Apple Corps v. Apple Computer
Encyclopedia
Between 1978 and 2006 there were 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. The High Court of Justice
handed down a judgment on 8 May 2006 in favour of Apple Computer, but the companies did not announce a final settlement until 5 February 2007.
, 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$250 million, but was later revealed to be US$80,000. 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.
and audio-recording capabilities to its computers, including the advanced Ensoniq 5503 DOC sound chip from famous synthesizer maker Ensoniq into the Apple IIGS computer. 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.
had included a sampled system sound called Chimes to the Macintosh operating system (the sound was later renamed to sosumi
, to 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. In other words, Apple Computer agreed that it would not package, sell or distribute physical music materials.
, 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 favoured 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.
The trial opened on 29 March 2006 in England, 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 favour of Apple Computer, with Justice Edward Mann holding that “no breach of the trademark agreement[had] been demonstrated”.
The Judge focused on section 4.3 of that agreement:
The Judge held Apple Computer’s use was covered under this clause.
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.
The verdict spawned the Wrong Guy
incident on BBC News 24, in which a job applicant mistakenly appeared on air after he was confused with computing expert Guy Kewney
.
conference, when Apple CEO Steve Jobs
featured Beatles content heavily in his keynote
presentation and demonstration of the iPhone
. During that year's All Things Digital conference, Jobs quoted the Beatles song "Two Of Us" in reference to his relationship with co-panelist Microsoft
chairman Bill Gates
. Speculation abounded regarding the much anticipated arrival of the Beatles' music 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, although newspaper accounts at the time stated that Apple Computer was buying out Apple Corps' trademark rights for a total of $500 million U.S.
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.
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 was still unavailable from the iTunes store, each Beatle’s solo work could be accessed and downloaded on this service. Paul McCartney
was quoted in Rolling Stone
as saying that their catalogue would be released through iTunes in the first quarter of 2008, but this did not happen until 2010.
released new merchandise such as t-shirts and posters which had Beatles albums, and pictures of the Fab Four on them since they signed a contract with Apple Corps
to do so. They also produced a limited edition Beatles iPod
box set including all 13 Beatles albums on CD. Contrary to some earlier reports, the Beatles songs were not preloaded on the included engraved iPod.
representative told the Financial Times
that an agreement had not been reached yet with Apple Inc.
Apple Corps
Apple Corps Ltd. is a multi-armed multimedia corporation founded in January 1968 by the members of The Beatles to replace their earlier company and to form a conglomerate. Its name is a pun. Its chief division is Apple Records, which was launched in the same year...
(owned by The Beatles
The Beatles
The Beatles were an English rock band, active throughout the 1960s and one of the most commercially successful and critically acclaimed acts in the history of popular music. Formed in Liverpool, by 1962 the group consisted of John Lennon , Paul McCartney , George Harrison and Ringo Starr...
) and the computer manufacturer Apple Computer (now Apple Inc.) over competing trademark
Trademark
A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or...
rights. The High Court of Justice
High Court of Justice
The High Court of Justice is, together with the Court of Appeal and the Crown Court, one of the Senior Courts of England and Wales...
handed down a judgment on 8 May 2006 in favour of Apple Computer, but the companies did not announce a final settlement until 5 February 2007.
1978–1981
In 1978, Apple CorpsApple Corps
Apple Corps Ltd. is a multi-armed multimedia corporation founded in January 1968 by the members of The Beatles to replace their earlier company and to form a conglomerate. Its name is a pun. Its chief division is Apple Records, which was launched in the same year...
, the Beatles-founded holding company
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
and owner of their record label, Apple Records
Apple Records
Apple Records is a record label founded by The Beatles in 1968, as a division of Apple Corps Ltd. It was initially intended as a creative outlet for the Beatles, both as a group and individually, plus a selection of other artists including Mary Hopkin, James Taylor, Badfinger, and Billy Preston...
, filed a lawsuit against Apple Computer for trademark infringement
Trademark infringement
Trademark infringement is a violation of the exclusive rights attaching to a trademark without the authorization of the trademark owner or any licensees...
. The suit was settled in 1981 with an undisclosed amount being paid to Apple Corps. This amount had been estimated to be US$
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
50–US$250 million, but was later revealed to be US$80,000. 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.
1986–1989
In 1986, Apple Computer added MIDIMusical Instrument Digital Interface
MIDI is an industry-standard protocol, first defined in 1982 by Gordon Hall, that enables electronic musical instruments , computers and other electronic equipment to communicate and synchronize with each other...
and audio-recording capabilities to its computers, including the advanced Ensoniq 5503 DOC sound chip from famous synthesizer maker Ensoniq into the Apple IIGS computer. 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
Apple II series
The Apple II series is a set of 8-bit home computers, one of the first highly successful mass-produced microcomputer products, designed primarily by Steve Wozniak, manufactured by Apple Computer and introduced in 1977 with the original Apple II...
line, all forays at the time by Apple Computer into the multimedia field in parallel with the Amiga
Amiga
The Amiga is a family of personal computers that was sold by Commodore in the 1980s and 1990s. The first model was launched in 1985 as a high-end home computer and became popular for its graphical, audio and multi-tasking abilities...
, and any future advanced built-in musical hardware in the Macintosh
Macintosh
The Macintosh , or Mac, is a series of several lines of personal computers designed, developed, and marketed by Apple Inc. The first Macintosh was introduced by Apple's then-chairman Steve Jobs on January 24, 1984; it was the first commercially successful personal computer to feature a mouse and a...
line.
1991
In 1991, another settlement involving payment of around US$26.5 million to Apple Corps was reached. This time, an Apple employee named Jim ReekesJim Reekes
Jim Reekes was a programmer at Apple Computer for 12 years. His work has significantly affected operating systems, most notably System 7 and QuickTime. He also is responsible for creating many of the system sounds for the Macintosh operating system...
had included a sampled system sound called Chimes to the Macintosh operating system (the sound was later renamed to sosumi
Sosumi
Sosumi is one of the system sounds introduced in Apple Inc.'s Macintosh System 7 operating system in 1991, an extremely short sample of a xylophone, which gained notoriety in computer folklore as a cheeky response to a long-running Apple Corps v. Apple Computer trademark conflict...
, to 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. 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 contractBreach of contract
Breach of contract is a legal cause of action in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance....
, in using the Apple logo in the creation and operation of Apple Computer’s iTunes Music Store
ITunes Store
The iTunes Store is a software-based online digital media store operated by Apple. Opening as the iTunes Music Store on April 28, 2003, with over 200,000 items to purchase, it is, as of April 2008, the number-one music vendor in the United States...
, which Apple Corps contended was a violation of the previous agreement. Some observers believed the wording of the previous settlement favoured 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.
The trial opened on 29 March 2006 in England, before a single judge
Trial court
A trial court or court of first instance is a court in which trials take place. Such courts are said to have original jurisdiction.- In the United States :...
of the High Court
High Court of Justice
The High Court of Justice is, together with the Court of Appeal and the Crown Court, one of the Senior Courts of England and Wales...
. 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 favour of Apple Computer, with Justice Edward Mann holding that “no breach of the trademark agreement
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 catalogue 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 clause.
In response, Neil Aspinall
Neil Aspinall
Neil Stanley Aspinall was a British music industry executive. A school friend of Paul McCartney and George Harrison, he went on to head The Beatles' company Apple Corps....
, 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
Court of Appeal of England and Wales
The Court of Appeal of England and Wales is the second most senior court in the English legal system, with only the Supreme Court of the United Kingdom above it...
.” The judgment orders Apple Corps to pay Apple Computer’s legal costs at an estimated UK£
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
2m, but pending the appeal the judge declined Apple Computer’s request for an interim payment of UK£1.5m.
The verdict spawned the Wrong Guy
Guy Goma
Guy Goma is a business studies graduate from Brazzaville in the Republic of the Congo who gained international fame when he was accidentally interviewed live on BBC News 24, a UK television news station, on Monday 8th May 2006.-The interview:...
incident on BBC News 24, in which a job applicant mistakenly appeared on air after he was confused with computing expert Guy Kewney
Guy Kewney
Guy Kewney was a South African-born British journalist, regarded by some as the first UK technology journalist. He was best known as a personal computing pundit, starting with Personal Computer World writing a monthly column for the magazine from its launch in 1978 until its closure in June 2009...
.
2007
There was a hint that relations between the companies were improving at the January 2007 MacworldMacworld
Macworld is a web site and monthly computer magazine dedicated to Apple Macintosh products. It is published by Mac Publishing, which is headquartered in San Francisco, California...
conference, when Apple CEO Steve Jobs
Steve Jobs
Steven Paul Jobs was an American businessman and inventor widely recognized as a charismatic pioneer of the personal computer revolution. He was co-founder, chairman, and chief executive officer of Apple Inc...
featured Beatles content heavily in his keynote
Keynote
A keynote in literature, music, or public speaking establishes the principal underlying theme. In corporate or commercial settings, greater importance is attached to the delivery of a keynote speech or keynote address...
presentation and demonstration of the iPhone
IPhone
The iPhone is a line of Internet and multimedia-enabled smartphones marketed by Apple Inc. The first iPhone was unveiled by Steve Jobs, then CEO of Apple, on January 9, 2007, and released on June 29, 2007...
. During that year's All Things Digital conference, Jobs quoted the Beatles song "Two Of Us" in reference to his relationship with co-panelist Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
chairman Bill Gates
Bill Gates
William Henry "Bill" Gates III is an American business magnate, investor, philanthropist, and author. Gates is the former CEO and current chairman of Microsoft, the software company he founded with Paul Allen...
. Speculation abounded regarding the much anticipated arrival of the Beatles' music to the iTunes Store
ITunes Store
The iTunes Store is a software-based online digital media store operated by Apple. Opening as the iTunes Music Store on April 28, 2003, with over 200,000 items to purchase, it is, as of April 2008, the number-one music vendor in the United States...
.
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, although newspaper accounts at the time stated that Apple Computer was buying out Apple Corps' trademark rights for a total of $500 million U.S.
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
EMI
The EMI Group, also known as EMI Music or simply EMI, is a multinational music company headquartered in London, United Kingdom. It is the fourth-largest business group and family of record labels in the recording industry and one of the "big four" record companies. EMI Group also has a major...
(and that Neil Aspinall had retired and been replaced by Jeff Jones
Jeff Jones (music industry executive)
Jeff Jones is the chief executive of Apple Corps, the company founded by The Beatles. He replaced long-time incumbent Neil Aspinall in April 2007. Jones was formerly a vice president at Sony/BMG, where he specialised in repackaging classic albums...
) further fueled media speculation that The Beatles’ catalogue would appear on iTunes.
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 was still unavailable from the iTunes store, each Beatle’s solo work could be accessed and downloaded on this service. Paul McCartney
Paul McCartney
Sir James Paul McCartney, MBE, Hon RAM, FRCM is an English musician, singer-songwriter and composer. Formerly of The Beatles and Wings , McCartney is listed in Guinness World Records as the "most successful musician and composer in popular music history", with 60 gold discs and sales of 100...
was quoted in Rolling Stone
Rolling Stone
Rolling Stone is a US-based magazine devoted to music, liberal politics, and popular culture that is published every two weeks. Rolling Stone was founded in San Francisco in 1967 by Jann Wenner and music critic Ralph J...
as saying that their catalogue would be released through iTunes in the first quarter of 2008, but this did not happen until 2010.
2008
In the summer of 2008, Bloomingdale'sBloomingdale's
Bloomingdale's is an American department store owned by Macy's, Inc. .Bloomingdale's started in 1861 when brothers Joseph and Lyman G. Bloomingdale started selling hoop-skirts in their Ladies Notions' Shop on Manhattan's Lower East Side...
released new merchandise such as t-shirts and posters which had Beatles albums, and pictures of the Fab Four on them since they signed a contract with Apple Corps
Apple Corps
Apple Corps Ltd. is a multi-armed multimedia corporation founded in January 1968 by the members of The Beatles to replace their earlier company and to form a conglomerate. Its name is a pun. Its chief division is Apple Records, which was launched in the same year...
to do so. They also produced a limited edition Beatles iPod
IPod
iPod is a line of portable media players created and marketed by Apple Inc. The product line-up currently consists of the hard drive-based iPod Classic, the touchscreen iPod Touch, the compact iPod Nano, and the ultra-compact iPod Shuffle...
box set including all 13 Beatles albums on CD. Contrary to some earlier reports, the Beatles songs were not preloaded on the included engraved iPod.
2009
On April 7, Reuters news service announced that after four years of work, the entire original British Beatles catalogue had been digitally remastered, and would be made available on individual CDs, and in a box set, with a release date set for September 9, 2009, according to Apple Records. The article indicated that the catalog would "not be available online for the foreseeable future, although the digital remastering is widely seen as bringing that process one step closer." In September 2009, an EMIEMI
The EMI Group, also known as EMI Music or simply EMI, is a multinational music company headquartered in London, United Kingdom. It is the fourth-largest business group and family of record labels in the recording industry and one of the "big four" record companies. EMI Group also has a major...
representative told the Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
that an agreement had not been reached yet with Apple Inc.
2010
On November 16 17 official Beatles albums were made available for sale on Apple's iTunes Store. Also 13 remastered albums were released on the iTunes Store.See also
- Notable litigation of Apple ComputerNotable litigation of Apple ComputerFrom the 1980s to the present, Apple Inc. has been plaintiff or defendant in civil actions in the United States and other countries. Several of these actions have determined significant case law for the technology industry, while others simply captured the attention of the public and media...
- A moron in a hurryA moron in a hurry"A moron in a hurry" is a hypothetical person against whom a claimant's concern might be judged in an English law civil action for passing off or trademark infringement. The expression is used to reject a claim that two items could reasonably be confused by a passer-by "A moron in a hurry" is a...
- Confusing similarityConfusing similarityIn trademark law, confusing similarity is a test used during the examination process to determine whether a trademark conflicts with another, earlier mark, and also in trademark infringement proceedings to determine whether the use of a mark infringes a registered trade mark.In many jurisdictions...
- Guy GomaGuy GomaGuy Goma is a business studies graduate from Brazzaville in the Republic of the Congo who gained international fame when he was accidentally interviewed live on BBC News 24, a UK television news station, on Monday 8th May 2006.-The interview:...