Apple Computer mounts defense in Beatles lawsuit

LONDON (Reuters) – Apple Computer opened its defense in
London’s High Court on Thursday against charges by the Beatles’
company, Apple Corps Ltd., that it had violated a 1991
trademark agreement by moving into the music business.

Apple Computer lead counsel Anthony Grabiner argued that
the market-leading iTunes music store was primarily a data
transmission service, permitted by the agreement.

“Data transmission is within our field of use,” he said.

Apple Corps, owned by Paul McCartney, Ringo Starr, John
Lennon’s widow Yoko Ono and the estate of George Harrison, has
sued Apple Computer twice before.

The 1991 out-of-court settlement, which included a $26
million payment by Apple Computer, set out areas in which each
party would have exclusive use of their respective fruit-shaped
logos.

The interpretation of that agreement is now in dispute.
Apple Corps is seeking a judgment of liability and an
injunction against Apple Computer. If it succeeds, a subsequent
trial will assess damages.

Grabiner said that Apple had helped to save the music
industry by offering a viable alternative to online piracy and
noted that the Beatles have consistently refused to license
their songs to any online music services.

“Apple Computer has been able to persuade every major
content provider to distribute through the iTunes Music Store,”
Grabiner said. “Apple Computer has not been able to persuade
Apple Corps in relation to the Beatles catalog, but at the end
of the day, they may have missed out on that.”

Apple Computer has become a major force in the music
industry, selling some 14 million iPod portable music players
and more than 1 billion songs from the iTunes Music Store.

The trial is set to continue through next week, with
scheduled testimony from Apple Corps Managing Director Neil
Aspinall, a former Beatles road manager, and Eddie Cue, Apple
Computer’s vice president for applications.