First, a quick backgrounder:

...from: http://arstechnica.com/apple/news/2008/07/apple-finally-sues-unlicensed-maci...

Apple finally sues unlicensed Macintosh cloner Psystar

By David Chartier | Last updated July 15, 2008 11:24 AM CT

[...] This past April, Psystar made instant waves by announcing a bargain-basement Mac clone for $399 that could run Leopard, the latest version of Apple's Mac OS X. Psystar's PC is an upgradeable tower with a respectable amount of features which, at face value, starts $200 lower than Apple's cheapest—and highly unconfigurable—Mac mini at $599. Despite drawbacks like incompatibility with some Apple software updates, a flood of orders brought the company's site down for days at a time.

[...] ....Apple has finally filed suit against Psystar in the US District Court for the Northern District of California. The lawsuit accuses Psystar of violating Apples licenses and trademarks, as well as copyright infringement. [...]

...from: http://www.engadget.com/2009/11/14/apple-wins-copyright-infringement-case-ag... Apple wins copyright infringement case against Psystar in California by Nilay Patel posted Nov 14th 2009 at 5:59PM

Well, well. Apple's won its copyright infringement claim against would-be Mac cloner Psystar in California. Anyone surprised? As we've been saying all along, the key argument wasn't the OS X EULA or Psystar's failed monopoly claims, but pure, simple copyright infringement, since Psystar was illegally copying, modifying, and distributing Apple's code. Psystar was also dinged for circumventing Apple's kernel encryption in violation of the Digital Millenium Copyright Act, but that's just another nail in the coffin, really. There's still some legal fireworks to come, as Apple's various other claims like breach of contract, trademark infringement, and unfair competition weren't addressed in this ruling, but those are all secondary issues now -- and we'd expect this decision to have quite an impact on the other case currently ongoing in Florida. We've broken down the highlights after the break, hit up the read link for the PDF and follow along.

Okay -- got your popcorn? Let's do this thing. (We're skipping right to the analysis section, but the key piece of info from the facts section is that Psystar didn't install OS X from its purchased DVDs, but from a Mac mini "imaging station.")

Copyright infringement. The court agrees with Apple right down the line here -- Psystar is illegally copying, modifying, and distributing Mac OS X, and the court basically slams the whole license-vs-own argument into the ground, saying, "Even assuming arguendo that Psystar was the owner of a copy... the copies at issue here were not lawfully manufactured with the authorization of the copyright owner." Psystar was making multiple copies of OS X from its imaging station, and you just can't do that without permission. Furthermore, Psystar's argument that it includes a purchased copy of OS X with all of its computers fell flat, as the version of the OS on the machines was often different than the version on the disc, and several of the machines examined didn't have discs included at all. Oops. Creation of derivative works. This is part of copyright infringement, but we're going to break it out because it's a major key to the case. In order to boot OS X on a hackintosh, Psystar replaced the OS X bootloader, disabled and removed Apple kernel extensions, and added its own kernel extensions. That was enough variation from Apple's code to warrant a finding of copyright infringement all on its own -- Psystar was essentially selling a custom version of Apple's copyrighted code, and you're not allowed to do that without permission. What does that mean? It means that you can throw out all the arguments about EULAs and ownership and fair use, because Psystar's main business -- hacking OS X to run on non-Apple hardware -- is illegal. What can we say? We told you so. Copyright misuse. After Psystar's antitrust and monopoly arguments were thrown out, it tried to argue that Apple was misusing its copyright on OS X by limiting it to Apple hardware. It was an interesting and ballsy argument, and the court didn't buy it for a second: "Apple has not prohibited others from independently developing and using their own operating systems. Thus, Apple did not violate the public policy underlying copyright law or engage in copyright misuse." Put another way, as long as Apple doesn't try to prevent OS X owners from buying Windows PCs, it can sell OS X however it wants. DMCA violations. Everyone's favorite section of copyright law gets some time in the sun -- the court found that Psystar illegally circumvented the OS X kernel encryption when it hacked OS X and booted it on non-Apple hardware. Amusingly, Psystar tried to argue that Apple's encryption wasn't effective because the keys are available on the internet, but that's just not how the law works at all. "Here, when the decryption key was not employed, the encryption effectively worked to prevent access to Mac OS X. And that is all that is required." Ouch. Relief. Psystar's gonna pay, but we don't know how much, because the court hasn't decided yet. Stay tuned -- that's going down next month. Remaining issues. Apple's complaint contained a number of other claims besides copyright infringement, and they're still on for trial. The big one is breach of contract, which is the fight over the OS X EULA -- but since Psystar has already been found liable for straight copyright infringement, we don't think it stands a chance of invalidating the EULA. There's also a number of trademark claims and unfair competition claims, none of which will affect the main ruling here. In short: things don't look so good for Psystar.

Now, this case only covered Leopard; Apple and Psystar are fighting a separate case over Snow Leopard in Florida, which means we haven't heard the end of this yet. If we were betting, though, we'd say that case will end up just like this one -- to quote Groklaw, "Judges notice if you were just found guilty of a similar cause of action in another state." Yeah.

....and the GROKLAW article with all the gory details: http://www.groklaw.net/article.php?story=20091114101637997