto]

For once, you've written a post that I can agree with almost perfectly.

The only thing I can think of otherwise would be the "flood gates" comment. Sure, if Apple loses the case then other clone-makers would arise... but Apple can just as easily stop selling retail copies of OSX as well, instead providing restore disks with each Mac sold, and downloads of OSX upgrades for purchase to registered users with existing Macs.

All that said, I can also see Apple washing their hands of clones, by simply modifying the EULA to state "we will not provide any support or warranty with this operating system if it is not installed in an approved Apple-manufactured computer"

/P

[Vegaman_Dan]

I don't see Apple ceasing the sale of their OS separately. That hurts the existing users too much. Forcing existing customers to buy a new computer every time there is a new OS out and available would be a fast way to alienate those loyal customers. You might try a secured update method, but again, it isn't likely to work. A subscription based system *could* work, and one that the OEM's are shifting to anyways. This may push it forward for OS udpdates.

If Apple modifies their EULA to not support the OS on non-OEM hardware, they are admitting defeat. That does open up the third party market for clones. I don't think anyone buying a Psystar unit expects support from Apple's Tech Support line in the first place. Perhaps they do, but if so, they are misguided.

Unless Apple can completely squash this company and send the threat of legal destruction to anyone who even thinks of doing something similar, then we're going to see a bunch of startups making custom OS X systems, and likely *better* quality than what Apple provides since they would be more customized and less mass produced.

It's going to be an interesting one to watch. It's definitely a David vs Goliath sort of situation here and nobody is rooting for Apple in this case. I'm not sure how Apple can come out of this one with any sort of respect. I know it's to protect their property, but at what cost to their reputation and image?

[FellowConspirator]

Apple has an infringement claim. The EULA never enters into it.

As for including Mac OS X, that would have been a different story, but Psystar doesn't do that because they can't. The fact remains that there are still tangible differences in the Apple and Psystar hardware -- the most important being that Psystar uses mainboards that boot using a traditional BIOS, whereas Macs use EFI-based updatable firmware and PRAM. Psystar has to introduce a hack to get their machines to boot, essentially tricking the Mac kernel into thinking the EFI exists. This introduces a problem in that every update to the OS has the chance of bricking your computer (especially if there's a firmware update), so Psystar instead sets up customer machines to point to their servers to receive updates, then Psystar downloads the Mac updates from Apple, tests them, and sometimes makes modifications to them, then pushes them to their servers to serve up to their customers.

It's the modification and redistribution of Apple software updates that Psystar is currently getting sued over.

[Penguinisto]

@FellowConspirator: There are numerous Non-Apple EFI motherboards for commercial sale, and from every major mobo manufacturer. EFI is not exclusive to Apple by any means.

The Software Updates issue depends on how they are handled. If the patches that threaten to brick the install are simply excised, then I doubt Apple would have much of a case here... now modifying software updates would be sticky at best. Do you know of any precedents that would parallel such a situation?

[The_Decider]

FellowConspirator, I am not sure why you persist on trying to separate EULA's with copyright. EULA's restrict copyright law, that is their whole purpose in existing. You can discuss EULA without bringing up copyright law.

[sanenazok]

"Apple has no right to say what you do with it after it has been sold." That's what the EULA is for, it states what rights Apple retains.

Even if PsyStar had sold a sealed OS X with an empty computer they would be liable. Given that installing OS X on a non-Apple computer is a breach of the contract (license agreement) then providing the means to do so is inducement of breach of contract.

You guys think it's easy to void a contract? Guess again. It's nearly impossible to win on an unconscionably argument or something analogous which you want PsyStar to use. The EULA is just another contract. If PsyStar goes to court to complain about the terms, any judge will tell them to sell a different brand of OS if they don't like Apple terms. PsyStar is not entitled to sell Apple computers.

The first sale doctrine would only apply to resale of the physical OS X disk, not the contract breach (or inducement) claims.

[Vegaman_Dan]

sanenazok wrote:

"Even if PsyStar had sold a sealed OS X with an empty computer they would be liable. Given that installing OS X on a non-Apple computer is a breach of the contract (license agreement) then providing the means to do so is inducement of breach of contract. "

I don't buy that argument. If that were the case, then every retailer that sells the software would be liable for any and all actions that those customers do with that product. Best Buy can and does sell Apple's OS X. They do not require any sort of proof on the customer's part to show that they will only install this on an Apple product. Even if they could, they have no means to enforce it. No, I disagree with this point. As long as the box is sealed and uninstalled, then that product can change hands many times before the EULA comes into play.

[Penguinisto]

"You guys think it's easy to void a contract?"

If said contract violates existing rights or existing laws (e.g. First Sale Doctrine, Fair Use, etc), then yes, it is very easy to do so.

[The_Decider]

So now you think that the act of buying something makes the purchaser bound to the EULA he/she hasn't even read yet?

Seriously????

Being an Apple supporter is one thing, acting the same way as the idiotic MS shills is something else entirely.

[tacit]

"Apple does nothing about Chinese iPhone clones that violate every imaginable copyright, trademark, patent and so on."

Apple can't.

American law does not apply in China. The Chinese legal system is notorious for permitting theft of intellectual property, and there's little that Western companies can do about it, because the laws here or in other Western countries don't apply in China. Pretty straightforward, really.

[codecat]

I'm a former Mac user. I got sick of the elitist attitude from the Mac community, not to mention the high prices of Apple products. In my opinion Apple has become a worse monopoly than Microsoft could ever dream of. They control the hardware, and software.

I'm behind Psystar, and the original Mac Clones like Power Computing that Steve Jobs decided to put out of business.

[ittesi259]

Love your stereotyping.....I own a Mac, I must therefore be an elitist....nice. Thats about as productive as me saying, you don't use a Mac, you must love viruses. Neither is productive, so lets just stop the friggin name calling and discuss the issue at hand.

[skillingssucks]

"I'm a former Mac user."

Sure you are.

[open-mind]

You don't seem to understand the difference between a market (like computer operating systems) and a product (like OS X). Monopoly rules apply to markets (not products), and Apple has less than 10% of the OS market.

[humanssssss]

@open-mind

He was talking about Mac OS on top of computer market. Apple has 100% of the said market. With Paystar this will reduce MacOS on top of computer market and create a more vibrant hardware market for MacOS.

[The_Decider]

I would love for you to show me who sells a machine with 2 quad core Xeon processors for cheaper than Apple.

Don't even think of comparing the crappy quad core processors in $900 Dells with the higher end quad core chips from Intel that Apple uses.

[iertry]

How is it greedy to stop others 'stealing' your product and making money off it? Like someone else said MS is regarded as greedy for trying to monopolise the browser market. Apple only sells Mac OS X on apple built computers and Psystar is violating the terms of the Mac OS X eula. Apple has every right therefore to sue them as the are illegally elling Apple's product.

[Vegaman_Dan]

You've got to be careful with such a broad statement. Just saying it's illegal for anyone but Apple to sell their products or make money doing so just accused the entire retail industry.

It's not clear yet in the story if Apple is going to go after Psystar for the OS EULA violation, modifying and distributing updates from Apple, or the cheeky fact that Psystar is making a product that people want and Apple doesn't. We're seeing all sorts of claims flying around here but very little actual fact. Once the lawsuit is posted, then we will all know exactly what they are accusing Psystar of.

[The_Decider]

Who is stealing?

[Perry_Clease]

" Apple has become a worse monopoly than Microsoft could ever dream of. "

Apple is not a monopoly.

[Seaspray0]

Psystar will be in the clear because they did not have to agree to the EULA. It's the end user who actually starts up the computer who is presented with the EULA and must agree to it before the OS completes the installation. So, who would be the one responsible for EULA violations? The end user. Unless apple gets all the sales records from psystar, they're not going to know who to go after.

[sanenazok]

They agreed to the EULA to install the software...or OS X installation is really stupid.

[The_Decider]

Sanenazok,

Do you really that that clicking a button in an installer is legally binding? Surely you aren't that dumb.

[open-mind]

Even if Apple loses this case (which I doubt) they still have another simple option. That is to market their own low-priced expandable tower system. Apple does not have any product in that space, and that's the only reason Psystar has been successful so far. If Apple competed against Psystar (even at a slightly higher price), Psystar would disappear.

[Perry_Clease]

"Psystar will be in the clear because they did not have to agree to the EULA. It's the end user who actually starts up the computer who is presented with the EULA and must agree to it before the OS completes the installation."

Maybe, in the situation where they are shipping the clone and OSX without OSX pre-installed. When Psystar pre-installs OSX then they the ones violating the EULA.

Whatever, it is up to the courts now, unless the parties settle out of court.

[stix213]

@humanssssss

The first sale doctrine is not as cut and dry as you think, and there is conflicting case law on the issue that has not yet been resolved by the supreme court.

http://en.wikipedia.org/wiki/First-sale_doctrine

But based on the majority of existing case law:

Since Psystar is agreeing to the Eula themselves when installing Mac OS X on their machines, then they are entering into a license agreement with Apple themselves, and are not merely reselling the product as if they had only purchased the CD/DVD and the customer installed the software.

Since Psystar is entering into a license agreement with Apple instead of just being a retailer of software to their customers (who then enter into the license agreement themselves instead of Psystar entering into the license agreement and then transferring the license to their customers), the first sale doctrine no longer applies. The first sale doctrine does not apply when software is licensed, only sold.

If Psystar sold their Mac clones with no software installed, and sold an unused copy of Mac OS X to the customer as well, then the first sale doctrine WOULD apply and Psystar should be safe... since Psystar themselves wouldn't be agreeing to the EULA license terms. The problem again is Psystar in entering into a license agreement with Apple by installing the software themselves, and then transferring the license to their customers... so the terms of the license apply both to the customer and Psystar, instead of applying only to the customer if Psystar had not installed the software themselves.

Your argument that EULA licenses don't apply merely because it is possible for someone to write potentially anything in them, does not hold water either. The license contains this clause in section 12:

"If for any reason a court of competent jurisdiction finds any provision, or portion
thereof, to be unenforceable, the remainder of this License shall continue in full force and effect"
http://www.apple.com/legal/sla/

This type of clause allows companies to put anything illegal or ridiculous they want in a license, and the courts can then justly rule that part is illegal... but the remainder of the license still applies, including the part about not installing on non-Apple hardware, which is perfectly legal no matter how you don't like it. Courts have upheld this type of license clause numerous times.

Apple can say in their license that they get to kill all their customers' first born children... and then the courts will then say no they can't, but they will still say you still can't install Mac OS X on a clone and then transfer the license to a customer of your Mac clone.

humanssssss, please know a little about what you are talking about before you start spreading lies next time, will ya?

[humanssssss]

@stix213

Understand the distinction between selling a license and a product. Both are sales. The first sale doctrine applies to both. Because both dealt with sales.

What you are saying is a contractual agreement not a licensing agreement. In a contractual agreement, there are provisions that are necessary to satisfy a legal binding contract. Contracts are very limited in the transactions, they often come into picture when it comes to real estate sales. A license agreement as a sale to consumers is very limited in legal rights and the first sale doctrine applies strongly and many other local laws which you have no clue of. Say, if a county bans the sale of MacOS, it is within the county's right to do so and it's legal.

So you see, you are confused by your interpretation of the First Sale Doctrine. This confusion of yours leads you to calling me a liar. But in fact, your misinterpretation makes you out to be a liar. ciao

[sanenazok]

In order for this to work under the theory of "sale of license" both the buyer and the seller have to be in compliance with the license terms. Here both buyer and seller are using an unlicensed product so this idea doesn't take you very far. Also, look at the first sale doctrine (Sec. 109). It requires a physical embodiment to be transferred. I.E. the transfer of the OS X disk from PsyStar to its customers would most likely be OK since that's the physical embodiment. The transfer of the unlicensed copy on the computer does not fall under the first sale doctrine.

The first sale doctrine has its own exceptions: the seller can't make his own copy (as Psystar does) and the sold copy has to have been authorized by the copyright holder.

Psystar has only one authorized copy of the OS X- the one on the CD. As soon as OS X is copied to the hard disk of an unauthorized computer the first sale doctrine is out.

[The_Decider]

sanenazok,

Now you are just being idiotic. Buying a retail version of software is now "unlicensed"?

It is not like Pystar bought one copy and burned copies for each machine they sold.

[humanssssss]

@stix213

And do you know what the definition of a sale is?

If you couldn't figure what a sale is ... then whole argument you make is not logical and consistent. It makes you out to be umm... stewpid.

[letsgethightech]

It just goes to show you that a Mac can be made much cheaper and doesn't have to cost TWO GRAND!

[Penguinisto]

A Mac Mini costs $500.00 or so. *shrug*

[kuhdep71]

Unfortunately they are doing more than just re-selling the OS. They are modifying copyrighted code (as in updates) to work with their computers. This in itself is a violation of US copyright laws. So regardless of first sale doctrine they have no legal right to change the code to make it work with their hardware.

[The_Decider]

Care to prove that?

It is my understanding that any modifications come from the part of OSX that is open source, or is actually seperate code that is running instead of the Apple bootloader, making it very legal to do so.

[sanenazok]

Tiny difference- the guy selling computers on eBay was selling otherwise licensed copies. Software manufacturers like Apple and MSFT "win" hundreds of cases against people who try to make a quick buck selling unlicensed stuff.

[The_Decider]

Pystar is buying legal, retail copies.

Seriously, enough with the brain dead shill nonsense.

[Vegaman_Dan]

Out of curiousity for the legal types out there- what are the penalties for violating the EULA? Are they legally enforcable? Do the penalties need to be spelled out verbosely in the EULA itself? If the penalties are simply that the end user loses any and all support from Apple, then there's no problem. If there is a fixed monetary amount associated, perhaps Psystar simply pays that fine as a 'fee' and still are good. Unless it is specifically spelled out in the EULA what the financial penalties will be, I'm not sure there is much that can be done about it.

EULA's are still largely a mine field of unproven ground. I'm sure a lot of OEM's will be watching this with interest. I wouldn't be surprised to find Psystar with some big name backing for legal assitance from those companies interested in making any sort of EULA ruling fall their preferred way.

Interesting.

[Dave Jones--2008]

I'm not sure Apple is suing Psystar for violating the EULA. I think it's more about them modifying the OS so that Apple can't "brick" the boxes after a software update.

[hawkeyeaz1]

The EULA is between the customer and the Apple. Psystar doesn't have to agree or disagree with the EULA to do what they do.

However, Apple could make a case that by installing the OS, Psystar is accepting the EULA as the end party, but that one will likely only get a few miles before falling apart, as the validity of the EULA and resale doctrine are a very good defense on Psystar's part.

[Perry_Clease]

"EULA's are still largely a mine field of unproven ground. I'm sure a lot of OEM's will be watching this with interest. I wouldn't be surprised to find Psystar with some big name backing for legal assitance from those companies interested in making any sort of EULA ruling fall their preferred way."

Possible

[xbrando7]

It really is weird that it took apple this long to finally take action against pystar. I would never go for that thing anyway, it lacks some of the most important features of existing, genuine macs. But as i was saying, it clearly says not to install any mac software on non apple labeled machines in the apple EULA. With such a public display of rule-breaking, I can't see why apple didn't jump on this right away.

[SirHomeALot]

Wow, someone should challenge Apple's EULA. Since when should a company be able to dictate what kind of machine should run a particluar piece of software, if you're paying for the software? Imagine if GM said you could only drive their cars on roads that met a certain speed rating, or that had a certain grade of asphalt? Craziness.

[Gromit801]

RIAA has already won those cases. You may have bought the CD, but you can't make copies and send them everywhere.

It's called intellectual property.

It's a slam dunk for Apple.

[humanssssss]

I agree with you. Fck Apple! If you bought something, it should be yours and if they don't want to sell, that's their fck'n problem. When they do and take my money, they better hand over the ownership.

[The_Decider]

Gromit,

I agree with you except for the fact that is not what Pystar is doing. Not even close.