Apple Inc on Tuesday lost its copyright claims against a Florida company that makes “virtual iPhones” used by security researchers to test for vulnerabilities to its system.
Apple claimed that Corellium LLC copied the operating system, graphical user interface and other aspects of the devices without permission.
It accused Corellium of acting under the guise of helping discover bugs in the iPhone’s operating system, but then selling the information “on the open market to the highest bidder.”
Corellium’s actions fell under an exception to copyright law because it “creates a new, virtual platform for iOS and adds capabilities not available on Apple’s iOS devices,” District Court Judge Rodney Smith in West Palm Beach said in his ruling.
That Corellium sells its product “does not undermine its fair-use defense, particularly considering the public benefit of the product,” Smith said.
Apple has a “bounty program” where it rewards so-called white-hat hackers who discover flaws in its system.
The Cupertino, California-based company argued that the Corellium product went far beyond that, although Corellium said that it evaluates potential customers and rejects some.
Corellium said its customers are government agencies, financial institutions and security researchers, and accused Apple of trying to control security research to limit what the public learns about vulnerabilities.
Apple had been in talks to buy the company, but the two sides could not agree on a price, Smith said.
Apple sued a year later.
Corellium’s virtual product is used on a desktop computer and cannot make phone calls, send text messages, access iTunes or do any of the other things an iPhone can.
“There is evidence in the record to support Corellium’s position that its product is intended for security research and, as Apple concedes, can be used for security research,” the judge said. “Further, Apple itself would have used the product for internal testing had it successfully acquired the company.”
Officials with the two companies did not immediately respond to queries seeking comment.
Apple argued that the case is similar to the billion-dollar dispute between Oracle Corp and Alphabet Inc’s Google unit, in which an appeals court rejected Google’s arguments that it had the right to copy Oracle code for inclusion into the Android operating system.
The US Supreme Court is considering the issue.
Smith said that the two cases are not comparable — Corellium transforms iOS and adds new content, and it is not a direct competitor.
It was instead more like the case in which an appeals court ruled that Google’s creation of digital copies of books and showing snippets in search results was a fair use of copyrighted works, Smith said.
The judge said that Corellium might still be in breach of the US Digital Millennium Copyright Act, which prohibits tools to circumvent security measures, so he declined to dismiss that aspect of the case at this stage.
He ordered the two sides to submit a status report by Jan. 11 to determine how the case proceeds.
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