TMO Reports - Apple's Case Against Psystar Comes into Focus

by , 4:30 PM EDT, October 2nd, 2008

In Apple's filing to dismiss with prejudice Psystar's countersuit revealed the tenets of Apples' strategy to win. The basis of Apple's argument is that Mac OS X and Macs do not, in themselves, create a legally plausible market, antitrust does not apply, and Apple has no obligation to share its sources of advantage.

An attorney who has been following the case, and wishes to remain anonymous, explained Apple's argument to TMO on Thursday:

"First, all of Psystar's counterclaims require the definition of a legally plausible relevant market. Second, Psystar's attempt to define the markets as OS X and OS X-capable computers do not define legally and factually plausible relevant markets. That's because the U.S. Supreme Court and all of the U.S. Circuit Courts, that have considered the issue, have rejected the proposition that an company having a monopoly in its own brand of a class of products is a violation of antitrust law. [TMO emphasis added.]

"Even Psystar's own responses admit that Apple's Mac OS X is only one brand of operating system in a vigorously competitive market consisting of Mac OS X, Windows and Linux -- where the dominant player is Microsoft. As a result, Apple has no 'market power.'

"Finally, even if Apple did have market power, according the U.S. Supreme Court and the 2nd Circuit, Apple wouldn't have any obligation under antitrust law to share the legitimate sources of its advantage in the market (for example, valid patent or copyrights) with competitors," he said.

The key to all this is that Mac OS X is just one brand of an OS, a minority OS, in a broader market, and so Antitrust issues do not apply. Apple, in its arguments, has supported these facts that are well accepted in law and confirmed by higher courts, and, accordingly, has asked that the countersuit be dismissed with prejudice.

If Judge Alsop immediately agrees, the countersuit could be immediately dismissed with serious consequences for Psystar's defense against Apple. However, Judge Alsop, with good probability, could also request more discovery to put the matter on record.

"Psystar must either file its Opposition to Apple's Motion To Dismiss on or before the end of the Court's business on October 16, file a stipulated consent to enlarge its time for filing an Opposition, or move the Court to enlarge the time for filing its Opposition. Psystar must win with its Opposition to preserve its case," he said.