Headline Feeds
The long and winding road that leads to profits for Apple Computer (Nasdaq: AAPL) and its iTunes service may be narrowed, considerably, by a lawsuit filed by the Beatles' Apple Corps in a London court.
The music publishing firm, controlled by Paul McCartney, Ringo Starr, and the widows of George Harrison and John Lennon, is facing off with Cupertino, Calif.-based Apple Computer for the third time in two decades.
This time, the Beatles are claiming that iTunes is violating a 1991 contract that prohibited Apple from using the name "apple" or an apple logo in connection with any music distribution. That pact was reached before the birth of the commercial Internet -- but the Beatles have used an apple logo since the 1960s.
Millions of Pounds
A judgment for the Beatles' Apple Corps could cost Apple Computer millions of dollars; an order may be forthcoming as early as next week.
The case is somewhat complicated. Though the controversy involves the apple logo, the suit is likely to be decided on the basis of other legal considerations.
"The question of who wins really doesn't turn on trademark law but on contract law," Christine Haight Farley, an associate professor of law at the American University's Washington College of Law in Washington D.C., told MacNewsWorld.
"It seems that Apple Computer signed a contract four years after adopting their name -- the lore is that George Harrison saw an ad of theirs in a magazine -- in which they agreed not to invade Apple Corps' record, entertainment and music realms," she noted.
Apple settled an earlier allegation of breach of contract for US$30 million, Farley said. Now, the dispute hinges on whether Apple has entered into the music production business or is simply selling services, which happen to include music, over the Internet.
"It's an interesting contract interpretation question, since today's understanding of what is content versus services seems not to have been the understanding at the time the language was agreed upon," said Farley, an expert on trademark law. "My expert opinion on the trademark aspects of this is that it was foolish and unnecessary for Apple Computer to have signed this in the first place." When the contract was reached, back in 1981, Apple Computer's products were far, far removed from the music industry, Farley pointed out.
"Even though today -- because of iTunes -- the products and services are much more related, a court may still not find Apple Computer to infringe Apple Corps' trademarks because consumers today are well educated that the two companies coexist and offer different goods and services."
Weak Claim
The Beatles -- whose guitarist, the late George Harrison, wrote a song called "Sue Me, Sue You Blues" after leaving the group -- don't have a strong claim at law, agreed attorney Dan Venglarik of the Dallas-based law firm of Davis Munck Butrus.
"I don't see that Apple Corps has much of a case," Venglarik, a leading intellectual property law expert, told MacNewsWorld. "In this day and age, it would be very difficult to argue the likelihood of confusion between Apple Computer/iTunes and Apple Corps. So their best bet is to prove a breach of the settlement agreement."
Apple Corps is using a "hyper-technical argument that one or more of iTunes' commercials, which carry the Apple logo and feature clips from various contemporary artists, constitute producing music," according to Venglarik. "If that's all they have, then the attack on the iTunes service as a whole certainly appears to be 'tail wagging the dog' tactics."
In court, however, the Beatles' company has been making a strong brief for its case and its rights to distribute music under the Apple brand. The group's longtime manager and producer, Neil Aspinall, told the court that he is remastering the Fab Four's catalog and hopes to make it available for downloading over the Internet.
Talkback: 
