Apple v. Psystar: What’s Up With That?

Written on July 17, 2008 by EsquireMac

So, you may have heard (you know, from here or here or here or here or here, ad infinitum) that Apple, Inc. has filed suit against Psystar Corporation. Psystar is the company that began selling Open Computer a few months ago. Open Computer is a PC box built by Psystar with the promise of being capable of running Apple’s OS X “out of the box.” Psystar offered, for an additional fee, to pre-install OS X on Open Computer.

If you are interested, you can buy a copy of the complaint from here for $9.99. Or, for the much more reasonable price of free, you can download a copy of the complaint by clicking here - courtesy of ZDNet.

I will summarize the ten count Complaint for those of you who don’t have the time or the energy to read the 16 page document.

Background: Paragraphs 1-15 - Apple has spent a lot of time and money becoming awesome. Psystar is not awesome. In fact, they suck, their service sucks, their computers suck, and even OS X sucks when run on their computers. Customers are confused into believing Apple is less awesome.

General Allegations: Per the OS X Leopard Licensing Agreement: OS X Leopard is not sold, it’s licensed. You are allowed to install and run OS X on one computer. You are not allowed to install OS X on any non-Apple hardware.

Count I: Copyright Infringement - OS X is copyrighted by Apple. “Defendant has reproduced, distributed and/or displayed the Copyrighted Works in violation of Apple’s exclusive rights under the Copyright Act. Apple has not licensed or otherwise authorized Defendant’s reproduction, distribution or display of the Copyrighted Works.”

Count II: Contributory and Induced Copyright Infringement - By selling OS X to customers for use on non-Apple hardware, and by installing OS X on non-Apple hardware, Psystar has “induced, caused or materially contributed to the infringing conduct of purchasers.”

Count III: Breach of Contract - Psystar violated the License Agreement by:

Installing OS X on non-Apple hardware;
Enabling others to run OS X on non-Apple hardware;
“Selling and/or Distributing Mac OS X software without requiring that the transferees agree to the terms of the license agreement;”
Selling modified versions of OS X; and
Installing a single copy of OS X on more than one computer at a time.

Count IV: Inducing Breach of Contract - Psystar induced others to breach the License Agreement by encouraging and assisting customers to buy and install OS X on non-apple hardware.

Count V: Trademark Infringement - Apple has a bunch of trademarks. Apple never authorized Psystar to use them. Psystar’s use of them confuses customers. [Although Apple alleges that Psystar uses Apple's trademarks, they never identify which marks Psystar used or how it used them.]

Count VI: Trademark Infringement - Psystar used the name Open Mac for a short while in the beginning before changing to Open Computer. They shouldn’t have done that.

Defendant’s conduct deprives Apple of the ability to control the quality of the goods and services marketed under the Infringed Marks and Apple’s unregistered common law trademarks and, instead, places Apple’s valuable reputation and goodwill into the hands of the Defendant, over which Apple has no control.

Count VII: Trade Dress Infringement - ["Trade Dress" is basically the distinctive look of OS X's GUI] Psystar’s sale of “goods displaying Apple’s Trade Dress is likely to cause confusion … as to the source of the goods…”

Count VIII: Trademark Dilution - “Psystar willfully intends and intended to trade on Apple’s reputation for excellence.”

Count IX: State Unfair Competition - All that stuff we said before constitutes “unfair competition and unfair business practices and business acts” under California statutory law.

Count X: Common Law Unfair Competition - All that stuff we said before constitutes “unfair competition and unfair business practices under state common law.”

Prayer for Relief: Give Apple a bunch of money, make Psystar cut it out, make Psystar recall all computers it sold, and make Psystar pay for our attorneys’ fees (this awesome Complaint wasn’t drafted for free!)

Ordinarily, I would predict that this kind of case would settle, and, therefore, would never reach trial on the merits. However, Psystar has been taunting Apple and egging them on from the get-go, and may well want this case to go to trial.

MacRumors shed some light on Psystar’s motivation, quoting InformationWeek’s interview with a Psystar employee known as “Robert” back in April:

[Robert] also said Psystar believes Apple’s prohibition against third-party installations might not hold up in court: “What if Honda said that, after you buy their car, you could only drive it on the roads they said you could?”

Robert said Psystar will continue to sell the OpenMac [later changed to Open Computer] system, despite the fact that it appears to violate Apple’s EULA. “We’re not breaking any laws,” he insisted.

MacRumors then pointed out:

Indeed, Apple’s EULA agreement is not cast into law, but simply represents an implicit agreement (”contract”) between the user and company. The enforceability of EULAs, however, has been a subject of much debate, and a true legal challenge would be very interesting. That being said, Robert’s loose use of the word “monopoly” and car/road analogy does not necessarily inspire confidence in his legal prowess.

Well put, MacRumors, I couldn’t have said it better myself.

I don’t think I ever really took Psystar seriously as a company, and saw them more as stunt-pullers. They certainly got some attention, and maybe they have money to fight this case. Maybe the EFF will get involved and see it as a chance to put some limits on the enforceability of software makers’ generally oppressive EULAs.

I don’t think Apple would win all 10 counts, but, to quote Ron White, “I didn’t know how many of those guys it was going to take to kick my ass…but I knew how many they were going to use.”

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