Apple v. Psystar Ping!
If you want on or off the Mac Ping List, Freepmail me.
Posted on 11/18/2009 9:20:28 AM PST by Star Traveler
Wed, Nov 18, 2009
Last Friday, Judge Alsup dealt Psystar a death blow when it granted Apple’s motion for Summary Judgment while at the same time denying Psystar’s own motion for Summary Judgment. Summary Judgment is essentially when a Judge dismisses an entire case, or specific issues in a case, because it lacks any evidentiary support.
Now that we’ve had time to fully pour over Judge Alsup’s 16-page decision, we’re going to break down much the reasoning behind Alsup’s ruling and pinpoint exactly why Psystar’s legal arguments failed to make an impression.
One of the key doctrines Psystar relied upon to defend its actions was Section 109 of the Copyright Act, also known as the first-sale doctrine. The first-sale doctrine enables the purchaser of media to resell that copy to a third party and keep all of the profits. Selling a book to a used book is an apt example. Psystar attempted to argue that its actions were covered by the first-sale doctrine to the extent that it was merely re-selling OS X to third party users, much in the way you would re-sell a book in the example above.
There are a few problems with Psystar’s argument. First of all, Section 109 only applies to the “owner” of a particular copy, and Psystar, despite its assertions to the contrary, is a licensee of OS X, not an owner. Still, Judge Alsup writes that even if we assume that Psystar did in fact own OS X, it’s actions would still not be protected under the first-sale doctrine because Psystar wasn’t selling the original retail DVD copies of OS X to customers. Rather, Psystar modified OS X on an imaging station where it then proceeded to make mass copies of an altered version of OS X. Judge Alsup points out that “Section 109 provides immunity only when copies are ‘lawfully made’”, and since Psystar copied OS X en masse without Apple’s permission, copies of OS X sold to customers from Psystar don’t fall under the first-sale umbrella. In other words, if I buy Bill Simmons’ latest book, The Book of Basketball, the first sale doctrine allows me to sell it to whoever I want whenever I want. The first-sale doctrine, however, doesn’t give me the right as a consumer to copy Simmons’ book myself and sell innumerable copies to the public.
Psystar attempted to skirt around this legal roadblock by arguing that it included a retail copy of OS X with every machine it shipped, but Judge Alsup writes that “there is no sworn evidentiary support for this assertion.” Furthermore, Apple provided expert testimony which proved that the copies of OS X installed on Psystar machines were substantially different from retail copies of Mac OS X DVD’s.
One of Psystar’s more interesting defenses was that it didn’t modify OS X at all, but rather that created its own software to work seamlessly with OS X and extend its functionality to work with non-Apple hardware. Psystar even went so far as to classify their ‘product’ as a third party application, similar to programs like Microsoft Word and Firefox. This, of course, was a blatant lie as Psystar made many modifications to OS X, and in the process, violated Apple’s right to create a derivative work under the Copyright Act.
The ruling reads:
Psystar infringed Apple’s exclusive right to create derivative works of Mac OS X. It did this by replacing original files in Mac OS X with unauthorized software files. Specifically, it made three modifications: (1) replacing the Mac OS X bootloader with a different bootloader to enable an unauthorized copy of Mac OS X to run on Psystar’s computers; (2) disabling and removing Apple kernel extension files; and (3) adding non-Apple kernel extensions. These modifications enabled Mac OS X to run on a non-Apple computer. It is undisputed that Psystar made these modifications.
The right to create a derivative work is what allows Dan Brown to write sequels to The Da Vinci Code while, at the same time, preventing everybody else from doing the same thing. Derivative works, naturally, are based on pre-existing works, and the right to create them is a right held solely by the copyright holder, which in this case happens to be Apple.
Almost comically, Psystar passionately argued that it didn’t create a derivative work because it wasn’t modifying OS X, even though they “admittedly replaced entire files within the software while copying other portions.” Moreover, Judge Alsup writes that Psystar provided no legal backing for its assertion that its actions did not amount to a modification of OS X. Apple, on the other hand, did include a number of pertinent legal decisions in its motion.
With respect to the DMCA act, Psystar argued that it couldn’t be found liable because Apple was guilty of copyright misuse to the extent that they have a monopoly in OS X and prevent OS X from running on non-Apple hardware. Psystar had brought up this theory previously in the past where it was shot down rather quickly - and it was shot down yet again by Judge Alsup. Put simply, Psystar’s allegations that Apple was in violation of anti-trust laws are unfounded because Apple does nothing to prevent Psystar from writing their own original operating system. Imagine that - writing your own software.
In the present case, Apple has not prohibited others from independently developing and using their 18 own operating systems. Thus, Apple did not violate the public policy underlying copyright law or engage in copyright misuse.
Hedging its bets, Psystar also argued that Apple’s EULA was unduly restrictive and sufficiently egregious to constitute copyright misuse. Judge Alsup also shot down this theory, reasoning that the cases relied upon by Psystar were inapplicable to the facts of the current case.
Regarding the DMCA, which generally prohibits one from circumventing security measures in software, Psystar argued that it was not in violation of the DMCA, in part, because information about how to circumvent Apple’s protection measures in OS X were already widely available on the Internet. Judge Alsup, however, ruled that this argument falls flat, citing case law which states:
The fact that circumvention devices 17 may be widely available does not mean that a technological measure is not, as the DMCA 18 provides, effectively protecting the rights of copyright owners in the ordinary course of its 19 operation.
And lastly, Apple had accused Psystar of trademark and trade-dress infringement to the extent that Psystar used copyrighted Apple imagery on its website. Psystar, for its part, claimed that their use of Apple insignia was protected under “fair use”, yet they failed to provide any legal or evidentiary support to back up that defense.
In total, Judge Alsup mopped the floor with Psystar, and when the dust settled, Judge Alsup granted Apple’s motion for Summary Judgment in full and found Psystar in violation of the following:
Psystar’s actions constitute copyright infringement, and specifically infringe on Apple’s right to reproduce, modify, and distribute OS X. Psystar’s actions also constitute a violation of the Digital Millennium Copyright Act.
Apple, however, did not file a motion for a permanent injunction, a fact which explains why you can still go to Psystar’s website and see Apple imagery and still order Psystar machines running Snow Leopard.
A hearing on potential legal remedies available to Apple will be held on December 7, 2009, with a brief from Apple on the matter scheduled for November 23, 2009.
There are still some issues remaining that weren’t addressed in either party’s motion for Summary Judgment. Specifically, Judge Alsup highlights the following issues which remain for trial.
(1) breach of contract; (2) induced breach of contract, (3) trademark infringement; (4) trademark dilution; (5) trade dress infringement; and (6) state unfair competition under California Business and Professions Code § 17200; and (7) common law unfair competition.
And don’t forget that Psystar, in August, filed a similar case in Florida which pertains solely to Snow Leopard. So Psystar won’t be going anywhere tomorrow, but their farewell tour is already underway and it’s only a matter of time before they’ll need to figure out what kind of scam they want to get into next.
I guess it doesn't work, legally speaking... :-)
I know you did Groklaw’s analysis of the case, but this is a brief article of the same.
Apple loves having 5% of the market. Jobs is a numbskull.
If you want on or off the Mac Ping List, Freepmail me.
Mr. Right Now: “Apple loves having 5% of the market.”
If so, it’s none of your business, is it? Unless you’re an Apple bond or share holder, what’s it to you? If you don’t like their marketing approach, don’t buy their products. If you do have a financial interest in them, you are free to vote your shares as you see fit, but majority rules.
I hope all the thieves at Psystar are ruined over this. I wouldn’t mind if some of them did jail time, too. This doesn’t have anything to do with “fair use.” It’s outright thievery.
Especially when it's the top-end 5% of the entire PC market, not just of the PC operating system software market.Jobs is a numbskull.
The market capitalization of AAPL, $186.1 Billion, says otherwise.
Jobs is a numbskull.
Wall Street thinks he's the best numbskull that Apple could ever have... LOL...
Third quarter 2009 Apple has 8.8% of the US market and is fourth in sales behind Dell, HP, and Acer.
Just checked on revenues and profits for the 2nd Qtr. 2009.
Dell
Revenues = $12.8 Billion
Profit = $472 Million (3.69%)
Apple
Revenues = $8.337 Billion
Profit = $1.229 Billion (14.74%)
Yeah, those guys at Apple are idiots...
Well they are still selling machines with OSX at their site. When will that stop?
OK, I see. When Apple files another injunction.
Hope they shut them down. They wanna sell Macs? Let them go to ebay and sell used ones.
But the cold hard fact is Apple shoots themselves in the foot by forcing a consumer to buy their hardware to use there software.
Actually what you call Apple shooting themselves in the foot -- is -- what makes Apple wildly successful and has given them a war chest of cash-in-hand and makes them the darling of Wall Street.
I would say that's their formula to success... :-)
But they only run on 5% percent of comps. now that's really stupid!
Apple Macintosh computers actually run 100% of the Windows/OS X software on the market -- in other words doing a whole lot better than Windows in that Macintosh can "run it all"... :-)
For Jobs being so stupid (as you say) it would seem that no one (either Wall Street or Macintosh users) want him to go away and/or stop doing what he's been doing all this time.
If Steve Jobs had a brain he would allow the Mac OS to run a PC.
I would say that Jobs has gone way past that point and has been proven to have not only a brain, but a knack for making Apple wildly successful... :-)
It's been the clearly stated aim/goal/policy of Apple (and Steve Jobs) to have complete design/manufacturing control over the hardware and software as an integrated whole and for that to be the cornerstone of their wildly successful run over the last decade.
If they had not done that, they would not be successful today.
The wishes of a few hackers in the market to run on Mac OS X on some generic beige knock-off boxes is not the formula for success for Apple and to keep the wildly successful products of Apple rolling out for its customers.
Well they are still selling machines with OSX at their site. When will that stop?
That will stop when the court hammers the last nail in the coffin of Psycho-star... LOL...
Coming soon.
Looks like all of you did an excellent job of explaining to Mr. Right why Apple is doing fine. I don’t agree with every aspect of their marketing plan, but I can’t deny they make excellent products and are extremely profitable.
Apple hardware and software is integrated to work very well together. Windows, on the other hand, is designed to work on a wide variety of platforms and pays a price for that.
I just wish Apple would use some of its profits to pay developers to port more best selling games to OS X. Games are pretty much the only reason I ever willingly run Windows. I’m not even a heavy gamer, but I’m forced to use a Boot Camp partition when I’d much rather stay in OS X.
I also want to add that I own Windows machines that would have been Macs had Apple offered a modicum of support to gamers. Games like Left 4 Dead could make Apple even more profit by selling more Apple computers. I don’t know how much it costs to port something like that over, but Apple has changed their core processor several times (680X0, PPC, to Intel). Seems to me it wouldn’t be difficult for them, but they are unlikely to listen to my advice (plus, it might be more difficult than I envision).
And Apple would be bankrupt within two years.
Last fiscal year, Apple's profit from Mac sales was about 40% of all of their profits or about $2.6 billion. Just to replace the income stream from the sale of the slightly more than 10 million Mac computers sold last year with the sale of OEM OS software, assuming a $50 profit on each OS sold, Apple would have to sell more than 53,000,000 units EVERY year.
In actual fact, bulk OEM OSes are actually only about $40 bucks of which only about $30 is profit. So now it would take the sale of 90 million units, or almost ALL PC sales in the US per year would have to run Mac OS just to break even with what Apple is doing now selling hardware...
Good thing YOU aren't running Apple.
“(plus, it might be more difficult than I envision).”
Like geting someone to port Direct X, or graphics card makers to write drivers - most of their code is closed.
Apple sells SYSTEMS, not software. Get that. SYSTEMS.
Apple makes their money on the hardware part (you may have noticed this, maybe not). The software is only part of a SYSTEM comprised of hardware and software and support. They cannot make money selling only software -- in fact I'd bet they sell the software at a loss, but that's my speculation.
THEIR BUSINESS MODEL WORKS WELL. You may have noticed that.
> But the cold hard fact is Apple shoots themselves in the foot by forcing a consumer to buy their hardware to use there software. Therefore they have a much smaller market share. Every computer Pystar sold put money in Apples pockets.
WRONG. See above. Apple doesn't make money on the software. They make money on the hardware. Every computer Psystar sold was a computer Apple LOST money on, if my estimate is correct.
> Also Apple sells some good software apps. But they only run on 5% percent of comps. now that's really stupid!
Yep, so stupid they're making money hand over fist while the rest of the PC market scrapes and grovels over tiny margins. Real stupid...
> If Steve Jobs had a brain he would allow the Mac OS to run a PC.
And if you had a brain you'd study his very successful business model before suggesting he run his successful company into the ground trying to be Microsoft.
One last time: Apple sells SYSTEMS. They make their money on the hardware part of the system. The software is not the money maker.
Got it?
An excellent example that Macs are a system and the others are commodity items.
The problem with writing games for Mac is that game programs like to take 100% control of the CPU. Going through a buffer (OS kernel) slows them down and limits shortcuts. That way the programmers can just use already developed libraries and can ignore OS calls and house keeping.
Microsoft understands this and provides hooks that allow the game programs to take control of anything it wants to. Unfortunately this is also the same vector where viruses like to play, a virus can grab a hook and take over the computer.
As processor speeds keep increasing Microsoft will increasingly follow the Apple example and try and eliminate as many hooks as they can, at least until they give up on backward compatibility, then they will eliminate them entirely. At that point Microsoft and Apple OS’s will be functionally identical.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.