Why Apple doesn’t trust Psystar to keep its financial information private

Thu, Sep 3, 2009

Legal, News

Wow, the ongoing litigation between Psystar and Apple is getting jucier by the day.  In addition to Psystar’s recent lawsuit regarding Apple’s tying of Snow Leopard, it also filed a motion in the current case seeking the court to compel Apple to disclose sensitive financial information pertaining to Apple’s profit margins.  If you recall, Psystar was displeased that Senior Apple VP Phil Schiller was unwilling to discuss that data.

Psystar claims that Apple’s sensitive financial data is an important part of its effort to prove that Apple is running afoul of anti-trust laws.  Apple, meanwhile, contends that its financial data is completely irellevant because Apple isn’t seeking lost profits, a fact which would render testimony regarding its profit margins unnecessary.  Moreover, and this is where things start to pick up, Apple expresses doubt that Psystar will keep Apple’s financial data private, as required by the court – a pretty reasonable concern considering that Psystar CEO Rudy Pedrazza has already been found to have purposefully lied during his deposition, not to mention the fact that Psystar’s blog at one point mentioned that it would release confidential information about Apple to the public once litigation was complete.  Psystar, for its part, writes that Apple’s concerns are completely unfounded, and that there’s no basis to believe that sensitive financial info given to Psystar would find its way into the public sphere, which would violate the court’s protective order.

Got all that?  Okay good, now let’s get busy.

In support of its assertion that Psystar can’t be trusted to keep information under wraps, Apple filed a motion yesterday which points us to the website of controversial Harvard Professor Charles Nesson, who used to teach Psystar lead lawyer K.D. Camara when he was a student there.  In an entry from July of this year, Nesson posts an email string involving Psystar counsel Camara and Psystar CEO Rudy Pedrazza on his blog.  The content of the email, which is pasted below, basically confirms Psystar’s intentions to create as big a public spectacle as possible out of the case.  Of note is that Pedrazza likens Apple to “Terrorists”, and that it was Camara’s idea to publicly list and brag about which Apple executives and engineers it would soon be deposing.

The email string follows below:

From: K.A.D. Camara
Date: Thu, Jul 23, 2009 at 1:13 PM
To:  rudy at psystar.com, Charles Nesson


I like very much the idea of conducting this litigation publicly. I think as we go along over the next month, we should start explaining the dispositive motions arguments to the world — first sale and 117 non-infringement, nominative use of trademarks, preemption, and copyright misuse. We have the advantage of a press corps that’s already engaged and that enjoys diving into legal arguments.

I also like the circus idea. We need to make sure that our circus day doesn’t vary in any material way from how we do business ordinarily, other than that lots of people plus Apple are also roaming around the office. Our people will be asked about this in depos.

As for scheduling, we’re negotiating dates with Apple right now and should be able to pin down a final schedule in the next couple of days. As you can imagine, they’re nitpicking over who exactly we get to depose and in what order. A nice follow-up post might be the roster of Apple people being deposed — we can invite the world to send us questions.

I’m cc’ing Charlie Nesson on this, who I told about the case, who likes our side and story, and who is expert in public litigation.


On Thu, Jul 23, 2009 at 11:27 AM, Rudy Pedraza wrote:


Hope all is well. Yesterday my staff forwarded you and CeCe a link to the blog we intend to launch now with our next newsletter; when you get a chance please let me know if the content is acceptable. We particularly wanted CeCe’s input on how we presented the change of counsel but keeping it light, upbeat and funny if possible (re: Cowboy quip).

I’ve also been thinking about the upcoming visit from Apple during depo week (which in my opinion is akin to letting Terrorists visit the Pentagon). Although the idea makes me uneasy, I figure that if we let them in, we might as well have an *event* for the public the same day showcasing our products and letting customers touch and feel them first hand. How do you feel about that? The theme of the day would be something like “The circus comes to town”, with everyone knowing Apple was also coming and at the same time making the public aware of how ridiculous Apple is behaving. Of course the key to pulling this off is planning, so we would need to get the visit date nailed down ASAP to ensure we get good media coverage.

Best regards,


Now why is this important, aside from giving us a glimpse into the legal strategy being employed by Psystar?  Apple explains:

Since filing its Supplemental Brief last week, Apple discovered that Psystar and its counsel have communicated the details of this case to individuals not bound by the protective order and thereby to the public at large. See Ex. A (print out from blog containing Psystar’s attorney-client communications) (http://blogs.law.harvard.edu/nesson/ 2009/07/23/morning-mail-honored-to-see-my-teaching-take-hold/).4

In addition to waiving the protections of attorney-client privilege as to the subject matters discussed, Psystar’s lead counsel, Kiwi Camara, wrote, “I like very much the idea of conducting this litigation publicly.” Indeed, it was Mr. Camara who suggested that Psystar post the schedule of Apple executives’ depositions and solicit deposition questions from the public. See Ex. A (“A nice follow-up post might be the roster of Apple people being deposed we can invite the world to send us questions.”). As noted in Apple’s Supplemental Briefing, in this same posting on Psystar’s website, Psystar told readers “to [b]ear in mind that we might not be able to release the answers to said [deposition] questions until the conclusion of this litigation (re: Apple’s Super Secret Protective Order) . . . .” Given the actions of Psystar and its counsel, and their waiver of the confidentiality of Psystar’s own privileged communications in an effort to drum up publicity, Apple’s fear of disclosing its highly confidential information is genuine and well-founded.
4 In an email exchange with his client discussing case strategy, Mr. Camara reports discussing this case with a Prof. Charles Nesson of Harvard Law School, whom he describes as an “expert in public litigation,” and to whom he simultaneously sent otherwise privileged information..

So there you have it.  I suppose its not too shocking that Psystar is more focused on creating a public circus than it is arguing its case on the merits, but it’s interesting to see that all of Psystar’s seemingly idiotic moves are calculated and with a purpose.



6 Comments For This Post

  1. skips Says:

    You have to wonder if Psystar’s goal is really extortion (dictionary meaning not legal). I.e., we are going to make such a spectacle of this case that you will agree to buy us out to get us to go away. During the bankruptcy, Psystar stated a value of their IP that was quite high, but never had to prove that value. It would seem that they could argue that value should define the amount of money that Apple should pay to have them go away. The investment of say $1 million for a return of say $100 million from Apple would not be an unreasonable return on investment.

    OTOH, any such speculation surely falls under the mantle of “conspiracy theories.”

  2. Sanford Says:

    Perhaps Apple should file a Motions for Rule 11 sanctions against Camara and contempt. It appears that the ‘legal’ practices of Psystar violate the ethical boundaries by which it’s supposed to be bound. If Pystar thinks they can extort a settlement from Apple, I hope they are sorely mistaken and that any competent judge will impose punitive sanctions against Pisstar and its counsel.

  3. CapnVan Says:

    I’ve got what I think is a simpler question – given that Nesson got his ass handed to him by the judge (and jury) in the Tenenbaum case, why would Camara and Psystar possibly want his advice?

  4. dizzle Says:

    Whoa, where was extortion mentioned?

    I am very displeased with Kiwi’s comportment, but before moving for Rule 11 Sanctions or even suggesting them— that is a very serious issue. Now after further examination I might come to the same conclusion, but I don’t see “extortion” in here anywhere.

  5. skips Says:

    dizzle – Hi

    I said that I was using the dictionary definition – I.e., the practice of obtaining money by force or threats – and that any such speculation fell squarely in the realm of conspiracy theories.

    None the less, Psystar has leaked information that suggests that they desire to embarrass and otherwise damage Apple’s public image, which has a significant monetary value. Apple might decide that $100 million to get them to stop is cheaper than the loss of image that they would suffer if Psystar was allowed to continue to conduct their “circus.” If the principals in Psystar invested $1 million to fund this charade, $100 million represents a very nice return on investment.

    just my mindless speculation — ss

  6. KenC Says:

    So, what is Prof. Nesson’s approach to litigation? Can we learn anything about Camara’s playbook by looking into what Prof. Nesson teaches?

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