Apple vs. Psystar is Not Over

By  |  Tuesday, December 1, 2009 at 8:57 pm

Today Apple reached a deal with Mac clone maker Psystar ahead of a federal court case that could have granted Apple an injunction forbidding Psystar from preinstalling Apple’s OS X software on its products. However, the settlement was very specific to what it actually settled, which means the companies will continue the legal wrangling.

Psystar is paying Apple $2.7M in damages to avoid a trial. That takes the immediate threat of a federal injunction off the table, but the overarching dispute remains. It is also likely that Psystar, which recently emerged from bankruptcy, won’t pay the settlement until its appeals have been exhausted.

I have not seen the terms of the agreement, and wonder whether any of the claims were dismissed without prejudice. Apple charged Pystar of breach of contract, copyright infringement, and violating the Digital Millenium Copyright Act; Psystar made counterclaims of copyright misuse and unenforceability.

“It looks like it isn’t really a settlement as much as a narrowing of the issues in dispute,” said Mark A. Lemley, director of Stanford Law School’s Program in Law, Science, and Technology, in reference to today’s agreement. “The issues that are outstanding are (1) the core legal issues, which are on appeal, and (2) whether the injunction would apply to future Psystar products,” he added in a follow up e-mail.

Many issues (and the “what is the point” question) remained unsettled, and will be weighed by the United States District Court for the Southern District of Florida. Apple has also not yet taken any action against Psystar’s Rebel EFI software, which allows end users to install copies of OS X on unauthorized generic hardware.

This convoluted, bumpy ride will continue. If you want a Mac, buy it from Apple, or, if so inclined, check in with the Hackintosh community.

 
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9 Comments For This Post

  1. Paul Says:

    Actually, according to Groklaw, the injunction hearing is still on – Psystar is just arguing certain points of that injunction. But the agreement (http://www.groklaw.net/pdf2/Psystar-238.pdf) says that the injunction hearing is still on the 14th (page one of the PDF.

    PJ of Groklaw (http://www.groklaw.net/article.php?story=20091201131422651) summarizes:
    “As you can see, Apple didn’t drop its trademark and state-based claims. It dropped them for now. That is what “dismiss without prejudice” means, that for now it’s dropped, but the party does not give up its right to reintroduce, and the end of the paragraph about it tells you why: because at this point, no one knows what will happen to the Florida case, so no one knows where the matter will be tried. It’s not dropped at all.
    The parties have agreed that Psystar will pay Apple $1,337,550 twice, first for Apple’s First through Fifth Claims, which would be copyright infringement, contributory and induced infringement, violation of the DMCA, and breach of contract and inducing breach of contract, and the second payment would be extra on the First, Second, and Third Claims, again the copyright and DMCA claims.”

    And:
    “This leopard has not changed its spots. All that has happened is the parties have agreed on how much Psystar owes so far. The rest absolutely will be going to trial, whatever there is left after Apple’s summary judgment motion is decided. There is a hearing set for December 14 [PDF] at 2 PM,”

    All that was agreed about was the amount owned when the dust settled. It does not take the injunction off the table and does not change the summary judgement that was issued before. If you read the filings, these agreements concerned the elements that were not covered by the Summary Judgement.

    The injunction is still there because as Apple put it, any kind of relief that was issued would be unlikely to be paid for by Psystar due to their limited resources. That and the nature of their entire business is based on infringement. Psystar is trying to argue that an injunction is unnecessary since their product line falls outside of this litigated activity (Leopard VS Snow Leopard and Rebel EFI), but thats to be expected and should be taken with the same amount of weight that their prior arguments have. We shall see about that (personally I don’t think Psystar is going to have much luck).

    You are right about this not being over, but your not quite right about the injunction being off, It’s just that Psystar fled the opposition papers at the same time. The settlement explicitly states that the injunction hearing is still on.

  2. Tim F. Says:

    “…Apple will dismiss without prejudice to its right to refile… Psystar agrees to toll the statute of limitations applicable to each of these claims for relief until a day thirty days after Apple is required to file an Answer in the matter Psystar Corporation v. Apple, Inc., whether that case proceeds in the Southern District of Florida, the Northern District of California, or some other district.”

    A temporary stay of execution…. or rather since no one, least of all Apple, thinks Psystar can actually pay any monetary damages, a temporary stay of executing the already pulverized ashes remaining after the already executed body has rotted into a pile of goop and then been cremated… and then hanged and shot again.

  3. Vulpine Says:

    The question about the Rebel EFI software will probably get tagged by the GNU group since Psystar’s initial hacking used software created by hobbyists and was clearly marked “This software for individual use only and is not to be sold or resold in any manner.” ( I paraphrase here because I don’t remember the exact words.) My guess is that once this level of litigation is completed, Apple will finance the original creators’ suit to stop the reproduction and sales of Rebel EFI. Either that, or Apple already has something else up their sleeve to block EFI emulation.

  4. Tim F. Says:

    Vulpine, Apple has exactly zero interest in trying to validate the GPL against Psystar and even much, much less interest in publicizing the fact that there is identical, similar, or slightly modified code out in the wild, freely available to everyone and far more difficult to surpress legally.

    This is just open source advocate wishful thinking.

    Apple has a much better, stronger, and simpler case of inducement to copyright infringement and inducement to DMCA circumvention via the existing case plus a step or two plus the Grokster case.

  5. Tim F. Says:

    Yes, Paul, I’m not a lawyer like Lemley, but I would say this is neither a settlement nor a narrowing of the disputed issues. The settlement mostly reasserts the summary judgment, doesn’t affect the injunction hearing, doesn’t affect Snow Leopard or Rebel EFI, doesn’t affect the pending Florida case or moving jurisdiction, etc…

    What this does do actually is eliminates the sticky, difficult, and potentially ugly problem before Apple of arguing the extent of monetary and non-monetary damage to Apple. Instead of getting into R&D costs, margins, estimated loss sales, incalcuable harm to reputation, etc… Apple basically said: these are our legal fees so far, pay us twice that.

  6. Paul Judd Says:

    Tim,
    That was when I was trying to argue. Legally speaking though, it is a selltelemt – the settlement itself is predicated on Psystar’s appeals process failing (which they are doing apparently), but it is still an settlement.

    To clarify, I was saying that this settlement covers the elements in California not ruled on by Allsup in the summary judgment. That’s it. The settlement also covers the monetary damages that Psystar would owe from their other infringements, however Psystar is appealing the copyright claims.

    I was not claiming that this had any affect on Snow Leopard clones or Rebel EFI – I specifically stated that the Florida case and the injunction hearing is still applicable (I even linked to the PDF showing that). The injunction hearing and Florida hearing are separate issues. If I was not clear on that before, I want to make it clear now. This settlement is just about the issues undressed already by Allsup and their intentions to appeal the Summary judgment (which is what the money is predicated on – should the appeal succeed, the settlement is likely dropped and the case continues on as before – I doubt that will happen though)

  7. Tim F. Says:

    Paul, we’re in complete agreement. By stating what I said, I was not trying to imply that you were saying the contrary; I was actually saying I agree with you 100% — I was just expanding on both our points. I maybe mixed my statement up too closely with the reply to the Lemley quote — if that confused you, I apologize.

    You have Kiwi Camara bragging how it’s such a win for Psystar and he doesn’t understand why Apple agreed when it does nothing but positive for Apple — they don’t have to create a number figure for losses before the court and it puts into affect immediately what has already been determined. Anything undetermined is still undetermined.

  8. Paul Judd Says:

    Tim:

    You are right – We are in agreement. I was slightly confused and I apologize. There is no way this is a win for Psystar. Not yet and that is a big stretch. They get no money in their settlement, they have to overturn a summary judgment (not an easy task), and Apple has to loose their injunction hearing.

    I doubt that’s going to happen.

  9. ecco6t9 Says:

    So much for “Thinking Differently”.

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