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ATPM 15.01
January 2009




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by Wes Meltzer,

Alpacas Cynics Foremost, Revised

Some of you might remember that the last time my column appeared in this space, we talked about a little company called Psystar that wanted to sell Macintosh clones from their sketchy office in a nondescript Miami industrial park. In July, I missed some important news, that Apple had filed legal complaints against Psystar, alleging that Psystar had violated their copyright. Psystar countersued with the argument that Apple was—you guessed it—violating antitrust laws. (I was skeptical of this claim in April.)

While I’ve been off the case, some of the reporters who did such a sharp job in April are still holding up their end of the bargain.

In late November, Psystar’s counterclaims against Apple were thrown out in court. Pamela Jones of Groklaw nailed the case: she waded through the document to find the pithiest ruling I’ve read since Republic of Bolivia v. Philip Morris. (Of course, I am not a lawyer. For all I know, pith is a quality that comes naturally to judges.) Judge William Alsop wrote, “The pleading as a whole does not allege facts that, if true, plausibly indicate that Mac OS is an independent, single-product market.”

On December 3, Jones reported that Apple had amended its original complaint against Psystar to include Digital Millennium Copyright Act violations (among other things). She noticed one really astonishing graf, one that sent a whole chain reaction of speculation across the Internet:

18. 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.

Jones described this as “the new paragraph that made my eyes bug out.”

Let’s go back over this, so we’re clear. The whole rest of this column hinges on that paragraph. Essentially, Apple is arguing that there are third parties (John Does 1–10) involved in the activities alleged against Psystar.

Macworld’s Jim Dalrymple and CNet’s Tom Krazit—who have also been on this since the beginning—interpreted this in its most direct sense, that Psystar has “backers” involved with the company. Dalrymple:

Documents filed with the court on Tuesday show that Apple believes Psystar may have backers involved with the company and Apple wants to know who they are.

And Krazit:

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.

John Gruber disagrees, because although it’s the most direct interpretation of the rulings, it’s not necessarily the simplest explanation. Gruber’s argument is that the John Does are not shadowy corporations or individuals seeking entree to the Macintosh market—they’re the OSx86 Project people, who have been attempting to make OS X run on generic PCs.

Gruber’s argument is persuasive, although I’m not as sure about the OSx86 Project. To assume that Psystar has shadow corporations backing requires assuming that the mid-1990s clone experiments had been a success for Power Computing, Motorola, Umax, et al., which they weren’t, really. And it requires assuming that someone wants to figure out how to get into a premium sector of the PC market without selling premium-level goods. The whole point of Psystar was to sell a Mac cheaper than Apple could sell it, but what you pay extra for isn’t necessarily the hardware or the software. It’s the gestalt, and it’s what makes a Mac different from a PC at the end of the day.

(Having said that, nota bene for Psystar: gestalt is not a component of a viable antitrust claim. Otherwise, Mercedes could sue Toyota for infringing on the German automotive gestalt with its high-end Lexus models.)

I’m not sure I can speculate on who the John Does are. The OSx86 Project makes sense, but why not just sue them separately? This is a point ZDNet’s Adrian Kingsley-Hughes (of Hardware 2.0) makes better than I could.

As you might expect, things spun out of control quickly here, with wild speculation about who the shadow backers were and whether there was some kind of conspiracy. If you want to get back to earth, read Dee Dee Warren’s legal blogging on the topic,

So, the world kept on turning. And Psystar filed an amended counterclaim, saying that Apple misuses its copyrights for OS X, according to Warren.

This filing was then misinterpreted—I can see why!—by several influential commentators, including InformationWeek’s Paul McDougall, Computerworld’s Gregg Keizer and Ars Technica’s Chris Foresman as saying that Apple hadn’t copyrighted OS X at all. I’m reasonably confident this isn’t what Psystar is claiming, after I read the entire ruling myself, but it certainly set off another round of wild speculation.

Foresman’s larger point about the case is worth looking at, beyond the narrow claim of non-copyright. It’s stronger on the technical merits than the other two articles, as you might expect. Foresman writes:

Psystar criticizes Apple for purposely adding checks in Mac OS X that prevent the OS from running on non-Apple hardware, describing in detail the methods Apple uses, such as the kernel entering an infinite loop unless certain CPUs are detected. In the next breath, Psystar denies that it creates or sells any computer with modified versions of Mac OS X that, as Psystar says, won’t run on unauthorized hardware. Psystar doesn’t explain how it enables unmodified Mac OS X to run on its hardware.


Psystar’s claims seem like reverse circular logic that spins so fast it collapses on itself to form a black hole, and then sucks reason right out of the universe.

I know I say this a lot, but I’m not sure what to make of this. All I know for sure is that it doesn’t sound like Psystar has a leg to stand on.

Andean Leftovers

  • A Q&A from Paul Kafasis (at O’Reilly’s Inside iPhone blog) answering some questions he had on the App Store from June—answers on questions about trials, upgrades, and other changes to the App Store.
  • Kafasis also had a really interesting piece on the way that the manner in which people shop for iPhone apps and the pricing models encourages the Walmart-ization of the App Store itself. (He links to a phenomenal Fast Company story about a lawn mower company CEO who turned down Walmart’s business.) Daniel Jalkut notes the same effect, adding that it’s hard to develop an application that’s worth buying for more than 99 cents when the ecosystem so strongly favors 99-cent applications. Lastly, Brent Simmons adds that, for all of its ups and downs, the App Store isn’t really a free market, because you can’t try the product before you buy it. That, too, strongly disfavors higher-priced applications.
  • Apple is now saying that 300 million iPhone applications have been downloaded from the App Store. That’s pretty impressive.
  • John Gruber has a specific bone to pick with developers using private iPhone APIs rather than the public APIs. I had no idea it was fraught with such peril, but, well, watch out.

That’s all I have in the notebook for this month. Hope you all had a nice holiday season. Now it’s time to buckle down until President’s Day!

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