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Beatles and Apple Settle Trademark Dispute

SAN JOSE, February 5, 2007. -- Apple Inc. has resolved a bitter trademark dispute with The Beatles' guardian Apple Corps Ltd. over use of the apple logo and name, the third such dispute between these companies in the past 30 years.

The new settlement replaces the 1991 agreement, and gives Apple Inc. ownership of all the trademarks related to "Apple." Apple Inc. will license certain of those trademarks back to Apple Corps for their continued use. Investment bank Piper Jaffray estimates that Apple Inc. paid The Beatles $50 million to $100 million for the rights to the Apple name, which is addition to the $26,5 million apple Inc. paid to the The Beatles in the prior lawsuits.

While the settlement announced Monday appeared to finally suave the long-time animosity, music lovers will need to wait for the right to buy Beatles songs from Apple Inc.'s iTunes online store. The Beatles have so far been the most prominent holdout from offering their music online for download. Some 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.

Apple Corps was founded by The Beatles in 1968 and adopted the logo of a green Granny Smith apple. The company is still owned Ringo Star, Paul McCartney and the respective estates of John Lennon and George Harrison. Apple Cops first sued Apple Computer Inc. for trademark infringement in 1978, culminating in a 1981 settlement agreement whereby the computer maker paying $80,000 and agreeing never enter the music business.

Apple Corps sued Apple Computer again later, alleging the musical instrument digital interface software included on Apple's Macintosh computers violated the terms of the prior agreement. Apple Computer settled again in 1991 and agreed to pay $26.5 million to secure the rights to the apple logo for selling computers and software, with Apple Corps having sole use of the trademark Apple in connection with producing and selling music.

With the advancement of technology and its product line, Apple Computer, Inc. changed it corporate name to Apple, Inc. Tension between the two companies flared again in 2003 when Apple Inc. started contracting with recording labels to offer their songs through Apple's new iTunes download store. Apple Corps took the position that Apple Inc.'s use of the logo on iTunes amounted to a breach of the 1991 settlement agreement.

Lawyers for Apple Inc. contend that there is no confusion in the marketplace and consumers can distinguish between the logos. Apple Corps uses a shiny green apple as its trademark, while Apple Inc. has a silhouette apple with a bite taken out.

A judge in the United Kingdom ruled in May that Apple Inc.'s trademark as used in association with the retail service and not the music, and therefore a permissable use.