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Psystar, Apple enter partial settlement to cease clone Mac sales

After 17 months of litigation between Apple and clone Mac maker Psystar, the whole ordeal may soon be at an end, with an agreement between the two parties expected to be revealed this week.

Psystar on Monday filed a new document with Judge William Alsup in a San Francisco court revealing that it and Apple had entered into a "partial settlement" that will be filed with the court on Tuesday. The revelation came as part of a response to Apple's request for a permanent injunction, filed last week.

Based on Psystar's claims, the agreement would seem to cover the sale of all clone hardware with Mac OS X preinstalled. Apple originally filed suit against Psystar in July of 2008 due to the Florida company's selling of unauthorized machines with the operating system installed.

Per the terms of the alleged deal, Psystar would pay Apple damages of an unspecified amount, and Apple would agree to drop the bulk of its case.

"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 been concluded," Monday's court filing reads. "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."

Further details of the settlement are due to be filed in the California court Tuesday.

But Psystar hopes that the court will not extend any potential injunction to its Rebel EFI product. The filing made Monday notes that Rebel EFI, which allows third-party installation of Mac OS X on unauthorized computers, is a "product that has not been litigated in this case, that has not been the subject of discovery in this case, that is presently the subject of litigation in the Florida case, that is composed exclusively of Psystar software, that is not sold in conjunction with any hardware, and that is sold entirely apart from any copy of Mac OS X or any computer running Mac OS X."

Revealed in October, Rebel EFI is a $50 application that allows certain Intel-powered PCs to run Mac OS X 10.6 Snow Leopard. In its filing last week, Apple alleged that Psystar has taken to "trafficking in circumvention devices," a practice that will irreparably harm Apple.

While Psystar claims it has agreed to pay damages to Apple, the Cupertino, Calif., company suggested last week that the Florida corporation would be unable to offer any money. Psystar filed for bankruptcy this May, only to emerge from Chapter 11.

The beginning of the end for Psystar came in November, when Alsup ruled in favor of Apple on a number of summary judgment points. Alsup concluded that Psystar infringed on copyrights owned by Apple and was in violation of the Digital Millennium Copyright Act.

Despite the summary judgment, a number of issues remained to be resolved in court prior to the alleged settlement: Apple alleged that Psystar engaged in breach of contract, trademark infringement, trademark dilution, and unfair competition, among others. The trial was scheduled to start in January 2010.