Apple

Psystar lawyers have begun deposing Apple executives in the copyright infringement lawsuit brought by Apple last year, the Mac clone maker announced.

Surprisingly, it seems that Psystar executives are actually enjoying themselves. In a Thursday post on its Web site called "A taste of their own medicine," Psystar seems to gloat over the fact it is now deposing several Apple executives. "For the past week and for the following ten days we will be doing depositions of some of Apple's highest level people. After numerous depositions of Psystar employees and associates the shoe is finally on the other foot, oh the joy!"

Apple accused Psystar of copyright infringement after it began making Mac clone computers and selling them with Mac OS X installed. Apple's license agreement clearly states that the operating system can only be installed on an Apple-labeled computer.

Psystar is even allowing its customers to submit questions to ask the Apple executives, according to a report on AppleInsider. The company said it will take the top 10 questions to each executive deposition.

According to the blog post, Apple executives being deposed are:

• Aug. 07 -- John Wright -- OS X -- Senior Software Manager
• Aug. 12 -- Kevin Van Vechten -- OS X -- Software Engineering Manager
• Aug. 13 -- Phil Schiller -- Marketing -- Senior VP Worldwide Product Marketing
• Aug. 14 -- Mike Culbert -- Mac Hardware -- Senior Director
• Aug. 18 -- Gary Thomas -- TBD
• Aug. 19 -- Simon Patience -- OS X -- Head of Core OS
• Aug. 21 -- Mark Donnelly -- Apple -- VP Finance and Worldwide Business management
• Aug. 21 -- Greg Christie -- TBD
• Aug. 21 -- Bob Mansfield -- Mac Hardware -- Senior VP Mac Hardware Engineering

Psystar said these executives were chosen because they are the most knowledgeable in their field.

The company kicked up the rhetoric a notch since changing lawyers in July. Psystar is now being represented by Houston-based Camara & Sibley, which is also defending convicted music-pirate Jammie Thomas-Rasset.

Psystar filed for bankruptcy protection in May, which normally could shield a company from its legal woes. But Apple asked the court to lift the automatic stay of proceedings in the copyright case. Apple won its argument, and a new trial date has been set for January 11, 2010.

Illinois residents Daniel and Barbara Owens are suing Apple, accusing the company of fraud related to its iTunes gift cards.

(Credit: Apple)

The suit, filed Wednesday in U.S. District Court in southern Illinois and obtained by CNET, shows that the couple is seeking monetary damages for Apple's "wrongful, illegal, improper and fraudulent acts."

The Owens claim that Apple markets the gift cards as selling individual songs on iTunes for 99 cents each. The couple argues that not all songs in the iTunes Store are that cheap--some actually cost $1.29. They contend that they have been "denied the benefit of their bargain to purchase any song" from iTunes for 99 cents.

In April, Apple changed the pricing structure of the iTunes Store from 99 cents per song to a variable model in which songs cost 69 cents, 99 cents, or $1.29. The Owens say they purchased several iTunes cards including two $25 cards on March 1, 2008, from Sam's Club and a $15 card on May 19, 2009, from Wal-Mart.

Apple has expanded its presence in many retail outlets over the years, allowing stores like Target, Wal-Mart, Best Buy, Walgreens, and others to sell gift cards.

The company is being sued on four counts including two counts of breach of contract, one count of violating the Illinois Consumer Fraud and Deceptive Business Practices Act, and one count of violating the Consumer Protection Statutes.

Apple could not immediately be reached for comment.

Apple wanted Psystar back in court, and now it's going to happen.

An automatic stay of proceedings imposed when Psystar filed for bankruptcy in May has been lifted by the court, according court documents shared with CNET News.

Judge Robert A. Mark, who serves the Southern District of Florida U.S. Bankruptcy Court, lifted the stay on Friday, opening the door for Apple to continue its copyright infringement case against the company.

Apple made a strong case for having the stay lifted, noting that Psystar filed for bankruptcy after a motion was granted compelling Psystar to give Apple additional documents. The bankruptcy filing also came just before a scheduled deposition from Psystar.

Apple cleared the way for the bankruptcy court to lift the stay by agreeing that it would not try to collect any monetary damages against Psystar if it won the infringement case. That was also a condition imposed by Judge Mark in making his ruling.

It seems clear that Apple feels it has a strong enough case against Psystar to win a favorable ruling or it would not be pushing so hard to get the case back in court.

Apple insists that its Mac OS X license agreement (PDF), which users must agree to before installing, should stand up to the court's scrutiny. In fact, the agreement clearly states that the operating system can only be installed on an Apple-labeled computer. That should leave any clone maker without a leg to stand on.

Apple has been dealing with several clone companies this year, but the Psystar case is the furthest along, so it makes sense for Apple to see it through.

If Apple were able to get a favorable ruling, it could use that precedent as a deterrent against other companies that want to get into the Mac clone business. RussianMac and PearC have started selling clones in Russian and Germany, respectively, and Quo Computer opened the first Mac clone retail store in Los Angeles.

Does Apple think the Palm Pre, shown here, rips off the iPhone? We might find out later this year.

(Credit: Corrine Schulze/CNET)

Like most people who paid attention to Consumer Electronics Show earlier this month, Apple noticed the Palm Pre.

In response to a question from a financial analyst about Palm's new smartphone and its multitouch interface, Apple COO Tim Cook, without addressing the Pre directly, made sure that everyone on Apple's quarterly earnings call Wednesday knew how Apple feels about intellectual property.

"We will not stand for having our IP ripped off," Cook declared, perhaps firing a shot across the bow of Palm and executive chairman Jon Rubinstein, a former Apple employee. To be clear, Cook did not accuse Palm of such an act, explicitly saying "I don't want to talk about any specific company."

But the context--in which Cook was being questioned about the rising threat to the iPhone from competitors like Research In Motion, Google, and Palm--was clear. Palm showed off some some remarkably iPhone-like traits on the Pre earlier this month, such as swiping the screen to move between windows and using multitouch gestures to zoom in and out of Web pages.

Palm--full of ex-Apple engineers brought over by Rubinstein--has not announced a launch date for the Pre yet, but Apple is clearly watching developments closely. Cook promised to use "every weapon at our disposal" if the company felt the iPhone's intellectual property was at risk, and I'd bet a house in Puerto Vallarta that he's talking about Apple chief legal officer Daniel Cooperman.

Psystar is pursuing a new legal argument in its uphill fight against Apple.

(Credit: Psystar)

Psystar is still tilting at legal windmills in its battle against Apple, this time asserting its right to do whatever it wants with products obtained legally from Apple.

After a judge rejected Psystar's antitrust argument--considered its best chance of continuing to sell its Open Computers with Mac OS X preinstalled--the Florida clone maker was allowed to amend its claims against Apple to include other arguments. It has already suggested that Apple is abusing its copyright on the operating system, and now it plans to argue that since Psystar legally purchased its copies of Mac OS X from Apple and resellers, it has the right to do basically whatever it wants with that software under the first-sale doctrine.

Computerworld spotted court filings to that effect submitted by Psystar last week. Here's a key passage:

Once a copyright owner consents to the sale of particular copies of a work, the owner may not thereafter exercise distribution rights with respect to those copies. See, e.g., Bobbs-Merrill Co. v. Straus, 210 U.S. 339, 350-51 (1908) (recognizing more than 100 years ago the concept of first sale and the limitations imposed upon a copyright owner in light thereof). Psystar acquired lawful copies of the Mac OS from Apple; those copies were lawfully acquired from authorized distributors including some directly from Apple; Psystar paid good and valuable consideration for those copies; Psystar disposed of those lawfully acquired copies to third-parties.

The problem with this argument is that courts have rarely agreed that the first-sale doctrine applies to software, considering software a product that is licensed, not sold, and can therefore have restrictions attached. There was a case involving Adobe that concluded otherwise, but for the most part courts have tended to side with the software developer.

Apple and Psystar are scheduled to meet next week to discuss the case and the latest arguments.

Psystar is now trying to argue Apple is abusing its copyrights in prohibiting the use of Mac OS X on non-Apple computers.

(Credit: Psystar)

Having run into a roadblock in its attempt to fire back at Apple, Psystar is changing tactics.

Court filings this week (click here for PDF) indicate that Psystar is dropping its argument that Apple is violating antitrust laws--which Judge William Alsup has already rejected--in favor of a new argument that Apple is abusing its copyright on Mac OS X to stifle competition. The Mac clone maker is attempting to stay in business against long legal odds by trying to convince a court that Apple's licensing policies for Mac OS X are unfair and illegal.

From the filing:

Psystar alleges that by virtue of Apple's leveraging of copyrights in the context of Apple's EULA, spurious litigation via the DMCA, and various other anti- and unfair competitive conduct, there is no viable alternative to the purchase and use of Apple-Labeled Computer Hardware Systems for users who wish to use the Mac OS, for a prospective buyer of the Mac OS, or for a user of an older version of the Mac OS.

Psystar further argues that Apple includes code in Mac OS X that causes "kernel panic" if that operating system is installed on anything other than an Apple computer. The company knows this, of course, because it has to bypass those checks in order to get Mac OS running on the Open Computer.

The idea behind the new complaint is that other parties have successfully argued that copyright abuse can have the same effect as antitrust behavior even if the strict tests needed to assert antitrust conditions are not met. But as with Psystar's other legal claims, it could be a long shot.

Apple and Psystar will argue the merits of the new complaint on January 15 in San Francisco before Judge Alsup.

Is another company backing Psystar's Open Computer? Apple wants to find out.

(Credit: Psystar)

Apple has amended its lawsuit against Psystar to allow for the possibility that other parties are backing the company.

When companies file lawsuits, they'll often tack something like "John Does 1-50" onto the list of defendants, in order to allow for the possibility that other parties to the case who have yet to be discovered could be added at a later date. Apple did not do that the first time it filed suit against Mac clone maker Psystar, but has tacked such a paragraph onto an amended copy of its lawsuit against the company, as noted by Groklaw.

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

It's always been a bit puzzling to ponder how Psystar emerged seemingly overnight with designs on challenging one of the tech industry's richest companies, retaining one of Silicon Valley's star law firms along the way. And it made ambitious, expensive claims, such as attempting to argue that Apple was in violation of antitrust law by refusing to license Mac OS X.

With that claim having been shot down by a judge, Psystar appears to be on borrowed time. There's no evidence that has surfaced tying Psystar to anything but the Pedraza brothers of Southern Florida, but if the company is forced to shut down, Apple may try to go after any person or organization that backed Psystar in an attempt to recover damages.

Apple also tacked on a DMCA (Digital Millenium Copyright Act) claim onto its complaint this week, alleging that Psystar is improperly modifying the code that prohibits upgrade copies of Mac OS X from being installed on anything but a Mac that has a previous version of the operating system already installed.

Apple and Psystar have agreed to pursue a mediated settlement to their legal dispute over Psystar's Open Computers.

Psystar's Open Computer, the source of the legal dispute between the clone vendor and Apple.

(Credit: James Martin/CNET News)

The Mac Observer turned up a court filing from earlier this month in the Apple-Psystar case noting that the two parties have agreed to participate in the Alternative Dispute Resolution process. As you may recall, Apple sued Psystar earlier this year for copyright infringement after Psystar began selling low-cost Open Computers with Mac OS X preinstalled. Psystar then countersued Apple on antitrust grounds.

ADR, as it is known, is a way to bypass the costly legal process as well as keep the outcome private, which is one of Apple's favorite words. I downloaded the document in question from the U.S. District Court of Northern California's Web site (click here for PDF), and it says that Apple and Psystar have agreed to three portions of the ADR process: non-binding arbitration, early neutral evaluation, and mediation. The parties have agreed to hold their sessions by January 31, 2009.

It's not exactly clear what Apple and Psystar are thinking with the decision to choose this path. If Apple loses the case, and Psystar is allowed to continue selling Mac OS-based Open Computers, it won't really matter if the outcome is kept private, since the availability of Open Computers will tell the tale. If Psystar is forced to stop selling Open Computers with Mac OS, we'll likewise notice that.

Psystar has never appeared to have a ton of resources to use on its behalf, despite hiring a big-time Silicon Valley law firm to represent it against Apple. So it might very well be interested in a cheaper method of resolving the dispute, especially if Apple has the upper hand.

And Apple may very well not want to concede in a public courtroom that Psystar has a chance of proving its antitrust claim that the relevant market for this case is Mac OS computers, rather than just personal computers in general. That could hurt Apple in other antitrust cases it's facing regarding iTunes and the iPhone.

A young software developer has decided to pull his iPhone game from Apple's App Store because it was too similar to the classic arcade game Tetris.

Noah Witherspoon, a college student in Atlanta, created a free game called Tris for Apple's handset platform. But Apple recently contacted Witherspoon to let him know that the Tetris Company, which licenses the eponymous video game, had notified it about copyright and trademark infringement claims against the app.

Witherspoon wrote on his blog that he has chosen not to take the matter to court and will pull the game on Wednesday. "I'm a college student, and not an affluent one, and I simply do not have the time, energy, or resources to fight this battle right now," he said.

He added, though, that he believes the Tetris Company has "little to no legitimate legal claim, and (is), presumably, relying on my being a small developer with insufficient resources to defend myself."

Apple has removed several applications from the App Store on its own for various reasons, including one called "I Am Rich," an application that did nothing but cost $1,000.

Copyright and trademark claims are a more complicated matter in the game world than elsewhere on the Web, something that came to light in the controversy over Scrabulous, an unauthorized clone of the classic board game Scrabble that rose to fame on Facebook's developer platform and was pulled after legal complaints.

The creators of Scrabulous, which was generating ad revenue, relaunched it with a redesigned game board and new points system under the name Wordscraper.

Likewise, Tris creator Witherspoon says he's not through yet. "I don't think this will be permanent; when I have the time and can find a good copyright lawyer, I'll be figuring out exactly what my position is and how I can make Tris available again," he wrote on his blog.