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Apple, Psystar strike deal in copyright case

Mac clone maker to pay Apple unspecified damages, but it may be able to keep selling systems

December 1, 2009 06:44 AM ET

Computerworld - Apple Inc. and Mac clone maker Psystar Corp. agreed Monday to settle a 17-month lawsuit that will effectively stop Psystar from pre-installing Apple's Mac OS X on the Intel-based computers Psystar sells.

It may not prevent the small Doral, Fla.-based computer maker from selling Mac clones, however. Instead, Psystar laid out an argument that would shift responsibility for installing Apple's operating system onto its customers.

Settlement details were not available, although Psystar indicated in a motion submitted Monday that additional information would be filed today in federal court in San Francisco with Judge William Alsup.

The settlement, which requires Psystar to pay Apple an as-yet-unspecified amount of damages, would not be awarded until Psystar has exhausted all appeals.

"Psystar and Apple today entered into a partial settlement that is embodied in a stipulation that will be filed with the Court tomorrow," Psystar's motion of Monday began. "Psystar has agreed on certain amounts to be awarded as statutory damages on Apple's copyright claims in exchange for Apple's agreement not to execute on these awards until all appeals in this matter have been concluded. Moreover, Apple has agreed to voluntarily dismiss all its trademark, trade-dress, and state-law claims. This partial settlement eliminates the need for a trial and reduces the issues before this Court to the scope of any permanent injunction on Apple's copyright claims."

The injunction Psystar referred to was requested by Apple only last week, when the Cupertino, Calif.-based computer maker asked Alsup to grant it a permanent injunction that would shutter Psystar's Mac clone business and require Psystar to pay $2.1 million in damages. Apple's demand for an injunction was prompted by an Alsup ruling in November that said Psystar violated Apple's copyright as well as the Digital Millennium Copyright Act (DMCA) when it installed Apple's operating system on the systems it sells.

In the request for an injunction, Apple demanded that Alsup ban Psystar not only from installing the older Mac OS X 10.5, also known as Leopard -- the only version sold when the case began -- but also include the follow-on upgrade, Mac OS X 10.6, or Snow Leopard. Snow Leopard is the only version of Apple's operating system that Psystar currently pre-installs on its clones before they're shipped to customers.

"Psystar's admission that it has moved on to infringing subsequent versions of Mac OS X confirms that any injunction must extend beyond Mac OS X Leopard," Apple said in its motion last week.

However, in the Monday filing, Psystar argued to exclude Rebel EFI, a $50 utility that the company started selling in October, from any potential injunction. Rebel EFI lets owners of generic PCs -- like the ones that Psystar sells -- install and run Apple's Snow Leopard operating system.

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