Intellectual Property

Mac Clone Maker Sued by Apple – FINALLY!


For intellectual property lawyers, the March announcement by Psystar Company that it had developed and planned to sell a fully functional clone of Apple, Inc.’s Macintosh computer was a lawsuit waiting to happen! So we waited. And waited.   Well, this week, Apple finally filed a lawsuit in the U.S. District Court for the Northern District of California alleging trademark, copyright infringement, unfair competition, and a host of violations of Apple’s system software licensing agreement.
 
Florida-based Psystar began selling its clone Macs aptly named “Open Mac” in mid-April. At the time several media outlets and bloggers were skeptical of the company’s claims and noted that Psystar’s address changed several times on its website. There were even comments by some who went to the addresses listed on Psystar’s website noting that the locations ranged from empty lots to open fields. Of course, suspicion only grew more intense after Psystar changed the name of its Mac Clone to “Open Computer.” Die hard Mac users wondered aloud if this alone was enough ward off the juggernaut.
 
In June, seemingly unfazed and unrepentant, Psystar added OpenServ, a clone of Apple’s Xserve server. Psystar advertised Open Computer models for as low as $399, with a comparably equipped Mac computer selling for nearly three times more. The Open Computer as packaged was a brick. If you wanted Apple’s operating system OS X, users would have to shell out an extra $155.
 
Apple contends that, according to the terms of its licensing agreement, OS X (which signifies the tenth generation of its operating system), cannot be installed on non-Apple labeled computers. It its complaint, Apple states that it never consented to Psystar’s use of the Apple trade name, and that Psystar’s use of the logo, the Macintosh name and other intellectual property will likely, “if not certainly”, cause consumer confusion as to the origin of the computers.
 
So why did Apple wait four months to raise an eyebrow. Regrettably, there are very few who knew what went on behind the scenes or what conversations, if any, took place with Psystar. Those who do know are most likely bound by attorney-client privilege. In addition, Apple may have been absolutely stunned that a web-marketed product would have the audacity to call itself “Open Mac.”   It is hard to believe that Psystar would enter the Mac clone market without a litigation strategy and some deep pockets to keep its lawyer’s fees paid for the foreseeable future. Can there be something more? Is there a hole in Apple’s copyright and licensing program? While highly doubtful, it is not impossible. Armchair quarterbacks in the legal community have always complained that Apple’s End User License Agreements were too restrictive and may amount to contracts of adhesion. Could this be part of Psystar’s legal strategy? We can only speculate, but it appears that Psystar is ready for a fight. In an article for Information Week ((http://www.informationweek.com/news/hardware/mac/showArticle.jhtml?articleID=209100376), a person claiming to be a Psystar employee said the company welcomed a legal challenge from Apple. “What if Honda said that, after you buy their car, you could only drive it on the roads they said you could?," said the purported employee who only identified himself as Robert.
 
It its prayer for relief, Apple is seeking actual and statutory damages, treble damages, attorneys’ fees, a permanent injunction against sales of Open Computer and Open Serv and an order requiring Psystar to recall all of product sold. In light of Apple’s claims, reports of Psystar’s death, however, may be greatly exaggerated. As of today, its website was still up and running and with a couple of swift clicks, users can add Open Computer to their virtual shopping carts. So at least for now, it looks like Psystar is digging in for a fight and hoping to sell more computers to help pay for it.