February 6, 2007
After Long Dispute, Two Apples Work It Out
By LAURIE J. FLYNN
The long and winding road has come to an end for the Beatles, at least as far as the dispute over their Apple logo is concerned.
Apple Inc., the maker of the iPod, and Apple Corps, the guardian of the Beatles’ music interests, announced yesterday that they had settled their dispute over the technology company’s name and its use of an apple logo.
Under the new agreement, Apple Inc. now owns all the trademarks related to “Apple” and will license certain trademarks back to Apple Corps Ltd., the London company founded by the Beatles in the late 1960s.
The agreement immediately raised speculation that the Beatles’ music, which has been unavailable on legitimate digital music services, might soon be licensed for downloads from the Apple iTunes service.
Neither company would comment directly on that prospect, though both sides said they were happy to have worked things out.
“We love the Beatles, and it has been painful being at odds with them over these trademarks,” said Steven P. Jobs, chief executive of Apple Inc., who is widely known as a huge fan of the Beatles’ music. The companies declined to provide further details of the settlement.
The new agreement replaces one signed by the companies in 1991, when Apple Corps, which represents Paul McCartney; Ringo Starr; the estate of George Harrison; and Yoko Ono, the widow of John Lennon, moved to ensure that the computer company did not use the apple logo in the music business. The Apple Corps logo is a Granny Smith apple. The logo for Apple Inc. is an apple with a bite taken out of it.
But things changed in 2003 when Apple Computer, as it was known until it dropped “Computer” from its name last month, began signing deals with record labels to distribute music online through iTunes.
Apple Computer had approached the British company in hopes of distributing the Beatles’ music on iTunes, but Apple Corps instead accused the technology company of breaching the 1991 contract, arguing that Apple was essentially entering the music business with its service.
Last May, a judge in London ruled in favor of Apple Computer, agreeing that the company’s use of the logo was fair and reasonable. Apple Corps’s appeal of that ruling was scheduled for this month.
“It is great to put this dispute behind us and move on,” Neil Aspinall, manager of Apple Corps, said in a statement. “The years ahead are going to be very exciting times for us.”
The Beatles are considered the last major holdout from online downloading services like iTunes. Today, Beatles fans can play Beatles music on an iPod only by transferring the songs from a CD.
But the latest settlement does nothing to resolve that issue, and Mr. Jobs said nothing about it yesterday. Speculation about a deal to sell Beatles songs on iTunes reached fever pitch on fan Web sites and blogs after Mr. Jobs appeared to give the band a highly public nod last month. In introducing the Apple iPhone, he demonstrated the device’s music-playing capabilities by displaying Beatles album covers and playing the song “Lovely Rita” for the audience.
Elizabeth Freund, a spokeswoman for Apple Corps, said the settlement had no bearing on any move to make Beatles music available on iTunes, saying that was a separate matter for the Beatles to discuss with EMI, which holds the rights to the Beatles’ recordings.
A spokeswoman at EMI, where digital sales of Beatles songs could be a lucrative source of income, declined to comment on whether or when that might happen.
The iTunes service is by far the largest legal music downloading site, having sold more than two billion music downloads accounting for more than 70 percent of the market, according to the NPD Group, a market research company.
With the Beatles dispute behind it, Apple Inc. faces still another trademark battle: a lawsuit filed by Cisco Systems, the networking company, over the use of the iPhone brand. Cisco has said the two companies have been unable to reach an agreement over the name after several years of discussion.
Mark Chandler, Cisco’s general counsel, said at the time the suit was filed in January that Cisco would have been willing to share the trademark if Apple had agreed to its terms. These included an agreement by Apple to differentiate its coming iPhone product — a combination iPod and cellphone — from Cisco’s iPhone, a business phone that uses the Internet to transmit calls.
Warning of Vista-iTunes Problem
Apple Inc. recommended yesterday that users hold off upgrading their computers to Microsoft’s new operating system, Windows Vista, because of compatibility problems with Apple’s iTunes music software.
Users should wait to upgrade to Vista until a new version of iTunes becomes available in the next few weeks, said Derick Mains, a spokesman for Apple.