Thursday, June 14, 2012

Apple (Nasdaq: AAPL) Wins Trademark Case With Beatles

Apple (Nasdaq: AAPL) Wins Trademark Case With BeatlesNorthern, WI 6/14/12 (StreetBeat) – Apple Computer (Nasdaq: AAPL) won today the right to keep its logo on the iTunes digital music store when a British judge rejected a claim by Apple Corps, guardian of the Beatles' musical interests, over the use of the bitten-apple symbol.

Justice Edward Mann of the High Court said Apple Corps had failed to prove that the use of Apple Computer's rainbow-colored logo on iTunes infringed on a 1991 agreement with Apple Corps in which the two companies agreed to stay out of each other's respective businesses.

Apple Corps, which represents Paul McCartney, Ringo Starr, Yoko Ono and the estate of George Harrison, had argued that by putting its logo on iTunes, Apple Computer was moving into proscribed areas. In particular, Apple Corps said that Apple Computer had taken on some characteristics of a record company by offering exclusive material and repacked musical compilations on iTunes.

Apple Computer's "use of the mark remains a use on or in connection with its service, and so far as it becomes associated with these additional factors I do not consider it goes beyond a proper, fair and reasonable use in connection with the mark and trespasses beyond it," Justice Mann wrote in his decision.

The decision is the latest development in a long-running trademark dispute between the two Apples, and it may not be the last. Apple Corps, which uses a logo resembling a Granny Smith Apple, said it would appeal.

The two companies also continue to fight over legal fees. Lawyers for Apple Corps had said that if they won they would seek undisclosed damages from Apple Computer.

"We felt that during the course of the trial we clearly demonstrated just how extensively Apple Computer had broken the agreement," said Neil Aspinall, manager of Apple Corps.

The decision today failed to resolve one important sidebar to the case: whether the Beatles' recordings, one of the few high-profile bodies of musical work that is unavailable via legitimate digital sites, like iTunes, will soon be made available. In the trial, a colorful spectacle in which the court was given demonstrations of the workings of iTunes on large computer screens, as well as playbacks of musical recordings like the disco classic "Le Freak" by Chic, Mr. Aspinall said the Beatles' entire collection was being digitally remastered. Steve Jobs, chief executive of Apple Computer, said in an e-mailed statement that he hoped the Beatles' songs would be available soon.

"We are glad to put this disagreement behind us," he said. "We have always loved the Beatles, and hopefully we can now work together to get them on the iTunes Music Store."

More than 1 billion tracks have been downloaded from iTunes, far and away the market leader in digital music, which accounts for at least 6 percent of overall music industry revenue, according to the International Federation of the Phonographic Industry.

But in 1991, when the two Apples resolved a previous round of litigation, the Internet and digital music had yet to develop into viable consumer propositions.

The judge, who acknowledged in the trial that he owned an iPod, one of Apple Computer's portable music devices, wrote that his decision hinged in part on a proviso to the 1991 agreement, preventing Apple Computer from using the trademark "on or in connection with physical media delivering pre-recorded content."

"It would require a serious distortion of fairly plain notions to say that files delivered by ITMS and stored somehow in digital form, and/or the hard disk which stores them, amount to 'physical media' which 'deliver' pre-recorded content," Justice Mann said, referring to the acronym for the iTunes Music Store. "It is true that physical things are involved —servers, communication equipment, wires and hard disks, to name but some, but they do not, in any form of ordinary parlance, amount to "physical media delivering pre-recorded content."

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