Psystar Afraid of Losing Intellectual Property

Unauthorized Mac clone maker Psystar filed its response to Apple's Motion for Relief in bankruptcy court on Monday with a claim that if Apple is allowed to proceed with its case in California it will be forced to liquidate and lose its own intellectual property. Prior to Pystsar's bankruptcy filing in Florida, to two companies had been locked in a legal battle in California over Apple's claims that the company is violating licensing agreements and copyright -- in other words, Apple's intellectual property -- by selling PCs with Mac OS X pre-installed.

Apple filed a Motion for Relief with the court in Florida after Psystar filed for Chapter 11 bankruptcy protection, which automatically stops other legal proceedings. If granted, Apple's motion would let the copyright case against Psystar resume in California earlier, potentially saving months of delays.

Psystar's response alleged that Apple shouldn't be granted relief from the automatic stay because it never filed for a restraining order or injunction to stop Psystar from selling PCs with Mac OS X installed. The response also states that "having to incur the cost of litigation without having had a chance to reorganize and operate more profitably will force the Debtor to liquidate its business and lose the opportunity to benefit from its intellectual property."

An attorney familiar with these types of cases told TMO anonymously "That Apple did not immediately ask for a temporary restraining order or preliminary injunction in no way impairs Apple's right to have the issue of infringement decided in the federal district court. Apple's procedurally correct litigation tactics are not grounds for denying it its right."

He added "However, if Psystar admits that it is infringing, I am sure Apple would immediately move for an injunction."

The U.S. District Court in Northern California set a November 9 trial date for Apple and Psystar. If the U.S. Bankruptcy Court judge in Florida chooses to grant Apple's motion for relief quickly, Apple might be able to avoid seeing the trial delayed into 2010.