Apple Trademark Battle With The Beatles Goes to UK High Court

The lengthy battle between The Beatles and Apple over whether the computer maker infringed on the legendary band’s trademark by pushing into the music business will reach the highest court in the United Kingdom this week.

Justice Edward Mann will hear arguments on whether Apple’s iTunes online music service violates a 1991 agreement between the PC maker and Apple Corps, the firm that holds the rights to The Beatles’ music and other assets.

Apple Corps has asked the judge to stop Apple Computer from using its brand name in conjunction with online music sales along with unspecified damages for past sales.

Apple Computer argues that the agreement permits the company to use the brand name to sell “online data transfers” which it says is exactly what digital music downloads are.

The latest legal battle comes as Apple prepares to mark the 30th anniversary of the date — April 1, 1976 — when Steve Jobs and Steve Wozniak formed Apple, a seminal date for the formation of today’s massive PC industry.

Low-Hanging Fruit

The stakes are seen as higher this time around, since Apple’s iTunes has grown to dominate the digital music business and because the Apple iPod has helped transform the company from a PC maker into a consumer electronics firm known for its ability to create strikingly designed products.

Apple Corps first sued the computer maker in 1980, as its Macintosh computers began to gain in popularity. A settlement was reached with the PC maker paying US$80,000 to Apple Corps, only to have another suit filed in 1989, when later versions of the Mac began to sport high-end music recording and storage functionality.

That case ended in 1991 with Apple agreeing to a $26.5 million settlement and to limit the music creation capabilities of future generations of Macs.

After the launch of iTunes in 2003, however, Apple Corps, which The Beatles established in the late 1960s while still together, sued again.

While Apple Records, a division of Apple Corps, has made no effort to sell or license music online and none of The Beatles’ recordings are yet available for legal download anywhere, Apple Computer announced on Feb. 23 that it had sold a billion songs through iTunes.

Other Issues

With the trademark battle being closely watched, the interest is generated as much by the personalities and companies involved as by any sense that an adverse ruling would have a major impact on Apple’s ability to sell music online.

Both Apple Records and what Apple has done with music are about the same thing — giving users and producers of music more control over it, Jupiter Research analyst Todd Chanko said.

“It’s not likely that most of the earbud-wearing generation is that aware of Apple Records, but Jobs should find a way to pay homage to the antecedents of his own ‘Revolution,'” Chanko said.

Meanwhile, another overseas action is seen as far more critical to Apple’s long-term financial future, with French officials still mulling a law that would require the company to open up its proprietary iPod format to enable the device to play back music bought through other digital download sites.

Others, meanwhile, expect Apple’s PC line to gain later this year as a result of Microsoft’s recent announcement that it would delay the rollout of Windows Vista for consumers until early 2007.

“If any computer maker benefits from Microsoft’s woes, it will probably be Apple,” Gartner analyst Martin Reynolds told the E-Commerce Times.