Apple Wins Judgement Against Psystar for Mac OS X Copyright Infringement

[Buzz Bumble]

3. The Hackintosh community is different because Apple doesn't know who these people are.

The "hackintosh" community also isn't making a profit. It's really just individuals.

Like indivduals downloading music, etc. it's not really worth the expense and time trying to hunt them all down, but the copyright holders for the music / movies do hunt down people selling illegal copies or "sharing" large quantities because it is then worthwhile stopping them.

Also the judge is flat out wrong when he says Apple sells an "upgrade" DVD for OS X.

"Snow Leopard" IS an upgrade DVD. You're meant to either already legally have Leopard or buy the more expensive box set.

Another argument: If DVDs are too expensive, he could buy used DVDs for say $5. Then other people would buy more DVDs for $15, because they could later sell them for some money when they don't like them anymore. So by not buying used DVDs he _is_ depriving the movie industry.

The small print on some software, books, DVDs, CDs, etc. actually says you aren't allowed to resell them, although most publishers don't bother enforcing it. If they did there would be no second-hand market at all.

 

[mcmillasc]

Remember that the information may be produced under a protective order, in which case the public will never know. Since it's confidential information, it wouldn't be surprising at all.

I strongly doubt Apple would try and keep Psystar's backers under wraps, and I don't think Psystar's defence would have the brawn to convince a judge grounds on which to give such an order. According to an interview with Psystar's founder, they were the only backers of the company essentially mortgaging everything they own - which could turn out to be a complete lie. If indeed Psystar is backed by some other investor, it will be an egg in their face.

 

[cmaier]

The small print on some software, books, DVDs, CDs, etc. actually says you aren't allowed to resell them, although most publishers don't bother enforcing it. If they did there would be no second-hand market at all.

Since the 1908 Bobbs-Merrill v. Strauss case, in the United States the copyright holder's rights are exhausted upon first sale, absent a contract/license agreement to the contrary.

 

[cmaier]

I strongly doubt Apple would try and keep Psystar's backers under wraps, and I don't think Psystar's defence would have the brawn to convince a judge grounds on which to give such an order. According to an interview with Psystar's founder, they were the only backers of the company essentially mortgaging everything they own - which could turn out to be a complete lie. If indeed Psystar is backed by some other investor, it will be an egg in their face.

The way it works is that Psystar produces the documents or answers the questions and designates the information as "CONFIDENTIAL." Then, under the protective order, it is sealed from the public, and Apple (and everyone else) cannot reveal it.

There is already a protective order. The only question is whether Psystar will designate the information as CONFIDENTIAL. If they do, then it's secret. The only way to make it not secret at that point would be for Apple to go to the judge and make a motion saying that Psystar is overdesignating. But since Psystar is really trying to maintain this information as confidential (assuming they really do have backers), the judge will not overrule the designation.

 

[jimmyjoemccrow]

That "fortune" they charge pays for, in many cases, superior hardware and materials, and, more importantly, R&D on the OS itself.

And yet they manage to cover the costs of those and still turn out a record profit in a time of recession while having lower sales figures than their competitors. If they have low volumes of sales, there is no other way to be showing record profits other than having huge markups on the actual cost of making the product.

 

[KnightWRX]

First, this is only a motion for summary judgment.

That's wrong. Apple put in the motion a while ago. This is a ruling on the motion for summary judgment, ie, a summary judgment.

It means some of the claims have already been ruled on. Some claims are left and set for a hearing on Dec 14, and the trial in January will probably be about damages if the judge hasn't wrapped it up or Psystar hasn't settled until then.

And for your information, California has already thrown out Psystar's counterclaims back in November 2008.

And yet they manage to cover the costs of those and still turn out a record profit in a time of recession while having lower sales figures than their competitors. If they have low volumes of sales, there is no other way to be showing record profits other than having huge markups on the actual cost of making the product.

That's because running a business isn't about charging costs + static profit margin. Selling a product is about supply and demand. Demand sets the price. You sell your product for the amount that the consumer is willing to pay for it.

The nice thing about niches is that you can fetch a higher price because of limited supply and good demand. Apple plays the niches. Workstations, high-end laptops, SFF PCs, all-in-ones. They don't compete in the razor-thin margin world of desktop towers. In their niches, they are competitive and they have prices that are quite comparable to their competition (who also understand the profitable nature of those niches).

(and please, no PCs are cheaper than Macs, you lost that argument once already).

 

[cmaier]

That's wrong. Apple put in the motion a while ago. This is a ruling on the motion for summary judgment, ie, a summary judgment.

It means some of the claims have already been ruled on. Some claims are left and set for a hearing on Dec 14, and the trial in January will probably be about damages if the judge hasn't wrapped it up or Psystar hasn't settled until then.

And for your information, Californation has already thrown out Psystar's counterclaims back in November 2008.

Yes, I meant "this is only a judgment on a motion for summary judgment." Go read what I said in that context. (I'm a lawyer, btw). I said:

"First, this is only a motion for summary judgment. They haven't had a trial yet. That stuff may come out at trial. Second, "we" don't necessarily find out anything. You can bet Apple will find out, though."

My point is that the information about backers is irrelevant to the MSJ, there was no testimony, no cross-examination, no presentation of evidence beyond declarations, etc. At the TRIAL, which will occur (absent a settlement), this information may become relevant and be presented. Or not.


And when I say "counterclaim" I mean "counterclaims and affirmative defenses."

 

[Macminiintel]

Oh this is great news for me, I've been wondering what would happen for months, so most of it sounds like its over for good pretty much. They can go to hell

I'm 110% certain if Apple set OS X free it would be utter chaos, first it would have to deal with all the driver issues on different hardware like windows, then Apple's satisfaction rating would decline almost instantly, Apple's support & customer experience is only as good as it is, because they make the software & control there hardware which go into there computers. Then not forgetting it would be targeted with more security threats, I like things perfectly as it is now.

 

[filmgirl]

All I can say is that I'm glad that this ruling (even though it isn't the final, definitive ruling) came down the way it came down.

I'm fine with individuals making the choice to do hackintoshes or whatever else they want to do -- regardless of whatever EULA violations are involved (it's not something I'm interested in doing myself, but I don't think those individuals should be prosecuted), but when you make that into a business -- and then you go another step further and break the licenses of the code you use to get around Apple's IP, you're just flat out scum.

After reading that disgusting profile of the two losers in the Miami Herald earlier this week, I wanted to kick those guys asses even more.

Good riddance bitches.

 

[MacinDoc]

I didn't realize that Psystar loaded OS X pirated from a single copy onto all of the machines it sold (no wonder it was able to sell its machines at a profit - no charge for the OS, and no labor wasted opening individual boxes of OS X and installing it on each machine). Psystar cooked its own goose, by clearly showing no respect for Apple's intellectual property (in music, the equivalent would be to buy one copy of a CD and then rip thousands of copies of that CD, selling them at a lower cost than the original distributor). The outcome might have been in question if Psystar had purchased a copy of OS X for every machine it sold, but even then, a retail copy of OS X is intended as an upgrade, not a full install; the copy of the initial version of OS X is included in the price of each Mac sold.

 

[cmaier]

I didn't realize that Psystar loaded OS X pirated from a single copy onto all of the machines it sold (no wonder it was able to sell its machines at a profit - no charge for the OS, and no labor wasted opening individual boxes of OS X and installing it on each machine). Psystar cooked its own goose, by clearly showing no respect for Apple's intellectual property (in music, the equivalent would be to buy one copy of a CD and then rip thousands of copies of that CD, selling them at a lower cost than the original distributor). The outcome might have been in question if Psystar had purchased a copy of OS X for every machine it sold, but even then, a retail copy of OS X is intended as an upgrade, not a full install; the copy of the initial version of OS X is included in the price of each Mac sold.

Supposedly they did purchase a copy for each machine. They didn't open the boxes and use them for the installs, though.

 

[pdjudd]

Supposedly they did purchase a copy for each machine. They didn't open the boxes and use them for the installs, though.

Supposedly. Psystar has never been able to prove that they bought anything. Their defense against that claim when their CEO was asked was the equivalent of “the dog ate it”. Actually they said they were “lost” but its the same as having no evidence.

 

[NoSmokingBandit]

I'm 110% certain if Apple set OS X free it would be utter chaos, first it would have to deal with all the driver issues on different hardware like windows, then Apple's satisfaction rating would decline almost instantly, Apple's support & customer experience is only as good as it is, because they make the software & control there hardware which go into there computers. Then not forgetting it would be targeted with more security threats, I like things perfectly as it is now.

Agreed. Apple doesnt have the manpower or balls to do what MS does (and they charge a premium for it!). They could afford it, but then they would have to dive into the massive cash reserves they have from charging as much as they do.

 

[cmaier]

Supposedly. Psystar has never been able to prove that they bought anything. Their defense against that claim when their CEO was asked was the equivalent of “the dog ate it”. Actually they said they were “lost” but its the same as having no evidence.

They didn't ship OS disks with the systems? I'm quite confused as to what they were actually doing - they make a lot of statements claiming all sorts of things, and while i've read the Order, I didn't look at the motions or supporting declarations.

 

[Drag'nGT]

This should make it easy to understand for those who don't get it.

Halo, Gears of War and Forza only run on the Xbox 360.

KillZone, Metal Gear Solid and Gran Turismo only run on the PS3.

The software is just as much a system seller as the hardware itself.

OS X and a Mac are no different.

 

[NoSmokingBandit]

This should make it easy to understand for those who don't get it.

Halo, Gears of War and Forza only run on the Xbox 360.

KillZone, Metal Gear Solid and Gran Turismo only run on the PS3.

The software is just as much a system seller as the hardware itself.

OS X and a Mac are no different.

No. Its not the same. The Cell cpu is physically not capable of running the binaries on the Forza 3 game disc. Nor is the Xeon (or is it Xenon, i always get them confused) in the 360 capable of running the KZ2 binaries.
However, my Q8400 in my pc is perfectly capable of running OSX. The only limitations are synthetic. There are no synthetic limitations keeping KZ2 from running on a 360, its that the cpu is not going to know what to do with the instructions.

 

[MacDSmith2]

No. Its not the same. The Cell cpu is physically not capable of running the binaries on the Forza 3 game disc.
However, my Q8400 in my pc is perfectly capable of running OSX.

That is completely irrelevant to the issue. The original post was correct. As to a previous post, they claimed they were buying individual copies of OS/X but when pressed couldn't provide a single receipt! So obviously they were simply duplicating a single update OS/X disc and copying it over and over and shipping it with their hardware. It is totally amazing that they thought they could get away with this, which makes me think the backers of this company are all crooks looking to make a bunch of money before they get shut down and move on to their next scam.

 

[capvideo]

Except that the judge did, essentially, affirm the EULA. See the section of the order on copyright misuse.

Yeah, "essentially" is another one of those weasel words.

Operating from the groklaw version, there are five questions of summary judgement that the judge ruled on.

1. Summary judgement is for when there are no facts at dispute. When facts remain in dispute, trial continues.

2A. Psystar copying something they don't hold the copyright on is a clear copyright violation, though it does appear that Psystar already waived a defense that they're trying to raise here.

2B. Psystar made changes to OS X and distributed a version of OS X with those changes. That's a derivative work, and they have no right to distribute it. It doesn't matter if they also distributed a non-modified version. (Apple does not appear to have been claiming that distributing the non-modified version was a violation.) EULA is not a factor here--this is basic copyright law.

2C. Yes, swapping out portions of the code, even if the individual files aren't changed, is creating a derivative work of the OS.

2, full summary: Making a derivative work, copying it, and then distributing the copy, is a copyright violation. Oh, and selling a copyright violation so that someone else can use it is also contributory infringement. This is basic copyright law, and has nothing to do with a EULA. No facts in dispute, Apple wins a summary judgement.

3. This is the only one that could hinge on a EULA turning a purchase into a license. However, all it does is not grant Psystar summary judgement. Summary judgement simply means that the facts are so obvious that the there is no need for further trial. Apple has been granted summary judgement on 1, 2, and 4. Psystar was not granted summary judgement on 3: the facts are still in dispute.

4. DMCA. Yes, breaking a key to make software work the way you want it to, violates the DMCA. The DMCA sucks, but it is the law.

5. Psystar's claim that their use of Apple's trademark was legal was not granted summary judgement, apparently because Psystar's lawyers provided no legal citations. If Psystar wants to continue this argument, they'll have to continue it in court. And maybe do some actual work this time.

6. Psystar apparently asked the court to restrict injunctions and damages that Apple didn't even ask for, and so the court bails on making any decision.

For all the conspiracy theories I've been hearing, it sounds like Psystar has some crappy lawyers. You don't generally waive defenses that you plan on bringing later...

Jerry

 

[Macminiintel]

Agreed. Apple doesnt have the manpower or balls to do what MS does (and they charge a premium for it!). They could afford it, but then they would have to dive into the massive cash reserves they have from charging as much as they do.

no i didn't mean that at all I own 6 "real" Mac's and am proud to say that I'm getting a MacBook pro to replace my 18 month old white MacBook.

I was saying if OSX was set free it be a massive blow to Apple, they wouldn't be able to make hardware & software anymore. I'm a Mac fan, do you honestly think I'm going to be on evil Psystars side here? We don't want OS X on millions of hardware configurations, it would be crap. Its brilliant how it is and I hope Apple NEVER Set's Mac OS X Free.

 

[scottness]

All I can say is that I'm glad that this ruling (even though it isn't the final, definitive ruling) came down the way it came down.

I'm fine with individuals making the choice to do hackintoshes or whatever else they want to do -- regardless of whatever EULA violations are involved (it's not something I'm interested in doing myself, but I don't think those individuals should be prosecuted), but when you make that into a business -- and then you go another step further and break the licenses of the code you use to get around Apple's IP, you're just flat out scum.

After reading that disgusting profile of the two losers in the Miami Herald earlier this week, I wanted to kick those guys asses even more.

Good riddance bitches.

Agreed. They (Psystar) were way off on this one.

 

[cmaier]

Yeah, "essentially" is another one of those weasel words.

Operating from the groklaw version, there are five questions of summary judgement that the judge ruled on.

1. Summary judgement is for when there are no facts at dispute. When facts remain in dispute, trial continues.

2A. Psystar copying something they don't hold the copyright on is a clear copyright violation, though it does appear that Psystar already waived a defense that they're trying to raise here.

2B. Psystar made changes to OS X and distributed a version of OS X with those changes. That's a derivative work, and they have no right to distribute it. It doesn't matter if they also distributed a non-modified version. (Apple does not appear to have been claiming that distributing the non-modified version was a violation.) EULA is not a factor here--this is basic copyright law.

2C. Yes, swapping out portions of the code, even if the individual files aren't changed, is creating a derivative work of the OS.

2, full summary: Making a derivative work, copying it, and then distributing the copy, is a copyright violation. Oh, and selling a copyright violation so that someone else can use it is also contributory infringement. This is basic copyright law, and has nothing to do with a EULA. No facts in dispute, Apple wins a summary judgement.

3. This is the only one that could hinge on a EULA turning a purchase into a license. However, all it does is not grant Psystar summary judgement. Summary judgement simply means that the facts are so obvious that the there is no need for further trial. Apple has been granted summary judgement on 1, 2, and 4. Psystar was not granted summary judgement on 3: the facts are still in dispute.

4. DMCA. Yes, breaking a key to make software work the way you want it to, violates the DMCA. The DMCA sucks, but it is the law.

5. Psystar's claim that their use of Apple's trademark was legal was not granted summary judgement, apparently because Psystar's lawyers provided no legal citations. If Psystar wants to continue this argument, they'll have to continue it in court. And maybe do some actual work this time.

6. Psystar apparently asked the court to restrict injunctions and damages that Apple didn't even ask for, and so the court bails on making any decision.

For all the conspiracy theories I've been hearing, it sounds like Psystar has some crappy lawyers. You don't generally waive defenses that you plan on bringing later...

Jerry

Yeah, but you are intentionally ignoring the dicta on 3 and ignoring the statement of law. On the facts, the judge says "Apple did not violate the public policy underlying copyright law or engage in copyright misuse." and "as explained above, Apple's licensing agreement is not unduly restrictive." The court did NOT simply rest on "there are facts in dispute and therefore this is not amenable to summary judgment." He considered the facts and essentially said that as a matter of LAW, none of the proffered facts support the position that the EULA is improper.

 

[MorphingDragon]

No. Its not the same. The Cell cpu is physically not capable of running the binaries on the Forza 3 game disc. Nor is the Xeon (or is it Xenon, i always get them confused) in the 360 capable of running the KZ2 binaries.
However, my Q8400 in my pc is perfectly capable of running OSX. The only limitations are synthetic. There are no synthetic limitations keeping KZ2 from running on a 360, its that the cpu is not going to know what to do with the instructions.

Thats not completely true, I've seen underground hacks making 360 games running on the PS3. Just like the Xbox could run PS2 Games.

 

[Hugh]

I don't know

Here's hoping Apple will eventually go after individual hackintosh owners and sue them like the RIAA does music thieves. Get a few large financial awards against individuals and let the others keep looking behinds their backs to see if Apple is gaining on 'em. That would be great!

I don't think Apple will go after individuals for hacking there machines. That would take time and money, and to be honest. How many people are out there that do this? A few 100 out 100000's real macs out there?

I don't hack my machines I buy true Apple branded PCs, but that doesn't mean that I don't support those that Hack there machines. As long as they buy a legal copy of the OS.

Hugh

 

[Pika]

Hackintoshes are for losers.

 

[scottness]

Curious... Has anyone here ever bought a Psystar machine? (and why?)