Psystar and Apple possible settlement out of court

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MacNN reports that the heated legal battle between Apple and the Mac clone manufacturer, Psystar, has taken an unexpected turn that could lead to resolution without a trial, according to the Mac Observer.

An attorney, who wishes to remain anonymous, has reported that the two parties agreed to try an Alternative Dispute Resolution (ADR). Although both parties have agreed to start the process, it is unknown which company initiated the action, or if it was a result of a judge recommendation.

During the ADR process, the parties can meet in non-binding arbitration, where a third party reviews the arguments presented by each side, including their legal arguments and facts. The arbitrator does not have authority to impose a settlement or make an official determination, however.

Another possibility for the process is an Early Neutral Evaluation (ENE), in which an expert evaluates each side's statement of the facts and applicable laws and responds to each party with a report of the merits of their case, at which time a settlement could be reached. The third option would be mediation, where a third party tries to help each side produce a negotiated settlement.

A few of the reasons that plaintiffs and defendants choose ADR include secrecy or lowering of costs associated with the dispute. Any settlement can remain a secret, which is sometimes preferred by corporations that could receive negative publicity, or similar lawsuits, if they lose a case in court. Alternatively, if one party expects to lose a case eventually, and the monetary settlement could bankrupt the company, they may choose to fold and settle for a lesser amount or terms that still allow the business to function.

The dispute between the companies began when Apple sued Psystar for producing Mac clones that operate with a modified version of the Mac OS X operating system, claiming copyright infringement and violation of the End User License Agreement (EULA). Psystar defended itself with a countersuit against Apple, accusing the company of illegally controlling the Mac market and driving prices artificially high. Recently, Apple has filed to have the court dismiss the monopoly countersuit.

The company is under fire from several directions with monopoly charges, including a lawsuit this week filed by a Taiwan-based MP3 player manufacturer that accused the company of monopolizing the media player and music download markets. The iPhone is also involved in several legal battles, such as a class action suit that claims violation of the Sherman Act, Cartwright Act, and Federal Trade Commission Act. Apple's motion to dismiss the suit was rejected.

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MacNN: Psystar suit stepping toward resolution outside court