A U.S. appeals court on Wednesday dealt an almost mortal blow (more on the “almost” after the jump) to former hackintosh vendor Psystar’s remaining chances of a comeback in its legal battle against Apple. Dismissing Psystar’s appeal, the U.S. Court of Appeals for the Ninth Circuit upheld a 2009 district court decision to award Apple a permanent injunction against Psystar’s infringement of Mac OS X.
Microsoft isn't usually the type of company that likes to compare itself with Apple, but in its anti-trust case over the Xbox 360, they are borrowing a page from Steve Jobs legal manual to justify the walled garden that is "Xbox Live". According to Microsoft, if Apple can prevent Psystar from selling unauthorized hardware with OSX, why shouldn't they be able to stop unauthorized accessories from being sold on the Xbox 360?
The company at the heart of the lawsuit is hoping to sell a game genie type device to allow in-game cheating, but if aftermarket accessories were to become a real possibility, I'm sure they wouldn't be the only ones to hop on the bandwagon. I know at least a few PC Gamers who have taken issue with SSD style prices for 5400 RPM laptop upgrade drives simply because they have no other choice.
Datel argues that Microsoft is monopolizing the market for "Multiplayer Online Dedicated Gaming Systems". This won't be an easy thing to prove, but do you think Microsoft is up to its old monopolistic tricks again?
I'm guessing that about half of our readership scanned over the headline and rolled their eyes, and the other half did a fist pump for the underdog. Psystar has tried pretty much everything to try and keep itself a float in its legal battle against Apple, and it seems determined to keep its name in the headlines just a bit longer by following through with its threat to file an official appeal.
For those that haven't been following the developments, U.S. District Judge William Alsup recently handed down a permanent injunction against Psystar after a drawn out 17 month legal struggle to prevent the sale of any future hackintoshes. Despite the ruiling the defiant startup seems determined to not let the issue go and this time around they are requesting a three member panel of judges from the Ninth Circuit to hear the case. Perhaps they are hoping Apple will get so sick of all the press they will simply pay them off, or maybe these guys really are fighting for the future of Hackintoshes.
The company that discontinued its range of Mac clones earlier this month has now “voluntarily suspended the sale of our Rebel EFI software product.” It has temporarily discontinued Rebel EFI – a boot loader that helps install OS X on any generic PC – as it first wants the court's “clarification on the legality” of the software. “In the coming days, we will again be offering complete systems but at discounted prices as they will be bundled with your choice of Linux operating system,” the company announced on its website.
The company is trying hard to garner some much needed public support. From the face of it, Psystar wants to be seen as a champion of open computing. “It's your software, you should be able to use it where you want to,” Psystar wrote on its site. “If you purchase an off-the-shelf copy of OS X Snow Leopard, its your right to use that software.”
After 17 months of litigation, a federal judge on Tuesday ordered Psystar to stop selling, distributing, copying, or creating derivative works of Mac OS X without prior authorization from Apple. Or in other words, it can no longer sell Mac clones.
The judge also placed a handful of other restrictions on Psystar, such as disallowing the company from intentionally inducing, aiding, assisting, abetting, or encouraging any other person or entity to infringe Apple's copyrighted Mac OS X software, Apple Insider reports.
Psystar has until midnight on December 31, 2009 to comply with the order, however it's not clear if the judge's statements also apply to the company's Rebel EFI software, a $50 app that allows some Intel-powered PCs to run Mac OS X 10.6. U.S. District Judge William Alsup intentionally avoided ruling on the software, noting only that Psystar's argument that it has a right to sell and distribute the software is weak.
"Whether such a defense would be successful on the merits, or face preclusion or other hurdles, this order cannot predict," Alsup said. "What is certain, however, is that until such a motion is brought, Psystar will be selling Rebel EFI at its peril, and risks finding itself in contempt if its new venture falls within the scope of the injunction."
The dispute centers on Psystar’s installation of Apple’s OS X, version 10.5 (a.k.a. Leopard) on Intel-based computers manufactured by Psystar. Apple took exception to Psystar’s hackintosh and sued, with its complaint upheld by a Federal Court in San Francisco. The Court agreed not only to Apple’s claim of copyright infringement, but to Pystar’s violation of the Digital Millennium Copyright Act (DMCA) for the unauthorized installation of OS X.
According to a motion Psystar filed with the Court Monday, Psystar states that it and Apple have reached a partial settlement, in which Psytar agrees to pay Apple damages for violating Apple’s copyright--an estimated $2.1 million. But, only after Psystar has exhausted all of its avenues for appeal. Psystar is hoping this will placate Apple and the Court enough that it can escape a permanent injunction Apple has requested that would shut Psystar down.
Psystar has also asked that it’s Rebel EFI utility be excluded from any injunction. Rebel EFI, which is sold separately, is used to load OS X onto its systems. With Rebel EFI buyers of Psystar’s desktops are able to install OS X themselves, rather than have it preloaded by Psystar, effectively allowing Psystar to remain in the hackintosh business.
Apple may have agreed to drop its copyright infringement claims against Psystar for the promise of a possible future payment. But it’s not clear that Apple is in agreement with Psystar’s continued sale of Rebel EFI, if Apple’s intent is to limit the hackintosh market. It would seem that the dust from this dispute has yet to settle.
Psystar had big plans, unfortunately, their plans were pretty much the only thing that fit that description. Now that Apple has effectively won its copyright infringement case against the company, not only is it all but sure to close, but it will likely have to pay a fine for each and every Hackintosh that went out the door.
Just how many machines is that you ask? Turns out even though the company planned to sell as many as 12 million units by 2011, they only managed to pump out around 768 Mac clones so far. Either the Psystar machines were far less popular than the company (and media) let on, or they are fudging the numbers to try and dodge some of the fine. The numbers were revealed as part of a court ordered release to be used against them at upcoming injunction proceedings. Even if Psystar does manage to pay the fine, they will still be a company without a product, not exactly an ideal situation.
It seems as though Apple has done a pretty good job of nipping these guys off in the bud before they had a chance to cost them any customers, but do you actually think the Hackintosh crowd will actually buy genuine Apple OEM goods now that the hammer has come down against Psystar? I also can't help but wonder how many of those 768 machines were sold to the press.
Apple didn't just win its case against Psystar, it demolished the "open computer" vendor whose Mac clones triggered a legal battle over whether or not the hackintoshes violated Mac OS X's EULA. According to Judge William Alsup, it most certainly does. In fact, the judge ruled in Apple's favor on every count brought to the court's attention, although the biggest focus was on copyright.
"Psystar's use of Mac OS X has been in excess and has violated Apple's copyrights," the judge wrote at one point in his 16-page order.
According to Groklaw, there are still issues that remain for trial, including allegations of breach of contract, induced breach of contract, trademark infringement, trademark dilution, trade dress infringement, and state unfair competition under California Business and Professions. In other words, the best case scenario for Psystar at this point is that it will be held liable for damages on Apple's copyright claims, but with its primary defense now seemingly dismantled, the company appears to be in a world of hurt. Or as Groklaw puts it, "Psystar is toast."
Psystar once again flips Apple the bird by confirming it will support Mac OS X Snow Leopard on all new Mac clones. Furthermore, the company said it had developed "new virtualization technologies" to better integrate with the newly released OS like "never before."
At the same time, Psystar issued a warning to its customers not to install Snow Leopard until the OEM had a chance to work out any kinks and ensure a no-fuss upgrade.
"We ask you not to attempt to install the new OS X as it may cause harm to your computer, resulting in a possible re-installation of Leopard OS 10.5 and a loss of data," Pystar wrote in a blog post. "As with all previous software updates to the OS, Psystar meticulously tests and retests all software updates to confirm their compatibility with older Psystar machines."
As could be expected, Apple is none too happy about Psystar's continued defiance and has asked a California judge to order a 30 day "re-opening of discovery" to give Aple time to obtain Psystar's modified Snow Leopard source code.
Psystar, the company responsible for the 'Open Computer' and a continual thorn in Apple's side, has filed for bankruptcy protection. According to court papers, Psystar owes more than $250,000 to shipping companies, the IRS, and its attorneys.
"Debtor sales have been greatly affected by the decrease in consumer spending," Psystar said in a statement. "The financial crisis has also caused creditors to tighten up their terms and become more demanding for immediate payment."
Psystar gained notoriety for taking on Apple by selling computer systems equipped with Mac OS X. In July of last year, Apple sued the company for copyright infringement, however that lawsuit has now been temporarily suspended until the bankruptcy protection goes through proceedings.