Apple vs The Beatles: The Long and winding case

It was third time unlucky for Apple Corp on Thursday as a high-court judge ruled in favour of Apple Computer, allowing the computer maker to continue to display an apple logo on its iTunes online music store.

Apple Corp, which represents the business interests of the Beatles and their families, has successfully defended its trademark territory twice since the first suit was filed in 1978, winning it total compensation of more than $100m from the US company.

But the Post- Fab Four - Sir Paul McCartney, Ringo Starr and the widows of John Lennon and George Harrison - have finally run aground in the ever shifting media landscape where rights have been blurred as digital data replaces records and CDs.

The Beatles’ latest action was sparked by the success of iTunes and the iPod digital music player. By using an apple logo, they argued, Apple Computer contravened a 1991 confidential out-of-court settlement that set out strict fields of business for both companies.

The service, which has sold a billion tracks since launching in 2003, is the clear leader in the legitimate music downloading business and has strong support from the music industry which has welcomed it as a leader in the fightback against piracy.

Under the terms of the 1991 agreement, Apple Computer agreed that although it may be involved in digital music, it would not package, sell or distribute any physical music materials, such as CDs. The action was brought after the IT group started to develop computers with sound capabilities.

In an initial 1981 settlement it was agreed that Apple Computer would use its name and logo only in the computer business, while The Beatles’ company would use it in the field of entertainment.

Apple Computer, which uses an emblematic apple with a bite taken out of it as its logo compared with Apple Corp’s more lifelike green fruit, denied it had broken the terms of the deal, saying its iTunes service was a data transmission service that clearly did not stray into the activities of a record label.

Lord Grabiner, QC, for Apple Computer, claimed that “only a moron in a hurry” could confuse the two. Geoffrey Vos, QC, representing Apple Corp countered that the US group’s definition of the downloading service was a “perversion” of the 1991 deal. He quoted Apple chief Steve Jobs as saying that downloading music was the modern equivalent of buying an album from a record shop.

Mr Justice Mann - who admitted he had an iPod himself early on in the case - ruled that Apple Computer only used the apple logo in association with the online store and not music.

Mark Mulligan, media analyst at Jupiter Research’s European division, said the case while interesting, held few ramifications for the media industry.

“Apple don’t use the Apple brand that much in the music arena, preferring to use iTunes or iPod, so there wasn’t much at stake for them,” he said.

“Meanwhile, The Beatles are in a unique position among music artists when it comes to negotiating their recording rights. Most musical groups have ceded control of their rights to their record companies so this case doesn’t have much implication for others artists,” he added.

While Apple are free to appeal, the decision could force the company to come to terms with the realities of the modern music world. It has been slow to embrace new technology, with allowing the group’s music to languish offline. The Beatles were the last big group to transfer music on to CD and have not gone the remastering route that many classic groups have followed in order to boost their income.

During the course of the trial, Neil Aspinall, Apple Corp chief and former Beatles road manager, said that the group’s back catalogue could be made available online in the near future in a remastered format. Meanwhile, Mr Jobs, a self-professed Beatles fan, said afterwards that hoped to work together with The Beatles to get their music on to iTunes.