Psystar Down For The Count?

A California court has granted Apple's request for a permanent injunction against Mac clonemaker Psystar. The injunction bars Psystar from selling computers with any version of OS X installed, suggesting that reselling someone else's product is not the best SMB business plan.To recap: Psystar started selling generic Intel PCs with Mac OS X preinstalled in April 2008. Apple promptly sued in the Northern California U.S. District Court and last month won a summary judgment that Psystar had infringed its copyrights on OS X. Apple then asked for a permanent injunction preventing Psystar from selling computers with any version of OS X -- Psystar had argued that since the original suit was filed before Snow Leopard came out, the judgment didn't apply to that later operating system.

Furthermore, Psystar had in the meantime started selling Rebel EFI, a software package that let end users install Snow Leopard on generic boxes themselves. Psystar asked that Rebel EFI be specifically excluded from any injunction, on the grounds that software products weren't part of the litigation.

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Judge William Alsup didn't buy either of those arguments. In his Order Granting Motion for Permanent Injunction (PDF download from the Groklaw blog), he ruled that Snow Leopard should reasonable be included in the injunction, and that it would be inappropriate to explicitly exempt Rebel EFI.

The judge did agree that Apple had lent some weight to Psystar's argument about Snow Leopard by excluding it from the original discovery period and calling it "irrelevant" to the case. After Snow Leopard was released, however, and Psystar filed a suit in Florida (its home state) asking for explicit permission to sell Snow Leopard clones and Rebel EFI, Apple suddenly asked to have Snow Leopard added back in to the California case. The Order called that move by Apple "high-handed" and "slick," but in the end that didn't matter.

The judge wrote, "Because a copyrighted work need not be included within the scope of discovery to fall within the scope of a permanent injunction, Snow Leopard will not be excluded from the scope of the injunction. Rather, it will be included to the extent that it -- and any other non-litigated Apple software programs of similar character to Mac OS X -- qualifies as a protected work under the Copyright Act."

As for Rebel EFI, the judge complained that Psystar hadn't been particularly forthcoming with details about the product. "Psystars opposition brief appears to purposefully avoid providing a straightforward description of what Rebel EFI actually does," he wrote. "Thus, it is not only inappropriate, but impossible to determine on this record whether Rebel EFI falls within 'the same type or class of unlawful acts' found at summary judgment. This order declines to 'bless' a 'product about which it knows little of substance."

The judge wrote that Psystar was welcome to bring a new motion about Rebel EFI in which it would provide "real details." But in the meantime, he warned, "Psystar will be selling Rebel EFI at its peril, and risks finding itself held in contempt if its new venture falls within the scope of the injunction."

Judge Alsup ruled that Psyar has until midnight on December 31 to comply with the ruling, emphasizing that that is the absolute latest date. "Defendant must immediately begin this process, and take the quickest path to compliance; thus, if compliance can be achieved within one hour after this order is filed, defendant shall reasonably see it done," he concluded. He also warned Psystar against using the compliance period to sell off any remaining products, including Rebel EFI.

For all the hoopla, it came out during the trial that Psystar only ever sold 768 computers, even as they were telling potential investors that publicity from the trial would give them established mindshare in the soon-to-be-booming Mac clone market. Perhaps the lesson here for SMBs and startups is twofold: don't base your business plan on getting a court to overturn someone else's established business practice; and don't tug on Superman's cape before you have a long chat with your lawyers.