By Michael E. Miller
By Allie Conti
By David Villano
By Jose D. Duran
By Michael E. Miller
By Allie Conti
By Kyle Swenson
By Luther Campbell
It's not a situation that makes Rudy particularly happy. "These guys are riding our coattails and we're shouldering all the court costs," he huffs. The company doesn't wield anything close to Apple's resources, but the Pedrazas think they have the law on their side — and several copyright and intellectual property experts say they might be correct.
Apple's suit against Psystar argues the Pedrazas violate copyright law by altering the operating system software. To the giant firms' lawyers, Psystar's crime is akin to illegally remixing a song and reselling it as one's own.
But the Pedrazas contend an operating system is more like a CD than a song. Apple's attempt to dictate what kind of computer runs the software, they believe, would be akin to Def Jam insisting consumers play the latest Jay-Z only on Sony stereos.
Psystar pays full price — $29 — for each copy of OS that it installs on its computers. So once they pay for it, the Pedrazas ask, why can't they use it however they like? "It's like buying a book," Robert says. "Once I own it, I can tear pages out, underline sentences, even rewrite a whole section. And if I can find a buyer, I can resell that one copy however I please.
On a larger scale, the Pedrazas' legal team pitches the case against Apple as a battle for the future soul of the computer world. If the brothers win, Apple might be forced to allow its programs to run on any computer on the market. "This isn't just about some Florida startup versus Apple," says Kiwi Camara of the Houston law firm Camara & Sibley, which represents Psystar. "It's about recognizing a future where anything can be connected to anything else."
Apple's attorneys, of course, see things differently. Filings clearly lay out their reasoning. Whenever people buy copies of Mac OS, they assent to a licensing agreement that pops up when the program is installed. The users promise not to alter the software or run it on anything but Apple hardware. Psystar clearly violated both promises, the lawyers contend.
What's more, Apple holds that consumers who purchase an operating system don't actually own the software. Instead, they purchase the disc and then are "licensed" to use the system. It's a dubious-sounding arrangement that courts, at least so far, have upheld. Many lawyers refer to a 1996 appeals decision, ProCD, Inc. v. Zeidenberg, which found that click-through computer contracts were, in fact, binding.
"Apple feels that if it doesn't go after Psystar, it leaves the door open to all these other companies who want to do the same thing," says Jim Dalrymple, a blogger at Macworld.com. "They want to control the whole product, from software to hardware to advertising, because they present themselves as the one company that can give you everything you need. They don't want to lose that."
So the California case, in essence, comes down to whether Apple's licensing agreement trumps the Pedrazas' rights as consumers. Both Apple and Psystar have asked the judge to bypass a trial by issuing a summary judgment.
"There's a lot at stake in this case," says von Lohmann, from the Electronic Frontier Foundation. "If Psystar loses, it could set the stage for companies to have a lot more leeway to demand that you use their hardware."
It's not an impossible argument to win, experts say. "They've already put some really good arguments forward," says Randy Friedberg, an intellectual property lawyer following the case in New York. "There's essentially one really interesting question here, and it's whether that licensing agreement holds up."
Apple also claims Psystar is selling an inferior product that diminishes the company's standing in the marketplace. But several tech websites have reviewed Psystar's computers and say the company delivers quality.
"It was nothing special visually, but from a performance standpoint compared to the price, it was great," says Rich Brown, a writer for CNET.com who checked out a Psystar last year. "We were pretty surprised. A few of our web guys upstairs actually bought one after trying the review model."
Derek Rohaly, a 22-year-old Penn State student, nabbed a $1,300 Psystar desktop that would have cost $3,500 for a comparable Apple model. A music major, Rohaly uses complex mixing programs. "It felt risky, but I ended up with a really great product at a really low price," he says.
Apple scored a brief victory this past May, when Psystar filed for Chapter 11 bankruptcy. The company, Rudy says, "needed some breathing room" as it worked to develop new models and fight off the legal onslaught. But the company quickly emerged from bankruptcy in August.
Psystar's filing did make a few things clear. One is that the company was selling a significant number of computers. Among the debtors listed was DHL, with a pending $12,793 bill for shipping the computers. The company also owed about $25,000 to credit card processing companies handling the orders.
But the filing also shows the deep personal risk Rudy Pedraza is running by taking on Apple. The bankruptcy listed a $120,000 personal loan from the 25-year-old programmer — and Rudy admits that is just a fraction of the debt he has incurred fighting Apple in court. Psystar, at the time, owed its first law firm — Carr & Ferrell — $88,464 in back fees.