Apple Computer prevails over Beatles' Apple Corps

The long and winding road of the Apple v. Apple battle appears to have finally come to an end, as a British judge has decided the case in favor of the American computer company. In the most recent episode, Apple Corps, the record label owned by Paul McCartney, Ringo Starr, Yoko Ono and the estate of George Harrison, had sued Apple Computer, saying that the iTunes Music Store violated an earlier settlement in which Apple Computer had agreed not to sell music. However, Apple Computer argued that the iTunes service only sold data, and the judge agreed, and told them so. "I find no breach of the trademark agreement has been demonstrated," he said. "The action therefore fails." Steve Jobs commented that he was glad that the battle was over, and added, "we have always loved the Beatles, and hopefully we can now work together to get them on the iTunes Music Store." You mean, you'll be selling Beatles data, right Steve?

Update: If you'd like to pore over it, the full legal decision has been posted by The Times. In the decision, the Judge says a key factor in ruling for Apple Computer was the fact that "for Computer to cross into Corps' territory with its mark it would have to have indicated, by its use of the mark, that Computer was the source or origin of the music. ... The ownership of the rights is always attributed to the correct person within the ITMS and in the track information on any downloaded track."

[Thanks to everyone who sent this in!]

[Antec @ May 8th 2006 8:15AM]

Gotta love those technicalities.

[bob @ May 8th 2006 8:18AM]

how do ya like those apples!!

[Kevin @ May 8th 2006 8:24AM]

Does this mean that the RIAA/MPAA et al can longer sue file sharers, because thay are no longer sharing music or films, only data? In other words, the data that people are sharing no longer comes into the purview of music or film copyright owners. Result: As long the data is not data that has been generated by the copyright holder, then it should be free to spread around as you like.

[Jarod @ May 8th 2006 8:27AM]

It's about time someone put those dung beatles back in their place! What a waste of time and energy!

[Alex @ May 8th 2006 8:33AM]

Honestly I wouldnt care who lost: they both have too much money. But I do think apple is among the worst for taking over a piece of the market, and locking it out by ensuring that only their hardware works with their software.

[KnipSter @ May 8th 2006 8:38AM]

I haven't read the ruling or the arguments. But it very well could be that the "data" argument is:

iTunes isn't selling "Music" because it isn't contracting artists and selling their works. It isn't being a record lable.

iTunes is selling "data" because it is merely selling recordings on behalf of the major "Music" sellers.

I think the physical analogy would be: If Apple opened a record store. By this interpretation, that would be okay. It would only be a problem if Apple created a record label or a recording company.

Remember Apple doesn't own the content, copyright, recordings, it merely traffics in those things by selling files.

Of course, what would happen if Apple were to merge with a large media company?

[Patrick @ May 8th 2006 8:39AM]

#5 -- iTunes works on Macs with PowerPC chip. iTunes works on Macs with Intel chip. iTunes works on PCs with Windows and Intel. iTunes works on Macs with Intel running Windows. So, how does that come across as "only their hardware works with their software", when it comes to music. I am curious to hear...

[bhaalspawn @ May 8th 2006 8:43AM]

Does this mean that the RIAA/MPAA et al can longer sue file sharers, because thay are no longer sharing music or films, only data? In other words, the data that people are sharing no longer comes into the purview of music or film copyright owners. Result: As long the data is not data that has been generated by the copyright holder, then it should be free to spread around as you like.

No. That's utterly different and this decision also in a different county from the US court decision that filesharing networks can be sued.

[tekdroid @ May 8th 2006 8:43AM]

I can argue that a CD is "data" too. It has been digitized. I would appeal.

[John Doe @ May 8th 2006 8:49AM]

"Gotta love those technicalities."

And yet if it was Microsoft you would be cheering them on. Shut the fuck up fanboi.

[Ian Jardine @ May 8th 2006 8:53AM]

Sounds like the Judge isn't too technically cavvy. Or maybe he's a Rolling Stone fan?

[iDZ @ May 8th 2006 8:53AM]

i play my iTunes-purchased music on my mac at home as well as my Dell PC at work. iTunes on both platforms is free. I don't really feel like i've been "locked out".

[xzavier @ May 8th 2006 8:53AM]

I think what we have he is nothing but "bad APPLES" Smells like rotton Apple pie to me!

[bhaalspawn @ May 8th 2006 8:54AM]

I don't even see how it's a technicality seeing as it was the main point on which the decision was made. A technicality is something like an error in filling out the claim form, not the major part of the judge's reasoning. So please think before you post.

[Brandon @ May 8th 2006 8:56AM]

I'm voting for Dukakis.

[Intrepid @ May 8th 2006 9:11AM]

That is crap. I agree with tekdroid, appeal and get a judge who wasn't smoking excessive amounts of pot in the days that the beatles were young.
What next, the RIAA can only sue you for owning pirated vinals? Good Point their Kevin.
...And as for fanboy Patrick... Alex makes a good and valid point. You do not. Can my iTunes song play on my Zen? NO!

[Antec @ May 8th 2006 9:25AM]

To the very smart #13. I don't even see how it's a technicality seeing as it was the main point on which the decision was made. A technicality is something like an error in filling out the claim form, not the major part of the judge's reasoning. So please think before you post.

Since its technically data and not music, they lost the case. please go to school.

[r @ May 8th 2006 9:29AM]

Everyone keep your knickers on (thought i'd throw a bit of british flavor in there). From a pure legal perspective, this case was a very simple contract interpretation case with very little need for technical savy (contract interpretation being something judges and lawyers are very good at). Contrary to what the post says, the decision was not rooted in the fact that Apple Comp. sells data, while Apple Corp. deals with "music." What it really came down to was the fact that Apple Comp's little apple logo and TM were not used on the itunes site to sell music. The Apple Comp. logo was used ONLY to sell itunes itself, a software program. The contract was limited ONLY to the use of the Apple Comp. logo and name, not to what Apple Comp can and cannot do as an entity.

And the plain fact of the matter is that NO ONE in their right mind would confuse Apple Comp for Apple Corp (that's more TM law than Contract law, but it is still important because this is a contract about a TM).

Not to be snippy or anything, but maybe you should get your legal commentary from a place other than engadget... they report gadget news with relative proficiency, but legal news not so much. (Sorry E, love you for everything else)

[Mister Smith @ May 8th 2006 9:31AM]

#15: And the "open" PlaysForSure will play on my iPod, right?

ANY DRM is closed by necessity. If you're going to pick on FairPlay, you have to pick on PlaysForSure, too. They both lock music into certain players. You're just bitter than it's Apple, not M$, who has the market.

[iDZ @ May 8th 2006 9:31AM]

if you read any further than engadget's blurb on the subject, it wasn't that the music is only "data" that won apple the case. it's the fact that apple computers is merely *distributing* or *transmitting* it.

apple computers is not a record company. you still end up buying it from the record labels in the end. you just go through apple to do it.

[Intrepid @ May 8th 2006 9:37AM]

#17, is the Apple logo not IN iTunes???

[r @ May 8th 2006 9:46AM]

#19, i do not have itunes on my work computer, so i cannot confirm or deny... but from what i've read about the actual trial, there was a demonstration for the trial court of the itunes program in operation (remember the downloading of La Freak). From what i can tell (and i'll have to double check this later), the apple logo, if used at all, was done so minimally and not in a context of actual "music" sale.

(while i do not have itunes on my computer, i went to the apple website and looked at the snapshots of itunes and did not see a prominent - or any - apple logo.)

I am not as familiar with the british courts as i am with the american courts, but on this side of the pond... a call like that is a factual determination that an appellate court can overturn only if clearly erroneous (a very very high standard to do).

I am trying to find the opinion of the trial court online, i can find US opinions easily... not as clear how the brits do it (and i dont want to use westlaw or lexis), if anyone finds it please post a link.

[r @ May 8th 2006 9:49AM]

yeah... i meant "le freak"... but whatever

[Intrepid @ May 8th 2006 9:54AM]

http://www.apple.com/itunes/overview/ - first picture.
I rest my case (excuse the legal joke)

[r @ May 8th 2006 9:59AM]

Here is the actual opinion (wasnt that hard to find)

http://www.bailii.org/ew/cases/EWHC/Ch/2006/996.html

I didnt read it (because i have real work to do), but i will skim it during my down time.

[r @ May 8th 2006 10:30AM]

#24, that's funny... i would think that picture proves my point. The apple logo is placed such that it has relevance to the itunes software, not the origins of the music content. TM law (and i know this is a contract case) comes down to confusion. So the question is, when using itunes, are you ever confused as to apple's relation to the music content? Or in other words, do you ever think apple is the creator of the musical content?... as opposed to the person just delivering/transmitting the music.

We look at TM Law (trademark law... sorry for the shorthand) because that is the context under which the contract was created. Therefore, an understanding of TM law (British, American, Intl) is important in interpreting ambiguous portions of a contract.

[Ian Jardine @ May 8th 2006 11:51AM]

I wonder if you carried out a survey asking the following question:

"What business is Apple Corporation in?"

My bet is the answer would go something like this:

"Apple Corporation makes computers and sells music thru itunes"

Now that would make a nonsense of this Judges's comment that nobody could confuse the 2.

[oshean @ May 8th 2006 11:57AM]

To r #18, last time I checked you could download iTunes for free.
And in Intrepid's #24 link to Apple.com. Under the Foo Fighter banner it reads "Inside the Music Store." According to this ruling iTunes in England should be called the "iTunes Data Store."

[crescentdave @ May 8th 2006 12:07PM]

I'm just happy both companies paid for their pissing match by making a bunch of lawyers even more rich.

[Damage @ May 8th 2006 12:08PM]

"ANY DRM is closed by necessity. If you're going to pick on FairPlay, you have to pick on PlaysForSure, too. They both lock music into certain players."

Except you have, ironically, more hardware choice for you to play PlaysForSure tracks vs. Fairplay tracks. Sure, you're still limited to using WMP as the manager on your PC side, but strangely enough, almost everyone but Apple and Sony supports PFS as DMA of choice (we know why Apple and Sony do not).

[r @ May 8th 2006 12:18PM]

oshean, sorry, you are correct... i should have used the word "market" instead of sell. The thrust of my comment, however, remains intact. The logo has nothing to do with the music content, just the delivery mechanism.

Also, why does it have to be called the data store? I believe music store is a pretty accurate, and accessible title for what it is. (although they do sell tv shows too). I read the opinion and didnt understand the judge to require a prohibition from apple comp. using the word music.

and #29, i love it when lawyers get rich. (the british system actually disincentives litigation by making the losing party pay attorney's fees for the winner, that's not the case in the states... so litigate all you want, just pay your own damn attorney or get a contingency fee).

[anon @ May 8th 2006 12:20PM]

Jobs is having a great run of success. First, he beats back the record companies threats to leave ITMS if he doesn't allow for variable rates for songs. Second, France backs down from their propistion to make iPod/ITMS open source. And now this win over Apple Corp, which, honestly, I didn't think they would win.


And lets not forget the switch to Intel will prove to add a significant market share to Apple's customer base. This is Job's year.

[hophead123 @ May 8th 2006 12:22PM]

"Have you seen the little piggies crawling in the dirt"

[David @ May 8th 2006 12:47PM]

"the banker never wears a Mac, in the pouring rain, very strange" :)

[NewType @ May 8th 2006 1:32PM]

http://news.findlaw.com/hdocs/docs/apple/aclac100991tmagr.html

Read the original consent agreement between Apple Corps and Apple Computer.

I quote (emphasis mine):

"1. Definitions:

1.1 "Apple Catalog" means the sound recordings, musical works, films and videos which now or hereafter cannot be released or published without Apple Corps' consent.

1.2 "Apple Computer Field of Use" means (i) electronic goods, [b]including but not limited to[/b] computer, microprocessors and microprocessor controlled devices, telecommunications equipment, data processing equipment, ancillary and peripheral equipment, and [b]computer software of any kind on any medium;[/b] (ii) data processing services, [b]data transmission services, broadcasting services[/b], telecommunications services; (iii) ancillary services relating to any of the foregoing, including without limiation, training, education, maintenance, repair, financing and distribution; (iv) printed matter relating to any of the foregoing goods or services; and (v) promotional merchandising relating to the foregoing."

I really wish people would actually read the details about the case rather than repeat some heresay based on something bit of information they heard from someone else about the supposed notions of the case.

The point is this. Apple Computer made the simple argument that, contrary to what Apple Corps may want in hindsight, that it legally granted them permission to run a service like iTunes Music Store in the above mention agreement.

[b]Data transmission services and broadcasting services[/b] pretty much covers iTMS, doesn't it? Unless you think that Apple wouldn't even be able to host movie trailers on iTMS or run streaming webcasts, then iTMS is perfectly legal.

It is not Apple Computer's fault that Apple Corps basically "gave away the store" (pun intended) in 1991 when few people could conceive of selling music online without a physical media. The judge obviously agreed with this simple point. Apple Computer even went out of its way to make the Apple Computer logo disappear from the iTunes interface during the checkout process (not from within sound files, as some extremely naiive readers believe, which is totally nonsensical) to make sure there is no undue confusion of the logos.

But pretty much, the Beatles gave Apple Computer the right to run a "data transmission and broadcasting service" in 1991. Now they are kicking themselves and trying to argue that those words meant "any data transmission service not related to music", but sorry, a data transmission service is a data transmission service, and iTMS clearly transmits music data from Apple's servers to your computer.

[Kevin @ May 8th 2006 1:54PM]

#18 and #25, thanks. I was just on a break, so I didn't have time to read the ruling. Now that I have, I think the judge made the right call, and it doesn't allow the kind of loopholes that I was alluding to in my first posting. The question came down to whether Apple Computer were branding the media as theirs, or just the ITMS. Cheers!

[Javaflash @ May 8th 2006 3:04PM]

FINALLY. Some common sense in the judicial system. Peace.

[Javaflash @ May 8th 2006 3:20PM]

To Beatles,

Why not actually earn a living on iTune Music Store instead of asking for handouts?

It's about the music...

[r @ May 8th 2006 3:40PM]

If i were the surviving Beatles, i'd hold out just to screw Michael Jackson... he owns the publishing rights to the majority of the Beatle's songs. (i'm not entirely sure how publishing rights work, except i think jackson is entitled to a share of the profits from royalties). Unless he had to sell them to finance his legal problems.

[Marian @ May 8th 2006 10:05PM]

"Except you have, ironically, more hardware choice for you to play PlaysForSure tracks vs. Fairplay tracks."

Really? That's why at least 75% of the mp3 players currently sold in U.S. play FairPlay?

[o rly @ May 8th 2006 11:15PM]

@ 41 / Marian : "Really? That's why at least 75% of the mp3 players currently sold in U.S. play FairPlay?"

You obviously misread his wording, by "more hardware choice for you to play PlaysForSure tracks vs. Fairplay tracks" it's quite obvious he means there are more CHOICES in what plays PlaysForSure vs what plays FairPlay, not which mp3 player SOLD more.
Last I checked, only 1 brand of player can play FairPlay tracks, while there are tons of brands that can play PlaysForSure tracks.

wtf are they teaching at the University of Texas at Dallas? It's definitely not basic comprehension.

[E71 @ May 9th 2006 7:57PM]

U.S. 1 -- U.K. -1

[Babble @ May 14th 2006 6:48PM]

The Apple Computer vs. Apple Corps case sets no legal precedent whatsoever. Justice Mann went to great lengths to limit his decision specifically to the 1991 agreement entered into by the two companies in which Apple Computer *PAID* Apple Corps for a settlement that a) specifically spelled out the respective non-infringing uses of each company's marks and b) specifically granted Apple Computer, per the agreement, the right to sell data that could reproduce sound and music.

Apple Corps is trying to manuever away from that agreement, as they now realize they probably gave away too much. That said, in 1991, Apple's interest was in protecting QuickTime's ability to reproduce sound and music, and Apple's lawyers were just smart enough to word a better deal.

If Apple Corps didn't INTEND to sign such an agreement granting Apple Computer such specific rights, the simplest answer would have been for them to simply NOT SIGN the 1991 agreement. Trying to wriggle out of that contract (for which they were paid a significant sum) is just silly at this point.

[Chad @ Jan 20th 2007 10:10PM]

It's claimed that Steve Jobs named his company "Apple Computer" as a tribute to the Beatles; as he is a big fan of their work. Both Apple Computer and Apple Corps felt legal issues regarding name trademark were settled awhile ago... until the iPod was introduced, and later iTMS. (see post 36, as I don't want to generalize on legal precendent or fact inaccurately)

My personal opinion is that Apple Corps had a very weak case against the Apple Computer in regards to Apple Computers enterance into the music scene. They might have had a strong case if it weren't for their previous agreement which pretty clearly allows Apple to run the iTMS and sell iPods. Apple Computer has made sure to keep the Apple name and Apple logo off of the iTMS as much as possible. Having the Apple logo in iTunes is fair game, as it is displayed in the iTunes software GUI. True iTunes provides access to the iTMS exclusively, and I am sure Apple would love to call the iTMS the Apple iTMS (why not? it gets them more publicity!) iTMS is a Music Store, no doubt about it. The arguement that Apple sells data on iTMS is true. But data can also come in form of vinyl records as said above. I could claim notes I took during a meeting is data. The data is audio data (or video data now), and there is no denying that. The whole data arguement seems irrelevant even though it was used. Apple Comp.'s lawyers threw it out there just like any good lawyer should. Remove the data arguement and Apple corps still had a weak case due to the 91 agreement. If Apple Corps ever had a legitimate, reasonable case against Apple Computer, it was over the Apple name, logo, and trademarking. It seems the 1991 agreement did "give away the store" allowing the iTMS to operate as a subsidiary component of Apple Comp, as long as there was no illegal use of the Apple Corps Catalouge, name, logo, and properties etc. by Apple Comp. Apple uses it's own logo, it's own corporate name, and it is hard to argue they have tried to benefit from association with Apple Corps, ecspecially in regards to iTMS. Apple Comp. has tried to keep anything Apple off the iTMS, other than its copyright footnote on iTMS pages (which is perfecly legal).

I'm a huge Beatles and Apple Computer fan. Jobs has been said to like the Beatles so much that Apple Computer is a tribute. What does Apple Corps stand to gain from winning this case? Money obviously. They have no real business interest in seeing the iTMS shut down. If Apple Corps won the suit, they would have probably been given a significant award (nothing that would break Apple Computer's bank). Enough is enough. Apple Corps is better served by teaming with Apple computer and putting the Beatles catalouge on iTMS. Why not at this point? They can also claim that the Beatles influence is so strong to this date that all of the innovative products Apple Computer makes were inspired in part by the Beatles, and their own creative spirit. Alot of people want to see the Beatles on iTunes, which would open up a revenue source for Apple corps to repay the legal fees from this case, and then make some profit afterward.