Psystar Crushed In Court

We've been following the case of Mac cloner Psystar for some time now. Apple was just handed a summary judgement over Psystar, and as usual Groklaw has the scoop. Here is the order (PDF), though PJ supplies it in text form at the link above. "Psystar just got what's coming to them in the California case. ... It's a total massacre. Psystar's first-sale defense went down in flames. Apple's motion for summary judgment on copyright infringement and DMCA violation is granted. Apple prevailed also on its motion to seal. Psystar's motion for summary judgment on trademark infringement and trade dress is denied. So is its illusory motion for copyright misuse. ... So that means damages ahead for Psystar on the copyright issues just decided on summary judgment, at a minimum. The court asked for briefs on that subject. In short, Psystar is toast." Reader UnknowingFool adds, "There are still issues to be decided but they are only Apple's allegations: breach of contract, induced breach of contract, trademark infringement, trademark dilution; trade dress infringement, state unfair competition, and common law unfair competition. Even if Psystar wins all of them, it is unlikely to help them very much."

Not first-sale doctrine: Psystar altered OS X

[javacowboy]

All this goes to show is that, contrary to the statements of some Slashdotters, Psystar did not re-install OS X as-is. They replaced key segments, including the bootloader and kernel extensions, in order to get it to install on commodity hardware. That makes Psystar the distributors of a derivative work, thereby violating copyright laws. This is not about the EULA:

"Psystar infringed Apple's exclusive right to create derivative works of Mac OS X," the ruling reads. "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."

I fail to understand how Psystar is even within light years of being right on this issue.

Re:They've almost died on PC sales several times

[javacowboy]

The Mac division is very profitable, and it is growing. I'd estimate the installed base (not market share) of Macs in North America at about 20%. Take a look at any Apple quarterly earnings report to see it for yourself.

Re:This comment surprises me

[UnknowingFool]

Well, legally the court said in the ruling there are cases where using a master copy in the name of efficiency is acceptable. For enterprises, the use of an image to install an OS to a large numbers of computers for the sake of efficiency is fine. For example, a large company may install a volume Windows license from MS onto a bunch of computers or they may use a disc image to do an install and then replace the generic license key with a specific one after the install is over.

Psystar's use however was not because typically enterprises have agreements with the original copyright owner to do this when they buy enterprises licenses. Apple did not sell Psystar such a license and did not grant them the authority to do so.

Psystar bought from Apple a single OS X copy, installed it onto a Mac Mini, loaded it onto an X86 computer ("master copy"), made modifications to it, then used the master copy to install to other computers. Psystar said since they included a retail copy of an OS X DVD, this was all legal. The court however found that Psystar did not always include a copy and that even if it did, the computer copy was not always the same version of OS X as the DVD. (I think this meant the DVD was Leopard whereas the computer had Snow Leopard installed, etc).

Even if it was the same version, fair use does not allow for anyone to make multiple, unauthorized copies as Psystar had done. Likewise if a person made a copy (even several copies) of your software, music, etc, that might be fair use. If a person made 500 copies of each, that might not be covered.

Lastly since Psystar modified OS X to run on X86 computers, it is guilty of creating a derivative work without Apple's permission.

Re:They've almost died on PC sales several times

[UnknowingFool]

While Apple's revenue does not entirely depend on their computer sales anymore, I wouldn't say that computer division isn't profitable. According to Apple's financial statements [apple.com], they are experiencing sales growth as well as profit growth in computer sales. Overall desktop sales are down but laptop sales are up.

As for real profit on units, Apple makes on the average more per computer than they do on each iPod and iPhone. They sell more iPods and iPhone than computers though.

Re:Darwin is not OS X

[Anonymous Coward]

Bingo. WebKit is just a set of bugfixes in KHTML. So - written by some else.

Re:Psystar winning would be terrible for Microsoft

[recoiledsnake]

Oh really? Why then is Microsoft trying to clone everything apple is doing?

Zune, Microsoft Store, the new "iPhone killer" windows mobile, etc, etc

Apple could be a very serious threat to Microsoft if they changed their attitude towards businesses.

Microsoft's bread and butter is Windows and Office. The iPhone, iPod, App store that you mention do nothing to dent that. MS is just trying to build a bigger business by trying to get into those markets, not to counter a threat to their cash cows.

Re:Not first-sale doctrine: Psystar altered OS X

[burris]

The court rejected 117. Partially because Psystar's lawyers suck. (emphasis mine)

The question is whether Psystar can rely on section 117 to escape liability. It cannot. As Apple pointed out, Psystar waived any Section 117 essential step defense when it failed to plead it. Psystar counters that it has not waived Section 117 because that provision is a
limitation on a copyright owner’s exclusive rights rather than an affirmative defense. An earlier Ninth Circuit decision stated “Section 117 defines a narrow category of copying that is lawful per se” and “Section 107, by contrast, establishes a defense to an otherwise valid claim of copyright infringement.” Sega Enters. v. Accolade, Inc., 977 F.2d 1510, 1521 (9th Cir. 1992). Since then, the Ninth Circuit has expressly referred to Section 117 as a defense. See Wall Data Inc. v. L.A. County Sheriff’s Dep’t, 447 F.3d 769, 776 (9th Cir. 2006) (referring to Section 117 as an affirmative defense); Asset Mktg. Sys. v. Gagnon, 542 F.3d 748, 754 (9th Cir. 2008) (referring to Section 117 as a defense). As such, this order treats Section 117 as an affirmative defense.

Alternatively, if Section 117 is considered an affirmative defense, then Psystar argues it has pled it in its answer and raised the substance of its Section 117 argument in its interrogatory responses. Neither the answer nor interrogatory responses, however, refer to Section 117. And Psystar has not demonstrated any good cause for its failure to assert the defense after a year of litigation. Also, there has been no showing that its failure to do so will not prejudice Apple. As such, Psystar has waived the defense.

At all events, the assertion of Section 117 is so frivolous in the true context of how Psystar has used Mac OS X that a belated attempt to amend the pleadings would not be excused.

Re:Darwin is not OS X

[BasilBrush]

Grand Central Dispatch is interesting, written fro scratch by Apple, and open sourced. You lose.

Re:That's not true at all.

[bertok]

Well said.

People forget that many of the Microsoft tools just work.

Just recently, a coworker and I set up a "green field" environment from scratch in two days flat (starting with one blank server), and had network authentication (AD), enterprise email (Exchange), and a PXE-booting machine imaging system (including Office) deploying images to laptops, including drivers! It was kinda neat that we could boot a blank machine, and within 30 minutes be able to log in with a user account, double-click Outlook, and see an inbox.

In the corporate world, Microsoft still rules, and will continue to rule for a long time.

Re:This comment surprises me

[Anonymous Coward]

Apple almost went out of business due to the proprietary model. Microsoft rescued them.

http://www.wired.com/thisdayintech/2009/08/dayintech_0806/

Re:Psystar winning would be terrible for Microsoft

[secolactico]

But if OS X were available for purchase for your home PC, or as an alternative to Windows when you buy a Dell... you can bet you'd see Windows's share drop quite a bit.

Are you sure of that? I like OS X but I don't find it that much superior to Windows (specially the new Windows 7 which I like quite a bit).

And I wonder if most of Apple's touted "just work" features have to do with the fact that it's a closed OS running on tightly controlled hardware (thus running it on third party hardware might defeat this feature).

You already have an alternative when you buy your new PC: Linux (don't laugh now...) and it doesn't seem to be making that much of a dent on Windows' share of the market.

No, it doesn't.

[langelgjm]

Read carefully the full section, [cornell.edu] and you'll see that while it allows for the creation for "adaptations", it explicitly disallows resale of those adaptations if you don't have permission from the copyright holder:

(b) Lease, Sale, or Other Transfer of Additional Copy or Adaptation.— Any exact copies prepared in accordance with the provisions of this section may be leased, sold, or otherwise transferred, along with the copy from which such copies were prepared, only as part of the lease, sale, or other transfer of all rights in the program. Adaptations so prepared may be transferred only with the authorization of the copyright owner.

Re:Darwin is not OS X

[Sir_Lewk]

Webkit is based off of KHTML, but if you have ever actually used both of them it will become immediately obvious it is not just a set of bugfixes. We are talking about a boatload of additional functionality.

For the record, I am not an Apple fanboi. I'm a card-carrying linux using, mac hater.

Re:Too Bad

[Kjella]

This statement seems silly on the face of it, and would benefit from some, you know, supporting evidence.

My experience every time:
I pick an Apple model I could use, and compare to a similar PC - no big difference.
I pick the PC I want, try to find something Apple has matching that - Apple loses bigtime.

The only explanation I have for Apple's success is that people don't feel the difference... computers like all have a gigahertz multicore processors, gigs of memory, terabytes of disk hundreds of GPU shaders, all sorts of ports and wireless and whatever. That only form factor and software really matters, the limited and expensive selection of everything else does not. I'm guessing that's true for many people, honestly I've been a power user almost all my life but lately even the most bloated abominations of software malpractice run decently. More speed is starting to be "nice to have", nothing more.

Re:This comment surprises me

[Anonymous Coward]

There is one core thing that Apple has that PC makers have completely dropped the ball with: Customer service.

PC makers have gone for the absolute lowest price which means they cannot afford anything but the most bare bone CS departments unless the individual or business pays for "gold" level support on each machine, or even a TAM (technical account manager.) If you buy an average PC, don't expect anything but offers for people to charge you $75 an hour to help you with the basic computer stuff.

Now contrast that with Apple's support. Got a question or problem? It's not perfect, but you can call them, or arrange a face to face session at an Apple store, or an authorized reseller. Since Apple sells the hardware, the OS, and maybe the application, it essentially is a one stop shop. No trying to play tag with the OS vendor, the hardware maker, and the application author.

The fact that people are getting decent CS is why people pay for a Mac. People rather be doing their business rather than be playing the support phone tag game. Especially if the hardware they are using is business critical.

What PC makers fail to understand when selling to the average consumer and SOHO, megahertz take a back seat to ROI, and if a machine is inoperable (be it due to usage errors or issues with the hardware/OS/app stack), people are either losing money, or losing free time they could be gaming. Of course, there are people who know the hardware and software, but most of the home market is more interested in buying something that works, plays their games, and runs their apps. Apple "gets" this. That is why their machines are selling.

Re:This is why I don't send money to Cupertino

[pizzach]

Apple specifically created their filesystem tools to kill the 3rd party market for hard drives and other peripherals such as CDROM drives.

If you buy the correct brand, the part would work. For example, Pioneer DVR 115/106/107 were the correct brand in the G3 era for DVD drives. Notice how they are not "Apple" brand. Outside of stuff apple never expect most people to change, I have never had any tricky hardware problems. The worst issue I ever went through was when my B&W G3 needed firmware flashing to allow G4 processors because they were explicitly blocked. Apple seems to be particularly strict about the CPUs. Other stuff...seemed to work fine as long as you had the correct drivers.

Re:Not first-sale doctrine: Psystar altered OS X

[eggnoglatte]

Jesus Fucking H Christ. You are like the 10th moron in this thread who quotes part (a) of that section, but is completely utterly incapable of reading on to part (b). If you actually read part (b), it expressly prohibits resale of the modified versions.

Are you all aiming for the Selective Reading of the Year Award or what?

Re:Not first-sale doctrine: Psystar altered OS X

[Torodung]

I think the problem comes in when you image dump it to a bunch of commodity hard disks and sell hundreds of machines from the one copy you bought on the single cheapo Apple computer you bought.

First-sale allows you to sell that one copy, or possibly put it in one new machine, not open up a distribution center.

Psystar's boneheaded defense was that first-sale lets you, vis-a-vis, buy a $16 factory-recorded CD and a spool of a hundred 50-cent CD-Rs, and sell the "new product" at half price, turning a $7.50 profit on each disc. They were wrong. Copyright law doesn't look kindly upon that.

And that is why Psystar got pounded. If they bought a hundred cheap iMacs, modded the software, and put it in exactly a hundred high-end workstations, first-sale might have a ghost of a chance of applying.

But then, you'd have to be an individual reselling, and not be a reseller business, incorporated to turn a profit on a derivative work, which you don't have the rights to and is also a violation of copyright. This is what you think is "stupid." That I should be able to, say, delete one of the mediocre filler tracks off of that $16 dollar CD and sell it for $8. It doesn't matter if I convert them to MP3's first, etc., I'm selling them, as a business, which makes me a distributor.

It's copyright. You can't copy it for resale. You can't make a derivative work for resale if you don't have the consent of the rights holder. You can't redistribute it for substantial gain. Copyright law has been that way since long before the DMCA. The operative words are "resale" and "substantial gain." This is why it's a summary judgment, because Psystar didn't have a case. They were like the New York Yankees showing up to play water polo here.

What Apple did is in accordance with the law, and it's their duty to their shareholders to defend their rights. I won't go so far as to claim that they were "right," or "good," but if folks don't like this, then they need work to change the law, because that's what the law says.

In my experience, the law is almost always "stupid," or at the very least it's blunt. It doesn't exist as a "common sense way to live" and while the courts are a system, the law is not. The law is there to arbitrate conflicts when all other options have broken down, with little to no room for compromise so there is a clear "winner." If you want compromise, or sense, you settle outside of court as soon as possible. We should not look to the courts for guidance, we should look to the courts for a clear redress of our grievances when all else fails.

--
Toro

Re:Use != Sale

[enkidu]

You missed the next section 117(b) which prohibits the transfer of such modifications without the permission of the copyright owner as noted in this post [slashdot.org].

Re:Because that's their business model

[Gadget_Guy]

Xerox Alto to oN-Line System [wikipedia.org]
Visicalc to LANPAR [renepardo.com] (Warning PDF link)

It gets too hard to go much further than this because a lot of this early stuff isn't documented anywhere. But the term spreadsheet predates computers, so even the earliest spreadsheet evolved from ideas in the real world.

Re:So what if you own one of these machines?

[Golddess]

The very first post seemed to suggest that some company setup the Psystar company to get precedent that Mac clones are legally allowed. GGP's post says that it was Apple in order to show that Mac clones are legally disallowed.