Apple may have a hard time shutting down the new maverick Mac-clonemaker Psystar, say legal experts.
Psystar, a Miami-based IT services company, started advertising the $400 OpenComputer this week. It's a generic PC that comes with Leopard, Apple's latest operating system, pre-installed.
And while Psystar may be violating Apple's end user license agreement, or EULA, by doing this, legally there's not much Apple can do about it, says Raj Abhyanker, a patent lawyer who used to write patents for Apple.
"Basically, when people go to a store or download software, they have a license with Apple to use this patented software on their computer. But breach of contract is one of the weakest forms of legal disputes," Abhyanker says, referring to EULA violations.
The emergence of an unlicensed Mac clonemaker is a sign of Apple's growing market power. The Cupertino company sold more than 2.3 million Macs during the first quarter of 2008 -- a growth rate that's more than 2.5 times that of the overall PC market, according to research firm IDC. Apple had an official clone-licensing program in the mid-1990s, but Steve Jobs killed it in 1997 after returning to lead Apple.
Based on the company's website claims, engineers at Psystar appear to be emulating parts of the Mac firmware on a Windows PC -- fooling Leopard into thinking it's running on top of genuine Apple hardware.
Psystar claims it can successfully install Leopard's kernel straight from the OS X disc using an EFI (Extensible Firmware Interface) emulator and a few drivers to ensure everything runs smoothly. What's more, Psystar is offering the pre-installation of Leopard for free if you order its budget Mac clone, the $400 OpenComputer, and purchase a copy of Leopard.
Abhyanker, an attorney who used to write patents for the Cupertino company and now runs his own patent firm, says Apple will have trouble preventing companies like Psystar from selling Leopard systems, especially now that Apple uses the same hardware as 99 percent of the rest of the PC industry.
In terms of a deterrent, Abhyanker says suing another company for violating a contract doesn't even come close to a tort or patent infringement case.
"Those types of litigation ultimately have a lot more remedies for a plaintiff," he says. "But if you look at breach of contract, it's usually limited (depending on the state) to the amount of services or the amount of goods as subject to the contract. The maximum damage Apple would be able to claim is the price of Leopard -- actually, the OEM (original equipment manufacturer) price of Leopard, which might be a few dollars."
Even then, Apple may not be able to sue Psystar directly because the company may be buying legitimate copies of Leopard from a distributor. In that case, the distributor would be liable for a breach-of-contract suit.
The problem, say lawyers contacted by Wired.com, is that breaking a EULA technically isn't illegal (it's not a signed or executable contract) and penalties tend to vary from state to state, making it very hard to stop.
"Generally speaking, these user agreements are much weaker than other forms of litigation," says Ted Man, a lawyer specializing in intellectual property and patents. "They're way more problematic, too. It's like going into an ER -- those incredibly broad license agreements they make you sign where you're basically signing away your life. Companies make them as broad as possible but there's no way to basically enforce them. It's a scare tactic, a way to say, hey, we're reserving all these rights," says Man.
If Apple sued Psystar, a private company, it would likely need to come up with a much better legal basis -- something like patent or copyright infringement, or misappropriation of trade secrets. Even then, says Abhyanker, it's not clear that Psystar is violating Apple's patents or trade secrets. For a patent infringement lawsuit, Apple would have to clearly show it had claims to patents on the particular simulator methodology Psystar is using -- which it may or may not have.
"Based on the fact that there's more than 20 years of emulator software out there, I don't see how they could claim infringement narrowly enough for what this particular company is doing," Abhyanker says.
In a famous 1983 case, Apple Computer, Inc. v. Franklin Computer Corp., Apple successfully convinced a California court that computer software in electronic form could be protected by copyright.
Engineers at Franklin Computer copied parts of Apple's operating system for the Apple II computer so it could also run on the Franklin Ace computer. Apple filed suit claiming copyright infringement and, while a judged initially sided with Franklin, in 1983 an appeals court overturned the ruling, saying that operating systems coded in computer hardware are subject to copyright.
While Apple could likely tie Psystar up in litigation by filing patent or copyright lawsuits, the better choice may be technical -- issuing OS X firmware updates.
"Apple issues regular updates to Leopard," Abhyanker says. "Future revisions might require massive changes to the way [Psystar] sells software in this virtual environment and usually these things don't last long unless there's some sort of agreement."
In the end, the clonemaker is always playing catch-up and it ends up being caught in a compatibility nightmare.
Psystar did not respond to multiple requests for comment, nor did Apple.
