“Psystar has violated Apple’s exclusive reproduction right, distribution right, and right to create derivative works,” Alsup wrote in his ruling (see full text below). Not only did the company infringe on Apple’s (AAPL) copyrights by installing Mac OS X on its hackintoshes, he explained, it violated the Digital Millennium Copyright Act to do so.

An ugly defeat for Psystar, which just a few weeks ago asked a judge to bless its business and rule that it is legally allowed to sell machines with Apple’s Mac OS X pre-installed. Still, it doesn’t mean that the acrimonious legal battle between the two companies is finished. Psystar could appeal, though Alsup’s ruling would seem to leave the company pretty far up that certain creek it’s been traveling lately–without a paddle.

There remain a number of accusations to be decided at trial, among them, Apple’s claims of breach of contract, trademark infringement, trademark dilution and unfair competition. Beyond these, there are the damages that will almost certainly be brought against Psystar on the copyright issues in the case.

“The court asked for briefs on that subject,” Pamela Jones notes over at Groklaw. “In short, Psystar is toast. Psystar’s only hope now is Florida, and frankly I wouldn’t bet the house on that one. Judges notice if you were just found guilty of a similar cause of action in another state.”

Psystar –

The suit, over Joltid-owned peer-to-peer technology used in Skype’s software, seeks an injunction against Skype as well as damages that Joltid claims “are amassing at a rate of more than $75 million daily.”

A nasty surprise for Skype’s new owners: Silver Lake, the Silicon Valley-based private equity group; Index Ventures, the London-based venture capital firm; Internet entrepreneur Marc Andreessen’s new Andreessen Horowitz fund; and the Canada Pension Plan Investment Board. Though, really they should have seen this coming. After all, Skype and Joltid have been sparring since earlier this year.

From an eBay Securities and Exchange Commission filing earlier this year:

As previously disclosed, Skype has been in a dispute with the licensor of certain key technologies and had terminated a “standstill” agreement that had been entered into between the parties, permitting either to take action against the other with effect from March 2009. On March 12, 2009, Skype Technologies S.A. filed a claim in the English High Court of Justice (No. HC09C00756) against Joltid Limited, a BVI company.

In connection with the license agreement between the two companies, Skype licenses peer-to-peer communication technology from Joltid, and Joltid has claimed that Skype has breached the terms of the license agreement. Following the filing of the claim, Joltid purported to terminate the license agreement. In particular, Joltid has alleged that Skype should not possess, use or modify certain software code (the “Code”) and that, by doing so, and by disclosing the Code in certain U.S. patent cases, pursuant to orders from U.S. courts, it has breached the license agreement.

On the basis of, among other things, the parties’ mutual dealings since the execution of the licence agreement, Skype is asking the English High Court for declaratory relief, including findings that:

(i) Skype is lawfully accessing, in possession of, using and modifying the Code so that Skype is not in breach of the license agreement with Joltid and accordingly Joltid’s notice of breach and subsequent notice of termination are invalid;

(ii) Skype lawfully disclosed the Code in the U.S. patent cases so that Skype is not in breach of the license agreement with Joltid and accordingly Joltid’s notice of breach and subsequent notice of termination are invalid; and

(iii) Joltid has certain indemnity obligations in relation to the U.S. patent proceedings.

Although Skype is confident of its legal position, as with any litigation there is the possibility of an adverse result if the matter is not resolved through negotiation. In such event, Skype would be adversely affected and the continued operation of Skype’s business as currently conducted would likely not be possible.

Perhaps this is why we saw so few bidders for Skype?

“We are no longer planning to pursue the acquisition as there has been no progress since we withdrew our offer as of Oct. 22, 2008,” the company said in a filing with the Korea Exchange. The announcement comes after the two companies inked a new seven-year NAND flash-memory license agreement, one that will see Samsung paying about half the royalty amount it paid previously.

The suit, filed in U.S. District Court for the Northern District of California, seeks unspecified, triple damages and, more importantly, an order voiding Apple’s end-user license agreements (EULA). If successful, it will allow OS X to be installed on hardware it was never intended to run on, opening the door for the first legitimate Mac clones in more than a decade. Hard to see Apple (AAPL) allowing that to happen, though. My guess is the company would sooner kill retail sales of OS X and manage upgrades through iTunes, than allow it to be run on inferior machines over whose quality it has no control.