We’ve got some news in the Apple vs. Psystar tragedy that’s been unfolding before our eyes for months now. We all know the gist: Psystar sells machines with Mac OS X pre-installed, while the EULA states that’s not allowed. Apple then took this stuff to court, and in the meantime, Psystar went into Chapter 11 Bankruptcy protection. The news today is that Apple has filed a complaint stating that this Chapter 11 thing is just a shield that allows Psystar to continue its business practices, which Apple deems as illegal.
The motion from Apple asks that the court have the legal proceedings against Psystar continue despite the clone maker being under Chapter 11 Bankruptcy Protection. Under Chapter 11, legal proceedings are put on hold (‘stay’), but at the same time, Psystar can continue to sell Mac clones, or, as Apple puts it, “knock-off computers that are designed to run, without permission, a modified version of Apple’s proprietary operating system” (you can run Mac OS X unmodified on a non-Apple labelled computer too, of course).
Apple’s motion actually kind of makes a lot of sense. The discovery process revealed that 80% of Psystar’s sales consists of Mac clones. Chapter 11 is meant for reorganising a company to make it a viable business going forward, but without any definitive court statement about whether or not selling Mac clones is legal, what would the small company reorganise if Apple prevails with its claim that Psystar is committing copyright and trademark infringement? “The Debtor has no legitimate property rights in an infringing product and cannot pursue reorganization of its business affairs based on the sale of products that violates applicable non-bankruptcy law,” Apple’s motion argues.
While I stand by Psystar in all this simply because I don’t believe an EULA should be able to impose post-sale restrictions (especially not silly ones), this motion by Apple has a lot of merit. It’s kind of weird that Psystar can continue to sell Mac clones, but not be sued for it because they’re under Chapter 11.
Another funny tidbit is that Apple draws a comparison between this case and the SCO vs. Novell one. In that case, Novell too motioned for the continuationg of litigation even after SCO went Chapter 11 – Novell’s motion was accepted.