Cupertino (CA) – Apple is no longer putting with a small Florida business that has hacked Mac OS X Leopard to run on cheap Intel-based PCs: Psystar made headlines by offering "cheap Mac alternative", teasing Apple with a sub-$400 desktop Mac clone and a $1599 Xserve clone . After months of unusual silence, Apple has brought its legal cannons in position.
 
Law firm Townsend and Townsend and Crew has filed the lawsuit for Apple, accusing Psystar of copyright infringement, according to Jorge Espinosa's blog. Earlier this year, the Apple community was stunned when Psystar began promoting and offering cheap bare-bone PCs that can run a hacked Mac OS X Leopard. Apple was expected to react quickly with legal force, but the Mac maker was unusually quiet on the matter, even when Psystar repeatedly said that a lawsuit wouldn't hold up in court.

Conspiracy theories claimed that Psystar was Apple's own idea and that the company may be open to Mac cloning once again. However, Apple is now clearly showing that cheap Mac clones are not in the company’s business plan. It seems that Apple has put a lot of effort in preparing this case and it can’t afford to be defeated: Psystar victory could open a legal floodgate for other vendors to build cheap Mac clones.

What got Psystar in trouble is messing with the Extensible Firmware Interface and hackery the company employs to trick Leopard into thinking it is running on a genuine Mac. Besides hacking, Psystar also sells retail copies of OS X Leopard and Leopard Server to its customers. In doing so, Psystar is violating the Mac OS X End-User License Agreement (EULA), which explicitly prohibits anyone from selling and installing the Mac OS X on non Apple-hardware without Apple's consent.

Another problem for Psystar is the fact that it has developed a custom installation that mirrors official system updates from Apple. Basically, the company used the copyrighted files from the Leopard install CD and the latest update from Apple's servers in order to hack the code and distribute a custom update to users who previously purchased its Mac clone systems. This is a direct copyright violation as no-one but Apple is allowed to mess with the operating system code base.

Although enthusiasts have been running hacked OS X on bare-bone PCs with not-so-great success, the procedure is un-reliable and the lack of OS X-compatible drivers for anything but the electronics that Apple uses puts limits at such efforts. But Psystar has carefully designed its system so that it mostly matches Apple's hardware, meaning it runs OS X without hiccups.

However, Apple circumvented this trickery with the Leopard update, forcing PsyStar customers to postpone the update until PsyStar releases its own scripted installation. Basically, it's a piece of software which downloads Apple's official update, applies a patch to break Apple's fix and then upgrades a user's Leopard installation. Psystar recently followed Apple's release of the Leopard 10.5.3 update with its own scripted installation that continues to fool Leopard into thinking it is running on a genuine Mac, even after the 10.5.3 update is applied.


Does Apple violate U.S. antitrust law?

We will have to wait until we have more visibility what the outcome of this case may be. Psystar could settle with Apple, but it could also be forced to stop selling Mac OS X and advertise its machines as "Mac clones." If Apple decides to press the matter further and seek damages, Psystar could easily end up in bankruptcy.

The company previously stated it could counterclaim that Apple's EULA violates U.S. antitrust regulations. But Psystar has gone to great lengths to hide itself publicly, providing only email and phone support as the main point of contact. Because of that, many had doubts about its existence initially. AppleInsider has been able to contact Psystar earlier and get in contact with an employee who would only reveal his first name (Robert).

He offered an interesting perspective about the case. "What if Microsoft said you could only install Windows on Dell computers?" he asked. "What if Honda said that, after you buy their car, you could only drive it on the roads they said you could?"

Law expert Jorge Espinosa thinks Apple will easily rebuff such an argument. "Statements that Apple's license might violate U.S. monopoly law have been attributed to Psystar employees," he said.

For once I would like to see Apple lose!!!

Jul 16, 2008 01:22     

Apple has been flexing a very arrogant muscle in the marketplace maybe even more so than Microsoft.Stooped to a pathetically weak marketing ploy aka the PC vs Mac.I have had a better Mac experience running Windows XP which is fine by me at the moment. In regards to why I truly wanna see them lose is that competition breeds more choices, better prices, and better support.Apple has become a Phone/TV/music conglomerate where computers are just objects in this very "me,me,me" lifestyle they have unleashed on the world.That was such an 80's attitude and remember what happened back then.

Well, well, well report abuse vote down vote up Votes: +13

Interesting Argument

Jul 16, 2008 06:56     

I've always thought it's an interesting argument by Psystar, however vs a slew of Apple lawyers, more than likely they will be on the lost cause side. I've always thought that one of the key inhibitors to Apple really, truly gaining market share in the desktop/laptop arena (for those who believe the Apple commercials...they are still ridiculously far behind Windows based PCs.) that opening of the EULA to allow for other hardware platforms would really give Apple a push in that arena if they wanted to. Unfortunately for any Apple fans out there, I highly doubt this will happen anytime soon.

Da Man report abuse vote down vote up Votes: +5

what if...

Jul 16, 2008 08:22     

I believe microsoft use to have a policy where when dell, hp, and others used their OS then they could not use any other (though at the time there were no others... so I suppose its a moot point). and if Honda only drove on honda operated roads then honda would go out of business. Mac has a game plan, and though they could easily open source OSX for use on all intel computers while jacking up the price to be just under the cost of windows and make a killing, I really don't think they want to get that big. Mac is small, very small. they only have about 5% of the over all market because of their pricepoint, and they seem not to want to get bigger than that. OSX's ability to be innovative is because they aren't worrying about hardware compatability, odd 3rd party software people who should never write software to begin with, and the viruses that come from being 90% of the market. they are a closed loop, and I think they will stay that way simply to keep their name and elete status. they keep their expenses down and their profit margins high, and I think that is a good game plan, though I really do wish that psystar would open them up for the rest of us.

caeden report abuse vote down vote up Votes: +1

Psystar could win if they fight

Jul 16, 2008 08:52     

But this could take years and I doubt Psystar has enough cash to take on Apple. Apple would have a very hard time proving it's hardware is proprietary and deserves a proprietary OS. A Mac is nothing more an a PC with a fancier off the shelf BIOS and a different OS. Which is why it's able to run Windows nativity now.
Action Jackson report abuse vote down vote up Votes: +1

Initially, they didn't hack OS X

Jul 16, 2008 09:10     

1.) The article is wrong. Initially, they didn't hack OS X as you stated they "hacked Mac OS X". They hacked a firmware that resides on a chip on the motherboard, the OS X was left intact, 100% genuine OS X. That's how I installed it on my hackintosh. 2.) I like what the Psystar employee said "'What if Microsoft said you could only install Windows on Dell computers?' he asked. 'What if Honda said that, after you buy their car, you could only drive it on the roads they said you could?'" I've thought about this for a long time and that's the reason why I haven't bought a Mac yet. Sorry apple. Apple just knows that once OS X can run on a regular PC they'll loose tons of business selling overpriced hardware. They're going to defending this to the death (well, not really) so the have a reason to sell (overpriced) hardware along with their OS

nobody report abuse vote down vote up Votes: +4

Psystar History

Jul 16, 2008 09:17     

Well I'd say Psystar knows they are in trouble as their website is down. Either they got scared and took it down or were forced to remove it I'd say that's it for them. They had to know they would get in trouble for this. Does Apple's EULA break US antitrust laws? Possibly, but that is not for Psystar to decide. What they did was still against their EULA and until changed by Apple, through a decision of their own or by the courts, Psystar was still breaking the rules.

Trilox report abuse vote down vote up Votes: +1

They have it.

Jul 16, 2008 09:21     

Action has a point, and so does Psystar, if Windows can run natively on a Mac, why does it deserve a proprietary OS?
Revrant report abuse vote down vote up Votes: +2

If Pyster's argument is right, why not you allow me to share your money?

Jul 16, 2008 09:56     

Mac OX X is created by Apple and so, has the rights to manage and license the software as Apple wishes. Apple created the good software in order to sell their hardware. This is their plan and their business model. This is not able anti-trust. Please don't use this on private properties.
PoorGuy report abuse vote down vote up Votes: -5

If Microsoft had the same bussiness practices they'd be sued...

Jul 16, 2008 10:31     

I've been making this argument for years, It's about time somebody told Mac they are breaking the law.
SilverDraco report abuse vote down vote up Votes: +4

sucks, but Apple will win.

Jul 16, 2008 11:27     

While what Apple does is "low" and below levels even Microsoft reaches, it is their right and they will win this battle. What's really sad is that Apple has no problem with Windows being run on theirs "Mac's" but don't like the idea that us PC enthusiests might want to dual boot OSX, and understandably so, they sell their hardware at such an extreme markup that even all of the OSX sales for Clones wouldn't make up for it. Apple is the king of scam artists, they always will be. People bash MS on a regular basis when they aren't even close to as evil as Apple.

crawlgsx report abuse vote down vote up Votes: +2

@PoorGuy

Jul 16, 2008 12:10     

do you understand the word "monopoly" or how about "antitrust" why do you think that MS got hit with BILLION $$$ fines with the EU ... for the same reason
09 F9 report abuse vote down vote up Votes: -4

No antitrust issue here

Jul 16, 2008 12:59     

The claim that Apple may be violating antitrust law is wishful thinking. Antitrust law doesn't apply unless someone has a monopoly. Apple is only 5% of the PC market. Since they aren't even close to a monopoly they can get away with tactics that M$ can only dream about. As for the commenters who think Apple doesn't "deserve" to have a proprietary OS...um, what does that have to do with anything? Sorry, but what they "deserve" to have is only relevant in the minds of tech fans.

Chuck Darwin report abuse vote down vote up Votes: -3

No antitrust issue here

Jul 16, 2008 13:00     

The claim that Apple may be violating antitrust law is wishful thinking. Antitrust law doesn't apply unless someone has a monopoly. Apple is only 5% of the PC market. Since they aren't even close to a monopoly they can get away with tactics that M$ can only dream about. As for the commenters who think Apple doesn't "deserve" to have a proprietary OS...um, what does that have to do with anything? Sorry, but what they "deserve" to have is only relevant in the minds of tech fans.

Chuck Darwin report abuse vote down vote up Votes: -2

re: No antitrust issue here

Jul 16, 2008 13:53     

You just need to prove Apple has a monopoly in their nitch. 95% of all macs sold run Mac OS. That sounds like a monopoly to me! Their only saving grace might be that a mac can run windows, but that didn't work for MS when they said you could run Fire Fox or Netscape and you don't have to use IE. They still got slapped with anti-trust because they controlled to much of a nitch.
Ricko report abuse vote down vote up Votes: +0

Apple can't write its own rules.

Jul 16, 2008 14:02     

It honestly doesn't matter what OS X's EULA says if it's not legally valid. It's just like a contract. And contracts have to meet certain legal criteria to be considered valid, and I do think Psystar makes a really good point when they argue that Apple's EULA doesn't meet this criteria. That being said, there are obviously a number of issues here, and should Psystar wish/be able to fight Apple on this I don't think either company will get the outcome they're hoping for.

no report abuse vote down vote up Votes: -1

Nothing Anticompetitive Here, Move Along.

Jul 16, 2008 16:01     

Apple is competing in the OS market by selling the complete package. If you want their OS you are limited to the hardware they sell it on. There are plenty of other OSs out there. No one, Apple included, is forcing you to go with theirs. Contrast that with MS, who did everything they could to wipe out competing OSs in the early stages to establish themselves as the only game in town. Anyone remember their "partnership" with IBM for OS/2? How about the $50 fee they hit OEMs like Dell with if they decide to go with a flavor of Linux? You don't want OSX? Fine, go with Windows, Linux, that new incarnation of OS/2, whatever. You want it, but not on their hardware? Hard cheese, but you're not in their target demographic because they make their money on the machine, unlike other OS vendors.

Cromag report abuse vote down vote up Votes: -1

Oh so making it think it is on a mac is illegal?

Jul 16, 2008 16:06     

Legal issues notwithstanding, if the computer can "make" the OS think it is ON a mac, and it RUNS on the computer that it THINKS is a mac, hmmm maybe it shouldn't be illegal since the OS DOES run on the pc.. I think if a computer can RUN the software then apple shouldn't have a leg to stand on. If it works, it works, and apple should have to write an OS that literally cannot run on a non apple computer before they start bitching about how it's wah wah illegal. Hey apple if you want your monopoly then make sure it don't actually work on a non-mac.

MorituriMax report abuse vote down vote up Votes: -1

Money talks

Jul 16, 2008 16:08     

Today, sadly, it isn't about whether you are right or wrong, it's how much money you can spend to crush other competitors under the legal machinery. I think apple will just drown these guys with money. How exactlys is this very different from when people started making ibm-clones that were able to run the same software on reverse engineered cpu's?
MorituriMax report abuse vote down vote up Votes: +1

Apples run windows, so...

Jul 16, 2008 16:12     

So how exactly is it legal for apple to run windows software on macs? Isn't their system the "complete package?" If they say you can only run OS X on their computers since that is what their computers are built for, how do they then say, "but wait you can also run windows on our macs."
MorituriMax report abuse vote down vote up Votes: +2

Re: antitrust

Jul 16, 2008 16:17     

Antitrust law applies in cases of anticompetitive behavior - not just monopoly situations. Apple sells a product - Mac OS - then tells its customers that they can only use Mac OS on an Apple-approved system, when the only thing preventing someone from installing on regular PC hardware is a chip with no purpose other than to prevent installation on a regular PC. Its the same thing as Sony telling you that you can only use you Sony-brand BluRay player with a Sony-brand TV - or JVC saying that you need to buy JVC speakers in order to listen to music from your JVC car stereo (not that, to my knowledge, either JVC or Sony is guilty of any such thing).

Andrew report abuse vote down vote up Votes: +1

Size doesn't matter (necessarily)

Jul 16, 2008 19:31     

Do a google search on BSDI v. AT&T According to one of the BSDI principals, AT&T was outspending them 10:1 in legal fees but lost anyway. (settled out of court). Yes, the little guy can win. ...or at least draw. I am not saying that Apple will loose, but they certainly are shooting themselves in the foot. -- k.
Kenyoni report abuse vote down vote up Votes: -1

Anti-trust and monopoly?

Jul 16, 2008 21:09     

Apple is not the only one in the hardware and software industry. You have plenty of choices out there. No on is forcing you to Apple and you still can do all the stuff available on Apple with other hardware and software. So, where's the anti-trust or monopoly is? I am curious to why there is no one sueing companies: 1. Making exclusive games for a specific console platform. 2. Making movie on specific BluRay/HD-DVD ROM. 3. Making movie and music on specific store/online store. To my feeling, Apple is really making the cool hardware and software but most just don't want to pay for it and demand Apple to lose. You need to pay for the perofrmance and usability!

PoorGuy report abuse vote down vote up Votes: +1

Great point!

Jul 17, 2008 01:37     

"How exactlys is this very different from when people started making ibm-clones that were able to run the same software on reverse engineered cpu's?" Fantastic...but to take it a little farther, how is it different than renaming a cloned operating system MS-DOS instead of PC-DOS? It isn't, and that's how Microsoft was born. Can you IMAGINE what would happen today if you took a proprietary OS like Apple's and cloned it so that it would run on all computers while marketing it as your own???

zooterboy report abuse vote down vote up Votes: -1

Clone wars

Jul 17, 2008 08:12     

I have this strange feeling of deja vu. Back when Apple was sueing everyone they could for copying their look and feel (which they stole from PARC) I always wondered why they hadn't simply done what Microsoft had done and licence their OS for other hardware. At the time Mac OS was clearly superior to Windows (which was on version 1 or 2), and the Mac hardware was clearly very overpriced for what you got.

TV John report abuse vote down vote up Votes: +0

Re: (which they stole from PARC)

Jul 18, 2008 08:52     

Wrong, Apple payed Xerox for the UI, then greatly enhanced it. The Xerox PARC interface was very primitive before Apple got it's hands on it. You could move a mouse pointer around and click on an icon. Windows existed, but I don't think they could be moved or overlap. I can't remember if you could drag things around or not.
Ralf The Dog report abuse vote down vote up Votes: +2

The ability to run Windows on a Mac is irrelevant.

Jul 18, 2008 09:13     

Microsoft chose to allow DOS and Windows to run on open hardware. Microsoft makes money from software. Apple chose not to open their hardware. Apple is a hardware company. They do not make money from selling software. They sell the software to support people who buy their hardware. Apple decided early on they did not want the Apple market contaminated by garbage hardware (Garbage hardware would Damage Apples reputation). the one an only time they tried, it was a disaster.

Ralf The Dog report abuse vote down vote up Votes: +1