Psystar and Apple Reach Settlement; Doral Clone-Maker May Live Another Day

Don't write Psystar's obituary just yet.

Psystar, which we recently profiled in depth, has been locked in a heated legal battle with Apple since last year because the tiny Doral-based firm sells unauthorized "clones" of Mac computers, running Mac OSX on PC hardware.

Apple claimed copyright violations, and on Nov. 13, a judge in California agreed, granting the computer giant a summary judgment on a number of the key issues. The future looked bleak for the young Pedraza brothers, the company's founders.

So it came as a shock to the tech world when Psystar announced this morning that Apple had agreed to partially settle the case. Even more surprising: The settlement might not force Psystar to stop selling its clones.

Until the full filing appears online, the exact details of the settlement remain vague. Here's what they have to say for now:

Psystar and Apple today entered into a partial settlement that is embodied in a stipulation that will be filed with the court tomorrow. 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 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.

So essentially, Psystar has agreed to pay Apple monetary damages and has accepted Apple's injunction to stop selling Mac OSX; Apple, in turn, has agreed to let Psystar play out its appeals before paying up and to stop suing for trademark infringement.

A number of tech writers believe the settlement will allow Psystar to continue selling its cloned computers, but without Mac OSX pre-installed on the hardware. Customers could then install the Mac system themselves.

Psystar also asks the courts not to include its latest product, the Rebel EFI software, in Apple's injunction against selling Mac operating systems. Rebel EFI, if you recall, allows customers to create their own clones by installing any operating system on any piece of hardware.

Psystar's lawyer, Kiwi Camara, hasn't responded to an email from Riptide looking for comment. Apple doesn't comment on ongoing legislation.

As soon as the full settlement appears on the docket, we'll be back with an update.

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Tim Elfrink is a former investigative reporter and managing editor for Miami New Times. He has won the George Polk Award and was a finalist for the Goldsmith Prize for Investigative Reporting.
Contact: Tim Elfrink