Apple wins copyright infringement case against Psystar in California
By Nilay Patel 
posted November 14th 2009 5:59PM
posted November 14th 2009 5:59PM
Okay -- got your popcorn? Let's do this thing. (We're skipping right to the analysis section, but the key piece of info from the facts section is that Psystar didn't install OS X from its purchased DVDs, but from a Mac mini "imaging station.")
- Copyright infringement. The court agrees with Apple right down the line here -- Psystar is illegally copying, modifying, and distributing Mac OS X, and the court basically slams the whole license-vs-own argument into the ground, saying, "Even assuming arguendo that Psystar was the owner of a copy... the copies at issue here were not lawfully manufactured with the authorization of the copyright owner." Psystar was making multiple copies of OS X from its imaging station, and you just can't do that without permission. Furthermore, Psystar's argument that it includes a purchased copy of OS X with all of its computers fell flat, as the version of the OS on the machines was often different than the version on the disc, and several of the machines examined didn't have discs included at all. Oops.
- Creation of derivative works. This is part of copyright infringement, but we're going to break it out because it's a major key to the case. In order to boot OS X on a hackintosh, Psystar replaced the OS X bootloader, disabled and removed Apple kernel extensions, and added its own kernel extensions. That was enough variation from Apple's code to warrant a finding of copyright infringement all on its own -- Psystar was essentially selling a custom version of Apple's copyrighted code, and you're not allowed to do that without permission. What does that mean? It means that you can throw out all the arguments about EULAs and ownership and fair use, because Psystar's main business -- hacking OS X to run on non-Apple hardware -- is illegal. What can we say? We told you so.
- Copyright misuse. After Psystar's antitrust and monopoly arguments were thrown out, it tried to argue that Apple was misusing its copyright on OS X by limiting it to Apple hardware. It was an interesting and ballsy argument, and the court didn't buy it for a second: "Apple has not prohibited others from independently developing and using their own operating systems. Thus, Apple did not violate the public policy underlying copyright law or engage in copyright misuse." Put another way, as long as Apple doesn't try to prevent OS X owners from buying Windows PCs, it can sell OS X however it wants.
- DMCA violations. Everyone's favorite section of copyright law gets some time in the sun -- the court found that Psystar illegally circumvented the OS X kernel encryption when it hacked OS X and booted it on non-Apple hardware. Amusingly, Psystar tried to argue that Apple's encryption wasn't effective because the keys are available on the internet, but that's just not how the law works at all. "Here, when the decryption key was not employed, the encryption effectively worked to prevent access to Mac OS X. And that is all that is required." Ouch.
- Relief. Psystar's gonna pay, but we don't know how much, because the court hasn't decided yet. Stay tuned -- that's going down next month.
- Remaining issues. Apple's complaint contained a number of other claims besides copyright infringement, and they're still on for trial. The big one is breach of contract, which is the fight over the OS X EULA -- but since Psystar has already been found liable for straight copyright infringement, we don't think it stands a chance of invalidating the EULA. There's also a number of trademark claims and unfair competition claims, none of which will affect the main ruling here. In short: things don't look so good for Psystar.
Now, this case only covered Leopard; Apple and Psystar are fighting a separate case over Snow Leopard in Florida, which means we haven't heard the end of this yet. If we were betting, though, we'd say that case will end up just like this one -- to quote Groklaw, "Judges notice if you were just found guilty of a similar cause of action in another state." Yeah.
Oh, there's also the small matter of definitively proving whether or not Psystar is stealing code from the OSx86 community, and we hope to have more on that next week -- we'll let you know.
And Yahoo Finance! says otherwise...believe whatever you want. Stock investors are the only ones who give a shit anyway, they're just meaningless numbers to the rest of us.
Apple Market Cap = 184.14B
HP Market Cap = 118.34B
Dell Market Cap = 30.12B
i was going by the "total assets" of each company, as provided by wikipedia.
Apple-39.57 billion
HP-113.331 billion
Dell-26.500 billion
@Kamakaze
Care to include the link to this article? Not saying you are wrong, I am just curious since other sites seem to offer different numbers :)
really, just look them all up on wikipedia.
it's in the right hand information column on each entry.
http://en.wikipedia.org/wiki/Hewlett_Packard
http://en.wikipedia.org/wiki/Apple_Inc.
http://en.wikipedia.org/wiki/Dell
i'm not sure which matters more; "total assets" or "market cap" but total assets sound more important.
MCap numbers make more sense than Total Assets. MCap is basically a the total worth of all the company's shares while Assets are basically the total value of a company's "physical" assets: Factories, tables, chairs, printers and all.
It's the same way why a house in San Francisco costs more than similar sized house in Idaho. Or as to Why Japan is considered "richer" than Canada even though Canada is like 100 times bigger.
In business Total Assets mean zilch unless you are a big bank who is about to lend money to these companies.,
Comparing two or more publicly traded companies in terms of who is "worth more" is actually not very straight forward.
An often cited determiner of value is market cap, but that's not the definitive answer. If the internet boom and bust earlier this decade should have taught us anything, it's that market cap can be a totally imaginary valuation with no basis in reality whatsoever.
The fortune 500 for example, ranks companies based solely on revenue, and I had a teacher in business school that said the true value of a company was its book value, and some people will say that the number of employees has a bearing on how large (or valuable) a company is.
As an example of what I mean, Microsoft has roughly 3x the number of employees that apple does (100k vs 35k for apple), nearly double the revenue ($58B vs $32B) roughly 3x the net income ($15B vs. $5B), but the difference in market cap is only a factor of 1.4 ($250B for MSFT and $185B for APPL)
Thus, by many measures MS is a way bigger company that Apple and should be worth a lot more, but if you look only at market cap, they appear much closer in value.
All this hate for psystart is pretty hilarious, especially from the "completely impartial" engadget. Hopefully as a result of this ruling we'll see a post from engadget calling for the end of the community-based hackintoch efforts. Fair is fair, right? Both groups have as an end goal to run OSX on non-apple hardware. The only difference being the former charged money for software created by the later.
Just so we're clear, both Psystar and the Hackintosh community are in the wrong.
Hackintoshers don't sell Apple's intellectual property. Psystar does.
If you Hack a Mac together, and then sell it, you ARE Psystar.
The Illegality and 'ripoff artistry' here is why Engadget is upset.
Capice?
All of this support for Psystar is hilarious, despite the obviousness of Psystar in the wrong. Hackintosh community has existed for a long time, and Apple never made it a big deal. Psystar is only hurting the OSx86 project by bringing & exposing the project to the public/media attention and forces Apple to take action.
DMCA do not made a different if you are selling a product or not.
For DMCA :hackingthosh = piracy.
period.
People keep saying that Apple will make more money if they sell the OS/other software standalone. Well that will greatly subtract from their hardware. So lets see Snow Leopard for 170 (the full install) compared to their least expensive computer, the Mac Mini, at 600 bucks. That is QUITE a different. Especially when compared with the iMac, Macbook, Macbook Pro, and Mac Pro. So their profits would REALY take a dive.
Yes, because we know the retail price of a product is 100% profit, and it doesn't actually cost Apple anything to manufacture a Mac Mini. Opposed to burning another copy of Snow Leopard, which has a one time cost to actually develop.
I just have one question for the hackintoshers? Why would you want to run mac os on a PC? As Far as i Know MAC OS is a paid copy of Linux. Try Ubuntu and see what im talking about.
Sounds like you don't know much then.
Blah blah blah Apple is hardware based company...
Why do their hardware is so lame then and still they're so successfull?
because they are not hardware based at all, hardware is where they make the money taking advantage of their strong software.
The real question is : is it in the best interest of customers (i.e. people) to be forbidden to install OS X on whatever they like and if not then why is there a law that allows Apple to do so (I.e. a law that's is not in the best interest of the people).
It's strange to see the american law is so corparate-biased from europe.
Psystar would have lost in Europe too, as copyright infringement is just about the same everywhere now (you can thank the record companies and movie studios for that). There's also nothing wrong with copyright law as it applies to this case (although there are things wrong with it). Copyright law protects all works, including yours (if you created any), and the fact this particular judgment was in Apple's favor and not Psystar's (which is another corporation, not a consumer) is irrelevant to whether the law is good or not.
@Henry
Cause like..., they were like... the lowest ranked... like.
Suprise, Apple wins the lawsuit...death to all who threaten Job's kingdom, I thought competition made you better...I guess in today's world there is no choice...Long live open source!! Forge ahead Psystar, some of us are cheering you on!
So you think Psystar is a legitimate 'competitor'? LMFAO. By selling ugly cheap boxes with OS X on them?
What have they brought to the table. Nothing. Innovate more than the other guy.
That's how you're supposed to win, not by stealing.
When people start cheering for the bad guy (like Psystar) it's usually because they don't understand what they've done wrong (illegally modifying/selling licensed code, violating EULAs, etc). This would be something akin to someone selling modified Windows 7 versions hacked to bypass the Microsoft activation process. Microsoft would certainly be concerned about that.
Apple FWT! Finally. I feel like everyone's hating on them these days. Let them silently take over the world in peace for Gosh darn it.
…what?
Wonder how this will play out with http://www.expresshd.com/pages.php?pID=17&CDpath=5 or is this another fictitious company like Fakestar, as described on /.
I believe that the decision regarding Psystar is correct.
They ripped of the OSx86 community as well as Apple. I would like to see similar action against Arts Studio Entertainment that produce and sell the Efi-x module, which is a total rip off.
People who subscribe to Efix and/or Rebel EFI get what they ask for a rip off which is not even original. I hope that Apple Asia will take some action to stop ASEM who are now operating out of Taiwan. As surely Apple who source and build their products in China/Taiwan must be able to do something to stop these scams.
I repeat :
for the DMCA, the hackingtosh community is piracy.
because:
a) it reverse engineering the "protection" of the system (EFI).
b) Hackingtosh modify the system, hence is illegal.
The hackingtosh community hasn't been prosecuted because it is small.
Personaly, i think that DMCA is unfair because it is too string. It is the same to consider that any modification to the system as illegal (with the exception of allowed modification), for example to consider that a car is illegal because you switched different mark of spark plug.
Imagine how quickly engadget's servers would die if they had a free chat function instead of text comments?
he's just being "thatguy" and he thinks its funny. he doesn't understand that nobody else does.
psystar is acting like a unfrank parasite and not like "lets do some hard work for a own good product" -company.
I'd love to support underdogs with good self-made-from-scratch products, but not firms with such a parasite philosophy.
"hackintosh-unity", "we are one family", "fuck apple this", " i hate steve jobs that", "this parole here that parole there" changes nothing.
this is simply not a behavior we should support - just like "be perky and act like a parasite, to make somehow cash".
I don't think any rational person had any doubt about who was going to win this case. Having said that, I was rooting for the underdog a little bit. Realistically, Psystar wasn't going to make a dent in Apple's profits. It was more an issue of the precedent they would set if allowed to continue doing what they were doing. Apple is going to remain a closed business model, because it works for them, and because history has shown that when they allowed licensing for clone-makers, they almost went bankrupt. When Jobs is gone from the scene, things may change. Until then, Apple's business model mandates they challenge each and every commercial attempt to produce clones. If they don't, they will create a precedent that will overtly threaten their very existence.
Psystar wasn't the underdog. An underdog would be a company who is competing honestly, like Apple competing with Microsoft. Psystar isn't competing honestly, are they? They're stealing from the OSX86 project, they're breaking Apple's licensing agreements and they're losing court battles.
There is no "underdog" in this scenario, since Apple is the only company who is allowed to put OS X on their hardware.
Great, just great. Again, this case just shows that it's not about being right, it's about having more money to win a case. Apple has shown it's true face one more time ...
But then again, I don't really see what all the fuss is about OS X, when Win7 is so much superior. Seriously, who actually wants to put OS X on a PC, except for kids and people who are just bored and want to experience something new (before they get frustrated and get back to Windows)??
Only that in this case the judge agreed Apple had the right to defend their own intellectual property and bottom feeders like Psystar were dead wrong. Serves them right. And the superiority of OS X continues trouncing Windows, specially in the smart phone market, and that's good news for all.
Did anyone really think that Psystar had a chance in winning this case? When it comes to infringement or anything else that even remotely smells like unauthorized use, Apple will defend and attack like a pack of Pit Bulls.
Regards,
Dan
For all those dumbasses who keep parroting that Apple needs to release OS X as a universal install for any PC:
1) The computer world does not revolve around how Microsoft's business model: OS on any PC.
2) Apple has its own business model: highly integrated hardware and software (like the Wii or PS3)
3) Apple is extremely profitable as is and will soon make more money than Microsoft.
Apple's soaring piles of cash:
http://www.businessinsider.com/charts-of-the-week-apples-soaring-pile-of-cash-2009-11
Apple market cap closing in on Microsoft's
http://www.businessinsider.com/chart-of-the-day-market-cap-apple-vs-microsoft-2009-11
iPhone: Most profitable phone on Earth
http://www.nytimes.com/external/gigaom/2009/11/10/10gigaom-apple-shoots-past-nokia-as-worlds-most-profitable-2393.html
And you Apple-haters can keep hating but nothing's going to change Apple's soaring and accelerating success!
yeah...you already posted that once, no one 'hates' anything. Grow up.
Good always beats evil ;)
that's why i don't even been bother use osx86 even there all crapped begin with, so i don't think hackintosh community will never understand that making mac osx on pc is a joke your running a os that been 2 year behind of windows and linux from software and drivers, then apple is isolated themselves from outside world of the pc and the company will die a lonely Marxism Company on earth, so sad. What they need to do is open up themselves and run a real competition against Microsoft; that can make osx on amd and intel pc. I am tired hearing the same bs that apple keep saying pc are this and that on ads; its getting nowhere to hurt microsoft sales; only competition i am seeing is microsoft, google, and linux opensource community are getting stronger every six months, that's is real competition i am witness today.
OS X is the most advanced in the planet.
Unlike your English.
The funniest part about all this IMO is the fact that even the most die-hard Apple fans are inadvertently admitting that Apple would have a really hard time selling computers if OSX were licensed out like Windows.
Macs are NOT overpriced... they're just, uhm, not competitive to actually sell without dangling the OSX carrot. ;)
Wrong. It's been proven over and over and over and over and over again that when you build a PC that matches the EXACT specs of a Mac, the price is the same, or in most cases, the Mac is actually cheaper. You think the Mac Pros are expensive? Have you tried building any 8 core Xeon workstations over at Dell.com? And yes I said Xeon, not Core i7, because that's what the Mac Pro uses.
Your confusion stems from the fact that Mac users recognize that people can build their own PCs for less money. That is not the same thing as building a PC with the EXACT SAME SPECS as a Mac for less money. If you build a PC that matches a Mac in every respect, feature for feature, it will cost the same or even more. And even then you'll still never get things like the Mac Pro's all aluminum case with 8 temperature sensitive variable speed fans in separate cooling zones that run completely silently.
The fact remains that a lot of people will buy cheaper PCs (and consequently get what they pay for) in order to run OS X, which will take hardware sales away from Apple. Running OS X on crappy hardware is something else Apple is opposed to, so it's just another reason for Apple to continue to not license OS X out.
What about the new rebel sw psystar is selling now?? 1.4 marcap MS/apple seems to indicate apple is overpriced but stocks and marcap look at the company a year from now.