Judge's ruling puts legal nail in Psystar's coffin

A federal judge has dealt a crushing blow to Mac clone maker Psystar by ruling that the Florida company violated Apple's copyright as well as the Digital Millennium Copyright Act (DMCA) when it installed Apple's operating system on Intel-based computers.

In an order issued Friday, U.S. District Court Judge William Alsup granted Apple's motion for summary judgment and quashed Psystar's similar request. Lawyers for both companies had filed their motions last month , each side claiming that enough evidence had accumulated through discovery to warrant a decision before trial, which is slated to start Jan. 11, 2010.

In a detailed analysis of Apple's argument -- which it broached 18 months ago when it first sued Psystar -- Alsup ticked off the copyright provisions that he ruled Psystar had violated.

According to Alsup, Psystar made unauthorized copies of Apple operating system during the computer manufacturing process by imaging a copy of Mac OS X, then installing that on other computers. The clone maker did not install Apple's OS from the copies it bought at retail, and in some cases did not include the Mac OS X DVD installation disc with the machines it sold. "Three of the nine computers did not include a Mac OS X DVD at all," said Alsup, citing a deposition by Apple, which sent personnel to Psystar's facility last summer to observe how it assembled computers.

Previously, Psystar had claimed it purchased a copy of Mac OS X for each machine it sold, buying them from Apple itself , as well as from Amazon.com and Best Buy.

"Even if it were the case that a DVD was included with every computer, that did nothing to cure the infringement as to the unauthorized copies discussed above," added Alsup.

He also gave the nod to Apple's argument that Psystar illegally created "derivative works" of Mac OS X by modifying the operating system so it would install and run on clones. "Psystar admittedly replaced entire files within the software while copying other portions," said the judge. "This resulted in a substantial variation from the underlying copyrighted work. In fact, if the bootloader and kernel extensions added by Psystar were removed, then the operating system would not work on Psystar's computers."

Although Alsup's ruling did not specifically mention subsequent moves by Psystar, which include selling the "Rebel EFI" utility , that program may now be in legal jeopardy.

"In sum, Psystar has violated Apple's exclusive reproduction right, distribution right, and right to create derivative works," Alsup said in the order. "Accordingly, Apple's motion for summary judgment on copyright infringement must be granted."

Alsup also ruled in favor of Apple's claim that Psystar violated the DMCA by breaking the antipiracy technology that locks Mac OS X to Mac hardware. Apple added the DCMA charge to its original allegations in November 2008.

"Psystar has used decryption software to obtain access to Mac OS X and to circumvent Apple's technological measure when modifying Mac OS X in its production process," Alsup said. "This is a violation of the Section 1201 anti-circumvention provision of the DMCA."

As Alsup awarded Apple summary judgment on multiple charges, he denied Psystar's. In December 2008, the Mac clone maker switched tactics after Alsup had tossed out its counterclaim that Apple broke antitrust laws by tying Mac OS X to Mac hardware. Instead, Psystar argued that Apple abused federal copyright law, including the DMCA.

"Apple has not prohibited others from independently developing and using their own operating systems," Alsup noted. "Thus, Apple did not violate the public policy underlying copyright law or engage in copyright misuse."

Psystar has sold Intel-based computers preconfigured with Apple's Mac OS X since April 2008, when it began selling machines at prices much lower than Apple's . In July 2008, Apple struck the first legal blow by suing Psystar in Alsup's California court.

Alsup's order does not put an end to the legal wrangling, since several of Apple's accusations, including breach of contract, trademark infringement and unfair competition, remain to be decided at trial. Also unaffected is a lawsuit that Psystar filed in a Miami federal court in August 2009, charging that Apple illegally links Mac OS X 10.6, aka Snow Leopard , to Mac computers.

Last month, Psystar submitted an amended complaint to U.S. District Court Judge William Hoeveler, who is handling the Florida case, and asked him to rule that it is legally allowed to sell machines with Snow Leopard. Hoeveler has yet to rule on Psystar's request.

Apple and Psystar did not respond to requests for comment late Saturday.

Copyright © 2009 IDG Communications, Inc.

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