Psystar's legal reply brief in response to Apple

[Alexander Terekhov]

It's short and really nice.

http://www.groklaw.net/pdf2/ApplevPsystarAppeal-21.pdf

"This reply brief addresses Apple’s response on
copyright misuse as well as those unanticipated
arguments that Apple made in response to the
sealing-order and scope-of-the-injunction issues.

COPYRIGHT MISUSE

Copyright gives authors the right to control
the copying, creation of derivative works from, and
distribution of their works. As Apple correctly
points out, copyright allows authors to refuse to
allow others to do some or all of these things — to
veto copying, the creation of derivative works, and
distribution of their creative output.

But copyright does not give copyright owners
the right to control how their works are used.
Copyright does not allow the author of a book to
require that it be read only at the beach or that
the information there contained be used only to
support Republican causes. Copyright governs
copying, not use.

This case is about Apple’s attempt to control,
through copyright, how purchasers of copies of OS X
use their copies of OS X. Apple is free to — and
does — do this by contract. The question is
whether Apple’s attempt to do this by copyright
too, and thereby gain access to the threat of
statutory damages, constitutes copyright misuse.

Copyright misuse is the use of copyright to
protect exclusive rights not granted by the
Copyright Act. See Altara Corp. v. Clear Logic,
Inc., 424 F.3d 1079, 1090 (9th Cir. 2005) (citing
Alcatel USA, Inc. v. DGI Technologies, Inc., 166
F.3d 772, 792 (5th Cir. 1999)); R. Br. at 27. The
exclusive right to control how a copyrighted work
is used is not a right granted by the copyright
act. Therefore, using copyright to control how
users use a copy of a copyrighted work is copyright
misuse.

The Fifth Circuit so held in Alcatel. For all
Apple’s attempts to distinguish that case, R. Br.
at 35–37 — the only case about use of a copyright
in an operating system to control the user’s choice
of hardware, and thus the only case squarely on
point — Apple must admit that the Fifth Circuit
held that it was misuse to use a copyright to
prevent a competitor from offering compatible,
cheaper hardware for use with a copyrighted
operating system. Alcatel, 166 F.3d at 792–93.

This Court should not create a circuit split
with the Fifth Circuit. No case requires it to do
so. Practice Management, cited in Psystar’s
opening brief, holds that it is misuse to license
diagnostic codes on condition that they be used
exclusively. See Practice Management Info. Corp.
v. American Medical Ass’n, 121 F.3d 516, 521 (9th
Cir. 1997). Apple says that this case is different
because Apple did not forbid the use of other
operating systems. R. Br. at 34-35.

In fact, this case is worse. Whereas in
Practice Management, the copyright owner’s
restriction related to the copyright work — use my
codes only — here, the restriction relates to a
wholly different subject — use my operating system
only in conjunction with my hardware. If the right
to make use of a copyrighted work exclusive is not
granted by the Copyright Act then, a fortiori, the
right to make use of an adjunct to the copyrighted
work — here, the physical computer hardware —
exclusive is not granted by the Copyright Act.

Apple says that its restriction fosters
competition and does not limit creativity. R. at
33–34. Not so. If Psystar is allowed to sell its
competing hardware for use with OS X, then
customers can choose between Apple’s integrated
product, OS X on a Macintosh, and Psystar’s
cheaper, unintegrated product, OS X on an Open
Computer. And further creativity and competition
can be expected as other companies, like Dell and
Lenovo, compete to offer the best hardware platform
for different users.

Apple also says that, as for patent misuse, a
requirement that a copyrighted product be used only
in conjunction with a different product should be
misuse only when the copyright owner has market
power in the market for the copyrighted product.
R. Br. at 28–31. But that was a change wrought by
statute for patent misuse, see 35 U.S.C. §
271(d)(5); if anything, the statute suggests that
the unamended law, which applies in the copyright
context, does not require a showing of market
power. And, as Apple admits, no court has yet
engrafted the market-power requirement onto the law
of copyright misuse.

In any event, Apple says, this Court decided
the issue in Triad. First, the discussion of
copyright misuse in Triad occupies a single
paragraph. See Triad Systems Corp. v. Southeastern
Express Co., 64 F.3d 1330, 1337 (9th Cir. 1995).
And Triad, like the other service-software cases
that Apple cites (Data General, MAI, In re
Independent Service Oragnizations Antitrust
Litig.), is distinguishable on the ground that the
software in Triad was never sold separately from
the hardware.

What Triad was doing was licensing its
operating and diagnostic software for, essentially,
its own use in maintaining its clients’ hardware.
What Triad did not do was sell copies of its
operating and diagnostic software, then require
that these copies be used only in connection with
Triad machines.

What distinguishes these two cases is that the
first involves a decision not to sell copies of
software. Apple sold copies of OS X; Triad did
not. The second involves an attempt to control
what purchasers of copies of software do with their
copies, in particular, what hardware they use the
software on. Apple tries to do this; Triad did
not.

What Triad did is not copyright misuse because
Triad merely exercised its copyright right not to
sell copies of its software. What Apple did is
copyright misuse because Apple sought to use
copyright to protect a right that is not a
copyright right: the putative right to control how
users use Apple’s copyrighted work after Apple has
sold them a copy. Declining to sell copies is a
copyright right. Controlling their subsequent use
is not.

* * *

Finally, it is worth taking a step back to look
at a strange feature of Apple’s position. Apple
admits that if it required OS X to be the only
operating system that a user used on his Macintosh,
then that would be copyright misuse. R. Br. at 34–
35. But Apple denies that, if, instead of
creating an exclusive operating system, it required
that its operating system be used exclusively on
Macintoshes, that would be copyright misuse.

It cannot be that misuse exists where a
copyright owner tries to use copyright to make his
copyrighted work exclusive, but not when he tries
to use copyright to make an adjunct, uncopyrighted
work exclusive. Both restrictions seek to protect
a right not granted by the Copyright Act. As the
Fifth Circuit recognized in Alcatel, both are
misuse.

SCOPE OF THE INJUNCTION

Apple contends that Psystar waived its
objections to the scope of the district court’s
injunction when it declined to take up the district
court’s invitation to file a postjudgment motion
seeking a declaration that Rebel EFI does not
violate the district court’s injunction. But the
whole point of Psystar’s argument is that Psystar
cannot be forced to litigate that issue in the
district court when the first-filed case
encompassing Rebel EFI is the case pending in the
Southern District of Florida. Apple’s discussion
of the injunction issue misses this point entirely.
R. Br. at 43–54.

Psystar stated its objection to an injunction
that encompassed matters being litigated in the
Florida case in its response to Apple’s motion for
a permanent injunction. E.O.R. at 105. The
district court evidently disagreed with this
response when it granted Apple’s motion for a
permanent injunction. Again, nothing more was
required to preserve error. See Floyd v. Laws, 929
F.2d 1390, 1400 (9th Cir. 1991) (“any question
which has been presented to a federal district
court for a ruling and which has not thereafter
been waived or withdrawn is preserved for review”).

SEALING ORDERS

Apple contends that Psystar waived its
objections to the district court’s sealing order.
R. Br. at 20, 59. This is incorrect. Psystar
filed a response to Apple’s motion to seal in which
it argued that the “trade secrets” that Apple
sought to protect had already appeared in
publications that Apple’s own witnesses described
as authoritative. E.O.R. at 552; O. Br. at 42.
The district court evidently disagreed with this
response when it signed Apple’s proposed order.
Nothing more was required to preserve error.
Floyd, 929 F.2d at 1400.

Respectfully submitted,
/s/ K.A.D. Camara"

Now, the GPL girl Pee Jay elaborates:

http://www.groklaw.net/article.php

(in comments)

-----
> They are suing for copyright violation over an act that they 
> should only be able to recover from as a contract violation. 

Ah! Now you're getting warm. I want you to think about the GPL. If there
is a violation, how is it enforced?

Is it not by copyright law? And didn't all the antiGPL trolls like
Terekhov and Dan Wallace argue for years on every message board that
didn't ban them that the enforcement of the GPL should be under contract
law instead of copyright law?

Wasn't that the issue in the toy train case too?

See the pattern a little bit now? 

Here's why they want enforcement to be under contract law instead. They
could then sue, state by state, for one thing, until they got one that
said the GPL wasn't fair. They thought, wrongly, that this would result
in GPL'd works being put into the public domain. They wanted that to
happen, and Terekhov even described how he believed he was allowed under
the GPL to do EXACTLY what Psystar then did. 

Coincidence? I don't think so.

Another reason to have EULAs and the GPL and any FOSS license made a
contract issue instead of copyright law: there's no muscle to it. With
copyright law, you can ask for and get an injunction and damages,
statutory damages, meaning you don't have to prove actual monetary harm. 

Those are two things that Apple just lost by means of the new exemptions
to the DMCA, by the way, and you notice everyone is saying they lost
their ability to sue, even though technically they can still sue under
contract law. The same would happen to Linux if the GPL was deemed a
contract issue, not copyright law any more.

And further, if you sue under contract law in New York, even if you win,
it applies to that contract, that state. If someone then does the exact
bad thing to you in California, you have to go there and sue again in
California, and then New Jersey and then Kansas.

Can you see how that would destroy FOSS licenses as any kind of
protection? Microsoft can afford to do that, but who in FOSS can pay for
all that? That was what Microsoft did to Lindows, suing them in country
after country until they sold out and gave up, even though they had, in
my view, a winning case on the trademark issue.

What? You never thought of that? Well, somebody on the Dark Side has. So
you need to think about it too."

ROFL!!!

regards,
alexander.

--
http://gng.z505.com/index.htm 
(GNG is a derecursive recursive derecursion which pwns GNU since it can 
be infinitely looped as GNGNGNGNG...NGNGNG... and can be said backwards 
too, whereas GNU cannot.)