Apple Inc. v. Psystar Corporation

Filing 41

Answer to Amended Complaint 38 Amended Complaint, Answer and Affirmative Defenses of Psystar Corporation to Apple Inc.'s First Amended Complaint byPsystar Corporation. (Grewe, Christopher) (Filed on 12/16/2008)

Apple Inc. v. Psystar Corporation

Doc. 41

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1 ROBERT J. YORIO (SBN 93178) [e-mail] 2 COLBY B. SPRINGER (SBN 214868) [e-mail] 3 CHRISTOPHER P. GREWE (SBN 245938) [e-mail] 4 CARR & FERRELL LLP 2200 Geng Road 5 Palo Alto, California 94303 Telephone: [phone] Facsimile: [phone] 7 Attorneys for Defendant/Counterclaimant PSYSTAR CORPORATION 8 9 10 11 12 13 14 15 v. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION APPLE INC., a California corporation, Plaintiff, CASE NO. CV-08-03251-WHA ANSWER AND AFFIRMATIVE DEFENSES OF PSYSTAR CORPORATION TO APPLE INC.'S FIRST AMENDED COMPLAINT JURY TRIAL REQUESTED

PSYSTAR CORPORATION, a Florida 16 Corporation, and Does 1-10, inclusive, 17 18 19 20 21 22 23 24 25 26 27 28 Defendants. AND RELATED COUNTERCLAIMS

Defendant and Counterclaimant Psystar Corporation (hereinafter PSYSTAR) responds to the first Amended Complaint for Copyright Infringement, etc. (hereinafter "First Amended Complaint") of Plaintiff and Counterdefendant Apple Inc. (hereinafter PLAINTIFF or APPLE) as follows:

-1Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)
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1 2 3 1.

BACKGROUND ALLEGATIONS

PSYSTAR admits that PLAINTIFF is a California corporation with its headquarters and

4 principal place of business at 1 Infinite Loop, Cupertino, California. PSYSTAR admits that 5 PLAINTIFF sells hardware, software, and services including the Macintosh computer, the iPod 6 music player, and the iPhone. PSYSTAR admits that the PLAINTIFF was founded in 1976 and 7 that PLAINTIFF has been referred to as "one of the most innovative companies in the world." 8 PSYSTAR lacks information or knowledge as to the number of persons employed by the 9 PLAINTIFF; PSYSTAR likewise lacks information or knowledge as to the number of stores 10 operated by the PLAINTIFF and on that basis denies those allegations; PSYSTAR admits that 11 PLAINTIFF sells a number of products online. PSYSTAR admits that in 2008, Fortune Magazine 12 named the PLAINTIFF "America's Most Admired Company." 13 2. PSYSTAR admits that PLAINTIFF launched the Macintosh line of computers in 1984 but

14 otherwise denies the allegation that PLAINTIFF is "[a] pioneer of the personal computer 15 revolution." On information and belief, PSYSTAR admits that the Macintosh (or "Mac") utilized a 16 mouse, computer icons, and graphical user interface but lacks information or knowledge as to 17 whether said components and functionality were novel and on that basis denies the remainder of the 18 allegation. PSYSTAR admits that the Macintosh line of computers has included those particular 19 models identified in the third sentence of paragraph 2 of the First Amended Complaint but denies 20 the un-cited reference that said line of computers is "perennially praised" and on that basis denies 21 the remainder of the allegation. PSYSTAR lacks information or knowledge as to the number of 22 Macintosh computers sold by the PLAINTIFF since 2001 and on that basis denies the allegation. 23 3. PSYSTAR admits the allegation that Macintosh computers are considered "famous" and

24 that Macintosh computers are generally considered to be reliable and to enjoy ease-of-use as it 25 pertains to the operating system. PSYSTAR, on information and belief, denies the allegation that 26 development teams of the PLAINTIFF "have seamlessly integrated the hardware and software 27 features of the Macintosh computer[]" and that the Macintosh "is simpler to service, update and 28 -2Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 maintain." PSYSTAR is without information or knowledge as to Consumer Reports' ranking of 2 technical support for or by the PLAINTIFF and on that basis denies the allegation. 3 4. PSYSTAR admits that version 10.0 of the Mac OS X was released in 2001. PSYSTAR

4 admits the allegations of the second sentence of paragraph 4 of the First Amended Complaint. 5 PSYSTAR is without information or knowledge as to whether the unidentified reviewers referenced 6 by the PLAINTIFF in the third and fourth sentences of the paragraph 4 of the First Amended 7 Complaint actually made such statements and on that basis denies the remaining allegations as set 8 forth in paragraph four of the First Amended Complaint. 9 5. PSYSTAR admits that the "color, transparency and animation" and "overall arrangement"

10 of the Mac OS X interface are "unique and creative" with respect to their operative functionality. 11 PSYSTAR admits that the combined Apple mark as purportedly found in the Finder toolbar is 12 "famous" for its functionality and that the Finder toolbar is combined with "a distinctive three13 dimensional applications bar" thereby offering additional functionality for the benefit of the user of 14 the Mac OS X. PSYSTAR denies that the "combination of elements" in the Mac OS X interface is 15 "distinctive," "nonfunctional" and "well known to consumers"; PSYSTAR is without information 16 or knowledge as to whether the aforementioned elements are "associated with the PLAINTIFF and 17 Mac OS X Leopard" and on that basis denies the remainder of the allegation. PSYSTAR admits 18 that the PLAINTIFF refers to the aforementioned combinations as the PLAINTIFF's "Trade Dress" 19 but denies that any legal protections offered by any associated theory are available and/or valid. 20 6. PSYSTAR admits that the Mac OS X has been the subject of media discussion and that the

21 Mac OS X--if the PLAINTIFF means to refer to the same as "[t]he product"--has received 22 "significant acclaim." PSYSTAR is without information or knowledge as to whether the sale of 23 Mac computers has "surged," whether the growth of any such sales is "at a faster pace than the 24 personal computer market in general," and whether any such sales are related to the Mac OS X and 25 on that basis denies the assertion. 26 7. PSYSTAR admits that the PLAINTIFF manufacturers and sells a product known as the

27 Xserve rack-mount server. PSYSTAR admits that the Xserve uses an iteration of one or more 28 -3Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 components referenced as the Mac OS X Leopard Server. PSYSTAR admits that the Mac OS X 2 Leopard Server has been the subject of media discussion. 3 8. PSYSTAR admits that the PLAINTIFF alleges ownership in certain registered trademarks

4 as identified in the first sentence of paragraph 8 of the First Amended Complaint and that certain 5 marks and brands of the PLAINTIFF have been referenced by others as being "one of the most 6 famous brands in the world." PSYSTAR admits that the PLAINTIFF promotes, offers, and sells 7 computers, goods, and services in interstate commerce but is without information or knowledge as 8 to the time and effort corresponding to such promotions, offers, and sales and/or the specific 9 trademarks used with such promotions, offers, and sales and on that basis denies the allegation. 10 PSYSTAR is without information or knowledge as to the promotional expenditures of the 11 PLAINTIFF and whether such expenditures are related to the trademarks identified in the third 12 sentence of paragraph 8 of the First Amended Complaint and on that basis denies the allegations. 13 PSYSTAR denies the allegation that the PLAINTIFF's brand, unidentified marks, and purportedly 14 distinctive trade dress (if any) are "synonymous" with anything and on that basis denies the 15 allegation. PSYSTAR admits that BusinessWeek Magazine has identified the PLAINTIFF as the 16 "World's Most Innovative Company." PSYSTAR is without information or knowledge as to 17 whether the unidentified independent research organizations referenced by the PLAINTIFF in the 18 final sentence of paragraph 8 of the First Amended Complaint actually made such determinations 19 and on that basis denies the allegation. 20 9. PSYSTAR is without information or knowledge as to what the consuming public

21 nationwide associates with or understands any marks or trade dress of the PLAINTIFF to identify 22 and on that basis denies the allegation. PSYSTAR is without information or knowledge as to the 23 quality of any goods or services of the PLAINTIFF and any good will established with respect to 24 the same and on that basis denies the allegations. 25 10. PSYSTAR is without information or knowledge as to the exclusivity and frequency of use

26 of any mark of the PLAINTIFF and on that basis denies the allegation; PSYSTAR expressly denies 27 that it is infringing said marks. PSYSTAR admits that certain marks of the PLAINTIFF may be 28 famous but deny that any alleged trade dress enjoys such fame, in part because the alleged trade -4Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 dress of the PLAINTIFF is functional and on that basis denies the allegation; PSYSTAR expressly 2 denies that it is infringing the same. PSYSTAR is without information or knowledge as to what the 3 PLAINTIFF considers its "most important assets" and on that basis denies the allegations; 4 PSYSTAR likes denies the assertion that any trade dress is distinctive and again notes the 5 functionality of the same. 6 11. PSYSTAR admits that it is a corporation organized and doing business under the laws of the

7 State of Florida with its principal place of business at 10475 NW 28th Street, Doral, Florida. 8 12. PSYSTAR admits that for a period of several hours on one day that PSYSTAR colloquially

9 referred to certain computers by the name of `OpenMac' but denies that it currently sells any 10 computer referred to by that name; PSYSTAR denies that it sells any computer under any name that 11 runs a modified, unauthorized version of the Leopard operating system; PSYSTAR likewise denies 12 that it sells any computer running a modified and unauthorized version of other Apple software and 13 firmware. PSYSTAR admits currently selling a computer referred to as the `Open Computer' and 14 that said computer may include the Leopard operating system; PSYSTAR denies that any such 15 computer runs a modified, unauthorized version of the Leopard operating system. PSYSTAR 16 admits that it sells a computer model referred to as the OpenPro but denies that it is named after the 17 MacProŽ or any other APPLE product; PSYSTAR likewise denies that the OpenPro is sold in 18 violation of any legally enforceable provision of the Software License Agreement that purportedly 19 governs the use of the MAC OS X software and/or any other APPLE intellectual property. 20 PSYSTAR denies the assertion that the OpenPro runs a modified unauthorized version of the 21 Leopard operating systems and/or any other Apple software and firmware. PSYSTAR admits that 22 it offers the Open Computer for sale online and that PSYSTAR ships said computer throughout the 23 United States including into the Northern District of California. PSYSTAR admits that it has made 24 statements concerning the number of computers sold. PSYSTAR denies the allegations in the final 25 sentence of paragraph 12 of the First Amended Complaint, specifically: that PSYSTAR makes 26 copies of the Leopard software; that PSYSTAR offers downloads of `updates' to the Leopard 27 software from the website www.psystar.com; that PSYSTAR copies any "updates" generated by 28 -5Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 the PLAINTIFF; and/or that PSYSTAR generates unauthorized, modified versions of software 2 updates from the PLAINTIFF. 3 13. PSYSTAR admits that it has offered for sale a series of rack-mounted servers referred to as

4 the OpenServ. PSYSTAR otherwise denies each and every allegation of paragraph 13 of the First 5 Amended Complaint. 6 14. PSYSTAR admits that it distributes a "restore disk" but denies that said disk violates any

7 legally enforceable term of the Software License Agreement that purportedly governs the use of the 8 Mac OS X and/or any other APPLE intellectual property. PSYSTAR denies the allegation that it 9 provides technical and support and assists its customers in an effort to violate the terms of the 10 Software License Agreement. 11 15. PSYSTAR admits that it is working to develop any number of products that will run a

12 number of different operating systems thereby providing its customers with flexibility and choice 13 with respect to the design and operation of their personal computer. PSYSTAR otherwise denies 14 the allegations of paragraph 15 of the First Amended Complaint. 15 16. PSYSTAR is without information or knowledge as to the allegations of paragraph 16 of the

16 First Amended Complaint and on that basis denies each and every allegation therein. 17 17. PSYSTAR admits that the PLAINTIFF seeks an injunction against the alleged

18 misappropriation and alleged infringement of the PLAINTIFF's allegedly proprietary software and 19 alleged intellectual property; PSYSTAR denies that it has misappropriated any such proprietary 20 software or intellectual property. PSYSTAR denies that its actions have harmed the consuming 21 public, sells a poor product, and/or has advertised and promoted any such product in a manner that 22 falsely and unfairly implied an affiliation with the PLAINTIFF. PSYSTAR denies that its action 23 have and/or continue to cause harm to the PLAINTIFF; PSYSTAR likewise denies that its actions 24 constitute a misuse of PLAINTIFF's intellectual property. PSYSTAR admits that the PLAINTIFF 25 seeks an award of actual damages (while concurrently denying that any exist), treble damages 26 (while concurrently denying that any such relief is appropriate,), and attorneys' fees and costs 27 (while concurrently denying that any such relief is appropriate); PSYSTAR denies that it has 28 -6Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 engaged in any action that is unfair, unlawful, exploitive, or that otherwise causes consumer 2 confusion and injury nor that any such action has ever existed. 3 18. PSYSTAR admits that APPLE contends that persons other than PSYSTAR are involved in

4 the activities alleged in APPLE's First Amended Complaint. PSYSTAR denies that said activities 5 are unlawful and improper. PSYSTAR likewise denies the suggestion that there exists a concerted 6 effort to commit infringement of APPLE's intellectual property rights, to breach or induce the 7 breach of APPLE's otherwise unenforceable license agreements, and to violate state and common 8 law unfair competition laws. PSYSTAR admits that APPLE contends that it will seek leave to 9 amend its First Amended Complaint upon the discovery of these purported individuals and/or 10 corporations but otherwise denies the allegations set forth in paragraph 18. 11 12 13 14 19. PSYSTAR admits that the Northern District of California has jurisdiction of the present JURISDICTION AND VENUE

15 action in that the PLAINTIFF has brought the action pursuant to, inter alia, the copyright laws of 16 the United States. PSYSTAR denies that it has caused the PLAINTIFF any harm. 17 20. PSYSTAR admits that venue is proper in the Northern District of California in that

18 PSYSTAR has done business in this judicial district. PSYSTAR otherwise denies the allegations of 19 paragraph 20 including that PSYSTAR has committed copyright and/or trademark infringement, 20 breached a contract, engaged in unfair competition, and/or continues to commit such acts in this or 21 any district. PSYSTAR admits that the present action is an Intellectual Property Action and is 22 therefore exempt from the intra-District venue provisions of Local Rule 3-2(c). 23 24 25 26 27 28 -7Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 2 3 21.

GENERAL ALLEGATIONS

PSYSTAR admits that the PLAINTIFF claims to license the use of the Mac OS for use only

4 on Apple-labeled hardware although PSYSTAR is without information or knowledge as to what 5 this otherwise vague and ambiguous terminology (i.e., Apple-labeled hardware) refers. PSYSTAR 6 is without information or knowledge as to what is meant by an "original version of the Mac OS" 7 and on that basis denies the allegations of the second sentence of paragraph 21 of the First 8 Amended Complaint and believes that the Mac OS may be purchased online and/or from any 9 number of resellers such as Amazon, AsenaShop, FadFusion, and SoftwareMedia.com. PSYSTAR 10 admits that the PLAINTIFF states that upgrades to the Mac OS may be licensed separately and, 11 further, that the PLAINTIFF states its license prohibits the use of the Mac OS or upgrades on non12 Apple hardware. 13 22. PSYSTAR admits that a license agreement is attached as Exhibits 1 and 2 to the First

14 Amended Complaint but is without information or knowledge with respect to whether those 15 agreements are provided with each version of the Mac OS X or Max OS X Server and on that basis 16 denies the allegations of the first sentence of paragraph 22 of the First Amended Complaint. 17 PSYSTAR admits that the quoted language matches that language as provided in the exhibit 18 attached to the First Amended Complaint claiming to be the Mac OS X license and, further, that 19 said quoted language also corresponds to that language in the exhibit purporting to be the Max OS 20 X Leopard Server License Agreement; PSYSTAR otherwise denies all remaining allegations of 21 paragraph 22 of the First Amended Complaint including whether or not said terms are valid and/or 22 enforceable. 23 23. 24 24. PSYSTAR admits the allegations of paragraph 23. PSYSTAR admits the allegations of paragraph 24 but only to the extent that PSYSTAR has

25 never engaged in any discussion concerning the allegations of paragraph 24 with the PLAINTIFF; 26 PSYSTAR similarly notes that the PLAINTIFF has never denied PSYSTAR the authorization to 27 install, use, or sell the Mac OS software on any non-Apple-labeled hardware until the filing of the 28 present action. -8Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 2 3 4 25.

FIRST CLAIM FOR RELIEF (Copyright Infringement)

PSYSTAR repeats and incorporates by reference its admission and denials as set forth in

5 paragraphs 1-24 of the present Answer. 6 26. PSYSTAR denies that Max OS, Mac OS X, Mac OS X version 10.5, and Mac OS X Server

7 all constitute "an original work of authorship" "constituting copyrightable subject matter" as those 8 terms are defined by the United States copyright laws and on that basis denies the allegations; 9 PSYSTAR is without information or knowledge as to who contributed to the purported works of 10 authorship identified in paragraph 26 of the First Amended Complaint and on that basis denies the 11 any corresponding allegation; PSYSTAR admits that the PLAINTIFF claims to be the owner of the 12 copyright registrations identified in paragraph 26 of the First Amended Complaint. PSYSTAR is 13 without information or knowledge as to whether registrations should have been granted as to the 14 aforementioned works and on that basis denies the remaining allegations in paragraph 26. 15 PSYSTAR denies the allegation that PSYSTAR has infringed any valid copyright held by the 16 PLAINTIFF. 17 27. PSYSTAR denies the allegations of paragraph 27 including the allegation that PSYSTAR

18 has in anyway infringed any of the PLAINTIFF's exclusive rights under the Copyright Act. 19 28. 20 29. 21 30. 22 31. 23 32. 24 33. 25 26 27 28 -9Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) PSYSTAR denies the allegations of paragraph 28 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 29 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 30 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 31 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 32 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 33 of the First Amended Complaint.

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1 2 3 4 34.

SECOND CLAIM FOR RELIEF (Contributory and Induced Copyright Infringement)

PSYSTAR repeats and incorporates by reference its admissions and denials as set forth in

5 paragraphs 1-33 of the present Answer. 6 35. 7 36. 8 37. 9 38. 10 39. 11 40. 12 41. 13 42. 14 15 16 17 18 43. PSYSTAR repeats and incorporates by reference its admissions and denials as set forth in THIRD CLAIM FOR RELIEF (Violation of the Digital Millennium Copyright Act) PSYSTAR denies the allegations of paragraph 35 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 36 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 37 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 38 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 39 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 40 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 41 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 42 of the First Amended Complaint.

19 paragraphs 1-42 of the present Answer. 20 44. PSYSTAR denies that APPLE employs technological protection measures that effectively

21 control access to APPLE's Copyrighted Works. 22 45. PSYSTAR denies the allegation that it has circumvented a technological copyright

23 protection measure that controls access to APPLE's Copyrighted Works. 24 46. PSYSTAR admits that it has developed means to allow the Mac OS X to operate on non-

25 Apple-Labeled computer hardware systems; PSYSTAR otherwise denies the remaining allegations 26 of paragraph 46 of APPLE's First Amended Complaint. 27 47. PSYSTAR denies that its "code" circumvents a technological measure by virtue of

28 avoiding, bypassing, removing, descrambling, decrypting, deactivating, or impairing a -10Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 technological protection measure in order to gain unauthorized access to APPLE's copyrighted 2 works. 3 48. PSYSTAR denies that it manufactures any product, device, component, technology,

4 software, or `code' that is primarily designed or produced for circumventing any so-called 5 technological protection measure that effectively controls access to copyrighted works or that 6 allows third parties to accomplish the same. 7 49. PSYSTAR denies the allegations of paragraph 49 of the First Amended Complaint

8 including the assertion that PSYSTAR manufactures or markets a so-called Circumvention Device. 9 50. PSYSTAR denies the allegations of paragraph 50 of the First Amended Complaint

10 including the assertion that PSYSTAR has realized a profit by virtue of circumvention of any 11 technological protection measure or trafficking in a circumvention device as is falsely alleged by 12 Apple. 13 51. PSYSTAR denies the allegations of paragraph 51 of the First Amended Complaint

14 including the assertion that APPLE has been damaged by virtue of PSYSTAR's alleged 15 circumvention of any technological protection measure or alleged trafficking in a circumvention 16 device for at least the reasons that PSYSTAR has not engaged in any such activity as is falsely 17 alleged by Apple. 18 52. 19 53. 20 54. 21 22 23 24 25 55. PSYSTAR repeats and incorporates by reference its admissions and denials as set forth in FOURTH CLAIM FOR RELIEF (Breach of Contract) PSYSTAR denies the allegations of paragraph 52 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 53 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 54 of the First Amended Complaint.

26 paragraphs 1-54 of the present Answer. 27 56. PSYSTAR denies the allegations of paragraph 56 of the First Amended Complaint in that

28 the software disk is not sealed or shrink-wrapped. -11Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 57. 2 58. 3 59. 4 5 6 7 8 60.

PSYSTAR denies the allegations of paragraph 57 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 58 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 59 of the First Amended Complaint.

FIFTH CLAIM FOR RELIEF (Inducing Breach of Contract)

PSYSTAR repeats and incorporates by reference its admissions and denials as set forth in

9 paragraphs 1-59 of the present Answer. 10 61. PSYSTAR admits that it is aware of the existence of the License Agreement governing the

11 use of the Max OS X software and certain conditions and terms thereof but lacks information or 12 knowledge as to what particular terms and conditions are referred to by the PLAINTIFF and for 13 that reason denies the allegation. 14 62. PSYSTAR denies that it has advised, encouraged, and assisted others to breach the License

15 Agreement; PSYSTAR has not advised consumers to acquire Mac OS X software and install, use, 16 and run it on non-Apple-Labeled computers. PSYSTAR denies that it has unlawfully induced 17 breach of the License Agreement by others. 18 63. 19 20 21 22 23 64. PSYSTAR repeats and incorporates by reference its admissions and denials as set forth in SIXTH CLAIM FOR RELIEF (Trademark Infringement) PSYSTAR denies the allegations of paragraph 63 of the First Amended Complaint.

24 paragraphs 1-63 of the present Answer. 25 65. PSYSTAR admits that registered marks exist as attached to the First Amended Complaint as

26 Exhibit 3 but is without information or knowledge as to what goods and service those marks pertain 27 and on that basis denies the remaining allegations of paragraph 65. 28 -12Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 66.

PSYSTAR admits that the PLAINTIFF has never expressly consented to the use of any

2 trademark of the PLAINTIFF but alleges that PSYSTAR has never engaged in any discussion 3 concerning the allegations of paragraph 66 with the PLAINTIFF; PSYSTAR further alleges that the 4 PLAINTIFF has never denied PSYSTAR the authorization to use any mark of the PLAINTIFF. 5 PSYSTAR denies that any valid mark has been infringed and on that basis denies the remaining 6 allegations of paragraph 66. 7 67. PSYSTAR admits that it is aware of the PLAINTIFF and its business but denies that

8 PSYSTAR has infringed any valid mark of the PLAINTIFF. 9 68. PSYSTAR denies the allegation that it has engaged in an unauthorized use of any trademark

10 of the PLAINTIFF; PSYSTAR further denies that any action of PSYSTAR has caused deception or 11 confusion or mistake amongst consumers as to the origin, sponsorship, approval, affiliation, 12 connection, or association between the PLAINTIFF and PSYSTAR and on that basis denies the 13 remaining allegations of paragraph 68. 14 69. 15 70. 16 71. 17 72. 18 73. 19 20 21 22 23 74. PSYSTAR repeats and incorporates by reference its admissions and denials as set forth in SEVENTH CLAIM FOR RELIEF (Trademark Infringement) PSYSTAR denies the allegations of paragraph 69 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 70 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 71 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 72 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 73 of the First Amended Complaint.

24 paragraphs 1-73 of the present Answer. 25 75. PSYSTAR is without information or knowledge as to the existence of the unidentified

26 common law trademark rights of the PLAINTIFF and on that basis denies the allegations of 27 paragraph 75 of the First Amended Complaint. 28 -13Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 76.

PSYSTAR is without information or knowledge as to the nature of existence of the

2 unidentified "various marks or . . . [purportedly] distinctive trade dress" referenced in paragraph 3 sixty-two of the First Amended Complaint and on that basis denies those allegations. 4 77. PSYSTAR denies the allegations of paragraph 77 because PSYSTAR has never sought to

5 cause confusion or mistake, or to deceive the public as to the origin, sponsorship, association or 6 approval of goods or services of PSYSTAR or to imply an association with the PLAINTIFF. 7 78. 8 79. 9 80. 10 81. 11 82. 12 83. 13 84. 14 85. 15 86. 16 17 18 19 20 87. PSYSTAR repeats and incorporates by reference its admission and denials as set forth in EIGHTH CLAIM FOR RELIEF (Trade Dress Infringement) PSYSTAR denies the allegations of paragraph 78 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 79 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 80 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 81 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 82 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 83 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 84 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 85 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 86 of the First Amended Complaint.

21 paragraphs 1-86 of the present Answer. 22 88. PSYSTAR is without information and belief as to whether the PLAINTIFF is the owner of

23 the alleged Trade Dress and on that basis denies the allegations of paragraph 88. 24 89. PSYSTAR is without information and belief as to what is well-known among consumers

25 and what has become exclusively associated with the PLAINTIFF and the Leopard version of the 26 Mac OS X and on that basis denies the allegations of paragraph 89. 27 28 -14Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 90.

PSYSTAR denies that PLAINTIFF's alleged Trade Dress is distinctive with respect to the

2 Max OS X Leopard operating system and whether the same distinguishes PLAINTIFF's goods and 3 services and on that basis denies the allegations of paragraph 90. 4 91. PSYSTAR denies that PLAINTIFF's purported Trade Dress is distinctive and on that basis

5 denies the allegations of paragraph 91. 6 92. 7 93. PSYSTAR denies that PLAINTIFF's purported Trade Dress is non-functional. PSYSTAR denies that it has engaged in an unauthorized use of PLAINTIFF's purported

8 Trade Dress and that any activity of PSYSTAR is likely to cause confusion, mistake, or deception 9 with respect to the source of goods and services or as to the affiliation, connection, association, 10 sponsorship or approval of such goods and services and on that basis denies the allegations of 11 paragraph 93. 12 94. 13 95. 14 96. 15 97. 16 98. 17 99. 18 19 20 21 22 100. PSYSTAR repeats and incorporates by reference its admissions and denials as set forth in NINTH CLAIM FOR RELIEF (Trademark Dilution) PSYSTAR denies that it has violated Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). PSYSTAR denies the allegations of paragraph 95 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 96 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 97 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 98 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 99 of the First Amended Complaint.

23 paragraphs 1-99 of the present Answer. 24 101. 25 102. 26 103. 27 104. 28 105. PSYSTAR denies the allegations of paragraph 101 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 102 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 103 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 104 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 105 of the First Amended Complaint. -15Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 106. 2 3 4 5 6 107.

PSYSTAR denies the allegations of paragraph 106 of the First Amended Complaint.

TENTH CLAIM FOR RELIEF (State Unfair Competition)

PSYSTAR repeats and incorporates by reference its admissions and denials as set forth in

7 paragraphs 1-106 of the present Answer. 8 108. 9 109. 10 11 12 13 14 110. PSYSTAR repeats and incorporates by reference its admissions and denials as set forth in ELEVENTH CLAIM FOR RELIEF (Common Law Unfair Competition) PSYSTAR denies the allegations of paragraph 108 of the First Amended Complaint. PSYSTAR denies the allegations of paragraph 109 of the First Amended Complaint.

15 paragraphs 1-109 of the present Answer. 16 111. 17 18 19 20 PSYSTAR expressly denies that the PLAINTIFF is entitled to any of the relief requested in the 21 Claims for Relief. 22 23 24 25 PSYSTAR further denies each and every allegation set forth in the First Amended Complaint to 26 which PSYSTAR has not specifically admitted, controverted, or denied. 27 28 -16Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) GENERAL DENIAL PRAYER FOR RELIEF PSYSTAR denies the allegations of paragraph 111 of the First Amended Complaint.

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1 2

AFFIRMATIVE DEFENSES

3 PSYSTAR asserts the following affirmative defenses and reserves the right to allege additional 4 defenses as they are discovered. 5 6 7 8 9 The PLAINTIFF has failed to state a claim upon which relief can be granted. 10 11 12 13 14 The PLAINTIFF's claims are barred, in whole or in part, by the doctrine of estoppel. 15 16 17 18 19 The PLAINTIFF's claims are barred, in whole or in part, by the doctrine of waiver. 20 21 22 23 24 The PLAINTIFF's claims are barred, in whole or in part, by the doctrine of unclean hands. 25 26 27 28 -17Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) Fourth Affirmative Defense (Unclean Hands) Third Affirmative Defense (Waiver) Second Affirmative Defense (Estoppel) First Affirmative Defense (Failure to State a Claim)

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Fifth Affirmative Defense (Lack of Injury in Fact)

4 The PLAINTIFF cannot satisfy its burden of demonstrating that the PLAINTIFF suffered any 5 injury in fact, nor did the PLAINTIFF suffer any such injury. 6 7 8 9 10 The PLAINTIFF cannot satisfy its burden, in whole or in part, of demonstrating that the present 11 case is a special case. 12 13 14 15 16 The PLAINTIFF lacks standing to assert a claim of infringement of any alleged copyright and/or 17 trademark including, but not limited to, lack of right, title, and interest to bring an action related to 18 the same. 19 20 21 22 23 PSYSTAR has not directly or indirectly--by contribution or inducement--infringed any alleged 24 copyright and/or trademark of the PLAINTIFF. 25 26 27 28 -18Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) Eighth Affirmative Defense (Lack of Infringement of Copyright / Trademark) Seventh Affirmative Defense (Lack of Standing to Assert Copyright / Trademark) Sixth Affirmative Defense (Special Case)

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Ninth Affirmative Defense (Lack of Copyrightable Subject Matter)

4 PLAINTIFF's alleged copyrights lack protectable subject matter in that they lack original 5 expression as required by 17 U.S.C. § 102(a) and/or encompass an idea, procedure, process, 6 system, method of operation, concept, principle, or discovery as prohibited by 17 U.S.C. § 102(b). 7 8 9 10 11 Any reproduction, display, derivation, or distribution of any valid copyright of the PLAINTIFF by 12 PSYSTAR is a fair use protected by the provisions of 17 U.S.C. § 107. 13 14 15 16 17 Any distribution of any valid copyright of the PLAINTIFF by PSYSTAR is subject to the first sale 18 doctrine. 19 20 21 22 23 Any reproduction, display, derivation, or distribution of any valid copyright of the PLAINTIFF by 24 PSYSTAR is subject to an express license by and between the parties including but not limited to 25 the Apple Public Source License and/or one or more other Open Source licenses. 26 27 28 -19Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) Twelfth Affirmative Defense (Express License of Copyright) Eleventh Affirmative Defense (First Sale / Exhaustion of Copyright) Tenth Affirmative Defense (Fair Use of Copyright)

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Thirteenth Affirmative Defense (Implied License to Copyright)

4 Any reproduction, display, derivation, or distribution of any valid copyright of the PLAINTIFF by 5 PSYSTAR is subject to an implied license by and between the parties. 6 7 8 9 10 PLAINTIFF is prohibited from bringing action against PSYSTAR for the alleged infringement of 11 one or more of PLAINTIFF's copyrights for failure to register said copyrights with the Copyright 12 Office as required by 17 U.S.C. § 411. 13 14 15 16 17 PSYSTAR has not willfully infringed--directly or indirectly--any copyright and/or trademark of 18 the PLAINTIFF. 19 20 21 22 23 One or more of PLAINTIFF's trademarks and/or trade dress is functional as prohibited by 15 24 U.S.C. § 1052(e)(5). 25 26 27 28 -20Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) Sixteenth Affirmative Defense (Functionality of Trademark) Fifteenth Affirmative Defense (Lack of Willfulness) Fourteenth Affirmative Defense (Failure to Register Copyright)

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Seventeenth Affirmative Defense (Lack of Association / Lack of Indicia of Source)

4 One or more of PLAINTIFF's trademarks are not associated with any good or service of the 5 PLAINTIFF nor are the trademarks indicative of source of any good or service. 6 7 8 9 10 One or more of PLAINTIFF's trademark and/or trade dress are descriptive and lack requisite 11 secondary meaning within the relevant consuming public as prohibited by 15 U.S.C. § 1052(e)(1). 12 13 14 15 16 One or more of PLAINTIFF's alleged trademarks are generic terms that do not warrant protection. 17 18 19 20 21 There has been no actual confusion with respect to any activity of PSYSTAR and one or more of 22 the trademarks and/or trade dress of the PLAINTIFF. 23 24 25 26 27 28 -21Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) Twentieth Affirmative Defense (Lack of Actual Confusion) Nineteenth Affirmative Defense (Generic Term) Eighteenth Affirmative Defense (Lack of Secondary Meaning of Trademark)

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Twenty-First Affirmative Defense (Lack of Likelihood of Confusion)

4 There is no likelihood that any members of the relevant consuming public will be confused with 5 respect to any activity of PSYSTAR and one or more of the trademarks and/or trade dress of the 6 PLAINTIFF. 7 8 9 10 11 The use of any trademark of the PLAINTIFF by PSYSTAR is a nominative fair use in that the 12 PLAINTIFF's product or service is not readily identifiable without the use of the trademark; 13 PSYSTAR only uses as much of the trademark as is reasonably necessary to identify the 14 PLAINTIFF's products or services; and PSYSTAR does nothing that would, in conjunction with 15 the trademark, suggest to the relevant consuming public a sponsorship or endorsement by the 16 PLAINTIFF. 17 18 19 20 21 The use of any trademark of the PLAINTIFF by PSYSTAR is protected by the Fair Use Doctrine 22 and/or the First Amendment including but not limited to parody, non-commercial use, product 23 comparison, and/or non-competing/non-confusing use. 24 25 26 27 28 -22Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) Twenty-Third Affirmative Defense (Fair Use of Trademark) Twenty-Second Affirmative Defense (Nominative Use of Trademark)

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Twenty-Fourth Affirmative Defense (Lack of Privity)

4 There is no contract by and between PSYSTAR and the PLAINTIFF whereby PSYSTAR could 5 have allegedly breached the same. 6 7 8 9 10 The PLAINTIFF violates Section 16600 of the California Business & Professions Code vis-ŕ-vis an 11 otherwise void contractual arrangement that attempts to restrain PSYSTAR from engaging in a 12 lawful profession, trade, or business; any related contract is therefore unenforceable. 13 14 15 16 17 PLAINTIFF's claims are wholly or partially barred because of a failure of consideration. 18 19 20 21 22 PLAINTIFF's claims are wholly or partially barred because the contract is preempted in whole or 23 in part by federal law. 24 25 26 27 28 -23Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) Twenty-Seventh Affirmative Defense (Preemption) Twenty-Sixth Affirmative Defense (Partial Failure of Consideration) Twenty-Fifth Affirmative Defense (Violation of Section 16600 of the Business & Professions Code)

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Twenty-Eighth Affirmative Defense (Illegality)

4 PLAINTIFF's claims are wholly or partially barred because the contract is unenforceable on the 5 grounds illegality. 6 7 8 9 10 PLAINTIFF's claims are wholly or partially barred in that the contact is unenforceable as being 11 contrary to the public policy of the law of the State of California. 12 13 14 15 16 PLAINTIFF's claims are wholly or partially barred in that the contract is unenforceable in that it is 17 procedurally and/or substantively unconscionable. 18 19 20 21 22 The alleged contract utilizes vague, ambiguous, and otherwise unintelligible terms thereby 23 preventing a meeting of the minds as to the scope, rights, and reservations of the alleged contract. 24 25 26 27 28 -24Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) Thirty-First Affirmative Defense (Vague, Ambiguous, and Otherwise Unintelligible Contract) Thirtieth Affirmative Defense (Unconscionability) Twenty-Ninth Affirmative Defense (Public Policy)

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Thirty-Second Affirmative Defense (Lack of Independently Actionable Claim)

4 PLAINTIFF's unfair competition claims fail to identify a requisite and independently actionable 5 activity of PSYSTAR giving rise to any alleged unfair competition. 6 7 8 9 10 Certain provisions of the alleged contract are unenforceable and therefore severable from any 11 otherwise valid provisions of the contract. 12 13 14 15 16 Enforcement of the alleged contract by and between the PLAINTIFF and PSYSTAR as alleged by 17 the PLAINTIFF would frustrate and cause the alleged contract to operate in a manner contrary to 18 the purpose of the same. 19 20 21 22 23 PSYSTAR has delivered on its consideration in full and the PLAINTIFF, notwithstanding said 24 consideration, now seeks to repudiate the contract. 25 26 27 28 -25Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) Thirty-Fifth Affirmative Defense (Consideration Paid in Full) Thirty-Fourth Affirmative Defense (Frustration of Purpose) Thirty-Third Affirmative Defense (Severability)

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Thirty-Sixth Affirmative Defense (Failure to Act in a Commercially Reasonable Manner)

4 PLAINTIFF's actions are unreasonable in light of the California Commercial Code. 5 6 7 8 9 The PLAINTIFF has attempted to leverage the rights granted under any valid copyright to areas 10 outside the exclusive rights granted by the Copyright Act. The PLAINTIFF has engaged in certain 11 anticompetitive behavior and/or other actions that are in violation of the public policy underlying 12 the federal copyright laws including, but not limited to, a failure to abide by the fair use and first 13 sale doctrines. 14 15 As evidence of the misuse of its copyrights, PSYSTAR is informed and believes that APPLE 16 intentionally embeds code in the Mac OS that causes the Mac OS to malfunction on any computer 17 hardware system that is not an Apple-Labeled computer hardware system. Upon recognizing that a 18 computer hardware system is not an Apple-Labeled computer hardware system, the Mac OS will 19 not operate properly, if at all, and will go into what is colloquially known as `kernel panic.' 20 Through kernel panic, the operating system believes that it has detected an internal and fatal error 21 from which the operating system cannot safely recover. As a result, the operating system 22 discontinues operation. Without a functioning operating system, functionality of the corresponding 23 computer is reduced to near zero. 24 25 In Unix style operating systems like that of the Mac OS, the kernel routines that handle panics are 26 generally known as panic(). Panic() routines are generally designed to output an error message to 27 the display device of the computer, dump an image of kernel memory to disk for postmortem 28 debugging, and then await either manual reboot of the system or automatically initiate the same. -26Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) Thirty-Seventh Affirmative Defense (Copyright Misuse)

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1 Attempts by the operating system to read an invalid or nonpermitted memory address are a 2 common source of kernel panic. Panic may also occur as a result of a hardware failure or a bug in 3 the operating system. While the operating system, in some instances, could continue operation 4 after occurrence of a memory violation, the system is in an unstable state and often discontinues 5 operation to prevent further damage and to allow for diagnosis of the error rather than risk security 6 breaches and data corruption. 7 8 As of the release of Mac OS 10.5, PSYSTAR is informed and believes and thereon alleges that 9 APPLE has continued to cause interoperability issues in its xnu kernel on generic Intel hardware, 10 including kernel panics. A sample and artificially induced kernel panic situation arises in the 11 10.5.5 xnu kernel during the initialization process where the Mac OS detects that the processor of 12 the corresponding computing device is not in a certain family. PSYSTAR is informed and believes 13 and thereon alleges that that `certain family' is the Intel Dual Core/Core/Core2 series of processors, 14 which is inclusive of Apple-Labeled computer hardware systems. 15 16 PSYSTAR is informed and believes and thereon alleges that there is no specific reason as to why 17 this "check" should be present in the code as the kernel is capable of booting on a much broader 18 range of hardware. PSYSTAR is informed and believes and thereon alleges that when the check is 19 patched out, either by binary patching the kernel or source patching and then compiling, the kernel 20 can easy be booted on a Pentium 4 processor. This is something that is currently restricted by the 21 "check" in current versions of the xnu kernel and for no functional reason. This "check" stops the 22 execution of the Mac OS on any x86 processor not sold by Apple--that is, the "check" stops the 23 execution of the Mac OS on any computer that is not an Apple-Labeled computer hardware system. 24 As further evidence of the misuse of its copyrights, PSYSTAR is informed and believes and 25 thereon alleges that APPLE embeds code in the Mac OS that causes the Mac OS to malfunction on 26 any computer hardware system that is not an Apple-Labeled computer hardware system. 27 PSYSTAR is informed and believes and thereon alleges that upon recognizing that a computer 28 hardware system is not an Apple-Labeled computer hardware system, the Mac OS will not operate -27Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 properly, if at all, and will enter into what is colloquially known as an `infinite loop.' An infinite 2 loop is a sequence of instructions in a computer program that endlessly loops. This infinite loop is 3 due either to the loop having no terminating condition or having one that can never be met. Infinite 4 loops cause a program to consume all available processor time. 5 6 As of the release of Mac OS 10.5, PSYSTAR is informed and believes and thereon alleges that 7 APPLE has continued to cause interoperability issues in its xnu kernel on generic Intel hardware 8 including infinite loops. PSYSTAR is informed and believes and thereon alleges that a sample 9 infinite loop arises during restart/reboot after calling modular restart functions. PSYSTAR is 10 informed and believes and thereon alleges that most x86 hardware fail to reboot with the stock xnu 11 kernel due to this infinite loop. 12 13 There is no specific reason as to why this infinite loop is present in the code as the kernel is capable 14 of restating/rebooting on a much broader range of hardware. Thus, the restart/reboot infinite loop 15 exists for no functional reason. This loop stops the execution of the Mac OS on any x86 processor 16 not sold by Apple--that is, an Apple-Labeled computer hardware system. 17 18 PSYSTAR is informed and believes, and thereon alleges, that APPLE is engaged in conduct that 19 constitutes misuse of its copyright by preventing the proper operation of the Mac OS on any 20 computer hardware system that is not an Apple-Labeled computer hardware system. Customers 21 purchasing the Mac OS are thereby forced to purchase, and only purchase, an Apple-Labeled 22 computer hardware system if they wish to have the Mac OS operate sans kernel panic or an infinite 23 loop. 24 25 In conjunction to technically preventing the Mac OS from operating on any computing device other 26 capable of executing the Mac OS including those that are not an Apple-Labeled computer hardware 27 system, the EULA for the Mac OS X Leopard and MAC OS X Leopard Server (collectively 28 -28Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 referenced herein as the aforementioned Mac OS), specifically--and by APPLE's own admission 2 in paragraph 22 of its First Amended Complaint--states: 3 4 5 6 7 8 9 10 "1. General. The software (including Boot ROM Code) . . . accompanying this License whether preinstalled on Apple-labeled hardware, on disks, in read only memory, or any other media or in any other form (collectively the `Apple Software') are licensed, not sold, to you by Apple Inc. (`Apple') for use only under the terms of this License . . . ." 2. Permitted License Uses and Restrictions. A. Single Use. This license allows you to install, use and run (1) copy of the Apple Software on a single Apple-labeled computer at a time. You agree not to install, use, or run the Apple Software on any non-Apple-Labeled computer or enable another to do so.

11 (emphasis added). 12 13 APPLE leverages its copyrights in the Mac OS to require customers to agree to install, use, or run 14 the Mac OS on--and only on--Apple-Labeled computer hardware systems. As such, a customer is 15 prohibited from seeking out and choosing any other computer hardware system that is not an 16 Apple-Labeled computer hardware system on which to install, use, and run the Mac OS. 17 18 As evidenced by the foregoing, APPLE misuses its copyrights in the Mac OS to force purchases of 19 Apple-Labeled computer hardware systems for use in conjunction with the Mac OS. APPLE, 20 therefore, has attempted to (and continues to) leverage the rights granted under any valid copyright 21 to areas outside the exclusive rights granted by the Copyright Act (i.e., forcing purchases of Apple22 Labeled computer hardware systems). APPLE has thus engaged in certain anticompetitive 23 behavior and/or other actions that are in violation of the public policy underlying the federal 24 copyright laws including, but not limited to, a failure to abide by the fair use and first sale 25 doctrines. 26 27 APPLE has leveraged and thereby misused its copyrights through the use of both its EULA and the 28 requirement that the Mac OS be used exclusively on Apple-Labeled computer hardware systems -29Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 notwithstanding the lack of any copyright interest in that hardware. By enforcing this provision in 2 its EULA, APPLE is attempting to obtain, maintain, and/or enjoy rights not granted by the 3 Copyright Act including those wholly unrelated to any valid copyright. 4 5 APPLE likewise purports to use "technological protection measures" to "control access to Apple's 6 copyrighted works." APPLE has accused PSYSTAR of having engaged in the manufacture, 7 importation, offering to the public, provisioning, or trafficking of an as yet unidentified 8 "Circumvention Device" primarily designed or produced for the purpose of circumventing 9 APPLE's technological protection measures and/or allowing third parties to access APPLE 10 copyrights without authorization. APPLE makes these assertions in the context of 17 U.S.C. § 11 1201 et seq. (the DMCA). 12 13 PSYSTAR is informed and believes and thereon alleges that APPLE is leveraging rights granted 14 under any valid copyright to areas outside the exclusive rights granted by the Copyright Act (i.e., 15 forcing purchases of Apple-Labeled computer hardware systems). APPLE has thus engaged in 16 certain anticompetitive behavior and/or other actions that are in violation of the public policy 17 underlying the federal copyright laws including, but not limited to, a failure to abide by the fair use 18 and first sale doctrines. 19 20 APPLE accomplishes this leveraging through the assertion of claims under the DMCA. Through 21 the use of the DMCA, APPLE attempts to leverage its copyright-granted limited monopoly in the 22 Mac OS into a broad monopoly in the independent manufacture of Mac OS capable computer 23 hardware systems by forcing purchases of Apple-Labeled computer hardware systems. 24 Specifically, APPLE alleges that any party utilizing the Mac OS on any computer system that is not 25 an Apple-Labeled Computer Hardware System has engaged in a violation of the DMCA. By 26 attempting to apply the DMCA in this manner, APPLE is attempting to obtain, maintain, and/or 27 enjoy rights not granted by the Copyright Act including those wholly unrelated to any valid 28 copyright. -30Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA)

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1 2 PSYSTAR is further informed and believes and thereon alleges that APPLE does not actually 3 employ a technological copyright protection measure that effectively controls access to the Mac 4 OS. PSYSTAR is also informed and believes and thereon alleges that any purported technological 5 copyright protection measure does not necessarily and/or effectively control access to a copyrighted 6 work. PSYSTAR further alleges that any PSYSTAR product or technology has a commercially 7 significant purpose or use other than to circumvent a technological measure that effectively controls 8 access to a copyrighted work notwithstanding APPLE's allegations as to the same. PSYSTAR is 9 informed and believes and thereon alleges that APPLE is aware of the foregoing; notwithstanding 10 such knowledge, PSYSTAR alleges that APPLE brought a DMCA claim in an attempt to chill 11 innovation whereby third-parties such as PSYSTAR would not engage in legal and legitimate 12 development of products that compete with Apple-Labeled computer hardware systems. 13 14 PSYSTAR is informed and believes and thereon alleges that APPLE made the foregoing DMCA 15 claims solely to prevent and/or stymie the continued development of a competitive threat to Apple16 Labeled computer hardware systems--that is, computer hardware systems capable of executing the 17 Mac OS that are not Apple-Labeled computer hardware systems. 18 19 20 21 22 APPLE does not employ a technological measure that effectively controls access to a copyrighted 23 work. 24 25 26 27 28 -31Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) Thirty-Eight Affirmative Defense (No Technological Measures Effectively Controlling Access to a Copyrighted Work)

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Thirty-Ninth Affirmative Defense (No Circumvention)

4 PSYSTAR has not circumvented any technological measure that effectively controls access to a 5 copyrighted work. 6 7 8 9 PSYSTAR does not manufacture, import, traffic, offer to the public, or provide a product, device, 10 component, technology, software, or code whose primary purpose is to circumvent a technological 11 measure that effectively controls access to a copyrighted work. 12 13 14 15 16 To the extent that PSYSTAR manufactures or sells any device that might be employed in any 17 conduct related to the circumvention of a technological measure that effectively controls access to a 18 copyrighted work--and without admitting that PSYSTAR does manufacture any such device-- 19 such a device has a significant commercial purpose other than to circumvent a technological 20 measure that effectively controls access to a copyrighted work. 21 22 23 24 25 To the extent that PSYSTAR manufactures or sells any device that might be employed in any 26 conduct related to the circumvention of a technological measure that effectively controls access to a 27 copyrighted work--and without admitting that PSYSTAR does manufacture any such device-- 28 PSYSTAR contends that any such device is utilized by third-parties acting beyond the control of -32Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) Forty-Second Affirmative Defense (Lack of Proximate Cause) Forty-First Affirmative Defense (Significant Commercial Purpose) Fortieth Affirmative Defense (No Circumvention Device)

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1 PSYSTAR whereby these third-parties utilize any such device in an unauthorized and otherwise 2 unexpected or unanticipated manner not intended by PSYSTAR. 3 4 Dated: December 16, 2008 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -33Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) By: /Colby B. Springer/ ROBERT J. YORIO COLBY B. SPRINGER CHRISTOPHER P. GREWE Attorneys for Defendant/Counterclaimant PSYSTAR CORPORATION

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DEMAND FOR JURY TRIAL

3 Defendant and Counterclaimant PSYSTAR hereby demands a jury trial of all issues in the above4 captioned action that are triable to a jury. 5 6 Dated: December 16, 2008 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -34Psystar Corporation's Answer to Apple Inc.'s First Amended Complaint (Case No. CV-08-03251-WHA) By: /Colby B. Springer/ ROBERT J. YORIO COLBY B. SPRINGER CHRISTOPHER P. GREWE Attorneys for Defendant/Counterclaimant PSYSTAR CORPORATION

CARR & FERRELL LLP