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Case 1:09-cv-22535-WMH Document 10 Entered on FLSD Docket 12/10/2009 Page 1 of 29

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

PLAINTIFF PSYSTAR’S RESPONSE TO APPLE’S MOTION TO TRANSFER

Case No. 09-22535-CIV-
HOEVELER

Psystar Corp.
Plainti?,
v.
Apple, Inc.
Defendant.

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Contents

1
2
3
4
5

6

Authorities
Exhibits
Introduction
The First-Filed Rule Does Not Apply
Transfer Under §1404(a) Is Inappropriate Because This Court Is At
Least As Convenient For The Parties As The Northern District of California 16
Conclusion
20

iii
vi
1
1

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1 Authorities

AG Leader Technology, Inc. v. NTech Industries, 574 F. Supp. 2d 1011
(S.D. Iowa 2008)

Attorney Yellow Pages.com, L.L.C. v. Advice Co., No. CV-09-282-PHX-
LOA, 2009 WL 1211662 (D. Ariz.)

AU Optronics Corp. v. LG.Philips LCD Co., No. 07-C-137-S, 2007 WL
5613513 (W.D. Wis.)

Baskin v. Bath Township Board of Zoning Appeals, 15 F.3d 569 (6th
Cir. 1994)

16

12

3

3

BellSouth Advertising & Publishing Corp. v. Real Color Pages, Inc., 792
F. Supp. 775 (M.D. Fla. 1991)

14

Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599 (5th Cir. 1999)

10, 11, 12

Carter v. Nicholson, No. 07-20169, 2007 WL 3316086 (5th Cir. 2007)

Central States Industrial Supply, Inc. v. McCullough, 218 F. Supp. 2d
1073 (N.D. Iowa 2002)

Chase Federal Savings & Loan Ass’n v. Chase Manhattan Financial Ser-
vices Inc., 681 F. Supp. 771 (S.D. Fla. 1987)

Clergy Financial, LLC v. Clergy Financial Services, Inc., 598 F. Supp. 2d
989 (D. Minn. 2009)

Cosmair, Inc. v. Dynamite Enterprises, Inc., No. 85-651, 1985 WL 2209
(S.D. Fla.)

12

3

19

15

19

Crawley v. Hamilton County Commissioners, 744 F.2d 28 (6th Cir. 1984) 4

Data Management, Inc. v. Control Module, Inc., No. 3:07-cv-966-O, 2009
WL 424158 (N.D. Tex.)

8

iii

Case 1:09-cv-22535-WMH Document 10 Entered on FLSD Docket 12/10/2009 Page 4 of 29

Design Bureau Corp. v. Colvin, No. 08-22455, 2009 WL 2576372 (S.D.
Fla.)

Designer’s View, Inc. v. Publix Super Markets, Inc., 764 F. Supp. 1473
(S.D. Fla. 1999)

Facebook, Inc. v. Power Ventures, Inc., No. C-08-5780-JF-RS, 2009 WL
1299698 (N.D. Cal.)

Finley v. Dun & Bradstreet Corp., No. 05-C-5134, 2006 WL 861920 (N.D.
Ill. 2006)

Frank v. United Airlines, Inc., 216 F.3d 845 (9th Cir. 2000)

In re Transaction Systems Architects, Inc., No. 609, 2000 WL 290351
(Fed. Cir.)

In re Western United Nurseries, Inc., No. MC 96-81-PHX-SMM, 2007 WL
2727301 (D. Ariz. 2007)

Intersearch Worldwide, Ltd. v. Intersearch Group, Inc., 544 F. Supp. 2d
949 (N.D. Cal. 2008)

Lawlor v. National Screen Service Corp., 349 U.S. 322 (1955)

18

19

7

20

9

3

12

14

9

Manuel v. Convergys Corp., 430 F.3d 1132 (11th Cir. 2005)

16, 17

Meekins v. United Transportation Union, 946 F.2d 1054 (4th Cir. 1991)

Mondo, Inc. v. Spitz, No. 97-civ-4822, 1998 WL 17744 (S.D.N.Y.)

National Bancard Corporation v. Visa U.S.A., Inc., 596 F. Supp. 1231
(S.D. Fla. 1984)

National Resources Defense Council v. United States Environmental Pro-
tection Agency, 437 F. Supp. 2d 1137 (C.D. Cal. 2006)

9

16

19

9

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Case 1:09-cv-22535-WMH Document 10 Entered on FLSD Docket 12/10/2009 Page 5 of 29

Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99 S. Ct. 645 (1979)

Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253 (11th Cir. 1996)

11

19, 20

Sensient Colors Inc. v. Allstate Ins. Co., 908 A.2d 826 (N.J. 2006)

Shire U.S., Inc. v. Johnson Matthey, Inc., 543 F. Supp. 2d 404 (E.D.
Pa. 2008)

Solna Web Inc. v. Printed Media Services, Inc., No. 90-0433-CV-W-6,
1990 WL 357918 (W.D. Mo.)

Storage Technology Corp. v. Custom Hardware Engineering & Consulting,
Inc., 421 F.3d 1307 (Fed. Cir. 2005)

Tenneco Oil Co. v. Environmental Protection Agency, 592 F.2d 897 (5th
Cir. 1979)

Texas Air Corp. v. Air Line Pilots Assocation International, No. 88-804,
1989 WL 146414 (S.D. Fla.)

3

7

3

7

16

16

Top Rank, Inc. v. Dona Barbara Restaurant, Inc., 1999 WL 127450 (1999) 19

Ven-Fuel, Inc. v. Department of the Treasury, 673 F.2d 1194 (11th
Cir. 1982)

Ward v. Follett Corp., 158 F.R.D. 645 (N.D. Cal. 1994)

Whirlpool Corp. v. U.M.C.O. Int’l Corp., 748 F. Supp. 1557 (S.D.
Fla. 1990)
17 U.S.C. § 117
28 U.S.C. § 1404(a)

14

14

19

6

1, 16

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2 Exhibits

Exhibit A — Order Denying Apple’s Motion to Enjoin the Florida Action
Exhibit B — Apple’s Motion to Enjoin the Florida Action
Exhibit C — Order re: Cross Motions for Summary Judgment
Exhibit D — Order Granting Motion to Exclude Testimony of Jacques Vidrine
Exhibit E — Order Vacating Pretrial, Case Management, and Scheduling Conferences

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3 Introduction

Psystar Corporation, a Miami-based computer startup, exercised its right as plainti?
to choose the Southern District of Florida as the venue for this antitrust case. Apple
contends that this Court should transfer this case to the Northern District of California
to be consolidated with Apple v. Psystar, a copyright case that Apple ?led in 2008.
Apple contends that transfer is appropriate under the “?rst-?led rule” and 28 U.S.C.
§1404(a), the transfer-for-convenience statute. Transfer is inappropriate under either
theory.

4 The First-Filed Rule Does Not Apply

4.1 This case is ?rst-?led case as to Snow Leopard and Rebel EFI.

4.1.1 Judge Alsup excluded Snow Leopard and Rebel EFI from the

California case after hearing exactly Apple’s arguments.

The ?rst-?led rule does not justify a transfer because this case is the ?rst-?led case with
respect to the products here at issue. This case concerns two products that did not
exist when Apple ?led the California case and that were not the subject of pleadings,
discovery, or litigation in that case: Apple’s new operating-system product, Mac OS
X Snow Leopard; and Psystar’s new virtualization-software product, Rebel EFI.

When Apple moved to reopen discovery in the California case in order to add Rebel
EFI and Mac OS X Snow Leopard to that case, Judge William H. Alsup denied their
motion. Judge Alsup held that Apple’s repeated objections that discovery about Snow
Leopard was irrelevant foreclosed Apple from “revers[ing] ?eld” “[t]o head o? a second
front” in Miami. Judge Alsup wrote:

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“Apple, not Psystar, commenced this action. Apple has fought hard to keep
its unreleased product — Snow Leopard — out of this action by, among other
things, relentlessly objecting to discovery on Snow Leopard as, for example,
at its Rule 30(b)(6) witness deposition and in response to document requests.
These refusals were express, intentional and speci?cally directed at Snow Leop-
ard. It is true that some discovery was permitted on Snow Leopard by Apple,
but it was adamant that Snow Leopard was not relevant (due to its status as
an unreleased product).

“Only after the discovery period closed did Apple release Snow Leopard,
having successfully kept it out of the case. Perhaps to Apple’s surprise, its
opponent Psystar then commenced a separate antitrust action directed at Snow
Leopard in the United States District Court in the Southern District of Florida,
assigned to Judge William Hoeveler. To head o? a second front, Apple now seeks
to reverse ?eld in the instant case and to enlarge it to include Snow Leopard
by way of re-opening discovery and resetting the summary judgment timeline.
In turn, this may aid Apple having the Florida action transferred here.

“Apple’s motion should be and is DENIED. If Snow Leopard was within
the scope of its own complaint herein, as it now suggests, then Apple should
have welcomed discovery thereon rather than, as it did, object to discovery
directed at Snow Leopard and e?ectively taking Snow Leopard out of the case.
Apple even chose when to release Snow Leopard and it chose to do so after all
opportunity to take discovery on it had ended. The problem is one largely of
Apple’s own making. Now that the discovery period has closed, we are well into
the summary judgment stage. Trial is looming early next year. It would now be
too prejudicial and too disruptive to re-open the case on the theory that maybe
the other action will come here too.” Ex. A at 1–2 (emphasis in original).

In so ruling, Judge Alsup considered exactly the arguments about convenience and
concentrating the Apple–Psystar litigation in one court that Apple advances again in
this Court. See Ex. B. (Apple’s motion in the California case to stay or dismiss this
case).

Because Judge Alsup denied Apple’s motion to include the products that are the
subject of this case in the California case, the California case is not an earlier-?led
case about the same or substantially similar subject matter that would trigger the

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?rst-?led rule. See, e.g., In re Transaction Systems Architects, Inc., No. 609, 2000
WL 290351 at *2 (Fed. Cir.) (“The California District Court also determined that
the infringement issues involved in the two cases were not similar because the al-
legedly infringing products were di?erent.”; reporting decision of the United States
District Court for the Southern District of California and denying petition for writ of
mandamus); AU Optronics Corp. v. LG.Philips LCD Co., No. 07-C-137-S, 2007 WL
5613513 at *2 (W.D. Wis.) (?rst-?led rule applied only after amendment in earlier
case added claims raised for the ?rst time in second case).

Some courts express the same point by saying that the ?rst-?led rule does not apply
where the plainti? in the later-?led case cannot receive complete relief in the earlier-
?led case. See, e.g., Sensient Colors Inc. v. Allstate Ins. Co., 908 A.2d 826, 837 (N.J.
2006) (“Zurich has failed to establish a necessary predicate to the application of the
‘?rst-?led’ rule, namely that . . . the New York action a?ords plainti? the opportunity
for the same relief available in New Jersey”); Solna Web Inc. v. Printed Media Services,
Inc., No. 90-0433-CV-W-6, 1990 WL 357918 at *3 (W.D. Mo.) (“It is only when the
two actions are identical that the ?rst to ?le rule is absolutely applicable. Because it
is apparent that the Minnesota suit deals with a more comprehensive set of issues, this
court is of the belief that it would be the more appropriate forum for the litigation of
the rights and remedies of the respective parties.”).

Neither Psystar nor Apple can obtain complete relief in the California case as it
currently exists. This is because Judge Alsup ruled that neither Snow Leopard nor
Rebel EFI would be added to that case. See, e.g., Central States Industrial Supply,
Inc. v. McCullough, 218 F. Supp. 2d 1073, 1086–87 (N.D. Iowa 2002) (“the parallelism
prerequisite looks at the two proceedings as they currently exist, not as they could
be modi?ed to mirror each other”; discussing parallelism in context of Colorado River
abstention, but holding that same analysis applies to ?rst-?led doctrine) (citing Baskin

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v. Bath Township Board of Zoning Appeals, 15 F.3d 569, 572 (6th Cir. 1994), and
Crawley v. Hamilton County Commissioners, 744 F.2d 28, 31 (6th Cir. 1984)). Because
of Judge Alsup’s ruling, this case is the ?rst-?led case — indeed, the only pending case
— covering Snow Leopard and Rebel EFI.

4.1.2 Judge Alsup’s decision to exclude Snow Leopard and Rebel EFI
from the California case was correct because these new products
present a completely di?erent set of factual and legal questions
— about a Psystar software product — from those at issue in
California, which concerned Psystar hardware products.

The California case and the Florida case concern two entirely di?erent Psystar prod-
ucts. Between April 2008 and November 2009, Psystar sold personal computers with
Apple’s OS X operating system preinstalled. Psystar installed its own proprietary
software in addition to OS X in order to make OS X compatible with Psystar’s non-
Apple personal computers. Psystar called these computers Open Computers. When
an end user bought an Open Computer, the end user received a computer with OS X
installed along with an unopened retail copy of OS X. In the California case, Apple
alleged that Psystar’s manufacture and sale of Open Computers constituted copyright
infringement.

Psystar stopped selling Open Computers in November 2009. Although the com-
plaint in this case refers to a new generation of Open Computers preinstalled with
Apple’s new operating system, OS X Snow Leopard, Psystar is not now selling and
does not intend to sell Open Computers running Snow Leopard. Accordingly, those
parts of the complaint that relate to Open Computers running Snow Leopard are now
moot. This leaves Psystar’s antitrust claim — the principal claim in the case — Psys-
tar’s Lanham Act claim, and Psystar’s claim for a declaratory judgment that Rebel
EFI is legal. See First Amended Complaint ¶¶8-b (Rebel EFI), 21-27.

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Starting in October 2009, Psystar sold a separate product called Rebel EFI. Rebel
EFI is a software product that users can install on their own personal computers.
With Rebel EFI, generic personal computers can run OS X. Psystar does not come
in contact with OS X at all in manufacturing or selling Rebel EFI. In particular, in
manufacturing and selling Rebel EFI, Psystar does not install a copy of OS X on any
computer; does not use any kind of imaging station; does not add to, delete from,
or modify any copy of OS X in any way; does not create any DVD’s or other media
containing OS X; and does not even resell retail copies of OS X to end uses.

Each of these facts, present in the case of Open Computers, but absent in the case
of Rebel EFI, was essential to the partial summary judgment that Judge Alsup entered
in favor of Apple:
• Judge Alsup ruled that Psystar infringed Apple’s reproduction right because “it
. . .made copies of Mac OS X and installed those copies on non-Apple computers.”
Ex. C at 4–5. Because Psystar neither makes nor installs any copies of OS X in
manufacturing and selling Rebel EFI, Rebel EFI presents di?erent factual and legal
questions.

• Judge Alsup ruled that Psystar infringed Apple’s distribution right because Psystar
“made an unauthorized copy of Mac OS X from a Mac mini that was placed onto an
‘imaging station’ and then used a ‘master copy’ to make many more unauthorized
copies that were installed on individual Psystar computers.” Ex. C at 7. Because
Psystar does not use an imaging station or a master image containing OS X in
manufacturing and selling Rebel EFI, Rebel EFI presents di?erent factual and
legal questions.

• Judge Alsup ruled that Psystar infringed Apple’s derivative-works right because
Psystar “replac[ed] original ?les in Mac OS X with unauthorized software ?les.
Speci?cally, it made three modi?cations: (1) replacing the Mac OS X bootloader

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with a di?erent bootloader to enable an unauthorized copy of Mac OS X to run
on Psystar’s computers; (2) disabling and removing Apple kernel extension ?les;
and (3) adding non-Apple kernel extensions.” Ex. C at 9. Because Psystar does
not make any modi?cations to OS X — does not even touch or use any copy of OS
X at all — in manufacturing and selling Rebel EFI, Rebel EFI presents di?erent
factual and legal questions.

• Judge Alsup ruled that Psystar violated the anti-circumvention provisions of the
Digital Millenium Copyright Act because Psystar “used decryption software to
obtain access to Mac OS X and to circumvent Apple’s technological measure when
modifying Mac OS X in its production process.” Ex. C at 13. Because Psystar does
not gain acces to OS X or have any kind of production process in which it modi?es
OS X or even touches OS X in manufacturing and selling Rebel EFI, Rebel EFI
presents di?erent factual and legal questions.
Judge Alsup did not decide, because he had no occasion to decide, whether end
users who buy Rebel EFI from Psystar and install their own copy of OS X from Apple
or a third-party reseller on their own personal computers are committing copyright in-
fringement. Such end users are protected by 17 U.S.C. § 117, which provides that “it is
not an infringement for the owner of a copy of a computer program to make . . . another
copy or adaptation of that computer program provided . . . 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.”

Apple argued that § 117 does not apply to Psystar’s manufacture of Open Com-
puters because the copies that Psystar created were for commercial resale and, hence,
not for “internal use.” This argument does not apply to end users who buy Rebel
EFI because such users are not installing OS X for commercial resale and, hence, are
installing OS X for an internal use. And if end users are not committing copyright

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infringement, then the DMCA’s anti-circumvention provisions do not apply to them.
See, e.g., Storage Technology Corp. v. Custom Hardware Engineering & Consulting,
Inc., 421 F.3d 1307, 1318 (Fed. Cir. 2005) (“To the extent that CHE’s activities do
not constitute copyright infringement or facilitate copyright infringement, StorageTek
is foreclosed from maintaining an action under the DMCA”); Facebook, Inc. v. Power
Ventures, Inc., No. C-08-5780-JF-RS, 2009 WL 1299698 at *5 (N.D. Cal.)
(copy-
right infringement is an element of a DMCA claim). For this reason, also, Rebel EFI
presents di?erent factual and legal questions from those that Judge Alsup considered
in California.

Apple contends that this case involves the same subject matter as the California
case because the copyrighted work at issue in this case, OS X Snow Leopard, is a
derivative work of the copyrighted work at issue in the California case, OS X Leopard.
See M. at 10. Apple contends that it follows from this that “a declaration of whether
Psystar infringes Apple’s copyrights in Snow Leopard necessarily includes a determi-
nation of whether Psystar is infringing Apple’s copyrights in Mac OS X and in Mac
OS X Leopard — the very issue Judge Alsup recently decided.” M. at 10.

But the mere fact that Apple might claim (it has not yet done so in its claims in
California or in counterclaims in this case) that Rebel EFI infringes Apple’s copyright
in OS X Leopard in addition to its copyright in OS X Snow Leopard does not mean
that this case and the California case concern the same subject matter. This case
and the California case concern entirely di?erent products, hardware in California,
software here, that infringe, if at all, in entirely di?erent ways. Just as the ?rst-?led
rule does not mean that all suits to enforce a particular patent must be brought in
one court even though they involve very di?erent accused products, see Shire U.S.,
Inc. v. Johnson Matthey, Inc., 543 F. Supp. 2d 404, 409 (E.D. Pa. 2008), the ?rst-?led
rule does not mean that this Court must transfer this case to California simply because

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Apple might, in the future, assert that Psystar’s new products also infringe Apple’s
copyright in OS X Leopard.

Apple recognizes that the facts as pled in the amended complaint show that this
case involves di?erent subject matter from that in the California case. “Psystar al-
leges in the instant action that it defeats the technological protection measures in
Snow Leopard using a new and di?erent circumvention method.” M. at 11.
In re-
sponse, Apple o?ers the a?davits of two witnesses who have not been subject to
cross-examination on this topic. See id. Judge Alsup actually struck one of these wit-
nesses, Jacques Vidrine, from the California case in response to a Psystar motion for
discovery sanctions because Apple failed to disclose him in its initial disclosures. See
Ex. D. Apple cannot prove its side of contested issues of fact by relying on testimony
from a witness who was never subject to cross-examination because he was excluded
from the California case.

Apple suggests that, if Psystar has any evidence to the contrary, “then Psystar can
easily present those di?erences to the court in California.” M. at 11. But this is not
how the ?rst-?led rule works. Apple cannot simply assert, contrary to the complaint,
that this case and the California case assert the same subject matter, then expect
Psystar to rebut that assertion in California. If this were the law, then, by the time
Psystar were to succeed in showing that di?erences exist, and, hence, that the ?rst-?led
rule should not have been applied, it would be too late to avert the transfer because
the case would already be in California. Instead, the law sensibly requires that Apple
demonstrate that Psystar’s complaint puts in issue only what is already at issue in
California. See Data Management, Inc. v. Control Module, Inc., No. 3:07-cv-966-O,
2009 WL 424158 at *3 (N.D. Tex.) (rejecting ?rst-?led rule where movant failed to
show substantial similarity); Ward v. Follett Corp., 158 F.R.D. 645, 648-49 (N.D.
Cal. 1994) (burden on movant to show that ?rst-?led rule applies). Apple admits that

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Psystar’s complaint pleads di?erent issues from those pending in California. See M.
at 11. This admission forecloses application of the ?rst-?led rule.

Apple’s discussion of Psystar’s antitrust claims is similarly misleading. Judge Al-
sup’s decision dismissing (with leave to replead) certain antitrust counterclaims that
Psystar ?led in California does not bar antitrust claims that arise from Apple’s conduct
after those counterclaims were ?led. See Meekins v. United Transportation Union, 946
F.2d 1054, 1058 (4th Cir. 1991) (“res judicata does not bar claims that did not exist
at the time of the prior litigation”); National Resources Defense Council v. United
States Environmental Protection Agency, 437 F. Supp. 2d 1137, 1155 (C.D. Cal. 2006)
(“Claim preclusion does not bar litigants from bringing claims based on conduct that
ocurred after the settlement of a prior suit.”). This is true even if the later claims
arise out of a continuous course of conduct that began before the prior judgment. See
Lawlor v. National Screen Service Corp., 349 U.S. 322, 327 (1955) (antitrust case);
Frank v. United Airlines, Inc., 216 F.3d 845, 851 (9th Cir. 2000). Thus, the antitrust
claims in this case, which arise out of Apple’s continued acts in restraint of trade, are
not barred by Judge Alsup’s prior order.

Moreover, Apple correctly notes that Judge Alsup’s earlier dismissal of Psystar’s
antitrust counterclaims was based on Judge Alsup’s conclusion that the market for
“Mac OS compatible hardware” was not a legally cognizable market de?nition under
the antitrust acts. But Apple fails to address at all the allegation in Psystar’s First
Amended Complaint that “Apple also has and has obtained and maintained a mo-
nopoly in the market for personal computers with a UNIX operating system.” First
Amended Complaint at ¶23; see M. at 13–15 (failing to address this new market
de?nition). Psystar did not make this allegation in California. Judge Alsup made
no decision about whether the market for UNIX computers is an adequate market
de?nition under the antitrust acts.

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This case concerns a software product, Rebel EFI, that did not exist when Apple
?led the California case, that Judge Alsup refused to add to the California case, and
that presents di?erent relevant facts and legal questions from those in the California
case. Because of these di?erences between the issues here and in California, this
case, not the California case, is the ?rst-?led case about Rebel EFI. (To be clear,
Psystar believes that Judge Alsup’s grant of partial summary judgment to Apple was
error. Psystar is appealing. But whatever the merits of Judge Alsup’s decision in the
California case, that decision has no bearing on the conduct at issue in this case.)

4.2 Apple’s arguments that the legal issues in this case are substan-
tially similar to the legal issues in the California case is properly
presented in a motion for summary judgment seeking application
of collateral estoppel or some other preclusion doctrine, not in a
motion to transfer.

The ?rst-?led rule justi?es transfer of a case to a di?erent court when an earlier-?led
case that involves substantially the same facts and legal questions is pending in the
transferee court. The ?rst-?led rule does not justify transfer of a case to a di?erent
court merely because the transferee court has already decided some or all of the issues
presented by the case. When two cases are pending, the ?rst-?led rule determines
which case will proceed. But when one case is complete, a new case is ?led, and one
of the parties argues that the issues in the new case were already decided in the older
case, the ?rst-?led rule does not apply. Preclusion doctrines do.

Cadle Co. v. Whataburger of Alice, Inc., Apple’s principal case on the ?rst-?led
rule, explains the distinction between the ?rst-?led rule and preclusion doctrines nicely:

“1. The Relationship Between the First-To-File Rule and Collateral Estoppel
. . . Cadle’s implicit comparison to the doctrine of collateral estoppel is
inapposite. The comparison does have some surface appeal in light of our

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statement in another case that the ?rst-?led court takes priority “[b]y virtue of
its prior jurisdiction over the common subject matter . . . .” But . . . [a]lthough
both doctrines rest on notions of judicial economy and consistency in judgments,
they address these issues at di?erent times.

“Collateral estoppel is a backward-looking doctrine. Courts apply it to avoid
relitigation of, and inconsistency with, issues already decided by other courts.
See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326, 99 S. Ct. 645, 58 L. Ed.
2d 552 (1979).

“The ?rst-to-?le rule, by contrast, is essentially a forward-looking doctrine.
Courts use this rule to maximize judicial economy and minimize embarrass-
ing inconsistencies by prophylactically refusing to hear a case raising issues
that might substantially duplicate those raised by a case pending in another
court. . . .

“In light of this distinction between collateral estoppel and the ?rst-to-?le
rule, it comes as no surprise that Cadle has not presented any persuasive case
law to support its analogy.” Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d
599, 603–04 (5th Cir. 1999).

Cadle explains that the ?rst-?led rule is a “forward-looking doctrine” that “pro-
phylactically” addresses potential future con?icts between the decisions of two courts
by providing that, when two pending cases cover the same subject-matter, only the
?rst-?led case will proceed. The ?rst-?led rule addresses the situation where two cases
are pending at the same time. See also Manuel v. Convergys Corp., 430 F.3d 1132,
1135 (11th Cir. 2005) (“[w]here two actions . . . are pending in two federal courts”). It
does not address the situation where there is only one case pending, but one of the
parties to that case argues that the issues were already decided in an earlier-?led case.
As the court in Cadle explained, collateral estoppel (and preclusion doctrines like it)
address that “backward-looking” problem.

The litigation in California is virtually complete. The only subject that remains
for decision is the scope of a permanent injunction, if any, to enforce Judge Alsup’s
summary judgment. See Ex. E (order). A hearing on this issue is scheduled for next
Monday, December 14. Final judgment will issue promptly after this hearing. Psystar

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will then take its appeal to the United States Court of Appeals for the Ninth Circuit.
Within the next several weeks, there will be no pending proceeding in the Northern
District of California to which this Court could transfer this case. See Attorney Yel-
low Pages.com, L.L.C. v. Advice Co., No. CV-09-282-PHX-LOA, 2009 WL 1211662
at *2 (D. Ariz.)
(“[T]he First to File Rule is inapplicable in the present scenario
because . . . [t]here is no active pending lawsuit in the Northern District of Califor-
nia, only an appeal to the Ninth Circuit”). Accordingly, under Cadle, we are in the
“backward-looking” situation where preclusion doctrines, not the ?rst-?led rule, apply.
The great bulk of Apple’s brief is dedicated to arguing that various issues in this
case have already been decided by Judge Alsup in the California case. See M. at 9–15.
Psystar does not believe that the issues decided by Judge Alsup are the same as those
to be decided here. Even if Apple were correct, however, this fact would not justify
transfer under the ?rst-?led rule. It would only justify application of collateral estoppel
or some other preclusion doctrine. See, e.g., Carter v. Nicholson, No. 07-20169, 2007
WL 3316086 at *4 (5th Cir. 2007) (where earlier case had already proceeded to judg-
ment, appropriate doctrine was res judicata, not ?rst-?led rule); In re Western United
Nurseries, Inc., No. MC 96-81-PHX-SMM, 2007 WL 2727301 at *8 (D. Ariz. 2007)
(?rst-?led rule did not apply where earlier-?led case had been dismissed and so was
no longer pending).

Apple may raise preclusion issues in this case, but it must do so by establishing
preclusion as a defense. Apple can do this through a 12(b)(6) motion, if Apple believes
preclusion applies on the facts as pled; through a summary-judgment motion, if Apple
believes, after discovery, that there is no issue of fact relevant to the application of a
preclusion doctrine; or, ultimately, by establishing the necessary facts at trial. Psystar
does not believe that any preclusion doctrine applies. This is because the di?erences
between the relevant factual and legal issues in this case and in the California case,

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described in § 4.1 of this brief, mean that the decisions that this Court will have to
make have not already been made by Judge Alsup.

Apple’s motion is not a motion to dismiss asserting preclusion. Even if it were,
however, it would lack merit. Apple’s preclusion arguments are based on factual
assertions that contradict the plausible factual allegations of the complaint, which
must be taken as true on a motion to dismiss. For example, Apple claims that “[a]ll
versions of Mac OS X, including Snow Leopard, are protected by the same technological
protection measures.” But this directly contradicts the factual allegations in paragraph
8 of the First Amended Complaint:

“The manner in which Psystar computers run Mac OS X Snow Leopard is
entirely di?erent from the manner in which Psystar computers run Mac OS X
Leopard. Both the technical details of Apple’s attempt to tie Mac OS X to
Macintoshes and the computer software that Psystar uses to enable Mac OS
X to run on Psystar computers changed with the release of Snow Leopard.”
First Amended Complaint at ¶ 8; see also id. at ¶ 13 (“Both the technical
mechanisms used by Apple to tie Mac OS X Snow Leopard to Macintoshes
and the technology used by Psystar to get Mac OS X Snow Leopard to run on
Psystar computers are new and di?erent.”).

To establish a preclusion defense, Apple must show, through discovery in this case,
that Psystar cannot prove this factual allegation. Apple will be unable to do this.
Until it does, it would be inappropriate to dismiss this case on grounds of preclusion.
Because Apple’s arguments for application of the ?rst-?led rule do not justify appli-
cation of that rule, but are, rather, misguided arguments for application of a preclusion
doctrine, Apple’s motion should be denied.

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4.3 This case does not trigger any special rule for staying or transferring

“anticipatory litigation.”

Apple contends that, even if this case is the ?rst-?led action with respect to Snow
Leopard and Rebel EFI, this Court should still transfer this case to the Northern
District of California because this case constitutes “anticipatory litigation.” See M. at
15–17. All declaratory-judgment cases are anticipatory litigation in the sense that they
seek a declaration of rights necessary to avoid future litigation. Declaratory-judgment
cases cannot be stayed merely because they are anticipatory in this sense.

As Apple’s cases explain, a case is only anticipatory in the relevant sense if the
plainti? ?led it immediately after receiving written notice from the defendant of the
defendant’s intent to ?le suit. See Ven-Fuel, Inc. v. Department of the Treasury, 673
F.2d 1194, 1195 (11th Cir. 1982) (Ven-Fuel ?led suit the day after “the Government
advised Ven-Fuel that if Ven-Fuel did not pay a certain assessed penalty ‘forthwith,’
then the Government would institute judicial proceedings to collect that penalty”);
BellSouth Advertising & Publishing Corp. v. Real Color Pages, Inc., 792 F. Supp. 775,
779 (M.D. Fla. 1991) (suit ?led the day after counsel received a letter stating “It
appears, regretfully, that BAPCO has no choice other than to ?le suit in this matter.
Please let us know today if you are willing to accept service.”).

Apple had given no speci?c, concrete indications that it intended to sue Psystar over
Snow Leopard or Rebel EFI before Psystar ?led this case. “A suit is ‘anticipatory’
for the purposes of being an exception to the ?rst-to-?le rule if the plainti? in the
?rst-?led action ?led suit on receipt of speci?c, concrete indications that a suit by the
defendant was imminent.” Intersearch Worldwide, Ltd. v. Intersearch Group, Inc., 544
F. Supp. 2d 949, 960 (N.D. Cal. 2008). Apple had not even sent a letter to Psystar
complaining about Psystar’s new products. See id. (letter alone would be insu?cient).
Apple was betting that it would prevail in the California case and that the changes

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that Apple’s engineers made to Snow Leopard would confound Psystar’s engineers,
resulting in the end of Psystar’s business. Apple was wrong: it turns out that Apple’s
decision not to seek an amendment in California was the wrong strategy.

Apple claims to have been unaware of Psystar’s plans to release the products here at
issue. See M. at 16. But this is incredible. A critical part of Psystar’s business is selling
software that allows OS X to run on non-Apple computers. At the time, Psystar’s
business also included selling non-Apple computers with OS X preinstalled. Apple’s
claim not to have known that Psystar planned to release Snow Leopard products
requires this Court to believe that Apple thought Psystar would shut down as soon as
Apple switched from Leopard to Snow Leopard.

As Judge Alsup concluded, there is no excuse for Apple’s failure to add Psystar’s
new products to the California case by amendment if Apple wanted to litigate the
legality of those products in California. See Ex. A. If Apple regrets that it is now
facing litigation in Florida, Psystar’s home state and the location of all the Psystar
evidence and witnesses, “The problem is one largely of Apple’s own making.” Id. at 2.
Apple also claims that the fact that Psystar did not formally serve Apple with this
case for about two months is somehow relevant to its present motion. See M. at 16.
This, too, is silly. Apple knew about this case almost as soon as Psystar ?led it. Apple
brought it to the attention of Judge Alsup in the California case and moved to have
Judge Alsup stay or dismiss this case. Judge Alsup refused to do so. Psystar then
served Apple well within the time required for service.

Apple’s cases describe circumstances where the case to be transfered was for de-
claratory relief only. Here, Psystar is bringing a?rmative antitrust and Lanham Act
claims on which Psystar seeks monetary and injunctive relief, not merely declaratory
relief. Apple’s cases do not apply for this simple reason alone. See Clergy Financial,
LLC v. Clergy Financial Services, Inc., 598 F. Supp. 2d 989, 994 (D. Minn. 2009)

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(rejecting argument that ?rst-?led rule should not apply to case seeking declaratory
judgment because “it also seeks injunctive relief and damages”); AG Leader Technol-
ogy, Inc. v. NTech Industries, 574 F. Supp. 2d 1011, 1017 (S.D. Iowa 2008) (same);
Mondo, Inc. v. Spitz, No. 97-civ-4822, 1998 WL 17744 at *3 (S.D.N.Y.) (Apple’s rule
does not apply “where the declaratory judgment plainti? seeks a?rmative relief or
asserts [distinct] claims”).

Finally, even if this case were anticipatory, that would remain only one factor to be
considered along with the other factors under § 1404(a), the transfer-for-convenience
statute. As the Eleventh Circuit recently explained:

“Even if a court ?nds that a ?ling is anticipatory, this consideration does not
transmogrify into an obligatory rule mandating dismissal. Such a ?nding still
remains one equitable factor among many that a district court can consider in
determining whether to hear a declaratory judgment action.” Manuel v. Con-
vergys Corp., 430 F.3d 1132, 1135–36 (11th Cir. 2005) (collecting cases).

As the next section establishes, these factors support Psystar.

5 Transfer Under §1404(a) Is Inappropriate Be-
cause This Court Is At Least As Convenient
For The Parties As The Northern District of
California

“A plainti?’s choice of forum is entitled to deference. Tenneco Oil Co. v. Envi-
ronmental Protection Agency, 592 F.2d 897, 900 (5th Cir. 1979). To displace
the plainti?’s choice, the court must determine that the convenience of the
parties and witnesses and the interests of justice require a transfer. 28 U.S.C.
§ 1404(a).” Texas Air Corp. v. Air Line Pilots Association International, No. 88-
804, 1989 WL 146414 (S.D. Fla.) (Hoeveler, J.).

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In assessing “the convenience of the parties and witnesses and the interests of

justice,” the Eleventh Circuit has identi?ed eight relevant factors:

“Section 1404 factors include (1) the convenience of the witnesses; (2) the loca-
tion of relevant documents and the relative ease of access to sources of proof; (3)
the convenience of the parties; (4) the locus of operative facts; (5) the availabil-
ity of process to compel the attendance of unwilling witnesses; (6) the relative
means of the parties; (7) a forum’s familiarity with the governing law; (8) the
weight accorded a plainti?’s choice of forum; and (9) trial e?ciency and the
interests of justice, based on the totality of the circumstances.” Manuel, 430
F.3d at 1135 n.1.

Each of these factors is neutral or cuts in favor of the Southern District of Florida.
1. Convenience of the witnesses. The critical witnesses are evenly divided between
San Francisco in the Northern District of California and Miami in the Southern
District of Florida. The critical witnesses are employees of Apple and Psystar.
Apple’s witnesses are mainly (although not exclusively) located in San Francisco,
while Psystar’s witnesses are all located in Miami. This factor is neutral.

2. Location of relevant documents and ease of access to sources of proof. Apple’s
documents are located in San Francisco, while Psystar’s are located in Miami.
Apple is likely to want to inspect the process by which Psystar manufactures Rebel
EFI and, perhaps, the packaging, advertising, and marketing materials associated
with Rebel EFI. These materials are all in Miami. Accordingly, this factor favors
of the Southern District of Florida.

3. Convenience of the parties. The Northern District of California is more convenient
for Apple because Apple is headquartered there. But the Southern District of
Florida is more convenient for Psystar because Psystar is headquartered here. This
factor is neutral.

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4. The locus of operative facts. As to the copyright claims, the locus of operative facts
is Miami, because that is where Psystar developed, manufactures, and sells Rebel
EFI. As to the antitrust and Lanham Act claims, there is no clear locus of operative
facts. Apple engages in the complained-of anticompetitive conduct throughout the
United States. Indeed, the misrepresentations that are the subject of the Lanham
Act claims are targeted at Psystar, which is headquartered in Miami. This factor
favors the Southern District of Florida.

5. The availability of process to compel unwilling witnesses. There are no unwilling
witnesses currently expected. If there are any such witnesses, they are most likely
to be former employees of Psystar. Apple’s witnesses are senior enough at Apple
that they are unlikely to leave Apple during the pendency of this case. Accordingly,
the availability of compulsory process favors the Southern District of Florida.

6. The relative means of the parties. Apple’s resources — including even only those
it expended on the California case — dwarf Psystar’s resources. Apple has tens
of billions of dollars in cash; Apple has physical stores throughout the country,
including in this district; and Apple has already engaged three excellent law ?rms
(Kenny Nachwalter, Townsend & Townsend & Crew, and O’Melveny & Myers)
to work on this case and the case in California. Psystar is a business run by
two brothers in their twenties with their mother as their bookkeeper and chief
administrator. The cost of traveling to California for discovery and hearings alone
would strain Psystar’s budget. This factor strongly favors the Southern District of
Florida.

7. Forum’s familiarity with the governing law. This Court is familiar with the Copy-
right Act, the Clayton and Sherman Antitrust Acts, and the Lanham Act.
It
has decided numerous cases involving these statutes. See, e.g., Design Bureau

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Corp. v. Colvin, No. 08-22455, 2009 WL 2576372 (S.D. Fla.) (Hoeveler, J.) (copy-
right); Top Rank, Inc. v. Dona Barbara Restaurant, Inc., 1999 WL 127450 (S.D.
Fla.) (Hoeveler, J.) (copyright); Designer’s View, Inc. v. Publix Super Markets,
Inc., 764 F. Supp. 1473 (S.D. Fla. 1999) (Hoeveler, J.) (copyright); Whirlpool
Corp. v. U.M.C.O. Int’l Corp., 748 F. Supp. 1557 (S.D. Fla. 1990) (Hoeveler, J.)
(antitrust); Chase Federal Savings & Loan Ass’n v. Chase Manhattan Financial
Services Inc., 681 F. Supp. 771 (S.D. Fla. 1987) (Hoeveler, J.) (Lanham Act); Cos-
mair, Inc. v. Dynamite Enterprises, Inc., No. 85-651, 1985 WL 2209 (S.D. Fla.)
(Hoeveler, J.) (copyright); National Bancard Corporation v. Visa U.S.A., Inc., 596
F. Supp. 1231 (S.D. Fla. 1984) (Hoeveler, J.) (antitrust). Because the issues in this
case are not the same as those that the parties litigated in California, that court
has no special legal competence in resolving this case. This factor is neutral.

8. The weight accorded a plainti?’s choice of forum. Courts accord great weight to the
plainti?’s choice of forum. Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253, 260
(11th Cir. 1996) (“The plainti?’s choice of forum should not be disturbed unless it
is clearly outweighed by other considerations.”). This factor favors the Southern
District of Florida.

9. Trial e?ciency and the interests of justice. Psystar chose this Court. This Court is
plainly a proper venue. Apple does extensive business in this state. And this dis-
trict, since Psystar’s headquarters and only o?ce is located here, is a district with
a clear connection to the subject matter of this case. Apple has shown nothing that
overcomes the presumption that Psystar’s choice of forum must be respected. And
the gross burden on Psystar that forcing Psystar to travel to San Francisco would
impose far outweighs any inconvenience to Apple, given Apple’s vastly superior
resources.

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Transferring this case to California would merely shift inconvenience from Apple
to Psystar. This is not a su?cient basis to disturb Psystar’s valid choice of forum —
particularly when Psystar has chosen its home forum, which is one of the two forums
naturally connected to this litigation. See Robinson, 74 F.3d at 260; Finley v. Dun &
Bradstreet Corp., No. 05-C-5134, 2006 WL 861920 at *4 (N.D. Ill. 2006) (party seeking
transfer must show more than that transfer would shift inconvenience by moving case
form one party’s home state to the other party’s home state). Accordingly, this Court
should deny transfer under § 1404(a).

6 Conclusion

Psystar respectfully requests that this Court deny Apple’s motion in full. Psystar joins
in Apple’s request for oral argument.

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Dated: December 10, 2009

Respectfully submitted,

/s/ K.A.D. Camara
K.A.D. Camara
[email protected]
Texas Bar No. 24062646
Massachusetts Bar No. 661087
Kent Radford
[email protected]
Texas Bar No. 24027640
CAMARA & SIBLEY LLP
2339 University Boulevard
Houston, Texas 77005
713-893-7973
713-893-1131 (fax)

/s/ Alex D. Weisberg
Alex D. Weisberg
Florida Bar No. 0566551
[email protected]
Aaron D. Radbil
Florida Bar No. 0047117
[email protected]
WEISBERG & MEYERS LLC
9369 Sheridan Street, Suite 656
Cooper City, Florida 33024
(866) 775-3666
(866) 577-0963 (fax)

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Certi?cate of Service

I hereby certify that I served the foregoing document by CM/ECF on December 10,
2009, on counsel of record as follows:

Richard A. Arnold
Kenny Nachwalter P.A.
201 South Biscayne Boulevard, Suite 1100
Miami, Florida 33131
James G. Gilliland
Townsend & Townsend & Crew LLP
Two Embarcadero Center, Eighth Floor
San Francisco, California 94111

/s/ K.A.D. Camara
K.A.D. Camara

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Veri?cation

1.

2.

I, Rudy Pedraza, am the President of Psystar Corporation, the plainti? in this
case. I have personal knowledge of the facts stated in this Response to Apple’s
Motion to Transfer. If called as a witness, I could and would testify to these facts.
Each statement of fact is true and correct.
I declare under penalty of perjury under the laws of the United States that the
foregoing is true and correct to the best of my knowledge and belief.

Executed on December 10, 2009

/s/ Rudy Pedraza
Rudy Pedraza

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