Psystar’s Star Dims a Bit

Psystar and Apple have been in a tech law tango based on Apple’s allegations that Psystar violated the end user licensing agreement when it started releasing the OS X operating system on non-Apple manufactured clone computers.  The federal court ruled in favor of Apple on its claims on a motion for summary judgment.  (See article here)  (You can find a copy of the judge’s decision here)

The Court’s decision to grant summary judgment for Apple is primarily based on Apple’s copyright infringement claims against Psystar.  The Court addresses the exclusive reproduction, distribution, and preparation of derivative work rights under the Copyright Act that are exclusive to Apple.  Apple alleged that Psystar, by taking a copy of OS X, modifying it so that it would boot on a non-Apple made computer, and selling that modified work to the public, had violated Apple’s copyright in OS X.  The Court examines the possibility of a section 117 defense under the Copyright Act which does grant the owner of a copy of a copyrighted work a limited right to make an additional copy of adaptation of the work.  17 U.S.C. § 117(a).  There are two possibilities under section 117: a copy of the work is made as an “essential step” in using the computer program, or the copy is made for archival purposes.

The Court held that Psystar had essentially waived this defense by not timely raising it.  In any case, Psystar had been making a lot more than a single copy of OS X when it cloned its modified copy of the operating system and installed it to computers that Psystar offered for sale to the public.  The language in section 117 is more geared towards us consumers that might make a backup copy of our OS X disk, or backup the operating system to our Time Machines in the event of a failure of our prized Macbooks.

The Court briefly addresses section 107, fair use, noting only that Psystar doesn’t attempt to justify its use as a “fair use” under section 107.  Most likely, that Psystar offered a copy of OS X for sale with its computers without paying the “customary” licensing price to Apple would have doomed such a defense anyway under the first element of this test.

Psystar then raised the first sale doctrine as a defense, under section 109.  Under this section, I have the right to resell a copyrighted work I have purchased to the general public, without responsibility to the copyright owner (for example, to resell at a set price).  So, if I were to buy a legitimate copy of Snow Leopard for $100, and offer it on ebay for $50, I have that right under section 109.  The Court found that Psystar was not doing this at all in modifying OS X and then selling this modified copy on computers to which it was installed.  Section 109 does not really help Psystar.

The Court next addressed whether Psystar was creating a derivative work of OS X, by modifying certain operating system files so that OS X would load onto a non-Apple manufactured computer.  Psystar tries to assert that because it did not modify the kernel of OS X, only the bootloader file and certain kernel extensions (disabling Apple extensions and adding its own extensions for the software to run on non-Apple hardware), it had not created a derivative work.  Again, the Court sides with Apple.  Even the modification of such humble files is the preparation of a derivative work, which was unauthorized under the Copyright Act.

Psystar also alleged that Apple was misusing its copyright.  This doctrine addresses a copyright holder who attempts to leverage his limited copyright monopoly to control areas outside of the monopoly.  For example, if I write blog software, and license it under an agreement that requires that you never write blog software, I am misusing my copyright in the work.  I don’t have the right to prevent you from writing a competing software package.

Psystar is arguing that Apple is unfairly limiting where its operating system can be installed, which is perhaps anti-competitive.  Unlike Windows, which can run on a broad range of hardware that Microsoft does not manufacture, Apple limits OS X to Apple-made hardware.  Psystar is essentially arguing that Apple should do what Microsoft does with its operating system, to allow for competition.  The Court sided with Apple on this argument as well, reasoning that Apple was only trying to control the subject matter of its copyright – the software itself.  I don’t think the Court was persuaded that Apple must license its software as others have in the market.  Apple may also have a legitimate reason for controlling the hardware on which the software is operated, given the drivers mess that is created with most Microsoft operating system releases.  Older versions of Linux also struggled with this problem, in spite of the many volunteer developers who write drivers for the Linux system in its many flavors.

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Maryland technology attorney and college professor.

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