Article published on TheAppleLounge.
Since at the MacWorld Expo of San Francisco of 10 January 2006 the Cupertino house officially confirmed the move to the Intel platform, its operating system has become an object of interest and of business for numerous companies, which propose to their customers hardware systems capable of running Mac OS X, alternative to those proposed by Apple itself. One above all for relevance, the numerous legal twists and turns is the Psystar case, but undoubtedly there are many proposals for building an “alternative” Apple system.
Established that at source-code level the operation is possible, the Hamletic question to ask is: “does current legislation allow these practices?”
The answer is very complex; various levels of legislative intervention come into play, starting from international intellectual property agreements (TRIPs), passing through EU legislation up to copyright provisions of Italian Law 633/1941 as subsequently amended (Italian Copyright Law, hereafter LDA).
This last regulatory text aims at the protection of creative intellectual works, therefore literary, musical, architectural, cinematographic etc. works (Cf. art. 1 of the cited law). Given the rapid development driven by the digital revolution, the regulatory text has undergone numerous successive interventions, so as to adapt the old framework to the new needs of the information society.
The various amendments were all consequent to supranational needs, exactly as supranational and not territorial has been the development of the Internet. For this reason new intellectual works such as software have received protection, alongside new manifestations of traditional intellectual works, such as for example musical works or figurative arts produced on formats spread through the network.
In particular the law provides that the author of the work be undisputed “dominus” of it, not only in the immediacy of the production — as may happen for other goods — but also, once the good has entered the availability of third parties, of its subsequent developments and, above all, of its use.
Whoever creates software has complete control of it and may decide how it should be used with almost total discretion.
The right holder may therefore grant the use of the programme by imposing restrictions.
The legal tool that allows to put these limitations in place is the licence, better known as EULA (End User License Agreement).
Apple’s operating system has a very particular one: it grants the use of the software only on an Apple computer.
Below an extract:
“2. Permitted Licence Uses and Restrictions. A. Single Use. This Licence allows you to install, use and run one (1) copy of the Apple Software on a single Apple-branded computer at a time. You agree not to install, use or run the Apple Software on any non-Apple-branded computer, or to enable others to do so. This Licence does not allow the Apple Software to exist on more than one computer at a time, and you may not make the Apple Software available over a network where it could be used by multiple computers…”
According to the above, Mac OS X may legitimately run only on Apple-branded hardware marketed by the Cupertino house, or by other parties having particular agreements with the latter (currently none). A corollary of this is that the conduct of someone installing software covered by the above licence on non-Apple hardware is illegitimate.
It is easy to trace the Psystar case to this category.
The aforementioned company in fact provides (provided…?) its customers with non-Apple machines on which software covered by the recalled licence is preinstalled. Psystar, sued, structured its defence by arguing that the Apple licence would represent a violation of antitrust laws, in particular the Sherman Act and the Clayton Act. In summary, Apple was charged with applying monopolistic practices: through its licensing policy, the Cupertino company would have significantly affected the user’s ability to autonomously choose the hardware…
The thesis was clearly rejected: it cannot be said that Apple is in a monopoly position, considering that in the operating systems market there are at least two solid alternatives such as Windows and, at least in part, Linux (for example in the “server” version operating systems market). In conclusion one cannot speak of single-brand-market.
Despite the position taken by the California court, the false myth is being created in the “hackintosh” environment that in Europe the Apple licence would not hold up against a contestation for violation of competition rules under art. 81 and 82 et seq. of the TCE (Treaty of the European Community). Such analysis rests on weak foundations; art. 81 in fact provides for sanctions where there are agreements between companies that effectively diminish competition, and art. 82 provides for abuse of dominant position.
Now, in the case at hand the logical-legal premises for applying said rules are missing: in fact there is no agreement between companies (Apple acts entirely autonomously based on its own business model that does not include agreements with any other player on the market and, even where it existed, users could still turn to other players to obtain a substitute solution), nor a dominant position, considering that Apple’s market shares do not place it among the parties that EU law defines as in dominant position — this position consisting in a situation of economic power thanks to which the company can “act in a manner significantly independent from its competitors, its customers and, ultimately, consumers” (COM(2008) 832 Def. — Commission Communication, Guidance on the Commission’s enforcement priorities in applying article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings). Established that the business model is not anti-competitive, it would remain to verify whether it is actually lawful to impose such a restricted and limited use of the software.
Of particular interest on this point is the recent harmonisation directive DIRECTIVE 2009/24/EC OF THE EUROPEAN PARLIAMENT AND COUNCIL of 23 April 2009 on the legal protection of computer programmes, and its recital no. 13 which reads:
“The exclusive rights of the author to prevent unauthorised reproduction of his work should be subject to a limited exception in the case of a computer programme to allow the reproduction technically necessary for the use of that programme by the lawful acquirer; this means that the contract may not prohibit the acts of loading and running necessary for the use of a copy of a programme that has been lawfully acquired and the act of correcting its errors. In the absence of specific contractual provisions, particularly in the case of sale of a copy of a programme, the lawful acquirer of said copy may carry out any other act necessary for the use of said copy, in conformity with its intended purpose”.
In line with this is art. 5 entitled “Exceptions to the restricted acts” which reads:
“In the absence of specific contractual provisions, the acts referred to in article 4 paragraph 1 letters a) and b) shall not require authorisation by the right holder where they are necessary for the use of the computer programme by the lawful acquirer in accordance with its intended purpose, including for error correction.”
To the above provisions echoes the content of art. 64-ter of the LDA.
As can be inferred from the above, in exercising their rights, the author may limit the use of the programme only where there is a precise contractual clause, a clause which, in the case of MAC OS X, is well clear and present in the licence at art. 2/A. The use restriction imposed by Apple is therefore well valid in the “Old continent”.
Psystar, Pearc in Europe, and all the other companies that supply PCs on which Mac OS X is installed therefore violate the licence. Different and more complex is the case of ApplePC, and even more particular, the case of EFI-X, but we will deal with this in the second part of this analysis.
In the first part of this analysis we examined the Psystar case and demonstrated how, in theory, even in the old continent those who sell non-Apple PCs with Mac OS X pre-installed — like the German PearC — are potentially “outlaws”.
In the second part we will instead deal with two slightly different cases, namely EFI-X (the USB module that allows to install Mac OS X on one’s own compatible PC) and Apple PC.
In both cases the violation of the licence obligations is demanded of the end user, since the companies simply prepare systems suitable to make the control system implemented in the “Apple” OS recognise the necessary hardware. In this way the selling company does not put in place any violation of the licence, limiting itself to providing original licences. If this is true in any case it does not mean that, by operating in this way, the company does not engage in unlawful conduct.
Indeed, even just limiting ourselves to Italian legislation (consider that the legislations of the EU area countries are similar on these points and regulation tends to be uniform also in non-European countries), art. 102-quater states that “the holders of copyright and related rights as well as of the right referred to in art. 102-bis, paragraph 3, may apply on protected works or materials effective technological protection measures comprising all technologies, devices or components which, in the normal course of their operation, are destined to prevent or limit acts not authorised by the right holders”.
The rule, in indicating “all technologies”, remains open to any kind of solution whose purpose is the exercise of rights not authorised by the licensee. To protect this faculty of the holder, in this case identifiable with Apple, the legislator has introduced 2 provisions: the first, a general rule, provides that:
“Whoever abusively duplicates, for profit, computer programmes, or for the same purposes imports, distributes, sells, holds for commercial or business purposes, or rents programmes contained in media not marked by the Italian Society of Authors and Editors (SIAE) is subject to the penalty of imprisonment from six months to three years and a fine from 2,582 to 15,493 euros.
The same penalty applies if the fact concerns any means intended solely to allow or facilitate the arbitrary removal or functional circumvention of devices applied to protect a computer programme. The penalty is not less in the minimum than two years of imprisonment and the fine of 15,493 euros if the fact is of significant seriousness.”
The second provision, in art. 171-ter — a special rule with respect to 171-bis, applicable to conduct in which a profit purpose is implied — reads:
“Whoever for profit, when the fact is committed for non-personal use, is punished with imprisonment from six months to three years and with a fine from 2,582 to 15,493 euros: […]
f-bis) manufactures, imports, distributes, sells, rents, transfers under any title, advertises for sale or rental, or holds for commercial purposes equipment, products or components, or provides services that have the prevalent purpose or commercial use of circumventing effective technological measures referred to in art. 102-quater, or that are mainly designed, produced, adapted or made for the purpose of making possible or facilitating the circumvention of said measures.”
As can well be inferred from the parts in bold, the conduct of those who produce systems designed to circumvent protection measures is anything but lawful.
There is no doubt at this point, the reference rule having been found, that whoever proposes Mac clones — in addition to having to assess their behaviour on the basis of the unfair competition paradigm as previously indicated — must also evaluate possible violations of the rule of art. 171-ter, considering that in these cases it is expressly indicated on the website or in the user manual that the hardware sold is suitable and designed to run Mac OS X, perhaps indicating which installation procedure to follow.
At this point — having proven the validity of the licence, given the violations — one might wonder: when will there be a Psystar case also in Europe or, why not, in Italy?
The answer might be never, or rather never before the conclusion of the Psystar affair. The impression is in fact that Apple does not want to venture into a terrain that is anyway insidious and energy-consuming such as Intellectual Property and Competition, without an illustrious precedent. Useless to open more fronts at this moment; in Cupertino they have perhaps assessed that, the licence’s resistance in court having been proven and a positive case history having been obtained, it will be much easier to bring the “cloners” to milder counsel, also in Europe and why not, in Italy.