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Friday, December 18, 2009, 10:35 am PT (01:35 pm ET)

Unauthorized Mac clone maker Psystar throws in the towel

Pesky would-be Mac clone maker Psystar said Friday it plans to close shop immediately, this following a definitive court ruling earlier this week preventing the company from shipping Apple's Mac OS X operating system on its third party systems.

Eugene Action, an attorney for the Doral, Fla.-based firm, told Dow Jones Newswire that Psystar President Rudy Pedraza will be "shutting things down immediately."

"They will not be in business," he added, noting that the company also intends to fire its eight employees.

Word of the shuttering comes roughly two weeks after Psystar said it would halt all hardware sales related to its unauthorized Mac clone business. It brings to a close a near 18-month legal saga that began in April of 2008 when the then little-known firm first began touting a $400 Mac clone via its website.

The fatal blow for Psystar came earlier this week, when a federal judge issued a permanent injunction against clone maker, banning it from selling hardware running hacked versions of the Apple's Mac OS X operating system.

Having been the recipient of Pystar's marketing taunts for roughly three months, Apple finally sued Psystar on grounds of copyright infringement in July of 2008. Psystar fired back the following month with a countersuit accusing the Mac maker of using anti-competitive tactics to unfairly squeezing out possible rivals.

However, Psystar would see its defense slowly unravel in the year that would follow, with the court throwing out the vast majority of its arguments before the clone maker made a bid for bankruptcy in an apparent attempt to delay the case.

Psystar ultimately agreed earlier this month to pay Apple a $2.7 million settlement, which included $1,337,500 in damages over copyright infringement, breach of contract, and violation of the Digital Millennium Copyright Act. Additional damages and attorneys fees amounted to another $1,337,500.

As of Thursday evening, Psystar's website had gone dark, though Action said Psystar intends to appeal the court's most recent decision.

The closing of the Web site also likely signifies the official end of the Rebel EFI product, which was a point of contention that stood out following this week's permanent injunction. The $50 application allowed users to install Mac OS X 10.6 Snow Leopard on certain Intel-based machines.

In his ruling in a San Francisco federal court, Judge William Alsup said he would not specifically include the Rebel EFI product as part of the injunction. Alsup said he did so because Psystar's statements to the court avoided saying specifically what Rebel EFI does, so the judge felt it was inappropriate for him to determine whether the software falls within the scope of the injunction. However, he said the company's argument that it has a right to sell and distribute the software is weak, and likely would not hold up if properly tested in court.

"Whether such a defense would be successful on the merits, or face preclusion or other hurdles, this order cannot predict," Alsup said. "What is certain, however, is that until such a motion is brought, Psystar will be selling Rebel EFI at its peril, and risks finding itself in contempt if its new venture falls within the scope of the injunction."

At the time, it appeared likely that the Rebel EFI matter would be resolved in a separate lawsuit filed by Psystar against Apple in a Florida court. In that complaint, Psystar alleged that Apple was engaged in "anticompetitive attempts to tie Mac OS X Snow Leopard to its Macintosh line of computers." But with the Florida company's Web site gone dark, potential customers no longer have a method to purchase the Rebel EFI product.