Psystar’s Official Response: Apple Abusing Copyright, Tying OS X to Hardware

August 28th, 2008 at 3:00 PM - Reports by John Martellaro

Late on Thursday, Psystar filed its official response to Apple in a 54 page document with the U.S. Northern District of California. In it, Psystar claims that Apple is abusing its copyrights in order to establish an anticompetitive tying of Mac OS X to Apple hardware and that that tying creates an illegal monopoly.

Earlier in the week, Pystar publicly disclosed the gist of its coming response to Appleis trademark and copyright infringement lawsuit. At that point, company owner Rudy Pedraza revealled his companyis plans to invoke the Sherman and Clayton Antitrust acts.

Just before the deadline on Thursday, Psystar filed its complete 54 page response to Appleis July 3 complaint for copyright and trademark infringement.

Psystaris Case

An attorney who follows the case closely told The Mac Observer that Psystar is asking the court to declare Appleis EULA illegal because it prohibits running OS X on other than a Mac. Psystar aslso raised questions about the supposedly vague and ambiguous meaning of "Apple labeled hardware."

Psystar also denied that it modifies the supplied copy of Mac OS X in any way, and that the copy provided is fully licensed. The problem there is that Psystar is not a licensing authority for Mac OS X.

The attorney, who asked not to be named, told The Mac Observer that, in his opinion, Psystar doesnit have a sound case. Apple has the legal right to restrict Mac OS X to its hardware the same way an author and book publisher have a monopoly right to publish a copyrighted work. In other words, copyrights create a legal monopoly to protect the author and his investment. "That idea, that the author has the right to create a monopoly and enjoy monopoly rents, is an idea that is as old as copyright and is how Congress has chosen to reward authors and inventors for their inventions so as to foster, promote, and facilitate the creative arts," he told TMO

In addition, the "tying" aspect of the case is on tenuous grounds, he said, because Mac OS X doesnit stand alone as a useful product. For example, when Toyota sells a car, it stands alone as a useful product. If Toyota then required the customer to buy gas at only their stations, that would constitute illegal tying. However, Mac OS X has no utility without running, under license, on Macintosh hardware. So that argument should fail, the attorney suggested. Apple can also claim that Mac OS X runs better on their hardware.

"For the court to hold otherwise would involve the court in interminable litigation over the design and function of OS X or require the court to take and transfer some part or all of Appleis constitutionally protected proprietary interests to copy, design, and/or develop OS X to Defendant Psystar," he said. Courts typically donit like getting involved in that.

The court is also not likely to buy into Psystaris affirmation that Apple is a monopoly in general because of Appleis minor position in the market place, the attorney added. Apple could win on that basis alone, but that would be an unfortunate way to win since it appears that in the long run, Apple resurgence could place it in a much stronger market position against PCs, and then the monopoly argument could be more successfully raised in the future. Instead, Apple would rather win on its rights to legally copyright, protect, and license its intellectual property.

Whatis Next

Itis likely there will be a long period of legal discovery now, lasting perhaps eight months. In addition, some additional legal procedures will end up placing the court date out about a year from now.

The U.S. District Court of Nortern California, San Francisco Division, is well versed in copyright and licensing law and is not likely to be misled by arguments not well founded in traditional copyright law, and the outlook could be grim for Pystar if they lose - especially with legal fees that could easily reach an estimated US$40,000 per month for more than a year.

There is a lot at stake for Apple, and the long delay in filing its complaint may have been the result of a careful deliberation of its position to make sure the company wins this important case without encountering any legal surprises along the way. If Apple does win, in the fashion it would prefer (copyright infringement), it could seek damages that, along with hefty legal fees, could put Psystar out of business and close the door forever on this issue.

There could still be a long road to travel, however.