Apple Wins Lawsuit Against Psystar

A California judge has ruled in favor of computer maker Apple after the company sued Psystar Corporation to block the sale of "Open Computers", PCs with Mac OS X Leopard pre-loaded onto them, that the Miami-based company was selling. Apple filed the suit in July 2008, claiming a copyright infringement (Apple prohibits non Mac-branded devices from running Mac operating systems). Judge William Alsup ruled Apple's copyright infringement claim was valid and rejected the basis of Psystar's countersuit, that Apple was misusing its copyright claims. The full ruling was posted on the legal news blog Groklaw.

"The parties spill much ink on whether Psystar was the owner or a licensee of the copy (i.e., the tangible copy) of Mac OS X that it purchased.  Even assuming that Psystar was the owner of a copy, the first-sale defense fails here," Alsup wrote. "Section 109 (of the first-sale doctrine) provides immunity only when copies are "lawfully made."  Alsup said the copies at issue were not lawfully manufactured an lacked the authorization of the copyright owner. "As stated, Psystar made an unauthorized copy of Mac OS X from a Mac mini that was placed onto an "imaging station" and then used a "master copy" to make many more unauthorized copies that were installed on individual Psystar computers," Alsup noted. "The first-sale defense does not apply to those unauthorized copies."

Apple claimed Psystar violated three of its exclusive rights in Mac OS X: its reproduction right, its distribution right and its right to create derivative works. In November 2008, Psystar's countersuit, claiming monopolistic practices and copyright misuse, was dismissed. However, in December of 2008 Psystar charged Apple was prohibited from bringing action against Psystar due to a failure to register certain copyrights, and claimed their actions did not amount to creating a derivative work because of modifications made to the source code and kernel extensions.

"Psystar cites no decisions to reasonably support its argument that its modifications do not amount to a derivative work; whereas, Apple points to decisions showing that such deletions, modifications, and additions to software result in an infringing derivative work," Alsup ruled. "In sum, Psystar has violated Apple's exclusive reproduction right, distribution right, and right to create derivative works. Accordingly, Apple's motion for summary judgment on copyright infringement must be granted."

A hearing on remedies has been set for December 14 and Alsup noted Apple has also asserted seven other claims, including breach of contract, trademark infringement, state unfair competition under the California Business and Professions Code and common law unfair competition, which remain to be brought to trial.

The battle follows another development showing Apple's desire to keep Mac software on Mac-branded products: In October, Apple's iTunes 9.0.2 update, prevented Palm Pre users, once again, from syncing their smartphones with iTunes. Apple has been in a cat-and-mouse game with the smartphone maker for months. Palm's WebOS 1.2.1 update, released in early October, had allowed Palm Pre users to sync fully with both Microsoft Exchange 2007 and iTunes. Months before the back-and-forth struggle began, during a Jan. 21 earnings call, Apple COO Tim Cook, declining to name Palm specifically, had said, "We will not stand for having our IP ripped off, and we'll use whatever weapons that we have at our disposal."