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Apple’s Case Against Pystar Cut-and-Dry? Attorney Analysis

Apple, Inc. has not surprisingly filed a law suit against a company called Psystar at the federal district court for the northern district of California.

Psystar has been re-distributing Apple’s proprietary operating system OS X and collecting profits on its so called “open-computers and servers.” When Psystar initially began selling hardware pre-installed with Apple’s Operating System a few months back, Apple stayed quiet for quite a while. It was rather understood that Apple was letting the evidence against Psystar build up into a concrete case before challenging the company. While firm details remain unclear, MacBlogz has learned that the suit alleges counts for violation of its shrink wrap license, trademark and copyright infringement. Additionally, Apple is seeking all products that Psystar sold to be recalled, as well as profits that were gained by Psystar to be reimbursed. If Apple wins, they would essentially be putting Psystar out of business.

We’ve spoken with an Intellectual Properties Lawyer and had him analyze a few statements from the fine print in Apple’s Software License Agreement for OS X, which ships with every single copy of Mac OS X that Apple sells.

Below are the statements from Apple’s Software License Agreement MacBlogz asked the Intellectual Properties and Media Attorney to clarify:

1. General. The software (including Boot ROM code), documentation and any fonts accompanying this License whether preinstalled on Apple-labeled hardware, on disk, in read only memory, on any other media or in any other form (collectively the “Apple Software”) are licensed, not sold, to you by Apple Inc. (“Apple”) for use only under the terms of this License, and Apple reserves all rights not expressly granted to you. The rights granted herein are limited to Apple’s and its licensors’ intellectual property rights in the Apple Software as licensed hereunder and do not include any other patents or intellectual property rights. You own the media on which the Apple Software is recorded but Apple and/or Apple’s licensor(s) retain ownership of the Apple Software itself. The terms of this License will govern any software upgrades provided by Apple that replace and/or supplement the original Apple Software product, unless such upgrade is accompanied by a separate license in which case the terms of that license will govern.

Title and intellectual property rights in and to any content displayed by or accessed through the Apple Software belongs to the respective content owner. Such content may be protected by copyright or other intellectual property laws and treaties, and may be subject to terms of use of the third party providing such content. This License does not grant you any rights to use such content nor does it guarantee that such content will continue to be available to you.

Attorney’s Analysis: The following excerpt “media or in any other form (collectively the “Apple Software”) are licensed, not sold, to you by Apple Inc. (“Apple”) for use only under the terms of this License, and Apple reserves all rights not expressly granted to you,” should be enough to prove without a general doubt that a firm foundation of the ownership of the core intellectual elements of Apple’s software, is in fact, strictly and entirely Apple’s property. This excerpt is stating that even though an Apple customer is paying for a copy of Leopard, they do NOT own it. They are merely licensing it from Apple, under the licensing agreement that Apple has set in place.

3. Transfer. You may not rent, lease, lend, redistribute or sublicense the Apple Software. Subject to the restrictions set forth below, you may, however, make a one-time permanent transfer of all of your license rights to the Apple Software (in its original form as provided by Apple) to another party, provided that: (a) the transfer must include all of the Apple Software, including all its component parts (excluding Apple Boot ROM code and firmware), original media, printed materials and this License; (b) you do not retain any copies of the Apple Software, full or partial, including copies stored on a computer or other storage device; and (c) the party receiving the Apple Software reads and agrees to accept the terms and conditions of this License. You may not rent, lease, lend, redistribute, sublicense or transfer any Apple Software that has been modified or replaced under Section 2D above. All components of the Apple Software are provided as part of a bundle and may not be separated from the bundle and distributed as standalone applications. Apple Software provided with a particular Apple-labeled hardware product may not run on other models of Apple-labeled hardware.

Updates: If an Apple Software update completely replaces (full install) a previously licensed version of the Apple Software, you may not use both versions of the Apple Software at the same time nor may you transfer them separately.

Attorney’s Analysis: Apple has done a tremendous job making sure that its intellectual property remains completely proprietary. In the above excerpt, the following statement “You may not rent, lease, lend, redistribute or sublicense the Apple Software,” is once again cut-and-dry. Without having to delve into major infractions of violations, Apple should be able to show and highlight fundamental support for its case against Psystar. Shown through previous public interaction with Psystar, the company knew they were challenging a strict software distribution license and were claiming that their argument would hold up in court. It does not help the firm that public intrigue has garnered negative attention through the sales of Apple’s property.

4. Consent to Use of Data. You agree that Apple and its subsidiaries may collect and use technical and related information, including but not limited to technical information about your computer, system and application software, and peripherals, that is gathered periodically to facilitate the provision of software updates, product support and other services to you (if any) related to the Apple Software, and to verify compliance with the terms of this License. Apple may use this information, as long as it is in a form that does not personally identify you, to improve our products or to provide services or technologies to you.

Attorney’s Analysis: Since Psystar is not providing Apple with customer information every time they sell a unit with Apple’s proprietary OS installed, they are indirectly violating rule #4 of Apple’s Software License Agreement. “…you agree that Apple and its subsidiaries may collect and use technical and related information, including but not limited to technical information about your computer, system and application software, and peripherals, that is gathered periodically to facilitate the provision of software updates, product support and other services to you…” Apple does not have the ability to gather information about customers who have purchased Psystar hardware. Psystar is NOT comparable to a re-seller who sells copies of OS X online or at a physical location. Psystar is altering the core foundation of OS X in order to make it run on their systems, which they are selling for a profit directly violating rule #4 of this license. Since Apple has no record of these purchases, system information cannot be gathered and official updates cannot be issued to purchasers of the devices. Official catalogs of un-approved updates to Apple’s OS X have been released by Psystar, only making the case stickier for them, and that much more cut and dry for Apple.

14. Third Party Acknowledgements.A. Portions of the Apple Software utilize or include third party software and other copyrighted material. Acknowledgements, licensing terms and disclaimers for such material are contained in the “online” electronic documentation for the Apple Software, and your use of such material is governed by their respective terms. B. Certain software libraries and other third party software included with the Apple Software are free software and licensed under the terms of the GNU General Public License (GPL) or the GNU Library/Lesser General Public License (LGPL), as the case may be. You may obtain a complete machine-readable copy of the source code for such free software under the terms of the GPL or LGPL, as the case may be, without charge except for the cost of media, shipping, and handling, upon written request to Apple. The GPL/LGPL software is distributed in the hope that it will be useful, but WITHOUT ANY WARRANTY, without even the implied warranty of MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE. A copy of the GPL and LGPL is included with the Apple Software.

Attorney’s Analysis: Psystar has nothing here. Certain pieces of software and open source applications are available for everyone to use both commercially and non-commercially. Apple’s proprietary Operating System known as OS X Leopard, is not one of them. The statements above in rule #14 of the Software License Agreement further Apple’s explanation and clarification that OS X is NOT one of the many open source solutions available within the industry.

MacBlogz Analysis: It certainly seems as though Psystar has an uphill battle ahead of itself. OS X is the pride and joy of Apple, it (or a version of it) powers every piece of hardware the company makes. Psystar isn’t the first company to try and re-distribute proprietary software, and they won’t be the last. While some analysts speculate that “If Apple doesn’t win this one they may have stepped on a bee’s nest,” from MacBlogz’s analysis this case is highly in Apple’s favor. Expect this one to end short and sweet with very little, if any mention of Psystar in the long term.

One analyst speculates that “If Apple doesn’t get everything it asks for and it’s forced to concede some points and the court orders Psystar to pay Apple some sort of licensing fee, Apple will have stepped on a bee’s nest. In one fell swoop, other companies will realize that they will be able to get away with selling Mac OS X on their own brand of computers and use the precedent of the Psystar case to their advantage if and when they face legal action from Apple.” Of course, it is always important to factor in both sides of any argument before a decision can be made, however based on our analysis and research, Apple’s case against Psystar is extremely cut and dry. What the quoted analyst fails to mention or delve into are the specific “points” that would Apple would be conceding. He also continues to mention that the court could possibly order Psystar to pay “some sort of licensing fee,” thus warranting many other companies the legal ability to redistribute OS X. However, this analysis stops short at delving into key specifics while lacking the ability to stand up against deeper research. Without extremely specific points in Psystar’s defense, this case remains in Apple’s favor.

You can download Apple’s Software License Agreement for OS X here, fine print is at the end.