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First Sale vs. EULA - Psystar vs. Apple, once again
ArcSyn
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Computer World
Engadget
So what do you all think?
If I purchase OSX, should I be able to load it on whatever hardware I want? If a company purchases OSX, do they have the right to sell it to me on hardware of their own? Will an EULA stand up in court? Will this set precedent for legality of the EULA (which is unknown or agreed upon at the time of purchase)?
I think if Apple is going to sell OSX, they have to give up certain "restrictions" they try to place on it. Companies have every right to sell hardware and/or resell a product, so why is Apple's OSX special?
Engadget
So it looks like wannabe cloner Psystar's supposedly hotshot law firm of Carr and Farrell regrouped for a deep think after pumping out some fairly weak arguments in its case against Apple -- according to a new draft of Psystar's countersuit, the Florida-based computer reseller should be allowed to sell whitebox Mac OS X machines because it legally purchased copies of Leopard at retail. That's the first sale doctrine, if you're into copyright law -- it states that the purchaser of copyrighted materials (like a book) can sell or dispose of it however they want. Here's the thing though: a big part of Apple's case (but not all of it) is based around the fact that consumers license OS X under the terms of the EULA -- and courts are basically up in the air over whether the first sale doctrine should apply to software transactions. It's an interesting tactic with a ton of repercussions beyond Apple if it's successful, but we honestly can't see it working -- in the cases where first sale has been used to overcome a EULA, it's generally been for used software, not companies like Psystar, who are modifying and installing new copyrighted software sold by a first party. We'll see how Apple responds -- things just got interesting again.
So what do you all think?
If I purchase OSX, should I be able to load it on whatever hardware I want? If a company purchases OSX, do they have the right to sell it to me on hardware of their own? Will an EULA stand up in court? Will this set precedent for legality of the EULA (which is unknown or agreed upon at the time of purchase)?
I think if Apple is going to sell OSX, they have to give up certain "restrictions" they try to place on it. Companies have every right to sell hardware and/or resell a product, so why is Apple's OSX special?
ArcSyn on
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that won't happen, even if Apple loses. They'll just say "this is the hardware that the Mac OS is designed to run on, if you run it on something else, and it doesn't work, oh well"
Meh, that's not what apple is about. They are about a vertically integrated solution, that way each user gets the exact same experience. Really, that's not a horrible way to go about things, it ensures consistency.
Before the windows and linux fanboys jump on me, I don't own a mac, and probably never will because I don't want to pay the apple tax, but I appreciate the business model.
Either that or we'll see them upheld. I'm not sure how I feel about this finally being put to the test.
1.) Charge ~$300 for the OS to make sure everyone pays their fair share of the development cost or however they want it to work out on the books.
2.) Go the Nintendo route. Get around technicalities in IP law by forcing another type to apply. Nintendo required carts to contain a representation of their logo. If you made a cart to work with their systems, you had to include a bitmap of their trademarked logo in the first few bytes, which you would not have permission to use unless you were licensed. I'm not sure how this would work since if they lost, the court would be upholding the OS modifications Pystar made, which could easily include skipping the logo check.
3.) Apple could do something like sell Mac OS licenses in two pieces. One piece is in the shrinkwrapped box, the other is good for all versions and symbolically located in only their machines, say, the hardware serial number. Then they could say first sale does not apply because the software does not have a complete license.
4.) Stop selling shrinkwrapped standalone Mac OS altogether and only sell upgrades. Standalone Mac OS only comes with Macs. Effectively the same thing as option 3.
The economics behind Apple's success have everything to do with control.
Apple is only as successful as it is because Apple has a monopoly on Apple (it sounds funny, but if you play it out, it makes sense.)
They hold close to complete control on what can and can't be done with and on their software and hardware. The company is designed around that fact. They couldn't charge the prices that they do otherwise, for instance.
Obviously Apple is not terribly enthused with this idea.
Steam / Bus Blog / Goozex Referral
They can be as unenthused as they want, but it's still in the consumer's (or reseller, arguably) right to do so. If Apple wants to avoid it they have to stop selling OSX outside of the hardware.
(Note: Just because they have the right doesn't mean they should exercise it. That's another issue entirely.)
No, it does not. Once you've sold a copy, that's it. Random House doesn't a say in what I do with their books when I'm done with them, for example. There are certain loopholes- NDAs, street dates, etc- but in general, no.
This isn't a case of some random guy buying a copy of OS X then realising later on that they don't need it and selling it on, this is the case of a business purchasing copies of OS X for the sole purpose of reselling it on a pre-build system.
If the ratio came out such that they could charge $200 or less for standalone OS X, they'd be crazy not to do it. Cloning nearly killed Apple in the mid 90s but these days the market is different. Specs no longer matter to the average consumer. They just want a computer that meets their other criteria (value, aesthetics, durability). Cloning wouldn't affect Apple other than maybe giving them a large chunk of the low end at the cost of a small piece of the middle.
Like I said, someone needs to do a real market study, and with Jobs's ego sidelined, it might be possible.
Apple tried the licensed clone route once, and it cost 'em a lot of money (and they rushed operating system releases just to get rid of the problem.) I think they're pretty settled against the idea of allowing other systems to run OS-X, because of that.
The clones were all cheaper than their Apple-counterparts, and looking at hundreds of dollars in their pocket, no one cared that the clones looked sort of like PCs or had floppy drives with eject buttons. Apple gained a bit of market-share, but so many Apple users (and educational institutions and businesses, driven by bottom lines) switched to the clones that Apple sales fell flat. They made a bit of money from each system sold, but they were no longer making money from the systems themselves, and a bit of extra market share didn't come close to making up for it.
I'm sure they'll fight it as hard and as long as they can.
And...this isn't that situation. At all. Resale is not derivative works, and neither is slightly modifying something to work with your product.
And why should is that a problem, again? I mean, I can do that with almost anything else and no one gives a shit. That's all Dell, etc does with Windows, after all.
Microsoft doesn't have a problem with it. Infact, that's exactly what they want to happen.
that's the difference in the business models of Microsoft and Apple.
I think you can be guaranteed this happens regularly. In fact let's run through the numbers right now. In Q408 Apple sold 2.216m Macs for $3620b of revenue. According to their quarterly report their total gross margin was 34.7% but that includes high margin sales like software and iPods. Let's be really conservative and say gross margin on Macs is 15%. That would put the profit from Q4's Mac sales at $543m. We'll work with that number for now since this is conjecture anyhow.
We'll go ahead and assume gross margin on software is 99%, you can do this because the cost of developing software is considered a sunk cost and the material cost of selling the software is miniscule. At $130 it would take 4,176,923 copies of Leopard to be sold to equal the Mac profit to equal a single quarter of selling Mac hardware. That's half as many copies of Leopard as they sold in Macs in all of 2008. With our conservative 15% margin a single MacBook makes as much profit as one and a half copies of Leopard. A MacBook Pro makes 2.3x the profit (with our numbers) that a boxed copy of Leopard does. Real numbers are likely much larger than this.
It's tempting to assume that releasing OSX and other Apple software for generic PCs will print money but that's not very likely. Even with the conservative numbers above it would take more twice the unit sales of Macs in OSX boxes to simply match the profit of the hardware sales. To exceed it would require more than twice the unit sales. To get close to 2008's Mac profits more than 20m copies of OSX would have to be sold to PC users. I've heard rumors (not confirmed mind you) that Windows boxed copies make up roughly 10% of their total unit sales. With August's 140m sales milestone announced by Bill Gates that would put Vista's retail sales at 14m since it was released to retail in January of 2007. Based on this conjectural numbers Apple would have to sell more retail copies of OSX in a year than Microsoft has sold of Vista in two years to simply meet the profit of their hardware division. I hope that strikes you as unlikely.
I'd love for EULAs to be put under some serious legal scrutiny, but I don't think this is going to be it.
By this logic book publishers should be able to shut down second hand book shops.
Not really.
Publishers don't explicitly tell you what you can or can't do with a book before you buy it. Books don't have EULAs. If a book publisher stated that you could not buy a specific book unless you agreed not to sell it or read it in anything other than a specific chair that you tell them about beforehand, and you agreed to those terms before you bought and started reading the book, then that would be a different story.
Steam / Bus Blog / Goozex Referral
They do explicitly tell you that the "work" can't be transferred to another medium or duplicated.
The difference is, when you buy a book, you can actually use (read: read) it anywhere you like (in a chair, on the couch, on the bus, in an airplane, etc), whereas with OSX you can only use (read: install and use) it on the specific Apple computer it shipped on.
Steam / Bus Blog / Goozex Referral
I do gather that Apple's EULAs are more enforceable than many due to the hardware locked components. MS OEM software, on the other hand, currently has a "may only accept the agreement when opening the package with intent to resell to a 3rd party" component that I can't see being enforced in any realistic fashion.
The original statement is a hypothetical basically saying that the poster thinks a business has rights beyond first sale, other than those defined by law. The implication is that if a given publisher started putting a "no re-selling" clause on the copyright page of the book, the poster would feel the publisher would be justified in taking legal action against a second hand bookshop that resold those books.
Personally I don't think that should be the case for any retail product.
Let's try a shitty analogy.
Garmin sells you a GPS navigator for a great price. $70 less than the equivalent TomTom. You decide a year in to upgrade the map software. You contact Garmin and they tell you it's going to cost $100. Oh my, you say, and investigate the licensing cost. Sure enough, it's about double the cost of map data if you were to buy it in a generic form.
However, in your search, a store comes up online where you can buy a set of TomTom maps, the same exact map data, for $40 and convert them to work with your Garmin with a free program. You go for it and enjoy your $60 savings .
Now when TomTom finds out about this, they sue the website. Why?
Because TomTom was using the increased cost of their base unit as a justification for charging less than cost for the maps. They figured they could build in the cost of a map upgrade into the unit and attract customers with the low upkeep cost. Those who never upgrade their maps? Icing on the cake!
If a 3rd party comes in and buys up maps without the matching GPS units, their entire strategy falls apart.
There is no right or wrong here, there are only plans and those companies that figure the cost of litigation will be cheaper than changing the way they do business.
But thats not really accurate is it? You read the EULA after you buy it.
Basically. Neither company is doing anything wrong, and for the legal system to stop one or the other from doing what they do would be wrong. If company B doesn't like company A's business that undercuts them, then they need to change business plans/pricing. Otherwise, suck it up and welcome to America.
Isn't that all kinds of illegal?
Grotesque.
Not yet anyway.
Then let's keep on not arguing that.
PSN:RevDrGalactus/NN:RevDrGalactus/Steam