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11/19/2008
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Judge Dismisses Psystar Antitrust Suit Against Apple

The clone manufacturer failed to prove that the Mac OS is a market unto itself.

A judge has rejected Psystar's claim, filed as a countersuit to Apple's ongoing copyright infringement case against the unauthorized Mac cloner, that the Mac OS represents a discrete computer market unfairly dominated by Steve Jobs' company.

"The counterclaim does not plausibly allege that Mac OS is an independent market," wrote federal court judge William Alsup, in a decision handed down Tuesday.

Alsup noted that many of Psystar's arguments actually worked against its allegation of an Apple monopoly. For instance, Psystar claimed that Apple's "Think Different" ad campaign was evidence that Mac users do not view Windows computers as reasonable substitutes for Macs.

"Those advertising campaigns more plausibly support an inference contrary to that asserted in the counterclaim," wrote Alsup. "Vigorous advertising is a sign of competition, not a lack thereof."

Alsup also said Psystar failed to provide evidence for its claim that Apple can increase prices for Mac-based products without losing market share -- a situation that would indicate the presence of a monopoly market.

Psystar has 20 calendar days to submit a motion asking the judge to reconsider the dismissal.

Psystar's countersuit, filed in August, claimed that Apple's dominance of the market for its own products violates Sherman antitrust rules and other U.S. laws. A Psystar victory could have paved the way for other PC makers, including big vendors like Dell, HP, and Lenovo, to enter the Mac OS market and offer alternatives to Microsoft Windows PCs.

Apple filed its original copyright suit against Psystar in July. Psystar sells low-cost knock offs of Apple's pricey Macs -- including models that run the new OS X 10.5 "Leopard" operating system -- from a nondescript warehouse in Miami. For its defense and countersuit, Psystar retained high-profile Silicon Valley law firm Carr & Ferrell.

Psystar isn't putting all its eggs in the Mac OS market. The system integrator recently introduced a Linux-based personal computer that sells for just $299. Psystar's OpenLite system ships with the Ubuntu Linux desktop pre-installed, running on a 1.8-GHz Intel Celeron chip with integrated graphics support.

Upgrading to a dual-core Pentium chip costs an additional $40. "With unparalleled affordability, this computer can bring Windows computing into every home and office," Psystar boasts on its Web site, even though the system runs Linux, not Microsoft Windows.

Psystar is offering a dual-boot option that, for an extra $75, gives buyers an additional hard drive and the ability to boot the Mac OS or Windows alongside Linux.

Psystar's Web site, which appears to have undergone a significant makeover recently despite its battle with Apple, also prominently features other Windows- and Mac-based computers.

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