## Facts

- Apple developed and sold the Mac OS X operating system, distributed both preinstalled on Apple computers and as a standalone product subject to a Software License Agreement (SLA).
- The SLA restricted installation and use of Mac OS X to Apple-branded hardware.
- Apple used technological protection measures within Mac OS X to prevent operation on non-Apple computers.
- Psystar manufactured and sold non-Apple computers with Mac OS X installed.
- Psystar bought retail copies of Mac OS X, modified the software to run on its hardware, copied and installed the modified system onto its machines, and shipped an unopened retail copy of Mac OS X with each computer.
- Apple sued for copyright infringement and for violations of the DMCA’s anti-circumvention provisions, and also asserted related state-law claims.
- The district court granted summary judgment to Apple on copyright and DMCA liability, rejected Psystar’s copyright misuse defense, entered a permanent injunction, and granted motions sealing certain summary-judgment materials.
- On appeal, Psystar did not contest infringement findings, but challenged the rejection of copyright misuse, the permanent injunction, and the sealing orders.

## Issues

1. Whether Apple’s restriction limiting Mac OS X use to Apple-branded hardware constituted copyright misuse, including whether Psystar could invoke first sale principles against Apple’s software licensing terms.
2. Whether the district court abused its discretion by issuing a permanent injunction against Psystar’s infringement and DMCA violations, including the scope of relief.
3. Whether sealing dispositive-motion materials was justified despite the presumption of public access to judicial records.

## Decision

- The Ninth Circuit affirmed the rejection of Psystar’s copyright misuse defense.
- The court held Apple’s distribution terms constituted a license rather than a sale, so Psystar’s first sale theory could not defeat the license restrictions.
- The court affirmed the permanent injunction, concluding the district court properly applied the four-factor test for equitable relief.
- The court vacated the sealing orders, finding the record did not supply an adequate basis for sealing Apple’s materials, and remanded for further proceedings on access.

## Legal Principles

- Under Ninth Circuit law, software distribution may be treated as a license rather than a sale when the copyright owner (1) specifies a license, (2) imposes significant use restrictions, and (3) retains title; in that event, first sale protections do not apply to downstream uses inconsistent with the license.
- Copyright misuse bars enforcement only when the copyright holder uses copyright to secure rights beyond the statutory grant (such as suppressing development of competing works), not merely by imposing use restrictions on its own copyrighted work through licensing.
- A permanent injunction in copyright and DMCA cases must satisfy the traditional equitable factors (irreparable injury, inadequacy of legal remedies, balance of hardships, and public interest).
- Judicial records attached to dispositive motions are subject to a strong presumption of public access; sealing requires a sufficiently specific, record-supported justification.

## Conclusion

The Ninth Circuit held that Apple’s Mac OS X license restriction to Apple-branded hardware was enforceable and not copyright misuse, upheld an injunction stopping Psystar’s infringing and circumvention conduct, and vacated sealing orders because confidentiality assertions did not justify restricting public access to summary-judgment materials.


Apple Inc. v. Psystar Corp., 658 F.3d 1150 (9th Cir. 2011)