Apple has won its copyright-infringement claim against the Mac cloning company Psystar.

Psystar sold PCs that ran Apple's OS X software. The computers functioned essentially the same as standard Macs, but were sold for less than Apple-built machines. Psystar argued that since the OS X software was legally purchased, the right of first sale allowed them to resell the operating system on custom-built computers.

However, the courts sided with Apple (pdf), and agreed that "customers were contractually precluded from utilizing Mac OS X on any computer hardware system that was not an Apple computer system." In addition, Psystar circumvented "lock-and-key technological measures to prevent Mac OS X from operating on non-Apple computers," which violates the Digital Millennium Copyright Act (DMCA).

Groklaw provides analysis of the court order and concludes:

That means damages ahead for Psystar on the copyright issues just decided on summary judgment, at a minimum. The court asked for briefs on that subject. In short, Psystar is toast.

The court's message is clear: EULAs mean what they say; if you don't want to abide by its license, leave Apple's stuff alone.

Psystar, which is also fighting a second infringement case in Florida, will likely appeal the decision, but for now it looks like you Snow Leopard fans will be forced to stick with Apple-approved computers. Or build your own Hackintosh.

In a recent Sky News interview, News Corporation chairman and CEO Rupert Murdoch announced that News Corp websites such as The Wall Street Journal may be removed from search engines.

News Corporation chairman and CEO Rupert Murdoch

Websites typically rely on search engines to index their content so users can find them. Search engine optimization (SEO), or the process of increasing a site's presence on search engines, is big business. But Murdoch would prefer News Corp sites weren't indexed at all.

In the interview, Murdoch criticized Google and other news aggregates for taking content without permission. When asked about the value of traffic generated from search engines, Murdoch claimed readers who use search engines to find articles have little value to advertisers.

Murdoch continued by attacking the ad-based model that much of the Internet is built upon, "There are no Web sites anywhere in the world that are making serious money ... there's not enough advertising in the world to go around to make all the Web sites profitable."

While not every site can rely on advertising, Google may disagree with the suggestion that ads can't generate serious money.

Murdoch's plan is to charge a subscription fee to readers of News Corp.'s Internet content, similar to a subscription for a newspaper. He admits this business model will decrease traffic, but believes a pay wall is necessary to protect content from news aggregators: "We'd rather have fewer people come to our website and pay."

I can't see the future, but Murdoch's plan for News Corp. sites sounds like a big bag of fail to me. The subscription-based business model is not worth reviving. Internet content, especially news, should remain free for everyone.

Watch the full interview below.

Net neutrality is a complex issue, but this user-generated chart posted on Reddit does a great example of illustrating a worst-case scenario.

The chart envisions a future without Net neutrality, where Internet Service Providers (ISPs) are allowed to adopt pricing models similar to cable television. Consumers pay subscription fees for individual slices of the internet that ISPs package into tiered pricing plans.

This pricing model is a far cry from the freedom most ISPs currently offer. Rather than charging for individual Web sites you probably purchase a "dumb pipe" of information from your ISP, and are free to use this data however you wish. But Net neutrality supporters claim without strong neutrality regulation ISPs could change their behavior and consumers will suffer.

Do you believe Net neutrality regulation is required to prevent this chart from becoming a reality or is free-market competition enough to ensure consumers' best interests?

Popular online video service Hulu will start charging subscription fees sometime next year, says News Corp. Deputy Chairman Chase Carey.

While speaking at a recent Broadcasting & Cable summit Carey announced his plans for Hulu: “I think a free model is a very difficult way to capture the value of our content. I think what we need to do is deliver that content to consumers in a way where they will appreciate the value. Hulu concurs with that, it needs to evolve to have a meaningful subscription model as part of its business.”

Hulu.com has attracted a large online audience by offering commercial-supported TV shows and movies from NBC, ABC, Fox, and other networks since 2007. However, the addition of a subscription fee may send most of Hulu's users searching for alternatives.

I use Hulu frequently to watch everything from Comedy Central's "Daily Show" to Fox's "Family Guy." I stomach the commercial interruptions in exchange for the high-quality streaming content, but I certainly won't be pulling out my credit card if the service puts up a subscription pay wall. And I doubt many other customers will be happy to start paying money for a service they previously received for free.

The move to a fee-based business model is a decision that will still have to be approved by the Hulu board, and I hope someone has the sense to blackball this idea. But common sense doesn't always prevail in the entertainment industry –  if it did, we might still have "Arrested Development."

A proposed law could force UK Internet service providers to disconnect users who repeatedly share copyrighted files, but TalkTalk, a British ISP, doesn't want to become a copyright cop.

UK Internet service provider TalkTalk CEO Charles Dunstone

TalkTalk's CEO Charles Dunstone is openly critical of legislation that will force ISPs to disconnect a user if their IP address is connected to illegal downloads:

If you try speed humps or disconnections for peer-to-peer, people will simply either disguise their traffic or share the content another way. It is a game of Tom and Jerry and you will never catch the mouse. The mouse always wins in this battle and we need to be careful that politicians do not get talked into putting legislation in place that, in the end, ends up looking stupid.

A recent demonstration by the ISP highlights cracks in the proposed legislation. For the stunt, TalkTalk sent a security expert into the streets of Stanmore, Middlesex to connect to open or easily hacked WEP-secured wireless networks. The expert first obtained permission from the wireless access point owners before connecting and downloading several songs.

While the songs in this demonstration were downloaded legally, the stunt shows just how easily an innocent account holder could be targeted based on evidence collected from their IP address.

However, the British Phonographic Industry (BPI) claims the law will not target innocents. BPI spokesman Adam Liversage says, "The responsibility for ensuring that an internet account shared throughout a household is not being used for illegal file-sharing clearly lies with the account holder."

What do you think? Are hacking victims or those who choose to openly share their wireless network responsible for third-party illegal file-sharing? And should ISPs like TalkTalk be required to police their networks and report illegal activity?

In a press release Tuesday AT&T announced it will now allow iPhone VoIP apps, like Skype, to run on the cellular network.

AT&T previously restricted all VoIP apps, which transmit voice calls over a data network, for use only when an iPhone was on a Wi-Fi network. With these restrictions dropped, iPhone customers can now use AT&T's 3G data network to make calls without using their wireless minutes.

AT&T claims this change was due to customer demand:

In late summer, AT&T said it was taking a fresh look at VoIP capabilities on iPhone for use on AT&T’s 3G network, consistent with its regular review of device features and capabilities to ensure attractive options for consumers.

“iPhone is an innovative device that dramatically changed the game in wireless when it was introduced just two years ago,” said Ralph de la Vega, president and CEO, AT&T Mobility & Consumer Markets. “Today’s decision was made after evaluating our customers’ expectations and use of the device compared to dozens of others we offer.”

Recent FCC scrutiny over Apple's rejection of the Google Voice app, as well as a congressional push for net neutrality are likely also responsible for AT&T's change of heart.

New VoIP (Voice over Internet Protocol) apps that take advantage of 3G capabilities should be available soon. However, AT&T's 3G network where I live in Atlanta is about as reliable as the Detroit Lions, so I doubt I will be dropping my traditional voice service any time soon.

A new law that would require airbrushed images to contain a disclaimer is gaining popularity in the French Parliament, according to the Telegraph.

An advertisement Photoshop Disasters claims is overly manipulated.

Politicians who support the law claim digitally enhanced images portraying unrealistic beauty are to blame for body and self esteem issues in adolescents.

Campaigning MP Valerie Boyer released a statement with the bill saying:

These photos can lead people to believe in a reality that does not actually exist, and have a detrimental effect on adolescents. Many young people, particularly girls, do not know the difference between the virtual and reality, and can develop complexes from a very young age.

Boyer is joined by 50 other French politicians who support the required text, which would read "Photograph retouched to modify the physical appearance of a person."

Violations could carry costly penalties. Boyer is asking for a fine of over $50,000 or up to half of the cost of the publicity campaign, whichever is greater, for advertisers that break the law.

The law has only been proposed in France, but magazines around the world are filled with 'Photoshopped' images of slim and sexy models.

Ars Technica asks:

Clearly, there's a line somewhere between reality and fantasy when it comes to images in the media, and the widespread practice of Photoshoppery has only helped to blur that line. Still, do airbrushed images really require an Surgeon-General-like warning?

Would a similar requirement on images in the U.S. help adolescents maintain a realistic body image? Or would the disclaimer serve only to irritate publishers and advertisers?

A new report by the World Economic Forum (pdf) ranks United States intellectual property (IP) protections 19th in a worldwide survey. The rank was not based on a comparison of IP laws, but determined by a survey of global business leaders on how well they felt intellectual property was protected in their country.

The US Chamber of Commerce responds to the U.S.'s 19th-place finish by calling for greater IP protection and stricter copyright laws.

For a country whose economy is driven by innovation and creativity, where nearly half of the exports are from IP-based industries, and over $5 trillion of our GDP is based on IP, America should be setting the gold standard for IP rights and protections.

Ars Technica argues tougher IP laws are "largely a giveaway to huge businesses and rich artists," and claims most artists see less than 1 percent of the financial benefits of copyright extensions.

Artists and producers undoubtedly deserve compensation for their work. But is more "protection," which restricts fair use, encourages DRM and decreases public domain, always a good thing?

Nate Anderson of Ars Technica doesn't think so:

Reports like this come out, trade groups argue that their countries all need to do a better job of "catching up" to the first-place finisher, laws are passed, IP systems are tightened up, and a new number one country emerges. Everyone else then tries to reach this "new level."

It's a one-way system of ever-increasing control coupled with moral opprobrium for not agreeing that the only direction IP protection must go is up.

Do you feel more laws are needed to protect intellectual property in America? Or will further restrictions only stifle innovation and prevent a free flow of information?

Take-Two Interactive has agreed to pay $20 million to settle a class-action lawsuit over a sexual minigame that was mistakenly included in the 2004 title "Grand Theft Auto: San Andreas."

The minigame, dubbed "Hot Coffee," simulates sex between title character Carl "CJ" Johnson and his in-game girlfriend after she invites him in for a cup of coffee. The sexual content was inaccessible without manipulating the game's code, but that didn't stop a media frenzy in 2005 when parents heard there was "porn" in their child's video game.

Ars Technica explains:

[Hot Coffee] led to a media panic because it was assumed the sexual content was easy for children to get to (it wasn't) or that sex games were becoming common in games (they aren't).

In 2005, several parents and one grandmother filed lawsuits against Take-Two Interactive claiming they felt defrauded because they did not know the game contained adult content, even though "Grand Theft Auto: San Andreas" was rated 'Mature' and not recommended for anyone under 17. 

Ted Frank of Overlawyered.com, who objects to the $20 million settlement, described the suits as "ridiculous:"

The lead plaintiff in the putative class action is an 85-year-old grandmother, Florence Cohen, who bought the game for her 14-year-old grandson, who may have his own claims for emotional distress when his ninth-grade classmates beat him up.

The class-action suit also alleged "Take-Two’s management was not cooperating or assisting with the Company’s audit" and "Take-Two falsely stated that the embedded pornography was 'the work of a determined group of hackers who have gone to significant trouble to alter scenes.'"

The Hot Coffee content was actually included in the distribution of the game. Developers attempted to remove the sexual content by disabling access when they should have deleted the code all together. Curious gamers discovered they could unlock the code by downloading a third-party modification (hack) from the Internet.

Following the Hot Coffee discovery, "Grand Theft Auto: San Andreas" was pulled from retail shelves, the ESRB rating was changed to Adults Only, and Take-Two Interactive's stock price dropped like, um, CJ's pants.

Will this $20 million settlement finally absolve Take-Two Interactive of the Hot Coffee scandal?

Any baseball fan is familiar with MLB's frequent reminders not to rebroadcast a game without "the express written consent of Major League Baseball." But did you ever consider that your Facebook, Twitter or blog posts could be targeted by overzealous media regulations?

Can the SEC prohibit fans from sharing pictures similar to this iPhone shot of a Braves game I posted to my Facebook profile? Should they even bother trying?

According to current policy, Southeastern Conference (SEC) fans cannot "produce or disseminate (or aid in producing or disseminating) any material or information about the event, including, but not limited to, any account, description, picture, video, audio, reproduction or other information."

Adam Ostrow, of Mashable.com, translates that to mean "no Twitter, Facebook, YouTube, TwitPic, or any other service that could in any way compete with authorized media coverage of the event."

The SEC media-credential policy also states that violations may result in "ejection from the Event and prosecution for criminal trespass."

Conference spokesman Charles Bloom told the Charlotte Observer there are plans to loosen the restrictions, but the current policy forbids tweeting from the stands.

While speaking with CNN, Attorney Evan Brown questioned the legality of the SEC policy. Brown equates a ban on social media in state-sponsored schools to a violation of the First Amendment and a form of prior restraint.

Media-coverage rights to sporting events have always been expensive and, consequently, heavily policed (this year the U.S. Open banned all cameras and phones) but can social media possibly be restrained?

Could social media ever compete with authorized media coverage in a way that would threaten profits and rationalize SEC's media policy?

Bloggers Adam Ostrow, Evan Brown and Steve Raquel discussed the SEC policy today on CNN.com Live (Watch Video).

Update:

This afternoon the SEC released a revised version of its media policy (pdf). The revision provides exemptions for noncommercial updates and personal messages.

The new policy reads:

No Bearer may produce or disseminate in any form a “real-time” description or transmission of the Event (i) for commercial or business use, or (ii) in any manner that constitutes, or is intended to provide or is promoted or marketed as, a substitute for radio, television or video coverage of such Event. Personal messages and updates of scores or other brief descriptions of the competition throughout the Event are acceptable.