Report: Apple, Psystar Reach Partial Settlement

According to reports, Psystar filed court documents Tuesday stating that it has come to an agreement with Apple and will pay undisclosed damages to the company in return for Apple dropping its lawsuit. (Wired has the court document here). Apple sued Psystar in 2008, alleging copyright and trademark infringement, among other things, stemming from Psystar's business of selling PC hardware with modified versions of Apple's popular OS X operating system.

The move to settle the case comes as no surprise. Psystar used bold strategies in its legal defense, first arguing that Apple was engaging in antitrust practices by tying OS X to its own hardware. When that argument was thrown out of court, Psystar then argued that Apple was engaging in copyright misuse with its restrictive software license agreements. But last month, U.S. District Judge William Alsup ruled that Apple was not abusing its copyright power by requiring OS X to run on Mac hardware.

The judge's decision was a virtual knockout blow to Psystar and all but clinched a legal victory for Apple. Following last month's decision, Apple then filed a motion seeking a permanent injunction against Psystar that would prevent the company to sell its Mac clone hardware and force it to pay Apple $2.1 million.

Such a penalty would have put Psystar out of business. The company had filed for Chapter 11 bankruptcy protection earlier this year and had reportedly sold a small number of Mac clones. However, in its proposed settlement agreement this week, Psystar argued that its Rebel EFI software tool, which helps users install OS X versions on PC hard drives, should be exempt from any injunction or legal claims. So it seems that Psystar is doing everything it can to stay in business and continue its "Hackintosh" strategy.

Apple and Psystar have yet to comment on the proposed settlement.