UPDATE: Judge Accepts Psystar-Apple Settlement; Clone-Maker to Keep Fighting

The California judge overseeing the long and bloody fight between Doral-based clone-maker Psystar and Apple has accepted a settlement between the two firms, setting the stage for Psystar to keep fighting in appeals court.

Judge William Alsup's order leaves Psystar on the hook for $2.8 million in damages plus legal fees to Apple and forbids the company from selling "cloned" computers running Mac OS X.

But it also dismisses Apple's remaining trademark infringement claims. And more important for Psystar, the settlement allows the company to exhaust its appeals before it ponies up the cash.

Calling the settlement "extremely favorable," Psystar's lawyer, Kiwi Camara, says the company will keep selling its open computers while the appeals process runs out.

"We're conceding nothing," Camara tells Computerworld this morning. "We've agreed that Apple will not collect these damages until all appeals have been heard. Until then, we have no liability."

As we wrote yesterday, the ruling sets the stage for Psystar to keep its niche as a clone-maker by selling its models with its Rebel EFI software -- which allows users to load Mac OS X software on most hardware.

Then customers could buy their own copy of OS X and load it onto their PCs.

Judge Alsup could still throw a monkey wrench into that plan, though. He hasn't yet ruled on Apple's request for a permanent injunction against Psystar -- a ruling that could include a ban on selling Rebel EFI.