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Apple (NSDQ: AAPL) won an appeal yesterday that confirmed it can stop others from selling clones of its popular computers. But the court also dealt a setback to Apple’s obsession with secrecy when it rejected the company’s attempts to seal documents related to the case.
The unanimous three-judge ruling was handed down by California’s 9th Circuit Court of Appeals, a court that is an authority on computer and technology issues. The case was about a company called Psystar that came up with a way to provide its customers with Mac-like laptops for $699. It did this by copying Apple’s operating system onto cheaper computers.
Psystar also shipped its computers, called “OpenMacs”, with a disc containing an authorized copy of the Apple software. The point of including the disc was not for the customer’s benefit — the $699 computers already had the software installed — but an attempt to get around copyright law.
When it was sued, Psystar tried to argue that Apple was abusing copyright by refusing to let people use software that had they validly purchased. The argument was based on the legal rule that a copyright owner’s rights expire after an article has been sold (this is why you can sell a used book or CD). In the case of Psystar’s Mac clones, however, the court ruled that the principle did not apply because people did not actually own the software but instead used it subject to a license from Apple. The license amounts to a contract that limits how the software can be used.
The outcome of the appeals court decision is not a great surprise because the software license theory is a long-established part of the legal landscape. What did come as a surprise, however, is a short section at the end of the ruling that said a lower court was wrong in letting Apple seal documents related to the case. The 9th Circuit said it had joined another influential court in believing there is “a strong presumption in favor of access” when it comes to court records.
This could prove bothersome for Apple, which is known for being highly secretive, even by the standards of technology companies. In legal matters, Apple routinely tries to seal anything and everything related to the hundreds of lawsuits in which it has been involved. One prominent recent example is the case in which a patent troll called Lodsys is suing companies that develop apps for the Apple store. Apple claims that it has a license that protects the developers and has filed a copy with the court — but then convinced the court to promptly seal the license.
In its decision, the California court may be sending a message that Apple and others are going too far with their requests to conceal documents, and that iit s time for them to be more transparent in their legal proceedings.