Edible Apple

A few weeks ago, Psystar filed a lawsuit against Apple seeking a court order that would allow it to sell Snow Leopard on non-Apple hardware in addition to seeking an injunction against Apple to prevent it from tying OS X to Apple hardware.  Psystar’s arguments rest on claims that Apple’s actions are anti-competitive and run afoul of anti-trust laws.

This might all sound familiar because Psystar articulated similar arguments in its on going litigation with Apple that were subsequently dismissed by the Court.

In response, Apple recently filed a motion with the court in California seeking to have the case in Florida dismissed, or at the very least, put on hold until after the current litigation comes to an end.  Apple asserts that Psystar’s latest lawsuit is a waste of judicial resources as it covers identical issues that are already in play or have already been addressed in the ongoing litigation.

On August 27, 2009, defendant Psystar Corporation (“Psystar”) filed a new lawsuit against plaintiff Apple in the Southern District of Florida with allegations that are virtually identical to the issues that have been actively litigated in this case for more than a year. By doing so, Psystar is brazenly attempting to avoid rulings made against it by this Court, and admissions it previously made to this Court.

Specifically, Psystar’s Florida action seeks a declaratory judgment concerning the enforceability of Apple’s Software License Agreements and a determination of whether Psystar is violating federal copyright laws, including the Digital Millennium Copyright Act. These precise issues have been pending before this Court since July, 2008, and will be resolved through trial within a few months.

There is absolutely no valid reason for two actions to be pending 3,000 miles apart, in two different federal courts, raising the same issues. Such blatant forum-shopping should not be countenanced within the federal court system. To conserve judicial resources, avoid possibly conflicting results, and halt duplicative litigation, Apple seeks an Order dismissing or staying the Florida action and preventing Psystar from filing further lawsuits based on legal theories already at issue in, or already resolved by, this Court.

Psystar, of course, for its part, argues that the two cases are completely different because the former involves OS X Leopard while the latter concerns OS X Snow Leopard.  Psystar asserts that the technological mechanisms it uses to run OS X on non-Apple hardware varies from one version of the OS to the other.  Apple, in an earlier brief, disputes this assertion, but even if it were true, it’s ultimately irrelevant.  The crux of Apple’s case is that Psystar is circumventing “technological protection measures to decrypt Apple’s encrypted software.”  Whatever means Psystar uses to get OS X onto Psystar hardware thus has no bearing on the legality of the action in the first place, especially considering that Apple uses the exact same EULA to cover all of its OS X releases.  Given Psystar’s reasoning in the Snow Leopard lawsuit, it would have the right to sue Apple anytime Psystar came up with a new and varied technology to run OS X on its own hardware.  Apple writes,

Neither the allegations nor the relief sought in the Amended Complaint is limited to a specific version of Apple’s Mac OS operating system software.

Apple then goes on to point out that Psystar is raising anti-trust issues that were not only shot down by the court a few months ago, but that Psystar chose not to amend those claims when given the chance by Judge Alsup, who is overseeing the California litigation.

The Court explicitly provided Psystar an opportunity to amend its counterclaims, giving it a second chance to “plead its best case.” However, Psystar chose not to amend its antitrust counterclaims, specifically informed the Court that it was not attempting to restate those claims and asserted counterclaims under a copyright misuse theory instead.

.. Psystar attempts to justify filing these duplicative claims in a completely different forum by knowingly misrepresenting that the California action does not cover Apple’s latest version of Mac OS X, Snow Leopard, and that Psystar’s circumvention of the technological mechanism used by Apple to restrict access to Mac OS X Snow Leopard is not part of the California litigation. That rationalization is groundless; these very issues already are pending before this Court or already have been decided by this Court.

Apple then proceeds to list a number of examples from previously filed motions which make it clear that Apple’s initial lawsuit against Psystar encompasses all versions of Mac OS X, and was never in any way limited by Apple to include solely Mac OS X Leopard.  Apple reasons that Psystar’s claim that Snow Leopard isn’t encompassed by the current proceedings in California is knowingly false.

Likewise, Psystar’s Answer and Counterclaim in this action, filed over a year ago, encompass versions of Mac OS X beyond Leopard. Psystar refers to “Mac OS” throughout its Answer and Counterclaim – without reference to a specific version number of Apple’s operating system… Psystar further alleged that Apple’s purported anticompetitive conduct began with the “release of Mac OS 8” and continued with “Mac OS 9—up to and including Mac OS 9.2.2 on December 6, 2001” and “with respect to Mac OS X.”  It is beyond disingenuous for Psystar to accuse Apple of anticompetitive conduct that spanned more than a dozen years and three major releases of Apple’s operating system software (Mac OS 8, Mac OS 9 and Mac OS X) but now claim these allegations – while covering MAC OS X versions 10.0 through 10.5 and their incremental variants – do not cover Mac OS X version 10.6.

Checkmate, bitch.

Apple continues to point out Psystar’s hypocrisy,

Similarly, Psystar’s own discovery sought broad information about “MAC OS,” which Psystar initially defined as “all versions and updates of the operating system Mac OS including, without limitation, Mac OS X, Mac OS 9, and Mac OS 8” and subsequently defined as “all versions and updates of the operating system Mac OS X.” Indeed, both parties previously agreed that Snow Leopard is a part of this case.

And though not mentioned in the current filing, Apple noted previously that Psystar’s lead counsel, K.A.D. Camara, acknowledged in a prior deposition that issues in the current California case encompass Snow Leopard. According to Apple, Camara remarked, “Snow Leopard beta seeds are still within your cause of action.”

Moreover, Apple asserts that Psystar essentially lied about its intentions to run Snow Leopard on Psystar machines.

Despite active discovery proceedings for more than one year, Psystar never disclosed its intention or effort to run version 10.6 of Mac OS X on Psystar’s computers. […REDACTED…] Significantly, Psystar never disclosed during discovery any information about its plans to run Snow Leopard on its computers or any communications with others about that version of Mac OS X – all of which are responsive to numerous Apple document requests.

Instead of supplementing its interrogatory responses as required by Federal Rule of Civil Procedure 26(e) to reveal that Psystar was taking actions to run Snow Leopard on its computers, Psystar concealed its work. Indeed, when asked by Apple’s counsel as recently as August 19, 2009, whether Psystar was going to enable Snow Leopard to run on non-Apple computers, Psystar’s counsel declined to answer that question…

Psystar deliberately concealed its intention to run Snow Leopard on its computers despite being relevant to Apple’s claims and responsive to many of Apple’s discovery requests.

Apple concludes by arguing that the “Court should stop further proceedings in Florida”, but not before it address’s some of the inconsistencies in Psystar’s claim that Apple has a monopoly in the market for premium computers.

Even though groundless, Psystar’s new allegation that the relevant product market should be defined as “the market for premium computers – computers priced over $1,000” could – and should – have been raised in this California action. Since it was not, Psystar is barred from litigating it in the Florida action. Nor is there any legal or factual basis for Psystar’s “premium computer” market definition. Psystar has not alleged, and cannot allege, that a $999 personal computer is not reasonably interchangeable with a $1,001 personal computer. As this Court already ruled in this case, relevant product markets are defined by “’reasonable interchangeability’ of use” – not by an arbitrary dollar figure or a single brand.  Indeed, Psystar’s market definitions in the Florida action contradict its prior pleadings and cannot be made in good faith. In this action, Psystar previously alleged a $1,099 Apple MacBook was a “counterpart” to a $674 Dell laptop. Now, in direct contradiction of this prior allegation, according to Psystar’s new, contrived, market definition in Florida, these “counterpart” computers are in entirely separate relevant product markets. Nothing could be further from reality.

Apple ultimately asks that the Court issue “an appropriate order either directing Psystar to dismiss the Florida action outright or, at a minimum, enjoining Psystar from pursuing the Florida action.”  Apple then requests that discovery be re-opened for 45-60 days so that it can examine how Psystar manages to run Snow Leopard on its line of Psystar Open Computers.  Apple notes that this “would only require examination of Psystar’s new source code and potentially one deposition.”  In turn, Apple writes it would provide an Apple witness for deposition who would testify “about Apple’s technological protection measure in Snow Leopard and the extent, if any, it differs from Leopard.”

So there you have it, Apple came out swinging and landed some undeniably jarring blows.  Regardless if you are sympathetic to Psystar’s case, there’s no disputing that it’s legal maneuvering in Florida is ill-conceived and poorly thought out at best, and purposefully deceitful at worst.  Not only that, but the legal arguments raised in the Florida case can’t even stand on its own two feet.  Psystar is essentially starting with the conclusion that Apple has a monopoly, and is working backwards from there.  Such a baseless and legally bankrupt strategy can’t sustain itself for too long, and it seems that Apple just slam dunked Psystar’s attempt to litigate in Flordia.  Of course, that decision is ultimately up to Judge Alsup, and is one that won’t be made until Psystar has a chance to respond to Apple’s most recent filing.  And as with all things Psystar, it should be a doozy.