Advertisement

Archive for Tuesday, February 6, 2007

Apple works it out with Beatles

February 6, 2007

Advertisement

— For the third time in nearly three decades, iPod maker Apple Inc. has resolved a bitter trademark dispute with The Beatles' guardian Apple Corps Ltd. over use of the iconic apple logo and name.

But while the truce announced Monday appeared to finally bury the long-simmering animosity, music lovers still will 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 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 download any time soon.

The Beatles have so far been the most prominent holdout from iTunes and other online music services, and Apple's overtures to put the music online have been stymied by the ongoing litigation.

The settlement gives Cupertino-based Apple Inc. ownership of the name and logo in return for agreeing to license some of those trademarks back to London-based Apple Corps - guardian of The Beatles' commercial interests - for their continued use.

It ends the ongoing trademark lawsuit between the two companies, with each side paying its own legal costs. Other terms of the settlement were not disclosed.

Industry analysts said 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."

Apple of Jobs' eye

It's no secret that Steve Jobs - Apple Inc.'s chief executive officer and a huge Beatles fan - has wanted the British band's music on iTunes, which has sold more than 2 billion songs worldwide and has catapulted Apple into the top ranks of music sellers.

Jobs even cued up some Beatles music and album art in unveiling the company's highly anticipated iPhone gadget at the Macworld Conference and Expo last month, setting off rampant speculation that some type of deal might be in the works.

Apple CEO Steve Jobs plays a Beatles Song from the "Sgt. Pepper's" album on iTunes as he introduces the new iPhone at MacWorld in San Francisco in this Jan. 9 file photo. Apple said Monday that it settled long-simmering trademark issues with The Beatles' Apple Corps Ltd. company about the use of the name "Apple" and apple logos.

Apple CEO Steve Jobs plays a Beatles Song from the "Sgt. Pepper's" album on iTunes as he introduces the new iPhone at MacWorld in San Francisco in this Jan. 9 file photo. Apple said Monday that it settled long-simmering trademark issues with The Beatles' Apple Corps Ltd. company about the use of the name "Apple" and apple logos.

However, decades of legal disputes between the two companies have thus far made any partnership all but impossible.

"We love the Beatles, and it has been painful being at odds with them over these trademarks," Jobs said in a statement. "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."

The Beatles had been one of the few remaining big-name musical acts to reject any legal distribution of its work on the Internet. Formerly hesitant artists from Madonna to Metallica have made peace with online customers as digital downloads have continued to grow in popularity - with iTunes holding the bulk of the market.

Artists have complained that online distribution leaves them with too small a profit and that iTunes wrecks the artistic integrity of an album by allowing songs to be purchased for 99 cents apiece. Bands such as AC/DC have sold albums only at other, more flexible sites.

Discordant relationship

Apple Corps was founded by the Fab Four in 1968 and is still owned by Paul McCartney, Ringo Starr, the widow of John Lennon and the estate of George Harrison.

The Beatles' company, whose corporate logo is a giant green Granny Smith apple, first sued what was until last month Apple Computer Inc. for trademark infringement in 1978. The computer maker agreed in 1981 to pay $80,000 and never enter the music business.

Apple Corps sued again nearly a decade later, alleging the musical instrument digital interface, or MIDI, software included on Apple's Macintosh computers violated those terms. Apple Inc. again settled, agreeing in 1991 to pay $26.5 million to secure the rights to the apple logo for selling computers and software, while Apple Corps would get it for producing and selling music.

But the tension flared again in 2003 while Apple Inc. was signing up recording labels to offer their songs through Apple's new iTunes download store and attempted to woo The Beatles' management.

Apple Corps contended that Apple Inc.'s use of the logo on iTunes amounted to a breach of the 1991 agreement. Lawyers for Apple Inc. have argued that music lovers are smart enough to tell the difference between the logos. Apple Corps uses a shiny green apple as its logo, while Apple Inc. has a cartoon-like apple with a bite taken out.

Comments

Use the comment form below to begin a discussion about this content.

Commenting has been disabled for this item.