2 Apples settle suit over use of trademark

Music label had sued over online iTunes

February 06, 2007|By Jesus Sanchez | Jesus Sanchez,Los Angeles TImes

Apple Inc., the computer maker and iPod seller, and Apple Corps, The Beatles' record label, agreed yesterday to settle a trademark lawsuit.

The London-based music company had sued the technology company over the Apple name on its online iTunes music store, a move that it claimed violated a 1991 agreement between the two companies.

Apple Inc., formerly Apple Computer, will own all of the trademarks related to "Apple" and will license certain of those trademarks back to Apple Corps.

The companies, which agreed to end the lawsuit and pay their own legal costs, did not say how much Apple would pay for the licensing rights or whether Beatles songs would be sold through iTunes.

"We love The Beatles, and it has been painful being at odds with them over these trademarks," Apple Chief Executive Officer Steve Jobs said. "It feels great to resolve this in a positive manner and in a way that should remove the potential of further disagreements."

In a separate statement, Neil Aspinall, manager of Apple Corps, said: "We wish Apple Inc. every success and look forward to many years of peaceful cooperation with them."

But while the truce appeared to finally bury the long-simmering animosity, music lovers will still need to wait for the right to buy such songs as "Love Me Do" or "Hey Jude" on Apple Inc.'s iTunes online store.

The settlement announcement, made jointly by one of the world's largest music sellers and one of history's most beloved bands, was silent on whether the catalog of Beatles songs will become available for downloading anytime soon.

The Beatles are considered the last major holdout from online downloading services like iTunes. Today, Beatles fans can play Beatles music on an iPod only by transferring the songs from a CD.

But the latest settlement does nothing to resolve that issue, and Jobs said nothing about it yesterday. Speculation about a deal to sell Beatles songs on iTunes reached fever pitch on fan Web sites and blogs after Jobs appeared to give the band a highly public nod last month. In introducing the Apple iPhone, he demonstrated the device's music-playing capabilities by displaying Beatles album covers and playing the song "Lovely Rita" for the audience.

Industry analysts said yesterday that a resolution on putting The Beatles' music online is likely already in the works.

"It goes from impossible to a lock that it's going to happen - it's a function of time at this point," said Gene Munster, senior research analyst with investment bank Piper Jaffray & Co. "I bet they move pretty fast. For Apple, it was critical that they got this taken care of."

Jaffray estimates that Apple Inc. paid The Beatles $50 million to $100 million for the rights to the Apple name. That would come on top of more than $26.5 million Apple paid to settle past disputes with Apple Corps.

The music label and the computer company have been engaged in an on-again, off-again legal battle since the late 1970s. A 1981 agreement allowed Apple Corps to use the logo for music and performances and Apple Computer for computers and software.

The deal even dictated how the logo apple could appear: whole and green, or cut in half for the band; rainbow or multicolored for the computer maker.

Another legal dispute arose a decade later when Apple Computer introduced computers with digital music interfaces and software for composing and playing music. Apple Corps balked, and Apple Computer ended up paying $26.5 million under a 1991 settlement, which also revised how it could use the trademark.

Apple Inc. had argued that the 1991 agreement entitles it to use the logo for goods or services used to make or reproduce digital music.

Jesus Sanchez writes for the Los Angeles Times. Times staff writer Dawn C. Chmielewski, the Associated Press and The New York Times contributed to this article.

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