Psystar drops antitrust gripes in fresh counterclaim against Apple

[AppleInsider]

Florida's now well-known unofficial Mac clone maker has modified its counterclaim against Apple to drop some of the riskier assertions of anti-competitive behavior, but has similarly added new sections that refute allegations of violating the DMCA.

The altered response, which would be filed on January 15th if given permission by a Northern District of California court judge, specifically omits the Clayton Act and Sherman Act antitrust claims of monopolistic abuse of copyright that had triggered Apple's successful motion to dismiss in the fall. Psystar "respectfully disagrees" with the court's interpretation of a monopolistic market but will abide by the earlier ruling for now.

However, the PC builder maintains that copyright is still at the heart of the issue. Psystar insists that Apple's policies regarding Mac OS X are considered abuse under the legally recognized concept of a "misuse doctrine," which prevents copyright from being wielded to block competition outside of any officially sanctioned terms.

As such, proof of a specific antitrust violation isn't necessary, the company argues. Instead, it's allegedly only the spirit of the law reflected in public policies that matters. Apple's end-user license agreement (EULA) is regarded as a threat in that it lets Apple have absolute control over hardware -- a component not covered under the largely software-focused Copyright Act -- and facilitates Apple's ability to abuse copyright law, even if it doesn't violate specific antitrust laws.

According to Psystar, this also extends to the Digital Millennium Copyright Act (DMCA) violations that Apple has added to the expanded lawsuit filed after its motion to dismiss was granted. Where Apple is convinced Psystar is breaking anti-circumvention laws by running Mac OS X on unauthorized hardware, the latter company insists that simply rendering hardware like its Mac clones compatible isn't a violation and that Apple is going beyond the bounds of copyright by suggesting otherwise.

Apple is thought responsible for violating California's Unfair Competition Statute as a result of the argument, which allows claims made under more universal terms.

The amended counterclaim also challenges the notion that the current response of Mac OS X to a non-Apple system doesn't constitute a copy protection system: just triggering an infinite loop or a kernel panic when particular firmware isn't in place doesn't represent a real defense mechanism, Psystar says.

No significant changes have been made to the penalties the company is seeking, which could potentially include a preliminary injunction against Apple's behavior. Even so, Psystar believes that its stripped down version of its lawsuit exists only for the "simplification" of the suit and that it has the right to reintroduce its Clayton and Sherman antitrust accusations should it get more definitive proof that Apple has violated either of those acts.

[TenoBell]

Its not antitrust because its not against the law for a company to monopolize their own product.

[vercordio]

Regardless of my feelings for Apple, this is bullshit. It's Apple software, it's Apple hardware. There's no illegal behavior. This would be like suing Nintendo because Mario isn't available on the Xbox. Even worse: it'd be like suing Nintendo because Wii games only play on the Wii, and not a generic Playstation. How ridiculous.

[lightstriker]

its not antitrust and not monopoly. A company can control how its proprietary product marketed and sold. Psystar is just hoping to delay the inevitable.

[meeksdigital]

These psystar douchebags deserve to go to hell

[maiv]

any corporate lawyers out there care to share your expertise?
thanks.

[brax.j]

I'm not a lawyer but one of my buddies from school is and according to him "Psyshit is screwed" (those are his exact words).

[Mr. H]

Originally Posted by maiv

any corporate lawyers out there care to share your expertise?
thanks.

I don't think you need to be a lawyer to see that Psystar are really clutching at straws here.

If I understand AI's article correctly part of Psystar's defence to the new DMCA allegations is that OS X doesn't contain anti-copying measures, because it, well, does contain anti-copying measures but they're not very complicated. Worst. Argument. Ever.

[aaarrrgggh]

Originally Posted by vercordio

Regardless of my feelings for Apple, this is bullshit. It's Apple software, it's Apple hardware.

You are forgetting about an important piece of the chain-- the person that purchases the software and the hardware.

This time around they are getting closer to issues that I consider important: How much can a software vendor restrict the rights of someone who purchases their product. Implicitly, this challenges EULAs as a class of contract.

[aaarrrgggh]

Originally Posted by Mr. H

I don't think you need to be a lawyer to see that Psystar are really clutching at straws here.

If I understand AI's article correctly part of Psystar's defence to the new DMCA allegations is that OS X doesn't contain anti-copying measures, because it, well, does contain anti-copying measures but they're not very complicated. Worst. Argument. Ever.

What they are really saying is that Apple has introduced an incompatibility to enforce their EULA, rather than a true copy protection issue. You could argue that fixing an incompatibility is different than breaking (cryptographic) copy protection.

ROT13 is still copy protection, at least in the DMCA's eyes.

[SpamSandwich]

Originally Posted by aaarrrgggh

You are forgetting about an important piece of the chain-- the person that purchases the software and the hardware.

This time around they are getting closer to issues that I consider important: How much can a software vendor restrict the rights of someone who purchases their product. Implicitly, this challenges EULAs as a class of contract.

I think you'd have every software company on the planet ready to file a suit against Psystar if this is anywhere near being a serious legal challenge.

[Wiggin]

So there is a "legally recognized concept of a misuse" pertaining to copyright? Does this mean that I can write a book based on the Harry Potter characters and JK Rowlings would have nothing to say about it because she would be wielding her copyright "to block competition outside of any officially sanctioned terms"? In fact, a recent court case Rowlings won confirms her right to prevent someone else from using her copyrighted works for their own gain.

Also, Psystar "insists that simply rendering hardware like its Mac clones compatible isn't a violation." But if I understand correctly, they aren't rendering their hardware compatible with Apple's software. They are rendering Apple's software compatible with their hardware. That's a subtle, but significant difference. They can make hardware using the same components Apple uses all day long without issue. But as soon as they modify code (either in software or firmware) that Apple owns the copyright to, then aren't they breaking the law?

[vercordio]

Originally Posted by aaarrrgggh

You are forgetting about an important piece of the chain-- the person that purchases the software and the hardware.

I don't disagree, but software is allowed to have operating requirements as long as they are clearly stated at the time of purchase. Every copy of OS X is sold with the distinct indication that it must be run on Apple hardware. No one is being tricked into buying OS X just to find out that they have to buy a Mac before they can use it.

Again, tell me how this is different than Nintendo selling Wii games that can't run on the Xbox.

[archer75]

Originally Posted by Wiggin

So there is a "legally recognized concept of a misuse" pertaining to copyright? Does this mean that I can write a book based on the Harry Potter characters and JK Rowlings would have nothing to say about it because she would be wielding her copyright "to block competition outside of any officially sanctioned terms"? In fact, a recent court case Rowlings won confirms her right to prevent someone else from using her copyrighted works for their own gain.

Also, Psystar "insists that simply rendering hardware like its Mac clones compatible isn't a violation." But if I understand correctly, they aren't rendering their hardware compatible with Apple's software. They are rendering Apple's software compatible with their hardware. That's a subtle, but significant difference. They can make hardware using the same components Apple uses all day long without issue. But as soon as they modify code (either in software or firmware) that Apple owns the copyright to, then aren't they breaking the law?

You don't have to modify apples code. You just add EFI emulation. And there are boards starting to show up that use EFI. A retail copy of OSX could boot right up straight out of the box with no modification whatsoever. You would add drivers or rather kexts but that would be adding, not modifying. No different than installing your own software on your computer. There is also a USB EFI emulator. Plug that in a board running an Intel or even now certain Nvidia chipsets and OSX boots up right out of the box.

And apple certainly doesn't own EFI.

Originally Posted by vercordio

I don't disagree, but software is allowed to have operating requirements as long as they are clearly stated at the time of purchase. Every copy of OS X is sold with the distinct indication that it must be run on Apple hardware.

According to the EULA. But a EULA will not stand up in court.

[Virgil-TB2]

Originally Posted by aaarrrgggh

You are forgetting about an important piece of the chain-- the person that purchases the software and the hardware.

This time around they are getting closer to issues that I consider important: How much can a software vendor restrict the rights of someone who purchases their product. Implicitly, this challenges EULAs as a class of contract.

You are kind of making the same mistake as Psystar here though in that they seem (and you as well), to just not understand/appreciate/believe/buy the central idea that Apple sells hardware and software together. They have never sold the OS for other hardware than their own. Uncoupling the software sale from the hardware sale is just not relevant. Sure everyone *else* sells OS's as a separate software product for whatever hardware you want to run it on, but that doesn't mean anyone can force Apple to do so.

Similarly, Psystar's new argument that the software licensing agreement can't dictate hardware choices is also flawed because Apple has never un-bundled the two.

[NasserAE]

Yeah, lets keep throwing counterclaims and hope that one of them stick.

[archer75]

Originally Posted by Virgil-TB2

Sure everyone *else* sells OS's as a separate software product for whatever hardware you want to run it on, but that doesn't mean anyone can force Apple to do so.

Not force apple to. But stop them from suing others. Essentially is boils down to the EULA which will not hold up. And psystar is buying each copy of OSX so apple is getting paid.

I think people are going to be suprised by this case.

[Cubert]

What a freakin' joke Psystar is! Grasping at straws.

[Virgil-TB2]

Originally Posted by AppleInsider

The amended counterclaim also challenges the notion that the current response of Mac OS X to a non-Apple system doesn't constitute a copy protection system: just triggering an infinite loop or a kernel panic when particular firmware isn't in place doesn't represent a real defense mechanism, Psystar says.

This has to be the weakest argument I have heard in a long time. A copy protection system is simply anything that protects the software from being copied or used. The fact that it doesn't use a key makes no difference at all, it's the intent that matters.

If I park my truck on an incline and I chose to put a block of wood under the wheel instead of using the hand-brake, that doesn't mean that I did nothing to stop my truck from rolling down the hill. I just used a different or unusual method to do so. I still had the intent of stopping my truck from rolling down the incline and it still worked.

[Virgil-TB2]

Originally Posted by archer75

Not force apple to. But stop them from suing others. Essentially is boils down to the EULA which will not hold up. And psystar is buying each copy of OSX so apple is getting paid.

I think people are going to be suprised by this case.

They are buying a box of software that is supposed to be used to upgrade only Apple computers and has a licence in the box that says can't be used for anything else. Then they are modifying that software (again in violation of the agreement contained in the box), to use it for a different purpose. Then they are taking Apple's software updates and patches and hacking them to work on their customers machines. they are also encouraging others to do the same.

I admit that the persistence of Psystar is kind of scaring me in that it seems like they actually expect to win, and US judges being what they are nowadays perhaps they might. But if they *do* win it would be so counterintuitive, and so disastrous that it's just not worth thinking about. if they win this case, copyright law might just as well be thrown out completely.

There would be giant cascade of other cases and other effects if Psystar wins and that is probably the biggest argument against them. Judges tend to not like cases that if won, change about a hundred other laws as well. A win here would set a big scary precedent and change a lot of behaviour that has been agreed upon for most of the history of copyright law.

[aaarrrgggh]

Originally Posted by Virgil-TB2

You are kind of making the same mistake as Psystar here though in that they seem (and you as well), to just not understand/appreciate/believe/buy the central idea that Apple sells hardware and software together. They have never sold the OS for other hardware than their own.

So, if I go to an Apple store and purchase a copy of OS X then what do I have? No where on the box does it say that this is an "upgrade" from a previous version as is done in the Windows world. The EULA is the only thing that attempts to tie it to Apple hardware.

I fully agree that the user experience of purchasing an Apple branded computer to run OS X will be better than running said software on a hackintosh. Apple has not claimed that this is their concern-- that companies like Pystar diminish the value of their brand by providing systems that do not live up to the Apple Standard. There might be some meat to that argument though.

I am in no way an apologist for Pystar, but at the same time I would love to see a challenge to the idea that a customer can be forced to enter into a contract after a sale is made or not be able to use the software or get a refund. Common-sense EULAs are one thing (even the "no warranty" crap), but today they have gotten out of hand as a class.

[vercordio]

Originally Posted by archer75

Not force apple to. But stop them from suing others. Essentially is boils down to the EULA which will not hold up. And psystar is buying each copy of OSX so apple is getting paid.

I think people are going to be suprised by this case.

Essentially I think you're correct in that, should it go to trial, this case will raise important questions about the legal strength of a EULA. However, I don't agree that Apple's EULA will not hold up in court. Typically, a clearly-worded EULA is legally binding; there is precedent for this. Apple may be asking more than normal, but I believe in this situation the court will rule in their favor.

Again, this has nothing to do with my opinion of Apple. This suit is frivolous and will fail.

[ascii]

Round 1 to Apple.

Before Microsoft, everyone sold the OS and computer together as one product. Remember the C64, Apple II, etc?

Now, Psystar might think Microsoft's business model is better, but that doesn't mean anyone who doesn't follow it is being antitrust. Were C64, Apple 2 etc antitrust?

[NasserAE]

Originally Posted by aaarrrgggh

So, if I go to an Apple store and purchase a copy of OS X then what do I have? No where on the box does it say that this is an "upgrade" from a previous version as is done in the Windows world. The EULA is the only thing that attempts to tie it to Apple hardware.

I fully agree that the user experience of purchasing an Apple branded computer to run OS X will be better than running said software on a hackintosh. Apple has not claimed that this is their concern-- that companies like Pystar diminish the value of their brand by providing systems that do not live up to the Apple Standard. There might be some meat to that argument though.

I am in no way an apologist for Pystar, but at the same time I would love to see a challenge to the idea that a customer can be forced to enter into a contract after a sale is made or not be able to use the software or get a refund. Common-sense EULAs are one thing (even the "no warranty" crap), but today they have gotten out of hand as a class.

No one forcing any one to get into any contract. You have the legal right to return any software if you don't agree to the EULA. Even if you open the software box you can return it. Beside, the box already lists system requirements and it clearly say "Mac computer".

[Mr. H]

Why are people going on about EULAs? This case doesn't have anything to do with EULAs. Psystar is not an "EU" so the EULA doesn't apply. The case has to do with copyright violation and the copy-protection circumvention in violation of the DMCA.

[archer75]

Originally Posted by Virgil-TB2

They are buying a box of software that is supposed to be used to upgrade only Apple computers and has a licence in the box that says can't be used for anything else. Then they are modifying that software (again in violation of the agreement contained in the box), to use it for a different purpose. Then they are taking Apple's software updates and patches and hacking them to work on their customers machines. they are also encouraging others to do the same.

No they aren't hacking updates. You can install updates direct from apple. The only issue is the point updates and you simply have to run a script then install apples combo update. However this type of update has been disabled on psystars.

They are then adding EFI emulation and whatever drivers are needed for the hardware. Not modifiying but rather addition to.

[archer75]

Originally Posted by Mr. H

The case has to do with copyright violation and the copy-protection circumvention in violation of the DMCA.

There is no copy protection circumvention. Retail copies of OSX have no copy protection whatsoever.

[Mr. H]

Originally Posted by archer75

There is no copy protection circumvention. Retail copies of OSX have no copy protection whatsoever.

Sorry, I should have said "alleged violation of the DMCA". Also copy protection isn't the right term. Certainly it would appear that Apple believes that OS X does have "don't run on non-Apple hardware" measures and that Psystar are circumventing them, in violation of the DMCA.

[iVlad]

I mean where ever this will lead and end it will bring positive to consumers. If court allows mac to be sold on other computers or for Apple to continue huge PC takeover. =)

[iVlad]

Originally Posted by Mr. H

Sorry, I should have said "alleged violation of the DMCA". Also copy protection isn't the right term. Certainly it would appear that Apple believes that OS X does have "don't run on non-Apple hardware" measures and that Psystar are circumventing them, in violation of the DMCA.

AHAHAH i love your signature, its very clever with it's irony

[TenoBell]

Yes in the EULA Apple states that this is a license for a computer purchased from Apple. The EULA is a contract you agree to with the purchase of the software. Their is no law that gets you out of a contract you agreed to abide by.

Originally Posted by aaarrrgggh

So, if I go to an Apple store and purchase a copy of OS X then what do I have? No where on the box does it say that this is an "upgrade" from a previous version as is done in the Windows world. The EULA is the only thing that attempts to tie it to Apple hardware.

[archer75]

Originally Posted by TenoBell

Yes in the EULA Apple states that this is a license for a computer purchased from Apple. The EULA is a contract you agree to with the purchase of the software. Their is no law that gets you out of a contract you agreed to abide by.

A EULA will not hold up in court.

[Mr. H]

Originally Posted by iVlad

AHAHAH i love your signature, its very clever with it's irony

[mrsteveman1]

Originally Posted by archer75

There is no copy protection circumvention. Retail copies of OSX have no copy protection whatsoever.

So this is directed at not just you, but the others who keep insisting that EFI is the only difference here.

There is copy protection, i'm surprised none of you have even mentioned it at all, and it is called protected binaries. You run OS X on an EFI machine, sure the kernel will not panic and most of the system will start, but the interface won't, including the dock, the finder, and some other key things that are quite important if you really want to use the OS.

The protected binaries are encrypted by a key, and that key is in the system management controller chip in every real mac. Sometime during the boot process, one of the kernel extensions grabs this key out of the chip and allows the kernel to decrypt the pages for these protected binaries when they are run.

Now, this is ABSOLUTELY a copy protection method, and will be protected by the DMCA, even though it can be broken by either reading the key out of the hardware and decrypting the binaries, or replacing the kernel extension responsible for doing the decryption, with one that contains the key. The fact that it doesn't prevent someone from running OS X who has not paid for it or has no serial number (there isn't one) is irrelevant. It does prevent stock OS X from running on even a compliant EFI machine, and that is all that matters, to actually get it to run you have to get around the encryption.

This is what the hackintosh people have been doing for quite a while, and i suspect it is exactly what psystar is doing. Either way, there is no way to run stock mac os x on non-apple hardware without getting around that encryption, because those things simply will not run unless they are decrypted, and once you do that you have circumvented Apples protection method.

[TenoBell]

This isn't entirely true. EULA has been upheld in court. There have been some court cases where EULA has not been upheld. But that was on a technicalities and differing opinions of fair use. These cases were nearly 20 years ago. Today these rules would be looked at entirely differently.

In the past the user was able to say they were not properly informed of the terms of the EULA. Now you are forced to agree to the EULA's terms to use the software. So their can be no argument that you were not informed.

Originally Posted by archer75

A EULA will not hold up in court.

[NasserAE]

Originally Posted by mrsteveman1

So this is directed at not just you, but the others who keep insisting that EFI is the only difference here.

There is copy protection, i'm surprised none of you have even mentioned it at all, and it is called protected binaries. You run OS X on an EFI machine, sure the kernel will not panic and most of the system will start, but the interface won't, including the dock, the finder, and some other key things that are quite important if you really want to use the OS.

The protected binaries are encrypted by a key, and that key is in the system management controller chip in every real mac. Sometime during the boot process, one of the kernel extensions grabs this key out of the chip and allows the kernel to decrypt the pages for these protected binaries when they are run.

Now, this is ABSOLUTELY a copy protection method, and will be protected by the DMCA, even though it can be broken by either reading the key out of the hardware and decrypting the binaries, or replacing the kernel extension responsible for doing the decryption, with one that contains the key. The fact that it doesn't prevent someone from running OS X who has not paid for it or has no serial number (there isn't one) is irrelevant. It does prevent stock OS X from running on even a compliant EFI machine, and that is all that matters, to actually get it to run you have to get around the encryption.

This is what the hackintosh people have been doing for quite a while, and i suspect it is exactly what psystar is doing. Either way, there is no way to run stock mac os x on non-apple hardware without getting around that encryption, because those things simply will not run unless they are decrypted, and once you do that you have circumvented Apples protection method.

I said that a while ago. I would love to see what Psystar would do in court if Apple asked them to demonstrate how to install Mac OS from the box on a formatted Psystar computer without using third party software. They simply cannot do it.

[VinitaBoy]

Thank you so very much, mrsteveman1. I think I understand the issue now!

[NasserAE]

Originally Posted by archer75

A EULA will not hold up in court.

EULA can hold up in court. However, in previous cases parts of EULA were challenged not the entire EULA. But that was more than 15 years ago.

[archer75]

Originally Posted by TenoBell

This isn't entirely true. EULA has been upheld in court. There have been some court cases where EULA has not been upheld. But that was on a technicalities and differing opinions of fair use. These cases were nearly 20 years ago. Today these rules would be looked at entirely differently.

In the past the user was able to say they were not properly informed of the terms of the EULA. Now you are forced to agree to the EULA's terms to use the software. So their can be no argument that you were not informed.

From the Mac OS X 10.5 Leopard EULA, Section 2A: "This License allows you to install, use and run one (1) copy of the Apple Software on a single Apple-labeled computer at a time."

You get two apple labels with the retail DVD.

[Rot'nApple]

Originally Posted by ascii

Round 1 to Apple.

Before Microsoft, everyone sold the OS and computer together as one product. Remember the C64, Apple II, etc?

Now, Psystar might think Microsoft's business model is better, but that doesn't mean anyone who doesn't follow it is being antitrust. Were C64, Apple 2 etc antitrust?

So if Apple were to license it's OS software per computer, not computer company, at a price of $25,000.00 for each computer sold, would that end the lawsuit and cause Psystar to go back where it once came?