1st edition

In my previous post, I included the comments of Raj Abhyankar, a patent lawyer who used to write patents for Apple. In his opinion, Apple would have a difficult time taking Psystar to court. Enforcing end user license agreements, he says, is not the easiest thing to do. To get a broader perspective, I posed the question on LinkedIn to some industry experts about the legality of Psystar’s “case” against Apple.

Colm MacKernan is the Director of Origin Ltd, an Intellectual Property Consulting Firm in London. He represents high-tech companies based in Europe, North America and Asia on complex international matters.

“Apple is in a tricky position,” he says. “The core of its problem is that it sells OS X Leopard as a separate item from an Apple Computer ($129 on the Apple site.) This gives rise to an argument that Apple is engaging in “tying,” a practice that is often held illegal under many antitrust or competition laws, that involves requiring a purchaser (or licensee) to buy a product that purchaser may not want as a condition of obtaining the product it does want, i.e., if you want A, you must take B as well, or in this case if you want OS X you must buy an Apple computer. In effect this is similar to the problems Microsoft had when it sold Internet Explorer in combination with Windows and Media Player — although in that case Microsoft had the added handicap of being dominant, which subjected it to stricter scrutiny. That Apple is not dominant does not mean that Apple would not be subject to scrutiny, just that the “market power” leg of an illegal-tying case is weaker.

“Students of competition law will note that Patent and Copyright “misuse” in the US refers to commercial strategies that seek to extend the economic benefits of an item of intellectual property beyond is lawful scope. Typically misuse involves a violation of antitrust or competition law, most commonly illegal tying. The most common penalty in US law is to block enforcement of the relevant patents and copyrights. The other problem for Apple is that tying is specifically addressed in the European Licensing Guidelines, the Technology Transfer Block Exemption, the US Antitrust Guidelines for Licensing Intellectual Property as well as the Japanese and Korean guidelines. None “smile” on tying, although the US does say that it will not be treated as automatically illegal and quality-control cases can be made under the others. Now this does not mean that Apple would lose a case of copyright and patent infringement (many aspects of OS X Leopard are also subject to patent protection), but it does mean that they have a complicated case.”

The blogosphere is flooded with reports of a cheap “Mac clone” that Miami-based Psystar claims to be selling. A Mac clone is a computer that runs the Mac OS X although it isn’t manufactured by Apple.

The news emerged a week ago and Psystar had to temporarily shut down its website, apparently due to a sudden rush of traffic. Its store is back online and claims its shipping orders.

“Not much Apple can do”

Psystar claims that its Open Computer is “an alternative to pricey Apple Hardware” and can run Apple’s OS X Leopard out of the box. The low-end $399 PC competes with some of Apple’s top-configutarion desktop machines and is still cheaper than the Mac Mini (the cheapest Mac). Psystar is happy to pre-install OS X for you if as long as you buy it.

The problem is that Apple’s end user agreement prohibits YOU from installing Mac OS X on any computer that isn’t made by Apple. Psystar has termed this “unfair” and “monopolistic” and claims that Apple over sizes its prices by a cool 80%. It has vowed to fight any legal pressure by Apple.

When the news first surfaced, many bloggers were wondering if Apple Legal would pounce on Psystar “as soon as they were done with their morning coffee.” But the folks in Cupertino have yet to respond. Wired.com spoke to Raj Abhyankar, a patent-lawyer who used to write patents for Apple. Abhyankar claims that it will be close to impossible for Apple to discipline Psystar since, apparently, its no big deal.

“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.” After a good read of the Wired article, it seems that Mr. Abhyankar knows what he’s talking about. Apple may not be able to effectively deal with what is being termed as “the attack of the clones” on the legal front.

Will they let it slide?

Apple should be able to cripple the clones. iPhone bricks are examples that anyone considering an Open Computer should keep in mind.

Apple “bricked” (rendered useless) iPhones that had been illegally unlocked through a swift firmware update. Although some people got their bricks fixed, it was a messy affair. It would be a nightmare if your fake Mac got bricked by an automatic update. It maybe cheap but it still has your data. Apple (and Psystar) would be under no legal obligation to help you since, ultimately, you’re the one who violates the END USER agreement.

Think before you leap!

Are you going for a cheap Mac clone or an expensive brick? Here’s a few things to consider before you jump on the bandwagon:

• Would you be willing to lose your data if Apple were to brick your computer?
• Macs are loved because they’re mostly hassle free. Would you rather play hide- and-seek with Apple as they try to outsmart your clone?
• Would the Mac experience be as good on an “Open” Computer?

Infoworld has just released “2007’s Top 10 Underreported Stories.” At number 1 & 2, we have Java and Sun Microsystems respectively. Whereas Java appears to be “falling out of favor with developers”, Sun is reportedly establishing its presence in the market. At a close third, we have Bill Snyder of Infoworld telling us how “the days when you can assume that Apple’s products are exempt from harm are over.”

In fact, there has been a lot of buzz surrounding Mac security recently. A Google News search with the keywords “mac malware” brings up about 128 results, most of which inform you about the alarming levels of malware that are targeting the Mac platform.

I would differ with Newsweek on their classification of this story as “underreported”. Under-performing yes, but not underreported. Under-performing because these stories seem to have had very little impact on the Mac community. When I read that according to F-Secure, the number of malware variants targeting Mac were up from 1-2 to 100-150, I didn’t panic and rush to get an anti-virus. I can imagine that the same would be true with most (if not all) Mac users. Somehow, the threat of virus attack just doesn’t seem likely enough.

Snyder does mention that “actual attacks against Macs and the rest of the Apple family, such as the iPhone, are still rare.” He goes on to say that “most Mac users take security too lightly. In fact, most are quite proud of the fact that they don’t run any security at all.” I agree.

In my opinion, as soon as there is a substancial threat to Mac users, Apple will reinforce security. After all,  hassle free computing is what Macs are all about.

P.s. If you’re worried about your Mac, grab the free ClamX Antivirus. You can opt for better support by purchasing Norton Antivirus 11 or McAfee Virus Scan.

Apple is developing a feature that will let iPod Touch and iPhone users locate nearby cafes and restaurants, avoid long queues, place orders and receive alerts when their orders are ready for pick-up.

On a busy day in New York City, you could order your coffee as soon as you leave office at lunch-time and have it ready by the time you get to Starbucks. Apple has previously entered into deals with the coffee maker including a wireless deal that lets iTunes users access Starbucks’ wi-fi free-of-charge to download content from the iTunes store.

Apple does not comment on rumors about its upcoming products and services. A patent filed by the company describes a service that enables users of digital devices to place digital orders at cafe’s and a complimentary serivice that provides feedback on order status. This service will also store users favorite products and preferences at different locations for quick and easy access.