Psystar Not Confident Mediation Will Solve the Legal Dispute with Apple

By Dee Chisamera
14:30, October 22nd 2008
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Psystar Not Confident Mediation Will Solve the Legal Dispute with Apple

The controversial legal dispute between Apple and Psystar Corp. is far from settling, despite the fact that the two have agreed to resort to the Alternative Dispute Resolution (ADR) in order to settle the matter out of court.

According to attorney Colby Springer of Carr & Ferrell LLP, who represents Psystar, the ADR in just standard practice for the Northern District [of California]. “Quite frankly, all the talk about entering negotiations is really a non-story,” Springer told Computerworld.

Although both parts agreed to the mediation, the most probable outcome will be absolutely no deal, especially since the ADR doesn’t force them to reach a resolution. Springer said the dispute “will go on a dual track now, the ADR and the case,” but one thing continues to be hard to settle between Apple and Psystar: Apple’s motion to dismiss Psystar’s countersuit, filed on September 30.

The legal dispute between the two companies began in July this year, when Apple finally decided to sue Phystar on a matter that had been circulating the media since April. At the time, Psystar was a mysterious company that offered consumers Mac-clones running the OS X Leopard for as little as $399, and dared to challenge Macs' rightful producer, Apple.

The problem was that Apple’s license for Leopard or any other version of Mac OS X only included Apple hardware, which meant that Psystar violated the Leopard end-user license agreement (EULA) that prohibits the installation of the software on third party hardware.

But that’s nothing! Apple decided to take the matter to court in July this year, but things got even more complicated. In the lawsuit filed July 3rd, Apple accused Psystar of violating the terms of its Software License Agreement regarding the use of Mac OS X software, as well as violating its intellectual property, and demanded full statutory damages for their “willful acts” of copyright infringement, as well as an injunction against Psystar’s production and distribution of copyrighted materials, and the recall of all products sold.

As a response to that, Psystar decided to fight back, and filed a legal action against Apple for anticompetitive business practices. Springer explained at the time that Apple’s policy to use the Mac operating system exclusively on Apple hardware is “an anticompetitive restrain of trade.”

Psystar’s owner, Rudy Pedraza, motivated that his intentions were strictly linked to offering consumers a cheaper way of using the Mac OS: “It’s not that people don’t want to use the Mac OS, many people are open to the idea, but they’re not used to spending an exorbitant amount of money on something that is essentially generic hardware.”

Psystar’s lawyer, Colby Springer, also said in August that the litigation is much more complex than the “misinformed” and “mischaracterized” copyright infringement allegations, and that it mostly refers to the nature of Apple’s EULA and the anti-competitive tactics related to the misuse of Apple’s copyrights.

Last month, Apple started another legal action against Psystar, demanding the dismissal of Psystar’s countersuit. Apple argued that Psystar was just trying to cover something they knew was wrong by filing “deeply flawed” antitrust counter-claims to force Apple to license its software to them.

Despite of that, Psystar doesn’t seem to give up the fight, and continues to challenge Apple, arguing that Apple is trying to use the same arguments they used in claims related to its iPod, iTunes Music Store and iPhone.



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