Filed under: Analysis / Opinion, Apple Corporate, Hardware, OS
Psystar dealt crushing blow in ongoing legal proceedings with Apple
Yesterday, Judge William Alsup, United States District Judge for the Northern District of California, dealt Psystar a crushing blow in its ongoing litigation with Apple over whether or not Psystar could market and sell non-Apple computers running modified copies of Apple's operating system. If you're not familiar with the The end result was a dramatic and startling court order in an ongoing series of dramatic legal squabbles between the two companies. And at least one of Psystar's attorneys saw this coming. The litigation doesn't end here; various issues still remain for trial such as breach of contract and trademark infringement, but Psystar has been gutted. The court is clearly unsympathetic to Psystar's core position and while damages on the copyright issues falling in Apple's favor in the order have not been ruled upon, it would probably behoove Psystar to start looking under the couch cushions for spare change.
A hearing is scheduled for December 14 on the remaining issues and for damages.
Read on for a more detailed analysis of the court's order....
The crux of Apple's beef with Psystar concerned the copyright it holds for its operating system and Psystar's alleged violation of said copyright. The order dealt most extensively with those claims. Judge Alsup agreed with Apple that Psystar's use of the Apple operating system on Psystar's computers constituted copyright infringement, violating Apple's rights to reproduction, distribution as well as the right to create derivative works.
Specifically, Psystar had defended the claim of reproduction infringement by arguing that the incidental copying of the software when it loaded it on its own computers did not constitute infringement because there exists a limited exception in the copyright law allowing copying or modifying a protected work without incurring liability. In denying that defense, Judge Alsup not only denied reliance on a failure to plead the issue, but that such a defense would be absurd in light of the way in which Psystar made copies of the program in its business.
More interestingly, the court tackled the biggest conceptual difference between Apple and Psystar's arguments, that being violation of Apple's distribution rights under its uncontested copyright. Apple continued to assert that sales of its operating system consisted of single license sales. For its part, Psystar hung its hat firmly on the idea that the sales made the purchasers owners of a copy, not mere licensees. The distinction between who is an owner and who is a licensee is arcane, but important.
By arguing that purchasers of OS X were owners of a valid copy and not licensees of a valid copy, Psystar could then argue that its resale constituted a valid application of the "first sale" doctrine, which permits a valid owner of a copy to resell the copy. A licensee has no such rights. The court eviscerated Psystar's novel argument by first agreeing with Apple that the sales were indeed licenses, as plainly laid out in Apple's license agreement. It then took it one step further when it ruled that, even if it accepted Psystar's argument that the sale was an ownership, Psystar could not rely on the first sale doctrine. The court ruled that the initial loading of the operating system on its machines through an "imaging station" copied from a Mac Mini with altered bootloaders and modified kernel extension files were unlawful copies in the first place, and reliance on the first sale doctrine required that the copies be lawfully made. Since they were not, the court refused to permit Psystar to rely on the first sale doctrine, even in a hypothetical acceptance of the idea that the copies were purchased, not licensed.
The court went on to agree with Apple's assertion that Psystar had violated Apple's right to create derivative works under the law. The court, relying on Psystar's admitted replacement of whole files within OS X, ruled that the result constituted a derivative work. For its part, Psystar had argued that because Apple's source code, object code, or kernel extensions had not been modified, there had been no infringement. But Psystar's replacement of the bootloader and the kernel extensions had the ultimate effect of permitting OS X to run on machines that otherwise would not run it. That, alone, constituted the creation of an infringing, derivative work.
In dispensing with the remainder of the copyright issues, the court ruled that Psystar had committed contributory infringement by intentionally inducing or encouraging others to commit copyright infringement, and denied Psystar's claim that Apple had committed copyright misuse, finding that its restriction that its software be used strictly on Apple machines was not unreasonable or unduly restrictive. Judge Alsup reasoned that cases where copyright misuse was found, the copyright holder had tried to restrict users from using competitor's products, not, as here, where Apple merely restricts users from using its products on competitor's products. Ultimately, the court found that Apple had not tried to "control competition in an area outside the copyright."
Lastly, the court agreed that Psystar had violated the Digital Millennium Copyright Act when it decrypted Apple's software and circumvented the software's technological measures that prevented it from running on an unauthorized computer and then sold it to the public. Psystar didn't deny that it had circumvented the protection measures, but instead tried to rely on the idea that Apple's security measures were ineffective due to the fact that circumvention code was widely available on the Internet. If it could prove that the security was ineffective, then it couldn't be held liable for circumventing it. The court did not accept that argument by stating that the mere wide availability of a circumvention measure was not an argument against the effectiveness of the security of the software. In other words, if, in typical use, most people aren't breezing around OS X's security, then the security was effective.
The court acknowledged that several issues asserted by Apple against Psystar remained for trial, including claims of trademark infringement and dilution, breach of contract, and unfair competition. At this point, Psystar can only hope to stem its losses, but it seems that any chance of it emerging from this litigation with a valid business model in place is quite unlikely.
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Reader Comments (Page 1 of 4)
Juan Secin said 6:52PM on 11-14-2009
That was obvious. Psystar is, almost, officially dead.
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Liquidmark said 7:07PM on 11-14-2009
DIE PSYSTAR DIEEEEEEEEEE!!!!
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Lumi said 7:06PM on 11-14-2009
I am actually quite glad. Apple has the rights to sell their own made works, for the price they ask.
Psystar takes Mac OS X, and tries to put in on plain grey boxes, making effectively what I like to call a Frankenstein Mac. However great these may work, these are never going to work exactly as intended, and therefore give Apple a bad name. Not just because of that, but for a long list of reasons.
And I am even more glad because in a few posts back, the Psystar founder was being a completely douche bag by disregarding all of the osx86 project's work, and taking credit for it himself.
So HA. Serves you right, Rudy (or whatever his name was).
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Rocky said 7:24PM on 11-14-2009
I don't see this being the end of it for Apple, as there are other companies around the world doing the same thing that aren't subject to US law.
Switching to Intel processors certainly helped with the speed, but now they have to put up with stuff like this. . .
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Andrew said 12:02PM on 11-16-2009
Yes, but Apple is present in those jurisdictions as well.
And the laws are generally the same [in essence] with regards to trade, copyright and such.
Usually these laws have been agreed upon in international treaties, often under a UN framework, to ease trade.
So while European nations don't have the DMCA they might have similar laws. They always have laws to protect IP.
camkevbell said 7:27PM on 11-14-2009
Gotta give Psystar points for boldness... I wonder who was really backing them?
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Troy Banther said 12:13AM on 11-16-2009
Well. We know it wasn't SCO.
invaderzimaus said 7:33PM on 11-14-2009
Has a court ever forced a manufacturer to recall and take back customer's owned systems (eg. the Psystar illegall clones)?
I'm actually pleased they affirmed Apple's rights to OS X-especially in the area of what it can be run on.
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Noah said 7:42PM on 11-14-2009
I think that Apple should allow OS X to be installed on any piece of hardware, not just something Apple makes.
Linux can be installed anywhere. Windows can be installed anywhere.
Why is Apple holding out? Why should I be forced to spend 1-2k dollars on a piece of hardware, when all I really want to use is the operating system... a piece of "software". It's all very confusing to me...
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Michael Rose said 8:42PM on 11-14-2009
Fortunately for Apple, their business model is not contingent on your comprehension.
puhsitch said 9:18PM on 11-14-2009
They kind of tried doing that once in the mid-'90s and it didn't work. Apple is primarily a hardware company; if you take that piece away, they don't make money. And if Apple doesn't make money, God help us all.
Noah said 10:24PM on 11-14-2009
Then why do people get up in arms if a web app doesn't work in a specific browser?
How would you react if Gmail suddenly ONLY worked in Google Chrome? Would you still use Gmail or would you give up your account for a Yahoo! mail instead, since it works in Safari & Firefox?
Would you be upset at the person who wrote a Firefox mod which made Gmail work in Firefox? Would Google then sue the guy who wrote the extension?
Would Tuaw and Techcrunch call Google evil? Or would they call the Firefox modder evil?
Michael Rose said 10:37PM on 11-14-2009
"Why should I be forced to spend..."
Noah, nobody is forcing you to spend anything. You can spend your money on ramen noodles and primo weed for all we care.
If you want to run Mac OS X, you should save up and buy a Mac. Mac OS X is copyrighted and governed by a license agreement. Psystar is in violation of that agreement and got spanked.
DT said 10:49PM on 11-14-2009
Nobody's "forcing" you to do anything. If you want OS X then buy a Mac. If you had a crappy DVR do you think you'd be "entitled" to Tivo's OS?
Noah said 10:56PM on 11-14-2009
Apple is forcing people to buy their $1k hardware if someone only wishes to use their $30 software.
Same thing with Windows... in order to use their $30 software, I have to buy a $300 piece of hardware. Only difference is, that piece of hardware can be created by Dell, HP, IBM, or I can go out and buy the parts individually and build my own computer.
The difference of course is that Apple does in fact "force" people to buy and use their hardware, giving the consumer no other choice in the matter.
I own a Macbook Air, which I bought for the both the software AND the hardware, but I still believe Apple should open up their software to other hardware vendors.
I don't think people would think too kindly if Windows 7 only ran on Dell machines, now would they?
I think many MORE people would be up in arms, and I think those people WOULD have a case. Because, uh oh... HP, IBM, Alienware, Sony all just lost a huge (if not all) of their hardware business.
Think about that.
puhsitch said 11:09PM on 11-14-2009
Noah, your Google scenario is a little different. Any company can do what it wants in limiting its product. If Google wanted make Gmail work only on Chrome, then that's their prerogative. It would probably be a stupid move since they would certainly lose revenue, but it'd be no skin off my back. I use IMAP, anyway :)
If someone were to then write a Firefox extension that allowed Gmail to work on Firefox, I don't believe that Google could sue as long as Gmail's code was not modified in any way, and especially if the individual didn't charge for the extension. That's where the difference is...Psystar modified Apple's product and re-sold it without the license to do so.
Also, you seem to be putting a lot of emphasis on how people would hypothetically react if "Company X" were to suddenly limit the accessibility of "Product Y." That doesn't really mean anything here since you're talking about reactions to a departure from the status quo. Apple's hardware-software tie is their status quo.
Jeremy said 7:37AM on 11-15-2009
Yeah, what you're missing is that it's NOT a $30 piece of software. It's a $30 upgrade to a piece of software whose cost was initially rolled into the hardware purchase.
They simply choose not to sell standalone licenses for the software. That's up to them; they tried it before and it was an unmitigated disaster, so Steve Jobs put an end to it.
mentalsticks said 9:25AM on 11-15-2009
Wow Michael Rose, you really are a prick. If you don't agree with someone you just start guffawing and calling them stoopid so you get some cheap laughs. Loser.
Noah's point is valid: what Apple does is called 'conditional sale' and at least here in the EU that's not an open and shut right. It's not so sure that Apple's in the clear here (especially if you consider they don't give away the OS, but sell it)
macserv said 3:30PM on 11-15-2009
There's a huge difference between Noah here and Psystar. If Noah, a geek with a lot of time on his hands, wants to build a Hackintosh, Apple's not going to come after him. They're not going to support him either, but they're not taking him to court. Apple's problem is with Psystar circumventing their license and their business model. If Mac OS X is to be sold on computers other than Macs, Apple has the sole right to do so.
As far as Apple's licensing approach goes, it's been both their greatest down fall, and their saving grace. They tried going the clone-licensing route back in '96/'97, and it nearly killed the already critically-ill company. Steve re-dedicated the company to making their original approach work: seamless interoperability between their OS and their hardware specifications. It seems to have been the right choice: based on Apple's growth, people are sick of what happens when an OS is forced to support an unlimited variety of hardware. Apple provides the only workable alternative for the masses. Any other company is free to try the same approach, and succeed or fail at it. Personally, I wouldn't be surprised to see Sony create their own UNIX-based OS and distribute it on the VAIO line.
If you don't like Apple's licensing strategy, that's fine; you're certainly not alone. But please don't go throwing the law around. Apple is in violation of no laws here, and nobody is being "forced" to do ANYTHING... you're completely free to not buy their products, so please stop using that word... it's just worthless hyperbole. Please just exercise your freedom to not buy their stuff, and move on.
Jeff said 4:32PM on 11-15-2009
I am a regular TUAW reader, and the likes of Michael Rose ruins the experience for me. This is not the first time I have had beef with what he has to say, and this time he didn't even write the article. He has personally insulted me in previous posts, and mistook what I said for his benefit and to put clout behind his argument. He implied that the person who questioned him is a miscreant by telling the commenter to go buy some marijuana. Not only is that unnecessary, but it is done on purpose to boost his own image in comparison to the supposed pothead. Mac OS X is good enough to be sold on his own merits without having to tie it to hardware. While they would lose money on the hardware, their OS market share would almost certainly increase.
His response will be the same as the last response, "then don't read TUAW." And if I say I won't, not only will he most likely not care, but he will reply with something along the lines of "Good," or, "We don't need you here." Be careful how many you say that to, because if you dismiss enough people, you won't have a job.