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Psystar v. Apple - The August 21, 2009 Hearing Transcript
Wednesday, May 26 2010 @ 11:53 PM EDT

Would you like to see how lawyers and judges talk to each other when there's no jury around to worry about? We get to, because the court has now made public the transcript of the August 21, 2009 hearing [PDF] in Psystar v. Apple. All we knew at the time was the very spare wording in the minutes of the hearing.

As you'll see, when judges talk to lawyers, it can be very straight talk. No feather boas or glitter, no pretty pictures, and no smoothing over what he thinks. You'll also see a lot of strategy in real time on the part of the lawyers as they try to read the judge's inclinations and mood, not to mention trying to see how to help him grasp what he doesn't yet understand. And the judge? He's cutting to the chase, looking at the law, the issues, and what his role is and what the jury should and shouldn't hear. What was at issue in this hearing was discovery violations.

Psystar has just filed an appeal, after losing the litigation at the lower level, and so the Appeals Court will be reading these transcripts also, but what they will be looking for -- mistakes by the judge, if any -- differs from what we're interested in. What I want to show you is how important it is for lawyers and judges to understand technology.

At issue in the hearing was some code that Psystar failed to preserve for discovery. Here's the letter Apple [PDF] sent to the court about the discovery violation, and Psystar also had filed a motion about another discovery issue. So both sides are complaining that they can't get the information they feel they need. The judge decided to hear only Apple's motion on this particular day, and he asked for further legal briefing on Psystar's issues.

Apple was asking for a jury instruction and their costs in bringing the motion. The parties had tried to resolve matters but had been unsuccessful, not being able to agree on what the sanctions should be. Psystar conceded the failure to preserve. The question was, what to do about it?

The judge is leaving for a bit, apparently on vacation, and I read the transcript to indicate he is overworked and tired of the parties' discovery issues. His worry is that the trial will have to be postponed if they don't cut it out, and so that's his issue. This is how he begins:

THE COURT: Okay, we are here on -- we're just going to put to one side -- there was -- you bombarded me, and I'm going to probably get a special -- I'll get a magistrate judge to help me so since you are so contentious in this case, maybe. I'm going to wait and see how I feel about it, but I just can't continue to do the kind of discovery disputes that you are bombarding me with.

We're going to only deal with today the first one that was sent in, that was about destroying evidence. And so we'll hear from Ms. Smith on that one. That one we will resolve today.

Psystar had just retained a new law firm, and the motions were in large part, I'd opine, the new firm trying to reposition the case in a new direction. If you are Psystar, you do want to have that opportunity. And as the hearing continues, you can see the judge, tired and grumpy though he may seem, definitely does make arrangements that are basically fair to both parties, even though he doesn't seem to be enamored of either. Apple does win overall on this motion, no doubt about it, but he could have come down on Psystar much harder, if he'd wanted to. And he's grumpy with Apple folks too. He seems to be very aware that what had been two large law firms going at it, the scene had shifted so Apple had a large law firm and Psystar no longer did. And he really just wants them to get the show on the road without all the contentiousness.

One problem when politicians can't agree about the confirmation of judges is that the ones already confirmed get overworked, and it is a real problem. Politicians may not care, but if you are before a judge, the last thing you want is for the judge to rush through without understanding your position, the facts of the case, and the underlying law. What do you make of this exchange?

MS. BOROUMAND SMITH: We spent about an hour in the meet and confer discussing the spoliation motion, and both parties agreed that relevant evidence that should have been produced by Psystar has been erased. That evidence consists of two kernel extensions: The apple decrypt kernel extension and the dsmos kernel extension, as well as a boot loader file that we are calling the Netkas boot loader.

Now, the kernel extensions are used to circumvent Apple's technological protection measure, and they contain Apple's copyrighted key in them. And the boot loader is used to enable Mac OS X to be booted up on nonApple hardware. So we've agreed that Psystar was required to preserve that evidence, that they were required to produce it, and that they have erased it.

The only dispute that we have remaining here today is what the sanctions would be. We are seeking sanctions in the form of a jury instruction whereby the jury is instructed that the kernels were on Psystar's machines; that they were used and that they were erased.

We are also seeking attorney's fees associated with this motion as well as costs that we have had to incur to have our experts find evidence that should have been provided to us as part of discovery.

Psystar contends -- in their letter brief, their opposition states that it was an honest mistake, that they didn't know that they were supposed to preserve this evidence, but the facts bear otherwise. Back in March of this year, we deposed Rudy Pedraza, Psystar's CEO and their designee on technical topics, and we specifically asked him about this dsmos kernel extension as well as the Apple decrypt kernel extension, and here is how the testimony went:

"Q. Do you know what that dsmos kernel extension is?

"A. No, I do not.

"Q. Have you ever seen that reference before?

"A. No.

"Q. Never?

"A. Never."

With regard to the kernel extension for Apple decrypt, he testified also that they never used them on their computers.

On May 15th, we -- as of today, when we met -- actually, let me kind walk you through the chronology here, Your Honor.

We sent a letter on May 15th about the spoliation usual. We met and conferred with new counsel for Psystar on the 23rd, before we filed our letter brief. In that meet and confer session, counsel stated that Psystar had never used the dsmos kernel extension or the Apple decrypt kernel extension on their computers. And then we filed our motion because we believe we had evidence that they did.

In their opposition that came in last night, they indicated that they are now acknowledging the possibility that copies of these kernel extensions may have accidentally be been transferred to Psystar computers.

In our meet and confer today, we told them that but for those kernel extensions, Mac OS X would not have run on Psystar's computers. They went back to their client, and as of today, 24 hours after, less than 24 hours after they filed their opposition, their client has told them that, yes, there is a high possibility that there is dsmos and Apple decrypt on the earlier Psystar computers.

We believe that we are entitled to sanctions, Your Honor, in both the --

THE COURT: Just --

MS. BOROUMAND SMITH: Yeah.

THE COURT: You are doing a great job of explaining this, but assuming that -- assuming it was -- let's say Apple decrypt was on there, so what?

MS. BOROUMAND SMITH: So Apple decrypt is the kernel extension they use to actually circumvent Apple's --

THE COURT: Is that illegal?

MS. BOROUMAND SMITH: -- technological protection measures.

THE COURT: What's wrong with that?

MS. BOROUMAND SMITH: It has -- it's -- you're not allowed to circumvent under the DMCA technological protection measures --

THE COURT: You are not allowed to do what?

MS. BOROUMAND SMITH: You are not allowed to circumvent technological protection measures that are used to prevent access to copyrighted works.

THE COURT: And that is what some statute says?

MS. BOROUMAND SMITH: Yes, the Digital Millennium Copyright Act.

THE COURT: Okay, I take your word for it. So you are saying that under that act, if you used Apple decrypt that would a violation of the statute.

MS. BOROUMAND SMITH: That's correct because Apple decrypt contains Apple's copyrighted keys. And what has happened is they basically circumvented our technological protection measure, which prevents Mac OS X from running on anything but Apple Computers.

THE COURT: Okay. How many units, roughly, were -- had this Apple decrypt on it?

I know some of you geeks will read this and say, OMG, he doesn't know what the DMCA is? No. He does. If you read his very careful and one might say even scholarly orders, you can see he knows the law very well. It's the tech he asks them to explain to him, as you'll see. He's likely never heard of a kernel extension. He's asking Apple what they are asserting in this motion, what the law is they are relying on that they believe applies to the specific conduct complained about, that supports their assertion that the fact that Psystar erased code matters. He's being asked to sanction Psystar, after all, and award Apple money, and he wants to know what the legal basis is that Apple is claiming. In the end, he does give Apple $5,000, and he asks them to do further interrogatories to get more info from Psystar.

This is a hearing about a discovery violation; any DMCA violation is something not yet in proven by evidence, so his wording also reflects that. At that point, the expectation was that the case would go to the jury to decide if what Psystar did was a violation of the DMCA or not. So he's saying, OK, I'll accept your representations with respect to this motion hearing that this is what we are discussing. And, assuming that is so, how bad was it? He next tries to get a handle on the metes and bounds of the violation. And that's where the interrogatories come in.

But I'm sure you also noticed that Pedraza, under oath, claimed he'd never even heard of dsmos. Some of you choked on your soda when you read that part. Me too. When Psystar's lawyer is asked to respond, he starts to tell a tale about Pedraza being the business guy, but then he just says he won't defend it, that it's false testimony:

THE COURT: That's totally false, isn't it?

MR. CAMARA: Well --

THE COURT: I mean, sounds totally false based on what I'm hearing today that that testimony was just false.

MR. CAMARA: Well, here's what happened. They -- the people at Psystar -- well, I won't defend that, Your Honor, I think those answers were false.

THE COURT: All right.

MR. CAMARA: Coming from a 30(b)(6) deponent.

THE COURT: All right.

MR. CAMARA: Robert Pedraza at the business was in charge of this, but, certainly, Rudy Pedraza should have had that information at the 30(b)(6) deposition. If I could give the Court some background?

THE COURT: Go ahead.

MR. CAMARA: We came into this case a month ago, as the Court knows. And after coming in, we have done our best to clean up the discovery that took place. We have just produced a massive amount of documents curing, I think, almost all of the outstanding problems, if not all of the outstanding problems.

Blame it on the first lawyers. But, if I may so state, it's also not so that Pedraza was *just* the business person in the company, or that he had no awareness of the tech the company was using. Engadget spoke to him in 2008, specifically talking to him about Netkas. And this lengthy article about the Pedraza brothers also identified him as a computer programmer. So he was the business guy, true, but that wasn't all he was, and he certainly would have known what the company was selling, judging from the article, and as a computer guy, he'd understand it. Even his first lawyer knew back in August of 2008 what code Psystar was then using:
On claims of code modification, Springer said that the company had not made any modifications to the operating system. Any techniques applied to make Mac OS run on Psystar, he said, can be found in already available, open source software.
So while Psystar's lawyer is admitting Pedraza should have known what the code used was by the time of the deposition, in that he was supposed to be the guy representing the company in that deposition, I think Pedraza didn't need to be briefed on all that. And incidentally, Psystar's lawyer is also a geek, a programmer. He might be the only one at that hearing who completely grokked everything about the code.

I question the story told about the first lawyers not informing Psystar of its discovery obligations. This was known to be a case about code. It was about a DMCA violation. Carr & Ferrell is a reputable firm that has handled other technology cases. Here's the impressive list of cases on Colby Springer's page, including the Burst v. Microsoft case. How could they not know that they had to preserve the code at issue? It's hard for me to believe that story. I guess the bottom line is that I see why judges get grumpy with lawyers sometimes. And lawyers with each other.

Here is the transcript as text, but for anything that matters, go by the PDF, as we strive for accuracy, but we're only human:

********************************

United States District Court
Northern District of California
Before The Honorable William Alsup

Apple, Incorporated,

Plaintiff.

vs.

Psystar Corporation,

Defendant.

____________________________

No. C08-3251 WHA

San Francisco, California
Thursday, August 20, 2009

Reporter's Transcript Of Proceedings

Appearances:

For Plaintiff:
Townsend and Townsend and Crew
[address]
By: Mehrnaz Boroumand Smith, Esquire
James G. Gilliland, Esquire
Tyler Gee, Esquire

For Defendant:
Camara & Sibley, LLP
[address]
By: K.A.D. Camara, Esquire
Kent Radford, Esquire
Noah Radbill, Esquire
Christian Curtis, Esquire

Reported By: Sahar McVickar, RPR, CSR No. 12963
Official Reporter, U.S. District Court
For the Northern District of California

(Computerized Transcription By Eclipse)

Sahar McVickar, C.S.R. No. 12963, RPR
Official Court Reporter, U.S. District Court
[phone]

Thursday, August 20, 2009 12:00 P.M.

PROCEEDINGS

THE COURT: All right, welcome, everyone. Have a seat, please.

THE CLERK: Calling civil action 08-3251, Apple, Inc., versus Psystar Corporation.

MS. BOROUMAND SMITH: Mehrnaz Boroumand Smith, Townsend, Townsend and Crew, on behalf of Apple, Inc., Your Honor.

THE COURT: Say that name, again.

MS. BOROUMAND SMITH: Mehrnaz Boroumand Smith.

THE COURT: Smith?

MS. BOROUMAND SMITH: Yes.

THE COURT: Thank you.

MS. BOROUMAND SMITH: And I've got here with me Tyler Gee and Jim Gilliland.

THE COURT: Great.

MR. CAMARA: I'm K.A.D. Camara for the defendant, Psystar Corporation.

THE COURT: You are going to have to speak louder. Whenever each lawyer talks, I'm going as to ask you to come to the lecturn because I can't hear.

MR. CAMARA: Yes, Your Honor. It's K.A.D. Camera for the defendant, Psystar Corporation.

2

And I'm joined at counsel table by my colleagues, Kent Radford, Noah Radbill and Christian Curtis.

THE COURT: All right, welcome.

MR. CAMARA: Thank you, Your Honor.

THE COURT: Okay, we are here on -- we're just going to put to one side -- there was -- you bombarded me, and I'm going to probably get a special -- I'll get a magistrate judge to help me so since you are so contentious in this case, maybe. I'm going to wait and see how I feel about it, but I just can't continue to do the kind of discovery disputes that you are bombarding me with.

We're going to only deal with today the first one that was sent in, that was about destroying evidence. And so we'll hear from Ms. Smith on that one. That one we will resolve today.

MS. BOROUMAND SMITH: Thank you, Your Honor. Your Honor, we spent about an hour --

THE COURT: Use the microphone. You can bend it around anywhere you want.

THE COURT: Thank you. Go ahead.

MS. BOROUMAND SMITH: We spent about an hour in the meet and confer discussing the spoliation motion, and both parties agreed that relevant evidence that should have been produced by Psystar has been erased. That evidence consists of two kernel extensions: The apple decrypt kernal extension and

3

the dsmos kernel extension, as well as a boot loader file that we are calling the Netkas boot loader.

Now, the kernel extensions are used to circumvent Apple's technological protection measure, and they contain Apple's copyrighted key in them. And the boot loader is used to enable Mac OS X to be booted up on nonApple hardware. So we've agreed that Psystar was required to preserve that evidence, that they were required to produce it, and that they have erased it.

The only dispute that we have remaining here today is what the sanctions would be. We are seeking sanctions in the form of a jury instruction whereby the jury is instructed that the kernels were on Psystar's machines; that they were used and that they were erased.

We are also seeking attorney's fees associated with this motion as well as costs that we have had to incur to have our experts find evidence that should have been provided to us as part of discovery.

Psystar contends -- in their letter brief, their opposition states that it was an honest mistake, that they didn't know that they were supposed to preserve this evidence, but the facts bear otherwise. Back in March of this year, we deposed Rudy Pedraza, Psystar's CEO and their designee on technical topics, and we specifically asked him about this dsmos kernel extension as well as the Apple decrypt kernel

4

extension, and here is how the testimony went:
"Q. Do you know what that dsmos kernel extension is?

"A. No, I do not.

"Q. Have you ever seen that reference before?

"A. No.

"Q. Never?

"A. Never."

With regard to the kernel extension for Apple decrypt, he testified also that they never used them on their computers.

On May 15th, we -- as of today, when we met -- actually, let me kind walk you through the chronology here, Your Honor.

We sent a letter on May 15th about the spoliation usual. We met and conferred with new counsel for Psystar on the 23rd, before we filed our letter brief. In that meet and confer session, counsel stated that Psystar had never used the dsmos kernel extension or the Apple decrypt kernel extension on their computers. And then we filed our motion because we believe we had evidence that they did.

In their opposition that came in last night, they indicated that they are now acknowledging the possibility that copies of these kernel extensions may have accidentally be been

5

transferred to Psystar computers.

In our meet and confer today, we told them that but for those kernel extensions, Mac OS X would not have run on Psystar's computers. They went back to their client, and as of today, 24 hours after, less than 24 hours after they filed their opposition, their client has told them that, yes, there is a high possibility that there is dsmos and Apple decrypt on the earlier Psystar computers.

We believe that we are entitled to sanctions, Your Honor, in both the --

THE COURT: Just --

MS. BOROUMAND SMITH: Yeah.

THE COURT: You are doing a great job of explaining this, but assuming that -- assuming it was -- let's say Apple decrypt was on there, so what?

MS. BOROUMAND SMITH: So Apple decrypt is the kernel extension they use to actually circumvent Apple's --

THE COURT: Is that illegal?

MS. BOROUMAND SMITH: -- technological protection measures.

THE COURT: What's wrong with that?

MS. BOROUMAND SMITH: It has -- it's -- you're not allowed to circumvent under the DMCA technological protection measures --

THE COURT: You are not allowed to do what?

6

MS. BOROUMAND SMITH: You are not allowed to circumvent technological protection measures that are used to prevent access to copyrighted works.

THE COURT: And that is what some statute says?

MS. BOROUMAND SMITH: Yes, the Digital Millennium Copyright Act.

THE COURT: Okay, I take your word for it. So you are saying that under that act, if you used Apple decrypt that would a violation of the statute.

MS. BOROUMAND SMITH: That's correct because Apple decrypt contains Apple's copyrighted keys. And what has happened is they basically circumvented our technological protection measure, which prevents Mac OS X from running on anything but Apple Computers.

THE COURT: Okay. How many units, roughly, were -- had this Apple decrypt on it?

MS. BOROUMAND SMITH: It's unclear, Your Honor, because we don't -- we bought -- our experts ended up buying several those units, and we don't know when they started shipping another decryption text on their computers.

But we know that at least up until September, so between April and September we believe they were using either Apple decrypt or dsmos.

THE COURT: What are they using now --

7

MS. BOROUMAND SMITH: But part of the issue is they destroyed evidence, and we don't know.

THE COURT: What are they using now to run Apple?

MS. BOROUMAND SMITH: They are using another kernel extension that they have written called OpenCojones.text and that also contains Apple's copyrighted key.

THE COURT: Is that a violation, too?

MS. BOROUMAND SMITH: Yes, Your Honor. I believe the only difference between the Apple decrypt kernel extensions and the open Cojones kernel extension is that in the Apple decrypt and dsmos kernel extensions the key is written out, just in the form of a poem, and in open Cojones, an algorithm is running to retrieve that poem, and then the poem is used to go into the decryption engine.

THE COURT: Well, since you know all of this now -- I'm losing track of what the problem is.

Sounds like you we could prove everything you want to prove, so what's the problem/

MS. BOROUMAND SMITH: Well, the problem is, Your Honor, we have two computers on which we can prove this. Psystar sold a bunch of computers. They had source code or executable code that they have destroyed or written over. And had we had that code and all versions of it up until today, we would be able to show that, together with our master copies, what they were shipping on their computers at any given point

8

in time.

THE COURT: But their brief says that there were only three lines of code destroyed. What am I thinking of.?

MS. BOROUMAND SMITH: So their brief says that they destroyed opened Cojones -- I'm sorry, they destroyed dsmos and Apple decrypt as well as the boot loader. And so --

THE COURT: Presumably, that's more than three lines of code.

MS. BOROUMAND SMITH: Yeah, that -- oh, you're thinking of the change in the boot loader, Your Honor, and that is a different issue.

THE COURT: Different issue, all right, well, don't even get to that yet.

MS. BOROUMAND SMITH: Okay.

THE COURT: So -- well, wait a minute, let's go back. At the master file stage, you're saying that they deleted from their master file Apple decrypt, for example?

MS. BOROUMAND SMITH: So what we area saying is they deleted from their code the Apple decrypt kernel extension as well as the Apple -- as well as the dsmos kernel extension. Maybe I should go back and explain how all this stuff works together, if that's okay, if it would be helpful?

THE COURT: Do it in less than one minute, okay.

9

MS. BOROUMAND SMITH: Okay. So in order to run Mac OS X on nonApple hardware, Psystar had to do two things: They had to use the kernel extensions that I've been talking about, and they also had to modify the operating system by using different boot loader because the boot loader that is used in Mac OS X is specifically for Apple computers, and the boot loader that they are using is for nonApple hardware. What they do, is they take a --

THE COURT: What they did, or -- what you mean what they did?

MS. BOROUMAND SMITH: So what they did was they wrote over that code, Your Honor.

THE COURT: They did what?

MS. BOROUMAND SMITH: They wrote over that code.

THE COURT: Over what code?

MS. BOROUMAND SMITH: The code for Apple decrypt and dsmos as well as the boot loader code for the Netkas boot loader.

THE COURT: "Write over" means what?

MS. BOROUMAND SMITH: They -- from my understanding of what I've been told by counsel, is that they just continued to program, and they didn't save different versions of the code. So let's say today I'm programming, I write some

10

portion of the code, and then tomorrow I decide I want to write over that, I write over it, but I don't preserve what I had before.

THE COURT: But some of these must have been out there on real machines.

MS. BOROUMAND SMITH: Correct, because what they did ways they took the -- some of this code, and they stamped it onto master copies. A master copy is then taken and stamped onto each computer that is sold to customers.

THE COURT: So why don't you just rely on the master copy?

MS. BOROUMAND SMITH: I'm sorry?

THE COURT: Why don't you just rely on that master copy?

MS. BOROUMAND SMITH: Because they haven't produced the master copy, and it doesn't exist anymore. So if we had the master copy for each time that -- from -- the master copies from April of 2008, when they started shipping their computers, till today, then we would be able to establish during that time frame which computers had Apple decrypt on them and which computers had dsmos on them, which computers had the Netkas boot loader on them. But because we don't have the master copies and because they have written over the source code over time and the executable code, we don't have any of that information.

11

THE COURT: Have you requested the master copies?

MS. BOROUMAND SMITH: We have, Your Honor. And they've produced what they have, but they don't have the initial master copies, the ones that matter.

THE COURT: How many do they have?

MS. BOROUMAND SMITH: They have produced two. They've produced one as of is July of 2009, so last month, and they've produced, I believe, another one as well. Is that correct?

MR. CAMARA: Yes, one earlier and one in July, Your Honor.

MS. BOROUMAND SMITH: Right.

THE COURT: Okay. Have a seat. I'm going to give you a chance to speak some more in a minute.

MS. BOROUMAND SMITH: Thank you, Your Honor.

THE COURT: Let me hear the other side. All right, what do you have to say?

MR. CAMARA: Your Honor, I think you've identified the issue correctly, which is that they have copies of what was on Psystar's computers. That's, in fact, the basis for their motion. They have copies of these kernel extensions, which were --

THE COURT: Yeah, but they don't know how many you put it on.

MR. CAMARA: Well, we don't know the answer to that

12

and they don't know to answer that.

THE COURT: If you haven't destroyed the evidence, we would know.

MR. CAMARA: We would, but we have offered to stipulate that until the time the computers had open Cojones on them, we will stipulate that all of them had this code on them.

So I think there can be no prejudice to them. We offered that in the meet and confer. And because we recognize that the failure to preserve these documents makes it impossible to tell which, if any, computers --

THE COURT: Maybe that will work. Don't go away. Ms. Smith what's wrong with that?

MS. BOROUMAND SMITH: So --

THE COURT: Doesn't that proving everything you need to prove?

MS. BOROUMAND SMITH: So what -- the other part of the meet and confer that Mr. --

THE COURT: Wait. Just address that part about the stipulation that -- what's wrong with that stipulation?

MS. BOROUMAND SMITH: So that's stipulation works, so long as it's presented to the jury.

THE COURT: Of course it would be.

MS. BOROUMAND SMITH: Right. But Mr. Camera indicated in meet and confer that they wanted to bifurcate and not provide that information to the jury, was my understanding.

13

MR. CAMARA: I think that is a simple miscommunication, Your Honor.

If what we are telling the jury is that Apple decrypt dsmos and the Netkas boot loader were on all Psystar computers shipped before a certain date, we are happy to have that be an instruction to the jury.

What I was talking about was if the Court were to prefer a more prejudicial instruction, like Psystar destroyed evidence.

THE COURT: What's wrong with telling the jury that you destroyed the evidence?

MR. CAMARA: Well, Your Honor, we think --

THE COURT: Is there an issue of bad faith in this case?

MR. CAMARA: Yes, Your Honor.

THE COURT: Well, if there is an issue of bad faith and somebody's been destroying evidence, that's highly relevant.

MR. CAMARA: Yes, Your Honor, we think it's certainly highly relevant to the pre-September 2008 computers that contain that destroyed evidence, but we think it would be highly prejudicial with respect to the post-2000 -- sorry, the post September 2008 computers, which everyone agrees do not contain and never did contain Apple decrypt, dsmos, et cetera. So if we could not present to the jury with respect

14

to what Psystar is doing now --

THE COURT: We are not going to have two trials. What do you mean, two trials? We are going to have one jury hear everything and sort it out.

MR. CAMARA: Well --

THE COURT: If your people happened to destroy evidence along the way that's relevant, then the jury is going to hear about it. And that's your problem if it's prejudicial because, you know, evidence can be prejudicial, but rightly so. And if somebody is destroying evidence, that's your -- to my mind, a jury can at least say, hey, they've been out destroying evidence, they're guilty as sin.

MR. CAMARA: It's certainly relevant to the computers that were printed from the -- the missing master boot copies. And I certainly would have no objection to Mr. Gilliland or Ms. Smith crossing our witnesses using the destruction of that evidence.

THE COURT: All right.

MR. CAMARA: But it isn't, relevant, I think, Your Honor, to the computers that were manufactured after September of 2008.

THE COURT: Why don't you just prove that the ones after September 2008 don't have that -- the offending modules on it?

MR. CAMARA: In fact, it's agreed that that's so,

15

Your Honor. And that's precisely the way we would like to proceed, we would like to have competing lawyer argument and cross-examination and testimony.

What we object to is an instruction that tells the jury that there has been destruction of evidence because it's quite possible that the jury will think that that's prejudicial not only as to the preSeptember 2008 computers, but also as to the post-September 2008 computers.

They will have a field day on cross with this evidence, and that's perfectly proper, but I don't think it requires an instruction from the Court for them to have the advantage that they are entitled to.

THE COURT: Well, let me give you some general principles. I'm missing something in this discussion, so I want you to help me understand what I'm missing.

One way to go here is to just let Apple prove -- we'll have no stipulations. One way to go is no stipulations, and then Apple just prove it up at trial that all this stuff was destroyed. That happens in a lot of trials, and the jury then says, ah-hah, they destroyed evidence, I don't like these people, they are trying to infringe.

But the jury gets all that information because it's highly relevant to the issue of intent. That's one way to go.

Another way to way go would be have a stipulation, but if you have a stipulation, you can't have it both ways.

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You can't then start putting in the same evidence that the stipulation goes to. So you would just have a cold two or three sentence stipulation that says here is what we did, here is what we did not do. And then you just argue it to the jury that there is bad faith, based on -- you wouldn't be putting in additional evidence because that would be superfluous.

Those are two different ways to try a case, one with a stipulation that knocks out a lot of the Q and A, one without it but you don't get the benefit of the stipulation but you would then get the Q and A.

Ms. Smith, what bothers me about your approach is you want me to instruct -- I'm not going to do all this instructing the jury. I can tell them that if somebody destroys evidence, they can consider that on the issues of bad faith, sure I can do that. But I'm not going to say that there has been bad faith. I'm not going to say that there has been destruction, unless something -- if you all were to stipulate and say here is what was destroyed, here is what is not destroyed, then I can instruct the jury along those lines, of course.

But then that would preclude you from -- maybe not 100 percent, but 90 percent from getting into the details of that with evidentiary material because that is the whole point of the stipulation. So what am I missing here?

Now, I'll give you one other -- some lawyers in your

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position, Ms. Smith, would be delighted to have all this evidence, and you would just throw it in front of the jury and say look how bad these people are. And you would not want a stipulation. You would not -- so what is it you are trying to ask me to -- be careful what you wish for, because you might get it and regret it at trial. What is it you want me to do?

MS. BOROUMAND SMITH: Well, to the extent Your Honor is saying that the information would be -- we wouldn't be able to bring that information in front of the jury --

THE COURT: To the extent -- I'm not saying -- I am saying that if you have a stipulation, then the other side is going to stand up and say we've covered that by the stipulation, why are we going into this. And I probably at some point -- I'll give you a little bit of loosey-goosey room because no stipulation is perfect, but I would probably cut you off before -- and you'd be unhappy about it.

MS. BOROUMAND SMITH: Then I guess you are right, Your Honor, I should be careful about what I'm asking for. And I would say that we want to bring that evidence in front of the jury and make sure that they do realize what Psystar has done as far as writing over the code and destroying evidence. But we still would like to seek the expenses that we have incurred bringing this motion as well as the expert --

THE COURT: What is the relief you are getting here?

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MS. BOROUMAND SMITH: I'm sorry?

THE COURT: What is the relief that you are getting that is -- warrants attorney's fees?

MS. BOROUMAND SMITH: Well, it's the fact that had they not lied to us in their 30(b)(6) deposition, Your Honor, and told us that they did -- we basically went down this whole path trying to find all of this information. We have spent time meeting and conferring with them, writing briefs, only to find out today what we should have known back in May --

THE COURT: Go back over all that. That sounds plausible. Go back through that chronology of how you got misled on this.

MS. BOROUMAND SMITH: Sure. So back in March, we had a 30(b)(6) deposition of Psystar's CEO, Rudy Pedraza. At that deposition, we asked him whether he knew what the dsmos kernel extension was, whether Psystar used the dsmos kernal extension --

THE COURT REPORTER: Slow down just a little for me.

MS. BOROUMAND SMITH: I'm sorry. And similarly, we asked him about the Apple decrypt kernel extension and whether or not Psystar used that kernel extension: The answers to all of those questions were "no." We then --

THE COURT: Stop just a second.

MS. BOROUMAND SMITH: Yes.

19

THE COURT: That's totally false, isn't it?

MR. CAMARA: Well --

THE COURT: I mean, sounds totally false based on what I'm hearing today that that testimony was just false.

MR. CAMARA: Well, here's what happened. They -- the people at Psystar -- well, I won't defend that, Your Honor, I think those answers were false.

THE COURT: All right.

MR. CAMARA: Coming from a 30(b)(6) deponent.

THE COURT: All right.

MR. CAMARA: Robert Pedraza at the business was in charge of this, but, certainly, Rudy Pedraza should have had that information at the 30(b)(6) deposition. If I could give the Court some background?

THE COURT: Go ahead.

MR. CAMARA: We came into this case a month ago, as the Court knows. And after coming in, we have done our best to clean up the discovery that took place. We have just produced a massive amount of documents curing, I think, almost all of the outstanding problems, if not all of the outstanding problems. We have produced witnesses for depositions, including Mr. Pedraza, again, in Miami. Mr. Pedraza's is being deposed still again next week here in San Francisco. So we have taken major steps. We have implemented a

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source control program to maintain changes. All changes that are committed to the source code so that something like that won't happen again in the future.

Rudy and Robert Pedraza, this is a startup in Miami. It's a small office. There are five guys running this business. They did not receive advice from former counsel about how the preservation rules applied to things like source code and things like the document images. And, regretfully, some of this has not been preserved.

We have offered stipulations, as Your Honor just heard, that we think cure the problem from a substantive point of view. And so we think that Rudy and Robert acted in good faith and continued to act in good faith, especially over the past month, taken steps to cure all the substantive objections so that a substantial penal argument is not warranted.

With respect to the missing files, Apple decrypt, dsmos and the Netkas boot loader, it's clear that Apple and Apple's counsel would have undertaken an independent investigation to verify whether or not those files were on our computers, no matter what with Psystar had produced in discovery. That's what any good lawyer would do.

So certainly, if there is any award, we would hope that it be narrowly tailored to any additional work that this discovery fight has generated. Certainly, the independent investigation into computers that they bought would have been

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performed no matter what.

THE COURT: Here is one thing that I think should be done, and this is not a stipulation, per se, it's going to be a court ordered interrogatory.

But Ms. Smith, you are going to write it. I don't want a big firm -- I don't want a big firm thing with definitions and instructions, just a plain interrogatory with no lead-in that says something like, do you admit that Apple decrypt was used on computers? You make it, you know, refine that. Then I assume your answer is going to be "yes."

MR. CAMARA: Well, Your Honor, I think so, too, but we haven't seen the basis for their motion. They haven't supplied the expert testimony.

THE COURT: They don't need to. Listen, you ought to go what was on your own computers. If you don't know what's on your own computers, I'm going to get upset.

MR. CAMARA: We have offered that as a stipulation, and the answer will be yes, Your Honor.

THE COURT: All right. And then the next question is on how many computers was it on? And then you ask the same question, dmso, and how many was it on. And then these are going to be court-ordered interrogatories which you can read to the jury.

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MS. BOROUMAND SMITH: Okay.

THE COURT: And so you get this done by Monday. And then you answer it by Monday of the following week.

MR. CAMARA: Yes, Your Honor.

THE COURT: And now, I don't want 36 interrogatories, I'm thinking about like 8 or 9 that would pin down this information that's come out today. Ms. Smith, are you following me?

MS. BOROUMAND SMITH: I am, Your Honor.

THE COURT: All right, so at least you'll get that much relief. You'll get a clear-cut interrogatory answer and -- that you can read to the jury. That's not a stipulation, that's a interrogatory answer.

Now, the jury may take into account that during the course of discovery you tried to clean up the problem. But they can also figure out, probably, that there was some monkey business going on earlier. And maybe that indicates bad faith, and that's up to them.

If they want to -- you know this would be classic evidence that goes to intent, if they were lying about whether the Apple decrypt was used or not. So that part I think should be done.

And then explain the boot loader thing to me -- boot loader thing to me.

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MS. BOROUMAND SMITH: Sure. So the boot loader, Your Honor, is a -- it's a file that allows the computer to boot up on certain hardware.

THE COURT: Right, I understand that.

MS. BOROUMAND SMITH: And what they've done -- in order to run Mac OS X on nonApple hardware, you have to modify the boot loader that is contained within the copyrighted works that constitute the Mac OS X.

So what they have done is basically taken a new boot loader, put it in together with the Mac OS X software in order to allow it to run on the hardware that they want it to run on. They have created a derivative work, in essence.

And what they have done is they have not provided to us, in either master copy or as part of executable code, the Netkas boot loader that they used, which is separate and different from the boot loader that is used by Apple as part of Mac OS X.

THE COURT: Just a second. I want your interrogatories -- write this down -- to state that they admit that the masters were destroyed, and that the dates -- and they ask for the dates that they were destroyed. I'm talking about the ones that had those Apple and dsmos on it.

MS. BOROUMAND SMITH: Okay.

THE COURT: All right, so, now, coming back to the boot loader, what do you say to the boot loader problem?

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MR. CAMARA: Your Honor, it's exactly the same problem. Just as Apple decrypt and dsmos were on those images, so was Netkas. And we would be happy to answer the same interrogatories --

THE COURT: All right, those -- add those to the interrogatories.

Now, how much are you asking for by way of sanctions?

MS. BOROUMAND SMITH: We are seeking the amount that we expended on filing this motion.

THE COURT: How much is that?

MS. BOROUMAND SMITH: I haven't done the calculation. I apologize.

THE COURT: You get $5000.

MS. BOROUMAND SMITH: Okay, thank you, Your Honor.

THE COURT: Probably a lot less than you really spent. But --

You going to complain about $5000?

MR. CAMARA: No, Your Honor.

THE COURT: All right, $5000. Now, on the other one -- you know, I just got -- you are using this as an occasion to argue over this one, and then -- and then instead of replying, I get these brand new arguments, brand new products. So Ms. Smith, what's going on here?

25

MS. BOROUMAND SMITH: So, Your Honor, this -- we have a motion that was filed by Mr. Camera with regards to topic three deposition that they noticed up on a 30(b)(6). This is our opposition. I know you didn't order us to respond. It's an opposition, as well as a motion for protective order on certain issues.

THE COURT: Just a minute. Why can't they take a deposition of your people on what that harm has been? I don't buy -- it's bogus to say that this is for experts. How are their experts going to prepare their reports without knowing what you contend are the damage items?

MS. BOROUMAND SMITH: So, Your Honor, we did provide testimony on harm to Apple. We provided testimony on irreparable injury to Apple, specifically. And Mr. Schiller was designated to testify on that topic, and he did testify for several hours, actually, during his personal --

THE COURT: Well, then, what's the problem?

MR. CAMARA: Your Honor, he was not designated on irreparable injury. Irreparable injury, as you know, is a predicate to an injunction, it has nothing to do with harm. I can read from (sic) you from our brief exactly what those were, and, indeed, Apple's agreement that provides --

THE COURT: All right.

MS. BOROUMAND SMITH: So I did misspeak, Your Honor.

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I meant to say injury and not irreparable injury. But what we did have him testify on was irreparable injury.

THE COURT: Well, somebody should be testifying about damages.

MS. BOROUMAND SMITH: So our damages except is going to be testifying about that as well. We're not --

THE COURT: But, how are they going to do their damage study?

You know, it's not just the plaintiff gets a damage study; they get to go out and hire an expert, and they got to be feeding him information all this time. And if you are stonewalling on the issue of how you have been damaged, they are going to have two weeks to prepare.

MS. BOROUMAND SMITH: That's correct, Your Honor. I understand they have the right to have certain information, but we are not seeking lost profits in this case, and we have told them that.

The information that they are seeking is subject to another topic, topic 8, and not to topic three. They are seeking information about profit margins and revenues, and what not.

THE COURT: What are you seeking, then? What kind of damages are you seeking?

MS. BOROUMAND SMITH: So for our breach of contract case, we are seeking disgorgement as well as -- or nominal

27

damages. For our copyright infringement and our DMCA claims, we are seeking statutory damages. And for our trademark claims, we are going to prove that there has been harm to Apple's brand and tarnishment, as well.

THE COURT: How are you going to prove that?

MS. BOROUMAND SMITH: We are going to prove that through secondary -- establishing evidence of secondary meaning and likelihood of confusion surveys that we are going to submit tomorrow.

THE COURT: What do you say to what counsel just said, Mr. Camera?

MR. CAMARA: Your Honor, first, they only waived the lost profits claim after we had this fight at the deposition. So to say that that somehow excuses the failure to present the witness on the topic is not correct.

If we look at their objections to our deposition topic, they have all the big firm objections, and then at the end they say, subject to and without waiving these objections and a general statement and objections. Apple will provide a witness to testify on injury suffered by Apple as a result of the unlawful acts committed by Psystar that Apple complains about in this action. We went to that deposition, prepared to take it, and Mr. Schiller refused to give us testimony on that point.

With respect to the relevance of lost profits from

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Apple, that is relevant to the statutory damages award that they seek in this case.

THE COURT: Say that again. You said it okay, I just was back on that point. Say it again.

MR. CAMARA: Sure, Your Honor. They are claiming that lost profits are no longer relevant because they have stipulated not to seek them, agreed not to seek them.

THE COURT: Um-hmm.

MR. CAMARA: They are still relevant to the statutory damages claim because one factor that a jury can consider in setting statutory damages under the Copyright Act is the amount of injury to the plaintiff. And a major part of the injury to the plaintiff, Apple, based on the sale of Psystar computers running Mac OS X, is any decline in sales and any loss of profit that Apple suffered.

And the legislative history and the cases interpreting the statutory damages provision of the Copyright Act bear that out. If the Court will indulge me, to quote, simply, from the Senate report, quote, "The plaintiff in an infringes suit is not obliged to submit proof of damages and profits and may choose to rely on the provision for minimum statutory damages."

But that's not what they are seeking, they want the

29

jury to pick a number from the range. However, there is nothing in section 504, this section, to prevent a court from taking account of evidence concerning actual damages and profits in making an award of statutory damages.

And the Supreme Court in Feltner, the decision that guarantees a jury trial on statutory damages in a copyright case, says that in setting what it believes is a just award, the jury can be presented with all evidence relevant to what is a just award.

And here, I think the actual damages suffered by the plaintiff are plainly relevant. It's their election whether to pursue actuals or statutories. But even if they pursue the statutories, we get to argue that the actuals weren't that large.

MS. BOROUMAND SMITH: Your Honor, may I respond?

THE COURT: What do you say?

MS. BOROUMAND SMITH: So the case law on statutory damages in copyright case does look at different factors as to what the range of damages will be, whether they should be on the higher end or the lower end. But what they look at specifically, and this is throughout all the copyright cases, is not lost profits, but lost revenues to the plaintiff. They do look at lost profits for the defendant, but they look at lost revenues for the plaintiff.

THE COURT: Say that again.

30

MS. BOROUMAND SMITH: They don't look at lost profits.

THE COURT: The "they" is who?

MS. BOROUMAND SMITH: The courts.

THE COURT: Court don't look at?

MS. BOROUMAND SMITH: Don't look at lost profits for the plaintiff, they look at lost revenues. That is the factor that they consider rather than lost profits. What they do look at is lost profits for the defendant as a factor.

THE COURT: How can the defendant lose anything? They are the wrongdoer.

MS. BOROUMAND SMITH: That's true.

THE COURT: So how do they lose anything? Maybe you mean profits, disgorgement.

MS. BOROUMAND SMITH: Sorry, not lost profits, but profits.

THE COURT: All right. Mr. Camera, what do you say to Ms. Smith? She says that the case law does not allow for -- you got to look only at revenue, not profits, for the plaintiff.

MR. CAMARA: With respect, Your Honor, the statute does not say that. The cases that Counsel's discussing are mainly District Court cases that cite kind of a popular paragraph that lists some factors but doesn't purport to be

31

exclusive.

The Supreme Court, in Feltner, held that you are entitled to a jury trial on statutory damages and that the jury may hear anything relevant to setting that award.

I think it's clearly relevant to what amount of penalty is fair to know what injury was done. And here, the injury is that sales that would have gone to Apple went to Psystar instead, that's the central element of injury.

So when we are arguing to the jury that the number from the range, which is quite large, 750 to 150,000 for wilful infringement, should be on the low end of that range, I think we're entitled to say, hey, the computer's price was 2 or $3000, and not all of that was profit. In fact, quite a small amount of it was profit.

THE COURT: I'm not prepared to make a legal ruling on what the statute would allow a jury to consider on the issue of statutory damages.

So are you willing to state on the record that you had no profits, Ms. Smith? I can't believe that would be true.

MS. BOROUMAND SMITH: Well, Your Honor, it's not that we had no profits -- I'm sorry.

THE COURT: Well, why -- so his argument, Mr. Camera's argument, is the jury can consider the extent to which Apple would have made any profit on this, anyway. And I am not going to make a legal ruling on that now, so why don't

32

you just go give him the information?

MS. BOROUMAND SMITH: Your Honor, we have several concerns about giving our profit margins to -- to the defendants in this case.

One of them stems from recent activity on their website where they have stated that -- they have actually listed all the people that are being deposed from our side, given the dates, and asked people to provide questions for those depositions. At the end of that listing, they have indicated that after this case is over they will provide information that comes out of those depositions to the public.

We have -- we are very concerned. Our profit margins, all of this information that they are seeking is extremely confidential to Apple, they don't release it at all. And so they're concerned that if they hand over this information to anyone on the other side that it will be released to the public. And it's a legitimate concern based on the statements that are on Psystar's website.

Additionally, this information, Your Honor, is not relevant. And we would be happy to further brief this issue of statutory damages and what information is relevant to the assessment of statutory damages.

One other thing, Your Honor: We have agreed to produce a witness to testify as to our revenues, our costs -- sorry, our revenues associated with Mac OS X and the CPUs, our

33

R & D costs and the advertising and marketing costs associated with those. What we do not want to reveal is our profit margins on a product-by-product line.

There are profit margins for Apple, generally across the board in our 10Ks, but they are not reliant on a profit-by-profit line. They are highly confidential. And if any of that information at any point got out, it would be very problematic for Apple.

THE COURT: Is there any information -- sorry. Is there any briefing on this point in this paper paperwork now?

MS. BOROUMAND SMITH: There is --

THE COURT: On the legal point.

MS. BOROUMAND SMITH: There is very little briefing on the legal point with the exception of on page 3, where I cite to some cases with regards to the statutory damages, but it's not briefed extensively.

THE COURT: Is this what this whole issue is, Mr. Camera, is on profit margin by product?

MR. CAMARA: No, no. That's one part of the issue, Your Honor, but we would ask other questions about harm to Apple of the 30(b)(6) witness designated on that topic.

This is also a procedural aspect to this, Your Honor, which is that we made that designation, they made a variety of objections to it, but not this one. And, indeed, they, in their objections, stated affirmatively that they would

34

provide a witness to testify about harm to Apple. It's only at the deposition itself that this objection was asserted.

As Your Honor knows, the expert deadline is tomorrow for case in chief evidence, and rebuttal experts are a few weeks after that. And then the summary judgment deadline hits. So we would request that the Court rule on the legal issue at the appropriate time, perhaps in a motion in limine, but not hold up fact discovery and thereby delay our ability to prepare for experts, summary judgment, and trial.

THE COURT: Well, you ought to go ahead and do the depositions on what they are willing to provide. And then in the meantime, I'm going to ask you to submit by Monday briefs on the issue of whether or not Townsend is correct that the profit margins for the plaintiff are irrelevant, irrevocably irrelevant.

MS. BOROUMAND SMITH: Your Honor, may we be permitted to do the deposition on the topic that -- on the information that we are willing to provide next week?

THE COURT: Go ahead and do that, yes. Because, I mean, I won't rule on this, probably, next week. I won't even be here next week.

MS. BOROUMAND SMITH: Okay, Your Honor.

THE COURT: So I won't be able to rule on it. But you can get the briefing done -- in fact, I'll give you till Thursday of next week. My law clerk can be looking at it. And

35

both sides simultaneously submit, and as soon as I get back, I'll try to rule on it around August 31.

MS. BOROUMAND SMITH: So submit by Thursday of next week?

THE COURT: You got all these problems: I may have to undo the trial date if you continue to have all these problems because, see, now you are putting me in a position where you are going to come in and say, oh, we go to redo the experts, oh, we got to do all this after-the-fact discovery.

I'm not going to undo the trial date yet, but this is what -- all these discovery motions put a lot of pressure on the trial date and the schedule.

MS. BOROUMAND SMITH: We understand that, Your Honor.

MR. CAMARA: Your Honor, given that the witness designated to testify on damages refused to do so, might we request that that deposition take place in Houston, which would be far more convenient for us and for our cash-strapped client?

MS. BOROUMAND SMITH: Your Honor, they are out here next week for depositions for Rudy Pedraza, anyways, because one point that Mr. Camera didn't mention was the fact that all of their financials documents were not provided to us until last Friday.

THE COURT: All right, do all of that out here. I don't think it's warranted to go to Houston yet.

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Is there another dispute you have, or is that it?

MR. CAMARA: That is all on our side, Your Honor.

MS. BOROUMAND SMITH: I believe that's it for us right now, as well, Your Honor.

THE COURT: Now, Ms. Smith, in your submission next week, in addition to saying you are not going to seek lost profits, you might offer whatever proviso that would be on the issue of statutory damages, such as Apple has refused to or will refuse to tell the jury what that profit margins are. And the jury is entitled to assume the worst. I don't know, I'm making that up, but, you know, on the one hand you don't want -- you want to accuse them of stonewalling, and then whenever it comes time for you to turn over some information, you don't want the jury to know it.

MS. BOROUMAND SMITH: Your Honor --

THE COURT: So think about whether or not you are being even-handed.

MS. BOROUMAND SMITH: Your Honor, we don't believe the information is relevant, but we will do what you say.

THE COURT: Well, you may be right. I'm not going to say -- but you may be wrong on that, too. And if under statutory damages that's relevant and you refuse to turn it over, I'm going to tell the jury that you have stonewalled.

MS. BOROUMAND SMITH: Okay, Your Honor.

THE COURT: Just like we are going to let the jury

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know that they have destroyed evidence.

MR. CAMARA: Thank you, Your Honor.

MS. BOROUMAND SMITH: Thank you.

THE COURT: All right, see you soon.

(Proceedings adjourned at 12:45 p.m.)

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CERTIFICATE OF REPORTER

I, Sahar McVickar, Official Court Reporter for the United States Court, Northern District of California, hereby certify that the foregoing proceedings were reported by me, a certified shorthand reporter, and were thereafter transcribed under my direction into typewriting; that the foregoing is a full, complete and true record of said proceedings as bound by me at the time of filing. The validity of the reporter's certification of said transcript may be void upon disassembly and/or removal from the court file. /s/ Sahar McVickar
Sahar McVickar, RPR, CSR No. 12963
Friday, August 21, 2009

39


  


Psystar v. Apple - The August 21, 2009 Hearing Transcript | 214 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Here
Authored by: LocoYokel on Wednesday, May 26 2010 @ 11:58 PM EDT
Please help PJ out by changing the title of the post to indicate the error and
correction.

error -> correction

[ Reply to This | # ]

News Picks here
Authored by: LocoYokel on Thursday, May 27 2010 @ 12:02 AM EDT
Any discussion of the News Pick items goes here. Keep it clean so as to not
aggravate PJ.

Also please indicate your topic in the title of your post.

Thanks,

[ Reply to This | # ]

Comes here.
Authored by: LocoYokel on Thursday, May 27 2010 @ 12:03 AM EDT
Please help PJ by posting Comes transcripts here.

[ Reply to This | # ]

Off Topic Here
Authored by: LocoYokel on Thursday, May 27 2010 @ 12:04 AM EDT
Anything you wish to discuss that is pertinent to this posting. Pay attention
to the posting guidelines and keep it clean.

[ Reply to This | # ]

Apple users and feather boas
Authored by: IMANAL_TOO on Thursday, May 27 2010 @ 01:43 AM EDT
Funny, but I have associated Apple users, not judges with feather boas.
Straight talk would, only go for judges, too.

---
______
IMANAL


.

[ Reply to This | # ]

"Copyrighted key"?
Authored by: Anonymous on Thursday, May 27 2010 @ 02:39 AM EDT
Is he speaking imprecisely, or can you actually get a useful copyright on a
cryptographic key?

I admit that I'm not a lawyer, but I'm having a hard time differentiating that
from the case where Lexmark had lockout code and they weren't allowed to assert
the copyright on it the way that they tried to, because it was required for
interoperability with replacement ink carts.

[ Reply to This | # ]

Wow, lawyering sure looks like an easy job
Authored by: Anonymous on Thursday, May 27 2010 @ 05:37 AM EDT
Between Camara throwing up his hands and saying "Sure, my client lied, but
you only found out about it because their last lawyers didn't hide it", and
Smith asking for actual costs and then not knowing what they were(!) I reckon
that I could do a better job. Sure, I don't know the law or the fact, but I
could pound the table just as well, for a lot fewer $$$ per hour.

[ Reply to This | # ]

I was not really into this Psystar v. Apple stuff... but what a window into how things are done!
Authored by: SilverWave on Thursday, May 27 2010 @ 06:38 AM EDT
I was going to hit pj's highlights and have a quick skim through... but damnit
it got interesting :-)

---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

Erased the code?
Authored by: hAckz0r on Thursday, May 27 2010 @ 07:25 AM EDT
Ok, even if they did, they admitted that it was Open Source code, so just
download it again! Here is where Open Source works against people on the wrong
side of the law. Open source doesn't just disappear overnight.

The thought of 'accidentally' erasing the very code that is pivotal to your
entire business model just doesn't fly. Any business would treat such code as
they would a brick of gold. If they erased it, they did it deliberately, and
therefore are just are refusing to go to their backups to retrieve a copy of it.
If that is not contempt of court I don't know what is.

IANAL, and its a good thing for Psystar I'm not sitting on the bench for this
one. Even though I am very pro-competition for the market place, Psystar should
be slapped silly for telling this one to the judge. $5k in legal fees doesn't
even come close to what I would do for telling such a fib to the court.



---
DRM - As a "solution", it solves the wrong problem; As a "technology" its only
'logically' infeasible.

[ Reply to This | # ]

How do you copyright a key?
Authored by: BitOBear on Thursday, May 27 2010 @ 02:58 PM EDT
A cryptographic key isn't a creative expression, its the result of, and input
source material for a subsequent, mathematical process.

A key is typically generated by generating random number or numbers, picking one
or more that are "likely to be prime" and then running some tests on
it to insure that its is more likely to be prime than you can prove on first
guess.

This is neither creative in the human sense nor novel in any meaningful way.

It is, at best, a "trade secret" and once someone knows your trade
secret its out there.

Seriously, if paystar doesn't challenge the "copyrighted key"
assertion they are making a huge legal blunder.

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Legal definitions of "effective" and "copy protection"
Authored by: BitOBear on Thursday, May 27 2010 @ 03:08 PM EDT
In any mention of the DMCA I always wonder about the weasel words
"effective" and "copy protection".

In particular, if you circumvent a "protection" was it legally
"effective"?

Of equal status is the classic DVD CCS stuff. CCS does nothing to inhibit
copying of the disk. I can take bytes right off of one DVD and put them onto
another without changing a byte and end up with a fully functional copy. CCS is
designed to inhibit playback not copying.

Likewise in this case, the fact that Apple scrambles the kernel tidbits
_clearly_ didn't prevent those tidbits from being copied onto the computer nor
prevent those tidbits from being copied from the computer disk drive into the
computer memory. The encryption just prevents useful playback.

So if I can copy something as much as I want regardless of its playback
restrictions, how can that be an "effective copy protection measure"?

Its an access control. An "access right" so to speak. Where is the
"access right" to a creative work granted in the law?

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Makes me sad
Authored by: Anonymous on Thursday, May 27 2010 @ 09:31 PM EDT
I think Judge Kimball is a sharp guy with a very good legal mind, but this
transcript makes me wonder how many years ago SCO v. Novell would have been over
if he'd had this level of intolerance for BS procedural wrangling...

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Had a bad day at the office, dear?
Authored by: kevinsnotalawyer on Thursday, May 27 2010 @ 09:44 PM EDT
Wow. While reading this, I kept thinking to myself, "What if there were a
court
reporter taking down every word I said during the day when I had a bad
day?"

It's also a great example of trying to think on one's feet, and it helps me
appreciate all the things good lawyers consider. Imagine not having the ballpark

of damages right there, so the judge pulls $5000 out of his hat, and you get to

live with that.

Very entertaining from the peanut gallery!

---
"I declare you later, if I can. And thus, that received more stupider stupidest
the process in the history of the world rights. And a complete average batch."

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Psystar v. Apple - The August 21, 2009 Hearing Transcript
Authored by: Anonymous on Friday, May 28 2010 @ 01:44 PM EDT
I take it that PJ et al. are cheering for an outcome that lets the largest tech
company in the world tell buyers where and how they can use legally purchased
software?

Doesn't sound very much like advocacy for software freedom to me.

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DMCA and this judge
Authored by: crs17 on Saturday, May 29 2010 @ 07:05 PM EDT
On page 6, Ms. Smith arguing for Apple introduces parts of the Digital
Millennium Copyright Act, saying that Psystar has violated it. The judge claims
no knowledge of the law and asks for a clarification of the DMCA and then says
something to the effect of "For now, I'll take your word that that is what
the DMCA says."

I'm sure many of us (like myself) don't like the DMCA, but it IS the law and I'm
astonished that a judge hearing such a case would not take it upon him/herself
to be familiar with such a law.

Are judges expected to prepare for a case by rereading parts of law that will
obviously play a part in a case assigned to them?

[ Reply to This | # ]

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