The drama between Apple and Psystar began earlier this year when the mac cloner started selling machines with a hacked version of Apple’s proprietary OS X installed on them. Apple sued the cloners stating that they were violating its copyright and trademark laws.

In a 19-page order passed down on Tuesday, Judge William Alsup largely reject Psystar’s claims and granted Apple’s motion to have the countersuit thrown out of court should the clone maker not better its argument through an amended complaint that can be filed no later than Monday December 8th. Should the company fail to do so, all of its claims will be dismissed without leave to amend.

Central to Psystar’s complaint was that Apple’s Mac OS X operating system is not reasonably interchangeable with other operating systems such as Microsoft Windows and therefore comprises its own distinct market. The clone maker alleged that Apple has engaged in various forms of anti-competitive conduct in order to “protect its valuable monopoly in the Mac OS market” and that it has also run advertising campaigns to help define the Mac OS as a product separate and distinct from other operating systems, AppleInsider explains.

In response to Psystar’s argument, Apple’s argument made clear of the fact that a “market comprised of a single brand of a product is neither legally nor factually plausible.” Judge William Alsup agreed, “Whether products are part of the same or different markets under antitrust law depends on whether consumers view those products as reasonable substitutes for each other and would switch among them in response to changes in relative prices,” he wrote. “The counterclaim itself explains that Mac OS performs the same functions as other operating systems,” he wrote. “The counterclaim admits that market studies indicate that, although Apple computers with Mac OS enjoy strong brand recognition and loyalty, they are not wholly lacking in competition.” — “Psystar also points to Apple’s extensive advertising campaigns,” he continued.

“Those advertising campaigns more plausibly support an inference contrary to that asserted in the counterclaim — vigorous advertising is a sign of competition, not a lack thereof. If Mac OS simply had no reasonable substitute, Apple’s vigorous advertising would be wasted money. The advertising campaigns suggest a need to enhance brand recognition and lure consumers from a competitor.”

“Apple asks its customers to purchase Mac OS knowing that it is to be used only with Apple computers,” he wrote. “It is certainly entitled to do so.”

“For the above-stated reasons, Psystar’s claim that Mac OS-compatible computer hardware systems constitute a distinct submarket or aftermarket contravenes the pertinent legal standards, and Apple’s motion to dismiss Psystar’s federal counterclaims is therefore granted,” he wrote.

The primary case between Apple and Psystar over the products they are selling is still pending.

[AppleInsider]

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Let me preface the following by stating on record that I am an avid supporter of all Apple products, both hardware and software alike. I am writing this article on a Mac and I will continue to work with Mac products for, well, probably the rest of my life.

Okay, so now that we got that out of the way, allow me to speak candidly for a moment. There is a part of me that is secretly hoping that Psystar will prevail in their efforts against Apple to continue to freely distribute their open computer. In other words, be able to ship Apple software in non-Apple branded hardware. What the f$%@??!! You may be saying. But that’s right, I’m sticking to my guns on this one and I’m sure the are a few others out there that will agree. So what is the basis for all this Apple heresy?

It’s simple really. Apple has harbored a notorious reputation for selling over priced hardware. Whether you agree or not, there is not much in the way of denying that statement. The difficulty of accepting a statement like this, is taking into account how one measures and compares costs. While in numerous instances, you will find Apple’s entire Mac line to be relatively equivalent in price to PCs with comparable specs. Yet if you dig just a bit further, you will undoubtedly find numerous PC configurations with nearly identical, and in some cases more powerful innards than a Mac for a noticeably cheaper price tag. The logical explanation for this is simply that only Apple can make Apple stuff, which is why they remain the minority in the Personal Computer market. PCs on the other hand promote an open framework and allow for competition which has effectively lead to far greater choice and a buyers market. This being the case, one would more easily find a machine that suits their needs for a price that they can afford.

Don’t get me wrong here. Apple is a premium brand, and I do appreciate the level of quality that they maintain. There is valid contention for the fact that Apple makes top notch products. As is the case with luxury items in general, people know that they are paying extra for the sleek design and attention to detail. I will be the first person to agree with this as I am, and will always be a proponent for Apple products. Yet in today’s market, it would be foolish to assume that everyone can afford a machine that they so desire. It would certainly be a shame for those who know and appreciate the power and stability of Apple’s Mac OS X to have to resort to purchasing a machine with an inferior operating system.

While I’m not trying to spark price war comparisons, which can be debated forever, I do wonder what ramifications may ensue from having a company like Psystar legitimately make Mac clones. After running this question through my mind for quite some time now, I think that it would be a detriment to Apple as a whole, but I would like to see some healthy competition and room for consumers to purchase Apple software in cheaper hardware. Unfortunately, this is not entirely cut and dry as there are pros and cons to both sides of this argument.

One of the reasons that Mac OS X is so stable, is the fact that Apple knows exactly what hardware its running on. If for example, Leopard were available to all of the flavors of machines that run Windows, it may be susceptible to bad drivers, incompatible hardware, and corrupt updates, thus losing some of its credibility as an extremely stable operating system. Moreover, Apple is primarily seen as a hardware company, so if OS X was made publicly available, their hardware sales would suffer.

On the other hand, if companies such as Psystar had the legal authority to ship hardware with OS X installed, there would be room for healthy competition, giving consumers a wider array of choice. Let’s face it, users needs can differ dramatically depending upon what their interests or professions mandate. We can say, for example, that a professional user would require more configuration options and overall performance than an average user. While there are a wide array of configurations to outfit a Mac Pro, the cost of getting the level of functionality that they require can add up quick. Now if that same user, who much prefers OS X to any other operating system, is in need of a new machine, they better be prepared to spend some serious money, or settle for a weaker configuration. Without any other hardware options, this user would be, well S.O.L.

So what if Psystar prevails? Well, the first thought that comes to mind would be domino effect in the sense that if they are allowed to use Apple’s proprietary technology than anyone would be able to. This would open up a whole new world to hardware manufacturers, ultimately creating a highly competitive market. Consumers would gain a far greater amount of choice when it comes to finding a machine that perfectly suits their needs with a price they can afford.

While all of this may sound good to some, in theory, companies have been battling to gain access to Apple’s technology for years. Apple has clearly stated in the End User License Agreement, that installation of OS X on any non-Apple branded machine is strictly prohibited. While it is their legal right to make this statement, it can be construed as engaging in anti-competitive behavior, monopolizing an industry and thus negating the American principles of capitalism. Phew. Ok, so basically, while I do not fully believe that Psystar will win in the end, it is always nice to imagine what it would be like if they did.

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A press release that Psystar sent out today titled “Psystar Releases Blu-Ray, Nvidia 9800GT Before Apple,” directly mentions Apple’s decision to negate Blu-Ray from their current computer line. “Psystar is shipping Blue-ray® and 9800GT equipped computers before Apple’s release of these peripheral products on their own computers,” the release mentions.

Psystar is shipping Blue-ray® and 9800GT equipped computers before Apple’s release of these peripheral products on their own computers. Apple, developer of the OS X operating system, has chosen to delay support for Blu-ray® with Apple CEO Steve Jobs citing it as “a bag of hurt” during the recent release of the new Apple notebooks. Psystar president Rudy Pedraza countered:

“Blu-ray has already won the format war. Not only is there fully functional and mature support for Blu-ray in other operating systems but you can now rent Blu-ray discs from almost any rental chain. Blu-ray has become pervasive technology that is being widely adopted by consumers everywhere,” says Pedraza.

Pedraza also pointed out that “Blu-ray is not just for movies. The ability to burn 25-gigabyte discs is a feature that can help users in media editing or enterprise environments keep archives of large file sets. Our systems, regardless of configured operating system, can now provide this functionality.”

Psystar continues to explain that NVIDIA’s GeForce 9800GT graphics card is ideal for high-end gaming. “The GeForce 9-series has become ubiquitous in today’s PC hardware market although Apple currently does not currently offer the 9800GT on any computer,” they explain.

A quick jaunt through Psystar’s online store shows the possible configurations you can purchase. Specifically, the addition of a 6x Bluray Burner will run you around $350 extra. While some of the configurations and add-ons Psystar offers may seem tempting, it’s important to remember that these machines have not been built with proper cooling methods. Although they’ll sell you three 300GB 10,000RPM SATA drives for your machine, they won’t tell you how loud they are, how hot they’ll get, and that you shouldn’t run three hard drives this fast side-by-side without advanced air-flow and cooling techniques.

If you were expecting to see big public fireworks, and an intense legal battle drawn out over Psystar’s demise, you’re out of luck. Apple and Psystar are currently attempting to resolve their on-going dispute over through an Alternative Dispute Resolution (ADR), and are both set to appear before a judge on November 6th. Psystar continues to sell its Open-Computer amidst the legal drama, so only time will tell how this saga unfolds.

MacBlogz has approached an Intellectual Properties Attorney about the case who explains that, based on Apple’s licensing contract, Psystar is entirely in the wrong. Even so, the mac-cloner continues to sell its products directly against Apple’s legal demands. Psystar is pushing advertisements through Google Ads, and negatively which is surely to aggravate if not infuriate Apple’s legal team.

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Colby Springer, an attorney with legal firm Carr & Ferrell LLP who is on the team representing Psystar explains that the ADR is simply a “non-story.” It does not mean that both companies have suspended their legal battle in any way. “The Northern District [of California] requires you to go through ADR,” he said. “It’s standard practice, not for all courts, but the practice is growing. Quite frankly, all the talk about entering negotiations is really a non-story.”

As should have been clarified by writers, an ADR does not mean that both companies have reached an agreement, instead it was forced upon them by the courts in Northern California. “The case is very much alive,” Springer said.

Springer believes that the ADR and mediation will not help both companies resolve the dispute. He thinks that it will instead send the story on dual tracks instead of focusing on an ideal resolution. “This will go on a dual track now, the ADR and the case,” he said, “but the real story from our point of view is our objection to the Apple move to dismiss.”

In its motion to dismiss, which it filed Sept. 30, Apple said that the Doral, Fla.-based clone maker’s claim that Apple is a monopoly is “deeply flawed” and should be tossed out by U.S. District Court Judge William Alsup. Apple also asserted that it could not be compelled to license its operating system to rivals, such as Psystar. “Neither the federal nor the state antitrust laws require competitors to stop competing with, and instead to start helping, each other,” the computer maker argued.

Psystar rebutted Apple’s reasoning last week. “Apple is nothing if not tenacious, having previously asserted this very same argument in attempts to dismiss antitrust claims related to Apple’s iPod, iTunes Music Store, and iPhone ending in the Northern District of California,” Psystar’s lawyers said. They cited several rulings, including one by the Ninth Circuit Court of Appeals, that denied other Apple motions to dismiss antitrust cases brought against those product lines.

As it currently stands, both parties have filed documents and are moving forward with mediation, and are scheduled to argue their motion to dismiss before a judge on November 6.

Click here to get caught up on the saga between Apple and Psystar.

[MacWorld]

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While browsing the web on my iPhone, I came across a suspicious and rather out of place Psystar advertisement on a few of my favorite websites, and quickly saved the bizarre image. The 300×250 square ad had the usual “Ads by Google” underneath it. Clearly this wasn’t an ad campaign run through a sales department, or ad network, however simply a brunt push through Google Ads.

The above advertisement is for Psystar’s “Open Computer”

Whether the sites that were showing the Psystar advertisement knew it, or if the ads were simply showing up by default, is unconfirmed. But my instincts tell me that the second these ads were found by most publishers, the Psystar name was banned through their ad campaign managers or Google Ads accounts. As a web publisher, if you sign up for an account with Google Ads, you are given authority to decide which websites or companies are allowed to advertise on your site. Unless you configure the settings correctly, you may occasionally get some ads that are unwanted on your site.

Apple and Psystar have recently decided to work through their legal issues with an ADR (Alternative Dispute Resolution). This allows the ongoing proceedings and final outcome of the case to remain as private as possible, and also allows Psystar to negotiate (through a mediator) with Apple, instead of having to plunk down piles of cash (which they probably don’t have) on a legal team. The final decision in whether Psystar is able to continue selling the Open Computer or not, has yet to be determined.

Either way, Psystar’s decision to advertise through Google Ads, with the clear intention of getting their Open Computer ads on numerous tech sites, shows that the company may have some brass after all.

Update: The image above is another Psystar advertisement I found on the web moments ago.

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