Apple prevails on motion to dismiss Psystar’s counterclaims

Tue, Nov 18, 2008

Analysis, Legal, News

WorldofApple is reporting that a court today has ruled in favor of Apple in it’s motion to dismiss Psystar’s claims that Apple is in violation of anti-trust laws for having a monopoly in the OS X market.

This legal saga began last July when Apple first sued Psystar for illegally selling copies of Leopard installed on their own hardware. In response, Psystar initiated a counterclaim where it accused Apple of having a monopoly in the OS X market and running afoul of anti-trust laws. Essentially, Psystar’s defense was hinged entirely on its anti-trust allegations, and now that that has been thrown out of court, don’t expect Psystar to be in business too much longer.

The Court’s ruling isn’t surprising. Psystar couldn’t argue that Apple had a monopoly in the PC market as Apple has less than a 10% market share. So instead, Psystar came up with the somewhat specious argument that Apple has a monopoly in the OS X market since it won’t allow its operating system to run on any non-Apple hardware. It’s curious, though, how Apple can have a monopoly in a market that Psystar essentially made up out of thin air. Think about it – there is no OS X market. Apple puts OSX on computers that it sells in the computer market. I mean, you can’t sue Coke for refusing to put its formula into a different can on the notion Coke has a monopoly over the coke formula. Admittedly, its an original idea, but legally it had no merit and the Court ruled correctly in dismissing it.

Psystar has until December 8th to file an amended complaint.

Part of the Judge’s ruling noted:

“Psystar also points to Apple’s extensive advertising campaigns. Those advertising campaigns more plausibly support an inference contrary to that asserted in the counterclaim — vigorous advertising is a sign of competition, not a lack thereof. If Mac OS simply had no reasonable substitute, Apple’s vigorous advertising would be wasted money. The advertising campaigns suggest a need to enhance brand recognition and lure consumers from a competitor.”

In Apple’s original filing to dismiss Psystar’s counterclaims, it noted:

“Psystar’s single-brand relevant market definitions are irremediably flawed. Psystar’s own allegations establish that there is no such relevant market as the ‘Mac OS market.’..

Psystar’s effort to define a single-brand relevant market contravenes well-known principles of antitrust law. Relevant markets generally cannot be limited to a single manufacturer’s prodcuts.”

We will have more on this as new information becomes available.

Apple’s original motion to dismiss Psystar’s claims can be found here.

Related: The Psystar Myth – Not as cheap as advertised


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2 Comments For This Post

  1. dizzle Says:

    Thank you very much for the link back. I had been checking the docket nearly hourly at .32 cents a pop to be sure to get the jump on when the Order came out, and it is nice to be recognized for my effort as the first to report this. Thank you again. There are some other interesting tidbits in the Order I plan to post later. The quote you posted is indeed quite interested. I had found that argument of Psystar quite silly. You don’t make ads criticizing a non-competitor.

    You should have heard me whooping and hollering at work when I refreshed the page and the Order was there. Now, though, I have to pay up on a bet. It is very difficult to win a Motion to Dismiss, Apple’s attorneys are to be commended, and this Judge is a smart cookie. I wish we had him on our cases here in Florida. He is very sharp at seeing through lawyer-speak to what the plain facts are. I understand more about the pertinent law reading his Order than I did reading the voluminous material produced by both law firms. In 19 pages he nailed it.

    I will share the link love back when I write on this a bit more tonight.

  2. web Says:

    This is pretty much the end for Psystar. The antitrust argument was really their best bet. The only remaining argument they have is that EULA’s are not valid, which isn’t likely to fly. EULA’s have been ruled as legal by the courts, and reversing that would cause a lot of problems, including invalidation of open source licenses.

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