May 2006
Apple Computer emerges Victor as Beatles Lose their Court Battle
Who would have thought that an apple could be so precious so to cause years of legal wrangling. Well that’s exactly what happened and it is only now in a recent judgement that the position is a little clearer.
The background to this dispute is the only information that hasn’t been muddied. In one corner we have Apple Corps, which is owned by former Beatles Sir Paul McCartney and Ringo Starr alongside the widows of John Lennon and George Harrison. The company was established in 1968.
In the other corner we have Apple Computer, the firm whose home computers helped launch the personal computer industry. This was founded in 1976.
The bone of contention in all this is the apple. The Computer Company’s logo is an apple with a section removed out of the side whereas a complete green Granny Smith apple represents the record company. When Beatle George Harrison spotted an advert for Apple Computers in a magazine there was apprehension that fans would associate the computer manufacturer with them. The two companies, aware that problems may ensue, concluded an agreement in 1981 whereby they agreed to share use of the Apple trademark and stay out of each other’s business. Had each party remained within their remit of goods and services then maybe we wouldn’t be here today. However Apple Computer’s business increasingly began to encroach on the entertainment sector and in 1989 the company found themselves seeking a new trademark agreement that was less restrictive upon them. Ultimately this was resolved in 1991 and the parties entered into a new agreement.
Matters were peaceful for a while but it was only a matter of time before the strained truce broke into all out war again. The Apple Corps label now alleged that Apple computers' online music store iTunes, which allowed people to download music from the internet for a fee, was in breach of a 1991 agreement between the two companies in which they agreed not to enter the music business. It was the launch of the iPod and its assisted iTunes music store that instigated the latest round of legal action.
However the Beatles have today lost their case against Apple Computer over their download service.
Mr Justice Edward Mann considered that Apple Computer had used the apple logo in connection with its store and not the music. As a result there had been no breach of Apple Corps rights. Apple Corps had requested that the High Court use its powers to stop Apple Computers using the logo in its music arm of the business. The High Court resisted such attempts despite efforts by Mr Vos, counsel for Apple Corps, to demonstrate how many times the Apple logo appeared on the computer screen as he downloaded a track using the iTunes service.
A decision may have been reached but we’ve a feeling that this one will run and run.
Briffa’s Comment:
It is difficult to predict which argument will hold more water. Despite co-existence of the trademark for both parties, Apple Corps may consider that Apple Computers had swayed into their territory on what was previously a well-carved up market between the two. As a consequence they may have considered that this alleged breach of their agreement entitles them to automatic relief. However it is always difficult to ascertain with any degree of certainty which way the law will go. Apple Corps presented a strong case for trademark infringement yet were unsuccessful. In light of this it is worth considering the usefulness of ‘live together compromise’ or a ‘co-existence agreement’, where dual owners of the trademark operating in different arenas, begin to encroach on each other’s product territory.
Sanam Fiaz
sanam@briffa.com