The included notes with the update state the following improvements in the update:

iTunes 8 and iTunes U are now accessible with VoiceOver on your Mac.

• Enhancements to Maps
  - Google Street View
  - public transit and walking diretions
  - display address of dropped pins
  - share location via email

• Enhancements to Mail
  - resolved isolated issues with scheduled fetching of email
  - improved formatting of wide HTML email

• Improved stability and performance of Safari
• Podcasts are now available for download in iTunes application (over Wi-Fi and cellular)
• Decrease in call set-up failures and call drops
• Improved sound quality of visual voicemail messages
• Pressing the Home button from any Home screen takes you to the first Home screen
• Preferences to turn on/off auto-correction in Keyboard settings

Although not listed Emoji icons are included and Apple has issued a technote on Emoji and troubleshooting Emoji.

The vulnerability was initially revealed by ComputerBild earlier in the week but was transcribed in more detail today by Fraunhofer Institute for Secure Information Technology (SIT).

SIT has revealed that it notified Apple of the vulnerability one month ago and that a fix will be available via a firmware update on November 21. The report corroborates earlier reports that the latest iPhone OS would be released on Friday November 21.

The iPhone ships with the ability to send and receive SMS only which has caused some people to become aggravated that even very basic phones on the market can send and receive MMS messages but the iPhone can’t.

MMS messages allow for the transfer of images, audio, video and rich text.

In the report it is said that Telia will be pushing the MMS application to users in Sweden in the next couple of months, there is no word whether other carriers will also be creating similar applications.

[Update] It has been revealed that Mobispine is the provider of the MMS solution for Telia in Sweden. The company has released a press release about its MMS application for the iPhone (PDF).

Mobispine AB (MOBS) the market leader in delivering
mobile solutions to operators announced the availability of the world’s first true Multimedia
Messaging (MMS) for iPhone. Mobispine is now offering a “white label” MMS service for iPhone
to global operators. This new and innovative service will increase revenue per user (ARPU) and
generate profits for operators.

Apple has posted a support document which lists the feature changes in the update:

• Music can be streamed via AirTunes to Airport Express speakers or other Apple TVs in your house.
• Apple TV can now learn other remote controls and use them in addition to the Apple Remote.
• Playlists in iTunes that contain Movies, TV Shows, Podcasts, and Music Videos can now be seen on Apple TV.
• Support for volume control in Music.

Speaking at LISA ‘08 Hubbard showed a slide during his presentation, about the evolution of Mac OS X from large servers to embedded platforms, which showed a slightly more specific date for the release of Mac OS X Snow Leopard than we’ve seen before.

The slide which can be viewed in a PDF of Hubbard’s presentation states that Snow Leopard will see a release in Q1 2009.

Snow Leopard was announced at WWDC 2008 and at the time Apple said that the latest OS would ship “in about a year.”

It should be noted that previous releases of Mac OS X have gone through extensive testing in the developer community and so far Snow Leopard has only had two test release, both of which were to a limited amount of developers.

First, here are some basics for persons unfamiliar with legal proceedings. Apple had initially sued Psystar for copyright infringement; inducing others to commit copyright infringement; breach of contract; inducing others to commit breach of contract; trademark infringement; trade dress infringement; trademark dilution; and violations of state and common law unfair competition acts. Psystar responded with thirty-seven affirmative defenses to these claims and brought a countersuit against Apple. Psystar’s countersuit alleged violations of Sections 1 and 2 of the Sherman Antitrust Act and Section 3 of the Clayton Antitrust Act as well as California-specific business codes and state common law on unfair and anti-competitive business practices. So essentially there were two lawsuits going on at one time with Apple being both the Plaintiff and Counter-Defendant, and Psystar being both the Defendant and Counter-Plaintiff.

Apple moved to dismiss Psystar’s counterclaims for reasons previously discussed here. I had predicted that Apple would lose its motion, not because I thought it was without merit, but rather that motions to dismiss are rarely granted unless the arguments are particularly compelling. Although I found Apple’s arguments to be strong, I am not an attorney, so I predicted the usual outcome of losing on a motion to dismiss since every presumption is given in favour of the non-moving party. I made a foolish bet on this prediction with Alex Brooks that I will now have to live up to, but I ask him to have mercy and let me fulfill my end of the bargain over the weekend. [Editors note - I’m ensuring dizzle keeps her end of the deal]

The Court Order Granting Apple’s Motion to Dismiss comprised nineteen pages of very lucid commentary. I understand the issues and legal concepts much more now having read those nineteen pages than I did reading the hundreds of pages of materials submitted and/or referred to by both parties. As I said before, I like this Judge. He is very clear and to the point. Following is an abbreviated summary of the Court’s opinions by category.

Legal Standards for Granting a Motion to Dismiss

Psystar’s counsel had argued that the existence of the various alleged markets was an issue of fact and not an issue of law. Some explanation is needed here. Generally speaking, the judge is present to make decisions on issues of law, while the jury is present to make decisions on issues of fact. Therefore, Psystar was claiming that Apple’s arguments, even if valid, simply were not grounds for dismissal since they were not solely issues of law but also contained disputed issues of fact. Apple obviously disagreed. My earlier statement, “It [the Motion to Dismiss] appears to hinge on Apple’s arguments on the legal standards required to prevail,” turned out to be quite correct.

Judge Alsup found that Psystar merely made conclusory and unsupported allegations of law and inferences drawn therefrom without plausible factual grounding. The case of Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964–65 (May 21, 2007) factored heavily in the Court’s reasoning.

The alleged Mac OS market

The dispute between the parties in the counterclaims concerned whether the Macintosh OS is a single-product market, or whether there are other operating systems, such as Windows, that are also part of the relevant market. Psystar’s success absolutely depended on their being able to demonstrate this single-product market theory, and they argued that this was a factual determination for a jury. The Court noted:

The definition of antitrust “relevant market” is typically a factual rather than a legal inquiry, but certain legal principles govern the definition.… Whether products are part of the same or different markets under antitrust law depends on whether consumers view those products as reasonable substitutes for each other and would switch among them in response to changes in relative prices.

Citing Newcal Industries, Inc. v. Ikon Office Solutions, 513 F.3d 1038, 1044 n.3 (9th Cir. 2008).

Now I understand much more clearly why Psystar focused so heavily on the idea that a small but significant non-transitory increase in price (SSNIP) would not reduce Apple’s consumer base to any significant degree. At first blush, this seems quite strong in Psystar’s favour. Many Mac users would pay even more for the product without considering switching to Windows. However, the Newcal case dealt with a derivative, not a primary, market. Basically, in that case, there were two competing manufacturers of copying equipment. The issue was not with the primary sale of the copiers but with the sale of parts and supplies. It is completely inapplicable to Psystar’s claim. As an example, if this present case was about Apple requiring only Apple-branded RAM and Apple-branded hard drives, then perhaps there would be a precedent, but not in a case alleging a single-product primary market. The Court recognized that Psystar did cite one case which could lend support to their allegation; however, that case had later been implicitly over-ruled and was no longer valid case law.

The Court also noted:

Single-brand markets are, at a minimum, extremely rare. “Even where brand loyalty is intense, courts reject the argument that a single branded product constitutes a relevant market.”

Citing Green County Food Market, Inc. v. Bottling Group, 371 F.3d as75, 1282 (10th Cir. 2004).

Thus:

[Psystar’s] pleadings, however, fail to allege facts plausibly supporting the counterinuitive claim that Apple’s operating system is so unique that if suffers no actual or potential competitors.

In reading the decision, I sensed a hint at this point where the Judge seemed to be telling Psystar that if they could provide a factual basis for their SSNIP claim, rather than simply making conclusory statements of law, an amended counterclaim might survive dismissal. I suspect that Psystar will scour the Apple fanboy sites for hyperbolic statements of loyalty to the death for the cause of Apple and Dear Leader. However, a little more digging will find just as many current Apple users who would certainly consider a switch if the prices were higher. Ah, but would they switch to Windows? Probably not, but this points to the big pink elephant in the middle of the room that seems to have been ignored thus far. Apple is losing some consumers daily, and a large reason is due to price. To whom? Linux. The price can’t be defeated; it is free. There is no way with free alternatives readily accessible to the typical Macintosh consumer that Psystar can make the argument that there isn’t a reasonably equivalent substitute without Rudy Pedraza crossing his fingers behind his back. The Court noted what I had previously said: It is possible that this willingness to pay a higher price is due to additional perks to the purchaser that aren’t so easily quantifiable, such as customer service, the coolness factor, and other such intangibles.

Judge Alsup pointed to the same admission noted by Apple in Psystar’s own pleadings that the Mac OS performs the same functions as other operating systems; operating systems which Psystar itself also sells as alternatives to OS X. I am also somewhat self-pleased (I beg the reader’s indugence) that the Court also noted the same foot-shooting argument that I had detected. Apple’s aggressive ad campaign against Vista doesn’t prove that Vista isn’t a competitor; the whole purpose of the campaign is to prevail against a very real competitor.

In short, Judge Alsup agreed with Apple that Psystar’s arguments on this point were internally contradictory and circular.

The alleged Mac OS capable hardware market and the alleged Apple-Labeled hardware submarket

As per the Court, Psystar’s Federal causes of action in this regard are absolutely dependent on the existence of separate markets with improper tying practices between the two. Additionally the alleged violations of the Sherman and Clayton Acts depend upon the existence of the submarket claimed by Psystar. Although Psystar did not use the terminology of “aftermarket,” the Court used the term “aftermarket” as functionally equivalent to “submarket,” presumably in an effort to give Psystar the benefit of the doubt, and acknowledged that Newcal did allow for the potential of a distinct single-brand aftermarket. However, here is where things get very interesting. Enter stage right: The End-User Licensing Agreement (EULA).

The Court noted that Newcal specifically excluded single-brand aftermarkets that were created by fully disclosed contractual agreement. Citing Newcal at page 1048, the Court noted:

“…the law prohibits an antitrust claimant from resting on market power that arises solely from contractual rights that customers knowingly and voluntarily gave to the defendant.”

In a related case to Newcal, Eastman Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451 (1992), the aftermarket customers did not have full knowledge of the consequences of the agreement tied to the initial purchase so is thus distinguishable from the present controversy. Again, quoting Judge Alsup:

“…here Apple asks its customers to purchase Mac OS knowing that it is to be used only with Apple computers. It is certainly entitled to do so.… Psystar also asks the Court to create a non-existent market. This order declines to do so.”

The Court distinguished this case from current litigation cited by Psystar against Apple concerning the iPhone in which customers were required to sign a two-year contract with AT&T but were not told that Apple and AT&T had entered into a five-year exclusivity agreement, effectively tying the customer to AT&T for five years instead of the disclosed, and agreed-upon, two years. Obviously that is not the case here. The purchaser of the Mac OS makes his purchase with full knowledge of the limitation.

The Court lastly dealt with Psystar’s reliance upon United States v. Microsoft Corp., 253 F.3d 34 (C.A.D.C. 2001). Judge Alsup acknowledged that portions of that case do support Psystar’s contentions but that other portions flatly contradict them. Further, the Judge noted the age of the case and his doubts on its continued applicability in the face of rapidly changing technology. Additionally, the Court also noted that the case was completely factually distinct as it did not deal with a single brand/product market but the stifling of existing competitors in the browser market.

California State Claims

The Court noted that the Cartwright Act is patterned after the Federal Sherman Act and that the failures noted above would also apply here. There are some differences in the laws, but Psystar did not allege any that would survive the aforementioned deficiencies; such as inter-firm agreements rather than unilateral conduct. Further, the relevant markets would still have to be established, which the Court has opined that Psystar has filed to do.

Since I am more familiar with Court filings and Orders than the average layperson, I chuckled at the Court’s final comment where others might have paid it no attention:

The remaining cases Psystar cites are similarly unenlightening.

(bold emphasis mine) That was a subtle stinger aimed directly at Psystar “creative” use of case law.

Conclusion

It is very important to note that Apple did not prevail in one important area. Apple requested that Psystar’s counterclaims be dismissed “with prejudice.” That would mean that Psystar would have no opportunity to raise them again in modified form. Instead, the Court dismissed the counterclaims without prejudice, giving Psystar twenty days from November 18, 2008 to move for leave to amend its counterclaims and to explain how the amendment would cure the problems described in the order. I have not reviewed the Local Rules for this Court on the procedures for calculation of time, so I am hesitant to set a date certain when this is due. It is safe to assume that the deadline is approximately December 8, 2008.

I believe that Psystar will try again. They have to. If they completely lose their counterclaims, they have very little chance of winning this case. In my lay opinion, their affirmative defenses are very weak. Another real possibility is that settlement discussions will take place during this twenty-day window with Apple making a business decision to pay some “go away” money, and if I were Rudy Pedraza, I would take it and run. Psystar has much more to lose by proceeding, and right now both parties are in an uncertain position creating an atmosphere ripe for settlement. Apple knows that it is possible that Psystar may file amended counterclaims that pass muster with the Court. I have seen it happen in cases I have worked on in which a court strongly criticizes a party’s arguments and later allows them in amended form. Psystar knows that the Court is likely to dismiss any amended counterclaims. If Pedraza waits, and the Court does rule against Psystar again, Apple has very little motivation to settle and a lot of motivation to make an example out of Psystar.

I have noted some Apple web writers asking if this Order could be appealed. As the writers in question appear to be somewhat unsophisticated in legal terminology, I believe what they are asking is whether or not Psystar can file what is known as an interlocutory appeal. At this point, I confess that is beyond my ken, and I will inquire with lawyers that I know. Until that time, the Wikipedia link does provide some information on guidance formulated by the Supreme Court for allowable interlocutory appeals. Right now, however, the Order is definitely NOT ripe for an interlocutory appeal—assuming for sake of argument that this order is within the scope of qualifications for such an appeal—as the dismissal is without prejudice. The question would not arise until such time as the Court dismisses the counterclaims with prejudice, if it ever does.

Another motivation for Psystar to settle might exist if my prior musings are correct. Basically I argued that if Apple were to lose, all they would have to do is cease selling Mac OS X separately and that “market” would evaporate. They could charge slightly more for the computer which would include the OS and free upgrades for the life of the machine as long as it meets the technical specifications. If this is a real possibility (and frankly I have no idea if it is even feasible on the accounting side of things), unless Psystar is counting on some large monetary judgment, their victory would be meaningless. Further I see no basis for any large monetary judgment, Psystar has continued their business up until this point, what quantifiable damages do they have? If their main goal is the intangible prize of being allowed to install OS X on non-Apple hardware, and my solution is feasible, the only ones who will have anything to show for the effort is their attorneys.

Here is a downloadable copy of the Order for the reader’s review.

Made minor grammar corrections after publication.

According to the Mac Rumors forum member the listing for the MacBook Air cautioned buyers stating that the system had a malfunctioning hinge and minor blemishes on the outer shell. But the listing did not allude to its pre-production status.

The MacBook Air differs from models that shipped in early-2008 as it only features a 60GB hard drive with Mac OS X Tiger pre-installed and more prominently the lower enclosure is made from black plastic.

The serial number of the machine would indicate that it was manufactured in May 2007 a full seven months before Apple even announced the MacBook Air.

MacBook Air has no identifying label and has a plastic bottom enclosure | Image courtesy of Mac Rumors

System Profiler Identified the Machine as an M82 | Image Courtesy of Mac Rumors

Last week it was revealed that Apple had discontinued the 23-inch Cinema Display.

The 24-inch LED Cinema Display which features an iSight camera, speakers, and Mini DisplayPort is expected to ship in 7-10 days.

The Order is 19 pages long. I will analyze the Order and extract interesting portions in a separate post.

View the gallery.

This update improves QuickTime compatibility with iChat.

Update is available through Software Update.

This firmware update addresses an issue where trackpad clicks may not be recognized on MacBook (Late 2008) and MacBook Pro (Late 2008) systems.

The update is available in Software Update to owners of late 2008 MacBook and MacBook Pro notebooks.

Accordance by OakTree Software is one of those massively powerful programs that causes me to think, “Where to begin?” Let’s start with introductions. Readers, Accordance 8 is a highly flexible and in-depth program for studying the Bible, commentaries, and related reference tools—including maps—with the ability to conduct extraordinarily complex searches. Its functions meet the needs of the layperson up through the scholar starting with simple translation comparisons all the way to delving into the original languages behind the English translations of the text. Those two sentences, however, do not do this program justice. As I have stated in the past, I am a fairly new Mac convert, joining the cult family in about May 2007 after nearly twenty years of Windows usage since Windows 3.1. Prior to my switch, my Biblical software of choice was the very popular Logos program—particularly the Scholar’s Library. Logos did the job, but I did not find it particularly intuitive—and no matter how useful a program may be once mastered, if mastery becomes a chore, I lose interest and motivation. This is why I remain a mediocre Photoshop user. Although there are a ton of resources and conventions and blah, blah, blah to learn the program, I do not care for any software that requires the time of maintaining a second husband to understand. This fact does, however, have to be balanced with the reality that complex programs do have a learning curve, but a good developer will minimize that curve as much as possible and thoroughly equip the user with tools to quickly navigate that painful period. I am very pleased to report that Accordance has done this with true faithfulness to continuity with the Macintosh GUI. While I had recently learned that Logos is being developed for the Macintosh platform, and my (expensive) license is transferable, unless something has greatly changed with their user interface, I do not anticipate ceasing use of Accordance as my primary Bible study program. Also, I have my doubts that a long-time Windows developer with its attached baggage of Windows butt-ugly navigation experience will be able to create a product with the look and function of a citizen of the Appleverse.

I have also used the free program MacSword as an alternative to the free PC software e-Sword and promptly gave up. It was confusing and aggravating in addition to being very limited in its available resources as compared to its PC counterpart. I have a well-stocked personal library of theological texts; if it is more efficient for me to grab books and conduct research the old-fashioned way, then a particular study program is not for me. Now despite this admittedly glowing introduction, I will now highlight the major features that I have been road-testing and give my frank assessment of each—good and bad. In the interest of full disclosure, the base software and any add-on modules reviewed were given to me gratis from the developer. I hope I have developed a relationship with my readers from my prior reviews to have earned the trust that this does not influence my opinion. In fact, in this case, I had already learned that my Windows Logos license for which I had paid well over $500 could be transferred to a Macintosh license prior to contacting the Accordance developer, so my motivation for requesting the review was not a burning need to try to obtain sophisticated Biblical study software for free.

Read more…

Although the build has no known issues this is not necessarily an indication of development wrapping up, but the speed of releases is indicative of nearing public release.

Seed notes below.

Known Issues

• None

Focus Areas with Additional Information

MobileMe / Syncing:

Please help test MobileMe automatic syncing. We are particularly interested in testing automatic sync on portable computers and on networks with medium to high latency and or constrained bandwidth. Please include the ~/Library/Logs/Sync/dotmacsync.log with any radars you file.

If you are working behind a firewall (ie. corporate proxy), we would like to know your experience with the syncing. If you have auto sync turned on, and you make a change from me.com, or MobileMe website, does that change sync within a reasonable amount of time?  Also attempt general syncing of Contacts, Calendars, Bookmarks and other sync data. Please watch for excessive syncing and file radars for any abnormal syncs.

AFP:

The 10.5.6 release includes changes to improve Time Machine reliability in both the AFP Client and Server. The changes in the client will detect conditions that lead to corruption of a Time Machine backup disk image and eject the AFP volume before damage to the disk image occurs. 

Mail:

We need people who send messages entirely in non Latin character sets, such as Hangul, Kotoeri, Traditional Chinese character sets. Including attachment names, punctuation, everything. We would also like to include those who send messages and enclosures in Latin character sets as well (French, German, Italian, etc). Cyrillic, Hebrew, and Arabic would be another good set of writing systems to extensively test

General Focus Areas

• AccountsPref
• AddressBook
• AFP
• AirPort
• apache
• AppKit
• AppleBacklight
• AppleDictionary
• AppleDisplays
• AppleFWAudio
• AppleGraphicsControl
• AppleGraphicsPowerManagement
• AppleHIDMouse
• AppleHWRaidUtility
• ApplicationFirewall
• AppleWWANSupport
• AutomatorActionsBinaries
• ATS
• Automator
• backupd
• BatteryMonitor
• BezelServices
• Bom
• BomArchiveHelper
• Bluetooth
• BootCache 
• Calculator
• CFNetwork
• Chess
• CoreAudio
• CoreFoundation
• CoreGraphics
• CoreMidi
• CoreServices
• CoreTypes
• cups
• DirectoryService
• DiscRecording
• diskdev_cmds
• DiskImages
• Dock
• DVDPlayer
• DVDPlayback
• Finder
• Foundation
• gnutar
• GraphicsDrivers/OpenGL
• HIToolbox
• iCal
• iChat
• ImageCapture
• Installation & Setup
• IOSerialFamily
• IOStorageFamily
• Keyboard & Mouse
• KeychainAccess 
• KeychainScripting
• LoginWindow
• Mail
• MobileMe
• Networking
• Network File System
• OpenSSH
• Parental Controls
• PDFKit
• Printing
• QuartzComposer
• QuartzCore
• RAWCameraSupport
• Safari: HTTP Cookies, HTTP Proxies
• SmartCardServices
• Spaces
• Spotlight Syncing
• System Preferences
• TimeMachine
• TimeZoneData
• udf
• Video Conferencing
• webdavfs
• xnu

Areas of Change

• Resolved issue with Automatic bookmark syncing and dotmacsyncclient
• Fixed issue with Sync Services and slow sync prompt
• Fixed issue with DVI and display detection
• Issue with Superdrive and eject sound resolved
• Fixed issue with MobileMe pref pane and periodic syncing
• Fixed issue with printing a PDF file from Mail.app
• Resolved issue with LaunchServices and downloading playlists
• Resolved problem with Sync Services and calendar syncing

Issues fixed in previous seeds:

• Resolved issue with FileSync and FileSyncAgent
• Fixed issue with syslog and duplicate message suppression
• Fixed multitouch issue with Finder
• Resolved issue with USB disconnect warning dialog
• Fixed issue with notified syncs and dotmacsyncclient
• Fixed issue with System Preferences and MobileMe sync tab
• Issue with KeychainAccess and prompting of passwords resolved
• AFP Server no longer caches FPGetSessionToken
• AFP Server now turns off replay cache for non replay clients
• AFP Client now advertises that it supports Replay cache
• Bluetooth and USB in closed lid mode compatibility fix
• FileSyncAgent syncing fix
• HTTP basic authentication with long URL containing username/password fix
• iCalExternalSync - you can now change the record identifier to RootNode
• Misc localization fixes
• Buenos Aires (Argentina) Local Time One Hour time change fix
• Fixed issue with CFNetwork and Content-Disposition file names
• Addressed issue with CoreTypes and certain zip file contents
• Fixed problem with USB OTG Disks and Mass Storage
• Fixed issue with Parental Controls and idle sleep
• Fixed issue with Parental Controls and curfew login
• Fixed issue with iDisk Syncing
• Fixed Calculator issue with Swiss German
• Fixed network server file copying issue
• Addressed issue with AudioQueue and CoreAudio
• Fix to Network Authorization UI
• Fixed issue with AirPort Drivers and “off” setting
• Issue with decoding GIF images and CoreGraphics resolved
• Fixed issue with Mail and authentication of inactive accounts
• Resolved issue with iCal Search and text search
• Fixed issue with iCal Alarms not firing in certain situations
• Problem with Quick Look and CoreGraphics resolved
• Issue with iChat setup assistant fixed
• Fixed issue with firewall configs being reset after upgrading
• Resolved issues with CFURLCookies
• Address books syncing fixes
• AFP server login fixes
• Graphic drivers performance fixes
• New iCal Events and AppleScript applet fix
• Safari and cookies compatibility fixes
• Core Audio and AU component version mismatch fix
• Multiple instances of MatrixReverb in separate threads fix
• Core Audio compressor threshold fix
• Switching default audio device’s output stream is now immediate
• More channels for Core Audio 3D mixer
• Programmatically created (public) aggregate device now plays correctly
• Audio Channel Layouts and Unique ID fix
• Changing the composition of an aggregate device audio dropout fix
• kAudioSubDevicePropertyDriftCompensation property can now be set on an aggregate device
• Renaming aggregate devices now propagate device name changes to all applications
• AudioFileOpenURL memory management fix
• CoreAudio AudioFileWritePackets file creation fix
• audioqueue compatibility fixes
• audio file stream compatibility fixes
• ExtAudioFileCreateNew memory management fix
• ADTS files now supports kAudioFilePropertyPacketSizeUpperBound
• Core Audio performance fixes
• CGDisplayBaseAddress and 64bit binaries compatibility fix
• Command-H and applications hiding fix
• FSCatalogSearch() on 64 bit binary app now returns correct results
• iCalExternalSync floating events and stability fixes
• iCal can now identify VTIMEZONE with a simple offset and no transition dates
• Setting iChat setting to “invisible” via AppleScript now keeps you logged in
• Embed ColorSync Profile” in Image Capture no longer leaves invisible file behind
• Image Capture Architecture performance fixes
• Show(Hide)Window() without Window menu memory management fixes
• Linked binary with NFS shares fix
• Keychain Access: Change Password now works for smart cards
• AppleScript/Keychain Scripting now saves passwords as UTF-8
• pthread operation support fixes
• Access times on FAT32 formatted USB external drive performance fix
• Fixed issue with large file (4gb+) writes to LINUX nfs server when initiated from finder
• NFS export and hostname resolution at startup fix
• copying from a framebuffer object to a texture via glCopyTexSubImage2D fix
• GL_ARB_occlusion_query now works with multiple in-flight queries
• Dealloc method of Cocoa PDE is now called when Print dialog is closed
• Two-Sided Checkbox now follows PPD UIConstraints
• Carbon Printing sheets and window flickering issue fix
• ‘Collated’ can now be set as default in print dialog
• Print sheet now honors first page/last page settings
• PDFView now works with undoManager when its document is set
• Paper sizes and some PPDs compatibility fixes
• AERecord-to-NSDictionary translation now handles ‘usrf’ fields.
• Support for serial smart card readers in pcscd
• SyncServer performance fix
• AppKit recognition of xml-format webarchives
• Latest time zone changes for Brazil, Europe, Argentina, etc
• Uploading of files to more than one webDAV volume at the same time fix
• X11 application gnubg segmentation fix

So I will give the World of Apple readers some additional details not yet reported on the Apple web that I have seen. In order to properly discuss the Hearing, a refresher is needed on the basic claims at issue, at least to the extent that a layperson can discuss them. I remind the readers that I am not an attorney and anything I say must be taken in that context. The Mac Observer has had the assistance of an attorney who wishes to remain anonymous who has opined that Apple’s chances of prevailing on its Motion are good. I respectfully disagree but more on that later.

An abbreviated summary of Psystar’s Counterclaims

Psystar is alleging violations of Sections 1 and 2 of the Sherman Antitrust Act and Section 3 of the Clayton Antitrust Act as well as California-specific business codes and state common law on unfair and anti-competitive business practices.

From the Wikipedia article linked above on the Sherman Act:

Around the world, what U.S. lawmakers and attorneys call “Antitrust” is more commonly known as “competition law.” The purpose of the act was to oppose the combination of entities that could potentially harm competition, such as monopolies or cartels. Its reference to trusts today is anachronism [sic]. At the time of its passage, the trust was synonymous with monopolistic practice, because the trust was a popular way for monopolists to hold their businesses, and a way for cartel participants to create enforceable agreements.

The Sherman Act was not specifically intended to prevent the dominance of an industry by a specific company, despite misconceptions to the contrary. According to Senator George Hoar, an author of the bill, any company that “got the whole business because nobody could do it as well as he could” would not be in violation of the act. The law attempts to prevent the artificial raising of prices by restriction of trade or supply. In other words, innocent monopoly, or monopoly achieved solely by merit, is perfectly legal, but acts by a monopolist to artificially preserve his status, or nefarious dealings to create a monopoly, are not.

Emphasis added. While Wikipedia is certainly not the most scholarly of sources, this is intended to be a discussion for the layperson, so it will serve for that purpose.

From the Wikipedia article linked above on the Clayton Act:

Second, Clayton-3 is notable as well. At the time of its passage, the legislature that enacted the Sherman act was largely concerned with horizontal restraints. For many years, enforcement of antitrust law using Sherman-1 focused on horizontal agreements. The clear focus of Clayton-3 is vertical agreements. This clarifies that both horizontal and vertical agreements are within the scope of federal antitrust law.

Under Sherman, Psystar is alleging illegal tying of the Mac OS to Apple-labeled hardware and attempts to maintain a monolopy in the Apple-labeled hardware submarket.

Under Clayton, Psystar is alleging an illegal requirement for consumers to deal with Apple exclusively with regards to these products.

Edited to add: These two claims do have some overlap.

There are other allegations under California and common law, but the main issues appear to be these two Federal acts. The reader will note that I italicized the word “submarket.” A great deal of this case is a disagreement on the existence and definition of market terminology. Psystar is alleging that there are two markets at issue: the Mac OS market and the Mac OS capable hardware market (which itself contains a submarket consisted of Apple-labeled hardware). Note: I originally had the hardware market and sub-markets reversed which I corrected.

The alleged Mac OS market

Psystar alleges that Apple has a monolopy on this market as the exclusive manufacturer and/or licensor of the product. It further claims that no other operating systems are an effective substitute and/or reasonably interchangeable. Lastly, they claim that there are near insurmountable barriers for a new entrant to compete against the Mac OS with another operating system.

I note (as does Apple’s attorney) that Psystar is engaging in obvious cognitive dissonance. As they admit, their own business, which is “devoted” to providing “choice” to customers, offers multiple operating systems thereby acknowledging by their actions that the operating systems are competing against each other. As to the last prong of the claim, it is my personal opinion that it is a ridiculous demand for entitlement. Apple, Microsoft, and many other companies started from scratch and made their way. Demanding that the law cobble existing businesses so that an upstart can gain market at their expense seems patently unjust in my opinion. It appears that Alan Greenspan shared a similar sentiment (from the Sherman Wikipedia article linked above):

Alan Greenspan, in his essay entitled Antitrust condemns the Sherman Act as stifling innovation and harming society. “No one will ever know what new products, processes, machines, and cost-saving mergers failed to come into existence, killed by the Sherman Act before they were born. No one can ever compute the price that all of us have paid for that Act which, by inducing less effective use of capital, has kept our standard of living lower than would otherwise have been possible.”

The alleged Mac OS capable hardware market

Psystar alleges that there are companies that desire to manufacture hardware capable of running the Mac OS and that it is technologically possible for them to do so. This is undoubtedly true. Edited to add: I am not stating that the theory of a separate market is undoubtedly true, in fact, I believe that position is untenable.

The alleged Apple-Labeled hardware submarket

Psystar alleges that Apple’s conduct in excluding other manufacturers from producing systems with the ability to run the Mac OS is improper tying and as such Apple holds monopoly power in this alleged submarket.

In support of all their claims, Psystar cleverly uses Apple’s own advertising campaigns against them in an attempt to show that Apple recognizes the separate markets that Psystar is claiming. While clever, I don’t find this particularly persuasive as commercials are by definition one-sided promotions of a product with differentiation from its competitors. The very fact that differentiation is made in Apple’s advertisements appears to prove the opposite of Psystar’s claims, i.e. Apple recognizes that Microsoft is its direct competitor and that consumers will choose between the two products, even if only between operating systems.

Psystar also points to the much-debated and hotly contested price differences between Apple hardware and that of other manufacturers. However, they appear to once again defeat their own point by noting that despite the fact that the Apple systems cost more, Apple enjoys a particularly devoted consumer base. On its face, I would see this as proof that there is more to value and cost than the price tag and that Psystar is improperly limiting what constitutes valuation. To my disappointment, Apple’s attorneys did not raise this point at the Hearing. I am sure there is some legal or strategic reason they did not, or perhaps they would disagree with my lay opinion of Psystar’s argument. Psystar further argues that Apple could charge even more (a small but significant non-transitory increase in price— SSNIP) and would not lose its consumer base. I fail to see how that helps Psystar, but again, these are legal subtleties.

The above of course is a very truncated summary of the allegations to give the reader a broad overview of the case. As mentioned previously, Justia has the filings online for free review. Psystar’s filing is docket entry 12.

An abbreviated summary of Apple’s Motion to Dismiss Psystar’s Counterclaims

The Table of Contents of Apple’s Motion provides the most concise summary possible:

III.A. All of [sic] Psystar’s Counterclaims Require The Definition Of Legally Plausible Relevant Markets.

III.B. Psystar’s Alleged Single-Product Relevant Markets Are Neither Legally Nor Factually Plausible.

III.B.1. Courts Repeatedly Reject Single Brand Markets.

III.B.2. The Allegations Contained In Psystar’s Counterclaims Disprove Its Contentions About Single Brand Markets.

III.C. Apple Is Not Obligated To Help Psystar Compete.

III.D. Psystar’s Cartwright Act Claims Should Be Dismissed.

III.E. Psystar’s California Unfair Competition Law Claims Should Be Dismissed.

As an aside, I am surprised that the inconsistent capitalization in III.A passed the proof-reading process at counsel’s offices. Apple cites to 59 cases in support of its Motion. I have printed all of them and have well over 1,000 pages of case law to review for future articles.

Apple relies heavily on alleged contradictory statements within Psystar’s Counterclaims, some of which I have already noted. I believe that their argument that Psystar’s very business model shows the existence of only one relevant competitive market, the personal computer market, is strong and makes common sense. Apple also notes that Psystar’s mission is to force Apple to provide assistance to its competitors.

The burden to prevail on a Motion to Dismiss is extraordinarily high. However, it is not so high that any possible scenario would survive dismissal, only plausible ones. It is possible that Steve Jobs is a space alien from Venus, but it is not plausible. This is where the heavy analysis of case law by a properly qualified attorney comes into play. Apple argues that Psystar has failed to meet the plausibility test required by case law and as evidenced by their own alleged contradictory statements. The issue of market power and its necessity in the proper definition of markets is also argued. Apple appeals to the Court that failing to dismiss the allegedly fatally flawed Counterclaims simply because there is a scintilla of possibility will result in protracted and expensive discovery.

Though I cannot yet claim to have a full grasp on the intricacies, it appears that the majority of the weight to prevail on its Motion rests on the success of its argument that courts repeatedly reject single-brand markets. Some persuasive quotes from other cases are provided. For example, citing United States v. E.I. DuPont de Nemours & Co., 351 U.S. 377, 76 S.Ct. 994 (1956):

[The] power that, let us say, automobile or soft-drink manufacturers have over their trademarked products is not the power that makes an illegal monopoly. Illegal power must be appraised in terms of the competitive market for the product.

Apple alleges that the above case upholds the proposition that reasonably interchangeable products that serve the same use are in the same market. In my opinion, this is strong. All one has to do is spend an hour on the Internet obersving the OS wars between Apple and Microsoft devotees to see that as far as the law should be concerned, there are reasonably interchangeable products existing in the marketplace.

In response to Psystar’s allegations regarding SSNIP, Apple notes that Psystar appears to have pulled a bait and switch since the additional market they are trying to establish is the Mac OS market, yet they did not mention the price of the Mac OS but rather the hardware.

Again, I urge the reader to view the actual filing which appears as docket entry 16 and to keep in mind that my summary is done as a layperson and not an attorney. A properly licensed attorney may very well summarize the issues much differently.

An abbreviated summary of Psystar’s Opposition to Apple’s Motion to Dismiss

Psystar cites 39 cases in its support. The contents of the Opposition address Apple’s allegations point by point. The main thrust of its arguments are that Apple has misconstrued the legal standard for a Motion to Dismiss and that Courts have upheld single-product market definitions.

As I noted in an earlier article:

One of the most interesting portions of Psystar’s Opposition is its attempt to use language found in U.S. v. Microsoft Corp., 87 F.Supp.2d 30 (D.D.C. 2000) as follows (see page 10 of Psystar’s filing):

As far as I understand their arguments as a non-attorney, Psystar is using that statement to support its allegations that the Macintosh is not part of the general PC market but is rather its own market. I am convinced that this will come back promptly to bite Psystar in the rear. This comment of the District Court in the Microsoft case dealt specifically with switchers in 2000, prior to Apple’s switch to Intel chips. The fact is that due to Apple’s switch to Intel chips—the very switch which makes possible the emulation that Psystar is relying upon— this observation is largely moot. Further, since 2000, Linux has become much more user-friendly with many people finding Ubuntu to be a viable alternative to both Windows and OSX.

Apple’s attorneys did argue that very point at the Hearing. The reader may find Psystar’s Opposition as docket entry 25.

An abbreviated summary of Apple’s Reply to Psystar’s Opposition

A Reply cannot bring up entirely new arguments, so as should be expected, Apple’s Reply is focused solely on Psystar’s last filing. Apple alleges that Psystar has relied upon case law that has been abrogated and that other case law cited by Psystar is inapplicable as it deals with aftermarkets. Apple continues to allege that Psystar’s own filings implicitly make Apple’s case. In this instance, Apple alleges that Psystar has tacitly admitted that Apple does not have to help a competitor. Obviously, Apple also defends its interpretation of the legal standard to prevail on a Motion to Dismiss.

An abbreviated summary of the Hearing on Apple’s Motion to Dismiss

First off, I like this Judge. He is a no-nonsense shooter. After noting that both parties failed to file Initial Disclosures on time, he read them the “Iron Curtain” act, basically reminding them that untimely disclosure can preclude the use of the untimely submission. Both attorneys seemed suitably chastised. The transcript was relatively short at 34 pages.

Apple’s attorney, James G. Gilliland, spoke first. Here is the heart of his argument:

There’s no dispute here, I think that the counterclaims, their success depends upon Psystar’s ability to allege and prove a single brand relevant product market. Specifically, they claim that the relevant market is the market for the Macintosh operating system. However, we think, on the face of the counterclaims, they need to be dismissed for two reasons. First, the counterclaims themselves contradict the allegation that there is a single brand relevant market. Second, the only time when there can be such a market, the aftermarket context, does not exist in this case.

And:

We submit under “Twombly”, Your Honor, its simply not plausible to admit that operating systems all serve the same purpose. To admit that they are all sold by Psystar on the same computer, to the same customers, through the same line of commerce, and then to claim they are not in the same relevant market.

One entertaining quote from Gilliland is when he encourages the Court to watch the submitted DVD of Apple television advertisements as “some of them are very cool to watch.” Gilliland also made the arguments that I had already noted above in my commentary within the abbreviated summaries.

Psystar was represented by Colby B. Springer who spoke immediately after Gilliland.

Springer argued through case law that there has been relevant case law defining a single-product market that would be applicable in this case and that there is no “bright line rule” on this issue. He argued that Apple’s arguments failed to address the submarket issue as opposed to an aftermarket. The heart of Springer’s position was as follows:

…Again important here with respect to defining the market, is that issues of factual disagreement, and there are clearly issues of factual disagreement here with respect to what constitutes the relevant market, issues of factual disagreement are not appropriate for a 12(B)(6) Dismissal, especially in light of the fact this was a jury question [in other cases].

Judge Alsup had a humourous moment as well when he asked Springer how to pronounce Psystar and then inquired “What happened to the P?”

Judge Alsup then questioned Springer on various issues including how Psystar was able to get the Mac OS to run on a non-Apple computer. Springer represented that “they [Psystar] have also developed their own code that allows it to operate on a non-Apple-labeled computer system.” Now readers, correct me if I am wrong, but isn’t this almost nearly false? Wasn’t this code developed by the OSx86 Project who are not too happy with Psystar either?

It is during this questioning period that Judge Alsup made the comment reported by The Mac Observer:

There are people that like a Ford pickup truck that wouldn’t be caught dead in a Chevy. I don’t think that anybody is going to say Ford and Chevy—that anybody has a monopoly on the pickup truck market.

Springer countered by quoting Apple’s own promotional blurbs about the virtues and superiority of OS X.

Gilliland was allowed a brief response. He pointed out to the Court that Psystar’s reliance on SSNIP is entirely pointed towards hardware, which undermines their case, since Mac OS X upgrades sell for a similar price as Windows upgrades.

After that portion was done, the issue of possible recusal was discussed. As I suspected, this was not as potentially major of an issue as some articles seemed to imply. One of Apple’s attorneys, Megan Chung, was a law clerk for Judge Alsup approximately four years ago. Judge Alsup made it quite clear that he did not believe that this was significant enough to warrant recusal unless Springer had some case law that he was not aware of. The deadline to file a Motion for Recusal has come and gone; thus, Judge Alsup remains on the case. He promised a decision within two weeks of the Hearing.

My Impressions

The Judge seemed very fair with perhaps a slight inclination in Apple’s favour. By inclination I do not mean bias but rather that he was persuaded by the arguments. This is difficult to tell by simply reading a transcript. The attorneys were very professional and get along with each other which unfortunately is not always the case. Though I am admittedly biased, I do think that Gilliland performed slightly better than Springer which would be in line with my opinion of the filings. I believe that Psystar’s Counterclaim was very cleverly argued, and I gave it grudging respect. However, from that point on, I have found their arguments weakening. This is my lay opinion, and I will be the first to admit that my Apple fangirlism may be colouring my view unawares.

However, I stand by my prior repeated comments. I do not believe that Apple will win this Motion (and that many website will make a huge deal out of this non-event). Every benefit of the doubt is given to the non-moving party in a Motion to Dismiss, and it would be easy for the Judge to find disputed issues of fact in this matter. It appears to hinge on Apple’s arguments on the legal standards required to prevail.

Edited 11/15/08: I neglected to add that while Judge Alsup was chastising the parties for failing to timely exchange disclosures that Springer informed the Judge “the reason we discussed among ourselves postponing until the end of the month was because we thought there might be guidance as to whether there were or were not antitrust issues in the case.” The Judge then inquired if that meant that Psystar’s case will evaporate if the antitrust issues are dismissed to which Springer replied strongly that they would still have their own affirmative defenses.

Another bit of trivia, also present at the Hearing besides the above-mentioned counsel and their supporting staff were Dan Cooperman as General Counsel of Apple and Carlene Claus (phonetic) as Litigation Director as well as Rudy Pedraza, CEO of Psystar Corporation.

Minor grammar and style corrections were also made.

Zaky writes that this would represent “the largest revenue beat by any company I’ve ever seen”.

When it comes to sales Zaky appears to be ignoring concerns of slowing consumer spending predicting growth in all of Apple’s product lines:

• iPods: 22 million units (up from 11.05 million in Q4)
• Macs: 2.8 million (up from 2.61 million)
• iPhones: 8 million (up from 6.89 million)

Papermaster’s lawyers filed their answer to IBM’s original lawsuit on Wednesday as well as filing counter claims. As is common in such cases the filed papers admitted only solid facts and denied everything else.

In particular Papermaster’s lawyers claim that IBM’s non-competition agreement is unreasonably broad as well as arguing that the agreement doesn’t apply in Texas – where Papermaster has lived and worked for 17 years – or California where Apple is based.

A status conference is schedueld for November 18 at 10 am in the U.S. District Court, Southern District of New York, White Plains.

Read the filings so far (PDF):

• IBM’s original complaint
• Papermaster’s answer to IBM’s suit
• Judge’s Order for Papermaster to halt work at Apple
• Papermaster’s Filings

Steve Jobs had said in the past that he wished the iPhone to be in China and Russia by the end of 2008, the latter he has already achieved.

[Update] As of writing the job listing has been removed.

This update is recommended for all Safari users and features protection from fraudulent phishing websites and better identification of online businesses. This update also includes the latest security updates. For detailed information on the security content of this update, please visit this site: http://support.apple.com/kb/HT1222.

• Safari 3.2 for Leopard - 39MB
• Safari 3.2 for Tiger - 25MB
• Safari 3.2 for Windows - 19MB

According to Mac Rumors’ sources Apple today end-of-life’d the 23-inch Cinema Display as well as the old In-Ear headphones. As Mac Rumors writes, this is generally a good indication of newly shipping products.

During the iPod Special Event in September Apple stated that he In-Ear headphones would ship during October.

The report states that the three companies held meetings about setting prices of TFT-LCD displays.

They agreed to charge predetermined prices for the displays, issued price quotes based on those agreements, and exchanged sales information on the display panels, in order to monitor and enforce the agreement, the Justice Department said.

Apple, Dell and Motorola were among the larger companies affected by the price fixing.

Sharp was the company who affected Apple directly as between September 2005 to December 2006 the company used Sharp displays in all iPods sold at the time.