Apple Wins Crucial Legal Victory in Psystar Lawsuit

U.S. District Judge William Alsup ruled on Friday that Apple was not abusing its software copyright of the MacIntosh OS X operating system. Psystar, based in Miami, Fla., specializes in cracking copies of OS X and loading them on "Mac clones."

Apple filed a lawsuit against Psystar in 2008, alleging the company was engaging in copyright infringement, trademark infringement, and breach of contract by violating OS X's license agreement, which specifies that the operating system can only be run on Apple hardware. Initially, Psystar filed a counterclaim alleging Apple was violating antitrust laws by creating a monopoly for OS X. That defense, however, was thrown out.

Psystar modified its defense earlier this year and argued that Apple was engaging in copyright misuse. Initially, the decision to allow Psystar to modify its legal defense was seen as a major victory for the company and a potentially game-changing blow for Apple. Essentially, Psystar argued that it was allowed to hack and redistribute OS X under the first-sale doctrine, which gives owners of a legally copied product the right to sell that copy or give it away. Psystar also argued it was the owner of the OS X copies, rather than a licensee of the software.

However, last week Judge Aslup ruled that the first-sale doctrine did not apply. Even if Psystar was the legal owner of the software, which it was not, then it still can't copy and modify the software for resale. "The parties spill much ink on whether Psystar was the owner or a licensee of the copy (i.e., the tangible copy) of Mac OS X that it purchased," Judge Alsup wrote in his decision, which can be found on legal Web site Groklaw.

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"Even assuming arguendo that Psystar was the owner of a copy, the first-sale defense fails here. Section 109 provides immunity only when copies are "lawfully made." The copies at issue here were not lawfully manufactured with the authorization of the copyright owner. As stated, Psystar made an unauthorized copy of Mac OS X from a Mac mini that was placed onto an "imaging station" and then used a "master copy" to make many more unauthorized copies that were installed on individual Psystar computers. The first-sale defense does not apply to those unauthorized copies."

Thus, the ruling not only destroyed Psystar's primary legal defense, but it also reaffirmed Apple's copyright protection and the company's right to keep OS X on its proprietary hardware. Apple can continue keeping a stranglehold on its popular operating system and prevent anyone from modifying the software to run on non-Mac hardware.

As for Psystar, this is likely the end of the road. The company filed for Chapter 11 bankruptcy protection in May. With its two legal defenses now gone, Psystar will almost certainly fall to Apple's lawsuit, which will continue in court next month. Apple can then seek an injunction against Psystar, preventing the company from selling its "Open Computer" Mac clones.

Psystar is still selling Open Computer models on its Web site. The company also released a software tool, dubbed Rebel EFI, last month, which purportedly allows users to install six different operating systems, including OS X, on a single PC with six individual hard drives.

In turn, Apple recently took a drastic measure in destroying the "hackintosh" community by releasing an OS X update that prevented the software from running on PC's running Intel's Atom processor. The update bricks Atom-based netbooks running unauthorized versions of OS X by sticking the machines in an instant reboot loop.