Apple Corps v Apple Computer

Last updated

Between 1978 and 2007 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, specifically over the use of the name "Apple" and their respective logos which consist of a profile of an apple. Apple Inc. paid Apple Corps. over three settlements: $80,000 in 1978, $26.5 million in 1991, and $500 million in 2007, when Apple Inc. acquired all the trademarks related to "Apple."

Contents

The disputes provided a notable example of the "A moron in a hurry" legal test. They also led to the Guy Goma incident and inspired the Sosumi alert sound.

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 for the then-undisclosed amount of US$80,000 (equivalent to $268,100in 2023) being paid to Apple Corps. [1] 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. [2] [3]

1986–1991

In 1986, Apple Computer added MIDI and audio-recording capabilities to its computers, which included putting the advanced Ensoniq 5503 DOC sound chip from synthesizer maker Ensoniq into the Apple IIGS computer. In 1989, this led Apple Corps to sue again, claiming violation of the 1981 settlement agreement. [2]

In 1991, a settlement involving payment of around US$26.5 million (equivalent to $59.3 million in 2023) to Apple Corps was reached. [4] : 581–582  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. [5] In other words, Apple Computer agreed that it would not package, sell or distribute physical music materials.

Sosumi

In 1989, when the lawsuit was filed, Apple Computer employee Jim Reekes was part of the team working on the company's operating system update, System 7. He had added a sampled system sound called Chimes, which the company legal department worried would further exacerbate the legal challenge. Reekes successfully resubmitted the name as sosumi , not pointing out to the company lawyers that this would be read phonetically as "so sue me". [6] By coincidence, Mac OS 7 was released to the public in 1991, the same year the settlement of the lawsuit was reached.

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 favoured Apple Computer in this case. [1] 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. [7]

Following Apple Computer's unsuccessful efforts, in 2003 and 2004, to have the lawsuit dismissed by a California court, or have the jurisdiction changed to California by an English court, [8] the trial opened on 29 March 2006 in England, [9] 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 $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, [10] with Mr Justice Mann holding that "no breach of the trademark agreement [had] been demonstrated". [11] [12]

The Judge focused on section 4.3 of that agreement: [11]

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, 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. [...] We will accordingly 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 GB£2 million, but pending the appeal the judge declined Apple Computer's request for an interim payment of £1.5 million. [13]

The verdict coincidentally led to the Guy Goma incident on BBC News 24, in which a job applicant mistakenly appeared on air after he was confused with computing expert Guy Kewney.

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. 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.

As revealed on 5 February 2007, Apple Inc. and Apple Corps reached 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. [14]

Commenting on the settlement, Apple Inc. CEO Steve Jobs 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."

Reports 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. [15]

Ahead of the June 2007 release of Paul McCartney's solo album, Memory Almost Full , Apple aired an ad for his single "Dance Tonight", promoting their iPods. Later in September that same year, an Apple press release for the new iPod touch, related iPod updates, and iPhone price cut was titled "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. McCartney was quoted in Rolling Stone as saying that their catalogue would be released through digital music stores such as iTunes in the first quarter of 2008, [16] [17] but this did not happen until 2010. [18]

See also

Related Research Articles

<span class="mw-page-title-main">Michael Robertson (businessman)</span> American businessman

Michael Robertson is the founder and former CEO of MP3.com, an Internet music site. In the years following his departure from MP3.com Robertson has launched several companies, including Linspire, SIPphone, MP3tunes, and Ajax13. He is also founder of OnRad.io, a search engine for radio and DAR.fm, a website for recording audio from internet radio.

iPod Line of portable media players by Apple (2001–2022)

The iPod is a discontinued series of portable media players and multi-purpose mobile devices that were designed and marketed by Apple Inc. from 2001 to 2022. The first version was released on November 10, 2001, about 8+1⁄2 months after the Macintosh version of iTunes was released. Apple sold an estimated 450 million iPod products as of 2022. Apple discontinued the iPod product line on May 10, 2022. At over 20 years, the iPod brand is the longest-running to be discontinued by Apple.

<span class="mw-page-title-main">Neil Aspinall</span> British music industry executive (1941–2008)

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.

<span class="mw-page-title-main">Jon Lech Johansen</span> Norwegian programmer (born 1983)

Jon Lech Johansen, also known as DVD Jon, is a Norwegian programmer who has worked on reverse engineering data formats. He wrote the DeCSS software, which decodes the Content Scramble System used for DVD licensing enforcement. Johansen is a self-trained software engineer, who quit high school during his first year to spend more time with the DeCSS case. He moved to the United States and worked as a software engineer from October 2005 until November 2006. He then moved to Norway but moved back to the United States in June 2007.

Apple Records is a British 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. In practice, the roster had become dominated by the mid-1970s with releases of the former Beatles as solo artists. Allen Klein managed the label from 1969 to 1973, then it was managed by Neil Aspinall on behalf of the Beatles and their heirs. Aspinall retired in 2007 and was replaced by Jeff Jones. Jones stepped down on October 21st, 2024.

iTunes Store Digital media store

The iTunes Store is a digital media store operated by Apple Inc. which opened on April 28, 2003. As of April 2020, iTunes offered 60 million songs, 2.2 million apps, 25,000 TV shows, and 65,000 films. The iTunes Store is available on most home and portable Apple devices, as well as some platforms by other companies. The store opened as part of then-CEO Steve Jobs' push to open a digital marketplace for music; when it opened, it was the only legal digital catalog of music to offer songs from all five major record labels, which played a part in its success and influence in the music downloading business. While initially a dominant player in digital media, by the mid-2010s, streaming media services were generating more revenue than the buy-to-own model used by the iTunes Store; Apple now operates its own subscription-based streaming music service, Apple Music, alongside the iTunes Store.

<span class="mw-page-title-main">Bonjour (software)</span> Computer networking technology

Bonjour is Apple's implementation of zero-configuration networking (zeroconf), a group of technologies that includes service discovery, address assignment, and hostname resolution. Bonjour locates devices such as printers, other computers, and the services that those devices offer on a local network using multicast Domain Name System (mDNS) service records.

Sosumi is an alert sound introduced by Apple sound designer Jim Reekes in Apple Inc.'s Macintosh System 7 operating system in 1991. The name is derived from the phrase "so, sue me!" because of a long running court battle with Apple Corps, the similarly named music company, regarding the use of music in Apple Inc.'s computer products.

FairPlay is a family of digital rights management (DRM) technologies developed by Apple Inc. for protecting videos, books and apps and historically for music.

<span class="mw-page-title-main">Apple Corps</span> Multimedia company founded by The Beatles

Apple Corps Limited is a multi-armed multimedia corporation founded in London in January 1968 by the members of The Beatles to replace their earlier company and to form a conglomerate. The name is a pun for its pronunciation "apple core". Its chief division is Apple Records, which was launched in the same year. Other divisions included Apple Electronics, Apple Films, Apple Publishing and Apple Retail, whose most notable venture was the short-lived Apple Boutique, on the corner of Baker Street and Paddington Street in central London. Apple's headquarters in the late 1960s was at the upper floors of 94 Baker Street, after that at 95 Wigmore Street, and subsequently at 3 Savile Row. The last of these addresses was also known as the Apple Building, which was home to the Apple studio.

A podcast is a program made available in digital format for download over the Internet. Typically, a podcast is an episodic series of digital audio files that users can download to a personal device to listen to at a time of their choosing. Podcasts are primarily an audio medium, but some distribute in video, either as their primary content or as a supplement to audio; popularised in recent years by video platform YouTube.

<span class="mw-page-title-main">Allen Klein</span> American businessman (1931–2009)

Allen Klein was an American businessman whose aggressive negotiation tactics affected industry standards for compensating recording artists. He founded ABKCO Music & Records Incorporated. Klein increased profits for his musician clients by negotiating new record company contracts. He first scored monetary and contractual gains for Buddy Knox and Jimmy Bowen, one-hit rockabillies of the late 1950s, then parlayed his early successes into a position managing Sam Cooke, and eventually managed the Beatles and the Rolling Stones simultaneously, along with many other artists, becoming one of the most powerful individuals in the music industry during his era.

<span class="mw-page-title-main">Lee Eastman</span> American attorney and art collector, father of Linda McCartney

Lee Eastman was an American show business lawyer and art collector from New York City.

Northern Songs Ltd was a limited company founded in 1963, by music publisher Dick James, artist manager Brian Epstein, and songwriters John Lennon and Paul McCartney of the Beatles, to publish songs written by Lennon and McCartney. In 1965, it was decided to make Northern Songs a public company, to reduce their income tax burden.

The Beatles were an English rock band, active from 1960 until 1970. From 1962 onwards, the band's members were John Lennon, Paul McCartney, George Harrison and Ringo Starr. Their break-up is attributed to numerous factors, including: the strain of the Beatlemania phenomenon, the 1967 death of their manager Brian Epstein, bandmates' resentment of McCartney's perceived domineering behaviour, Lennon's heroin use and his relationship with Yoko Ono, Harrison's increasingly prolific songwriting, the floundering of Apple Corps, the Get Back project and managerial disputes.

The multinational technology corporation Apple Inc. has been a participant in various legal proceedings and claims since it began operation and, like its competitors and peers, engages in litigation in its normal course of business for a variety of reasons. In particular, Apple is known for and promotes itself as actively and aggressively enforcing its intellectual property interests. From the 1980s to the present, Apple has been plaintiff or defendant in civil actions in the United States and other countries. Some of these actions have determined significant case law for the information technology industry and many have captured the attention of the public and media. Apple's litigation generally involves intellectual property disputes, but the company has also been a party in lawsuits that include antitrust claims, consumer actions, commercial unfair trade practice suits, defamation claims, and corporate espionage, among other matters.

A moron in a hurry is a phrase that has been used in legal cases, especially in the UK, involving trademark infringement and passing off. Where one party alleges that another has infringed their intellectual property rights by offering for sale a product that is confusably similar to their own, the court has to decide whether a reasonable person would be misled by the defendant's trademark or the get-up of their product. It has been held that "if only a moron in a hurry would be misled" the case is not made out. Although this formulation addresses only fairly extreme instances of confusability, and says nothing about less clear examples, the phrase is sometimes referred to as a "test".

Jeff Jones is a music industry executive best known as the former CEO of Apple Corps, the company founded by The Beatles. Jones was formerly an executive vice president at Sony/BMG, where he managed Sony's recorded catalogs, including repackaging classic albums.

<span class="mw-page-title-main">History of the iPhone</span>

The history of the iPhone by Apple Inc. spans from the early 2000s to about 2010. The first iPhone was unveiled at Macworld 2007 and released later that year. By the end of 2009, iPhone models had been released in all major markets.

Microsoft has been involved in numerous high-profile legal matters that involved litigation over the history of the company, including cases against the United States, the European Union, and competitors.

References

  1. 1 2 Salkever, Alex (30 September 2004). "John, Paul, George, Ringo ... and Steve?". Bloomberg BusinessWeek . ISSN   0007-7135. Archived from the original on 10 March 2007. Retrieved 14 September 2022.
  2. 1 2 Hormby, Tom (27 April 2014). "What's in a Name? Apple Corp vs. Apple Computer". Low End Mac . Archived from the original on 26 December 2021. Retrieved 14 September 2022.
  3. ↑ "History of Apple v Apple". BBC News . 8 May 2006. Archived from the original on 7 February 2007. Retrieved 3 February 2007.
  4. ↑ Miles, Barry (15 October 1998). Paul McCartney: Many Years from Now. Vintage-Random House. ISBN   978-0805052497. LCCN   98105657. OCLC   40284619. OL   7932279M.
  5. ↑ Borland, John; Fried, Ina (23 September 2004). "Apple vs. Apple: Perfect harmony?". CNET . Archived from the original on 12 June 2022. Retrieved 14 September 2022. According to a recent court decision quoting the 1991 settlement agreement, the Beatles were given the right to use the Apple name wherever their songs were involved and on "any current or future creative works whose principal content is music." However, Apple Computer was allowed to use its brand on "goods or services...used to reproduce, run, play or otherwise deliver such content," as long as it was not on physical media such as a CD.
  6. ↑ Jardin, Xeni (24 March 2005). "Early Apple sound designer Jim Reekes corrects Sosumi myth". Boing Boing . Archived from the original on 1 June 2005. Retrieved 8 October 2013.
  7. ↑ Graves, Alice (11 December 2006). "Apple v Apple: What is at the core of The Beatles' Apple Records vs. Apple iPod ..." LegalZoom. Archived from the original on 12 March 2007. Retrieved 1 March 2007.
  8. ↑ Royal Courts of Justice (2004). "Judgment in Apple Corps Limited vs Apple Computer, Inc. - EWHC 768 (Ch) in Case No: HC-2003-C02428". courtservice.gov.uk. Archived from the original on 15 March 2005. Retrieved 8 October 2013.
  9. ↑ "Apple Giants Do Battle in Court". BBC News. 29 March 2006. Archived from the original on 10 March 2007. Retrieved 1 March 2007.
  10. ↑ Brandie, Lars (8 May 2006). "Apple Computer Triumphs in Beatles Case". Billboard .
  11. 1 2 Apple Corps Limited and Apple Computer, Inc., UKMr. Justice Mann (High Court5 August 2005). (archived on 2 April 2009)
  12. ↑ "Beatles lose court case against Apple Computer". BBC. 11 May 2006. Retrieved 29 January 2007.
  13. ↑ "Beatles lose Apple court battle". BBC News. 8 May 2006. Archived from the original on 5 February 2007. Retrieved 1 March 2007.
  14. ↑ "Apple Inc. and The Beatles' Apple Corps Ltd. Enter into New Agreement" (Press release). Apple Inc. 5 February 2007. Archived from the original on 7 February 2007. Retrieved 5 February 2007.
  15. ↑ Evans, Jonny (12 April 2007). "EMI, Apple Corps deal good news for iTunes?". MacWorld .
  16. ↑ Kreps, Daniel (14 November 2007). "McCartney Says Beatles Going Digital in '08, New Alice in Chains Album, Queens of the Stone Age Booted From Rehab Clinic". Rolling Stone. Archived from the original on 14 April 2010.
  17. ↑ "McCartney: Beatles Should Go Digital Next Year". Billboard. Archived from the original on 14 August 2010.
  18. ↑ "Beatles albums offered on iTunes". BBC News . 16 November 2010.

Bibliography

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.