Psystar Agrees to Pay $2.67M in Mac Clone Case

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Apple agreed to a partial settlement in their ongoing legal battle over Mac clones at the end of November, and Psystar agreed to pay Apple over US$2.67 million in damages and legal fees in the deal. Psystar suffered a hefty legal blow earlier in the month when the U.S. District Court in Northern California ruled that the PC maker was violating the Digital Millenium Copyright Act and Apple's copyrights by building and selling Mac clones without authorization.

As part of the settlement, Psystar agreed to pay Apple $1,337,550 in damages and $1,337,500 in legal fees after the appeal process has been completed. The court will also rule against Psystar for circumventing the copy protection in Mac OS X 10.5, violating Apple's end user license agreement, and illegally copying Mac OS X. In turn, Apple agreed to dismiss its trademark, trade-dress and state law claims.

Psystar isn't, however, giving up on its Rebel EFI product that lets users install Mac OS X on PCs instead of Apple hardware. The company is hoping to take that fight to a parallel case it launched in U.S. District Court in Florida.

A pending injunction from Judge Alsup in Norther California could include block Psystar from building clones with any version of Mac OS X, and from using or selling technology that circumvents Apple's copy protection technology -- like the Rebel EFI.

Psystar may have a hard time convincing Judge Hoeveler in Florida that a second trial is warranted after Judge Alsup completes his rulings in California.

"The Florida case is still pending, but Judge Alsup's summary judgment for Apple and the instant stipulation disposing of the claims makes it even more likely, I think, that Judge Hoeveler will be disposed to transfer his case to Judge Alsup and the Ninth Circuit, rather than duplicate everything that Judge Alsup and the Ninth Circuit's panel has done -- or is doing -- and risk inconsistent judgments issuing from either his court, the 11th Circuit or both," an attorney familiar with this kind of case told The Mac Observer.

While the recent proceedings in Judge Alsup's court may make it look like the legal battle is winding down, this is more likely just the next step on Psystar's path to filing an appeal.

"Once Judge Alsup enters final judgment for Apple, Psystar can appeal that judgment to the U.S. Ninth Circuit Court of Appeals, which it appears that Psystar intends to do," TMO's legal contact said. "In short, Psystar has had enough of Judge Alsup and hopes to do better with a panel of judges from the Ninth Circuit."

Just how well Psystar fares in Appellate Court remains to be seen, but if the PC maker sticks with its current track record, it won't win the chance to continue making Mac clones any time soon.

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Comments

Khaled

all’s well that partially ends well smile

Lee Dronick

I am not understanding that if they still can appeal the ruling then why agree to to pay the settlement?

gslusher

I am not understanding that if they still can appeal the ruling then why agree to to pay the settlement?

I’m not an attorney—maybe Nemo will chime in and give us another law-school lesson.

However, what the agreement may do for Psystar (among other things) is limit their potential liability. It’s quite possible that, if the trial were held, they might be forced to pay even more.

Lee Dronick

However, what the agreement may do for Psystar (among other things) is limit their potential liability. It?s quite possible that, if the trial were held, they might be forced to pay even more.

Yes, I was wondering if that was the case.

greg the bunny

Apple is scared right now. Psystar has grounds on which to challenge thier abuse of EULA and the DMCA.Lower courts only decide whether a law was broken or not. The higher ones determine weather the current interperatation of the law is correct. Sometimes they even throw out bad laws.

Almost everytime a case goes to a higher court about DMCA the higher courts take away powers that intellectual property holders have been claiming. DMCA was not meant to allow intellectual property holders to restrict the privlages given to those who pay for intellecual property, it was meant to fight piracy.

Lee Dronick

Apple is scared right now

No they are not.

Psystar has grounds on which to challenge thier abuse of EULA and the DMCA.

No they don’t

“The court will also rule against Psystar for circumventing the copy protection in Mac OS X 10.5, violating Apple’s end user license agreement, and illegally copying Mac OS X. “

gslusher

Lower courts only decide whether a law was broken or not. The higher ones determine weather the current interperatation of the law is correct.

Any Federal court can rule on Constitutionality, for example. Lower courts can establish interpretation of the law. Indeed, judges interpret law every day. Their interpretation may be overruled.

Re: appeals. You might be interested in the appeals statistics for California, including the Ninth Circuit. A summary:

California civil cases reviewed by the Court of Appeal in 2006-7:

66% affirmed in full
10% affirmed with modification
20% reversed
3% dismissed without consideration of the merits

Ninth Circuit:

50% not even considered for review
15%of those that were considered on their merits were reversed

IOW, there’s an overall rate of reversal of 7-8% in the Ninth Circuit.

Almost everytime a case goes to a higher court about DMCA the higher courts take away powers that intellectual property holders have been claiming.

Can you cite specific cases?

DMCA was not meant to allow intellectual property holders to restrict the privlages given to those who pay for intellecual property, it was meant to fight piracy.

Do you have evidence for that based upon the expressions of legislative intent when the DMCA was written and passed—or is this just your opinion?

Josh Hague

I wonder if the “1337” was intentional.

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