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Crunch Time for Apples in Music Dispute Firms Battle Over Downloads

Posted on: Thursday, 30 March 2006, 06:00 CST

By CALUM MACDONALD

TWO giants of the music industry went to court yesterday in a battle over a piece of fruit.

Apple Corps Ltd, the record company of the Beatles, is suing Apple Computer Inc, makers of the iPod, claiming a breach of a trademark agreement between the two by selling music. It is the latest round of a multi-million pound battle over logos which dates back to the early 1980s. Under an agreement reached 15 years ago, each company had agreed a strict "field of use" of the Apple mark.

The 1991 trademark agreement gave Apple Corps, owned by Sir Paul McCartney, Ringo Starr, and the widows of John Lennon and George Harrison, exclusive rights to use Apple marks for the record business.

Apple Computer had exclusive rights to use Apple marks for the computer, data processing, and telecommunications industry.

There had been no further disputes between the two until the advent of Apple Computer's iPod, which can be used to download and save pre-recorded tracks via the internet. Apple Corps is claiming the pledge by Apple Computers not to sell music has been breached by its online iTunes Music Store, which complements its iPod.

Geoffrey Vos, QC, representing Apple Corps, told Mr Justice Mann at the High Court in London yesterday that to call iTunes simply an electronic device, as Apple Computers has done, was a "perversion" of the constraints laid down in the agreement between the two. He said Steve Jobs, who co-founded Apple Computer, had said that the downloading of music from the internet was exactly the same as buying an LP in the modern world.

Mr Vos said Apple Computer had violated the agreement by selling music online and its argument that it uses the Apple mark only in connection with a delivery system was "plainly wrong".

He told the court that Apple Computer had given the public access to one billion downloads through the Music Store website. Mr Vos said Apple Computer sold musical content on its website and that was what the consumer was paying for.

He added that the Apple logo was prominent on the iTunes website and almost every advert for it carried the logo.

Apple Corps is seeking court orders to stop Apple Computer using the Apple marks in connection with the iTunes music store and damages.

Mr Vos said that when Mr Jobs launched the iTunes music store in 2003, part of the presentation included exclusive tracks from artists including U2, Eminem, and Bob Dylan - "tracks for the store that you cannot get anywhere else".

He said: "Apple Computer was promoting a store at which to buy music, and more particularly, Computer's musical recordings; permanent downloads with special characteristics. No objective onlooker could think otherwise."

He said Mr Jobs wanted to use the Apple mark for the music store, but realised that the agreement prevented this.

He added: "Computer was so keen to use a name with the word 'apple' in it as the name of the music store that shortly before it launched the music store, Computer approached Corps with a proposal to buy the mark 'Apple Records' for dollars1m." He said the offer was rejected by Apple Corps.

Although Apple Computer recognised that the use of Apple marks would be impermissible, he said it "succumbed to its earlier desire" and used the logos with great prominence and the name Apple and had continued to do so up to the present date.

The hearing continues.

Fruit fight

APPLE COMPUTERS

Founded in 1976 Apple-1 and Apple II helped to ignite the personal computer boom in the late1970s.

The Macintosh was launched in 1984.

The iPod, the leading MP3 player, was launched in 2001.

APPLE CORP

Formed in 1968 by The Beatles.

Apple Records is the chief division. Others include Apple Films, publishing, and retail.

It exists today as the licensing agent for Beatlesr elated products.

Source: Herald, The; Glasgow (UK)

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