Apple wins antitrust fight with Psystar, judge tosses claims

Apple isn't a monopoly; judge calls clone maker's arguments 'contradictory'

A federal judge yesterday dismissed an antitrust lawsuit against Apple Inc., shutting the door on Psystar Corp.'s attempt to force the company to let it install Mac OS X on its Mac clones.

Calling Psystar's claims "internally contradictory" in his order to dismiss, U.S. District Court Judge William Alsup tossed out all six claims that Psystar made in August when it hit Apple with a countersuit charging restraint of trade, unfair competition and other violations of antitrust law. Psystar has 20 days to plead against the dismissal.

Doral, Fla.-based Psystar has sold Intel-based computers preconfigured with Apple's Mac OS X 10.5, a.k.a. Leopard, since April. The company filed the countersuit in response to Apple's lawsuit of early July, when it said Psystar had broken multiple copyright and software-licensing laws. For example, the Mac OS X end-user licensing agreement (EULA) forbids users from installing the operating system on hardware not sold by Apple.

Apple's lawsuit prompted Psystar to fire back with one of its own that argued that Apple is a monopoly by virtue of the uniqueness of its operating system and therefore violates the Sherman Antitrust Act and the Clayton Antitrust Act by tying Mac OS X to its own hardware. In a news conference at the time of the countersuit filing, Psystar attorney Colby Springer called Apple's EULA "a restraint of trade."

At the end of September, Apple scoffed at the idea that it's a monopoly and said that Microsoft Corp.'s Windows, not Mac OS, dominates the market. Nor should it be forced to help Psystar, a hardware competitor, sell systems, Apple said.

"Neither federal nor the state antitrust laws require competitors to stop competing with, and instead to start helping, each other," Apple's lawyers argued then.

Alsup agreed. "The [Psystar] pleadings, however, fail to allege facts plausibly supporting the counterintuitive claim that Apple's operating system is so unique that it suffers no actual or potential competitors," Alsup wrote in his order.

"If Mac OS simply had no reasonable substitute, Apple's vigorous advertising would be wasted money," Alsup continued, referring to such marketing as Apple's aggressive "Get a Mac" television ads. "The advertising campaigns suggest a need to enhance brand recognition and lure consumers from a competitor."

Elsewhere, Alsup called Psystar's allegations "circular" and "internally contradictory," and concluded that the company's claim "does not plausibly allege that Mac OS is an independent market."

Although Psystar's countersuit has been rejected, Apple's original lawsuit against the clone maker will continue. In its suit, Apple has asked, if it wins, that Psystar be forced to recall all the machines it has sold with Leopard preinstalled, a move that would likely put Psystar out of business, according to one attorney not involved in the case. Currently, the case is set to go to trial Nov. 9, 2009.

Psystar's attorneys were not available for comment early Wednesday.

The company's Web site continues to list systems for sale with Leopard preinstalled at prices starting at $554.99.

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