An in-depth look at Psystar’s legal defeat at the hands of Apple

Wed, Nov 18, 2009

Legal, News

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.



6 Comments For This Post

  1. Joe Says:

    Amazing how Psystar was so 100% wrong on every issue.

    I saw a fun theory that explains how they could put up such a weak defense. Someone argued that APPLE was behind Psystar because cleaning the floor with Psystar gives them solid legal grounds for a defense if a more worthy competitor comes along.

    Although I don’t believe that for a minute, at least it would explain how Psystar people could manage to be so grossly incompetent – and still manage to walk and chew gum at the same time. 🙂

  2. Chanson de Roland Says:

    A pretty good summary of Judge Alsup’s Order and Opinion. However, you got the definition of summary judgment wrong. In our legal system, when a jury trial is demanded as a matter of right, the jury decides issues of fact based on the judge’s legal instructions. The judge decides the legal issues once the jury has made its determinations of the material facts at issue. Summary Judgment is appropriate and required by Rule 56 of the Federal Rules of Civil Procedure where there are no material issue of disputed fact relating to a claim or defense such that a reasonable juror, drawing every reasonable inference in favor of the opposing party, could not find for that party on any of the prima facie, that is essential, facts necessary to prove the claim or defense at issue. Apple was able to persuade Judge Alsup that there were not any material issues of disputed fact, so he was, therefore, obliged to decided the Copyright and DMCA issues as matter of law.

    As for Psystar, it either couldn’t convince Judge Alsup that there were any material issues of disputed fact and that on the legal issue in dispute, it, not Apple, should prevail.

  3. Michael Says:

    What a terribly arrogant company. They apparently think they can just rip off other peoples work and sell it for profit. Something tells me this company is run by some random hacker who doesn’t really understand copyright law very well.

  4. KenC Says:

    What surprised me is that Shyster seems to be represented by a paralegal. They provide no supporting cases for their arguments, and when they do, they are inapplicable. How is their Harvard-trained lawyer not disbarred for incompetence? Truly juvenile behavior.

  5. Steve Says:

    Right result.
    We all knew it was coming – it seems that those at Psystar just didn’t think everything through – or they simply aren’t smart enough in the right areas.


  6. jabberwolf Says:

    UGHH this is what happens when they get a retarded judge!
    The copyright misuse doctrine specifically is designed so that software makers cant insert sabotage code to their products to lock it down to a specific party. It’s a monopolistic practice. Apple has openly admitted to putting sabotage code to prevent installation on to other hardware!

    “However, Judge Alsup found that this is not what Apple had done: “Apple has not prohibited purchases of MAC OS X from using competitors’ products. Rather, Apply has simply prohibited purchasers from using MAC OS X on competitors’ products.” – duh THIS IS WHAT THE COPYRIGHT MISUSE DOCTRINE STATES IS ILLEGAL!

    And Apple purposely got a stupid judge for this.
    Psystar doesn’t have enough money to appeal and probably wont.
    Chalk one up to those with $ win concerning law and doctrine!

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