Apple Corps v. Apple Computer

Between 1978 and 2006 there was a number of legal disputes between Apple Corps (owned by The Beatles) and the computer manufacturer Apple Computer (now Apple Inc.) over competing trademark rights. In the latest dispute, the English High Court handed down a judgment on 8 May 2006 in favor of Apple Computer. The companies announced a final settlement of the dispute on 5 February 2007.

History of trademark disputes

1978–1981

In 1978, Apple Corps, the Beatles-founded holding company and owner of their record label, Apple Records, filed a lawsuit against Apple Computer for trademark infringement. The suit was settled in 1981 with an undisclosed amount being paid to Apple Corps. This amount had been estimated to be US$50–US$200 million, but was later revealed to be US$80,000.cite news|last =Alex | first =Salkever | title =John, Paul, George, Ringo...and Steve? | publisher =BusinessWeek | pages = | year = | date =2004-09-30 | accessdate =2007-03-01 | url =http://www.businessweek.com/technology/content/sep2004/tc20040930_9317_tc056.htm ] As a condition of the settlement, Apple Computer agreed not to enter the music business, and Apple Corps agreed not to enter the computer business.cite web | last =Hormby | first =Thomas | title =What's In a Name? Apple Corp vs. Apple Computer | publisher =Low End Mac | date =2007-01-10 | url =http://lowendmac.com/orchard/07/0110.html | accessdate =2007-03-01 ] [cite news|url=http://news.bbc.co.uk/1/hi/entertainment/4750533.stm |title=History of Apple v Apple|publisher=BBC|date=2006-05-08|accessdate=2007-02-03]

1986–1989

In 1986, Apple Computer added MIDI and audio-recording capabilities to its computers, including the advanced 5503 sound chip from famous synthesizer maker Ensoniq into the Apple IIGS line. In 1989 this led Apple Corps to sue again, claiming violation of the 1981 settlement agreement. The outcome of this litigation effectively spelled the end of any further development of the highly profitable Apple II line, all forays at the time by Apple Computer into the multimedia field in parallel with the Amiga, and any future advanced built-in musical hardware in the Macintosh line.

1991

In 1991, another settlement involving payment of around US$26.5 million to Apple Corps was reached. Miles 1998. pp581-582.] This time, an Apple employee named Jim Reekes had included a sampled system sound called "Chimes" to the Macintosh operating system, but Apple’s legal department objected citing the agreement with Apple Corps. Reekes renamed the sound to "sosumi", which he asserted was Japanese and meant nothing musical, but in fact can be read phonetically as “so sue me”. Outlined in the settlement was each company’s respective trademark rights to the term “Apple”. Apple Corps held the right to use Apple on any “creative works whose principal content is music”, while Apple Computer held the right to use Apple on “goods or services...used to reproduce, run, play or otherwise deliver such content”, but not on content distributed on physical media. [cite web | last =Borland | first =John | last2 =Fried | first2 =Ina | authorlink = | coauthors = | title =Apple vs. Apple: Perfect harmony? | work = | publisher =CNET News.com | date =2006-09-23 | url =http://news.com.com/Apple+vs.+Apple+Perfect+harmony/2100-1027_3-5378401.html | format =HTML | doi = | accessdate =2007-03-01 ] In other words, Apple Computer agreed that it would not package, sell or distribute physical music materials.

2003–2006

In September 2003, Apple Corps sued Apple Computer again, this time for breach of contract, in using the Apple logo in the creation and operation of Apple Computer’s iTunes Music Store, which Apple Corps contended was a violation of the previous agreement. Some observers believed the wording of the previous settlement favored Apple Computer in this case. Other observers speculated that if Apple Corps was successful, Apple Computer would be forced to offer a much larger settlement, perhaps resulting in Apple Corps becoming a major shareholder in Apple Computer, or perhaps in Apple Computer splitting the iPod and related business into a separate entity. [cite web | last =Graves | first =Alice | authorlink = | coauthors = | title =Apple v Apple: What is at the core of The Beatles’ Apple Records vs. Apple iPod… | work = | publisher =LegalZoom | date =2006-12-11 | url =http://www.legalzoom.com/articles/article_content/article11325.html | format = | doi = | accessdate =2007-03-01 ]

The trial opened on 29 March 2006 in England, [cite web | last = | first = | authorlink = | coauthors = | title =Apple Giants Do Battle in Court | work = | publisher =BBC News | date =2006-03-29 | url =http://news.bbc.co.uk/2/hi/entertainment/4854408.stm | format = | doi = | accessdate =2007-03-01 ] before a single judge of the High Court. In opening arguments, a lawyer for Apple Corps stated that in 2003, shortly before the launch of Apple Computer’s on-line music store, Apple Corps rejected a US$1 million offer from Apple Computer to use the Apple name on the iTunes store.

On 8 May 2006 the court ruled in favor of Apple Computer, [cite news | last =Brandie | first =Lars | title =Apple Computer Triumphs In Beatles Case | publisher =Billboard| date =2006-05-08 | url =http://www.billboard.com/bbcom/news/article_display.jsp?vnu_content_id=1002464164 ] with Justice Mann holding that “no breach of the trademark agreement [had] been demonstrated”.cite court |litigants=Apple Corps Limited and Apple Computer, Inc. |vol= |reporter=UK |opinion=Mr. Justice Mann |pinpoint= |court=High Court |date=2005-08-05 |url=http://www.hmcourts-service.gov.uk/judgmentsfiles/j4226/apple_v_apple_hc03c02428_0506.htm] [cite news
url=http://www.bbc.co.uk/worldservice/learningenglish/newsenglish/witn/2006/05/060512_apple.shtml |title=Beatles lose court case against Apple Computer|publisher=BBC|date=2006-05-11|accessdate=2007-01-29]

The Judge focused on section 4.3 of that agreement::4.3 The parties acknowledge that certain goods and services within the Apple Computer Field of Use are capable of delivering content within the Apple Corps Field of Use. In such case, even though Apple Corps shall have the exclusive right to use or authorize others to use the Apple Corps Marks on or in connection with content within subsection 1.3(i) or (ii) [the Apple Corps catalog and any future music] , Apple Computers [sic] shall have the exclusive right to use or authorize others to use the Apple Computer Marks on or in connection with goods or services within subsection 1.2 [Apple Computer Field of Use] (such as software, hardware or broadcasting services) used to reproduce, run, play or otherwise deliver such content provided it shall not use or authorize others to use the Apple Computer Marks on or in connection with physical media delivering pre-recorded content within subsection 1.3(i) or (ii) (such as a compact disc of the Rolling Stones music).

The Judge held Apple Computer’s use was covered under this cause.

In response, Neil Aspinall, manager of Apple Corps, indicated that the company did not accept the decision: “With great respect to the trial judge, we consider he has reached the wrong conclusion,” and announced that it would “be filing an appeal and putting the case again to the Court of Appeal.” The judgment orders Apple Corps to pay Apple Computer’s legal costs at an estimated UK£2m, but pending the appeal the judge declined Apple Computer’s request for an interim payment of UK£1.5m. [cite news | title =Beatles lose Apple court battle | publisher= BBC News | date =2006-05-08 | url =http://news.bbc.co.uk/2/hi/entertainment/4983796.stm | accessdate =2007-03-01 ]

Despite the decision, plans have been announced by Neil Aspinall to completely remaster and release the entire Beatles catalogue on unspecified online music services, as well as to release some previously unheard work by the band. No firm date has been set for this as yet. [cite web|publisher =Zee News | title =Beatles set to join online music revolution | date = | url =http://www.zeenews.com/znnew/articles.asp?aid=288466&ssid=2&sid=ENT | accessdate =2007-03-01 ]

2007

There was a hint that relations between the companies were improving at the January 2007 Macworld conference, when Apple Inc. CEO Steve Jobs featured Beatles content heavily in his keynote presentation and demonstration of the iPhone. Speculation abounds that the much anticipated music of the Beatles will finally be coming to the iTunes Store.

On 5 February 2007, Apple Inc. and Apple Corps announced a settlement of their trademark dispute under which Apple Inc. will own all of the trademarks related to “Apple” and will license certain of those trademarks back to Apple Corps for their continued use. The settlement ends the ongoing trademark lawsuit between the companies, with each party bearing its own legal costs, and Apple Inc. will continue using its name and logos on iTunes. The settlement includes terms that are confidential. [cite press release| url=http://www.apple.com/pr/library/2007/02/05apple.html | title=Apple Inc. and The Beatles’ Apple Corps Ltd. Enter into New Agreement | publisher=Apple Inc. | date=2007-02-05 | accessdate=2007-02-05 ]

Commenting on the settlement, Steve Jobs, Apple’s CEO said, “We love the Beatles, and it has been painful being at odds with them over these trademarks. It feels great to resolve this in a positive manner, and in a way that should remove the potential of further disagreements in the future.”

Commenting on the settlement on behalf of the shareholders of Apple Corps, Neil Aspinall, manager of Apple Corps said, “It is great to put this dispute behind us and move on. The years ahead are going to be very exciting times for us. We wish Apple Inc. every success and look forward to many years of peaceful co-operation with them.”

An announcement in April 2007 that Apple Corps had settled another long-running dispute with EMI (and that Neil Aspinall had retired and been replaced by Jeff Jones) further fueled media speculation that The Beatles’ catalogue would appear on iTunes. [cite web|last=Evans|first=Jonny|title=EMI, Apple Corps deal good news for iTunes?|publisher=Macworld|date=2007-04-12|url=http://www.macworld.co.uk/ipod-itunes/news/index.cfm?newsid=17737&pagtype=allchandate]

In early September 2007, an Apple press release for the new iPod touch, related iPod updates, and iPhone price cut was entitled “The Beat Goes On”, the title of the Beatles’ last press release before splitting up. Although Beatles content is still unavailable from the iTunes store, each Beatle’s solo work can now be accessed and downloaded on this service. Paul McCartney revealed in Rolling Stone Magazine that their catalog would be released in the first quarter of 2008, [ [http://www.rollingstone.com/rockdaily/index.php/2007/11/14/mccartney-says-beatles-going-digital-in-08-new-alice-in-chains-album-queens-of-the-stone-age-booted-from-rehab-clinic/ Rolling Stone: McCartney Says Beatles Going Digital in ‘08 [sic] , New Alice in Chains Album, Queens of the Stone Age Booted From Rehab Clinic ] ] although as of yet, no Beatles content has appeared on iTunes.

2008

In the summer of 2008, Bloomingdales is going to release new merchandise like T-Shirts, Posters which will have Beatle albums, and pictures of the Fab Four on them since they signed a contract with Apple Corps do to so. They are also going to sell a Beatle iPod loaded with the entire catalog of their songs. [http://www.artistdirect.com/nad/news/article/0,,4707849,00.html] Only 100 will be made and they will be sold at Bloomingdales over the Summer.

ee also

*Notable litigation of Apple Computer
*A moron in a hurry
*Confusing similarity

References

*cite book | author=Barry Miles!Miles, Barry | title=Many Years From Now | publisher=Vintage-Random House | year=1998 | id=ISBN 0-7493-8658-4