World of Apple

The Florida Court has granted Apple’s request for a stay of proceedings pending the outcome of the Appeal. This is typical and expected. The Florida Court had not yet ruled on Apple’s Motion to transfer the Florida case to Judge Alsup in California. On the Appellate front, Apple has filed its Answering Brief as well as a Motion for Judicial Notice.

Answering Brief of Plaintiff-Appellee Apple Inc.

Unlike the other early filings in the Appeal, this item was not filed under seal. It is broken into three primary categories which I will follow in digesting the Brief. I remind the readers that Appeals are limited to mistakes of law or fact and thus are usually much more narrow than the issues in the underlying suit. For example, Psystar did not appeal the dismissal of its antitrust counterclaims that were originally alleged in the California case. Nor did it ever supply the California Court with the requested information for a determination to be made on the Rebel EFI product which was enjoined until Psystar could prove that its operation was substantially different from the issues ruled upon. Based upon this latter fact, Apple argues that Psystar has waived its right to ask the Appellate Court to remove Rebel EFI from the Injunction.

We do learn some details about Psystar’s sealed Opening Brief. Apple alleges:

Nonetheless, on the pretext of educating the Court regarding the technology at issue in this case, Psystar supplies a “Technical Addendum” with its opening brief. This document appears to be a veiled attempt to revive factual claims the district court has rejected and Psystar has abandoned on appeal. (Page 11 of Answering Brief)

Psystar has more veils than a harem girl.

Psystar now asserts that installation of Psystar’s bootloader and numerous kernel extensions is unnecessary to run Mac OS X on Psystar computers absent the existence of Apple’s TPM [technological protection measure]. Opening Br. At 27. But this claim is contrary to the unchallenged factual record. For example, even if Apple did not implement its TPM, Psystar would still be required to modify Mac OS X by replacing the bootloder and modifying certain Mac OS X kernel extension files to force the operating system to run on non-Apple hardware. (Page 15 of Answering Brief)

And we get this interesting graphic of Psystar’s Pirates R Us operation (Page 11 of Answering Brief):

The District Court Correctly Rejected Psystar’s Affirmative Defense of Copyright Misuse

Psystar does not dispute that it is a copyright infringer. Instead, its defense is that the infringed copyrights are per se invalid due to Apple’s copyright abuse. However, per se copyright abuse would be a novel doctrine in contravention of existing precedent. In fact, the Ninth Circuit itself rejected this theory in the case of Triad Systems Corp. V. Southeastern Express Co., 64 F.3d at 1337 (9th Cir. 1995). Unbelievably, Psystar is arguing that Apple also abused its copyright by suing Psystar in the first place, an act it describes as sham litigation,—despite the reality that Apple prevailed. Apple argues that if Psystar were correct then nearly any software licensing would be invalid and undermine long-standing laws, rights, and business relationships. It is well-established that courts have rejected findings of copyright abuse when proprietary software is limited to use on specific hardware as long as the creator does not prevent other parties from creating their own competing software—something Psystar has acknowledged that its lacks the talent to do. In fact, a copyright owner could refuse to let ANYONE use the protected work. In order to prevail on copyright misuse in general (not the even more radical theory of per se copyright abuse) Psystar would have to show that Apple used its copyrights to create an unlawful monolopy or to inhibit competition and creativity.

The cases relied upon by Psystar do not have a bearing in this case. First, in Practice Management Info. Corp. V. American Medical Ass’n, 121 F.3d 516 (9th Cir. 1997), the copyright owner extracted a promise that the consumer would abstain from using competing products regardless of any infringement on the copyrighted work. That is not the case here. In fact, Apple makes it easy to use competing operating systems with its Boot Camp feature. Second, in Alcatel USA, Inc. V. DGI Technologies, 166 F.3d 772 (5th Cir. 1999), Alcatel effectively prohibited the addition of any non-Alcatel peripherals or components to its systems. Of course this is also not the case here. Psystar, however, attempts to stretch the facts by claiming that the microprocessor cards in Alcatel are analogous to an entire Macintosh computer. Even if this were so, competing hardware exists, and more on point, the analogy is ridiculous. A more pertinent example would be after-market hard drive or memory.

When allegations of copyright misuse are grounded in tying software to another product, there is no misuse unless the copyright holder used the copyrights to limit competition in the market for the tied product. The market in this case has been ruled to be personal computers in general, and it is patently obvious that there is no lack of competition in hardware vendors. However, this can be overcome by a showing of market power being leveraged to harm competition. Apple may soon have to worry about this prong, but right now, its personal computers are still in the minority and in this matter, Psystar did not allege that Apple had market power in the relevant market as its theory of a separate market consisting of Macintoshes alone was shot down.

The District Court Correctly Enjoined Psystar’s Continuing Infringement and DMCA Violations

A lower court’s grant of Injunction can only be reversed based upon a showing of reliance upon an incorrect legal standard or clearly mistaken findings of fact. There is nothing in the record to show the Court misunderstood the facts or the law. Psystar cannot now allege a factual difference with its Rebel EFI product when it declined to produce such evidence to the Court granting the Injunction. Psystar attempts to claim that the Florida case is the “first-filed” for Rebel EFI but that is putting the cart before the horse. It was not products that were deemed unlawful in and of themselves, it was the infringing activity that was the basis of the California Court’s Injunction. If the infringing activity is similarly unlawful, it wouldn’t have to be re-litigated de novo each time Psystar conceived of a new parasitic product. Imagine the legal nightmare that would cause. No party could be assured of the final disposition of their rights. With Rebel EFI, Psystar admits in its Opening Brief that it is a continuation of the same infringing process ruled upon.Further, the Court properly enjoined infringing acts with Snow Leopard as it is a derivative work of Leopard in addition to the essential infringing activity being nearly identical.

The Sealing Orders Should Not be Vacated

Psystar claims that Apple’s TPM [technological protection measures] are already widely available so that sealing them is unnecessary. Apple counters that their trade secrets are not public and that the existence of websites which routinely speculate upon same does not deprive Apple of its rights. Apple does not acknowledge the validity of any of these speculations nor sanction them. The items sealed were narrowly confined to trade secrets and do not impeded upon the public’s ability to understand the case. There is one Order that Apple inadvertently submitted that was broader than the parties agreed. Psystar never brought this error to Apple or the Court’s attention and cannot sit upon such knowledge of a non-malicious mistake and attempt to play “gotcha.”

Apple Inc.’s Request for Judicial Notice

If a court takes Judicial Notice of something that means it will be accepted as fact without need for any further proof. This is commonly used for things such as a date falling on a certain day of the week or from nearly indisputable sources. This is within a court’s discretion. In this instance, Apple is asking the Court to take Judicial Notice of proceedings which are directly related to this matter and cites case law in which proceedings can be so introduced if they have substantial relation to the present matter. The cases which Apple is seeking to have recognized are the Florida District Court case and Psystar’s prior Bankruptcy case. I think this will likely be granted. The relevant filings from the California case are already before this Court.

It is unclear to me whether or not Psystar is allowed a rebuttal to this filing. If so, it should have been filed within seven days of the Answering Brief, which date has already expired. However, there are other relevant, and later dates, relating to Apple’s filing of the Answering Brief, so if a reply is forthcoming and allowed, it should appear any day.