Apple's lawsuit against Psystar examined
By Nilay Patel 
posted July 16th 2008 3:46PM
posted July 16th 2008 3:46PM
PS. - Somewhat charmingly, we're quoted in the factual allegations section as calling the Psystar machine we reviewed "crazy loud" -- aww, you shouldn't have, guys. Maybe you want to throw in a citation next time, though? Just a thought.
- Copyright infringement: According to Apple, Psystar modified and redistributed OS X without a license, so straight copyright law applies. This is probably a winning argument -- even if the EULA (which forbids modification and redistribution) is held invalid, redistributing a modified copyrighted work is a big no-no.
- Contributory and induced copyright infringement: As we pointed out a while back, by building a business model around the knowing copyright infringement of its customers, Psystar is probably liable for contributory copyright infringement -- this is the same principle that MGM v. Grokster was decided upon back in 2005.
- Breach of contract: This is the EULA violation claim. Contrary to what you may have read elsewhere, EULAs in general have been tested in courts many times and have been held enforceable in several states, including Florida, where Psystar is located. In addition, EULAs are currently valid in the federal Ninth circuit, where Apple's brought suit. It's true that there are some cases holding that EULAs are unenforceable and the Apple's Leopard EULA has never been litigated specifically, but this claim isn't nearly as shaky as it's been made out to be -- it's just not a big money-winner like a copyright claim.
- Inducing breach of contract: Apple says Psystar "advised, encouraged, and assisted others" in violating the EULA. Considering that's the heart of Psystar's business, we'd say this one lives and dies with the main EULA claim.
- Trademark infringement: Apple has registered trademarks on both "Mac OS" and "Leopard," and it says that Psystar infringed those marks when it advertised that the Open Computer could run "Mac OS Leopard" in a way that made it seem like it was an official product. We're not convinced that this is the strongest claim -- Psystar was basically marketing itself on defiance of Apple, not any kind of official support -- but we can see how a court would buy it, especially since Apple makes a big deal of how Psystar's subpar machines were causing harm to the OS X brand.
- Trade dress infringement: This one is pretty interesting, actually -- Apple says that the Mac OS X user interface is well known to consumers and has become associated with Apple to the point where it is protectable trade dress -- and that Psystar infringed on Apple's trade dress rights when it shipped Open Computers that contained OS X. It's around this point where you get the sense that Apple's going for the jugular -- there's no way that any damages Apple gets from Psystar are going to cover the additional cost of litigating a claim like this.
- Trademark dilution: Dilution is a special trademark protection reserved for "famous" brands -- Apple undoubtedly qualifies. It's a complicated doctrine, but basically Apple says that by using its trademarks, Psystar caused damage to its brand.
- State unfair competition: Apple says Psystar violated California law by infringing its copyrighted works, specifically the California Business and Professions Code. We're not up on our California law -- any readers want to flesh this out for us? We'd say it's just a failsafe claim to at least get an injunction in case everything else gets thrown out.
- Common law unfair competition: This is basically the same as the state unfair competition claim, only based on a different set of doctrines.
[Special thanks to Matt Gavronski of Michael Best & Friedrich in Chicago for his help with this post]
Disclaimer: Nilay's a lawyer and a rockstar, but he's not your lawyer, and none of this is legal advice or analysis.
Awww, I didn't think Pystar was all that evil, though now that Apple is running on the same hardware as Windows, I suppose they do need to worry about their band more than ever. It's all they have... Well, that and the iPhone, lol.
"Apple is running the same hardware as Windows"
Err... just because they changed their processor, doesn't mean they now use the same hardware...
Although, it must be said, I'm not an expert on what goes into these machines.
Yes they do run the same hardware, the only difference is the shiny cases that the (HARDWARE) is installed in. Yes there are some differences in how some of the components are installed in said boxes, the harddrive bays for instance, but essentially, the computers that apple sell are no different than the computer that dell, hp or any other PC manufacturer sells. The CPU is just one part of the many parts that apple have (LICENSED) from PC hardware manufacturers..
That's why apple users are paying a shitload of money for their OS, the hardware is so overpriced, it has such a high margin, that the only definable difference between platforms is the operating system. APPLE IS GREEDY!
and Steve (peckerhead) Jobs is the greediest of the bunch.
Can they even legally make them recall EVERY open computer sold? If I had one I'd just say no and keep it. (unless the cops showed up but I'd still go down fighting)
To use my previous Preston Tucker example, there were a few Tuckers sold before the courts shut him down, and I do believe the court ordered the return/recall of all the cars (of course, they didn't all come back).
My history is a bit hazy on this one, though. Anyone want to expand on it?
What I do know is that when GM scrapped their leasing program for the electric car in California, they issued an instant and inflexible recall on the cars, even to people who wanted to use the contract's purchase option and keep the cars. GM took them all back (except two, I believe) and crushed them without a moment's hesitation. This was a lease, of course, but the possibility is there for a company to recall a product and destroy it.
Zero... I don't know anything about the recall of Tuckers, so I'll let others worry about that, but the GM recall of electric cars was a recall of cars GM owned and leased to consumers, and then required the consumers to give back. That is nothing like what Apple is asking here. Psystar manufactured the hardware (well, probably had someone in China manufacture it, but whatever) and sold the hardware (i.e. transferred title) to the consumers. Apple *might* have an argument requiring the deinstallation of OS X, but they can't just demand that Psystars customers give back the computers. I can't even fathom what their legal justification for that would be.
The EV1 specifically had a lease with no purchase option. Nobody owned one except GM. GM crushed them as leases came to an end.
Since it's a jury trial, Apple would win easily as soon as they bribe the jury with standalone OS X.
And Psystar's next foray shall involve an Open Phone running iPhone OS. And it shall overheat and be slow and dozens shall perish. And Psystar shall fall into the depths of the deadpool. And only then shall everything be all right.
Dozens of people or dozens of phones?
I'll jump on the California Unfair Competition claim: it has the dual advantages from a plaintiff's standpoint of being easy to plead and difficult to get thrown out. The legal standard is that the defendant's actions must have been "unfair." That's pretty much it.
It's a good throw-in claim to make because it almost always gets past any motion to dismiss. It's an easy way to ensure that Apple gets to the discovery and trial phases. After discovery, Apple may get a chance to amend to conform its pleadings to the unfairness that is located during discovery.
maybe he's citing a case or an analogy of hippo crates... though i don't get it... =)
but... windows is a brand... microsoft is the company... and microsoft doesn't make computers... if they did, they might be able to make the same argument.
wouldn't that up-end the world! as of windows 7... it must be run on an xbox. if you're a pc manufacturer... make your own OS... but they won't because that would lead to the death of windows... the rise of linux... and global chaos.
Oh my God...
It's "HYPOCRITES!" It's spelled 'HYPOCRITE'
Within hours after the news hit Psystar's "Open Computer" no longer offers the Leopard "option" but now only sells only the computer with the Leopard OS preinstalled. It seems like they really want to make a scene and showdown in the legal front.
I am no lawyer and I am definitely not going to take sides in this case, but why is Apple suing them for copyright infringement, as you had to purchase an OEM version of OS X to go along with the computer?
If you buy your copy from Apple, and pay them for it is it copyright infringement?
There's no such thing as an OEM version of OS X
The shroud of the Dark Side has fallen. Begun the Clone War has.
fozzy ur a douche bag
And you're a failure. Both at insulting and spheling.
i think you're the first person who has ever told Fozzy Bear that he isn't liked...
everyone loves Fozzy Bear... you've just ruined the childhood of millions of kids... i don't think Fozzy Bear is problem here. =)
Boo hoo Apple, sob sob "UNFAIR COMPETITION"
Itunes,Ipod,Iphone, ICRAP!
Anyone would think these guys invented everything, but they have plenty of marketing budget to dig out a Monopoly from a niche market.
@ Paul,
Instead of posting stupid diatribe on this site why don't you go DO something more useful? Like re-book your Vista... Or maybe sit on your Zune?
show of hands y'all, how many of you didn't know things were as messy as they are?
seriously.
tomo
apple products are completely overpriced, their computers are underpowered compared to pc's.
the only good thing about apple is their OS and the visual design of their products. the hardware inside the computer is nothing special.
so why do i have to pay 600$ for their entry level computer that can't be upgraded later?
i say if you want to get away from Windows and you're thinking about Mac, take a second and check out Ubuntu. it's free, it's open source, there's lots of great software and support available and you can even dress it up like a mac.
check out youtube and search ubuntu desktop
Is it just me or do mostly tech freaks/geeks/etc (I mean I'm one myself, so I'm not trolling here!) come to Engadget? If that's the case, aren't we smart enough to not talk trash to each other? It doesn't change anyone's stance (well, it might, but probably not as often) on a company they like or dislike. Everyone has an opinion, that's fine, and if someone was falsely led to believe something and another KINDLY provides a link to prove otherwise from a reputable source, then just say "my bad" or don't say anything at all.
Quit arguing folks! Now some posts definitely call for it, but when you have people hating on Microsoft or Apple and talking crap back and forth it gets annoying. Although some of it is rather amusing...
Apple is beginning also to look like AT&T back in the day when a customer could not use a 3rd party phone!
Apple needs to be broken up into different units and allow the market to determine what works.
Only in America does capitalism resemble a 3rd rate communist state. I would most likely buy Apple but I want the choice to put my OSX on my HP Blackbird 002.
Vista, Linux and more run on Apple. Makes money for MS but it's weird to see this and hear about yet another lawsuit maintaining its AT&T like control.
Wow, I can't believe I spelled it wrong myself! Guess I'm the hypocrite (spelled right this time!). Sorry lol.
The requirement to run OS X on apple only hardware shouldn't be upheld.
It's like buying an "iKnife" and saying you can only use it on an "iCuttingBoard" it's lubricious and apple has no jurisdiction on the use of their own product once it's in the consumer's hands.
If I wanted to create a wrapper to make OS X run on my microwave's CPU then that's fine.
Not saying Psystar is in the right or wrong, but the notion that apple gets to dictate what hardware their software runs on is idiotic at best.
This situation is going to pretty much live or die on the fact that Psystar was breaking open and cracking Apple's IP. The idiocy of the EULA, the demand for apple to make a midrange system, these won't clear psystar on the IP rights, and that's really what's going to bite them. Editting any sort of IP without express permission of the author is illegal, no questions.
Plus, I doubt this could backfire on apple and turn into a suit against their EULA - Psystar would really have to rail them on that one.
Here's a question though; does the EULA actually state that the operating system can only be used on apple hardware, or does it state the system requirements for the operating system, and they just happen to be apple hardware? There's a world of difference. If it's the second one, it would be just as easy for anyone to sue sony for releasing PS3 only games.
jonE
Well I'm all for Psystar and I hope they win. First of you can install from a store bought, legal license mac OSX disks to most computers these days. Although it may void their EULA or be against it. Which is giving them a monopoly for their product by locking customers into hardware. Which if that's going to be the case then they should build their own hardware and should have never went with a standard intel CPU, should have been custom just for them. If they wont allow us to install on other hardware then I think Microsoft should do the same thing first cancel all contracts or let them run out with pc manufactures like Toshiba, Dell, Sony, ect.., second start making their own computers from standard parts that they call theirs even though they are made by intel, nvidia,etc... and lock customers into their hardware. And to take it a step further make Windows a independent Os that doesn't allow anyone else to make software for it, All software made by Windows for Windows. Hey It's their product they designed why should they design it to allow others to work on it ? It's just ridiculous to say you have to use apple hardware its just like windows saying you have to use windows software and only windows software. In my opinion.
What the world is Steve Jobs thinking? He is a bit of a monopolist and only allow OS X to run on Apple Hardware! Jeeez, EU please sue and fine Apple harshly so they learn this lesson! And I believe Steve Jobs would let Psystar open again! Bad Steve Bad!!! :Z!!!
How is Psystar's Open Computer any different that the IBM PC Compatibles that came about to remove IBM's stranglehold on the home PC market? (Back in the day where there were only IBMs and Apples) How is this really any different? Apple is just a modern day IBM with a monopoly on a particular home computer. It is well known that Apple's current OS will work on PCs if it weren't for artificial barriers that Apple has been putting in the Mac OS code. That in itself is anti-competitive behavior that has gotten MS into trouble before.
Uh you can do this in a Virtual Machine by using a trick to make any Mac OS X run on any computer so can Apple stop everyone from breaking EULAs?
Will Apple Sue Everyone if so they be broke up.
You can put Apple OS X on any computer because it is Unix/Linux based like OS look it up people on Google.