PowerTools files suit against Umax
The start-up saw its nascent Mac-cloning business affected dramatically when Apple changed its licensing practices and is striking back with a $50 million lawsuit.
The suit is the latest twist in the ongoing saga of Apple's cloning strategy. Apple decided to virtually do away with its cloning licenses earlier this year, buying out Power Computing's license for $100 million and restructuring similar agreements with Motorola and IBM. These moves left UMAX Data Systems (UDS) the only cloner to retain a valid license.
Apple, which has not yet been served with a copy of the lawsuit, declined to comment on the matter.
PowerTools also alleges that after UDS agreed to supply the clone maker with the bare bones machines, the vendor transferred the PowerTools contract to a UMAX subsidiary, UMAX Computer Corporation (UCC). UCC, however, has an agreement with Apple that precludes it from selling "bare bones" or incomplete Macs, which effectively makes the PowerTools deal null and void.
Victor Wong, PowerTools' chief executive, says that the confusion has placed the start-up venture in "very high jeopardy."
"As an ongoing concern, it has affected us dramatically," he said. "We've tried to negotiate with these people for many months now. We have no other alternative at this time."
UMAX general counsel Susan Meyer would say only that, "[UMAX has] no comment on the alleged suit because we have not yet been served."