What Is the Issue in the Psystar Case?

Numerous irrelevant issues and feelings about them are ventilated in comments on the case. However, there are only two important issues. One is what the law is, the other is what we think the law should be.

What the issue at law is

We need to take a pure form of the case in order to see this, and in particular, to abstract from the particular method Psystar has used to install OSX. Lets take the case of efi-x, or some similar way of modifying a standard computer to install OSX on it, which does let us see the issue in pure form without being distracted by any difficulties with Psystar’s particular method.

We go into a retail store and buy a copy of OSX on optical media. There is no doubt about the situation or the transaction. This was, just as when I go into a bookstore and buy a book, the purchase of one copy of OSX. This has been explicitly confirmed by the US Courts in Softman, the case being found here among other places.

There are two important points to be found in this judgment. The first is that the transaction of purchase is a sale and not a license. The second is that until installation of the software and click through occurs, the EULA is not binding because the contract has not been entered into.

The Court understands fully why licensing has many advantages for software publishers. However, this preference does not alter the Court’s analysis that the substance of the transaction at issue here is a sale and not a license.

(c) EULA Terms

Adobe argues that the EULA requires construction of the transaction as a license rather than a sale. The Court finds that SoftMan is not bound by the EULA because there was no assent to its terms.

Later it is said that

The Court finds that Adobe’s EULA cannot be valid without assent. Therefore, Softman is not bound by the EULA because it has never loaded the software, and therefore never assented to its terms of use.

And later still the following:

In short, the transfer of copies of Adobe software making up the distribution chain from Adobe to SoftMan are sales of the particular copies, but not of Adobe’s intellectual rights in the computer program itself, which is protected by Adobe’s copyright. SoftMan is an “owner” of the copy and is entitled to the use and enjoyment of the software, with the rights that are consistent with copyright law. The Court rejects Adobe’s argument that the EULA gives to purchasers only a license to use the software. The Court finds that SoftMan has not assented to the EULA and therefore cannot be bound by its terms. Therefore, the Court finds that Adobe has not demonstrated a likelihood of success on the merits of its copyright infringement claim.

So, I have gone into the store and bought a copy of the software, not licensed it, and I am not (yet) bound by any clause in any EULA which may accompany that copy.

It is not an upgrade copy

Let us note that I have not bought an upgrade copy. An upgrade copy might exist. It would check for the existence of a previous version of OSX and require it to be used. Or it might be labelled as upgrade only. This particular copy is neither. It is simply labelled as a copy of OSX, it works as one, and that is what it is. Let us also notice that people sometimes argue here that the copy must be an upgrade because all Apple machines come with a preinstalled copy of OSX. This is irrelevant. No facts about other copies of OSX, or machines on which this copy is not installed, can make this particular copy an upgrade. It is what it is in virtue of facts about it. It is simply irrelevant to whether it is an upgrade how Apple chooses to conduct other aspects of its business.

Apple had no obligation to make OSX available at retail or support any particular use of it

We should also note that I have no particular right to buy these kinds of retail copies of OSX, nor does Apple have any obligations to support all of the things I may do with them. Its support obligations are an independent question. It is perfectly entitled to say that it will only support installations of OSX on equipment of certain categories, like, post a certain date or spec. It is also under no obligation to sell retail copies of OSX at all, and it is perfectly entitled to only sell copies that are locked to particular hardware. There is nothing to stop it using the previous method, encrypted ROM, to prevent installation on the ‘wrong’ hardware. I have no right to buy a copy of OSX that is installable on non Apple hardware. That is not at issue. The question is, having sold me the retail copy that is technically installable on non-Apple hardware, what can Apple say about what I then install it on?

Copyright law

It is then a retail copy, and I own it. I now have the right to do with this whatever I have the right to do with other purchased copies of copyrighted documents. What is that? I can use it. I cannot make unauthorized copies of it. In the US I have the further right explicitly guaranteed in law in section 117 of the Copyright Code in connection with computer programs:

Notwithstanding the provisions of section 106, it is not an infringement for the owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program provided:

(1) that such a new copy or adaptation is created as an essential step in the utilization of the computer program in conjunction with a machine and that it is used in no other manner, or

(2) that such new copy or adaptation is for archival purposes only and that all archival copies are destroyed in the event that continued possession of the computer program should cease to be rightful.

Does copyright limit the right to install? Let us now look at the situation in the light of the above, when I return to my office and prepare to use the bought copy of OSX. It is clear that as far as copyright law is concerned, I have the right to do whatever is necessary to install the software on one machine. Nothing in copyright law gives the copyright owner the right to restrict what machine that is.

But does the copyright owner have the ability to impose restrictions over and above those of copyright law? Yes, he potentially does, by an additional contract, which you do not have to assent to. He cannot sell it to you, and then by copyright say that you cannot use it. But he can, in consideration of selling his copy, which he has copyright in, ask you to enter into agreements of various sorts. You do not have to enter into them, you do not have to buy the copy, and if you decline imposed contracts subsequent to purchase, he must give you a refund. But if you do enter into them, you really have entered into a contract. Whether it is to bow in the direction of Cupertino, bless the holy name, or wear a black turtleneck while using the software, you really will have entered into such a contract.

The question will be whether the courts will enforce these terms.

Is my hardware an illegal clone?

I have, let us suppose, a standard Intel machine which happens to support EFI. It may be that I have adapted it to support EFI by use of the efi-x dongle. Is this legal? It must be. EFI is an international industry standard, there can be nothing in the least questionable about owning a machine which supports it, or adapting a machine to support it.

My machine also consists of only components for which OSX ships drivers. Is this legal? It must be. These are standard off-the-shelf components, and anyone has the right to buy them and assemble them. The fact that Apple uses these components in a Mac does not give them any right to stop anyone else using them, singly or in combination.

Let us imagine that I have two computers on the desk, and that I have bought two copies of OSX in the retail store. These machines have pretty much the same components, however one was bought from Apple, though I have replaced the hard drive, and the other was self assembled.

Moving to installation

I boot from the bought copy on each machine, and now comes the interesting part. The copies will install in the same way on both machines. On both machines I am presented with a EULA. This EULA is a second agreement. The first agreement I entered into was with the store, and it was a purchase agreement for a copy of OSX. Now I am being asked to enter into a new and different agreement, independently of the first, with Apple. This agreement will among other things restrict what I install the copy on.

Notice that there are two machines in front of us on which it is equally possible to do the installation. Apple is saying that it has the right to permit me to install on one, and not on the other. It happens to intend restricting me by brand of machine, and to restrict the brand to Apple. But this is a detail of implementation. The principle would be the same was the agreement to say that I could only install on Apple and Asus labelled machines. Or on machines of any brand, as long as they did not then or subsequently contain hardware from particular vendors. Or if they then or subsequently did not contain particular software. Examples of this sort of thing come from Microsoft. The EULA for retail copies of Office forbids the installation of Office on any machine not running Windows. Installation on Wine on Linux or OSX is thus forbidden. Similarly, it is forbidden in the EULA to install Vista Home Basic on a virtual machine.

The basic legal question

We can now see what the root question is. It is technically possible to install a purchased retail copy of OSX or some other software on a number of different machines. Will the courts uphold a click through agreement in which, in order to perform the installation, we agree not to install it on some categories of them as listed in the EULA?

We will all have views on this, and we will have views on what differences different jurisdictions will make to what the courts rule. Let us leave that interesting subject and ask:

What do we think the law ought to be?

My view is that suppliers should in general not be able to restrict the use buyers make of their products except in cases where the public interest in terms of health and safety is a significant factor. It may be reasonable, for example, for a vendor of gas tanks to be able to forbid, by a contract entered into at the time of sale, anyone but an authorized agent from recharging the tank. It may be reasonable for a vendor of disposable medical equipment to enter into enforceable agreements that the buyer will not re-use it. It may be reasonable for a chain saw vendor to oblige users to sign an agreement agreeing to only use the equipment subsequent to attending a training course.

What we should not want the law to allow is for vendors to restrict our ability to use the products in ways which have no such justification, but perhaps benefit only them. We should not, for instance, want the vendor of an attractive software package to be able to use its attractiveness to force people who want to use it to buy hardware they do not need, as a condition of its use. We should not want Black and Decker to be able to supply two identical lines of drill. One might be labelled ‘Professional’, the other DIY. The first would be permitted to be used in way of trade, the other not. We should be free to use either in way of trade, or not, as long as there are no health and safety issues. We should not want Sony to be able to say that a particular CD or DVD was only permitted to be played on some and not other brands of audio visual equipment. It should be up to us what we play it on, regardless of what we assent to on opening the package.

To continue, a publisher should not have the right to forbid me to read my copy of his book in the bath tub. Regardless of what the shrink wrap or click through forces me to assent to when I open it to read it. It is not in the public interest for the prohibition on installing Office under Wine to be enforceable. Nor would it be in the public interest for a prohibition on installing AutoCAD in conjunction with a file format converter to be enforceable. And finally, it is not in the public interest for Apple to be able to restrict, by EULA, on what subset of technically available equipment we install retail copies of OSX.

It is generally not in the public interest for vendors to have the power to impose restrictions on how we can use products we have bought in conjunction with others we have bought, where there are no health and safety issues, and where the law is being adhered to in other respects.

This is the issue in the so called Mac Clone cases, and this is why it is important to all of us, including those of us who have no interest in using OSX, or buying Apple hardware. If the issue of principle is decided in this case, and if the implication of the ruling should be that software vendors can sell their software at retail and then dictate as a condition of sale and use where their software is installed, we will all have lost freedoms we now think we have as a matter of right. We may still retain them, but it will be at the discretion of the vendors, to be withdrawn or modified the moment they see fit.

This matters, and it matters whether or not you are ever going to buy a Mac or run OSX.


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